‘Billions paid to Pharmally could feed 1.6 million families’

MANILA, Philippines — The P12 billion paid by the government to Pharmally Pharmaceutical Corp. to deliver COVID-19 supplies could have fed at least 1.6 million poor Filipinos or could have obviated the need to secure loans from China to fund a dam project, Sen. Richard Gordon said.

Gordon, who chairs the Senate Blue Ribbon committee, spoke on possible losses of the country when the administration granted nearly P12 billion in supply contracts to Pharmally, a company being linked to former presidential adviser Michael Yang and President Duterte, at the inquiry of the panel on the corruption scandal on Friday.

The committee is looking into allegations that bulk of the P42 billion transferred from the Department of Health (DOH) to the Procurement Service of the Department of Budget and Management (PS-DBM) last year went to a few and favored companies, including Pharmally, which was formed only in September last year with P625,000 in capital and no clear office address.

Pharmally, according to records obtained by the committee, got some P8.7 billion in supply contracts from the PS-DBM from March to the end of last year. As of June this year, the company had an estimated P12 billion total in supply contracts with the PS-DBM.

“In other words, we spent so much money and yet we were still not able to help our countrymen – you’ve no work, and you have to depend on their (government) assistance but it’s not enough. Why? They gave so much, P8.7 billion,” Gordon said in Filipino.

He claimed that if this money was not awarded to Pharmally, it would have helped 1.6 million poor families at P5,000 each. He also compared the cost of the P10-billion loan the Duterte administration secured from China for the Kaliwa Dam project to the amounts given to Pharmally.

While Duterte keeps on insisting there was no corruption and overpricing, it was just a defense as the apparent plot to award Pharmally with juicy contracts was already in place beforehand, he added.

Gordon said if there was no overpricing, there was definitely “fraud, waste and abuse” in the administration’s procurement of face masks, face shields and other COVID-19 supplies.

Sen. Francis Pangilinan also claimed there was overpricing as government officials admitted to buying face masks based on suggested retail price (SRP), not wholesale price.

During the hearing, Health Secretary Francisco Duque said it used the SRP as basis for quotation and approval of wholesale prices for the purchase of medical supplies.

“Everyone knows that wholesale price is much lower than retail price. Price drops for bulk purchase, not in per piece,” Pangilinan said.

In a March 2020 memorandum, the DOH used the Department of Trade and Industry’s SRP of P28 as reference price for each unit of surgical mask. Reference price refers to the price ceiling with which the government is willing to purchase a product.

Pangilinan said the suppliers of PS-DBM provided the government a quotation of four million masks at P22 each in response to the DOH’s price ceiling of P28.

Senate Minority Leader Franklin Drilon on Saturday urged the Commission on Audit to conduct a special audit and the Office of the Ombudsman to conduct its own investigation on the controversial multibillion-peso deals between the PS-DBM and Pharmally.

Drilon said it is about time for the two constitutional bodies to step in following what the committee has unearthed as anomalous award contracts to Pharmally, noting that the COA’s regular annual audit may not be sufficient to establish overpricing, hence a special audit is necessary.

“Because of the many things that came out of the Blue Ribbon committee investigation, there is a need for a special audit,” Drilon told dwIZ.

He said the Ombudsman can form a fact-finding team to probe the purchase of overpriced medical supplies from Pharmally by PS-DBM.