Press Release
August 19, 2021

Excerpts from the Interview with Senate Minority Leader Franklin M. Drilon
ANC Headstart with Ms. Karen Davila

19 August 2021

Q: What do you make of Sec. Duque's explanation yesterday as a whole?

SFMD: Totally unsatisfactory. To start with, my own findings indicate that of the P77 billion, which was the budget of the DOH for COVID-19 response, 31% or about P25B, remained unobligated and unspent. You can imagine. That is why the nurses are complaining they have not received the amounts due them because we discovered that about P900M for the special risk allowance or SRA has not been spent. So, for Sec. Duque to blame the DBM or the hospitals for the delays, that is totally passing the buck. He must assume full responsibility.

SFMD: Another issue, P42B was moved over from the DOH to DBM-PS for the purchase of medical supplies.

Q: Just for our viewers to get an overview, there is a DOH budget in 2020 of about P200 billion and there is Bayanihan 1 and 2.

SFMD: There are four authorizations - 2019 budget, which the effectivity was extended, the 2020 budget, Bayanihan 1 and 2. For COVID-19 response alone, in my computation, there is P77 billion. Out of the P77 billion, roughly P25 billion was not spent.

Q: Yesterday, you discovered that the DOH transferred P42B to a procurement office in the DBM and this procurement office is headed by Lloyd Christopher Lao.

SFMD: That's correct.

Q: What did they do with the P42B?

SFMD: The PS-DBM is the one engaged by different national agencies to purchase supplies which were allocated to them under the budget. In this particular case, the DOH assigned for purchases P42B of its budget to DBM-PS for which medical supplies were purchased, among which were face masks and face shields, and this is where mystery starts.

Q: Would face masks and face shields, even if you honestly buy face masks and face shields for 100 million Filipinos, amount to P42?

SFMD: In fairness, hindi naman lahat ng P42B ay napunta sa face masks and face shields. What we are pointing out, however, is there is a gross overpricing of face masks and face shields.

Q: The face shield at P120.00.

SFMD: Yes. By the very memorandum of the DOH, the SRP or suggested retail price is something like P50.00. That's even on the high because the Red Cross was able to buy it at a much lower cost.

Q: Has the P42B been fully spent?

SFMD: No, it was not fully spent. Of the P42B, my calculation is that about P12 billion remained unspent. Only P29B was spent and included in the P29B are questionable purchases of face masks and face shields.

Q: Where is Christopher Lao, the head of DBM-PS?

SFMD: According to the DBM, Mr. Christopher Lao has resigned quietly. We didn't even know it. In the meantime, he leaves behind him so many questionable transactions which we will dig into. yesterday, Sen. Gordon required the DBM to submit all transactions involving the P42B. I repeat, P42B was passed on to them to purchase supplies, among which are the overpriced face masks and face shields

Q: Christopher Lao who was the head of DBM-PS was actually an aide of Sen. Bong Go. In October 2020, he also applied for the second highest Ombudsman post. The question of him quietly resigning and his links to Sen. Bong Go. Where is Sen. Bong Go in all these considering that he is the Senate health committee chair

SFMD: You are correct that Sen. Go is the chair of the Senate committee on health. But the investigation yesterday was done by the Blue Ribbon. The other facts that you mentioned I do not know those things on a personal level and I only read them in the news. We will be awaiting the testimony under oath of Christopher Lao.

Q: Lao is not yet off-the-hook?

SFMD: Certainly, not. If there was overpricing, certainly he is responsible. Just to put it in context, we are not talking of small money. From our research, on the face masks alone, we estimate that the overprice is about a billion pesos.

Q: The COA actually flagged the DOH for transferring to Christopher Lao's procurement office under the DBM without proper documentation. What was the excuse?

SFMD: They said that an MOA is not required under existing regulations, which we dispute. Even assuming that the MOA is not required, nevertheless, that does not excuse the overpricing of supplies and the compliance with our procurement laws.

Q: Are you comfortable with the fact that the head of the procurement of the DBM is a former aide of Sen. Go? That could have been, frankly, a career post?

SFMD: My comfort or discomfort is immaterial. We assume that the appointees are qualified under they prove otherwise. We will leave at that because we are still investigating this issue. We will not leave any stone unturned in uncovering what could be an overpricing in procurement service.

The issue of procurement service existence is something that I told Sen. Gordon we should look at as a matter of policy because there is still another procurement agency like the PITC, and again, about P35B of public funds were entrusted to them. I manifested yesterday that it is time for us to review this policy of NGAs passing on to these government agencies the purchase of supplies. In this particular case in the DOH, it gave them the opportunity to overprice because of the loose setup, as found by COA, the moment the DOH passed on to the procurement service. In the PS service, they also could not spend the money fully and in the money they spent there's overpricing.

Q: Did the DBM need to transfer the funds or could they just have procured it themselves?

SFMD: They have a bids and awards committee. In fact, one of the questions I intended to raise is who directed the DOH to transfer P42B to PS-DBM. Somebody must have given instructions. And why was MOA not required? Prudence would have dictated that when you transferred P42B, you executed a document...You cannot leave this to the whim and caprice of government officials. There are rules to follow and they must be followed.

Q: The COA says there was P11.8B of unobligated funds. Ang tanong ko, nasaan na ito?

SFMD: If you follow the law, this should have reverted to the national treasury under the law. The P11.89B flagged by COA, which was not disbursed by the DOH, is supposed to have been remitted back to the national treasury.

Q: Sec. Duque blamed the hospitals and said it is their duty to submit the names...

