Stop accepting bids from local firm linked to fraud scandal, Hontiveros tells DBM

Senator Risa Hontiveros on Monday, August 30, told the Department of Budget and Management (DBM) to cease from accepting proposals from a local company allegedly linked to a financial fraud controversy in Taiwan.

Senator Risa Hontiveros (Senate PRIB)

“Pera ng taumbayan ang ginagamit para bayaran ang bilyon-bilyong halaga ng kontrata para sa ating COVID-19 response. Hindi pwedeng ang kaban ng bayan ay napupunta pala sa mga kumpanyang hindi pala mapagkakatiwalaan (It's the people's money we are using to pay for the multi-billion peso contracts being awarded for COVID-19 response. Public funds should not go to firms we cannot trust)," Hontiveros said in a statement.

"This dubious supplier must go,” she told the DBM.

Hontiveros referred to the Pharmally Pharmaceutical Corporation, which bagged over P8 billion worth of deals from the DBM's Procurement Service (DBM-PS) last year for the purchase of various medical supplies for COVID-19 response.

Senators questioned the award for the company's lack of track record and a low paid-up capital.

During the Senate Blue Ribbon hearing on the disbursement of the Department of Health's (DOH) COVID-19 response funds last week, Hontiveros raised Pharmally Pharmaceutical's "possible links" to the Pharmally International Holdings Corporation, a firm accused of colluding with businessmen in what was reported as "one of the largest security fraud cases" in Taiwan.

Hontiveros said her office retrieved a disclosure statement from an annual shareholder report of a different holdings corporation showing that Huang Tzu Yen, one of the owners of Pharmally Pharmaceutical, is the son of Huang Wen-lai, chairman of Pharmally International who was issued an arrest warrant amid the fraud mess.

Bloomberg has also identified Huang Tzu Yen as a board member of Pharmally International.

At the hearing, former DBM-PS chief Lloyd Christopher Lao said he is not aware if the two companies are related. He also admitted to senators that he "failed to check" the background of the local firm.

“It is unacceptable that DBM continues to award Pharmally with contracts. Is the DBM simply failing to do its due diligence or is it in cahoots with this questionable local firm?" Hontiveros said on Monday.

"Either way, it is deplorable all the same. We should not hesitate to end contracts with companies that may be involved with illegal activities, whether here or abroad,” she appealed.

Senate Minority Leader Franklin Drilon on Sunday, August 29, opined that the government's procurement of overpriced supplies from Pharmally Pharmaceutical consitutes a premeditated plunder.

Senator Panfilo Lacson, for his part, suspected a "large-scale corruption" in the DBM-PS procurement of COVID-19 response supplies.