MANILA, 16 May — Labor Secretary Patricia Sto. Tomas yesterday confirmed that the Overseas Workers Welfare Administration (OWWA) had lost 1.2 billion pesos in bad investments and that the current head of the agency could be held criminally liable.
Speaking out publicly for the first time on the issue, Santo Tomas said that a team she formed to look into the case has yet to complete its report but it’s quite clear that OWWA Administrator Wilhelm Soriano invested the agency’s money in various projects without approval of the agency’s Board of Trustees.
"The OWWA has been investing workers’ money without a board resolution, which is a violation of Presidential Decree 1809, among others," she said in an interview with radio DZBB.
Santo Tomas was also quoted yesterday by The Manila Times as saying OWWA had spent about 77 percent of the Overseas Filipino Workers’ money for administrative expenses, eclipsing the benefits for OFWs, which has averaged at 22 percent.
She said in both interviews that the differences among members of the OWWA Board of Trustees over how the workers’ fund should be managed spurred Soriano to lobby for the transfer of the agency’s administrative control from DOLE to the Department of Foreign Affairs (DFA).
Under the OWWA’s charter, the Board of Trustees is chaired by the labor secretary, while the administrator is the vice chairman.
The members include secretaries of budget, finance, foreign affairs, one DOLE, the Philippine Overseas Employment Administration (POEA) administrator, and a representative each from the recruitment, labor, women, plus sea-based and land-based OFWs.
The Board’s function is to formulate the policies and programs of OWWA, and administer the agency’s fund resources through the Secretariat.
Sto. Tomas, being the current chair of the OWWA board, said the reason the reason she has not approved the agency’s proposed budget was because she didn’t like the "way OWWA is using the workers’ money."
Santo Tomas said that as a result of the unapproved and failed investments, the money of OFWs that could be "forever lost" could reach 1.2 billion pesos. A big part of the amount was lent out to R-II Builders, a construction company favored by the Ramos administration to undertake the rehabilitation of the Smokey Mountain dumpsite in Tondo, Manila.
According to a Commission on Audit (COA) report for the year 2000, OWWA invested 600 million pesos in the Smokey Mountain Project Participation Certificates, a flagship project involving a low-cost housing project for the former dumpsite’s residents.
The COA report said the OWWA had been unable to collect the loans, which should matured as of end-1999.
Interest in the loans had grown to at least 1.021 billion, according to Santo Tomas.
She also said that OWWA, under Administrator Salvador Bigay in 1983, lost 200 million pesos in OFW money that were invested in Landoil Resources Corp. and Greater Manila Land Corp. in 1983.
Landoil Resources is the same company owned by House Speaker Jose de Venecia Jr., which had defaulted in payment of hundreds of millions of pesos from the Philippine National Bank (PNB). Filipino taxpayers ended up shouldering the PNB’s losses.
Santo Tomas said she was not saying Soriano benefited from the investments "but it is a government policy that you should leave important decisions to those authorized."
"Investments should be done through the permission of the board... these are the people’s money so we should be extra careful how we use them," she said.
In her interview with The Times, Santo Tomas said that apart from the failed investments, the OWWA had been spending too much on administrative costs that little was being spend for the welfare of OFWs and their dependents.
OWWA, she said, was formed in 1982 precisely to provide welfare assistance to registered overseas workers and their dependents and to ensure the viability of the fund.
She said the OWWA has already accumulated a "huge fund" and the amount should continue to grow, considering that it charges a $25 fee from every OFW for every contract signed, in addition to the 900-peso year Medicare fee.
She noted that OWWA has collected fees from an average of 350,000 workers a year since 1984.
"Just last year, about 866,000 Filipinos left for jobs abroad. "That is a lot of money," The Times quoted her as saying.
She further explained that under the OWWA charter, only five percent of OWWA’s investment income may be allocated for operational expenses, except those approved by the president.
A guideline issued by the board in 1992 also allocates not more than half of OWWA’s investment income in the previous year for operational costs, and not more than 60 percent of its revenue for programs in the previous year.
Unfortunately, she said, OWWA had been violating the guidelines.
She noted that in 2001, the agency spent 492.99 million pesos on salaries, benefits (for its personnel), operational costs and other financial transactions.
In contrast, it spent only 143.59 million for OFW benefits.
These were the same points repeatedly raised by various OFW groups.
Soriano, who was also asked for his comments by The Times and DZBB, said he is not in a position to debate with his superior especially in media.
But he said he was "saddened that (Santo Tomas) has prejudged the investigation."
He said he would await the results from the investigation and would explain all the issues in public at the proper time.
Soriano also said the OFW fund is intact and that it is tapped during emergency situations.
"In the early 1990s, we were able to spend 500 million pesos for repatriating OFWs in affected areas in the Gulf War, but the following years, there was no such emergencies. If the Mideast war had erupted, we were ready to spend at least P800 million to repatriate OFWs," Soriano said.
As far as the spending cap is concerned, Soriano said the board approved the budget and the cap was removed through a board resolution.
Soriano defended the approval of the Smokey Mountain project without a board resolution.
"There is no board resolution then mandating the OWWA to submit all financial transactions to a board resolution. It was just this March 25 that such a board resolution was passed. Aside from that, the board only meets once a month, sometimes not even, so the OWWA administrator had to call the shots," he told The Times. Soriano further said the project passed the scrutiny of the Department of Justice.
He said the OWWA decided to invest in the project because it was "socially responsive," was guaranteed by the government, being a flagship project.
Sto. Tomas yesterday said she wanted to resolve the issue in the board but Soriano’s media campaign have become "too personal."
Soriano yesterday insisted that his move to get OWWA out of DOLE was a clamor from the families of the OFWs "and not because we have disagreements in the board."
