This story was taken from Bulatlat, the Philippines's alternative weekly newsmagazine (www.bulatlat.com, www.bulatlat.net, www.bulatlat.org).
Vol. V, No. 5, March 6-12, 2005

Over anomalous GSIS eCard system:
Garcia Faces Storm as State Employees Call for His Ouster Anew

Government employees will call anew for the ouster of Winston Garcia, GSIS chief and a close political ally of the President. Garcia’s multimillion-peso eCard project was found to be anomalous no less by the Commission on Audit.

BY ALEXANDER MARTIN REMOLLINO
Bulatlat

The Government Service Insurance System (GSIS) will once again become a battleground as state employees are gearing to renew their call for the ouster of the agency’s president and general manager, Winston Garcia.

This time however, Ferdinand Gaite, chair of the Confederation for the Unity, Recognition and Advancement of Government Employees (Courage) said, the campaign for Garcia’s resignation will also be brought to Malacañang, the presidential office of Gloria Macapagal-Arroyo for her failure to curb corruption particularly at the GSIS.

On March 16, Gaite told Bulatlat, government unions will mount a nationally-coordinated protest action against Winston and President Macapagal-Arroyo. Garcia came under fire last year for his refusal to leave GSIS despite charges of corruption including anomalies that appeared to bleed the state insurance firm dry of funds.

“This time the fight is no longer just against Garcia,” Gaite said. “We intend to bring the fight to Malacañang, because, the fight is against a president who claims to wage an anti-corruption campaign but has not even lifted a finger against Winston Garcia, a corrupt official.”

The renewed demand for Garcia’s ouster stemmed from a report no less by the state Commission on Audit (CoA) that the establishment of the GSIS eCard violated law, rules and regulations.

In particular, the eCard project was awarded to the Union Bank of the Philippines (UBP) which is owned by the Aboitiz Group of Companies. Presidential Social Secretary Bettina Araneta-Aboitiz is married to Sabin Aboitiz, the Aboitiz Group’s chief executive officer.

The Courage chair said that the new CoA findings merit the filing of charges against Garcia before the Ombudsman. Charges against the GSIS chief are being prepared by Courage and the Kapisanan ng Manggagawa ng GSIS (KMG or GSIS Employees Association) led by its president, Albert Velasco

The CoA had reported Jan. 21 that “the processes employed in the prosecution of the GSIS eCard project and their repercussions” violate law, rules and regulations. The CoA team that investigated the implementation of the eCard project was composed of lawyers Joel Estolatan and Rhoda Pileña, team leaders; lawyer Leonor Boado, team supervisor; and lawyer Alexander Juliano and Ma. Rosalinda Salvarod, members.

Trouble with eCard

“Supposedly, the eCard system was created to ease GSIS members’ transactions of their applications for loans and benefits,” said Velasco, a lawyer. “Instead of filling up papers, the members simply have to go to ATMs, punch in some codes, and they could see how much they could avail of, and in a few minutes they could get the amount they need.”

The problem, Velasco said, is that the eCard has instead made life more difficult for GSIS members.

“The first problem of eCard holders is finding ATMs,” said Velasco. “So they are often forced to resort to the old way where they have to go through the processing of papers. The purpose of the eCard system is thus defeated.”

The depository bank for the eCard system, which involves P1 billion ($17.86 million based on a $1:P55.99 exchange rate) in GSIS funds, is the UnionBank of the Philippines (UBP) which has only 111 branches and 94 ATMs nationwide according to its own company website (http://www.unionbank.com.ph/).

In contrast, the LandBank of the Philippines (LBP), the former GSIS depository bank, has 503 ATMs nationwide based on the CoA report, and has interconnections with the ExpressLink and Megalink member banks. “Eighty percent (80%) of the national government agencies’ accounts are maintained with the LBP and it has proven its capability to serve their electronic-based banking needs,” the CoA report said.

The designation of the UBP as GSIS depository bank is disadvantageous not only to the 1.6million GSIS members, but to the government itself, the CoA report stated. The government stands to lose an estimated income of P1.27 billion in seven years from the transfer of GSIS funds from the LBP to the UBP, the report also said.

Legality

And this is where the issue of legality comes in, Velasco said.

The CoA report shows that the GSIS, in January 2003, had sent letters to the LBP, the Development Bank of the Philippines (DBP), and the Philippine National Bank (PNB) inviting hem to submit proposals to provide the GSIS with an eCard service. The GSIS would then evaluate which proposal would best serve its requirements and “with the most favorable cost-benefit comparison.”

The three banks submitted their proposals, but the GSIS decided in February that same year to defer the eCard project. But in January 2004, the GSIS revived discussion on the eCard, inviting the Bank of the Philippine Islands (BPI) to participate in “exploring options” and increasing GSIS depository banks to include private banks. The BPI and the LBP discussed their respective services in a series of meetings with the GSIS, as would other banks like the Equitable-PCI Bank (EPCIB) and Metrobank.

It was only on May 17 last year that UBP submitted its proposal to the GSIS. Yet, three days later the GSIS Board of Trustees awarded the eCard project to the Aboitiz-owned bank.

The CoA report noted that the project did not go through the regular bidding process as required by law, and that the GSIS Board of Trustees “gravely abused its discretion” in awarding the project to the UBP.

“The bidding process itself was full of anomalies because it was railroaded to award it to the UBP,” Gaite said.

“We had said even last year that the GSIS fund transfer was anomalous,” Velasco said. “Now that it is the CoA itself that is saying so, I think our arguments should carry more weight.”

Political payback?

“Why was the project awarded to the UBP, in such an anomalous manner, when the LBP is clearly more capable of serving its requirements?” Velasco continued. “We can see no reason except that it is part of President Gloria Macapagal-Arroyo’s payback to those who supported her during the 2004 election.”

As early as October 2003, Garcia had expressed support for Macapagal-Arroyo’s bid for a fresh presidential term. “We trust in the leadership and moral ascendancy of the president and believe that she deserves six more years to finish the programs that she has started,” Garcia said in a press interview on Oct. 18, 2003.

Macapagal-Arroyo assumed the presidency through a largely anti-corruption people-power uprising in January 2001. Bulatlat

 © 2004 Bulatlat ■  Alipato Publications

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