House to probe Duty Free supply contracts

The House of Representatives will inquire into allegedly anomalous “midnight” supply contracts entered into by state firm Duty Free Philippines during the Aquino administration.

The inquiry was prompted by Resolution No. 1742, introduced by 22 congressmen, including two House leaders – Pampanga Reps. Juan Pablo Bondoc and Aurelio Gonzales Jr., who are senior deputy majority leaders.

The authors also include several party-list representatives led by Eugene de Vera of ABS (Arts, Business and Science).

In their resolution, the authors said Duty Free Philippines (DFP), as a government corporation, should follow the procurement procedure under Republic Act No. 9184, or the Government Procurement Reform Act, which requires public bidding.

“We received reports that there were contracts entered into by DFP that did not undergo the required public bidding process and are therefore grossly disadvantageous to the government,” they said.

They said the supply agreements were made in 2013 and were good for five years up to this year.

“Surprisingly, in 2015, the previous officers of Duty Free Philippines extended the term of these contracts for another five years from 2018 to 2023,” they added.

They pointed out that the fact that the extension took place three years before the expiration of the supply deals was highly unusual and irregular for contracts in the government and even in the private sector.

“There is no justification for the premature extension of these contracts, which can be characterized as midnight deals of the previous officers of DFP,” they stressed.

There is thus a need to look into the agreements and DFP’s procurement process “to ascertain the necessary measures aimed at preventing these issues from arising again in the future,” the authors said.

They said the inquiry would also attempt to unmask those responsible for the alleged irregularities.

The investigation by the committee on good government and public accountability is expected to start shortly after Congress reconvenes on May 14 after an eight-week Lenten recess.

Duty Free Philippines was created as a government corporation under Republic Act No. 9593 or the Tourism Act of 2009. It replaced privately operated duty free shops established during the Marcos era.

It is attached to the Department of Tourism.