The Market Monitor Minding the Nation's Business
By Rose de la Cruz
The Bangko Sentral ng Pilipinas under Governor Benjamin Diokno signed a memorandum of agreement with the Philippine Statistics Authority for the printing of the National ID (PhilID) in 2020.
Instead the BSP subcontracted to ALLCard Inc. part of the services of the PhilID printing, an integral part of the MOA executed between BSP and PSA, which was disallowed under Bids and Awards Committee Resolution No. 20-06-03 series of 2020.
In the annual audit report, the Commission on Audit cited the MOA thus: “We agree that the PSA diligently followed the requirements and procedures outlined in the agency-to-agency agreement under RA No. 9184. However, the BSP subcontracted part of the services in line with the printing of PhilID cards, which is not allowed under BAC Resolution No. 20-06-03…”
The botched agreement resulted in the production of poorly- made national IDs, with fading photographs (that did not even last up to five years, the guaranteed duration of its quality) and erroneous personal data printed on the cards. Worse, the subcontracting of IDs to a private company exposes the members identity to scammers.
The PSA’s PhilID project has four major components: the supply, delivery, and managed services for 5,000 registration kits; the supply, installation, support, and maintenance of Automated Biometric Identification Systems; consultancy services as a system integrator; and the supply, delivery, and managed services of the personalization and distribution of PhilID cards, business blog site, Bilyonaryo reported.
The personalization and distribution of the PhilID card, the biggest component of the project, went to BSP under an agency-to-agency procurement. The P3.48-billion contract involved the production of 116 million cards from 2020 to 2023 at a cost of P30 each.
Instead of using its own equipment to produce PhilID cards, BSP leased the printing machines from ALLCard Inc., which was installed inside the BSP office along East Avenue and manned by ALLCard employees. The private company also provided the supplies used to print the cards, including the toners and blue tapes.
The actual card where the ID information was printed was outsourced from OVD Kinegram of Switzerland.
“Thus, the BSP only provides the facility where the printing machine is located and where the PhilID Cards are to be printed, which COA said is subcontracting, which is not allowed.”
Since the PhilID production was subcontracted to ALLCards, PSA was unable to immediately address problems regarding the cards’ quality because it entailed relaying concerns first to BSP, which in turn passed the buck to ALLCard.
Among the problems found by COA with the printed PhilIDs were the fading photographs and erroneous personal information of the cardholder, Bilyonaryo added.
Under the agreement with the BSP, the photographs on the PhilID should last for at least five years but those produced by ALLCard vanished within a year.
COA said the poor quality of the PhilID cards prompted entities, such as banks and other financial institutions, to require cardholders to present another form of identification.
PSA rescinds contract with BSP
BSP’s bungling of the PhilID contract— despite having the highest paid employees in government— prompted the PSA to formally initiate the termination of the deal.
COA said PSA wanted another registered government printer to take charge of printing the PhilIDs. The BSP, however, wrote the PSA on May 20, 2022 (still Diokno’s time) affirming its capability and mandate to fulfill the contract.
BSP’s certification also stated that it has the absorptive capacity to take on the project and owns or has access to the necessary tools and equipment to produce the cards without subcontracting the project
Thorough probe sought
Following the recent termination of the contract between the BSP and Allcard Inc., the supplier for the national ID cards, Capstone-Intel Corp. CEO Nicasio A. Conti is calling for a comprehensive investigation into the failures associated with this contract.
The BSP’s decision to end its agreement with Allcard Inc. due to significant delays and non-compliance with project requirements highlights the urgent need for scrutiny.
The national ID system is a crucial infrastructure project intended to streamline government services and provide a unified proof of identity for all Filipinos.
The failure to deliver this project on time and up to standard not only undermines the government’s modernization efforts but also erodes public trust, Conti said.
“The delays and failures related to this contract may suggest issues beyond mere administrative inefficiency,” stated Conti. “I have personally experienced the impact of these delays, having only received a digital copy of my National ID while waiting for the printed version. This is unacceptable for a project of such national importance.”
Conti, a former Commissioner of the Presidential Commission on Good Government (PCGG) and the Presidential Anti-Graft Commission (PAGC), emphasizes the need for a thorough examination of the procurement process.
The investigation should assess potential issues within the contract and ensure that public resources are managed effectively.
“We must ensure that those responsible for this failure are held accountable,” Conti added. “Contracts, especially those impacting millions of Filipinos, must be awarded and managed with stringent oversight to prevent any form of misconduct. This incident should prompt all government agencies to strengthen their safeguards and accountability measures.”
Conti urged the government to learn from this incident and implement rigorous safeguards in future contracts to ensure responsible management of public resources.
“Ensuring the integrity of public contracts is essential to delivering the services and infrastructure that Filipinos deserve,” Conti said. “We must select partners who are fully capable of meeting our nation’s needs and upholding the trust placed in them.”