Finance Secretary Carlos Dominguez III has formally asked the Department of Trade and Industry (DTI) to return to the Bureau of the Treasury (BTr) the interest earnings of the Philippine International Trading Corp. (PITC) to help augment the government’s COVID-19 response and disaster relief efforts.
In a letter addressed to Trade Secretary Ramon Lopez, Dominguez said the amount of P1.15 billion earned by the PITC from the funds it has been holding in trust as of 2019 was recorded as interest income of the state-run firm, when these should have been remitted to the National Treasury.
Dominguez said PITC’s interest earnings came from the cash and investment balances transferred by several national government (NG) 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 Bureau of the Treasury (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.”
Budget Secretary Wendel Avisado was furnished a copy of the letter to Lopez.
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 (PD) No. 1445 and Department of Finance (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 Avisado 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 (DBM) to ask for its endorsement to President Duterte on the issuance of a directive for the transfer of the PITC funds to the BTr.