House in a rush to probe DSWD cash payment contract

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Rolando Bautista. PHOTO FILE APPLICANT / JAM STA ROSA

MANILA, Philippines – A Makabayan lawmaker on Tuesday urged the House of Representatives to open its own investigation into the distribution through a little-known company of cash aid to poor Filipinos by the Department of Social Welfare and Development (DSWD).

Bayan Muna’s representative, Carlos Isagani Zarate, pointed out that the Makabayan bloc had already tabled on August 19 the House Resolution No. 2146 seeking to investigate the financial aid called the Social Improvement Program (SAP).

“If the House has heard about the Pharmally issue, there is no reason why this Starpay issue should not be investigated as well. Especially when you consider that this is a much larger amount allocated to a relatively unknown entity, ”the Deputy House Minority Leader said in a text message to the Inquirer.

Pharmally Pharmaceutical Corp. is at the center of a Senate investigation into the health ministry’s controversial pandemic supply contracts after the under-capitalized company made government deals worth 12 billion pesos.

Starpay Corp., owned by businessman Joey Yeung Uy, is an electronic money issuer (EMI) licensed by Bangko Sentral ng Pilipinas (BSP) and operates as an electronic wallet similar to GCash and PayMaya. He was one of a number of IMEs solicited by the government to deliver cash benefits to beneficiaries identified by the DSWD.

sharing the lion

It was brought to light last July when Senator Manny Pacquiao exposed suspected massive corruption in the DSWD’s cash payment program, claiming that $ 10.4 billion in SAP funds had not been accounted for, and has raised several questions about how Starpay was able to grab a 50 billion peso share of the cash aid to distribute to DSWD beneficiaries despite acquiring a license only in 2018 and reporting a loss in 2019 .

Zarate added: “It is imperative to probe the slowness of aid delivery and why it is so. Are these funds deposited in private banks and used to collect interest? The distribution of cash aid cannot be done at a snail’s pace because the lives of our poor compatriots are at stake. ”

HR 2146 sought to probe the DSWD’s “allegedly abnormal transactions” in delivering social improvements to poor Filipinos hard hit by COVID-19.

In August, the Makabayan bloc said Starpay had received 33.2 billion pesos, or 69% of the social improvement fund of 47.9 billion pesos.

Citing a 2020 DSWD audit report, he added that DSWD only channeled 0.01-11.48% of social improvement funds to five other financial service providers: G-Xchange Inc. (operator of GCash), Paymaya Philippines Inc., Rizal Commercial Banking Corp. (RCBC) and Union Bank of the Philippines.

He also noted that only 500,000 beneficiaries received the aid, contrary to the DSWD report that Starpay disbursed 1.8 million beneficiaries.

The measure then urged the House committees on good governance and accountability and on public accounts to conduct an investigation in support of legislation on the distribution of cash assistance by the DSWD.

However, a check of the House of Representatives website showed that the measure had been pending before the House Rules Committee since August 23. This means that the measure has not yet been referred to both committees for hearing and appropriate action. The House is on recess and will resume its sessions on November 9.

The House Good Government and Accountability Committee recently concluded its investigation into the alleged overpricing of COVID-19 supplies involving Pharmally Pharmaceutical Corp. and is expected to publish a report within the next two months.

“I will follow up, but since we are on recess it may be when sessions resume and the House Rules Committee meets again,” Zarate said.

BSP’s list of supervised NDEs as of September 30, 2021 lists Lamberto P. Scarella as President of Starpay. The company’s LinkedIn profile named Ulysses Lao as CFO. Lao is also president of Star Telecom Alliance Resources Inc.‍

Senate probe

At Monday’s Senate Finance Subcommittee hearing on the DSWD budget, senators learned that the underrated Starpay had won the lion’s share of social improvement fund transfers.

Senators drew parallels between Pharmally, whose COVID-19 supply contracts of 11.5 billion pesos are under review, and Starpay, whose start-up capital was reportedly 62,000 pesos.

During the Senate hearing, it was learned that Starpay had cornered 50 billion pesos out of the 85.1 billion pesos in cash assistance, even though it was relatively new and smaller than other providers. financial services like GCash and PayMaya.

Social Affairs Secretary Rolando Bautista told senators at the hearing that all DSWD transactions with Starpay were done in consultation with the BSP.

As part of the original deal, he said Starpay was supposed to handle cash transfers to just 1.6 million beneficiaries, but the DSWD allowed him to accommodate more people due to technical difficulties faced by other service providers, who had no way of offline transfers.

Bautista noted that many beneficiaries did not have cell phones or had given wrong or non-working numbers and that Starpay and RCBC had the ability to redistribute funds to these people.

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