By Philip M. Lustre Jr.
SADDLED by heavy debts and notorious for being a milking cow of people associated with past administrations, little known APO Production Unit, Inc. was given up for good in 2010. But a last-minute decision to revive and reengineer it instead has brought APO Production Unit back to life.
Now, APO Production Unit, or simply APO, is a government owned and controlled corporations (GOCC) engaged in highly sensitive security printing services for various state agencies and other GOCCs. Without fanfare, it has metamorphosed into a professionally run GOCC that has started to recover from a debilitating debt trap to post decent profits.
APO is one of the three state firms engaged in printing business; the other two are the Central Bank of the Philippines and National Printing Office (NPO). It is currently under the Presidential Communications Operations Office (PCOO).
"APO was bleeding heavily, when the current board took over in 2010. The thinking then was to close shop," Amando Dimarucut, APO president and member of its board of trustees, said in an interview with this writer.
But then Communications Secretary Herminio Coloma, who taught management subjects and the Asian Institute of Management (AIM) before he went to public service in 2010, had a better idea, as his team felt APO could be saved and transformed into the state printer of highly sensitive printing requirements of various line agencies and complement the two other state printers, the BSP and NPO.
The reengineering move has led APO to become the official printer of state agencies like the Department of Foreign Affairs, Bureau of Internal Revenue, Land Transportation Office, Maritime Industry Authority, among others.
These agencies do not need the usual printed materials like brochures, books, pamphlets or any other printed materials, but those requiring security features and state-of-the-art facilities. For instance, APO now produces DFA's e-passports that contain security features to ensure the integrity of passports issued to Filipino nationals.
APO posted net revenues of P1.21 billion by end-2015, up by almost 300 percent from P329.1 million by end-2010. It posted a net profit of P47 million in 2015, of which P5 million was remitted to the Bureau of Treasury. It was the first time it had remitted to the national government after almost five decades of existence.
APO Production Unit, Inc. was formed in 1967 to serve as the printing arm of the Asian Productivity Organization (APO), the Japan-based organization that provided information materials to Asian countries. In 1971, the Japanese and Philippine governments entered into a memorandum of agreement transforming it into a formal production unit.
In 1974, APO Production Unit, Inc. was incorporated and registered with the Securities and Exchange Commission (SEC) as a non-stock, non-profit organization. Earlier press reports indicated that APO, since its incorporation until 2010, was used by its officials point to serve their personal requirements, which included the printing of campaign materials for a member of its board of trustees and relatives of two company officials.
Until 2010, APO had an identity crisis. Even its previous officials could hardly say with conviction if it was a private firm or state, thus enabling some of its previous officials to take advantage of its operations.
It was only in the 2011 budget law and two other laws that APO has been defined as a GOCC. Previous references APO described as a "government instrumentality."
APO's financial turnaround came in 2011 when it jettisoned its former identity as a mere printer of usual printed materials like books, pamphlets, brochures, forms and among others ventured into the highly technical and specialized security printing.
It changed overnight its mission and vision statement to say: "To meet the requirements of the National Government and its agencies for highly sensitive security printing services by employing innovative technologies, business efficiencies and highly competent personnel through the judicious use of the corporate form of organization ".
It borrowed fresh funds, acquire new specialized machines, streamlined its printing and sales operations, retrained its workers, entered into agreements with state agencies that need security printing services, and established the three-hectare Lima printing facility in an industrial enclave in Malvar, Batangas .
APO did not only reform itself to become a highly competitive and efficient state firm. It assumes part of the ongoing reforms in government.
In 2013, APO has started the implementation of the internationally awarded Philippine Excise Tax Stamp Project, which involves the printing of excise tax stamps for the Bureau of Internal Revenue (BIR) and establishes a tracking system to prevent illicit trade of tobacco products.
This project is in pursuit of two major institutional reforms: the 2009 adoption of the Framework Convention on Tobacco Control (FCTC), a World Health Organization treaty that identifies the elimination of illicit trade in tobacco products as a key element of global tobacco control; and the enactment of the product sin tax law that allocated funds for the Universal Health Care program.
The FCTC treaty requires the development of a "practical tracking and tracing regime to secure the tobacco products' distribution system and prevent their illicit trade." Until 2013, the BIR did not have a system to know the actual quantity of cigarettes manufactured and sold by the tobacco companies and relied solely on what the cigarette manufacturers reported and remitted.
