Philippine Health Insurance Corporation (PhilHeath) president and chief executive officer Ricardo Morales maintained on Tuesday that there were no irregularities in their proposed procurement of the P2.1-billion information technology (IT) system.

During the Senate Committee of the Whole's inquiry on the alleged anomalies hounding the the state health insurer, Morales defended the PhilHealth's proposed IT project against claims of overpricing and even dismissed the amount as insignificant, compared to the billions of pesos that the agency has been losing over the years due to fraud.

"If a corporation that stands to lose tens of billions a year through fraud, which can be avoided by information technology, then the alleged overpriced P2.1-billion IT program over three years appears paltry indeed," Morales told senators.

President Duterte earlier ordered an investigation on the allegedly overpriced IT project of the PhilHealth, which was also rejected by the members of the PhilHealth board. 

"No Sir,  I don't think there was irregularity, it is a matter of explaining fully to the members of the board the details of the IT system. Because the IT system is very complicated," Morales said when asked by Senator Panfilo Lacson on whether or not he recognizes the possible irregularities with the project.

In the hearing, PhilHealth board member Alejandro Cabading explained the board members’ opposition to the release of the P2.1-billion funds to the project repeatedly endorsed by Morales.

Cabading, an accountant, said the PhilHealth Board first rejected the budget proposal for the procurement of the IT system and equipment in December for lack of details as to how the funds will be spent. 

He said the PhilHealth board requested for specifications from concerned officials but were given "vague and scrambled data in an attempt to confuse the board."

In April, Morales again pushed for a P750-million budget for the planned IT project and another P216 million the following month despite the PhilHealth Board's reservations about the proposal.

Dr. Susan Mercado, who recently resigned from the PhilHealth Board, recognized the need for an improved IT system for country's health care sector but said they cannot approve the budget proposal for lack of justifications.

"Noong humihingi po kami ng explanation, lagi pong hindi tama, hindi sapat ang nasasagot (Whenever we ask for explanation, their responses are always incorrect, insufficient)," Mercado lamented.

Cabading said several items in Morales' budget proposal were not listed in the original plan approved by the Department of Information and Communications Technology and there was an overprice of about P98 million.

Morales, on May 15, wrote to PhilHealth members saying that he "particularly take issue" with the PhilHealth board members' concern that the provisions of the budget proposal would be disadvantageous to the agency.

"Since all submissions to the Board are supposed to have the management's imprimatur, by extension, management and its head, the was complicit," Morales said in the letter.

Lacson said Morales should have acknowledged the possible irregularities and deferred the procurement for IT project. He said Morales should be ordering an investigation and further inquiry on the budget proposal.

Morales, in his opening statement, said the IT system is key in streamlining the agency's services and solving the long-standing problem with fraudulent claims.

"Only such a system can keep track of the 109 million members, the 40,000 health care professionals, the 8,000 health care facilities, filing 85,000 claims a day, and paying P2 billion a week," the PhilHealth president pointed out.

In defending the IT project, Morales said the PhilHealth lost about P10.2 billion to fraudulent benefit payments last year. The amount will balloon to P18 billion next if not corrected, he warned.

"The main solution to the problem is a robust, harmonized and integrated IT management system for update database," he maintained.

"This is the strategic shift...The smaller the budget, the bigger the risk of failure," he added.