It is now beleaguered ex-health secretary Francisco Duque’s word against ex-president Rodrigo Duterte’s protestations that he is lily-white as far as the multibillion-peso Covid pandemic scam initiated by Pharmally Pharmaceutical Corp. (Pharmally) and coddled by Lloyd Christopher Lao of the Procurement Service of the Department of Budget and Management (PS-DBM) is concerned.
On Monday, June 3, 2024, Duque admitted to ACT Teachers Rep. France Castro that it was Duterte who ordered the transfer of the P47.6 billion Covid funds from the Department of Health (DOH) to PS-DBM, which meant shifting the duty of disbursing for a medical and health crisis from doctors to a lawyer like Lao, who had earlier raised hackles when he was assigned to the Housing and Land Use Regulatory Board (HLURB), where he clashed with executives and purportedly took over the management of a fund collected from property developers for “mass housing” projects. This issue should likewise be investigated by the Makabayan Coalition and the Office of the Ombudsman.
Lao belongs to the Davao faction of the Duterte regime and he had been doing chores for now-Sen. Christopher “Bong” Go before he was sent to the HLURB and then promoted to lead an office at the DBM that literally swims in money. Among those said to be very close to Lao was Cebu businessman Lincolnn Ong, who was involved in reclamation projects in Manila Bay and dredging projects in Zambales, said to be the source of materials for China’s man-made islands in the South China Sea (SCS.) Pharmally, capitalized at only P625,000 and thus should be owned, controlled and managed by Filipino businessmen, imported cheap face masks, face shields and personal protective equipment (PPE) and sold them to DOH at a huge overprice.
The Commission on Audit (COA) reported that all the business deals Pharmally secured passed through Lao and PS-DBM. Lao become the pointman for Pharmally, which benefited from its ties with Michael Wang, the Chinese citizen who eerily became a Duterte economic adviser, and who also provided funds for the company whenever it needed cash. Transferring the P47.6-billion to PS-DBM was a surefire way of guaranteeing that DOH purchases would pass Lao’s muster, making him the gatekeeper. Duterte cannot claim that he had nothing to do with Pharmally, but he has everything to do with Lao, Go, Wang, Ong and all the foreign executives of the company organized to handle DOH’s China purchases.
Probably, Duterte thought of PS-DBM as the resurrection of the Department of General Services (DGS) that his old man Vicente Duterte headed during the unlamented 21-year Ferdinand Marcos Sr. regime. DGS was the procurement unit of the government and it knows practically all the prices that suppliers could offer. Of course, there is the standard government discount and the allowable 10% variation in prices categorized as “business costs.” The pandemic shattered the DGS model as prices skyrocketed and Chinese corporations made a pile by charging hapless buyers higher prices and delayed shipments padded the costs.
The DBM has no business acting as the procurement office of government instrumentalities since, by law, all these entities are provided with annual appropriations that must be disbursed by them and subjected to accounting and auditing procedures by the Commission on Audit (COA.) It was DOH’s duty to handle the Covid funds and be answerable for its use or misuse. Duterte exceeded his authority by shifting the money to PS-DBM, which is led by an underling of Bong Go, who also happened to be Duterte’s runner in Davao City. The aggregate sum of P47.6-billion is 77.4% of the total P67.32-billion Covid fund. Duterte may be immune from suit for his official acts from June 30, 2016 to June 30, 2022 but he will be liable for the fraudulent, overpriced deals that favored the foreigner-controlled Pharmally. It is hornbook doctrine that in a conspiracy, the act of one is the act of all.
It is understandable for Duque to sing a different tune now that Duterte is no longer in Malacanang while he is being investigated and charged with criminal offenses related to the Pharmally scam. Duque told ACT Teachers Rep. France Castro that Duterte authorized the transfer publicly due to the health crisis in March 2020. The former health secretary said Duterte also talked about the fund transfer during the weekly Cabinet meetings and the program “Talk to the People.” Duque made three statements on this single issue. The knives may now be out for Duque, who had insisted he had nothing to do with the importations of the masks, face shields and PPE.
In its August 2021 report, COA found deficiencies in how the DOH managed its P67.32-billion fund to fight the COVID-19 pandemic, and focused on the China-made masks and face shields as well as the PPE that could have been sourced locally. If the PS-DBM controlled the P47.6-billion and spent most of it for the products imported by Pharmally, Duque could technically exercise only fiduciary duties over less than P20-billion of Covid funds. Yet, another COA report showed that DOH was swamped by deficiencies and failed to comply with pertinent laws and regulations. which led to missed opportunities for the department primarily tasked with managing the pandemic.
