MANILA – There is nothing wrong with government buying face masks, face shields, and personal protective equipment from Pharmally Pharmaceutical Corp., a lawmaker said, noting that procurement laws were waived when the deals were signed.
“In your opinion, given what you know now, you don’t think there’s anything wrong with what happened here?” Diwa Party-list Representative Michael Aglipay was asked in an interview.
“In a normal case, there is a lot of things that are wrong,” he answered.
Pressed, however, if he saw anything wrong in this particular case, he said, “No, because of the Bayanihan 1 Act which was signed in March 26 during the height of the pandemic when everybody was in their house, and it says that all procurement laws and other related laws…the act that governs purchases is waived.”
“So the only thing that government needs to do is to buy these supplies expeditiously in the interest of government,” he added.
Both houses of Congress in the Philippines are currently probing government’s purchase of allegedly overpriced medical equipment from Pharmally, which reportedly has ties to President Rodrigo Duterte’s former economic adviser Michael Yang.
While Duterte has lambasted senators looking into the alleged overpricing in the government's pandemic response deals, he has praised the House probe for being “fair.”
Aglipay said the House of Representatives is focusing on the deals signed with Pharmally from April to May 2020, when it was the only supplier of face masks around.
“What we are focusing here was when they were the only supplier, which is April and May,” he said.
“As a chairman when I reviewed how they did the deal, I can say with maybe, 90 percent certainty that there is no overpricing because during that time that we are talking about, April [and] May, the supply was very limited.”
“And they had to resort to what was available. Please remember during that time, it was already, the first world countries were already really getting all the supply,” he said.
“So the directive of the President then was to at all costs get the supply,” he added.
Aglipay also noted that the price of goods bought from Pharmally also covered the costs of shipping these directly to various parts of the Philippines.
“Let’s take note that the price of other suppliers then, April and May, does not include delivery up to the regional centers. Davao, Cagayan de Oro, Cebu--Pharmally did that in April and May. They bore the cost.”
“The other suppliers from China at that time, April and May, our boats, Republika ng Pilipinas Philippine Navy, and our commercial flights went there to China to get the supply. We spent for that, over and above the price of the mask,” he added.
“So the price difference, that is allocated to Pharmally for their profit and for the logistics so that they can bring the mask to the site.”
Asked about the Senate's finding that Pharmally may have been financially incapable of delivering on contracts it secured from government, Aglipay said it is not unusual for businesses to incorporate at the lowest possible capital.
"I’m a businessman and it is normal for people in going in business to minimize cost. They just--it’s not correct but that’s what’s happening--that they are incorporating at the lowest possible capital then after they get advances from the stockholders they classify it (as) advances and number two, they take out loans."
At least one group has noted that they have not seen disclosures for loans in Pharmally's financial statements.
Aglipay said the government has also awarded a contract to build an airport to a company that did not pass government’s standards for capital.
"And to make you an example, we have the biggest airport awarded to a big conglomerate--I won’t mention a name already--in Bulacan that is at the cost of almost $15 billion."
"And this airport is awarded to a subsidiary of that big corporation with only the capital is very low. Not enough to bag that project. So, it did not pass also the government’s standards for capital in terms of NFIC, which is the net financial capability."
The House of Representatives in October approved measure granting San Miguel Corp a franchise to construct a new airport in Bulacan and an adjacent airport city.
--ANC, 22 September 2021