Duterte admits ‘utang na loob’ behind appointment of Lao

"Ang isda nahuhuli sa bunganga.” The P8.7-billion purchase of pandemic gear from an unqualified supplier is scandalous. Senators aim to catch the culprits.

President Rody Duterte tried to blunt their inquiry with his taped telecast Thursday. In blurting details only he knows, he incriminated himself.

Duterte practically connected the dots. On one side is his college fraternity-mate Atty. Lloyd Christopher Lao. Duterte said Lao provided legal services for Davao City Hall during his mayoralty. As presidential prerogative, he appointed him in succession to three key posts in Malacañang. The last was as head of the Procurement Service-Department of Budget and Management.

It’s natural for an official to appoint someone he knows and trusts, Duterte asserted. Besides, he growled, what’s wrong with repaying “utang na loob” (debt of gratitude).

On the other side is Duterte’s longtime businessman-friend Michael Yang whom he met in Davao City two decades ago. He called him a “pagador (paymaster) of Chinese businessmen.” A Malacañang video shows Yang accompanying fellow Chinese to meet the President. Duterte made him presidential consultant.

If senators were to draw a matrix as criminal investigators do, Duterte will be the central link. Two previous hearings established the ties between Lao and Yang.

PS-DBM head Lao ordered from Yang pricey personal protective equipment in May 2020. Yang’s Pharmally Inc. is not a manufacturer but a mere trader. It was only eight months old, undercapitalized at P625,000 and had zero income. Yet Lao granted Pharmally P8.7 billion in state funds – 13,920 times its worth.

Corruption and procurement laws repeatedly were broken, Senate Blue-Ribbon head investigator Richard Gordon said. Lao admitted neglecting to check Pharmally’s shady background. Its officers and partners are wanted fugitives in Taiwan, Senator Risa Hontiveros bared.

Presidential spokesman Harry Roque alibied no harm-no foul; the supplies were supposedly delivered anyway. The Senate has yet to verify that. Minority Leader Franklin Drilon called it “premeditated plunder.”

Three elements make a crooked deal plunder, no bail and with life sentence. One, the amount is over P50 million. Two, a series or combination of crimes was committed. Three, the culprits benefited. From records, Pharmally instantly made nearly P300-million income.

The repayment of “utang na loob” here was not in Duterte’s personal capacity. It consisted of three official postings. Headship of PS-DBM was sensitive. The small office procures annually hundreds of billions of pesos in government common use supplies, like pens and paper.

The budget secretary has no control over PS-DBM. He supervises it only administratively; meaning, his office merely releases the salaries and operating expenses. In case of vacancy the Office of the President may appoint the PS-DBM head.

The 2020 report of the Commission on Audit sparked the Senate inquiry. Among the COA findings were document deficiencies for P67.3 billion in Department of Health pandemic spending. Of that total, the DOH had transferred P42 billion to PS-DBM without the requisite memorandum of agreement.

Senators found it irregular. There was no official DOH authority for PS-DBM to procure special paraphernalia, Drilon said. The DOH has its own bids and awards committee, expert in medical-grade supplies.

Bulk of the P42 billion went to face masks and shields. The masks were overpriced at P27 apiece; the shields at P120. Gordon said the Philippine Red Cross, which he chairs, purchased those at the same time for only P5 and P15 respectively.

Senate President Tito Sotto has been questioning why the Philippines is the only country that requires face shields against COVID-19. Not even the World Health Organization recommends it.

Duterte resented the audit of his administration. He ordered the independent Constitutional COA to not post its findings online. He illegally instructed his Cabinet to ignore the body.

Duterte even asked in an earlier telecast who audits the COA anyway. Impliedly the guardians of the public coffers are unchecked, so have no right to check others.

Actually COA has an internal auditor like all government agencies. In fact, hours before Duterte’s tirade, the internal auditor posted the 2020 findings on the COA.

Does Duterte wish to take his line of reasoning to its logical conclusion? Which is, if he doesn’t want audits, then his admin must stop exacting taxes. With no tax collections, the admin will have nothing to spend. With no spending, there’s nothing to audit. In short, no taxation without audit.

*      *      *

Catch Sapol radio show, Saturdays, 8 to 10 a.m., dwIZ (882-AM).

*      *      *

“Gotcha: An Exposé on the Philippine Government” is available as e-book and paperback. Book orders accepted at Shopee: https://shopee.ph/GOTCHA-(Paperback)-by-Jarius-Bondoc-i.264837039.3870254862