Senators raised suspicions Friday, September 17, over the donations made by Pharmally Pharmaceutical Corporation, the newly-registered firm given over ₱8.6 billion in contracts for the purchase of COVID-19 supplies, to the government in 2020.

At the resumption of the Senate Blue Ribbon Committee's inquiry on the Department of Health's (DOH) procurement of medical supplies, Senate Minority Leader Franklin Drilon noted the ₱33 million worth of donations declared by Pharmally in its financial statements for last year.

Raymond Abrea, a certified public accountant and president of the Asian Consulting Group, said that in their study of the company's audited financial statement, Pharmally did not disclose details of their donations.

He noted that 79 percent of Pharmally's operating expenses for 2020 was declared as donations.

Asked by Drilon, Pharmally director Linconn Ong said he has no recollection of their accounting statements.

"Ito ay malaking halaga, ₱33 million sinabi niyo sa financial statements ninyo. Dinonate niyo ito. Kanino niyo dinonate? Hindi ba pinag-uusapan sa board ito bago niyo i-donate or pinag-uusapan man lang sa inyong mga officers kung saan ido-donate ito (This is a huge amount, ₱33 million according to your financial statements. You donated this amount. To whom did you donate this? Didn't you discuss this in your board or at least among your officers to whom you would donate this)?" Drilon pointed out.

"I don't have the records...I don't recall," maintained Ong, who was earlier cited for contempt for supposedly being evasive in his responses.

Senator Richard Gordon, committee chairman, called out Ong for his "lies", stressing that the resource person is one of the members of the company's board and should have been aware of their financial dealings.

"₱33 million 'yan, hindi ka aangal nang direktor (That's ₱33 million, you would not protest as a director?" Gordon asked.

Drilon also inquired if Pharmally paid its donor's tax for the donations, which Ong was also supposedly not aware about.

Pharmally's external auditor Illuminada Sebial said that the ₱33 milion was donated in the form of goods.

The recipients of the donations include the Research Institute for Tropical Medicine (RITM), and the VRP Medical Center, as well as the Taguig City Hall, San Juan City Hall, Quezon City Hall, Quezon City Council, the Cavite provincial government, and the Navotas City Hall.

Pharmally has yet to submit to her documents about the other donees, Sebial said.

"Listahan lang po ang binigay po nila (They only gave me a list of their donees)," she told the Senate panel.

Senator Francis Pangilinan found it "unusual" for a business like Pharmally to allot most of their money for "donations".

Abrea shared the observation, saying that unless they operate as a foundation, it is "unlikely" for commercial operations to declare majority of their operating costs as donations; and that salaries and rent expenses "normally" comprise the largest portion of a corporation's expenses.

But the accountant also noted the lack of disclosure from Pharmally on its rent expenses, or lease agreements it entered into. He said the lease agreements were also requirement under the Bureau of Internal Revenue and are subject to documentary stamp tax.

There was also no disclosure on the loans availed of by Pharmally, even as Ong already admitted that it borrowed money from former presidential adviser Michael Yang for some of its purchases.

"Sa records na nakita po natin sa Pharmally, hindi naging malinaw kung sino pong nagpautang po or kung nakautang po sila. Kasi ang nakalagay lang po, interest payments po, wala na pong iba (In the records of Pharmally that we studied, it was not clear who lent the company the money or if they were able to avail of loans. They only stated interest payments, no more)," Abrea said.

Senators have accused the executive department of giving undue preference to Pharmally in its purchases of COVID-19 supplies, despite its low paid-up capital. They have asked the Anti-Money Laundering Council (AMLC) to look into the foreign firm's bank transactions to determine possible irregularities in their dealings.

The Senate Blue Ribbon Committee has also subpoenaed the documents relating to Pharmally's financial transactions.