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Senate panel to subpoena contracts with Pharmally outside of COA report

Bella Perez-Rubio - Philstar.com
Senate panel to subpoena contracts with Pharmally outside of COA report
Senate Minority Leader Franklin Drilon interpellates former Budget Undersecretary Lloyd Christopher Lao at a Senate Blue Ribbon Committee hearing on September 10, 2021.
Screen grab / Senate of the Philippines YouTube page

MANILA, Philippines — The Department of Budget and Management awarded contracts and issued purchase orders worth over P4 billion to Pharmally Pharmaceutical Corp. that were not included in its 2020 audit report, a senator bared Monday. 

Senate Minority Leader Franklin Drilon presented documents corroborating this as the Blue Ribbon Committee resumed its hearing on deficiencies in pandemic spending earlier flagged by state auditors.

The probe has so far focused on the DBM's procurement service and Pharmally which it awarded the largest pandemic contracts despite having a paid-up capital of only P625,000 when it incorporated in 2019.

Drilon, at the hearing's sixth installment, asked former PS-DBM officer-in-charge Lloyd Christopher Lao to account for the following contracts with Pharmally:

  • An April 23, 2020, notice of award and contract agreement worth P300 million. The contract was for 3 million pieces of KN95 masks at a unit price of P100.
  • A June 9, 2020, purchase order worth P2.88 billion. The order was for 41,400 test kits with a unit price of P69,500.
  • A June 10, 2020, purchase order worth P245.85 million. The order was for 312 test kits at a unit price of P787,968.
  • A purchase order worth P774.35 million. The items ordered were 17,000 test kits for a unit price of P45,550.

"This is not in the COA report. What happened to this?" Drilon asked Lao who was OIC of the PS-DBM until he resigned in June 2020. 

RELATED: Palace official decries 'bullying' at Senate hearings on pandemic spending

At least two of these contracts were signed by Lao himself, according to Drilon. The senator also presented the following documents: 

Sen. Panfilo Lacson noted that additional awards and purchase orders bared by Drilon and Sen. Richard Gordon could mean that Pharmally actually bagged contracts worth around P12 billion with the government, questioning anew how the firm could have cornered so many contracts with the PS-DBM. 

Blue Ribbon to subpoena PS-DBM documents 

Upon Drilon's request, the Senate panel agreed to subpoena the relevant documents from the PS-DBM in time for its next hearing on Friday, Sept. 17, 2021. 

Asked by Drilon to account for the additional contract and purchase orders, Lao said he had "no idea about that." He acknowledged, however, that "if it's on record with PS-DBM then it must have [been awarded]." 

Lao also said these items are purchased by the PS-DBM as common supplies to be sold to the DOH  and other agencies. He added that the PS-DBM has a "revolving fund" of 1.5 billion added to its budget in 2019, almost P3 billion short of the purchases bared by Drilon. 

He could not tell senators, however, if these items were delivered, where the funds were sourced, and if the medical supplies were distributed to government agencies. 

Before he joined the DBM, Lao worked as an undersecretary at the Office of the Special Presidential Assistant, an office held by Sen. Go until 2018. He also worked on President Rodrigo Duterte's presidential campaign. 

COVID-19 DEPARTMENT OF BUDGET AND MANAGEMENT
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