Tolentino acts on Pharmally scandal; files bill ensuring financial capacity of gov't contractors

Published October 14, 2021, 10:52 AM

by Vanne Elaine Terrazola

Senator Francis Tolentino has filed a bill seeking to ensure that government suppliers and contractors are financially capable to take on their obligations even in emergency purchases.

Senator Francis Tolentino (Senate of the Philippines PRIB)

Tolentino recently filed Senate Bill No. 2433 to amend provisions of the Republic Act (RA) No. 9184 or the Government Procurement Reform Act on negotiated procurements to require suppliers, contractors and consultants to prove their financial capacity.

“This is important since the government and its instrumentalities should make sure that those they choose to enter into contract with have their financial capacity to fulfill their contractual obligations,” the senator said in the bill, which was released to media on Thursday, Oct. 14.

Tolentino said that under RA 9184, a negotiated procurement scheme may be conducted by the government directly with suppliers and contractors in case of extraordinary circumstances on the condition that the chosen private firm is technically, legally, and financially capable.

He, however, noted that law failed to provide explicit guidelines in determining whether a supplier or contractor is efficient enough to fulfill their contractual obligations.

“The pandemic laid bare disparities in our laws, particularly those related to health care, travel, transportation, and procurement,” said Tolentino, who alluded to the congressional inquiries over the alleged overpricing of personal protective equipment (PPEs) and other medical supplies purchased by the government during the COVID-19 outbreak.

In the Senate Blue Ribbon Committee’s marathon hearings on the issue, senators questioned the government’s award of over P8.6 billion in contracts to Pharmally Pharmaceutical Corporation, a start-up incorporated in late 2019, despite its supposed lack of financial capability.

The lawmakers later found out that Pharmally does not manufacture PPEs and only earns from commissions from the products of its suppliers.

Under Tolentino’s bill, procuring government agency shall also “ascertain the financial, technical and legal capability of suppliers, contractors or consultants” during an emergency procurement.

“It’s about time to amend the present procurement rules,” he said, adding that he “believes it will promote and sustain efficient and good governance.”