MANILA— A corporation that landed billions worth of contracts with the Department of Budget and Management (DBM) has been using fake addresses in its registration documents, senators said Friday, as a Senate committee looked into its possible collusion with government officials.

Pharmally Pharmaceutical Corporation won P8.6 billion in government contracts for the procurement of face masks and RT-PCR test kits last year even if it was only incorporated in 2019 with a P599,000 capital, documents presented during a Senate Blue Ribbon Committee hearing showed.

The Senate tried to serve a subpoena to Pharmally officials living in a high-end condominium in Taguig, but the guard said that the units indicated in the company's general information sheet have been vacant since 2018, Blue Ribbon Committee chairperson Sen. Richard Gordon said.

"In other words, they stated fake addresses," Senate Minority Leader Franklin Drilon said.

"A simple diligence would have shown that these are fake addresses," he said.

Sen. Risa Hontiveros added that one of Pharmally's officials is also a board member of a Taiwan-based company that was taken off the stock market due to fraudulent activities.

Sen. Panfilo Lacson asked former DBM Undersecretary Lloyd Christopher Lao "what kind of due diligence" was observed before the agency decided to award billions of funds to Pharmally.

Lao said that the DBM did not have a copy of Pharmally's general information sheet so they did not have an idea about the said bogus addresses.

"We do not include GIS so we do not have data... They have the business permits... We did not pay them in advance. They have to deliver first," he said.

Pharmally was among Chinese companies recommended by ambassadors last year, when the national government was looking for a supplier at the height of the COVID-19 pandemic, Lao explained.

"You mean to say they just walked into your office?" Drilon asked.

"They are just 6 months old... They committed forgeries and perjuries in their informations sheets," he said.

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.

"Either walang diligence for reasons of collusion, or tinamad sila mag-due diligence or they are sloppy," Lacson said.

"You threw out of the window lahat ng requirements, lahat ng kailangan," he said.

"Clearly, there is a collusion."

Lao said the PS-DBM was in a rush to procure supplies last year as the Philippines did not anticipate that the COVID-19 pandemic would last for months.

The national government had to buy several pandemic-related items at a higher than usual price due to the supply and demand situation, he said.

But Lacson rebutted Lao's claim, saying: "How can you justify high demand when the Philippines is the only country in the world that mandates the use of face shields among its citizens?"

Sen. Imee Marcos added that the PS-DBM should stop using the supply and demand issue last year to justify why it bought "overpriced" items from Pharmally, noting that the questionable firm continues to win bids up to this year when supplies of pandemic-related items have already stabilized.

Pharmally won a P1-billion contract on June 29, 2021 for the procurement of RT-PCR test kits, Marcos said.

"They (DBM) keep alluding to shortage but they (Pharmally) are still winning," she said.

"Paano at nakaka-bid at nananalo 'yan kung non-existent 'yung mga tao at yung kompanya?" she asked.

(How are they able to make bids and win if the company and its people are non-existent?)

Drilon urged the Senate Blue Ribbon Committee to recommend the filing of anti-graft charges against Lao "for entering in contracts which are grossly prejudicial to the interest of government."

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