The excise stamp project involves an integrated system that is not limited to printing, but it includes a security software process for ordering, distribution and monitoring to ensure the correct collection of excise taxes on cigarette products. Hence, the adoption of the system, known as the Internal Revenue Stamps Integrated System (IRSIS), APO has made as the sole authorized printer of tobacco excise stamps.
This move enables the BIR to assume full control and supervision over the production and issuance of excise stamps. Moreover, this reform ensures that all taxes imposed on tobacco products are accurately and fully paid.
APO's implementation of the excise tax stamp project has helped to raise state revenues from tobacco products. Official data showed the incremental raise in sin tax collections in 2014 reached P50.2 billion, up by slightly over 20 percent from P42.9 billion projected for that year.
In 2015, APO has started producing e-passports in fulfillment of its contract with DFA. It has similarly started using its five printing facilities in Batangas. Since then, the Lima facility has been used for DFA's e-passport and BIR excise tax stamp projects.
Jaime Aldaba, APO executive vice president and general manager, told this blogger that the e-passport project is quite sensitive because every e-passport contains security features that should not - and would never - compromise the integrity of issued Philippine passports.
"It's like printing money. Its security features are quite similar to the bank notes we have in circulation," said Aldaba.
Aldaba said APO has bigger plans for the future. Its mission and vision statement says its vision in the following words: "By 2018, for APO Production Unit to have been transformed into an integral and essential component in providing world-class infrastructure total printing solutions to the National Government and its agencies. By 2020, for APO to provide cutting-edge printing services to foreign governments and international organizations. "
Dimarucut and Aldaba said those future objectives are attainable and sustainable.
ADDITIONAL ARTICLES
BLOGGER'S NOTE: The following is a two part series on APO Production Unit, Inc. and a related opinion piece. The two part series was written by veteran journalist Tita Valderrama for the Philippine Center for Investigative Journalism (PCIJ). The opinion piece had the same author and it appeared last year in the Manila Times.
APO, government press, printing
campaign materials of bets
by Tita C. Valderama
TUESDAY, MAY 4TH, 2010
First of Two Parts
THE ELECTION Code is clear: Any printing press owned or controlled by the government is prohibited from being used in any election campaign or partisan political activity.
The penalties for officials of such an entity caught in violation of the law range from one to six years jail term without probation, along with disqualification from public office and forfeiture of the right of suffrage.
But some officials of the APO Production Unit, Inc., which is under the Philippine Information Agency (PIA), say the company is "private" and is therefore free to print campaign materials for one of its board members who is among the candidates for local office on May 10, as well as for the son and brother of two other company officers.
This is even though the company has been shuffled from one government agency to another through the years, seems to have become a dumping ground for protégés of people close to Malacañang, and has its books pored over from time to time by the state bean-counters the Commission on Audit (COA).
'Desire letters'
Its corporate policy-makers and officers also acquire their positions through a "desire letter" from the president of the Philippines.
Still, Roberto Brillante, former councilor and vice mayor of Makati City who now sits as a member of the APO Board of Trustees, insisted in an interview with PCIJ, "It's a private corporation registered under the SEC (Securities and Exchange Commission), originally under NEDA (National Economic and Development Authority). "
"We are not appointed (officials)," Francisco A. Arellano, APO president and a nephew of Senator Joker P. Arroyo, also asserted. "We're here through a letter desire. A desire is just a referral letter."
Other members of the APO Board of Trustees are: Mr. Benjamin Defensor, chairman; Renato L. Tobias, treasurer; Juan P. Dayang, corporate secretary; Taciana B. Verceles, comptroller, and T. Raul Corro, chairman, committee on legal affairs.
All of them have ties to the Palace or a past government officials. Defensor is an uncle of former congressman and presidential chief of staff Michael Defensor, who is now running for mayor of Quezon City. Tobias is said to be a protégé of former Executive Secretary Eduardo Ermita while Dayang is a media person close to Malacañang. Verceles is the widow of the late Immigration Commissioner Leandro Verceles Sr. Corro and was recommended to the Board by then Press Secretary Ignacio "Toting" Bunye said.
As member of the board, each of them is entitled to an honorarium of P30,000 every time the board meets, plus a monthly salary of P50,000 to P100,000. Apparently, too, the position comes with privileges such as free or discounted print jobs for themselves, their relatives or their friends.
