Challenges in gov’t transactions | Inquirer Business
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Challenges in gov’t transactions

/ 04:12 AM October 27, 2020

A promise to pay is not good enough. Only full payment will do.

That, in a nutshell, was Sen. Richard Gordon’s response to the promise of the Philippine Health Corp. (Philhealth) to pay its debts to Philippine Red Cross (PRC) within this week to convince it to resume its COVID-19 testing. Gordon is also PRC chair.


According to PRC, Philhealth has, to date, outstanding debts of P1.1 billion representing unpaid reimbursement of the expenses it has incurred in the conduct of those tests.

Gordon said the payment from the Philhealth would be used to defray the costs of procuring additional testing kits from China to replenish PRC’s dwindling stocks. He insisted on full payment in spite of Malacañang’s assurance the government would pay the arrearages.


Thus, if Philhealth fails to come up with the P1.1 billion, PRC would stop the tes­ting of, among others, overseas Filipino workers (OFWs) who have been forced to return to the Philippines due to COVID-19-related reasons.

The slack that would result from PRC’s suspension of its tests has to be picked up by other testing centers with limited facilities and at costs higher than those charged by PRC.

Bear in mind that any delay in the release of test results means additional government expenses for the housing and feeding of the OFWs in lodging facilities prior to their repatriation to their homes.

Gordon cannot be faulted for his hard-line stance.

As an international nongo­vernmental organization, PRC does not receive any subsidy from the Philippine government. It relies on donations for its operation and the payment of the salaries of its staff, many of whom are volunteers.

Besides, the Philhealth is not financially strapped as to excuse its failure to pay its debts to PRC. Philhealth’s coffers are oozing with money from annual budgetary allocations from the government and premium contributions from members.

As was shown in the congressional hearings, corrupt Philhealth officials have squandered billions of pesos of its funds in questionable transactions and part of which found their way in their pockets. In other words, it has the money and more to pay PRC.


The financial standoff between PRC and the Philhealth is illustrative of the challenge private entities often have to contend with when they enter into contract with government offices.

A signed contract that meets all applicable government procurement, regulatory and auditing regulations is no assurance it would be scrupulously complied with by the government officials or staff concerned, especially with regard to payments.

The clear statement of the terms and conditions of a contract are subject to the personal interpretation or whims and caprices of the people tasked with receiving and reviewing supporting documents of requests for payment.

The pace of the payment process depends on the integrity of the head of the government office.

If he or she is a no-nonsense manager who does not tolerate any hanky-panky, the payment of financial obligations would be done promptly and by the book.

The opposite would happen if he or she is made of a different stuff or, worse, sees nothing wrong with making private contractors share their “blessings with the boys” to expedite the payment of their billings.

The reasons often cited to justify the delay in the processing of payments include the unavailability of the final signing authority, the need to submit additional documents, lack of clearance from the in-house lawyer and ambiguity in some of the contract’s provisions.

It does not take a genius to figure out the motives behind those reasons. For the right amount of money to the right officials, the payment process would be a breeze.

Yes, we have an anti-red tape law that is supposed to speed up transactions with the government by fixing the number of days they should be acted upon and reducing the number of signatories.

Sadly, however, the office tasked with accomplishing them, the Anti-Red Tape Authority, has failed to live up to its mandate.

It looks like the corrupt officials of Philhealth have found their match in PRC and Gordon. This time, no grease money has to be paid for PRC to be able to collect from the Philhealth. INQ

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