Diokno to Andaya: Name officials involved in 'illegal' commissions from contractors

BUDGET Secretary Benjamin Diokno challenged Camarines Sur Representative Rolando Andaya Jr. on Wednesday, February 13, to name high-ranking government officials supposedly receiving "illegal" advance payment from contractors who won government contracts.

Diokno made the dare after Andaya, a former Budget chief, claimed Monday, February 11, that "favored" contractors who prematurely won government contract by giving advance commissions worth billions of pesos to public officials now want the return of their money.

While stressing that conduct of early procurement activities was "not new," Diokno said any form of advance payments or commissions are strictly prohibited.

Diokno also noted that "reputable" contractors would not engage in the practice of giving cash advances.

“I do not know what the practice was when Andaya was Budget secretary but under our watch, advance payments of commissions are considered illegal. Such practices are not, and will not be condoned by the Duterte administration," the Budget secretary said in a statement.

"If Andaya knows of such practices, and he clearly does, as he has been defending contractors, then he should name these personalities as they should be investigated. That is graft," he added.

On Monday, February 11, Andaya said contractors who already paid commissions for the P75billion infrastructure projects allegedly inserted by Diokno's office in the proposed 2019 budget were upset that they might not get their money back.

Andaya issued the statement to back his claim that Diokno, along with Cabinet Secretary Karlo Nograles, was trying to restore P75 billion in public work projects in the proposed 2019 budget to "appease" contractors who had already paid 10 percent to 20 percent in kickbacks to proponents.

Diokno, however, vehemently denied Andaya's accusation, emphasizing that the Department of Budget and Management (DBM) "is only in charge of crafting and overseeing the budget process."

“The DBM is not concerned with program and project implementation by agencies. It is not concerned with contractors. Nor is the DBM involved in the bidding process and awarding of contracts,” Diokno said.

“It seems Andaya has appointed himself spokesperson of these contractors who have already given commissions. Let me remind the congressman that giving commissions is very clearly graft. It is his duty to name the high profile government official he mentioned who advanced his own funds to a contractor because of expected commissions,” he said.

But as far as the early procurement is concerned, Diokno stressed that it can be done before the start of the budget year to ensure the "efficient and timely" implementation of projects.

He added that such practice was "not new," noting that it has been allowed since 2009, under the Arroyo administration with Andaya as Budget Secretary.

Under Circular 01-2009 issued by the GPPB in 2009 when Andaya was Budget secretary, agencies can proceed with the procurement activities prior to the issuance of the Notice of Award using as basis the National Expenditure Program (NEP).

This early, procurement policy was also restated in DBM Circular Letter 2010-9, allowing agencies to proceed with their procurement activities, short of award, upon the President’s approval of the NEP.

"The DBM has even sought to institutionalize early procurement as a best practice to meet global standards in government efficiency, as is the practice in many developed countries," he said.

"The conduct of early procurement is guided by circulars to ensure agency compliance with the existing Procurement Law, its Implementing Rules and Regulations, and other pertinent rules and regulations... In early procurement, the contract is not perfected until the General Appropriations Act is passed," Diokno added. Two bills that seek to promote innovation and provide benefits to startups and micro, small and medium enterprises (MSMEs) were approved by both houses of Congress and are now a step closer to becoming laws.

The bicameral conference committees of the Senate and House of Representatives have reconciled the versions of the proposed landmark Philippine Innovation Act and Innovative Startup Act.

Once ratified by both Houses, the twin bills will be sent to Malacanang for President Duterte's signature.

"These bills do not only intend to promote a culture of innovation in the Philippines, they aim to improve ease of doing business and to provide MSMEs and startups with a platform to flourish and create more jobs. Innovation is key to sustainable and inclusive growth in the country," said Representative Victor A. Yap (2nd District, Tarlac), author of both bills.

The Philippine Innovation Act seeks to provide MSMEs greater access to finance, market and technology.

Under the bill, a National Innovation Council, to be chaired by the President, will be created to develop the country's innovation goals, priorities, and long-term national strategy.

Moreover, the proposed measure provides for a comprehensive support program, from incorporation to internationalization, for MSMEs. The program shall include coaching and mentoring in the areas of design; technology extension services; standard business practices in contracting, accounting and project management; quality control; standard-setting; business services such as commercialization and management; patents; among others.

Through a startup MSME innovation development program, the government shall mobilize its various agencies to work hand in hand with private organizations to provide technical and financial support for the development training of entrepreneurs.

"Regional innovation that will harness the competitive advantages, as well as existing and potentials strengths of regions and provinces shall also be promoted," Yap said.

A P1-billion Innovation Fund will be established to strengthen entrepreneurship and enterprises engaged in developing innovative solutions benefitting the poorest of the poor.