'Corrupt officials' marring PhilHealth's shift to digital, Morales claims

Katrina Domingo, ABS-CBN News

Posted at Aug 07 2020 01:53 AM

'Corrupt officials' marring PhilHealth's shift to digital, Morales claims 1
PhilHealth President and CEO Ricardo Morales attends a Senate hearing on the fraudulent medical claims in PhilHealth, in Pasay City on Aug. 14, 2019. Jonathan Cellona, ABS-CBN News/File

MANILA - Philippine Health Insurance Corp. (PhilHealth) President Ricardo Morales on Thursday said "corrupt officials" in the agency have been trying to cast doubt on the firm's push to automate systems and make irregularities easier to spot in the state-run insurance company.

Morales claimed that some PhilHealth officials have been trying to discredit the executive board's decision to purchase equipment by saying that the items were overpriced and were being used to mask corruption.

He did not name the officials.

"It cannot be scandalous or fraud... it is a budget process in mid-stride so hindi nagtatapat-tapat yung amount," Morales said in an online press conference, referring to the agency's alleged P2.1-billion proposal to procure digital equipment.

"It is not fraudulent because it is still incomplete... The budget is not a contract. Even if the budget is approved, it will not result in obligations in any party," he said.


Around P25 million was needed for PhilHealth's "integrity security sweep" because the license for their anti-virus and security software was about to expire, said Jovita Aragona, PhilHealth's senior vice president for Information Management Sector.

The procurement of laptops was placed in 2 separate items amounting to several millions because PhilHealth's purchase of some units in 2019 were delayed, and had to be included in the succeeding budget, she said.

Alejandro Cabading, a certified public accountant who was part of the agency's board of directors, earlier said in a Senate investigation that Morales and other high-ranking officials approved the purchase of overpriced equipment and software.

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.

Meanwhile, there were also multimillion-peso discrepancies in the purchase of 15 units of "network switches" due to varying specs, Aragona said Thursday.

PhilHealth opted to purchase the more expensive option because it included a 3-year warranty, value-added tax, delivery services, and other tech specifications, she said.

"I have no reason to doubt the people working in PhilHealth," Morales said.

"Unfortunately, Mr. Cabading does not have confidence in our IT people. When the explanations become too technical, he thinks it is an attempt to mislead him," he said.

PhilHealth was supposed to hire an external IT consultant, but some officials found their services "expensive," Morales said.

"Namahalan naman 'yung mga principals namin so ngayon we are doing it on our own," he added.


Despite the controversy in PhilHealth's IT push, the insurance firm will continue and "even increase" the initial P2-billion budget for its automation efforts, Morales said.

"Kung gusto talaga natin mawala ang fraud and be more efficient, wala tayong choice but to proceed with automation technology," he said, adding that 7.5 percent of PhilHealth funds or around P10 billion is lost to scams in the agency.

"Bakit tayo magtitipid ng P2 bilion a year when we can drastically reduce our losses?" he said.

Senators earlier admonished Morales for "justifying" the alleged irregularities in the the insurance firm's IT budget, saying the former general was either being misled or is already coopted in the so-called PhilHealth "syndicate."

"We are indignant, we are angered when we hear reports like this (corruption)... That is only an information system will help us. Hindi tayo puwede magrely sa mga whistleblower," Morales said.