P100-billion payables restore kickback system — Rolando Andaya

MANILA, Philippines — The Department of Budget and Management (DBM) and the Department of Public Works and Highways (DPWH) owe infrastructure contractors at least P100 billion, Camarines Sur Rep. Rolando Andaya Jr. said yesterday.

“This gargantuan amount of payables has reincarnated an old system that forces DPWH contractors to cough up kickbacks just to be paid for completed projects. The practice of bribery has returned in the DBM and DPWH. This happened 20 years ago, unfortunately, when Secretary (Benjamin) Diokno was also DBM boss,” he said.

Andaya chairs the House of Representatives committee on appropriations. He was budget secretary during the presidency of Speaker Gloria Macapagal Arroyo.

He said concerned DBM and DPWH personnel gave him the information on the amount the two agencies owed contractors as of the end of last year.

“According to my sources, the release of payment from the DBM to DPWH varies per engineering district. Some districts get 10 percent only, others 30 percent. The amount of release depends on the amount of kickback. Districts that do not come across get zero payment,” he said.

When the money reaches DPWH offices, officials are given the discretion to choose who among contractors get paid, he said.

“Since the funds are insufficient, contractors resort to bribery to get paid,” he added.

Andaya claimed that Diokno has been “rationing payments” and has created a “cash shortage.”

“This is one of the reasons why we are questioning Sec. Diokno’s decision to adopt a cash-based budget system for 2019. Why insist on cash-based budgeting when you have billions of pesos in payables for 2018?” he asked.

He said contractors are incurring interest expense on loans from banks that are already demanding payment, and could lose properties they offered as loan collateral. 

“How can we convince legitimate contractors to continue bidding for infrastructure projects if we cannot pay them on time? A contractors’ revolt is possible. The Build, Build, Build program may turn out to be Stop, Stop, Stop, courtesy of Secretary Diokno. Given this scenario, an economic slowdown is imminent,” he said.

He said he could not understand why Diokno insisted on adding P75 billion to this year’s DPWH budget when the two agencies still owe contractors billions in overdue payments.

In his quarrel with Andaya, the budget chief has labeled his House tormentor as a defender-spokesman of contractors.

He has dared him to name the official who Andaya claimed has returned P200 million in advance commissions he allegedly received from a group of Mindanao-based contractors for projects to be funded from the P75-billion DPWH augmentation.

Diokno said if true, the unnamed official could be prosecuted for graft. It is therefore Andaya’s duty to name him, he said.