STATE-owned Philippine Pharma Procurement Inc. (PPPI), a subsidiary of the Philippine International Trading Corp (PITC), extended its losing run to 13 years posting net losses totaling P481.733 million as of yearend 2019.
Government auditors said PPPI’s operating expenses for 2019 amounted to P53.15 million while declaring an income of only P26.737 million, or a P26.415 million deficit.
Despite being the only government pharmaceutical firm with a permit to run a common facility for pooled procurement of “medicine and vaccines,” the PPPI has been unable to gain profitability.
The Commission on Audit (COA) noted that in its 14-year existence, it was only in 2013 that the firm posted a profit on P357.728 million earnings against expenses amounting to P347.69 million.
“The continued losses and lack of funds also resulted in the non-settlement of its loans of P291.795 million and interests totaling P112.02 million that are already due and demandable,” the audit team said.
At its present financial footing, the firm has only P0.59 current assets for every peso of liability.
The firm is subsisting only on billed income from outsourcing projects of the Department of Health and the Armed Forces of the Philippines – Health Service Command (AFPHSC).
Since restructuring its P291.795 million long-term loans in 2013 from the National Development Company, another government-owned or controlled corporation, the PPPI has not paid any amortization on the principal as well as the P112.02 million interest.
While it was tapped by the DOH last year to provide warehousing and forwarding services, the firm again failed to realize the P38.17 million projected income from the said operation because of procedural weaknesses in the system wherein proof of deliveries was provided late resulting in its collection of only P1.884 million.
In 2017, the Government Commission for GOCCs (GCG) had already warned the PPPI about its unsatisfactory performance which made it a candidate for reorganization, merger with another agency, or outright abolition and privatization.
The COA said the PPPI should heed the GCG warning and address its adverse financial condition.
PPPI’s management however said despite being unprofitable, its services remain important as it had helped Filipinos have access to low-priced medicine and has played a role in keeping the prices of medicine down.