By Irma Isip and Angela Celis
Trade Secretary Ramon Lopez has yielded to a request of Finance Secretary Carlos Dominguez for the Philippine International Trading Corp. (PITC) to remit its interest earnings to the Bureau of the Treasury (BTr) to help augment the government’s coronavirus disease 2019 (COVID-19) response and disaster relief efforts.
Lopez, chairman of PITC, said in a text message to reporters it has ordered the PITC “to reconcile the numbers with DOF to remit the balance of the interest income.”
Dominguez in a statement quoted the amount of P1.15 billion earned by PITC from the funds it has been holding in trust as of 2019 and which was recorded as interest income of the state-run firm.
“We have no problem on remitting the balance of interest income earned from the funds, especially if it is to fund the requirements to address the COVID-19 pandemic. PITC is a government corporation and we have a whole-of-government approach in fighting the pandemic,” Lopez said.
But he noted that PITC, as part of its mandate, has to manage its funds and that it has been remitting annually to the national treasury the 50 percent of the interest income from the funds.
Dominguez made the request to Lopez in a letter dated Nov. 27, 2020.
In his statement, the finance chief said PITC’s interest earnings came from the cash and investment balances transferred by several national government agencies to the corporation for the procurement of their various requirements.
These fund balances, which are considered as trust liabilities of the PITC, amount to P33.3 billion and P32.6 billion as of the end of 2019 and October 31, 2020, respectively, Dominguez said.
“Following our discussion, we would like to request the return to the BTr by PITC, the interest earned on such funds held in trust. From 2018 to 2019, the interest earned on such funds totaled P1.151 billion,” Dominguez said in his letter to Lopez.
The finance chief said his request “is in line with our continuous efforts to identify sources of fiscal space and to accommodate the country’s various medical and social needs as a result of the pandemic, compounded by the successive calamities which recently hit the country.”
In his letter, Dominguez cited a 2019 report by the Commission on Audit (COA), which at that time found that PITC recorded its interest earnings “aggregating P581.135 million as of December 31, 2019,” as the corporation’s income, instead of remitting the same to the National Treasury.
The COA said this practice “is not in accordance with Presidential Decree No. 1445 and DOF Circular No. 01-2017,” referring to the Government Auditing Code of the Philippines and the DOF’s amended guidelines on authorized government depository banks, respectively.
Last week, the DOF furnished Senate Minority Leader Franklin Drilon a copy of Dominguez’s letter to Wendel Avisado, budget secretary, seeking the return to the BTr of about P33 billion in funds lodged with the PITC.
Drilon said Dominguez wrote the Department of Budget and Management to ask for its endorsement to President Duterte on the issuance of a directive for the transfer of the PITC funds to the BTr.