Department of Budget and Management debt to Department of Public Works and Highways contractors now P100B

February 15, 2019
Benjamin Diokno

SECRETARY Benjamin Diokno should explain why the Department of Budget and Management (DBM) has incurred billions worth of payables to Department of Public Works and Highways (DPWH) contractors.

House Committee on Appropriations chairman Rep. Rolando Andaya Jr. revealed that DBM has P100 billion payables to contractors as of the end of 2018.

According to Andaya, concerned DBM and DPWH employees have intimated to him that the total amount of unpaid contracts for 2018 infrastructure projects has risen from P44 billion last November to more than P100 billion at the end of the year.     

“Utang ito ng DBM sa mga government contractors na lumobo nang mahigit sa P100 bilyon sa pagsasara ng taon. Hanggang ngayon, malaki pa ang halagang hindi nababayaran ng DBM sa mga utang na ito,” Andaya said in a statement. 

Andaya pointed out that this gargantuan amount of payables has reincarnated an old system that forces DPWH contractors to cough up kickbacks just to be paid for completed infrastructure projects.     

“Bumalik na naman ang lagayan sa DBM at DPWH para mabayaran lang ang mga contractors. This happened 20 years ago, unfortunately, when Sec. Diokno was also DBM boss,” he added.

Based on the information gathered by Andaya, the release of payment from the DBM to DPWH varies per engineering district. Some districts were paid 10 percent only, others 30 percent.

“Depende sa lagayan. Yung hindi naglalagay, zero payment. Notices of Cash Allocation are given in lump sum. No breakdown. Discretion is given to Regional Directors. Since it’s insufficient, contractors have to resort to bribery just to get paid,” he said.

What’s worse, Andaya said is that DPWH casuals were not paid their salaries for three months.

“Last week lang daw sila pina-suweldo,” he noted.

Reports also showed that 99 percent of the contractors are still not paid fully for the completed projects as DBM only released partial payments.

Ten months to pay, just like paying for credit card installments.     

“In short, the DBM has resorted to rationing of payments. If there was rice shortage before, now there is cash shortage thanks to Sec. Diokno,” Andaya said.   

“This is one of the reasons why we are questioning Sec. Diokno’s decision to adopt a cash-based budget system for 2019,” he added.

“These payables are incurring interest expense. Banks are already demanding payment from government contractors, who face foreclosures of their properties. Contractors are already in default of their obligations,” he said.    

“But the more interesting question: Why then did Secretary Diokno insisted on inserting an additional P75 billion into the DPWH infrastructure projects for 2019 when the DBM has no money to pay for P100 billion in debt to contractors and suppliers?’ Mag-iinsert ka ng P75 billion, ‘di naman pala mababayaran mga utang?” he added.