Senators: PS-DBM favored Pharmally over Filipino face mask producer

MANILA - Several senators on Tuesday questioned why the Department of Budget and Management's Procurement Service (PS-DBM) seemed to have given preferential treatment to foreign supplier Pharmally instead of patronizing local producers of pandemic supplies.

Records from the PS-DBM showed that the agency bought 12.9 million face masks from Pharmally at between P22 and P27 a piece, while local company EMS Components Assembly sold face masks for only P13.50 each.

"Nakakabahala na malaman natin na 'yung local supplier natin would supply for P13.50 and yet binigay 'yung kontrata sa foreigner... na ang prices, double the prices," Senate President Pro Tempore Ralph Recto said during a Senate inquiry.

"Kaya ng mga Filipino manufacturers to produce... [pero] hindi sila nakatanggap ng mga kontratang tulad ng sa Pharmally," Sen. Risa Hontiveros said.

Former DBM Undersecretary Lloyd Christopher Lao said the PS-DBM had to procure from Pharmally in the first few months of the pandemic as EMS could only deliver the face masks by June 2020.

"'Yung binili natin ng early April, naghahabol tayo noon," said Lao, who is accused of helping Pharmally bag billions in government contracts.

"We had a contract with EMS. We asked them, 'How fast can you assemble your factory and deliver?' Their commitment was in June," he said.

"When we had a contract with EMS already, we stopped procurement from any entity except EMS," he said.

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Sen. Francis "Kiko" Pangilinan rebutted Lao, noting that the PS-DBM still had transactions with Pharmally months after the COVID-19 virus was first detected in the Philippines.

"Kung 'yung unang 3-4 na buwan siguro maiintindihan ko pa pero mayroon pang gastos na P2.3 billion for 2021," Pangilinan said.

The Department of Trade and Industry (DTI) - which has been pushing the government to buy from local traders - said the Department of Health (DOH) and the PS-DBM were "not responding for several months on the issue" of procuring personal protective equipment from local players, the senator said.

"Parang mayroong nagdri-dribble ng bola. The same story for the testing kits," he said.

"Parang ang lumalabas dito, dini-dribble 'yung lokal, kasi nga mayroong favored na supplier," he said.

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Pangilinan also questioned why Pharmally was the lone supplier who was able to match material specifications from the DBM within 2 to 3 days.

"'Yung 2-3 days na delivery, sa mga bidding na pabilisan, ang tawag doon lutong macau kasi alam na ng favored supplier 'yung specs," he said.

"Tinimbre na sa kanila ano yung hahanapin eh kaya mabilisan," he said.

FROM P13 TO P2

Lao noted that the PS-DBM awarded the largest contract possible to EMS.

While EMS secured a 100-million piece face mask contract with the government, only 25 million pieces were bought for P13.50, while the PS-DBM only paid P2.35 each for the remaining 75 million face masks, EMS chairman Ferdinand Ferrer said.

The original contract was P1.3 billion but total sales was at P523 million, Ferrer said.

"Nalugi kami," he said.

Commission on Audit chairperson Michael Aguinaldo said EMS suffered losses due to the PS-DBM's "problem with inventory management."

"Hindi po na-dispose a lot of these equipment right away so noong dumating 'yung September, prices went down, ayaw na kumuha sa PS-DBM kasi mahal," Aguinaldo said.

"They are faced with the problem of getting a lot of stock that no one wants to get because it is expensive," he said.

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Senate Committee on Labor chairperson Sen. Joel Villanueva slammed the PS-DBM's move saying hundreds of jobs could have been saved if the government prioritized procuring from local sellers.

"Gaano kalaki tama nito sa ating labor sector? Ilang trabaho dapat ang nalikha, ang nagawa, kung nagkaroon ng puso ang ating PS-DBM at ang ating pamahalaan na tulungan ang ating mga local manufacturers," he said.

C-130 DELIVERIES

Senators also flagged why assets of the Armed Forces of the Philippines were used to ship the pandemic supplies from Pharmally.

"Hindi ko nilalagay sa spot ang Armed Forces... Ang tinatanong ko lang bakit iba ang treatment sa Pharmally kaysa sa mga kababayan natin?" Sen. Panfilo Lacson said.

National Task Force for Coronavirus Disease 2019 Chief Implementer Secretary Carlito Galvez Jr. said military vessels had to be deployed as commercial plane operations were limited last year due to the pandemic.

"During that time, we don't have the supplies... I am not aware who is contracting [the flights]... But my mission is to produce PPEs and deliver it to all hospitals," he said.

Recto said the Senate will review the PS-DBM's role and craft a policy to stop the agency from procuring in behalf of other executive departments under the 2022 national budget.

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