Pharmally exec admits borrowing money from Michael Yang for PS-DBM deal

Katrina Domingo, ABS-CBN News

Posted at Sep 10 2021 08:14 PM | Updated as of Sep 10 2021 08:45 PM

MANILA - Pharmally Pharmaceutical Corp on Friday admitted to the Senate Blue Ribbon Committee that it won billions of pesos in contracts from the Philippine government despite having insufficient funds to deliver pandemic supplies.

The company had to borrow money from Chinese businessman and former presidential economic adviser Michael Yang to finance the procurement of face masks and RT-PCR test kits, said Pharmally chairperson Huang Tzu Yen.

"We did receive Mr. Michael Yang's help. We borrowed money from him," Huang told the Senate Blue Ribbon Committee.

"Since we were not able to finance these things, he offered to lend us the money so we will be able to pay for it. We will pay him back once we receive the money from the government," he said.

Pharmally officials said they would have to check their records as they could not remember how much money they borrowed from Yang.

CITED IN CONTEMPT

Huang's admission came after the Senate moved for the arrest of Yang and Pharmally's Linconn Ong for giving the panel "evasive" answers when questioned about the former presidential adviser's involvement in the questionable procurement of pandemic supplies from Pharmally.

"Mr. Linconn Ong was hesitant to say that because of courtesy... Someone helped you at a difficult time and you might say things that might implicate them," Huang said.

"Perhaps this is what caused him to be evasive. We hope the committee can take that into consideration and not cite him in contempt," said the 31-year-old Pharmally chief.

"He is down with COVID and is sick. He is probably confused," Huang said in defense of Ong.

Yang earlier denied that he was involved in any transactions of Pharmally, saying he only introduced Huang and Ong to several suppliers in China.

"Mr. Yang would like to clarify that when Pharmally gets their contracts… he has nothing to do with those contracts or awards," the Chinese businessman said through an interpreter.

"Then eventually, Mr. Linconn approached Mr. Yang. Mr. Yang introduced to Mr. Linconn who could help them with their supplies,” his interpreter said. 

Yang said told senators that he knew Ong through a relative. He also said that he introduced Ong to suppliers, but left them to discuss matters on their own.

'MICHAEL YANG LIED'

"Now the cat is out of the bag... Mr. Yang actually lied to the committee. We all heard the same thing," Senate Blue Ribbon Committee chairman Richard Gordon said.

Yang's camp tried to clarify their earlier statements, saying: "There are 2 different Pharmallys registered. The one in 2017 was Pharmally Biological. They are 2 are different companies."

Sen. Francis Pangilinan shut down Yang's argument.

"The argument doesn't hold. He said he only introduced the suppliers and had nothing else. Now we find out belatedly that he was also one of the funders and creditors as admitted by Mr. Huang," the senator said.

Huang apologized to the Senate panel, admitting that his company has caused a "big ruckus."

"We realized that we have caused a big ruckus. We don't want people to think that we are a dummy company for Mr. Yang," Huang said.

"We are three young men. We were greedy, We wanted to bag a bigger contract. Perhaps we were too ambitious," he said.

Senate Minority Leader Franklin Drilon said he does not fault the "young" Huang for his "ambitions."

"It is natural that as a young businessman, you would try to get the most and the best contract," Drilon said.

"But from the Philippine side, there were certain basic requirements that must be complied with among which is the financial capacity of your company," he said.

"You won a contract without a single peso."

FORMER PS-DBM EXEC DEFENDS PHARMALLY DEAL

Despite its lack of funds, Pharmally cornered P8.5 billion in contracts with the Department of Budget and Management's Procurement Service (PS-DBM) between April and June 2020, Gordon said.

Prior to Huang's admission, Lloyd Christopher Lao - former head of the PS-DBM, who signed the deal with Pharmally - claimed there was nothing wrong with awarding the billions-worth contract to the 2-year-old company.

"We don't release money unless they deliver," Lao said.

"Ang layo-layo na ng discussion natin. Basic question should be: Did government release money? Never once in the instance of PS-DBM did that happen with Pharmally," he said.

Senators slammed Lao saying this does not justify why Pharmally and PS-DBM should be allowed to "cut so many corners."

PS-DBM awarded face mask deals to Pharmally even if company did not have license to import, Pangilinan said.

"Their license to import at that time was for the importation of drugs, not of medical devices," he said.

"[Pharmally's] License to import medical devices came in January 2021. They did not have that license when they brought in these PPEs."

The Senate Blue Ribbon Committee suspended its hearing for an hour-long break where senators are expected to finalize what sanctions it would impose on Yang and Ong for lying under oath.

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