MANILA, Philippines — An internal audit of the Department of Budget and Management (DBM) flagged “constant delays” in the “various deliveries” of Pharmally Pharmaceutical Corp., Sen. Imee Marcos said Tuesday at the resumption of the Senate blue ribbon investigation into the government purchase of allegedly overpriced medical supplies.
Marcos cited an audit ordered by former Budget Secretary Wendel Avisado that found that Pharmally’s “various deliveries” were made “way beyond” the approved delivery dates.
“Is this the supplier that they’s saying has the capability to really deliver? They are always short in their deliveries, always delayed, and always asking for an extension. There are even liquidated damages charged,” Marcos said in Filipino.
This developed after Lloyd Christopher Lao, the former head of the Procurement Service of the DBM (PS-DBM), defended the contracts it awarded to Pharmally.
“I scrutinized [the firm]. In fact, I asked for proof that they can deliver,” Lao told senators.
“They were able to prove it because they actually showed proof by delivering it,” he added.
But Marcos insisted that this was not the case, citing the DBM audit.
In one instance, Marcos said Pharmally was supposed to deliver RT-PCR kits in 14 tranches, but only nine were supposedly fulfilled, seven of which were submitted to the DBM audit team.
“They repeated time and again the unsatisfactory progress of deliveries and the constant request of Pharmally for extensions and that it was always short. There is further mention in many of the documents presented in this internal audit that liquidated damages were in fact charged already because of the constant delays,” Marcos said.
“There was also the possibility of a COA [Commission on Audit] observation memo because of the non-accountability of the supplier of the incurred damages,” she added.
Senators are investigating the government’s transactions with Pharmally, which was awarded over P8.6 billion worth of contracts for medical supplies in 2020 despite being only several months old and having just P625,000 in paid-up capital.
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It was earlier disclosed that Pharmally had borrowed money from former presidential adviser Michael Yang to help them fill some of the government’s orders last year.
READ: Pharmally ‘borrowed money’ from Yang, to be paid with gov’t funds – exec
This, senators said, was an indication that Pharmally had no financial capacity to be given these procurement contracts.
READ: Pharmally exec: All our business dealings are aboveboard
In a House hearing Monday, Yang insisted that it was his friends, not him, who funded Pharmally in some of its contracts with the government.
READ: Pharmally funding came from friends, not me, Michael Yang insists
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The Pharmally chairman and president, Huang Tzu Yen, has also previously denied that the company was favored in any way in the government’s procurement of medical supplies in 2020, saying the firm has been “unfairly prejudged.”
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