MANILA - Pharmally Pharmaceuticals Corp’s multi-billion peso deals with the government deserve to be investigated, a tax expert said on Tuesday amid allegations that the company sold overpriced medical gear and bagged state contracts despite lacking a track record.
Mon Abrea, a consultant with the Bureau of Internal Revenue, said he finds it suspicious how a company barely a year old was able to bid for billion-peso contracts.
Abrea noted that the process of obtaining the accreditation and licenses necessary to qualify for biddings usually takes at least 2 years.
"If you will be importing goods to the Philippines you need an importer's license, and it takes normally 2 to 3 years to establish your reputation to prove your financial capacity,” Abrea said.
The Bureau of Customs lists as a requirement for new importers, income tax returns for the past 3 years, duly received by the Bureau of Internal Revenue "if applicable."
Abrea added that this is also considered before a company is accredited by the Philippine Government Electronic Procurement System (PhilGeps), which lets a firm be a supplier or contractor of the government.
PhilGeps also requires audited financial statements duly received by the BIR, but it does not specify how many years.
Abrea also noted that the performance of the company in 2020, just a year after registering with the SEC, is suspicious.
How did a company with a starting paid-up capital of less than P625,000 manage to purchase over P7 billion in inventory for resale, Abrea asked.
"Mapapansin natin na zero inventory in 2019, with P600,000 in, probably, cash as initial capital. Pero nag-purchase sila ng P7.2 billion inventory, P100 million balance at the end of 2020.”
(We can see that it had zero inventory in 2019, with P600,000 in, probably, cash as initial capital. But they purchased P7 billion in inventory, with P100 million balance at the of 2020.)
Abrea noted that Pharmally was also able to dispose of its inventory in less than a week.
“Hindi sya usual for any company.”
(It’s unusual for any company.)
He also noted that Pharmally had an over 12,000 percent return on equity. Abrea did not call the company’s deals illegal but said they were suspicious.
“So not illegal, but yeah probably suspicious. Definitely, this is something you have to look into.”
President Rodrigo Duterte has criticized senators conducting the probe into Pharmally and insisted that there was nothing anomalous in it deals with the government. The President also defended ex-adviser and Davao-based businessman Michael Yang who has been linked to Pharmally.
Senators however have said that the Senate "will not flinch" in its investigation into the allegedly anomalous deals.