Relatives, Inc.?
Up until the third week of April, APO's printing plant in Quezon City was churning out campaign materials for Corro, a candidate for councilor in Muntinlupa City, Leandro Verceles Jr., who is running for congressman of Catanduanes; and Mario T. Lumanao, who is aiming to become Surigao del Sur vice governor.
Verceles Jr. is the son of the comptroller and APO board member, while Lumanao is the brother of Emmanuel T. Lumanao, APO's executive vice president and general manager and a buddy of the late Press Secretary Cerge Remonde.
The printing of his campaign materials, which included four-color posters, leaflets, sample ballots, and pocket calendars, were apparently snuck in between the printing of forms and documents for the end-decade census of the National Statistics Office (NSO).
Last April 29, Brillante Arellano PCIJ and toured around the printing plant. It was teeming with activities for the NSO forms that are supposed to be finished by May 17. What caught the attention PCIJ was a handwritten note on a small white board inside the CTP (computer-to-machine) room where some of the campaign materials were done. It said: "Puro TY angpriority jobs. '' TY 'means thank you or free of charge.
Beside it was a bigger board on which recent and current job orders were written. Although the scribblings did not include the number of copies for each order, there were 'D' and '-N' marks beside some of these. According to APO workers, 'D' meant either the paper used was supplied or the printing job was granted a generous discount. (In some cases, the reams of paper used were sourced from "donations" from APO suppliers, the workers said.)
Job orders with 'N,' meanwhile, meant nothing was paid for the printing.
Going by what was written on the board, there were two "discounted" job orders for pocket calendars and posters, and a "complimentary" printing of handbooks for Verceles board member. There were also "complimentary" printing job orders for election posters for Corro and posters for Lumanao.
Initially, both Brillante Arellano and feigned innocence when asked about the campaign materials being printed at the plant. When told that the PCIJ has copies of election paraphernalia printed by APO and that there were job orders that had '-N' marks, Arellano said, "We do outdoor jobs. But they are not much, and only if there is excess paper. "
"Those are just small jobs," Brillante also said. But then he seemed to take that back, saying, in reference to the campaign of Verceles and company: "I'm sure they paid. We will not allow that if they did not pay."
"No 50-percent down payment, no printing job," added Brillante.
Private or public?
Reminded of Article XXII, Section 12 of Act No .. 881, or the Omnibus Election Code that, among other things, prohibits the use of "... .equipment, facilities owned or controlled by the government for an election campaign," Arellano said, "Because we're a private corporation, were not covered by that ban."
He also noted that the Board of Trustees member Corro, who had election materials printed by APO, is "a lawyer, (s) he should know."
In truth, Corro, who served as mayor of Muntinlupa from 1998 to 2007, also sits as chairman of the legal committee in the APO Board. He got into the APO board in October 2007 through a "desire letter" from President Gloria Macapagal Arroyo. That letter was issued upon the advice of the Press Secretary Bunye, who at the time had supervisory powers over APO, which was then under the Office of the Press Secretary.
When reached for comment, Corro said that the nature of his appointment to APO "is not a direct appointment" from the president, but through a desire letter that the Board could have refused. Asked if the Board has ever declined to honor a "desire letter" from the president, Corro replied that he did not know of any.
He did point out that after the Supreme Court ruled in March that early presidential appointees running for public office should leave their posts, he never received any suggestion or advice to resign from APO. Instead, he said, the APO Board "collective (ly)" told him to remain, which is why he is still collecting his salary and other compensation from the company.
But he also said, "I'm leaving my fate to the Board. I can leave anytime. I can not resign because I may be accused of abandoning my post. And I am willing to reimburse one or two months (of honorarium and other compensation) I'm getting now if it's ruled by the Board or any appropriate agency if indeed the nature of my appointment is a direct appointment, although by desire of the president. "
'Help me'
Corro did not deny that APO had printed campaign materials for him. Based on job orders obtained by the PCIJ, these included 80,000 pieces of leaflets with eight pages of his personal background and accomplishments, 8,000 pieces of pocket calendars, and another 5,000 pieces of campaign posters, all complimentary.
Apart from this, job order no. N-1003032, a copy of which was obtained by PCIJ, last March shows Corro ordering 18,150 pieces of calling cards each for "seven names." The 'N' mark denotes that this order was free as well.