SFMD: We have to look into that. But certainly, blaming each other and pointing fingers at each other when the COVID-19 response is your primary responsibility does not speak well of the leadership. You should assume responsibility and do something about it. I am sorry to tell Sec. Duque na hindi dapat ganon. Do not point fingers. See what the problem is and see what can be solved rather than pointing your fingers to the hospitals. The fact remains that our health workers have not received their special risk allowance.

Q: Where can you get the money now that Bayanihan 2 has lapsed?

SFMD: Do not forget that one of the charges made on by COA is the mismanagement and there were funds available. In theory, the money is there because it was not spent by the DOH.

Q: The money is there. So, what is this? Is this just mismanagement, inefficiency...a lack of systems in the DOH? How could it be like this when there is money? What is the problem?

SFMD: The COA said while they are saying they have not seen yet evidence of corruption, there certainly was mismanagement that resulted in missed opportunities. There is negligence which resulted in our medical workers not receiving their allowances?

Q: Is Sec. Duque accountable for transferring P42B to Christopher Lao, head of DBM-PS?

SFMD: One of the things I'd like to ask is and had no opportunity to ask yesterday, who is the official who directed the transfer of P42B? Is this done as a matter of course or is this the first time it was done? It is something unusual. A government official would be afraid to do this unless directed by somebody higher. This is what I want to find out.

Q: What else did the DBM-PS purchase? Why did it have to go to DBM-PS?

SFMD: In fact, the equipment that they purchased through the DBM-PS are items that the DOH would be fully familiar with because there are medical supplies. If there is any expertise, it belongs to the DOH not DBM-PS.

Q: Do you smell something fishy with the transfer?

SFMD: I would say it is most unusual.

Q: As chairman of the Senate committee on health, should Sen. Bong Go be present and questioning the DOH regarding this issue?

SFMD: Yes, he should be present. He should assist us in clarifying these issues because Sen. Bong Go has familiarity with the health sector. Whether or not the senator would attend is a matter that is addressed to our discretion individually.

Q: On the procurement of medical items through the PS-DBM, we're talking about a transfer of P42B. Number one, Christopher Lao resigned. Yet, you have Sec. Avisado who resigned also. And this blows up in our face. Isn't that a bit? Do you question or do you doubt the resignations of such high officers in the DBM in the midst of a full-blown investigation...?

SFMD: The resignation of Sec. Avisado is especially troublesome, because, remember, the 2022 national budget has not yet been submitted. The sudden resignation is a little unusual. Of course, he said that it is for health reasons, we accept that...This gives rise to a lot of speculation. Now, being uncovered is the P42B that was moved to the DBM-PS. The public speculates, whether you like it or not, especially with the COA report and given the past incidence where the procurement service was exposed to have been accountable for the overpricing of the face masks and face shields, which are essential tools to fight the pandemic.

Q: Is it right to assume that the Blue Ribbon would be calling Lao and Avisado at one point?

SFMD: Lao will be called as Sen. Gordon said so yesterday. The invitation to Sec. Avisado I am not aware of...

Q: You will not be calling other agency heads because the COA flagged other agencies heads?

SFMD: Yes, because the matter of the other agencies will be taken up when we hear their budgets for 2022. There are a lot of questions to be asked. You heard OWWA purchasing overpriced sanitary pads.

Q: The COA said that by flagging deficiencies, it does not prove corruption. Fair. But do the Filipino people have to live with inefficient officials like that? Are there other offenses committed that could be brought against inefficiency for government officials?

SFMD: Well, certainly, gross negligence is a ground for disciplinary action under our Civil Service rules. A career employee who is negligent can be disciplined. But insofar as a cabinet member is concerned, whether or not a cabinet member remains, is a political decision on the part of the President. Nobody can compel the President to dismiss Sec. Duque. The continued stay of Sec. Duque in the cabinet is a matter of trust and confidence. The President is answerable to the Filipino people. That ultimately becomes an issue of the appointing power.

Q: The administration is asking for a P5-trillion budget for 2022...What is the likelihood it would be approved?

SFMD: We will scrutinize it carefully. Remember that his budget will be financed principally from borrowings, because income from taxes would not be meeting its target because of the pandemic. We just hope that the borrowings or the funds are properly spent. There's a standard that the borrowings must not exceed 60%.

Q: Where are we now?

SFMD: From what I read, it's almost there, 60%. That is the area we will examine closely. Therefore, we must have the correct priorities, let's move to the backburner military spending, security spending, the anti-insurgency fund of the NTF-ELCAC, which I understand will be doubled. These are the priorities which we will closely examine. Is this a correct priority given the pandemic? Can we not postpone this in the meantime? We will examine this closely.

Q: Do you believe that considering there is an issue of absorptive capacity, do you believe that a P5T budget is justifiable, considering that P4.5T was not completely spent?

SFMD: We do not know how much was unspent. We will see once we see the budget. It is good to point out that even the DBM itself called the attention of the DOH in the previous budgets about their ability to spend the budgets allotted to them, because that goes into deficiency in governance?

Q: What can we expect in the next few days?

SFMD: For one, I expect Sen. Gordon to call another meeting of the Blue Ribbon. I would be busy examining the documents coming from the DBM-PS.

Q: What are your recommendations for the request of medical frontliners?

SFMD: After debate, it was agreed and the conclusion was the funds are still there in the national treasury. The authorization is still good with some refinements...It behooves upon Sec. Duque and the DOH to act quickly, because these were promised to them. It is criminal to deny them these benefits. The money is there.

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