MANILA - Pharmally Pharmaceutical Corp, a company that supplied face masks, face shields and other medical equipment to the government, is facing allegations that its goods were overpriced.

Lawmakers have also questioned how a company that was less than a year old was able to secure multi-billion government contracts.

But what is Pharmally?

Based on documents from the Securities and Exchange Commission (SEC), the company was registered on Sept. 4, 2019. That year, it had zero sales and even reported a net loss of P25,550.

But in 2020, when the COVID-19 pandemic hit the country, Pharmally's sales skyrocketed to nearly P7.5 billion pesos.

This was after Pharmally bagged P8.68-billion worth of contracts with the Department of Budget and Management (DBM) despite having a paid-up capital of only P625,000 in 2019.

Senator Franklin Drilon, a member of the Senate Blue Ribbon Committee, said the DBM did not exercise prudence when they closed a deal with Pharmally, which has no “track record.”

After the DBM deals, the company generated a gross profit of P393 million and a net income of P265 million in 2020.

Several lawmakers said the goods sold by Pharmally to DBM were overpriced.

"Official records will show that it sold facemasks at a whopping P27.72, when other suppliers sold the same to PS-DBM [Procurement Service Office-DBM] at P13.5, P16, and P17.50 for the same period," Drilon said during a Senate hearing on the issue last week.

"It sold test kits at P1,720 when it could be bought at P925. It sold PPEs [Personal Protective Equipment] at P1,910 each when its market cost is at P945," he added.

• Drilon asks DBM: Why spend P8.68B for 'overpriced' items from company without track record?

Based on SEC documents, Pharmally was headquartered in Units 8 and 9 on the 22nd floor of Fort Victoria Tower B in Fort Bonifacio, Taguig City.

When the Senate tried to serve a subpoena to Pharmally officials using that address, the building’s guard said that the units have been vacant since 2018.

• Senators flag DBM top contractor for using fake addresses in registration papers

SEC documents also show that a Singaporean national named Huang Tzu Yen sits as chairman of Pharmally and controls 40 percent of the company.

The rest of the company is held by four Filipinos: Twinkle D. Dargani of San Juan City, sits as president with 10 percent ownership; Mohit C. Dargani of Taguig, sits as corporate secretary and treasurer with 30 percent ownership; Linconn Ong and Justine Garado of Taguig both sit as directors. Ong has 16 percent ownership while Garado has 4 percent.

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Pharmally’s cash balance at the end of 2020 was P44.9 million, the majority of which is being held in the company’s bank accounts.

As of the end of last year, Pharmally’s total assets amounted to almost P285 million with nearly P272 million comprised of current assets including trade and other receivables and inventory.

Total equity was over P265 million. The company also held P13 million in property and equipment.

Senators have accused former DBM Undersecretary Lloyd Christopher Lao, who oversaw the deal with Pharamally, of failing to conduct due diligence on the company.

Lao admitted that the DBM's procurement service (PS-DBM) under his leadership last year "failed to check on the articles of incorporation" of the company in question.

President Rodrigo Duterte has criticized senators conducting the probe into Pharmally and insisted that there was nothing anomalous in the DBM deals. 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.

• After Duterte's latest vitriol, Lacson says Senate 'will not flinch' in probe vs overpriced pandemic supplies
• Duterte defends trader with alleged ties to pandemic supplier

- With a report from Warren de Guzman, ABS-CBN News

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