Press Release
September 18, 2021

Drilon urges COA, Ombudsman to probe PS-DBM multi-billion deals with Pharmally

Senate Minority Leader Franklin M. Drilon on Saturday urged the Commission on Audit to conduct a special audit and the Ombudsman to conduct its own investigation on the controversial multi-billion deals between the Procurement Service of the Department of Budget and Management (PS-DBM) and Pharmally Pharmaceutical Corp.

In a radio interview on Saturday, Drilon said that it is about time for the two constitutional bodies to step in following what the Senate Blue Ribbon has unearthed as anomalous award of over P10 billion contracts to Pharmally, a small company with only P625,000 capital in 2019.

Drilon maintained that there's reason to believe that there's overpricing of face makes and other medical supplies. He said that the COA's regular annual audit may not be sufficient to establish overpricing, hence a special audit is necessary.

"Dahilan sa maraming lumalabas sa investigation ng Blue Ribbon ay hinihingi ko po at siguro panahon na para magkaroon ng special audit para makita nila at ma-confirm ano yung lumalabas sa investigation ng senado," Drilon said.

"Sila ay may kapangyarihan tingnan at suriin isa-isa ang mga dokumento," he added.

The former justice secretary said the Ombudsman should also investigate the anomalous transactions.

In a statement, Drilon said the Ombudsman can form a fact-finding team to probe the purchase of overpriced medical supplies from Pharmally by PS-DBM.

"Siguro panahon na rin para ang Ombudsman ay magkaroon ng sariling investigation," he said.

Drilon said both the Ombudsman and COA can subpoena documents and witnesses.

The opposition senator cited, for instance, why Pharmally sold facemasks at 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.

Drilon said that in 2020 alone, Pharmally bagged P8.68 billion worth of contracts. with P625,000, obviously insufficient to assume huge risk for the delivery of billions worth of procurement. In 2021, Pharmally bagged another P2 billion deal with PS-DBM.

After cornering P8.68 billion government contracts in 2020, Pharmally's income soared to over P300 million in 2020 from zero declared income in 2019.

Drilon also mentioned the luxury cars allegedly bought by Pharmally executives in 2020 when it cornered billions of contracts from PS-DBM.

The minority leader also reiterated that former PS-DBM Usec. Lloyd Christopher Lao should be investigated for possible violation of the anti-graft law for favoring Pharmally despite absence of technical, legal and financial capabilities as required by law.

Even if the COA and Ombudsman start their own probe, Drilon said that the Blue Ribbon can still continue its investigation, saying the purpose of the investigation of the Blue Ribbon is different from the investigation by the Ombudsman and COA.

Drilon also defended the investigation being conducted by the Senate, saying "to investigate in aid of legislation is the Senate's constitutional mandate" and it is up to the chairman, Sen. Richard Gordon, whether to continue or wrap up the investigation.

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