Pharmally delivered 500,000 face masks ahead of purchase order, senators learned

Katrina Domingo, ABS-CBN News

Posted at Sep 13 2021 05:27 PM

MANILA - Pharmally Pharmaceutical Corp delivered 500,000 pieces of surgical face mask to the Department of Budget and Management's Procurement Service (PS-DBM) ahead of an official purchase order from the government agency, the Senate Blue Ribbon panel's inquiry showed Monday.

The delivery was made on March 25, 2020, the same day Pharmally received an email from PS-DBM for proposal of the item and days before the latter issued the corresponding purchase order, according to records from Pharmally, the senators learned.

It was also done a day prior to Pharmally's official response by email to the PS-DBM's request for quotation, and ahead of the notice of contract award, based on the testimony of Pharmally's Krizle Grace Mago.

As per Mago, the notice of award was on April 6, 2020.

Records from the Commission on Audit (COA), meanwhile, showed that the purchase order was issued only on April 16, 2020.

"Ang ibig sabihin, nag-deliver sila nang wala man lang purchase order," Senate Minority Leader Franklin Drilon said at the continuation of the Senate Blue Ribbon Committee hearing on Pharmally's transactions with government.

(It means they delivered items even without a purchase order.)

"This could be indicative of the way your company was favored by PS-DBM," Drilon said.

Senators also questioned how Pharmally was able to deliver the surgical face masks in about three hours since it received a request for quotation, when it did not have the items on hand.

"Parang Grab delivery lang ano? Napakasimple," committee chairman Richard Gordon said.

(It's just like Grab delivery, right? It's so simple.)

"Sino ba ang sira-ulong magde-deliver ng wala pa kayong purchase order?" he asked.

(Who in their right minds would deliver without a purchase order?)

The mask's unit price is P27.72, and the approved budget for the contract is P8 million, said Mago.

Pharmally director Linconn Ong said they were able to produce large quantities in a short period of time as he had several suppliers that were willing to give the the goods in advance.

"Nakukuha ko po ang inventory kahit hindi ko pa sila binabayaran. Babayaran ko sila kapag binayaran na ako ng gobyerno," Ong told senators.

(I get the inventory without paying them right away. I only pay them after the government pays me.)

"Wala po kami ginamit na pera diyan," he added.

(We did not have to release money for that.)

But for succeeding contracts with the PS-DBM, Ong admitted that Pharmally had to either borrow funds or seek help from former Presidential Economic Adviser Michael Yang.

Among the contracts involving Yang were the purchase of 2 million pieces of personal protective equipment amounting to P3.82 billion, and the purchse of 41,000 RT-PCR test kits worth P2.8 billion.

"Ako po lumapit kay Michael Yang... na baka puwede niya akong tulungan sa paghanap ng funding kasi kulang po talaga yung cash namin," said Ong, who served as a former translator for Yang, a Davao-based businessman.

(I was the one who approached Michael Yang to ask for help in funding our procurement because we did not have enough cash.)

Senators asked the PS-DBM why it awarded multi-billion contracts to Pharmally, which only had about P600 million in capital.

Former PS-DBM officer-in-charge Lloyd Christopher Lao said the procurement agency was allowed to measure a company's "capability basis" on its "capacity to deliver" alone under the Bayanihan to Heal as One Act, as the Philippines was under a state of emergency due to the COVID-19 pandemic.

Lao said several companies went to the PS-DBM office on March 24 last year to join the bidding for pandemic supplies.

"My challenge to them was to show proof that they can deliver. What did Pharmally do? They delivered the item on March 25. The office was so shocked," Lao said.

"Sabi namin, hindi namin bibilhin 'yan. But at least they showed proof that they delivered," he said.

(We told them that we will not buy the items on the spot. But at least they showed proof that they delivered.)

The items were eventually paid for on April 15, 2020.

Gordon said Pharmally was "given tremendous, superlative favors more than anybody else."

"They gave you (Pharmally) all the breaks. They don't even check you when all you are is a middle man," Gordon said.

"Nakakapagtaka na ang isang kumpaniya, tinalo lahat ang Pilipino [bidders]," he said.

(It is surprising that one company managed to outbid all other Filipino bidders.)

The Senate Blue Ribbon Committee issued a subpoena to gather documents related to Pharmally's transactions with the government.

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