By Antonio S. Lopez
Pharmally did not even have the inventory of the 500,000 face masks, nor did it have the warehouse to store the masks. A Pharmally official, Lincolnn Ong, a Pharmally director, simply called up another local supplier or a “contact”, a Tiger Phil Marketing, headed by a “brother Tiger”, to provide the 500,000 face masks. Pharmally contracted another warehouse for the purpose. Obviously, with P600,000 startup capital but P11 billion contracts, Pharmally cannot afford to keep an inventory of billions worth of supplies ordered by the DBM, nor build warehouses for them.
Revelations at the recent hearings of the Senate anti-graft probe body, the Blue Ribbon, revealed how the Duterte government coddled the once unknown and struggling Pharmally Pharmaceutical Corp., a Chinese owned company, in securing P11 billion in choice contracts for the supply of anti-COVID paraphernalia—face masks, face shields, RT-PCR tests, and PPE sets (protective uniforms for health personnel), between March 25, 2020 and June 2, 2021.
Incorporated only in September 2019, Pharmally is a company with barely P600,000 in startup capital and in 2019 even reported a loss.
It has a powerful backer, billionaire Michael Yang, a Davao-based Chinese, and an economic adviser to President Duterte.
In one strange contract, for the supply of 500,000 pieces of face masks for P8 million, Pharmally was asked, by email by the cabinet-level Department of the Budget and Management, to quote a price on March 25, 2020.
Instead of just quoting a price, Pharmally proceeded to deliver the 500,000 face masks to the Procurement Service of the Department of Budget and Management (PS-DBM)—on March 25, 2020, the same day. PS-DBM was then headed by Davao lawyer and Duterte law fraternity brother Christopher Lloyd Lao.
Pharmally got paid promptly, for a higher amount, P12.8 million, on April 15, 2020. The actual PS-DBM purchase order (PO), dated April 6, 2020, arrived on April 16, 2020, three weeks after the delivery of the goods being ordered. That is what I call a fast buck.
Outrageous is the fact that Pharmally did not even have the inventory of the 500,000 face masks, nor did it have the warehouse to store the masks. A Pharmally official, Lincolnn Ong, a Pharmally director, simply called up another local supplier or a “contact”, a Tiger Phil Marketing, headed by a “brother Tiger”, to provide the 500,000 face masks. Pharmally contracted another warehouse for the purpose. Obviously, with P600,000 startup capital, Pharmally cannot afford to keep inventory of supplies worth billions nor build warehouses for them.
Were the face masks actually delivered? Nobody knows for sure. “I suspect it is a ghost delivery,” surmises Senator Frank Drilon. The view is shared by Blue Ribbon Chair Senator Richard Gordon.
What is sure is that the government bought the face masks at a huge overprice, P27.72 per piece. At that time, March 2020, you could buy face masks, at lower volumes, for P5 to P13.50 per piece. Pharmally’s Ong claims he bought the face masks from Tiger Phil for P23 a piece.
On April 14, 2020, Pharmally also was asked to quote a price for 2.4 million pieces of surgical masks.
The same day, April 14, 2020, the company got the contract, worth P54 million for 2.4 million pieces of masks, for P22.50 per piece.
During April 2020 alone, Pharmally got four contracts totalling nearly P1 billion.
They include the 2.4 million pieces of surgical masks worth P54 million, 4.5 million pieces of surgical masks worth P220 million, 2,000 RT-PCR test kits worth P688 million, and infrared thermometers, goggles and face shields worth P619,200.
Aghast at a company with P625,000 capital bagging billions pesos worth of contracts, Gordon asks: “Where did the company get the billions with which to buy the supplies?”. The answer: Michael Yang was advancing all the monies.
Overall, Pharmally’s five biggest contracts, so far, are: P3.82 billion for two million sets of PPEs on May 8, 2020; P2.88 billion for 41,400 RT-PCR test kits, on June 9, 2020; P774.35 million for 17,000 RT-PCR test kits on June 2, 2021; P688 million for 2,000 RT-PCR test kits: and P220 million for 4.5 million pieces of surgical masks.
Compare that VIP treatment given Pharmally to the shabby deal dealt a Filipino company, EMS Components Assembly headed by Ferdinand Ferrer.
Ferrer won the bid to supply 100 million face masks for only P13.50, or P1.35 billion. He invested P250 million in his plant to supply the face masks. When the masks were ready for delivery, PS-DBM told EMS to hold the delivery.
By the time PS-DBM was ready to accept the masks, it told EMS to reduce the price drastically, to P2.35 per piece only. Ferrer lost money, badly, in the deal. This is a company who put up a factory, could produce the pieces, could deliver them on time and had the warehouse space for them.
Pharmally did not manufacture the billions-worth supplies it was selling to the government, got the contracts on the same dates it was asked to make a quote in apparent concession to bidding procedure, and got paid in advance even before it could receive the actual purchase order.
Normally, the government would inspect the orders delivered to its premises or warehouses. In Pharmally’s case, there appeared to be no such inspections despite the huge value and the huge volume of deliveries.
Jorge Mendoza was PS-DBM Inspection Division officer-in-charge in early 2020. Before the Blue Ribbon Committee, Mendoza admitted it was not “standard” for deliveries to come to government warehouses without a procurement order.
In the case of the 2.4 million surgical masks delivered in April 2020 by Pharmally and worth P54 million, Mendoza admitted having signed the inspection report without him seeing the delivered orders.
Now, I ask you, ala Pulse Asia: Do you approve of the way Duterte does his job; do you trust him?
In December, 91% said yes to both questions.
Today, unfortunately, there has not been new surveys on Duterte’s job approval and trust ratings. Meantime, lab talaga ni Digong Duterte mga Chinese, Michael Yang and Pharmally, included.
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