Senator Imee Marcos on Monday said the Department of Budget and Management’s Procurement Service and the Philippine International Trading Corp. should be abolished, as Senator Franklin Drilon said the agencies were aiding “premeditated plunder” in the mismanagement of the Department of Health’s COVID-19 funds.
Marcos said the PS-DBM and PITC have outlived their usefulness, in the wake of concerns over buying overpriced face masks and face shields amid the coronavirus pandemic.
Senator Risa Hontiveros also called on the DBM to stop accepting proposals from Pharmally Pharmaceutical Corp., the country’s biggest supplier of medical goods for our COVID-19 response.
She noted that Pharmally Pharmaceutical has close links to Pharmally International Holdings Corporation, a Taiwanese company being charged with financial fraud.
Drilon earlier questioned why Pharmally was able to get P8.68 billion worth of contracts from the government despite only having a capital of P625,000.
He also flagged the DOH’s transfer of P42 billion to the PS-DBM, which was used to buy equipment described by the agency as “common use supplies.”
“I’m not a doctor but I think ballpens and face masks and face shields are different from each other. There’s really a coverup and as I said this is a planned plunder, a premeditated plunder… They really planned to steal the people’s money,” the opposition senator said.
Drilon also urged the Senate Blue Ribbon Committee to look into why electronics companies were able to close P2-billion worth of face mask deals with the DBM’s procurement service.
In a virtual briefing, Marcos said she will file for the abolition of the two agencies with a “miserable track record and all this corruption and inefficiencies we keep hearing about.”
Citing PITC documents, Marcos said the agency procured face masks priced at P40, and face shields priced from P180 to P190. She noted that the documents were incomplete and that these may be per pack.
Under its mandate, PITC engages in both export and import trading of new or non-traditional products and markets, which are not normally pursued by the private business sector.
It is also tasked to provide a wide range of export-oriented auxiliary services to the private sector.
Meanwhile, the PS-DBM is mandated to purchase, warehouse, and distribute items for resale to agencies of government, including government-owned and -controlled corporations (GOCCs).
In a previous Senate blue ribbon committee hearing, Drilon questioned the purchase of face masks and face shields by the PS-DBM, as flagged by the state auditors in the 2020 annual audit report.
It was found that PS-DBM bought face masks at P27.22 apiece and face shields at P120 each, which senators said were overpriced. The suggested retail prices were later set at P2 to P4 per face mask, and P26 to P50 per face shield.
Lloyd Christopher Lao, a former DBM undersecretary who headed PS-DBM, had earlier denied that there was overpricing in the purchase of face masks and face shields.
Lao explained that when PS-DBM procured face masks at P27 apiece and face shields at P120 each, “during that time that was one of the cheapest.”
He also said that during the peak of lockdowns last year, supplies of face masks and face shields were scarce since global trade was affected by the pandemic and most local suppliers were importer-distributors.
Marcos questioned why both the PITC and the PS-DBM were needed to procure face masks and face shields when the DOH continued to acquire supplies by itself.
“It is surprising because P11 billion is parked in the PITC while in the DBM-PS it’s P16 billion. Add the two and you have P27 billion. Why not give that amount to the hospitals and healthcare facilities? Let’s give it now,” she said.
The senator also raised the possibility of the two agencies not receiving funds under the 2022 national budget.
“I think it’s time that we look at both agencies properly. We will save a lot because they have plantillas, they have undersecretaries who have high salaries. At least all these savings will go to our COVID response,” she said.
But last November, Marcos said the PITC — which has already been questioned for supposedly serving as a “parking lot” for government agency funds — should lead the procurement of the COVID-19 vaccines.
The Taipei Times said Huang Wen-lai, the chairman of Pharmally International, was issued an arrest warrant for allegedly transferring $NT700 million into his personal account.
The report also said that Huang was accused of colluding with Chinese businessmen to “falsify accounts and financial statements in one of the largest securities fraud cases in the past few years involving a Taiwan Stock Exchange (TWSE)-listed firm.”
Hontiveros said It is unacceptable that DBM continues to award Pharmally with contracts.
“Is the DBM simply failing to do its due diligence or is it in cahoots with this questionable local firm? Either way, it is deplorable all the same,” said the opposition senator.
“We should not hesitate to end contracts with companies that may be involved with illegal activities, whether here or abroad,” she added.
Hontiveros’s office retrieved a disclosure statement from an annual shareholder report of a different holdings corporation showing that Huang Tzu Yen, one of the owners of Pharmally Pharmaceutical, is the son of Huang Wen-lai.
According to Bloomberg, Huang Tzu Yen is also a board member of Pharmally International.
In September last year, Hontiveros said that from April to May 2020, Pharmally sold two million units of PPEs for P1,910 each, amounting to a P3.8-billion contract.
Drilon had also flagged a P480-million contract awarded to Pharmally for the procurement of test kits, which he said was overpriced by P208 million.
Despite this, Pharmally still recently won another P744-million contract for the procurement of 17,000 RT-PCR test kits for P45,550 each, signed in June 2021.
“One year had passed and yet, DBM did not bother to scrutinize the company which earned billions. It’s sad to think that even during this time of crisis, there are many people who still want to exploit,” she said.
During the Senate Blue Ribbon hearings, the name of Pharmally had repeatedly been mentioned, prompting Hontiveros to ask how many warnings does the DBM need to stop giving them contracts.
Drilon on Monday said the mystery backer of former head of the PS-DBM, Lloyd Christopher Lao, and Pharmally “is the missing link that will connect the dots in this controversy.”
“We see a pattern of corruption that was perpetrated by Lao and his cohorts. It cannot be done by Lao alone,” he said.