Passport deal voided, but still in force—DFA

THE Department of Foreign Affairs is still perpetuating an invalid contract to print Philippine passports, four months after Malacañang came out with a memo that said the 10-year-contract with APO-Productivity Unit is illegal and void.

In a text message, DFA consular affairs chief Frank Cimafranca admitted that he has not seen the recommendation of Presidential Legal Counsel Salvador Panelo declaring the agreement as invalid after it was discovered that APO subcontracted the work to a privately owned printing press, UGEC.

“I have not seen the recommendation of attorney Panelo,” Cimafranca said.

Panelo’s recommendation was made on Jan. 25, two months before Foreign Secretary Perfecto Yasay Jr. was rejected by the Commission on Appointments and replaced by acting DFA chief Enrique Manalo.

Presidential Legal Counsel Salvador Panelo

A document acquired by the Manila Standard showed that Yasay raised the “anomalous subcontracting of services” by APO during Duterte’s first Cabinet meeting on June 30.

To protect the government’s interest and to avoid the disruption of passport printing, Yasay asked the joint venture company APO-UGEC to take corrective measures to address the breach of the terms of the memorandum of understanding.

When APO-UGEC refused to comply, Yasay asked the Palace to intervene in July 2016.

The agreement was later rescinded and the Banko Sentral ng Pilipinas agreed to resume printing of the passports under a new contract, after a three- to six-month transition period.

But after that period, APO-UGEC was still doing the printing, and Cimafranca said transferring the contract would take “three years.”

A source said the reason for the continued defiance was the huge amount of money involved.

The Philippine Association of Free Labor Union president Terry Tuazon said the e-passport was over-priced, and should cost only P650, instead of the P950 the DFA charges, plus P250 in “overtime charges.”

“Except for the electronic chip that is embedded in the e-passport that captures data and security features there are no other enhancement to justify the high cost. Digital products are getting cheaper not going expensive,” Tuazon said.

“With 17,000 new applicants [daily] who troop to the various consular offices all over the country that’s a lot of money for the government,” Tuazon noted.

It was estimated that APO-Production Unit and its private partner stand to rake in a whopping P25.5 billion from the e-passport contract, far outweighing the P9 billion offer of a controversial cigarette manufacturer to settle its tax cases with the government.

In his letter to Malacañang, Yasay also tagged the joint venture as a “subterfuge that engenders if not purposely conceals corrupt practices, irregularities and dishonest conduct.”

He tempered this allegation by saying UGEC is the sole investor in the Lima plant and handled practically all aspects of the e-passport production, while APO-PU’s equity consisted of “prohibited assignment of the personalization and printing services under the MOU.”

Yasay said the Lima plant was expected to generate an estimated P1.2 billion annually over a 10-year period in violation of the anti-graft law.”

Newly appointed Foreign Secretary Alan Peter Cayetano said he would look into the case.