Michael Yang, 5 Pharmally Execs Face Arrest

The Senate issued on Tuesday, Sept. 7, warrants for the arrest of President Duterte’s former economic adviser Michael Yang and five listed owners of Pharmally Pharmaceutical Corp. for snubbing subpoenas to testify before the Blue Ribbon committee investigating the allegedly anomalous procurement of COVID-19 supplies.

The arrest warrants were issued for Yang and Pharmally owners Mohit Dargani, Twinkle Dargani, Linconn Ong, Krizle Mago and Justine Garado to force them to face the committee, which twice sent them summons that went nowhere as their listed addresses are either fictitious or had already been vacated.

Senate President Vicente Sotto III signed the warrants after the committee finished its hearing on Tuesday where Huang Tzu Yen, chairman of Pharmally, appeared online from Singapore but was not allowed to testify until he had taken an oath before the Philippine embassy.

Senators asked him some questions in the morning but he was not yet under oath. Huang was able to swear before an embassy official to tell the truth before the inquiry in the afternoon. He is expected to testify online on Thursday, Sept. 9, when the committee resumes its hearing.

The committee, chaired by Sen. Richard Gordon, took nearly two hours to tackle administrative matters – including the issuance of the warrants and Huang’s testimony – before getting into the actual inquiry.

“They (witnesses) seem to be in flight…they’ve been given all the chances (to testify),” Gordon said.

Yang’s lawyer Raymond Fortun wrote a letter to Gordon saying his client only learned about the subpoena for him from newspapers as he has not received the summons.

Fortune said Yang is willing to cooperate and face the committee at the next hearing.

“Mr. Yang apologizes for his absence in today’s hearing but gives his assurance to be present at the next scheduled hearing of the committee,” Fortuna said in his letter, adding the subpoena may be sent to his law office in Las Piñas City.

Pharmally was able to bag about P10 billion in supply contracts from the Procurement Service of the Department of Budget and Management (PS-DBM) with about P1 billion in receivables for this year.

The committee is investigating the reported mishandling of some P67 billion in pandemic response funds by the Department of Health (DOH).

Of the amount, P42 billion was transferred to PS-DBM for the procurement of face shields, face masks, PPEs and other supplies.

It was found out at Tuesday’s hearing – the fourth since Aug. 18 – that the PS-DBM had apparently elbowed out local suppliers in favor of Pharmally and other foreign companies despite the latter offering higher prices.

Ferdinand Ferrer, chief executive officer of EMS Components Assembly, a local export-oriented electronic chips manufacturer, told the committee the company immediately heeded the request of the Department of Trade and Industry last year to repurpose its plant to produce COVID-19 supplies.

Investing P200 million to produce medical grade face masks, the company entered into a negotiated contract on April 27 to deliver 100 million of the said items at P13.50 each.

However, Gordon pointed out that just days before, the PS-DBM was procuring the same items from Pharmally at P22 toP27.72 each or almost double EMS’ prices.

Losing investment

Ferrer said the company was only able to ship 25% or 24.8 million masks at P13.50 and subsequent deliveries of 74 million at only P2.35 each following another round of negotiations with the PS-DBM, which had “pushed out” and “delayed” the scheduled deliveries.

“Nalugi kami (We lost money),” Ferrer said, adding the company invested some P200 million to fulfill its obligation to the nation.

He stressed the company still delivered even with the drastic change in prices.

He also said the reason given to them was that the PS-DBM warehouses were full and when the next scheduled deliveries came, the prices of the face masks in the market had plunged, forcing a renegotiation of the contract.

Senators believe the delays in the deliveries as requested by PS-DBM were deliberate to favor foreign companies.

Former PS-DBM head Lloyd Christopher Lao, who was testifying from his home in Davao City, maintained the government no longer dealt with Pharmally after entering into a contract with EMS, adding the renegotiation of the prices was necessary given that regional and other public hospitals no longer wanted to buy face masks from the agency as they could buy locally at much lower prices.

Lao is being linked to officials close to Duterte, including Sen. Bong Go, who has repeatedly maintained that he does not condone any corruption in government.

Commission on Audit (COA) chairman Michael Aguinaldo confirmed his agency’s report and senators’ observations that the DOH and the PS-DBM failed to manage their inventories that led to full warehouses.

