MANILA - Members of a Senate panel and the chief of the Department of Budget and Management (DBM) on Wednesday sought to clip the powers of the agency's procurement service following its controversial multibillion-peso transactions with Pharmally Pharmaceutical Corp.
The DBM's procurement service (PS-DBM) and Pharmally are at the center of an ongoing Senate Blue Ribbon Committee investigation on the alleged mismanagement of COVID-19 response funds.
Pharmally bagged billions of pesos worth of contracts from the office despite only having a paid-up capital of P625,000, records obtained by lawmakers showed.
Senate Minority Leader Franklin Drilon raised PS-DBM’s questionable access to government agencies’ funds and seemingly expanded function during the deliberation of the 2022 proposed P2.11 trillion allocation for the agency.
The agency’s function, he said, was originally intended to assist government agencies in buying “common use items” typically used in offices like ballpens, bond papers, among other things.
The office's procurements, however, were later expanded to buying face masks, face shields, and other medical supplies related to the government’s COVID-19 response, through a memorandum of agreement (MOA) between the agency and the Department of Health.
Recent procurements are now being questioned as the majority of the purchase items came from Pharmally, which senators said reached around P11 billion.
“This is like the PS-DBM is like a flying saucer revolving around, nobody supervising them except a UFO… We cannot continue to allow PS-DBM to be an unidentified flying object revolving around the Office of the President, being piloted by guys like Undersecretary Christopher Lao,” Drilon said.
Senate Committee on Finance Chairman Sonny Angara, described PS-DBM as an “independent republic” and compared it to a monster like Frankenstein.
“Even in the previous hearing, Usec. Canda sad that PS-DBM operates like some [kind of an] independent republic. They’ll have their meetings, although they are the chair, parang me sariling mundo itong PS-DBM,” Angara noted.
“It’s clear that it has mutated beyond its original purpose. When Senator Marcos’ father issued his Administrative Order or Presidential Decree.. it’s clear eh, it’s for the economies to scale. It has mutated to that and it has become a Frankenstein in effect, Frankenstein’s monster because... it led to the opposite,” he added.
Acting Budget Secretary Tina Canda also shared her opinion and agreed with the senators' sentiments.
Canda said there is a need to come up with a clear policy on how the PS-DBM operates, and that somebody should be in charge of its operations.
“There are certain aspects in the Procurement Service which also need reform at the moment… The Procurement Service has to be answerable to another department, bigger than it is,” Canda pointed out.
“A flying saucer is unidentified flying object, so it should not be in the same category because it is responsible for billions of pesos of public funds. So they have to be responsible even to the Office of the President or what department.. it should only be accountable,” she added.
Canda said that those conducting public biddings are “all contractuals” to ensure that they would not have tenure. This, she noted, incidentally also goes against the principle of bidding process.
OTHER ITEMS BEYOND SCOPE OF DUTY
Drilon requested Canda to submit the general provisions that Angara would include for the agency's 2022 budget, which he said would help prevent the repetition of current issues.
He also asked the official to issue a circular which will address the problems and “shenanigans” in the Government Procurement Policy Board and PS-DBM, including structural reforms.
Before this, however, Drilon mentioned the PS-DBM’s other supposedly procured items.
“Can you imagine ma’am, medical equipment, face shield, face mask, thermometer, etc. were made common use equipment? Pwede po yun?" he asked.
"Etong mga testing machines, were made at the same level as a ball pen and a bond paper?... etc How did you convert to common use the medical equipments which obviously, are not commonly used. How did you do that?”
Drilon was citing data which indicated that the office also procured “non-common use supplies” for the DOH specifically, “automated nucleic acid machine, mechanical ventilators, cadaver bags, face shields.”
PS-DBM OIC-Director Joshua Laure, who assumed the position recently, said the medical equipment is covered by the MOA.
Laure also promised to submit the explanation of their legal office.
Drilon insisted that the PS-DBM is not authorized to procure non-commonly used equipment which is beyond its scope of duty.
The GPPB agreed with this.
“Yun pong binabanggit ni Senator Drilon wala po dun sa listahan ng na-approve po ng GPPB. Kasi po yun precisely, ang guidance po hindi dapat kasama ang sophisticated items,” GPPB Executive Director Rowena Candice Ruiz said.
Ruiz explained that they approved it because of the DOH’s request for face masks, face shields and other medical supplies, which were identified during the previous Senate Blue Ribbon hearings.
“The reason provided in the recommendation of the DOH is that said items are expected to be commonly used in government offices in light of the pandemic. And at the same time, they wanted to seek the help of the Procurement Service given its expertise to be able to procure the same for them,” she said.
But Drilon said GPPB's action "gave rise and opportunity to all of these shenanigans,"
“Because without that classification, these medical equipment as common use, then this could not happen, because the transfer of P42 billion, a very substantial amount in the budget to PS-DBM, and of these happenings. Now, we’re running after them like crazy and there’s a howl,” Drilon said.
From 2014 to 2020, the PS-DBM had P91.8 billion in "parked funds" from other agencies, while parked funds in the Philippine International Trading Corporation (PITC) reached P50.7 billion.
“The guidelines for instance, cash balance of the Procurement Service and even the PITC should not fester longer than is necessary. The government needs funds and it’s an available resource that we can tap for projects which are probably even COVID-related. This can be addressed by issuing an executive order,” Canda said.