There's something in our soup: The Aquino administration canceled the Food for School program which was giving each child a kilo of rice every school day, saying it was laced with corruption and inefficiency. BERNADETTE REYES

Launched by the Department of Education in 2004, the Food for School Program (FSP) benefited some 2.8 million students and their families - including Grade 2 student Mary Rose Alacre of Kamuning Elementary School in Quezon City.

“My mother said I need to go to school so we will have rice to eat,” the schoolgirl told the Philippine Public Transparency Reporting Project.

But the days are now gone when she carried home a kilo of donated rice every school day. President Noynoy Aquino cancelled the program soon after taking office, citing problems with corruption and inefficiency. The FSP is currently under review after reports of misappropriation and funds that were previously allocated to it are now being redirected to the Department of Social Welfare and Development (DSWD) under the 2011 Budget being submitted to Congress.

The six-year-old program aimed to provide food subsidy to poor Filipino families and was channeled through public school elementary students. So long as a child was attending classes, his or her family was assured of rice supply for a period of five months. The program was double-pronged –designed to ease hunger while improving school attendance.

But in spite of its good intention, the FSP was criticized by many people who claimed it provided only temporary relief and it failed to target intended recipients.

In theory, the poorest Filipinos were identified through the Food Insecurity and Vulnerability Mapping System. However, the DSWD reportedly found out that part of the allocation went to the wrong hands.

“Part of the subsidy was received by people who could afford to buy (rice),” DSWD Secretary Dinky Soliman told the PPTRP.

While the FSP is now out of the picture, other feeding programs under the DSWD will continue and draw upon the freed-up funds. This includes feeding in daycare centers where hot meals are served. Like the FSP, it aims to provide food for under and malnourished children.

Some recipients under the FSP will be delisted, Soliman said. “All students in the selected schools used to get rice even if they are considered economically active poor. They could be students with parents working abroad or both parents with a steady source of income. We want only those who really need the subsidy, those who are not able to eat three meals a day to benefit.”

A more transparent program

Reported leakages in the system of DepEd led to the demise of FSP. DSWD believes the losses are made worse due to corruption. “Corruption happens because of pasa-pasahan (system of passing shipments from one person to another) from the warehouse to the LGU to schools before it reaches the students. Somewhere along the way, rice is being stolen,” Soliman said.

But some parents are unsure if simply changing the program and abandoning the FSP will have any impact on resolving corruption problems. Such parents include Concepcion Gobres, the mother of Grade 1 student Jeorge Gobres.

“Wala akong nakikitang masama na ilipat sa DSWD. Pero kapag ini-implement sa barangay, sino mamahala? Baka itabi ng iba yung bigas, hindi rin naman natin yung malalaman (I don’t see anything wrong about passing [the program] to DSWD. But if you implement it in the barangay for example, who will manage it? It’s possible that some will keep the rice and we will have no way of knowing it),” she told PPTRP.

In answer to such concerns, Secretary Soliman said stricter measures to ensure transparency will be put in place. Firstly, volunteer and faith-based organizations across the country will be delegated to monitor these programs. Secondly, government websites such as that of DSWD will be used as portal where people can view and examine budget allocations. “This will tell the people where their money goes. This is one of the strategies instituted by President Aquino to ensure transparency.”

Another feeding program

Part of the budget might also be allocated to a new food project still under the DSWD --only this time no longer with DepEd but with the Department of Agriculture. “During the most crucial time just before harvest people in the countryside do not have food to eat and they have no one to borrow money from. It is here where the rice subsidy is much needed,” Soliman said.

Formulation of an effective strategy to ensure the subsidy will go to its intended beneficiaries is crucial. So far DSWD has already identified qualified recipients through the National Household Targeting System for Poverty Reduction Program (NHTSPR), a database of who and where the poor are in the country. “It located the poorest provinces and municipalities in the country. From there another survey identified the poorest of the poor in the respective areas using a set of criteria such as number of people in the household and income. The computer system ranks people according to their financial status,” Soliman explained.

Noodles scam

The Healthy Start Program (HSP), another DepEd feeding project under the FSP has also been ditched in 2009 after very serious allegations of corruption surfaced.

The PhP 427-million (USD 9.7 million) program was intended to further address hunger among students and improve classroom performance by providing students with more nutrition in the form of fortified noodles.

It was intended to have benefited 426,277 pupils in 5,296 schools across 13 provinces – and yet the contract was famously abandoned after reports surfaced which claimed the noodles were both overpriced and failed to contain the stipulated nutritional value.

The noodle contract was agreed between the DepEd and the winning bidder in the public procurement process, the Jeverps Manufacturing Corp.

Jeverps had earlier bagged a contract in 2007 to supply 15 million packs of noodles worth PhP 245 million (USD 5.6 million) for the Healthy Start Program and the project was carried out smoothly.

However, in 2009 the company was contracted to provide noodles fortified with malunggay and eggs. But another company which regularly bids for DepEd Contracts questioned the deal.

Dennis Quido, sales manager of Kolonwel Trading Corporations claimed the contracts awarded to Jeverps were "highly anomalous, fraudulent and worse, most disadvantageous to the interest of the government and supposed beneficiaries - the public school elementary children."