Read more: ‘Surgical Masks, Face Shields Worth Over P95 Million Idle In Depots’

By choosing a foreign entity to provide for the government’s requirement of face masks, face shields and PPEs, thousands of Filipino workers were left without jobs as appeals of local manufacturers to patronize locally-made supplies fell on deaf ears, Sen. Joel Villanueva lamented.

Villanueva, who chairs the Senate labor and employment committee, pointed out that it was important to raise the issue of unemployment in the investigation of the alleged irregularities in the purchase of PPE sets from Pharmally.

He described PS-DBM as the kontrabida (villain) of Filipino workers and local manufacturers who were left hanging as the pandemic brought local business to its knees.

“What is the impact on our workers? We heard our local manufacturers from the Confederation of Wearable Exporters of the Philippines that 25,400 employees needed to be retrenched last year,” he said.

He said had the government strictly followed provisions of the Bayanihan laws regarding giving preference to local manufacturers, Filipino workers would have managed to hang on to their jobs and provide for the needs of their families.

Data from the Philippine Statistics Authority (PSA) showed that the total import value for PPEs and medical supplies as of June 2021 increased to about $71.96 million, or roughly P3.60 billion, which should have gone to local companies.

Special friendship

Sen. Risa Hontiveros, for her part, said President Duterte had a direct engagement with fugitive Huang Wen Lei, chairman of Pharmally International, the mother company of local firm Pharmally Pharmaceutical.

She shared a 2017 article from Taiwan-based newspaper China Times about a meeting between Huang Wen Lei and Duterte in Davao City.

“Is this another special friendship? While Pharmally was incorporated in the Philippines only in 2019, it immediately got the biggest contract,” Hontiveros said in Filipino. “Was this relationship the reason why the transaction with Pharmally was swiftly finalized in the midst of a pandemic?”

She said the English translation of the China Times article read: “Huang Wen Lei and entrepreneurial shareholder Wang Mingliang and other core executives visited the Philippines. Duterte made special arrangements.”

Duterte, Huang and the others, according the article, “met at the Davao Hall and invited the director of Drug Administration and the Deputy Minister of Health to attend the meeting.”

It is said in the article that “closer cooperation between the two parties” would “create a win-win situation.”

In 2017, the director of Food and Drug Administration was Nela Puno, whom Duterte fired in 2019 for corruption allegations. Puno – along with the President, Huang and Yang – is seen in the photograph that accompanied the China Times article.

Yang, chairman of the Philippine-based Full Win company, also has close links to another fugitive, Zheng Binqiang, the chairman of China-based Full Win Group.

Hontiveros said that while Duterte should still be given the benefit of the doubt, the meeting with the Pharmally boss certainly does not make him look good.

“That meeting includes a curious cast of characters. It seems that the President is very close to people with questionable track record in the service. Duterte supposedly has the best and the brightest on his side. But why does the person next to him in this picture look surly? Doesn’t he care if everyone sees him hanging out with a ‘wanted’ man?” she added.

“Government employees who remain loyal to the service need not worry. If the President is serious about eradicating corruption, he should let the process in the Senate take its course. He should not make it a hobby to defend Pharmally at press briefings,” the senator said.

Virus origin

Meanwhile, presidential spokesman Harry Roque called on nations to work together to end the COVID-19 pandemic and discouraged politicizing issues like the so-called origins of the virus.

“I have repeatedly said that the Philippines opposes the politicization of the so-called origins of the COVID-19. Let us allow the WHO (World Health Organization) to investigate this matter and meanwhile we call for international cooperation in beating this virus,” Roque said at a press briefing.

Roque was reacting to a report that the US intelligence community has compiled a report on the origins of COVID-19.

The Palace spokesman earlier said COVID-19 is “the common enemy of the entire humanity regardless of nationality, color or shape.”

“It is important that the world links arms to fight this. The problem is if we politicize this, it becomes a hindrance to our efforts to combat this,” he said.

COVID-19 was first reported in the city of Wuhan in China’s Hubei province in November 2019.

More than 220 million COVID-19 cases have been confirmed worldwide, with the US and India registering the most infections. – Cecille Suerte-Felipe, Helen Flores