House to probe fertilizer anomaly

The House of Representatives has decided to look into the alleged mishandling of hundreds of millions in fertilizer funds that Malacañang released to more than 110 congressmen three months before the May 2004 presidential election.

The decision was prompted by a privilege speech delivered on Monday night by Albay Rep. Edcel Lagman, who said he had nothing to do with the P500,000 in liquid fertilizer that Bacacay, a town in his district, had received.

"No funds were coursed through the office of the congressman of the first district of Albay or even released directly to Bacacay because what was delivered to the LGU (local government unit) by the Philippine Social Development Foundation Inc. (PSDFI), through the regional office of the Department of Agriculture, were 625 bottles of fertilizer covered by delivery receipt No. 1033 dated Sept. 15, 2005 with no unit price or total value," he said.

He said he and his predecessor, his daughter Krisel, never applied for funds from the Ginintuang Masaganang Ani (GMA) program of the agriculture department, nor did they use their priority development assistance fund (PDAF) allocation for the purchase of fertilizer and other farm inputs.

On the motion of Rep. Solomon Chungalao of Ifugao, the House referred Lagman’s speech to the committee on good government. Asked yesterday if the referral meant that the committee would look into the fertilizer scam, Lagman said, "that is my understanding."

He said it was better that the use of fertilizer funds be thoroughly investigated so that those behind the scam could be identified, prosecuted and punished. He later called The STAR to say that the good government committee had set its first hearing for Dec. 6.

At the time Lagman delivered his privilege speech, the presiding officer was Masbate Rep. Emilio Espinosa Jr., one of several Bicol congressmen to whom Malacañang allocated millions in fertilizer funds through the Department of Agriculture and who gave their funds to two foundations, PSDFI and the People’s Organization for Progress and Development Foundation Inc. (POPDFI), which purchased the fertilizer.

Auditors who examined the purchases discovered "excessive overpricing" of between 800 percent and 1,300 percent. They estimated that of the P60.7 million used in the procurement of fertilizer, including the 625 bottles for Bacacay, nearly P49 million, or 82 percent, had been skimmed through overpricing.

The liquid fertilizer was bought from Jo-Chris Trading at P800 per bottle. Auditors reported that it was available on the market for P58.50 to P90.54 per bottle. They tried to locate the two fund conduit foundations at the address that had been given to agriculture officials, but could not locate their offices.

Lagman acknowledged that the 625 bottles of fertilizer delivered to Bacacay indeed cost P800 per bottle.

He said he found the price too high.

Documents that auditors gathered included copies of memoranda of agreement that agriculture officials, the congressmen concerned and the two foundations signed for the transfer of the fertilizer funds.

In two towns in Chungalao’s province, auditors uncovered similar excessive overpricing of liquid fertilizer.

In Hingyon town, audit teams reported that the 2,166 bottles of liquid fertilizer town officials bought using a P3.2-million allocation they received from the Department of Agriculture were overpriced by P2.9 million.

The fertilizer was purchased at P1,500 per bottle when it was available on the market at P150 per bottle, including a freight cost of P20, they said.

The same extent of overpricing for the same farm input was reported in Mayoyao.

Similar cases of price padding were uncovered in Cebu.