Editorial Notes

Punish pandemic profiteers in Philippines: Inquirer

The paper says that profiteering from the pandemic that has caused untold suffering on millions of Filipinos is an utter abomination.

The writer says that Lloyd Christopher Lao bought from Pharmally face masks at P27.72 (S$0.75) when other suppliers sold the same goods at P13.5, P16, and P17.50 for the same period.
The writer says that Lloyd Christopher Lao bought from Pharmally face masks at P27.72 (S$0.75) when other suppliers sold the same goods at P13.5, P16, and P17.50 for the same period.PHOTO: REUTERS

MANILA (PHILIPPINE DAILY INQUIRER/ASIA NEWS NETWORK) - In just several days of hearings at the Senate, staggering revelations have tumbled out relating to the dubious purchase of P8.7 billion (S$234 million) worth of overpriced face masks, personal protective equipment (PPE), and Covid-19 test kits that senators have said may be tantamount to "premeditated plunder."

At the centre of the grilling by the Senate blue ribbon committee is Lloyd Christopher Lao, a provincemate from Davao and fraternity brother of President Duterte, who at one point was designated undersecretary in the Presidential Management Staff under now Sen Bong Go (Both Lao and Go have denied this link, but documents prove otherwise).

It was Lao who approved the outsized supply contracts with Pharmally Pharmaceutical Corp as executive director of the Procurement Service of the Department of Budget and Management (PS-DBM).

Lao was appointed head of PS-DBM on Jan 2, 2020 before "quietly" leaving in June that year; as Senate Minority Leader Franklin Drilon pointed out, he had been placed in the DBM in August 2019 despite a pending extortion case when he was earlier chair of the Housing and Land Use Regulatory Board.

On March 27, 2020, Health Secretary Francisco Duque III ordered the transfer of around P42 billion of Department of Health (DOH) Covid-19 funds to the PS-DBM.

Just two weeks after the fund was transferred - without any documentation as has been flagged by the Commission on Audit (COA) - the PS-DBM began awarding contracts to Pharmally. The contracts reached P8.6 billion from April to June 2020 alone.

The P42 billion that was transferred represents the biggest chunk of the DOH's P77 billion Covid-19 budget that the COA found to have "deficiencies."

Lao bought from Pharmally face masks at P27.72 (S$0.75) when other suppliers sold the same goods at P13.5, P16, and P17.50 for the same period.

He also bought overpriced PPE from Pharmally worth P3.82 billion on May 8, 2020, and test kits worth P2.88 billion on June 9, 2020, Drilon added.

Last June, Pharmally, whose license to operate as an importer-wholesaler of medical devices was given only in January 2021 by the Food and Drug Administration, won yet another award, this time worth P744 million, for the procurement of 17,000 RT-PCR test kits for P45,550 each.

Based on financial statements submitted to the Securities and Exchange Commission, the net income of the local Pharmally company, which was incorporated only in September 2019 with a paltry paid-up capital of P625,000, 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.

Pharmally officials were personally introduced to President Duterte in March 2017 by his former adviser on economic affairs Michael Yang.

How did Pharmally bag these contracts even if there were "significant disparities" with prevailing market prices at that time when the country was already reeling from the pandemic and the administration said it was scrounging for scarce funds?

"It seems to have been planned. If there is premeditated murder, here, we have premeditated plunder," said Drilon. "For me, in times of the pandemic, this is treachery."

Drilon had questioned Pharmally for overpriced medical supplies as early as September last year, citing, for instance, that it sold test kits at P344,000 each when others were selling the item for P240,000.

Sen Richard Gordon, chair of the Senate blue ribbon committee leading the probe, likewise sees "corruption" in the transactions. "Katiwalian talaga … Kaduda-duda … overpricing at finavor ang ilan (Corruption really… Doubtful…)," he said.

More "kaduda-duda" details: Executives of Pharmally that were supposed to be part of the Aug 27 hearing had given fake addresses, while another one had already left her San Juan residence.

Profiteering from the pandemic that has caused untold suffering on millions of Filipinos is an utter abomination.

The President is expected to be the first to condemn any indication whatsoever that officials in his administration may have taken advantage of the dire emergency to make a buck.

But on Tuesday, instead of ordering a thorough look at the PS-DBM irregularities, President Duterte spent his late-night TV address hurling personal insults at Gordon and Sen. Panfilo Lacson and disparaging the hearings, while again defending Health Secretary Francisco Duque III and even Yang.

That day had also marked a grim milestone: over 22,000 new Covid-19 cases, the highest the country has notched since the start of the pandemic.

The Senate cannot be daunted by the President's irrational response to what may turn out to be the heinous plunder of public funds in the middle of this devastating crisis.

Weary, outraged citizens will hold Drilon to his word, and his fellow lawmakers to their similar avowals, that the Senate "will not leave any stone unturned" in getting to the bottom of this likely massive racket.

Ferret out the truth, root out the pandemic profiteers, and let the overpriced chips fall where they may.

  • The Philippine Daily Inquirer is a member of The Straits Times media partner Asia News Network, an alliance of 23 news media organisations.