Finally, a Pharmally trial

Monday this week brought a wave of front-page stories: the magnitude-7.8 earthquake that shook parts of Mindanao, the continuing circus at the Senate where 18 self‑confessed “bagmen” holed up at a senator’s office instead of presenting their claims under oath before the blue ribbon committee, the House prosecution panel’s rejection of Vice President Sara Duterte’s rejoinder to the impeachment complaints against her as a “non-answer,” the huge shift happening in the education front as the school year opened under a new trimester calendar.

Buried by all these stories was a significant development—the first official reckoning on the Pharmally scandal, with the Sandiganbayan finally beginning the graft trial of former Department of Health (DOH) Secretary Francisco Duque III and ex-Department of Budget and Management (DBM) Undersecretary Christopher Lao. The two are on the dock for the transfer of COVID-19 funds worth P41.46 billion from the DOH’s coffers to the DBM Procurement Service (DBM-PS), supposedly for the procurement of pandemic supplies.

The fund transfer now at the center of a full-blown graft trial was merely one part of the sprawling enterprise of malfeasance that made up the Pharmally case. In fact, at the peak of its notoriety as the biggest political controversy of its day, the Pharmally story was described by then Sen. Richard Gordon as the “corruption of the century.”

Most appalling aspect

That portrayal now sounds quaint considering the far bigger amounts and far larger number of personalities involved in the current flood-control scandal. Estimates of the total public funds lost to infrastructure corruption over the past decade reach a mind-boggling P1 trillion to P1.14 trillion, which readily dwarfs the near-P11 billion once allocated to Pharmally Pharmaceutical Corp.

But that comparison also glosses over the particular infamy of the Pharmally case. It involved, after all, not only a familiar account of public money being wasted on a dishonest deal, but something more insidious: the power of the presidency being used first to favor close associates, then to try to shut down any questions on the apparent behest accommodation through fear, intimidation, and official stonewalling.

The most appalling aspect of the Pharmally scheme was that it happened at the height of the COVID-19 pandemic, when lives were literally on the line and Pharmally’s position as the favored procurer of what would turn out to be millions’ worth of substandard or expired medical equipment risked many more Filipinos—patients and frontline health personnel alike—dying from the pandemic.

Pandemic purchases

Even as the country’s health sector was buckling under severe strain from the global health emergency, Duque—under direct orders from his boss, then President Rodrigo Duterte, a detail he admitted before the Senate—funneled funds out of his beleaguered department to bankroll DBM-PS’ pandemic purchases. DBM-PS then proceeded to award purchase contracts worth billions of pesos to a little-known, newly established company called Pharmally with a paid-up capital of only P625,000.

Between March 2020 and July 2021, Pharmally secured 13 contracts worth some P11 billion to supply the government with personal protective equipment sets, face masks, face shields, COVID-19 test kits, and other medical items. The Commission on Audit (COA) and the Senate blue ribbon committee then chaired by Gordon, eventually flagged these purchases as markedly overpriced, and some medical supplies delivered were also found to be expired, reused, or relabeled.

Under Senate questioning, Pharmally’s executives admitted that the company itself didn’t have face masks on stock and had to buy from other suppliers, significantly jacking up prices. At one point, Pharmally also didn’t have the money to buy supplies and had to borrow from businessman Michael Yang.

Powerful connection

That was the dead giveaway link. Yang was a close friend of Duterte—so close that the former president even appointed Yang his economic adviser despite being a Chinese national. This powerful connection would seemingly shadow the Pharmally proceedings all throughout. Duterte repeatedly attacked the probe by Gordon’s committee, barred Cabinet officials from attending its hearings, slammed COA as well for flagging irregularities in the DOH‘s handling of pandemic funds, and generally took up the cudgels for the company his buddy Yang subsidized through generous loans.

The brazen way by which Duterte deployed the might of his office to shield Pharmally from accountability reeked of the worst impropriety and misconduct, yet years later, only his subalterns Duque and Lao—the main signatory in all the tainted contracts—are being asked to answer for their actions before a court of law. So many Filipinos needlessly suffered because of the depraved, callous actions behind this case. For that reason, Pharmally should remain unfinished business until all those behind it are pursued and punished accordingly.