Pharmally leads 10 firms that got biggest pandemic contracts, group says

Pharmally leads 10 firms that got biggest pandemic contracts, group says
Pharmally director Linconn Ong in a September 24, 2021, Senate blue ribbon hearing confirms the validity of a photo that shows him meeting with President Rodrigo Duterte and his former economic adviser Michael Yang. Ong used to work as Yang's translator.
Screen grab / Senate of the Philippines YouTube page

MANILA, Philippines — Pharmally Pharmaceutical Corp. is one of 30 "favored" firms that managed to clinch 42% of all pandemic contracts with the government, a freedom of information group said Thursday. 

In a special report, the Right to Know, Right Now Coalition (R2KRN) said Pharmally led 29 other firms in bagging supply deals worth P27.4 billion. This is a lion's share of the total P65.19 billion in contracts split between 7,267 suppliers from March 2020 to September 2021. 

The coalition came up with the report by reviewing the pandemic contracts enrolled in the official database of the Government Procurement Policy Board and the Philippine Government Electronic Procurement System. 

"By all indications, though, the contracts were awarded in a rushed, erratic, and in many instances irregular, manner to only a few suppliers evidently favored by some procuring agencies," R2KRN said. 

"Curiously, too, a significant number of the contracts covered goods and equipment that could not pass as pandemic-response items at all." 

The controversial Pharmally also led nine other firms that managed to clinch the biggest deals worth a total P18.8 billion. This is equivalent to 29% or nearly a third of the total supply deals awarded, R2KRN said. 

Here is a rundown of the total value of contracts awarded to each of the top ten firms: 

  • Pharmally Pharmaceutical Corp. (P10.85 billion)
  • Xuzhou Construction Machinery Group Imp. And Exp. Co., Ltd. (P1.9 billion) 
  • Phil Pharmawealth, Inc. (P1.81 billion)
  • Hafid N' Erasmus (P1.46 billion) 
  • Sunwest Development and Construction (P1.32 billion) 
  • Biosite Medical Instruments (P783 million) 
  • JV of Sunwest Construction and Development Corp. (P764 million) 
  • Ferjan Healthlink Philippines (P730.7 million) 
  • Bowman Technologies, (P689.7 million) 
  • SL Agritech Corp. (P674.4 million) 

Senators who are investigating Pharmally's deals with the government estimate that the firm may have bagged as much as P12 billion in supply deals. 

Meanwhile, R2KRN said the top 11 to 20 suppliers raked in a total of P5.19 billion or 7.96% of the total contracts awarded as of last month. 

Construction firms selling pandemic supplies? 

A number of construction firms figured in the GPBB's top 30, including the second-most awarded pandemic supplier, China-based Xuzhou Construction or XCMG and Shanghai Puheng Medical Equipment Co., Ltd. which clinched the 26th spot. 

The coalition noted that XCMG was incorporated in 1989 as a state-owned international company and primarily makes heavy machinery. 

The group also flagged that top-10 supplier Sunwest Development and Construction is owned by the family of Rep. Elizaldy Co (Ako Bicol party-list) who is also listed as the founder of the Sunwest Group Holding Co. Inc.

"A Triple-A construction company, Sunwest Construction secured from the Duterte administration the P708-million contract to build landslide facilities for the Bicol International Airport in Daraga, Albay, in December 2016," R2KRN said. 

"Earlier, in July 2016, the Department of Public Works and Highways had also awarded Sunwest Construction other contracts, including the P91.6 million for the construction of the Mayon Eco-Park Road in Sto. Domingo, Albay." 

More anomalies flagged 

"Pharmally’s story – a poorly capitalized, newly registered company with dubious financial, technical, and legal capability to deliver on multi-million contracts – is a narrative that seems to repeat for a number of the other top-ranked suppliers," R2KRN said. 

Of the top 20 suppliers, the coalition noted, only four had registration documents available from the Securities and Exchange Commission. They are Pharmally, Biosite Medical Instruments, No. 6, NIKKA TRADING, No. 13, and Philippine Blue Cross Biotech Corporation, No. 19.

"A secret to how and why these top suppliers managed to romp away with millions to billions of contracts lies in the simple things: a comma, a period, a word in singular or plural form, a word abbreviated or spelled out, or a name set in all caps or in caps-and-lower case," R2KRN said. 

"It is a secret that reveals, too, the multiple errors and major questions that could be raised about the integrity and quality of the information lodged in the GPPB database." 

The group said it wrote the GPBB, the Department of Budget and Management's acting secretary, and the DBM's procurement service to seek comment on the suspected errors. Initial request letters were sent on September 5 and 6 and followed up on September 16  but received no reply even after a month. 

The suppliers with minor variations in their name on the GPBB database include the third-most awarded Phil Pharmawealth with 15 different names and the top-four supplier Hafid N' Erasmus with five variants. 

The fifth and sixth most awarded firms Sunwest and Biosite were also listed under a number of different names. — Bella Perez-Rubio 

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