Corro, however, could not seem to recall only pocket calendars that were "small in number, I can not remember exactly how many."
"This was prior to the campaign period," he told PCIJ. According to Corro, APO's printing of his election materials were "donations" by the company and the Board.
"Some just help them 'it me, brought here and I appreciate their help (It's just their own little way of helping me, the materials are provided here and I'm thankful for their help)," he said.
On Tuesday, May 4, PCIJ received unverified information that Corro had asked CNN to bill him for the campaign done at the company. A few hours later, the PCIJ was told that Corro's delivery receipts were being replaced.
Compared to Corro, who was relatively responsive to PCIJ's queries, his co-member board Taciana Verceles, was palpably irritated when PCIJ finally reached her by phone last Monday, May 3.
Director's son
Pouncing on PCIJ's reference to allegations of anomalies and APO, she said, bristling, "Do not entertain that. It's too much problem (sic). Even the government does not entertain that. I have been a director for 15 years and there is no diyan.Nagpapasikat irregularity only those labor-labor that's right. Do not entertain that. "
Verceles was referring in part to a brewing labor problem in APO, to which she appeared to be attributing the allegations of irregularities. Told about job orders indicating the printing of campaign materials for her son, a former congressman of Catanduanes, the APO comptroller said, "I paid for all the materials down to the last cent. I have the receipts here."
Asked about the labor cost, Verceles replied, her voice rising, "We're from APO! I'm too busy. Do not entertain that. I'm sorry." Then she hung up.
APO insiders said 64 reams of paper from the firm's inventory were used for the initial printing of the campaign materials for Verceles's son. But the project needed reams 75 in all; according to the insiders, Verceles comptroller asked for discounts in the acquisition of the additional 11 reams.
Two job orders dated March 3, 2010 for Verceles indicated the printing of 100,000 pocket calendars for free, and 65,000 pieces of 17.5 x 17.5-inch poster campaign at a discount. Last April 19, there was a job order for an unspecified number of sample ballots, also for Verceles.
Some of the posters for Verceles's son that were printed and APO had this marking: "Printed by: Agustin Verceles, 2 Avocado Drive, Valley View Exec. Village, Phase 1, Cainta, Rizal, Paid for by Leandro Verceles Jr., San Isidro , Virac, Catanduanes. "
A day after talking to on the phone Verceles comptroller, the PCIJ was told by an insider that Verceles APO's job orders were erased from the company's computer database. PCIJ, however, has yet to verify the information.
GM's brother
APO Lumanao general manager, for his part, admitted having posters printed by the company for his brother Mario, the Surigao del Sur vice gubernatorial candidate of the PDP-Laban party.
Printed for Lumanao free of charge were 100,000 pieces of pocket calendar, 100,000 pieces of 12.5 x 12-inch calendar and a discounted price, and an undetermined number of pieces of posters.
Lumanao said complimentary printing jobs for the APO trustees were "normal." Besides, he said, the papers used for these types of printing jobs were either scrapped or those deemed "unusable."
He showed but refused to provide a copy of a March 3, 2010 memo by Alan Paton-og, APO materials department supervisor. The internal memo cited the company's December 2009 year-end report as saying, "Some of our sheeted papers are unusable due to deterioration and discoloration and have been classified as non-moving items for so many years. These stocks are tediously counted every year and occupy a large portion of our warehouse. "
The memo thus recommended that the paper stocks comprising 67 reams of book paper, white bond, self-adhesive stickers - all worth a total of P257,781.32 - be disposed of, either by being sold or used for outdoor jobs.
Samples of the APO-printed campaign materials obtained by PCIJ, however, turned out to be paper stock without any sign of deterioration or discoloration. Sample ballots were also of good quality imported newsprint and book paper.
'Complimentary'
APO Some employees see nothing wrong with the printing of "complimentary" campaign materials for board members. The employees' union president, Salvador Prado, even says, "Well if we make other complimentary, so the board (Well, we do complementary jobs for others, what more for the board)."
Prado and now sits in the APO board as an observer, after his predecessor, Alfredo Bautista, was promoted last February as assistant production manager.
As an observer on the board, Prado receives a P10,000 honorarium for every meeting he attends
Yet even granting the APO board members of their assertion that the company is private "private" nature, they may still be held liable under Republic Act No. 3019, or the Anti-Graft and Corrupt Practices Act.
