The Philippine Pharma Procurement Inc. (PPPI), central procurement arm for all government agencies in the importation of drugs and medicines, has been absorbing huge losses in the past 14 years and was apparently untapped in the multi-billion importation of vaccines and vital pharmaceuticals needed to address the current public health crisis triggered by the 2019 coronavirus disease (COVID-19) pandemic.

The Commission on Audit (COA) has disclosed that the PPPI has accumulated a deficit of P486.74 million as of December 31, 2020.

“The continued losses and lack of funds likewise resulted in the non-settlement of its loans and interests of P278.75 million and P132,445 million, respectively, that are already due and demandable,” COA said in its 2020 annual audit report for the government-owned corporation.

COA noted that in its yearly operations since 2006, the PPPI “was unable to manage its business profitably to improve its financial position.”

PPPI is a subsidiary of the Philippine International Trading Corporation

which has received numerous adverse audit observations in 2019 for failing to deliver hundreds of millions of pesos worth of supplies and equipment required by many government agencies, among them the Philippine National Police and the Armed Forces of the Philippines.

COA said the Governance Commission for Government Owned and Controlled Corporations (GCG) had previously warned PPPI that it is monitoring the firm’s operations.

Reacting to the COA observation, the PPPI management under its President and CEO Jose Capistrano Jr. said 2020 operations proved to be “challenging” because of the natural disasters and COVID-19 pandemic that continue to affect the country.

Despite operating as procurement arm for imported drugs and medicines for government, the PPPI’s role in the purchase of COVID-19 vaccines and other important medical supplies has not been clarified by COA.

The audit agency warned that unless the PPPI is able to address its losing financial operations, there is a possibility that the GCG might take “unfavorable action” against it.

In the same audit report, state auditors noted that PPPI failed to return to the source agencies (SA) some P157.74 million they transferred following the completion of procurement projects from 2016 to 2020.

“Instead these funds were used to finance other projects as requested and approved by the concerned SAs, contrary to the pertinent provisions of COA Circular No. 94-013 dated December 13, 1994 and the General Provisiosn of the applicable General Appropriations Acts,” the COA said.