MANILA, Philippines — Sen. Risa Hontiveros has identified 11 contracts that the Department of Budget and Management (DBM) entered into in April and May to procure millions of personal protective equipment (PPE) and defended her allegation that the government bought them at an overprice.
Hontiveros cited the contracts in a statement on Tuesday to support her findings, which she disclosed two weeks earlier, that the DBM bought PPE at a “very conservative” overprice of P1 billion and called for an audit of COVID-19 funds.
She was also responding to remarks by Anakalusagan Rep. Michael Defensor describing her allegations as baseless, saying she had no proof. Malacañang had also challenged her to file charges if she had evidence.
“You want evidence? Here are 11 pieces. DBM should plainly explain these contracts. They should not fool the people using false information. What we need is clarity,” Hontiveros said.
Contract figures
Budget Undersecretary Lloyd Christopher Lao, head of the Procurement Service of the DBM (PS-DBM), had earlier denied the senator’s allegation and said the government even saved P800 million from emergency PPE purchases.
In a statement on Tuesday, he dismissed Hontiveros’ repeated allegation as “absurd and nonsensical,” and claimed that it was “becoming political in nature.”
Hontiveros said that of the 11 contracts amounting to P9.2 billion, four were with local manufacturers and the rest with Chinese companies.
The cheapest set, or unit, of PPE was procured from Filipino company Hafid N’ Erasmus Corp. in May, at P1,700 each. The DBM bought 30,000 units from the company for P51 million.
A typical PPE set includes coveralls, masks, gloves, head cover, shoe cover, goggles and a surgical gown.
The highest-priced PPE came from Xuzhou Const. Machinery Group Imp. and Exp. Co. Ltd., which offered it at P2,000 per unit in April. The DBM purchased 250,000 from the Chinese company for P446.43 million. But Xuzhou grabbed a second contract for 1 million units at P1,898 each, for a total of about P1.9 billion.
But the biggest contract went to the Filipino-owned Pharmally Pharmaceutical Corp., which provided 2 million PPE at P1,910 each, for a P3.82-billion contract. The others that bagged the PPE contracts were Nikka Trading and Wamrus Trading, both local; and Chinese companies Wen Hua Dev’t Industrial Co., Ltd. (two contracts totaling about P1.45 billion), Chushen Company Ltd.; Pacific Field (Hong Kong) Ltd., and Shanghai Puheng Medical Equipment Co. Ltd.Hontiveros earlier said the average estimated cost of the PPE by the Philippine General Hospital was P1,200 to P1,500.
Why Chinese companies?
She questioned the DBM’s decision to procure the PPE from Chinese companies. According to her, the department could not say that local companies did not have the capability to produce PPE.
Hontiveros said that as early as Feb. 6, Bataan company Medtex said it could produce 2 million face masks a month. It has a sister company producing PPE, she added.
“Why did the DBM not negotiate with companies like them? Why did it turn to foreign companies first?” she said.
Hontiveros also said the Department of Health initiated a price freeze from March 23 to April 13 for supplies needed for COVID-19 response.
This means that the components of the procured PPE sets should only have cost a maximum total of P945 at that time, she said.
Of the 11 contracts, three came in the same time period as the price freeze, meaning one PPE set should have cost a little less than P1,000 if procured from local companies, Hontiveros said.
“But no, DBM opted to transact with Chinese firms. If you think about it, the P1-billion overpricing is highly conservative,” she added.
Congressional oversight
Hontiveros also responded to Defensor who said the Aquino administration, to whom the senator was closely allied, had purchased PPE at a higher price.
She said that if the previous administration had purchased higher priced PPE, then it should be investigated and charged, but that would not stop her from questioning the actions of the current administration.
“As senator during the current administration, I am simply exercising our congressional oversight. We saw something wrong, which is why we are questioning it,” Hontiveros said.
Lao issued a statement on Tuesday saying that the office of Hontiveros had not responded to the PS-DBM’s request for a copy of the basis of her findings.
“Our office operates with utmost transparency and we have cooperated for any request of inquiry. However, we are distressed as this issue on PPE procurement has become political in nature. Our interest is transparency and not politics,” he said.
“It has been often said that reiteration of a baseless allegation does not make it legitimate—it only makes the allegation absurd and nonsensical. We at the PS-DBM stand by our previous expression of facts.”
—With a report from Ben O. de Vera