MANILA, Philippines — A government attempt to purchase vaccines in January failed after the Procurement Service of the Department of Budget and Management (PS-DBM) refused to do it for the Department of Health (DOH), citing its incapacity and procurement rules that prohibit it.
“We declined because we do not have the capacity to handle the rollout of the vaccines,” PS-DBM officer in charge Jasonmer Uayan told members of the House of Representatives during a hearing on the DOH pandemic expenditures on Friday.
“With that, no funds were transferred to PS-DBM with regard to vaccine procurement,” Uayan added.
He said as an agency, the PS-DBM was only tasked with buying so-called common-use supplies and equipment (CSE) for government agencies, such as those used in offices.
Carolina Taino, health undersecretary for procurement and supply chain, said the DOH requested the PS-DBM to procure the vaccines for the health department earlier this year.
This was after the DOH requested the Government Procurement Policy Board (GPPB) to include jabs in the list of CSE. It was unclear from the hearing what the GPPB response was to that request. But in a memorandum for the budget secretary on Jan. 29, the PS-DBM “expressed its reservations on the request of the DOH to include the COVID-19 vaccines in the list of CSE considering the nature and definition of CSE items as well as its lack of appropriate expertise in the handling, storage, delivery and distribution of vaccines.”
It also cited restrictions from the Food and Drug Administration allowing pharmaceutical companies to sell vaccines “only to DOH.”
No details of the planned purchase, including the name of the vaccine producer or supplier, the number of jabs, delivery dates and amounts to be paid were mentioned during the hearing.
On Nov. 2, 2020, President Duterte announced that he had designated National Task Force (NTF) on COVID-19 chief implementer Carlito Galvez Jr. as the person in charge of the national vaccination program.
“The purchase of vaccines, the negotiation, manufacture, production, or distribution, I have given that to Secretary Galvez. So only Secretary Galvez is authorized to negotiate or whatever. There is only one,” Mr. Duterte said.
Private sector deals
Republic Act No. 11525, or the COVID-19 Vaccination Program Act of 2021, signed in February, allows private corporations to procure vaccines only in cooperation with the DOH and the NTF through a multiparty agreement with suppliers.
In late January, about 30 companies and business groups were able to secure 2.6 million doses of the vaccine produced by AstraZeneca, the first vaccine purchase deal by the country.
The country has secured 164 million doses of COVID-19 vaccines for 2021. These include those procured by the national government, local governments and the private sector and shots from the COVAX facility, according to the NTF.
The country has received 48,522,890 doses of vaccines as of Aug. 21.
The government reports that 16,250,043 had been inoculated as of Aug. 18, including 12,877,197 fully vaccinated individuals.
Uayan and DOH financial management team director Rowena Lora told House members that no funds from the DOH had been transferred to the PS-DBM for the aborted January vaccine purchases.
But the DOH came under fire for P41.4 billion it had transferred to the PS-DBM because state auditors reported that it did so without a memorandum of agreement (MOA) to cover the transaction to purchase face masks and shields.
Health Secretary Francisco Duque III said there was no need for a MOA on the fund transfer because the GPPB issued a memorandum that classified personal protective equipment (PPE) as common-use supplies.
But he still ordered the crafting of a MOA to comply with the Commission on Audit’s recommendation of a MOA to cover the transaction.
House deputy minority leader and Bayan Muna Rep. Carlos Isagani Zarate said the practice of government agencies of asking the PS-DBM to procure supplies raised the questions of “propriety.”
“Is it right to transfer large funds to an agency if you can execute the purchase yourself? There may be a conflict of interest here, they (DBM) decide on agencies’ budget but a big chunk of the budget will go back to them for procurement,” Zarate said.
Unused amounts
He added that relying on the PS-DBM for large procurements of common-use supplies had led to wastage of public funds, citing the P2 billion in potential “savings” from the unused amounts of P41.4-billion PPE procurement fund which expired with the lapse of the Bayanihan laws.
Lawmakers learned that only P39 billion of the amount was used to pay suppliers, leaving about P2 billion that could have been reallocated for other pandemic response measures of the DOH.
Uayan said this amount would be returned to the national treasury due to the lapse of the fund’s validity.
“If the DOH personally procured the supplies and generated savings, the savings could have been used,” Zarate said.
“This is very upsetting,” he said. “Why was the P2 billion parked? Healthcare workers were not paid their benefits. The savings could have been used for other things.”
Duque said the agency thought the savings with the PS-DBM could still be used for continuing procurement of supplies because the pandemic was still raging.