‘Nothing irregular’: DSWD’s engagement with FSPs for SAP distribution ‘above board'


The Department of Social Welfare and Development (DSWD) said Friday, Oct. 22, that there is nothing irregular in its engagement with financial service providers (FSPs) for the distribution of the second tranche of Social Amelioration Program (SAP) cash subsidies.

Manual SAP payout in San Mateo, Rizal in June 2021. A SAP beneficiary receives his emergency cash subsidy from the DSWD disbursing officer. (DSWD Facebook Page)

The DSWD stressed that its engagement with the FSPs was "above board and in accordance with the existing government accounting rules and procedures.”

It maintained that it engaged the services of the six FSPs— Gcash, Paymaya, Robinsons Bank, Rizal Commercial Banking Corporation (RCBC), Starpay and Unionbank “with the guidance and technical assistance of the Bangko Sentral ng Pilipinas (BSP).”

It said the BSP as the country’s central monetary authority has expertise on policies and regulatory environment for financial inclusion and digital payments.

“In identifying the qualified FSPs, the DSWD required the submission of their Securities and Exchange Commission Registration, BSP Certification, National Privacy Commission Registration, and Secretary’s Certificate allowing the FSP, and its representative, to transact with DSWD,” it said in a statement on Friday.

The Social Welfare department said the following general criteria were used: experience, reach and technical capabilities; corporate capability; and acquiescence to the request to waive the service or transaction fee in order to free the government from any cost.

it said to determine the allocation of beneficiaries per FSP, the following factors were considered:

-presence of payout partners to ensure ease and ability to cash out by beneficiaries balanced with other considerations;

- business model limitations such as smartphone only deployments were controlled in these areas with other options in light of the timeline required in the disbursement;

- tie-ups with LGUs by the EMI/FSPs were also considered;

- historical experience in commercial roll out; and

-type of cash out points that may contribute to ensuring liquidity/availability of cash

The DSWD noted that over 70 percent of SAP beneficiaries based on actual names listed by LGUs have invalid or no mobile phone numbers/smartphone.

"Hence, the DSWD recalibrated the allocation and only two of the six FSPs signified their capability of distributing the financial assistance using other means. These were the RCBC and Starpay, which conducted digital and direct payouts, simultaneously,” it explained.

In April this year, the DSWD terminated its engagement with the FSPs and decided to conduct manual payouts for unserved SAP beneficiaries.

“The FSPs, including Starpay, liquidated the remaining budget that they received and refunded the amount for the unserved beneficiaries to the DSWD,” the department said.

“The Starpay refunded about P8.2 billion due to mistakes in information or data quality issues, and/or inactive accounts of beneficiaries or those accounts with no activities within a period of 90 days from crediting. The Department then opted to conduct manual payouts for the unserved second tranche beneficiaries.”

In July, Sen. Manny Pacquiao revealed that P10.4 billion worth of SAP funds were not given to intended beneficiaries. He claimed that more or less P50 billion was allocated for Starpay e-wallet service when it purportedly just had paid up capital of P62,000.

“All funds provided to the FSPs are all accounted for and that there are no “missing” funds. All aid distributed is supported by liquidation reports that can be shared, if necessary in the proper forum,” the DSWD reiterated.