MANILA, Philippines — Pharmally Pharmaceutical Corporation continues to court controversy, this time over its incomplete and anomalous procurement papers which two opposition senators say show that the firm was granted alleged shortcuts by the Department of Budget and Management.
Pharmally has fielded intense scrutiny in recent weeks over its bagging of pandemic contracts worth at least P8.68 billion in 2020 despite its incorporation just the year prior with a paid-up capital of just P625,000. The medical supplies it sold to the government have also been criticized by lawmakers as overpriced.
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Senate Blue Ribbon Committee hearings into deficiencies in pandemic spending have also borne out Pharmally's connection to Michael Yang, former economic adviser to President Rodrigo Duterte, who was named by the firm's executives as their financier and guarantor to Chinese suppliers.
Sens. Risa Hontiveros and Francis Pangilinan this week called out anomalous practices undertaken by Pharmally and the DBM's procurement service, citing a delivery that preceded an order and inspection papers signed prior to actual inspections.
Delivery before order
As the Blue Ribbon resumed its hearing on Monday, senators zeroed in on Pharmally's first delivery to the PS-DBM of 500,000 face masks with a unit price of P27.72 on March 25, 2020 — over three weeks prior to the purchase order for the same documented by state auditors.
Also flagged as anomalous by senators was the fact that Pharmally fulfilled a large order within hours of receiving a mere quotation request from the PS-DBM.
Hontiveros asked Pharmally executive Krizle Mago if the firm had the four necessary documents to complete the procurement: a delivery order, a delivery receipt, an inspection and acceptance report of the delivery, and a statement of account of the delivery.
Mago said they had all but the delivery order, the first document needed to kickstart the procurement process. Despite this, Pharmally delivered the masks and was issued a delivery receipt.
The delivery order, by Mago's account, was dated April 6, some weeks earlier than the April 16 noted by state auditors but still much later than the actual date of the delivery.
Jorge Mendoza, who was PS-DBM Inspection Division officer-in-charge at the time, told senators that it was not "standard" for deliveries to come to government warehouses without a procurement order.
Mendoza has since retired, telling senators his contract with the agency was not renewed after 31 years of employment there.
"This transaction between Pharmally and PS-DBM looks like a short cut to corruption," Hontiveros said Tuesday in a statement written partially in Filipino. "There is no order, but there is a receipt? Is the discussion under the table?"
"Pharmally's incorporators seem to be naive entrepreneurs, intent on profiteering and making a quick buck, and PS-DBM was a willing enabler."
Inspection report signed before inspection
Also questioned by senators on Monday was the anomalous inspection report for some 2.4 million surgical masks delivered by Pharmally to the PS-DBM at a total price of P54 million last April 2020.
Former PS-DBM inspection chief Mendoza admitted that he had not "personally" seen the stock even though his signature was in the report.
He said, however, that this can happen because of the volume of the deliveries received by the agency.
Mendoza also revealed upon questioning from Sen. Pangilinan that PS-DBM personnel were instructed to sign inspection documents for deliveries of medical equipment even before they had been delivered.
Another PS-DBM official, Mervin Tanquintic, also told senators he was instructed by "management" to sign reports even prior to inspections.
"There was no delivery yet but we were advised or instructed to prepare the inspection document," Mendoza said, referring specifically to personal protective equipment from China.
He explained that this was because some Chinese suppliers, which the government had to "resort" to, only agreed to deliver once payment had been made.
Inspection reports had to be signed prior to this in order for the PS-DBM to release payment.
"This is contrary to our [normal] process," Mendoza admitted to Pangilinan.