The Act's Section 3, paragraph (i) prohibits a private individual from "(directly) or indirectly becoming interested, for personal gain, or having a material interest in any transaction or act requiring the approval of a board, panel or group of which he is a member, and whish exercises discretion in such approval, even if he votes against the same or does not participate in the action of the board, committee, panel or group. "
Section 4 of the same law also says: "It shall be unlawful for any person having family or close personal relation with any public official to capitalize or exploit or take advantage of such family or close personal relation by directly or indirectly requesting or receiving any present , gift or material or pecuniary advantage from any other person having some business, transaction, application, request or contract with the government, in which such public official has to intervene.
Violation of the anti-graft law carries a penalty of one to 10 years imprisonment, plus perpetual disqualification from public office and forfeiture of prohibited interest or unexplained wealth manifestly out of proportion to his salary and other lawful income. - To be continued, PCIJ, May 2010
part Two
Based on audit reports, APO has made full use of its being a government firm. For example, APO as a state instrumentality acquired loans with ease from the Philippine National Bank (PNB) and other government financial institutions. It imported printing materials tax-free. And unlike private printing firms, APO has been exempted from public bidding for government projects. Instead, it gets these through negotiated bids.
After all, Executive Order No. 301 under the decentralization of negotiated contracts says "(Any) provision of law, decree, executive order or other issuances to the contrary notwithstanding, no contract for public services or for furnishing supplies, materials and equipment to the government or any of its branches, agencies or instrumentalities shall be renewed or entered into without public bidding, except ... whenever the purchase is made from an agency of the government. "
And yet APO private corporate dons a hat whenever it decides to farm out government printing orders to private firms. In cases uncovered by the COA in 1996, 1997, and 1998, APO government projects subcontracted to private printers without bidding, citing an opinion from the Office of the Government Corporate Counsel (OGCC) that said it is a private non-stock, non- profit corporation, and therefore "the conduct of its business is that of private firms."
This practice continued, according to COA, not only "deprives the government of a lower cost of printing, but also of better income." The OGCC opinion cited by the former management of APO was meanwhile dismissed by the Commission through Proper COA decision No. 98-173, which reiterated that APO is a government instrumentality that is subject to public bidding requirements.
Yet in February 2009, APO would even subcontract a Hong Kong-based printer to do the orders of the Maritime Industry Authority or (MARINA) for seafarers 'identification and record books. Normally done by the Central Bank of the Philippines, the seafarers' order book somehow wound up with APO, which was then swamped with other projects, according to APO board member Brillante. APO thus looked for a subcontractor, but that move later became even more controversial when it was reported that the deal had been overpriced by P7 million.
In an interview with PCIJ, Brillante Marina's order described as a "rush job" that extracted additional cost from Marina because of its "lack of foresight." APO exonerating of any fault in the matter, he said Marina would not have had to spend that much if it had scheduled the project ahead of time.
In truth, government printing projects have kept APO's presses humming through the years, although the company has also accepted orders from private entities such as the International Bible Society. Staple government clients include the Bureau of Internal Revenue (BIR), the Department of Budget and Management (DBM), the Department of Tourism (DOT), the Department of Education (DepEd), and the Philippine Postal Corporation (Philpost).
The company currently employs some 250 regular workers. To accommodate a major job orders from the National Statistics Office (NSO), APO recently hired some 100 contractual employees.
Yet far from its lofty beginnings, APO's buildings are now old and unkempt. Its cramped facilities house several departments and include a composition area, press room, a security printing sector where sensitive forms are printed, a bindery department, and an engineering and maintenance section. It also has a warehouse, stock room, and offices for its managers, plus a conference room with mismatched furniture.
One veteran employee APO says its printing equipment had its last upgrade in the mid-1990s, although its latest gadget acquisition supposedly shortens the pre-press plate preparation.
Unpaid loans
In 1989, APO's inability to repay multimillion-peso loans from government banks landed it under the Asset Privatization Trust (APT). But it had no takers. By 2000, based on state audit reports, the firm owed the government P604 million, representing loans from the Philippine National Bank, insurance and security services of the APT expenses, and accrued interest and penalties.
