'Laptops worth P100M': PhilHealth's Morales repeatedly approved questionable IT budget - official

Katrina Domingo, ABS-CBN News

Posted at Aug 04 2020 11:36 AM | Updated as of Aug 05 2020 12:18 PM

MANILA (UPDATE) - Philippine Health Insurance Corp (PhilHealth) president Ricardo Morales and other high-ranking officials approved the purchase of overpriced equipment and software amounting to millions of pesos, a board member of the state-run insurance firm said Tuesday.

PhilHealth's initial information and technology (IT) budget for 2020 was pegged at P2.1 billion, but the proposal was thumbed down after a review of the costs showed that multiple items were either overpriced or were redundant, said Alejandro Cabading, a certified public accountant who was part of the agency's board of directors.

"There were numbers in the IT budget and financial reports that do not add up," Cabading said during a Senate investigation.

Cabading said the budget proposal was questionable because several items were priced up to quadruple the amount approved by the Department of Information and Communications Technology (DICT).

Among the allegedly dubious items in PhilHealth's IT budget are as follows:

  • P21 million for Adobe Master Collection software (DICT-approved cost: P168,000)
  • P40 million for application servers and licenses (DICT-approved cost: P25 million)
  • P5 million for structured cabling (DICT-approved cost: P500,000)
  • P42 million for identity management software (DICT-approved cost: P20 million)
  • P21 million for office productivity software (DICT-approved cost: P5 million)
  • P25 million for application servers and virtualization licenses (DICT-approved cost: P14.8 million)

The "anomalous" proposal also had questionable items like two sets of laptops, with one amounting to P4.11 million, while another was worth P115.32 million.

Another item priced at P98.07 million was only labelled as "three projects," Cabading said.

"I tried to find a solution by raising this with management, but the most frustrating part is it seems that management seems to be tolerating this act," he said.

Cabading said he only approved the release of P25 million for PhilHealth's IT needs, but Morales allegedly authorized a separate P302-million "supplemental budget" for IT-related purchases.

Months later, Morales approved another P750 million for IT expenses, Cabading said.

"There were items in the budget not approved by DICT," he said.


Morales told senators that he believed that there were no "major discrepancies" in the PhilHealth's IT budget.

"I don't think there was an irregularity," the PhilHealth chief said when asked about the allegations.

"I think it was a matter of explaining to the board... because information technology is a very complicated system," he said, noting that the documents Cabading presented were just "budget proposals and not contracts."

But Sen. Panfilo Lacson scorned the PhilHealth chief, saying the irregularities were "too blatant."

Cabading's revelations are not the first time irregularities were recorded in PhilHealth's IT budget, Lacson said.

The Commission on Audit (COA) earlier found that PhilHealth wanted to procure 15 "catalyst switches" for P4.81 million, while the market price was just at P939,360, he said.

The government almost lost P3.87 million, Lacson said.

On top of the overpricing, COA also found that PhilHealth still had 24 units of the same switches that have yet to be used, the senator said.

"Ganito kalaki 'yung overprice pero hindi natatakot na mabuko," he said.

(The overprice was that big but they were not afraid to get busted.)

"Masyadong blatant, masyadong brazen," he said.

(It was too blatant, too brazen.)

PhilHealth senior vice president retired Brig. Gen. Augustus de Villa ripped 6 pages of a procurement document because he knew it was anomalous, former agency officer Thorrsson Montes Keith said.

De Villa, however, said the document still exists.

"Nung time na 'yun sir nun wala po akong natatandaan na pinunit pero tinago ko po kasi I was informed by Col. (Etrobal) Laborte na mataas nga raw ang presyo. So sabi ko pagka ganyan medyo malabo 'yan," he said.

(I can't remember ripping it. I kept it because I was informed by Col. Laborte that it contained high prices.)

"In my 30 years of military service, napakaingat ko po sa ganyan. I never allow that. Di ko pa naman time nung bidding nyan. I’m only 9 months in PhilHealth."

(In my 30 years of military service, I'm careful in procurement. I never allow that. The bidding was not done during my time, I’m only 9 months in PhilHealth.)

Sen. Panfilo Lacson asked the Senate Committee of the Whole to issue a subpoena for the document, which Senate President Vicente Sotto III granted.

The Senate investigation into alleged irregularities in the state-run firm was held as lawmakers eye to amend the law that created the agency to stem corruption and embezzlement in the office mandated to shoulder the medical bills of Filipinos.