Press Release
August 27, 2021

Red flags all over: Drilon sees warning signs of anomaly in procurement of COVID-19 medical supplies

Senate Minority Leader Franklin M. Drilon exposed several warning signs of potential anomaly, corruption or fraud in the procurement of several medical supplies by the Procurement Service of the Department of Budget and Management (PS-DBM).

"I am worried there are so many red flags in the procurement of several medical items. These warning signs indicate possible anomaly, corruption or fraud," Drilon said during the continuation of the Blue Ribbon investigation on the Commission on Audit (COA) findings on COVID-19 related procurement on Friday.

"Red flags are all over. We should not ignore these red flags," he said in a statement.

The Senate minority leader cited as anomalous the choice of contractors of questionable qualifications with one contractor earning P284.9 million in 2020, from zero income in 2019, supposedly after bagging P8.68 billion worth of government contracts.

"Indeed, business is booming for these contractors. It appears that PS-DBM gave them the sure ticket to wealth. Nakakalungkot na habang marami ang naghihirap, mukhang marami rin ang nagpapayaman," Drilon said in his statement.

Drilon said that contrary to the law's clear requirement that negotiated procurement can only be entered into with persons who have the technical, legal and financial capabilities, PS-DBM entered into contracts with corporations of questionable qualifications.

The opposition senator questioned, for instance, why Pharmally Pharmaceutical Corporation bagged P8.68 billion worth of contracts. Incorporated only in September 2019, Pharmally has paid-up capital of only P625,000, obviously insufficient to assume huge risk for the delivery of P8.68 billion worth of procurement.

After cornering P8.68 billion government contracts, however, Pharmally's income soared to P284.9 million in 2020 from zero declared income in 2019. Its assets also jumped to P284.9 million in 2020 from P599,000 in 2019.

"Is it all thanks to PS-DBM?" Drilon added.

Drilon reiterated that goods procured from Pharmally are overpriced.

Official records will show that it sold facemasks at a whopping P27.72, when other suppliers sold the same to PS-DBM at P13.5, P16, and P17.50 for the same period. It sold test kits at P1,720 when it could be bought at P925. It sold PPEs at P1,910 each when its market cost was at P945, according to Drilon.

The Senate chief fiscalizer also questioned why electronic companies cornered almost P2 billion worth of facemask deals with PS-DBM.

"The procurement of face shields is also shocking. The procurement of 1.32 million face shields went to a single company, Philippine Blue Cross Biotech Corporation," Drilon noted.

Aside from face shields, Blue Cross Biotech was able to bag a total of P432.17 million contracts from PS-DBM, he noted.

"Mukha po yatang may mga favored suppliers ang PS-DBM. Dapat malinawagan tayo sa proseso at kuwalipikasyon," Drilon said.

"Though our emergency law and pertinent rules call for the most judicious, economical and expeditious manner of procurement, these do not serve as free-pass for disregarding rules on propriety, rules on transparency and accountability," Drilon stressed.

Drilon also defended the investigation being conducted by the Senate, saying "to investigate in aid of legislation is the Senate's constitutional mandate."

"It is our responsibility as duly elected representatives of the people to unearth truths, especially concerning disbursement of public funds," Drilon said.

He added that numerous Senate investigations not only yielded to numerous meaningful legislations but also led to the prosecution of corrupt officials.

"There's a long list of these instances. The Senate, perhaps, can submit a list to Malacanang," he said.

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