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Fraud audit on Pharmally deal urged, House out to scrap PS-DBM

Senate Minority Leader Franklin Drilon on Monday called for a special audit on the multibillion-peso contracts between the Procurement Service of the Department of Budget and Management (PS-DBM) and Pharmally Pharmaceutical Corp.

The call for a special audit came as a lawmaker in the House of Representatives filed a bill to abolish the PS-DBM.

Drilon on Monday said the regular annual audit conducted by the Commission on Audit (COA) may not be sufficient to establish overpricing of the government’s purchase of COVID-19 medical supplies from the company.

“First, I am asking COA to conduct a fraud audit because we saw there’s an anomaly… in PS-DBM,” he told ABS-CBN’s Teleradyo in an interview.

The Senate leader said the Ombudsman could also conduct a fact-finding investigation on the allegedly anomalous deals, using some of the evidence gathered in the Blue Ribbon hearings.

Despite having a paid-up capital of only P625,000, Drilon noted that Pharmally bagged P8.7-billion worth of contracts in 2020 to supply the Philippines medical supplies like PPEs, face shields and face masks in response to the COVID-19 pandemic.

He said the awarded contracts to Pharmally may have reached almost P12 billion as of June 2021.

The Senate Blue Ribbon committee will resume its hearing on Sept. 21 when the panel receives more documents from PS-DBM and Pharmally.

Drilon said the Senate might come up with a committee report of the investigation in November.

Meanwhile, Senator Panfilo Lacson said more Senate hearings are needed to fully uncover the alleged anomalies behind the supposed overpriced medical supplies procured by the Philippine government.

“I don’t think one more hearing will be sufficient to thresh out the issues. There is so much information coming out. And not all senators have had their turn to ask questions,” he said.

He said their concern revolves around the issue of corruption.

“That is why I said that as far as the inquiry looking into irregularities, we support the chairman of the Blue Ribbon Committee,” he said.

In spite of the resource persons’ refusal to cooperate, Lacson said the facts are slowly emerging on the transfer of P42 billion from the DOH to the PS-DBM.

Lacson also said the Executive Department should support the Senate probe, especially since President Rodrigo Duterte himself had said he wanted to eradicate corruption.

He said the investigation is targeting not personalities but the issue  of corruption.

“After all, we are all after the same thing,” he said.

Meanwhile, a bill has been filed at the House of Representatives abolishing the PS-DBM.

House Bill 10222, authored by Deputy Speaker and Cagayan de Oro City Rep. Rufus, also mandates national government agencies, including state-owned or controlled corporations, colleges and universities, and local government units (LGUs) to do their own procurement of supplies after the PS-DBM is abolished.

Appearing in the House hearing, former presidential economic adviser Michael Yang on Monday said it was his “friends” who helped Pharmally Pharmaceutical Corp. with its finances in purchasing COVID-19 supplies last year.

Yang, through his interpreter, said he only referred some friends who could help Pharmally with its finances.

In seeking the scrapping of the DBM’s procurement arm, Rodriguez said the office has faced “many issues and controversies, the most recent of which was the transfer of P42 billion by the Department of Health for face shields, face masks, personal protective equipment, and other Covid-19 pandemic-related purchases.”

“The PS-DBM has also been hounded by allegations of improper procedure and overpriced acquisitions,” he said.

He added that the budget department’s procurement arm was created to take advantage of economies of scale by handling purchases of common-use supplies and equipment.

But the passage of the Government Procurement Reform Act or RA 9184 undermines the mandate of the PS-DBM through the inclusion of relevant provisions that strengthen the procurement service of national government agencies, he said.

Also on Monday, opposition Senator Leila M. de Lima urged the Anti-Money Laundering Council (AMLC) to freeze the assets of Pharmally Pharmaceutical Corp. executives who went on a luxury car buying spree after they bagged multibillion-peso government contracts in 2020.

De Lima, chairperson of the Senate committee on social justice, said the AMLC should immediately apply for a freeze order against the Pharmally officers whom she called “soulless monsters.”

The purchase of luxury cars was revealed during the ongoing Senate Blue Ribbon committee hearings on the overpriced procurement of medical supplies in response to COVID-19 pandemic.

De Lima said AMLC should initiate civil forfeiture proceedings against “these shameless profiteers.”

The freezing of the assets of Pharmally Directors, she said, should be done urgently “before they all fly away to the Caribbean with their plundered loot.”

Topics: Franklin Drilon , special audit , Procurement Service , Department of Budget and Management
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