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PhilHealth VP resigns amid heat of corruption probes

Philippine Health Insurance Corp. (PhilHealth) Vice President for Operations Augustus de Villa resigned on Thursday amid allegations of rampant corruption and a claim that the state-run health insurer was on the brink of financial collapse.

A retired military officer, De Villa gave no reason for quitting in his letter of resignation, saying “the vice-chairman knows fully well the reason.” He was referring to PhilHealth President and COO Ricardo Morales.

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Promise to cooperate

De Villa promised to continue cooperating in the congressional inquiries into alleged irregularities in PhilHealth. “Be assured that I will make myself available for the ongoing investigations in aid of legislation in both houses of Congress,” he said.

When asked by the Inquirer for specifics, De Villa declined to answer questions. “On the advice of my lawyer, I am not entertaining interviews, especially since there is an ongoing Senate inquiry,” he said.

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In a hastily called news conference, Morales, also a retired military officer, said De Villa came to his house to hand in his resignation.

“It is not easy to be running PhilHealth even in ordinary times. He said he wanted to spend more time with his family, and I respect his decision and am grateful for his candor. That was the reason he gave me for his resignation,” Morales told reporters.

De Villa quit a day after Presidential Anti-Corruption Commission chief Greco Belgica said criminal charges would be brought against 13 PhilHealth officials and administrative charges would be slapped on 23 others for irregularities in the health insurance company.

Belgica said the 36 officials were named in the anticorruption commission’s report to President Rodrigo Duterte. The charges would be filed in the Office of the Ombudsman, he said.

‘Mafia’ in PhilHealth

De Villa’s departure followed the resignation of PhilHealth antifraud legal officer Thorrsson Montes Keith, who faced the Senate inquiry on Tuesday and testified that the company’s executive committee was part of a “mafia” or “syndicate” that had siphoned off billions of pesos from the health insurer’s coffers.

Keith also said Morales had become a “coddler” of the syndicate. Morales has denied the allegation.

During the news conference on Thursday, Rodolfo del Rosario, PhilHealth vice president for legal affairs, said the whole executive committee would bring libel charges against Keith.

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During the Senate hearing, Keith identified De Villa as the one who had told him that the whole PhilHealth executive committee belonged to the alleged syndicate that was behind the irregularities that cost the company P15 billion in 2019 alone.

Keith said De Villa ripped a six-page contract for the purchase of 15 Cisco catalyst neutral switches in front of him and Estrobal Laborte, Morales’ resigned head executive assistant.

Sen. Panfilo Lacson, citing official PhilHealth documents, said the switches were “excessively overpriced” by P3.9 million, as the company bought them at P320,000 each, or more than five times the commercial price of P62,000 a switch.

Contract not destroyed

Under questioning by Lacson, De Villa admitted that he had been talking regularly with Keith and Laborte, and that it was Laborte who had informed him about the overpriced switches.

De Villa, however, denied Keith’s claim that he had destroyed the supply contract. “I think I hid it somewhere,” he said.

Senate President Vicente Sotto III, who presided over the hearing by the Senate committee of the whole, issued a subpoena for the document. De Villa promised to bring the document to the hearing set for Aug. 11.

On Thursday, Lacson said he hoped De Villa would expose more wrongdoing at PhilHealth.

“I can only hope that he will be part of an advocacy group within PhilHealth and contribute in exposing more shenanigans based on his personal knowledge,” Lacson said.

Sotto said De Villa must have a “very good reason” for resigning amid the scandal at PhilHealth.

As to whether De Villa could be made a state witness, Sotto said the matter depended on De Villa’s testimony.

President Duterte has refused to fire Morales despite the mess at PhilHealth that he himself had ordered Belgica to investigate.

Presidential spokesperson Harry Roque said Duterte would keep Morales at his post unless evidence against the PhilHealth chief was found.

More than ‘whiff’

On Thursday, Lacson said that if Duterte wanted evidence against Morales, all the President needed to do was read the transcript of Tuesday’s Senate hearing.

Lacson said in a television interview that the Senate could send Duterte the entire transcript and the President could look at the responses of Morales and the other PhilHealth officials so that he could judge these for himself.

“He said in the past that just a whiff of corruption, if this comes out, you’re fired. This is not just a whiff of corruption. Very disappointing,” Lacson said.

He said a revamp at PhilHealth was necessary even if the country was in the midst of a pandemic.

“It is more costly if we allow corruption to persist, if we allow 5,000 percent overpricing, mismanagement of funds,” he said.

Sotto said the failure of PhilHealth officials to explain the alleged irregularities at the Senate hearing was enough evidence that something was not right in the company.

“Incompetence in governance legitimizes a corrupt and broken system. The inability of top officials to explain the lapses in PhilHealth is enough evidence that these managers are taking us—the public—on a joy ride,” Sotto said.

Fresh funds despite corruption?

Lacson said he and his Senate colleagues would hesitate to infuse more funds into PhilHealth unless the executive took concrete steps to put an end to corruption in the company.

PhilHealth Senior Vice President Nerissa Santiago told the Senate hearing on Tuesday that the company’s actuarial life was down to one year from 10 because members’ contributions had declined due to the coronavirus pandemic while payouts had significantly increased because of the crisis.

Santiago said PhilHealth was facing losses of P147 billion by next year. Unless it receives cash infusion from the government, PhilHealth will be gone by 2022, she said.

Lacson said that in previous years, the Senate gave PhilHealth funds without hesitation. For instance, the Senate increased PhilHealth’s budget for this year to P74 billion from P64 billion.

The Senate needs to dig deeper to see why PhilHealth is facing financial collapse, he said.

In the news conference on Thursday, Morales denied that PhilHealth was facing bankruptcy. “PhilHealth will only run out of money if the government runs out of money, because the government is the reinsurer of PhilHealth,” he said.

He said the actuarial life claimed by Santiago assumed that there would be no influx of fresh funds. The company, he said, had enough funds for benefit claims “until 2021.”

Morales also said he had no intentions of resigning, despite his family “begging” him to do so.

‘Build, Build, Build’ eyed

Quezon Rep. Angelina Tan, head of the House health committee, said on Thursday that the legislative chamber would find a way to fund PhilHealth to prevent its collapse.

“Definitely, [the House] will find a way to replenish the funds so that this will not happen. But up to what extent, up to that target set by PhilHealth, I don’t think we can give that,” Tan said.

She said the House could look at “making some sacrifices,” such as certain items in the national budget that may be realigned to the universal health care law.

“Hopefully, we can convince our colleagues in the House to give attention to health and sacrifice some funding for infrastructure projects, such as those allocated for the Build, Build, Build program,” she said, referring to the President’s ambitious infrastructure plans. —WITH REPORTS FROM MARLON RAMOS AND MELVIN GASCON

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TAGS: Augustus de Villa, corruption, Graft, Philhealth, PhilHealth Vice President, resignation
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