House set to investigate Duty Free Philippines

The congressional investigation into the virtual monopoly of supply and concessionaire contracts at Duty-Free Philippines (DFP) by a Chinese-Filipino businessman will now be conducted jointly by the House committees on good government and tourism, Parañaque Rep. Eduardo Zialcita said yesterday.

In a privilege speech last week Zialcita, chairman of the House committee on housing and urban development, exposed the alleged anomalies in the supply and concessionaire contracts held by William Tieng.

He vowed to push for a speedy probe despite what he revealed was the pressure exerted on him by influential friends of the businessman.

"I told those influential people who Mr. Tieng used to try talking me out of delivering my speech that I would be remiss in my duties to the people of Parañaque, many of whom are working at DFP," he said.

The controversy involving Tieng reached the chamber after some lawmakers sought an investigation into the chocolate and snack supply contract entered into by the DFP management led by former tourism secretary Roberto Pagdanganan and DFP general manager Michael Kho with the British Virgin Islands-based Eastern Duty Free (EDF).

A faction of DFP employees filed a graft complaint against Pagdanganan and Kho before the Office of the Ombudsman over the contract.

Zialcita said Tieng was behind the move to have the contract investigated by the Office of the Ombudsman since it weakened the businessman’s hold over deals at DFP.

He also cited media reports that Tieng was behind the protest rally staged in front of the Batasan complex by a handful of members of the DFP employees association.

He advised Tieng that, if he was opposed to the chocolate supply contract awarded to EDF and ratified by the Philippine Tourism Authority (PTA) board, he should file cases in court rather than resorting to pressure tactics and trial by publicity.

In his privileged speech, Zialcita condemned the terms of Tieng’s Fiesta Mall contracts, including the ten-year lease for the mall complex held by the businessman’s Dearborn Realty, which collects rentals ranging from P15 million to P20 million. The fees are three times higher than the P7 million rent for the former DFP shopping center.

For his part, Iloilo Rep. Rolex Suplico said Zialcita’s revelation on an alleged anomaly in the contract between DFP and EDF warrants a full-dress investigation by Congress to determine who is at fault.

Recalling Zialcita’s privilege speech, Suplico said that were it not for a much higher counter-offer from another concessionaire of imported chocolates, the DFP would have sealed a contract that was disadvantageous to the government, which is facing a fiscal crisis.

"A rival prospective supplier made a counter-offer before the PTA board which Eastern Duty Free matched, thereby improving the deal for the duty-free shop by some P180 million," Suplico quoted Zialcita as saying in his speech.

"Such disclosure clearly shows the government would have been disadvantaged by at least P180 million a year if not for the last-minute offer," he said.