Quido said the prevailing price of noodles at that time was only PhP 4.50 (less that a dollar) per pack but Jeverps’ bid was PhP 18 in 2007 and PhP 22 in 2009. Even so, DepEd accepted the terms. “The government had lost the amount of PhP 170 million (USD 3.8 million) more or less," he said. The noodles, he continued, did not even contain malunggay and the egg was found out to be a pre-mixed ingredient in the flour and thus failed to meet DepEd’s specifications.

But former Education Undersecretary Teodosio Sangil Jr. said the figures were not comparable and the noodles bought in 2007 did not contain the same nutritional value. Secondly, the weight of the noodles being compared was not the same. In an inspection which DepEd conducted, the cost of a 45 to 55-gram pack commercial noodles stood at PhP 8 to 9. DepEd’s estimate was PhP 17.86 for 100 grams or an equivalent of PhP 8.93 for 50 grams which was well within the price range of commercial noodles, he argued.

The noodles were also supposed to be delivered directly to the schools which would necessarily incur additional costs. “The cost for freight and handling to the DepEd district offices and overhead cost must also be considered. The school beneficiaries are mostly located in island municipalities and food-poor provinces in Visayas and Mindanao,” Sangil said.

As for the its nutritional value, Sangil said the noodles were certified to contain the required vitamins and minerals by SGS Phil Inc. SGS is a member of Societe Generale de Surveillance - an international company that provides inspection, verification, testing and certification services of goods. Sangil added that the Bureau of Food and Drugs (BFAD) validated the results.

For its part, the Office of the Ombudsman has begun a probe into the alleged noodles scam. Charges have been filed by the Field Investigation Office (FIO) against former DepEd Secretary Jesli Lapus, Undersecretary Sangil, former officer-in-charge Ramon Bacani, Bids and Awards Committee (BAC) vice chairman Demetria Manuel, BAC members Nanette Mamoransing, Macur Marohombsar and Artemio Capellan Jr. Also named respondents were officials of Jeverps Manufacturing Corp. They are charged with violating the Anti-Graft and Corrupt Practices Act, the Government Procurement Act and The Consumer Act of the Philippines.

DepEd officials involved in the noodles case have denied any collusion with Jeverps. Ramon Bacani told the PPTRP he has not received any summons and could not comment on the specifics of the case but nevertheless claims innocence. “There is no flaw in the system. We followed strictly everything that was stated in the procurement law. There was no concession to Jeverps because that would be a violation (of the law).”

PPTRP tried to interview Lapus but he did not respond to the request. Similar requests to interview officials of Jeverps went unanswered.

Transparent and competitive procurement

The Government Procurement Reform Law or Republic Act 9184 requires all government agencies such as the DepEd to standardize and make transparent all their procurement processes and the implementation of public contracts.

The law created the Government Procurement Policy Board (GPPB) which defines policies and regulations and creates guidelines on public procurement. The law itself deals comprehensively with all aspects of public procurement.

The first step in procurement requires the creation of Bids and Awards Committees (BAC) which are responsible for conducting procurement proceedings.

The respective BAC must ensure widespread information dissemination of opportunities to bid. The law requires the agency concerned to publish any bidding opportunities twice in nationwide media to attract the greatest possible number of bidders and preclude any failure of bidding.

A pre-bid conference is held where the eligibility of prospective bidders is screened. Bidding must then be conducted in public at a predefined place and time to ensure transparency. It allows interested parties to witness proceedings and so safeguard against fraudulent actions.

The DepEd insists it follows all these measures and guidelines in all its procurement transactions including those relating to the purchase of noodles.

Public procurement is designed to ensure the best value in terms of both quality and price. Competitive bidding allows the participation of a greater number of possible suppliers to compel them to offer the best goods and/or services, therefore helping to ensure the government obtains the best deal and best use of public funds.

Sole bidder

The law specifies competitive bidding as the standard procurement method but allows for alternative methods where competition is absent.

Under Section 36 of RA 9184, a single calculated/rated and responsive bid can be approved provided it falls under one of the following circumstances:

a. If after advertisement, only one prospective bidder submits a Letter of Intent and/or applies for eligibility check, and meets the eligibility requirements or criteria;

b. If after the advertisement, more than one prospective bidder applies for eligibility check, but only one bidder meets the eligibility requirements or criteria; or

c. If after the eligibility check, more than one bidder meets the eligibility requirements, but only one bidder submits a bid.

When the bidding for noodles was announced in 2009, DepEd said that only Jeverps responded to the call for bidding, hence it was granted the contract. But the statement of officers from some of the country’s leading noodle manufacturers says otherwise.

“In 2007 we got an invitation to attend a briefing for bidding for the supply of packages of instant noodles which we attended. However when we looked at their costing, we found out it would require a complicated distribution setup - drop off points to remote provinces and islands and the manufacturer was to shoulder logistic expenses so we decided not to do it anymore,” said Universal Robina Corp. general manager Edwin Canta. “The years after, we were never informed nor did we participate (in bidding). We just found out about it later through the news because of the controversy,” he added. URC is the manufacturer of the Nissin and Payless brands.

Nestle Philippines, maker of the Maggi noodles brand, says they were not informed either. “We don’t recall of any invitation to bid for the noodles,” said Edith de Leon, Nestle Philippines Senior Vice President for Corporate Affairs.

But DepEd Undersecretary Franklin Sunga says that their records show the bid was published in the Philippine Daily Inquirer, the PhilGEPS and the Department’s own website for the 2007 and 2009 bids as mandated by law. Philippine Public Transparency Reporting Project

(The author is a senior reporter at GMA Network Inc., covering business stories.)