Duterte ordered transfer of P47.6 billion COVID funds to PS-DBM – Duque

MANILA, Philippines — It was then-President Rodrigo Duterte who ordered the transfer of P47.6 billion in COVID-19 funds from the Department of Health (DOH) to the Department of Budget and Management (PS-DBM) in 2020.

Former Health Secretary Francisco Duque III admitted this information during the hearing of the House of Representatives committee on appropriations Monday, upon the questioning of ACT Teachers party-list Rep. France Castro.

Based on a Commission on Audit (COA) report, the P47.6-billion COVID-19 fund includes PS-DBM contracts with Pharmally Pharmaceutical Corp., which was accused of selling overpriced medical supplies such as face masks, face shields, and other equipment used during the pandemic to the government.

Former Health Secretary Francisco Duque III said it was former President Rodrigo Duterte who directed the transfer of P47.6 billion under the Department of Health (DOH) to the Procurement Service of the Department of Budget and Management (PS-DBM) during the height of the pandemic.

“Another question, it was authorized by former President Duterte, right?” Castro asked Duque, referring to the transfer of the funds.

READ: 2021: Pharmally scandal rubs salt on pandemic wounds

“Oho (Yes), in his public pronouncements, the transfer was done because of the public health emergency, which he declared sometime in March [2020],” Duque replied.

Later, during her interpellation, Castro asked Duque again if it was indeed Duterte who directed the fund transfers.

“Sinasabi sa atin ni Secretary Duque sa utos ni dating Presidente Duterte ay nagkaroon ng ganito na transfer ng P47.6B, tama po ba?” Castro asked again.

(Secretary Duque already said that it was the order of former President Dutert to have these transfers worth P47.6 billion, correct?)

“Publicly this was made by the President in our meetings, in the weekly meeting or ‘Talk to the People,’” Duque replied.

“So clear po ‘yan (So that is clear), P47.6 billion to be transferred to PS-DBM, publicly announced by former President Duterte na ma-transfer (for trasnfer),” she added.

In an interview after the House panel’s hearing, Solicitor General Menardo Guevarra – who was Justice Secretary during Duterte’s administration and when the COVID-19 pandemic hit the country in 2020 –said he could not recall Duterte making a public pronouncement about transferring funds to PS-DBM.

Guevarra, however, noted that if the announcement had been made through the media, he may not have known.

“I don’t think it’s referring to a Cabinet meeting because I don’t remember any such Cabinet meeting where the President made that. I was Justice Secretary at the time and I was attending, of course, Cabinet meetings,” said Guevarra, who was present during the discussions of the House appropriations panel Monday.

“But, frankly, I do not recall any Cabinet meeting where a public statement like that was made by the President, unless he made it publicly before the media.  Not before the Cabinet. I’m not too sure though, but that’s my recollection,” he added.

The House committee on appropriations held the hearing as part of its oversight functions to check on the budget performances of the DOH and Philippine Health Insurance Corporation.

In August 2021, the COA found deficiencies in how the DOH managed its P67.32-billion fund to fight the COVID-19 pandemic, adding that it contributed to the challenges that the country faced during the health crisis.

The COA’s annual audit report for DOH in 2020 revealed that the deficiencies are caused by non-compliance with pertinent laws and regulations, which led to missed opportunities for the department primarily tasked with managing the pandemic.

These issues, it said, cast doubt on the regularity of transactions, while keeping much-needed funds at bay and unspent.

READ: COA finds DOH lacking in managing P67.32-B COVID funds

Questions were eventually raised on how the DOH handed over to PS-DBM the responsibility of procuring protective equipment, when the latter’s mandate is to purchase common-use supplies like pens, paper, and other generic equipment.

PS-DBM was also quizzed at the Senate as to why it gave a contract to Pharmally, despite the company having a small paid-up capital of P625,000.

Just last month, the Office of the Ombudsman denied former PS-DBM head Lloyd Christopher Lao’s plea as he is facing various complaints for his involvement in the Pharmally controversy.

In an 18-page order signed by Ombudsman Samuel Martires on May 2, Lao contested the recommendation of graft charges against him and others, saying Pharmally was picked as the protective equipment supplier during the pandemic because other companies had a smaller paid-up capital.

The Ombudsman, however, noted that Section 8 of Republic Act No. 1991 or the Foreign Investment Act of 1991, specifically states that “small and medium-sized domestic market enterprises with paid-in equity capital less than the equivalent of US$500,000 are reserved for Philippine nationals.

Since Pharmally’s paid-up capital amounts to only P625,000, the corporation should be managed by Filipinos only. The Ombudsman reminded Lao that several officials of Pharmally – particularly the firm’s head, Huang Tzu Yen, and a certain Lin Weixiong – are foreigners.

READ: Ombudsman denies appeal of ex-DBM exec Lao on Pharmally case