Saturday, February 26, 2005

NR0226: COA's damning report on GSIS and Garcia's eCard

Mula sa Tanggapan ni Anakpawis Rep. Crispin Beltran
News Release February 26, 2005
House of Representatives, South Wing Rm 602
931-6615 Ina Alleco R. Silverio, Chief of Staff
Cellphone number 09213907362

Solon says COA has damning report regarding GSIS eCard; demands President Arroyo sack Garcia immediately

Anakpawis Representative Crispin Beltran today said that President Gloria Macapagal-Arroyo no longer has an excuse to retain Government Service Insurance System (GSIS) president and chairman Winston Garcia, and that she should immediately remove Garcia from office. This is the light of the latest report released by the Commission on Audit dated January 21 that the GSIS transfer of funds from the Land Bank of the Philippines (LB) to the Union Bank was illegal, and so is the controversial E-card system which Garcia himself pushed for implemention.

"If PGMA was serious in her anti-corruption drive, she would sack Garcia instead of protecting him. Garcia has committed so many anomalous transactions and implemented destructive programs in the GSIS that directlyt a ttack the security of GSIS funds and the welfare of its 1.6 million members," he said.

Beltran said that he has in his hands an original copy of the COA report addressed to Garcia from the COA team that led by Atty. Joel S. Estolatan; Aty. Rhoda Pilena; Atty. Leonor Boadol Atty. Alexander Juliano; and Ms. Rosalina Salvador.

"The team of COA auditors studied the issue inside and out, and their recommendations are damning," he said. "Garcia's leadership of the GSIS has led to countless anomalies that involves millions of pesos. Why is GMA keeping Garcia? Is the president somehow involved in the anomalous contracts and dealings Garcia has forged with private banks such as the Unionbank of the Aboitiz group of Cebu?"

Records to the COA show that the GSIS, through Garica, sent letters to three government depository banks, the Land Bank, the Development bank of the Philippines and the Philippine National Bank (PNB) inviting them to submit proposals to provide the GSIS product and service dubbed as the GSIS e-card envisioned as an ATM and an e-purse/e-wallet for the system's 1.6 million members, active and retired.

It was revealed that the awarding of the contract for the eCard did not go to public bidding. This is a direct violation of RA 9184, or the law on public bidding that states that all procurement of the national government; its departments, bureaus, offices and agencies, including state universities and colleges and GOCCS, government financial institutions and local government unit should show transparency in the procurement process and in the implementation of procurement contracts.

"The GSIS, according to investigations of the COA, clearly failed to comply with the requirements of law and jurisprudence. The mere letters of invitation for offers it sent to the banks and the verbal invitation given t o the Bank of the Philippine Islands, Metrobank and Equitable PCI Bank were without the specifications for approved budget for the contract. Neither did the GSIS give out eligibility requirements, instruction to bidders or criteria for eligibility," he said.
"Even granting that the GSIS adopted the limited source bidding in the procurement of the Ecard, it still failed to comply with the requirements of the law, rules and regulations," he said. "The GSIS eCard which involves an amount of P1 Billion did not appear to comply with requirements.

The veteran labor leader turned lawmaker said that the award of the GSIS eCard to Unionbank is also disadvantageous to the government and to the 1.6 million GSIS members, active and retired.
"Because of the fund transfer, the government through the LandBank will lose an estimated income of P1,273,625, 726 in seven (7) years representing loan processing fees and interest earnings of alternative investments, exclusive of income which the Land Bank could earn in the billions of deposits/investments of GSIS that were transferred to a private bank, in this case the Unionbank," he pointed out.

Award of the GSIS eCard to the Unionbank will cause the government to lose some P1,273,725 in estimated income for seven years comprising of P632,875,729 loan processing fee of the bank and P640,750,000 interest earnings of alternative investments on the P1 billion eCard project minimum balance requirement, exclusive of income which the LandBank could earn in the billions of feposits/investments of the GSIS that were transferred to the private bank.

He also said that the Unionbank's designation as GSIS depository bank and the award of the eCard project is against the interest of all GSIS members. "Records show that as of Sept. 13, 2004, Unionbank has no branches in 16 GSIS field offices, such as Antipolo City, Bataan, Bayombong, La Union, Palawan, Sorsogon, Butuan City, Catbalogan City, Cotabato City, Dipolog City , Dumaguete City, Kidapawan City, Maasin City, Roxas City, Surigao and Tagum. As of Nov, Unionbank has NO branches in 51 provinces and six NCR cities.

"Because of this scarcity in branches, pensioners and members w ill have to lay out hundreds of pesos for transportation and hours of their working time to encash their much-needed GSIS loans and benefits. For instance, a pensioner from La Union needs to go all the way to Baguio or Dagupan just to encash his pension which sometimes amouts to even less than P500. This doesn't even take into consideration the fact that most of these pensioners are already old and infirm," he said. #


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