SENATE minority leader Franklin Drilon yesterday said the two principal players in the overpriced purchase of medical supplies for the Department of Health are “culpable” for “planned plunder,” based on presentations made during hearings held by the Senate Blue Ribbon committee last week.
In an interview with ANC, he named Health Secretary Francisco Duque III and Lloyd Christopher Lao, resigned budget undersecretary and head of the Procurement Service of the Department of Budget and Management (PS-BDM) when the alleged overpriced purchases for the COVID-19 pandemic response efforts were made.
Based on a recent report of the Commission on Audit, the DOH transferred P42 billion of its COVID-19 response funds to the PS-DBM for it to procure face masks, face shields, and other personal protective equipment (PPE) in March last year. Drilon said he later found out that the actual amount transferred by the DOH to the PS-DBM could reach P47.7 billion, still based on the COA report.
“Therefore, it was because of that transfer, without MOA (memorandum of agreement), that allowed Lao to do the shenanigans that he appears to have been done. I suspect that is part of the planned scheme from the very start to commit this grand corruption,” Drilon said.
“Secretary Duque, by his act of transferring these funds, is a principal by direct participation or principal by indispensable cooperation because without his action this could not have happened. At this point, I can see the culpability of Secretary Duque and Undersecretary Lao,” he added.
Drilon said Lao’s failure to exercise due diligence brought Pharmally Pharmaceutical Corp. into the picture, as some P8.7 billion of contracts for the purchase of medical supplies was awarded to the alleged shady company.
Pharmally started operations in September 2019 with a paid-up capital of only P625,000. It was run by a Huang Tzu Yen who is reportedly wanted in Taiwan for stock manipulation.
An RTVM video shown by Sen. Richard Gordon, Blue Ribbon committee chair, during last Friday’s hearing, showed Michael Yang, former presidential adviser on economic affairs, introducing Pharmally executives to President Duterte in a ceremony in Malacañang sometime 2017.
Drilon said Pharmally was not even a manufacturer, as it only played “middle man” in the purchase of the medical supplies, which he said disputes the claim of President Duterte that the country needs to welcome investors for economic growth.
“First, this is not investment. Pharmally is not a manufacturer. In fact, their office no longer exists. The office is the same address as Huang Tze Yen who is listed as the CEO, and Mohit Morgani who is listed as treasurer,” he said.
Drilon said the PS-DBM should not have gotten the services of a “middle man” as it could have saved P284 million from the transactions with Pharmally.
“Why do you have to go to a middle man? Why not do a government-to-government transaction? Please answer that. I assume, the net income of Pharmally of over P284 million in 2020 all came from commissions,” he said.
“If there was a government-to-government transaction, without a middle man, that government would have saved P284 million as commission, fees of Pharmally. This question must be answered,” Drilon added.
With the way the P8.7 billion was awarded to a shady company, Drilon said it is a no-brainer that Pharmally was a “favored one.”
Drilon also took exception to the statement made by presidential spokesman Harry Roque that it is not the personality behind these transactions which is important, but the price of the items and that they were delivered which is relevant.
“I would invite you (Roque) to read your law because among the standards required are the legal and financial capacity of the company entering a contract with government. That’s one. Number two, this company (Pharmally) has only P625,000. How did it, in heaven’s name, generate and was able to enter into contract supply agreements worth P8.67 billion?” Drilon said.
Sen. Panfilo Lacson said “price matters” in all items procured by the government because it is the people’s money which is being used.
“But price matters even more at this time, especially if there is gross overpricing of medical supplies involving billions of pesos in public funds while millions of Filipinos are losing their jobs due to the pandemic. If we cannot see what is wrong with that – or worse, try to divert public attention from the issue – then certainly we are a ruined nation,” Lacson said.
Drilon also said that the PPE units bought by the Aquino administration in 2015 and 2016, which Roque said were more expensive that what the Duterte administration purchased at this time of pandemic, was not flagged by COA.
He said Roque was just trying to divert the public attention from the overpriced medical supplies purchased by PS-DBM.
“We will not be distracted. Secretary Roque, you act like a troll, you know. You should be man enough to know that when a P625,000-company would be awarded supply contracts of over P8.6 billion in two months’ time, there is a whiff of corruption that you should be man enough to admit merits an investigation,” Drilon said.
“You cite the purchases by the DOH during the Aquino administration. That’s five years ago, Sir. Number two, there was no COA report of questionable transactions. So, please, please. We will not be distracted and we will get to the bottom of this,” he added.
