PCSO denies shortage of paper

MANILA, Philippines - The Philippine Charity Sweepstakes Office (PCSO) on Friday denied there is a shortage of lotto thermal papers for its terminals.

"There is no shortage of lotto paper. There is enough lotto supplies from our current inventory,” said PCSO General Manager Joy Rojas II in a statement.

"The agreement by PCSO with its terminal suppliers is all inclusive resulting in approximately P350 Million savings annually,” Rojas added.

Rojas said the controversy on the supply of PCSO’s lotto papers arose from the cancellation by the present Board of a Joint Venture Agreement with TMA Australia.

Upon review by PCSO’s statutory counsels, Rojas said the Office of the Government Corporate Counsel (OGCC) found the agreement was to be grossly disadvantageous to government considering that the agreement will last for 50 years and that PCSO’s only participation was the issuance of purchase orders.

As a result of such cancellation, TMA Australia filed a case for Specific Performance and Mandatory and Prohibitory Injunction before the sala of Makati Regional Trial Court Branch 59 Judge Winlove Dumayas.

Rojas said TMA Australia, despite not having issued purchase orders, tried to deliver lotto papers at the PCSO warehouse in Camp Aguinaldo last week without receipt of a Purchase Order from the charity organization.

Rojas added that PCSO had filed a case against some former PCSO officers and TMA officials for violation of the anti-graft law before the Ombudsman. The cases against them are still pending as of this writing.

The PCSO has also filed a case against Judge Dumayas before the Office of the Court Administrator for gross ignorance of the law, gross neglect of duty and grave abuse of authority.

“PCSO will continue to institute appropriate measures to protect its rights and interests before the proper venue,” Rojas said in a statement.

In a one-page order dated December 2, 2013, Judge Dumayas ruled that in order not to disrupt the lottery operation of PCSO, there is a need for the supplier of the thermal paper, TMA Australia, to deliver the rolls of thermal paper to the PCSO warehouse in Camp Aguinaldo for its Luzon, Visayas and Mindanao terminals in accordance with its contract with the latter.

“Without going deeper into the merits of the case, in compliance with the Writ of Injunction earlier issued and to avoid the disruption of the lottery operation of PCSO, which is vested with public interest, this Court orders plaintiff (TMA Australia) to immediately deliver to PCSO the following papers……,” the Court ruled.

It also ordered the PCSO “to accept and pay the above goods in accordance with the prices set forth in the (Joint Venture Agreement) including any adjustments provided therein at the time of the issuance of this Order.”

The case stemmed from the case filed by TMA Australia, a manufacturer of thermal paper and other paper products in the Asia Pacific region questioning the cancellation of the PCSO board led by Chairman Margarita Juico of the 25-year joint venture agreement contract it entered with the PCSO in 2009.

On May 13, 2011, a Makati court issued a writ of preliminary and mandatory injunction stopping the cancellation and ordering the resumption of the implementation of the JVA without delay. However, the PCSO refused to comply with the injunction as it insisted on cancelling the contract.

TMA Australia had since then sought the citing of Juico for indirect contempt for refusing to observe the injunction.

Implementing the injunction and citing public interest, the Makati Court Branch 59 in an order dated November 6, 2013 then ordered the delivery of thermal papers by the TMA to the PCSO warehouse in Camp Aguinaldo given the memorandum signed by PCSO OIC-Asst. General Manager Remeliza Gabuyo admitting therein that the lottery papers would only last to the first quarter of 2014 and that they have to order after September 2013.

Former Solicitor General Romeo Dela Cruz, TMA Australia’s counsel, said that after the issuance of the injunction in April 2011, his client sent several letters to PCSO requesting for the issuance of purchase orders but all were unheeded.

Dela Cruz added that the PCSO then entered into a contract with Pacific Online Systems Corp. for the establishment of additional lotto outlets and the supply of lotto equipment including bet slips and thermal paper in violation of the JVA.

Dela Cruz added that before September 19, 2011, when the right of the past suppliers of PCSO of specialized paper had not yet expired, and after the issuance of the TRO, Juico and her board had ordered and obtained deliveries of specialized paper from said suppliers that were far in excess of the then lotto paper requirements.

Dela Cruz said that after signing the JVA with the PCSO in 2009, TMA Australia relocated its thermal manufacturing plant in the Philippines from China investing and invested US$400 million.

Dela Cruz said TMA Australia is the only thermal paper plant set up in the country to use high-tech machinery in the production of thermal paper and other paper products.

However, the succeeding PCSO board, chaired by Margarita Juico, revoked the JVA saying the deal was disadvantageous to the government. TMA then questioned the revocation saying the deal was aboveboard.