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Joint Committee continues inquiry into GSIS eCard project

Committee Source: GOOD GOVERNMENT AND PUBLIC ACCOUNTABILITY

VARIOUS ISSUES and concerns continue to hound the Government Service Insurance System (GSIS).

Just recently, the Committees on Good Government and on Government Enterprises and Privatization resumed its joint inquiry into the alleged irregularities and anomalies in the management and operation of the GSIS.

The two Committees, respectively headed by Representatives Arthur Defensor (3rd District, Iloilo) and Eladio ?Boy? Jala (3rd District, Bohol), once again focused its attention on the questionable award of the GSIS eCard project to the Union Bank of the Philippines (UnionBank).

The eCard is primarily a GSIS member?s identification card which also serves as an electronic purse or automated teller machine card and debit card through which the member can withdraw his or her loans, benefits and pension from the GSIS.

The award of the said project to UnionBank came under fire for being allegedly tainted with irregularities. No less than the Commission on Audit (COA), in a previous meeting of the joint Committee, disclosed that the GSIS did not comply with the bidding requirements and procedures stipulated under Republic Act 9184 or the Government Procurement Reform Act.

At the resumption of the joint meeting last week, Members took turns questioning the policies and procedures adopted by the GSIS in implementing the eCard project.

BSP?s role

Rep. Benasing Macarambon Jr. (2nd District, Lanao del Sur), for one, asked what role the Bangko Sentral ng Pilipinas (BSP) had in the contract entered into by the GSIS and the UnionBank concerning the eCard project.

Leny Silvestre, account managing director of the BSP, clarified that the BSP only authorized UnionBank to accept government deposits and nothing else. She pointed out that the authorization granted to UnionBank to accept government deposits was by virtue of BSP Circular No. 110.

She said a number of banks have been granted the same authorization as long as they have complied with the requirements provided in the circular. The BSP officer, however, did not give the names of the banks.

Rescind the contract

Reacting to the comment of Rep. Danton Bueser (3rd District, Laguna) that government money should be deposited in government banks, Silvestre informed the body that UnionBank is partly owned by the government. She pointed out that the government owns some shares of stocks in the said bank.

With regard to the suggestion of Rep. Macarambon that BSP rescind the contract between GSIS and UnionBank, Silvestre said the BSP is not in a position to do so.

This was affirmed by GSIS Vice President Ella Valencerina who said that it is the option of GSIS to withdraw from the contract or not, subject to certain conditions and with due notice to the other party.

No eCard in remote areas

Asked by Rep. Defensor about the non-availability of the eCard services in far flung barangays, Valencerina informed the joint body that GSIS is currently addressing the problem. She said the agency is conducting exploratory talks with MLhuiller, a corporation engaged in the business of remitting money, whose network reaches the country?s remote areas.

On further inquiry by the lawmaker as to who will shoulder the expenses related to the remittance of money if MLhuiller will start servicing the needs of GSIS members and pensioners, Omelita Tiangco, GSIS executive vice president for finance, said the GSIS members will have to pay certain charges.

Tiangco reasoned out that the option of remitting funds to members or pensioners through MLhuiller would still be better compared to using checks which still need to be encashed and which when sent by mail would take time.

Improved eCard

Tiangco also informed the joint Committee that the GSIS has plans of improving the features of the eCard adopting more advanced technologies such as the Radio Frequency Identification (RFID) microchip that is capable of identifying and accessing the record of the card holder or member.

For her part, Nenita Veran, senior vice president of the Land Bank of the Philippines (LBP), said that if the eCard contract was awarded to the LBP, it could have earned about P20 to P30 million annually.

She added that if LBP continued servicing the deposits of the GSIS, as it used to before the award of the eCard project to Unionbank, the deposits would have amounted to P4 billion annually.

The LBP is the government bank responsible for providing financial resources to the agricultural sector.

The joint body agreed to hold another meeting to continue its inquiry. It also requested the GSIS to furnish the joint Committee with a record of its investments from 1991 to 2001 or prior to the assumption to office of General Manager Winston Garcia and to indicate the areas where it suffered losses.

11 measures, 2 speeches

The joint inquiry is based on 11 House Resolutions and two privilege speeches delivered during plenary session.

Nine of these measures seek to investigate the P25.17 billion deficit incurred by the GSIS in 2001, the highly questionable salaries and perks given to GSIS officials, the transfer of GSIS funds from the LBP to UnionBank, the eCard policy, the deficiencies noted by the COA in the GSIS? purchase of the P53.5 million Juan Luna and Amorsolo paintings and the anomalous housing programs of the GSIS.

These are HRs 290, 291, 299, 304 and 305 filed by Rep. Crispin Beltran (Anakpawis); HR 57 and 697 by Reps. Beltran and Rafael Mariano (Anakpawis); HR 286 by Anakpawis Reps. Beltran and Mariano, Bayan Muna Reps. Satur Ocampo, Joel Virador and Teodoro Casi?o and Gabriela Rep. Liza Maza; and HR 276 by Rep. Rolex Suplico (5th District, Iloilo).

Similarly, HRs 119 and 235, respectively authored by Reps. Monico Puentevella (Bacolod City) and Clavel Martinez (4th District, Cebu), propose to look into all areas of operations of the GSIS and the Social Security System (SSS).

The privilege speech delivered on the floor by Rep. Beltran last March 2, 2005 focused on the transfer of funds from LBP to UnionBank and the award of the eCard system contract to UnionBank. On the other hand, Rep. Suplico?s privilege speech dealt on the ?slush fund? of GSIS President and General Manager Winston Garcia.

Source: Committee Administrative Support Service, Committee Affairs Department