In the COA report, state auditors noted their difficulty in obtaining company data, much less cooperation from APO officials, for their inquiry. In the 1996 to 1998 audit of APO, for example, the COA team supervisor said that they were unable to offer an opinion on the firm's financial statements "because of the materiality of the amounts involved and the refusal or reluctance of the close relatives, neighbor APO and friends of officers ... to confirm or deny having received uncrossed checks or proceeds from APO thereof .... "
Among the team's findings was the issuance of uncrossed checks amounting to P16.6 million to close relatives of APO's then internal auditor as commission fees. This two payments to non-employees APO, COA said, "cast doubts as to the propriety of the transactions".
Interestingly, in its 1999-2000 audit report, COA said that its previous recommendations have remained unimplemented that were to "stop granting commissions to close relatives / friends of APO officials, especially for those arising from sales to government agencies" and to "stop granting cash advances to non-APO personnel. "
APO Some employees have since asserted that officials have made a milking cow of the printing firm. Just last March, a number of employees wrote APO Executive Secretary Leandro Mendoza regarding alleged abuses of members of the Board of Trustees and some senior management executives, who had supposedly bloated salaries and allowances.
Little kingdoms
In 2008, then Press Secretary Jesus Dureza himself had written the APO Board of Trustees, indicating his desire for them to subject the company to regular audits COA. Dureza's letter was apparently part of his attempt to align the trustees' compensation with other executives from other GOCC - to no avail.
PIA Director General Conrado A. Limcaoco Jr., who began supervising APO only this March, said that while he has sat in just one APO board meeting so far, he is already convinced that there needs to be "some structural and policy imperatives" and the firm.
"The personality dynamics is complicated beyond belief," he said. "The board does not get along, the employees do not get along, and even the management and employees do not get along."
He said, however, that taking priority in his to-do list is to settle with finality regarding questions APO's corporate nature of the corporation by getting a legal opinion from the Office of the President and the DOJ. He also said that he is requesting the Presidential Anti-Graft Commission to investigate APO's printing of campaign materials for company officers and their relatives "to determine if there is cause to send it to the Ombudsman."
Monsod, for her part, told PCIJ that as with other GOCC, it has been difficult to put APO in order because "everybody has his little kingdom and everybody is busy protecting his own little turf." Asked if she thought there was a chance things may change and APO once a new government comes in, she remarked that any overhaul "has to be a general policy issuance along ... and this is all not just in connection with professionalizing the civil service but the boards of directors of all government corporations. "
Monsod said: "APO by itself is merely a symptom that really should be examined by government." - PCIJ, May 2010
APO: From bad debts to big profits
By Tita Valderrama, The Manila Times
July 19, 2015 8:28 pm
PROFESSIONALISM and competence has turned around a little known agency that used to be a dumping ground for political protégés.
Before the elections in 2010, I wrote about the APO Production Unit, Inc., a government corporation that was blatantly abused by the men and women tasked to manage it. It was turned into a milking cow, and used to print campaign materials for relatives of its officials.
Five years later, the corporate officers of APO called my attention to the agency's present condition and bragged about how they managed to make a 180-degree turn from a debt-ridden into an income-generating entity.
In 2011, APO realized a net income of P20.7 million, the first time in 11 years of losses.
In 2013, the corporate officers said, the agency has started remitting to the national treasury 50 percent of its income. In April 2014, it issued a check for P2.7 million to the Bureau of Treasury, and another P2 million in April this year as its contribution to the national government.
APO, by its corporate nature, does not receive even a single centavo from the national government.
For 2015, the agency is given a challenging sales revenue target of P1.08 billion, from P680 million last year. With a state-of-the-art security printing facilities on a three-hectare property at the Lima Technology Center in Malvar, Batangas, APO may not be far from achieving the revenue goals.
It will soon start producing the e-passport using the latest printing technologies and adopting high-end security features to ensure the credibility of the travel document.
With over 7,000 square meters of production area, the facility houses a data center, fiber optic data lines, CCTV system, K9 Unit, and state of the art security printing system.
It produces excise stamps for the Bureau of Internal Revenue (BIR) as well as the Internal Revenue Stamp Information System (IRSIS), a security software that tracks and traces tobacco products.
APO stands for 'Asian Productivity Organization,' the name of the Japan-based group that had helped start it in 1967 as an outfit that would serve the information and training needs of Asian countries.
Japan's APO and the Philippine government jointly created the production unit through a Memorandum of Agreement (MOA) on June 24, 1971.
