'Much bigger than Pharmally': Group finds more red flags in PH pandemic deals


Posted at Nov 02 2021 02:03 PM

Doctors and other health professionals hold a motorcade along T.M Kalaw in Manila on Oct. 19, 2021, in protest against the Department of Health's transaction with Pharmally Corporation. ABS-CBN News/File
Doctors and other health professionals hold a motorcade along T.M Kalaw in Manila on Oct. 19, 2021, in protest against the Department of Health's transaction with Pharmally Corporation. ABS-CBN News/File

MANILA — An advocacy group that tracks state spending said Tuesday it found more red flags in the government's P20-billion worth of COVID-19 contracts which the Commission on Audit and Senate must investigate.

Ken Abante, coordinator of Citizens' Budget Tracker, said the group looked into 581 contracts, purchase orders, notices of awards and annual procurement plans published on government websites as of August 2020.

"The story is much bigger than Pharmally. It's very important for the government to look into the systems in order to ensure that government does its due diligence in entering into contracts," he told ANC's "Rundown".

Abante said that some items were procured for up to 66 times the median market prices.

"If the government had bought these transactions at the typical or median prices... around P319 to P550 million would have been saved," he said.

Here are some of the group's findings:

  • Surgical masks bought at P1,400 per piece against P21 median price per piece
  • RT-PCR test kits bought at P344,000 per kit against P285,914 median price per kit
  • N95 masks bought at P641 against P150 median price per unit
  • Blood pressure monitors bought at P9,000 against P1,360 median price per unit

From the P20-billion COVID-19 government contracts, Abante said the Citizens' Budget Tracker was only able to analyze P5.4 billion worth of goods that had comparable market prices.

He said the study was limited because the publicly available documents were purchase orders and notices of awards, and there were no delivery contracts.

"While we're not able to conclude fraud or corruption from this review of documents because these are by nature incomplete because that was the only thing we found online, we still think this is a very good way to check red flags so that government regulators could prioritize their limited time," Abante said.

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In their analysis, the Citizens' Budget Tracker also found that the pandemic deals were not specified properly. 

Two-thirds of goods did not have sufficient descriptions or specifications to enable price or quality comparisons, Abante said.

The group also discovered that three suppliers with addresses abroad each bagged pandemic deals worth at least P300 million, representing 11.69 percent of the value of emergency procurement.

They are Xuzhou Construction Machinery Group Imp. and Exp. Col., Ltd (P1.8 billion), Shanghai Puheng Medical Equipment Co., Ltd (P343 million) and Element Trade Limited (P327 million). 

"While we actually do understand the need to possibly import some of these goods, but it’s also important to check whether domestic suppliers are capable of providing some of these transactions," Abante said.

The group also raised concern that three suspended suppliers were able to participate in negotiated procurement although the deals were already in the process of cancellation.

Abante also many transactions had inconsistent or missing dates or times across their uploaded documents.

"There were 10 percent of contracts for example that had dates of awards that were inconsistent with other supporting documents. You know, the proper order of approvals is needed to ensure people follow the proper process," he said.

Abante's group presented their findings to the government procurement policy board, which was "very professional about it and open to this feedback," he said.

The group recommends for better participation of the civil society and third party monitors in the government's procurement process, and an improvement in the quality of public data sets for better scrutiny.

"Having a better, independently-checked database allows for more transparency into these transactions. And the third most important thing (recommendation) is being able to understand the risks to the entire system... so that in future transactions, in future purchases, we won't make the same mistakes," Abante said.

"Core, really, is being transparent to the citizens that deserve the truth... because it's our money that's being spent," he added.

Lawmakers over the past few months have looked into the procurement deal of the government with Pharmally Pharmaceutical since last year, noting how the firm bagged around P10 billion worth of contracts despite having less than a million pesos in paid-up capital.

Some lawmakers alleged that there was overpricing and that Pharmally was favored because of its links with former presidential economic adviser Michael Yang.

President Rodrigo Duterte denied any overpricing and said the deals with Pharmally were above board.

Sen. Richard Gordon, chair of the Senate Blue Ribbon Committee that is conducting the probe against Pharmally at the upper chamber of Congress, said public funds wasted on anomalous transactions could have been used for the benefits of health workers who are battling COVID-19 in the frontlines.