Hontiveros flags P3.8-billion PPE contract awarded by DBM-PS to local drug firm

MANILA, Philippines — A local corporation that was awarded a P3.8 billion contract for the procurement of personal protective equipment (PPE) is “possibly linked” to a foreign firm marked by the Taiwanese government for financial fraud, Senator Risa Hontiveros said Friday.

A document from Hontiveros’ office distributed to the media indicated that the company was the “only Filipino-based firm awarded a significant amount for PPE procurement” in May 2020.

Hontiveros raised the concern during the Senate blue ribbon committee inquiry into the pandemic funds of the Department of Health (DOH) last year.

The probe was triggered by a Commission on Audit report that found “deficiencies” amounting to at least P67 billion in the health agency’s COVID-19 response budget for 2020.

Hontiveros identified the foreign firm as Pharmally International Holdings and the local company as Pharmally Pharmaceutical Corporation during the online Senate hearing which is open to the public.

“They could be possibly linked to a Taiwanese firm, Pharmally International Holdings, which was flagged by the Taiwanese government for financial fraud. Their stocks have been suspended in the Taiwan stock exchange and their Chairman faced a warrant of arrest for financial fraud,” according to the document from the senator’s office.

During the hearing, Hontiveros asked Lloyd Christopher Lao, former head of the Procurement Service of the Department of Budget and Management (PS-DBM), if the Taiwanese pharmaceutical firm is the same or is linked to the local drug company.

Lao said he was unaware if the two firms are the same or are related to each other.

Hontiveros, in response, said the PS-DBM should exercise due diligence in awarding contracts to companies.

“If you are telling the committee, hindi kayo aware noon, aware po ba kayo kahit ngayon na itong Pharmally International, charged po siya with financial fraud? Kung ito ‘yung parehong firm, this is the same firm whose chairman was issued an arrest warrant,” the senator said.

(If you are telling the committee that you were not aware of it before, are you aware now that Pharmally International was charged with financial fraud? If this is the same firm, its chairman was issued an arrest warrant.)

“Anong due diligence ang ginagawa ng PS-DBM on these suppliers, lalo na ‘yung nakakuha ng pinakamalaking kontrata, P3.8 billion at a doubly price average of P1,800 per PPE set kahit ang mismong price freeze ng DOH ay P950 lang?”Hontiveros asked Lao.

(What is the due diligence being conducted by PS-DBM on these suppliers, especially on the one that bagged the biggest contract at P3.8 billion at a doubly average price of P1,800 per PPE set even if the price freeze of the DOH was at P950.)

Lao answered Hotniveros by explaining that the PS-DBM had to connect to embassies and ambassadors in order to have contracts with firms for the PPE supply.

“These companies that we initially had contracts or relations with, that was the time when sarado po ang economy and wala pong supply (the economy was closed and there was no supply). We have to relay through our diplomatic channels. We contacted the embassies, ambassadors, special envoys,” he said.

He added that the PPE set worth P1,800 being flagged by Hontiveros was composed of multiple items.

“We would just like to clarify the price freeze of DTI of P900. Kasi may (Because there is a) layman’s term ng PPE and technical term ng PPE. The layman’s term of PPE is the cover-all, but technically, when you say PPE, it’s multiple items that protect a person from being infected,” he said.

“The items we procured at P1,800 are the eight-item piece or sometimes, nine-piece item or 10-piece item. Hindi po siya isang item, hindi po cover all. Multiple po ‘yan (This is not just one item. It has multiple items). ‘Yung sa (The) DTI price freeze I think na P900, that’s the cover-all,” he added.

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