Pharmally facemasks 54% costlier; P550 M wasted in expired test kits

by Jarius Bondoc – The Philippine Star, 24 Sep 2021

Presidential Chinese pal Michael Yang’s Pharmally Inc. sold to the government surgical masks 54-percent costlier than base price. It also supplied P550 million worth of COVID-19 test kits that expired shortly after delivery. The two findings by senators Tuesday controverted President Rodrigo Duterte’s repeated defense of his admin’s dealings with the shop of his former special economic adviser. He has been asserting in taped telecasts that Pharmally delivered pandemic gear on time at no overprice

Receipts showed that Pharmally was the third middleman in the supply of 500,000 masks on Mar. 25, 2020. “There was deceit,” Senate Blue Ribbon committee chairman Richard Gordon said. Being only six months old with no inventory, Pharmally sourced the masks from Chinese-owned Tigerphil Marketing at P23.90 each. Tigerphil in turn got them from Greentrends Trading International at P18, or P9 million total. Pharmally peddled the stocks to the Procurement Service-Dept. of Budget and Management at P27.72 apiece, totalling P13,860,000.

None of the three was a maker of masks. Had PS-DBM skirted the middlemen, it could have saved 54 percent and not overpaid nearly P5 million. Gordon said then-PS-DBM Director Lloyd Christopher Lao should not have dealt with Pharmally. A law school fraternity-mate, Lao was Duterte’s appointee.

The 500,000 masks were the first of 10 Pharmally transactions amounting to P12 billion. Senator Francis Pangilinan asked Lao why the request for quotation set a price ceiling of P28 per mask. The P28 tag was the Dept. of Health’s suggested retail price. The wholesale rate should have been much lower.

An earlier hearing bared that Filipino-owned EMS Components Assembly offered only P13.50. But that was only in June 2020, after it heard about the huge procurements.

In previous hearings, a 2017 Malacañang video was replayed of Yang presenting Pharmally executives to Duterte. Yang claimed his role in the PS-DBM deals was only to introduce Pharmally to suppliers in China. But Pharmally’s Singaporean chairman Huang Tzu Yen and Filipino director Linconn Ong swore that Yang lent them large cash and served as guarantor.

Senator Panfilo Lacson earlier bared that Pharmally sold two million sets of personal protective equipment at 66-percent mark-up. The firm bought the PPEs from China at P1,150 per set then sold it to PS-DBM at P1,910. It profited P1.5 billion from the P3.82 billion bonanza.

Pangilinan last Tuesday presented documents on PS-DBM procurements of P550 million worth of test kits. The DOH specified test kits with expiration of 24-36 months. But PS-DBM accepted Pharmally deliveries expiring in less than six months. A memo from DOH Assistant Secretary Nelson Santiago requested Lao to reschedule deliveries. That was to “prevent the repeat of the past scenario where a large number of stored kits expired.”

“This is like we are burning cash amid the many deaths,” Pangilinan remarked. “DOH was requesting a rescheduling of the delivery of Pharmally test kits because the ones that were delivered expired and were not used.”

The Senate inquiry began with the question of why DOH relinquished to PS-DBM P42 billion in medical procurements. The Commission on Audit had flagged the DOH for lack of a covering memorandum. PS-DBM procures for government agencies common-use supplies like paper, pens, trash cans and toiletries. Pandemic paraphernalia are the purview of DOH’s internal bids and awards committee.

The PS-DBM initially was grilled on its technical capability to handle medical supplies. Health Secretary Francisco Duque III was asked who ordered him to transfer the emergency purchasing to another department.

PS-DBM continued to buy from Pharmally till mid-2021, Senator Risa Hontiveros noted. That was despite information online that Pharmally chairman Huang and his founder-father are wanted by Taiwan authorities for embezzlement and stock fraud.

Gordon criticized Duterte for lawyering in his telecasts for Pharmally and Yang. Retorting on Wednesday, the President reiterated that Duque only followed his order to bring in the pandemic supplies at once. Distancing himself from Yang and Pharmally, he said, “The senators can quash all of these traders for all I care.”