Under the MOA signed by then NEDA Director General Gerardo Sicat and the Japan-based APO Secretary General Morisaburo Seki, the Philippine government was to "assume full responsibility for the unit to operate on a self-sustaining basis effective 1st July 1971 onwards." Manila was also to continue granting the unit "exemption privileges on all imported printing supplies and materials, equipment and other items needed for its productions operations."
Consequently, then President Ferdinand Marcos signed Letter of Instruction No. 197, directing NEDA APO to make a self-sustaining, non-stock, non-profit corporation. The order also enabled the unit to "solicit and accept printing jobs with other agencies of, or corporations owned or controlled by the Government."
In November 1972, APO Production Unit, Inc. was incorporated and registered with the Securities and Exchange Commission (SEC) as a non-stock, non-profit corporation.
The move to make the unit self-sufficient funding was a result of standing out from the joint contributions of the United States Agency for International Development (USAID) and Manila. It was also aimed at sparing the organization in Japan and the Philippine government from any financial burden stemming from the firm's operations.
Since then until 2010, APO Production Unit seemed to have mostly served the whims of government appointees placed at its helm, and who have insisted that the government corporation is "private" whenever such a label suits their needs.
And after so many years of confusion over its identity, APO has now defined itself as a government corporation as reaffirmed in RA 10149, or the 2011 budget law. APO is one of three recognized government printers security of highly sensitive government documents and forms. The other two are the Central Bank and the National Printing Office (NPO).
Through the years until 2010, APO was shuffled from one government agency to another. It is now comfortably under the Presidential Communications Operations Office (SSC).
When the present seven-man board took over the agency in November 2010, it was confronted with various complaints from the employees union, ranging from union busting graft, filed in different venues from the National Labor Relations Commission (NLRC) to the Office of the Ombudsman. So far, four major cases had either been dismissed or denied.
Despite protests from union members, APO chairperson Alora Milagros said the management remained focused on resuscitating the corporation to avert a shutdown if it would continue operating on losses.
The board's decision to allow management to transfer part of the corporation's account to the Asia United Bank (AUB) was a major issue for the union.
"But we had to do it because no government bank would lend us. AUB was my former client and it was the only bank that trusted us and extended loan to us my pleading," Alora said over lunch a few days ago. The engagement was for short-term loans to bridge the gap between collections and to finance raw materials for on-going printing jobs.
Another difficult decision it made was to lay off people. "We had to streamline, computerize operations and upgrade workers' skills to make them at par with those in the private sector," said General Manager [Jaime] Aldaba.
APO has paid more than half of its long standing obligations such as the payment of taxes for the 2008 tax amounting to P48 million and local business taxes to the local government.
To meet the need for capital projects in the face of financing shortage, the board approved the lease-purchase agreements that enabled the company to immediately acquire new equipment for urgent jobs and paid for with the income from the projects done using the same equipment and machines .
With the innovative steps taken to improve operations, APO has earned the trust and confidence of more government agencies that have security printing requirements. Among its new accounts are Revenue, Foreign Affairs, Social Security System (SSS), Department of Trade and Industry (DTI) and the Land Transportation Office (LTO).
Alora said the Governance Commission for Government Owned or Controlled Corporations (GCG) which supervises APO was impressed with its turn around and APO has made its poster boy in good and effective governance.
The NPO can be turned around in the same way that the APO had been turned from a company in bad debts into one that is earning big profits. The NPO plays an important role in the conduct of national and local elections as it is deputized by the Commission on Elections (Comelec) to print the official ballots and other election paraphernalia.
Just five days ago, The Manila Times published a story about government prosecutors asking the Sandiganbayan to suspend NPO Director Emmanuel Andaya, Chief Administrative Officer Sylvia Banda, Printing Operations Chief Antonio Sillona, Budget Officer Bernadette Lagumen and Printing Office Assistant Chief Ma. Gracia de Leon Enriquez, who were accused of giving unwarranted benefit to JI Printers Inc. by authorizing the allegedly illegal award of a printing deal worth P3.6 million to the company in 2011 through a negotiated procurement.
The anomalies and the NPO, which is far bigger than APO, are too much to swallow, including one that involved the awarding of a contract for the repair of an elevator to a printing company.
It was a classic case of the less-publicized APO Production Unit traversing the administration's Straight Way while its big neighbor, the NPO, opts to take the crooked path.
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