Oreta said she had personally seen the textbooks being openly hawked on the sidewalks, along with second-hand books, although these carried markings of "Government Property, Not for Sale" on their covers.
"Most of the (textbooks) that were on sale were obviously brand new, indicating that those involved in this scam had intercepted the (textbooks) before they can be used by students," she said. "This could yet be one of the biggest sources of corruption at the education department."
In a resolution, Oreta asked the Senate committee on education, culture and the arts, and the Blue Ribbon Committee to jointly investigate the anomaly in aid of legislation.
Oreta, former chairman of the Senate committee on education, culture and the arts, said the Department of Education spent more than P700 million last year to allow public school students to receive free textbooks.
"How many millions in government funds have been wasted as a result of this irregularity?" she asked.
Oreta said she toured Rectos sidewalks last Friday after receiving numerous complaints about the sale of the supposedly free textbooks, and that she saw "with my own eyes" that these were being hawked to students and parents.
"Syndicates were apparently conniving with erring government officials to perpetrate the scam," she said.
Oreta said the shortage of textbooks in public schools had forced parents to buy them in Rectos sidewalks after learning that these are being sold there.
"The textbooks were marked Government Property, Not for Sale but was crossed out or erased by liquid paper in a crude attempt to hide the anomaly," she said.
Meanwhile, Oreta called on Education Secretary Raul Roco to "absorb" contractual teachers instead of "passing" them to local governments for employment.
"Let the DECS take care of the hiring of teachers and the LGUs shoulder the maintenance of our school buildings," she said. "In this way, we can also prevent local executives from hiring contractual teachers, who would be merely indebted to the mayor or governor and may be subject to pressure, especially come election time."
Oreta said local governments could not pay the salaries of contractual teachers because a nationwide survey conducted by the Senate committee on education, culture and the arts, when she was heading it during the 11th Congress, showed that the electricity supply of more than 30,000 public schools could be cut off for lack of funds.
Oreta made the call after Roco asked local governments to hire contractual teachers. Aurea Calica