‘Local PPE makers biggest victim in Lao-led contracts’

THE questioned awarding by a former Budget department undersecretary of billion-peso contracts to 11 mostly foreign companies at the height of the pandemic in 2020 becomes even more egregious because of government’s failure to buy supplies from Filipino firms whom it had asked to retrofit operations in order to produce world-class PPES, or personal protective equipment against Covid-19.

Sen. Risa Hontiveros pointed this out in an interview with reporters on Monday, as the Blue Ribbon Committee prepared to bring in more personalities in the widening scandal of P42 billion in pandemicrelated money that State auditors flagged for the undocumented fund transfer by the Department of Health to the DBM, as well as for dubious bidding practices.

The questioned biddings were conducted by the former head of the Department of Budget and Management’s Procurement Service (PS-DBM), Undersecretary Christopher Lao, whom Senate Blue Ribbon probers led by chairman Richard Gordon grilled for six hours in a hearing last Friday.

Senators zeroed in on Lao’s award of P8.7 billion in contracts to Pharmally Pharmaceutical Corp., a firm set up only in 2019 with capitalization of P650,000. Lao’s PS-DBM awarded 11 contracts to mostly Chinese firms—pharmally was supposedly the only Filipino one—for face masks and face shields that were deemed grossly overpriced.

Hontiveros, however, said the overprice is not the only sin in this episode, but the gross injustice done to several Filipino manufacturers that were then reeling from the pandemic, and whom government asked to retrofit operations in order to fast-track the making of PPE supplies that were then in short supply around the world.

“There were so many Filipino PPE manufacturers that are members of CONWEP and also CPMP, Coalition of Philippine Manufacturers of PPES; they retrofitted their production line on the request of government and offered medical-grade [PPES] that passed DOH standards and were definitely cheaper,” Hontiveros said, partly in Filipino.

She continued: “But they complain that until now, they were not awarded ny contract, but these 11 mostly foreign firms got contracts, mostly Chinese and just one supposedly Philippine company, this Pharmally. But which we subsequently unearthed in the Blue Ribbon as being an affiliate of a foreign company charged with financial fraud right in its home country in Taiwan and was even de-listed from the Taiwanese stock exchange.”

Hontiveros added, “It seems this Philippine affiliate called Pharmally Pharmaceutical Corp. is behaving similarly.

Why? Two of its board members gave fake addresses in their business papers, and one had not lived in the stated address for the past three years.”

In light of this, the senator said the DBM should no longer accept proposals from them, asserting that “people’s money used to pay billions worth of contracts for the government’s Covid response should not go to firms that cannot be trusted.”

In Friday’s hearing, Gordon had excoriated Lao for enabling what were apparently “supply-driven contracts” after he admitted having met with some of the suppliers in his office.

Gordon earlier showed old photos showing Pharmally officials with former presidential Adviser Michael Yang and President Duterte.

Senate probers are close to citing Lao in contempt for what they deem to be “evasive” answers, especially to their efforts to find out who exactly recommended Lao to be a budget undersecretary in charge of the PS-DBM with the questionable mandate of acting as outsource agent for other state agencies’ procurement needs.

Lao also admitted he did not thoroughly vet the background of suppliers, after Sen. Imee Marcos noted that several suppliers were not really into PPE or health-related manufacturing, but in alien endeavors like construction and hydraulics equipment.