Senator Joel Villanueva on Tuesday, Oct. 5, chided an official of Pharmally Pharmaceutical Corporation for supposedly fooling the government in declaring that it paid over a million in employee benefits when government records showed otherwise.

At the resumption of the Senate Blue Ribbon Committee's hearing on the government's transactions with Pharmally for the purchase of COVID-19-related medical supplies, Villanueva disclosed receiving a certification from government institutions that the firm did not properly remit the mandated contributions for its workers last year.

Citing a Social Security System (SSS) certification dated Sept. 13, 2021, Villanueva said Pharmally only started paying SSS contributions for its employees in November, 2020.

This was also the same month that the company started contibuted to the Philippine Health Insurance Corporation (PhilHealth) and to the Home Development Mutual Fund or PAG-IBIG Fund, Villanueva said while presenting certifications dated September 10, and September 24, respectively.

"This is not the same answer that you have given me when I asked you if you are contributing with the government-mandated contributions," Villanueva told Pharmally chairman Huang Tzu Yen, who has been attending the virtual Senate hearing from Singapore.

Pharmally, which bagged nearly P12 billion in contracts to supply the government personal protective equipment and test kits, was incorporated in September, 2019 with only seven to 11 employees.

According to the certifications presented by Villanueva, Pharmally paid a total contribution of P220,910 to SSS from November, 2020 to August, 2021, and a total of P44,557 in contributions to the PhilHealth from November, 2020 to May 2021.

The PAG-IBIG certification did not specify the amounts that Pharmally paid for its employees, but stated that the firm remitted membership savings also from November, 2020 to August, 2021.

Pharmally's financial statement to the Securities and Exchange Commission, on the other hand, declared P1,343,379 in expenses for "employees' benefits" for 2020.

Huang explained that bulk of the contributions for Pharmally's employees were paid through the contributions of the now-defunct Pharmally Biological Company, citing an "administrative delay". He also maintained that their employees were "rightfully compensated", even though they were paid under different companies.

But during the Senate committee's hearing last September 18, Rose Nono-Lin, one of Pharmally Biological's former executives, vehemently denied that the two firms were related.

“It’s either you are fooling your employees or you are fooling the government or both. Unfortunately, these records would not lie," Villanueva told Huang.

“Kapag hindi po nagcocontribute sa SSS, Philhealth at PAG-IBIG, marka po iyan ng isang fly-by-night na kumpanya (If a company does not contribute to the SSS, Philhealth, PAG-IBIG, it's a mark of a fly-by-night company),” he further said.

The senator, who chairs the Senate labor committee, noted that under the Bayanihan to Recover as One Act, local products and businesses should have been prioritized in the government's purchases amid the pandemic.

He said local factories have also repurposed to be able to cope with the impacts of the health crisis to minimize job loss.

Senators believed that the Duterte administratioin gave undue preference for Pharmally over local manufacturers of PPEs. They found that Pharmally had no manufacturing operations and only earned from commissions.

"Ang kapalit, ito ho, hindi nag-cocontribute man lang sa mga government mandated contributions...At pito hanggang labing-isang empleyado lamang ang nalikhang trabaho (In exchange, we have a firm that does not pay government-mandated contributions, and was only able to create seven to 11 job opportunities),” Villanueva said.