FORMER Health Secretary Francisco Duque III yesterday told lawmakers that former President Rodrigo Duterte was the one who ordered the controversial transfer of P47.6 billion from the Department of Health (DOH) to the Procurement Service of the Department of Budget and Management (PS-DBM) for the purchase of COVID-19 supplies in 2020.
Duque made the disclosure during the oversight hearing of the House committee on appropriations, insisting the move was legal because the country was in the middle of a health emergency.
“Publicly this was made by the President in our meetings in the weekly meeting or `Talk to the People,’” Duque told the panel which is reviewing the budget performance of the DOH and of the Philippine Health Insurance Corp. (PhilHealth), on the questioning of Rep. France Castro (PL, ACT).
Responding, Castro said, “So clear po ‘yan (So that’s clear), P47.6 billion to be transferred to PS-DBM, publicly announced by former President Duterte na ma-transfer ‘yan (that it be transferred).”
The Office of the Ombudsman last month ordered the filing of a graft case against Duque and former PS-DBM executive director Lloyd Christopher Lao for the fund transfer, in violation of Section 3 (e) of Republic Act 3019 or the Anti-Graft and Corrupt Practices Act.
The anti-graft body has also found Duque and Lao guilty of grave misconduct, gross neglect of duty and conduct prejudicial to the service.
The Ombudsman’s investigation stemmed from a 2020 Commission on Audit (COA) report and the complaint filed by Sen. Risa Hontiveros and former senator Richard Gordon in 2022 following months of hearings by the Senate Blue Ribbon committee.
In 2021, then Senate minority leader Franklin Drilon said Duterte made the order “to provide it legal cover, because under the law and the Constitution, only the President can direct the transfer of funds from one agency to another in the Executive Branch.”
“Secretary Duque cannot do that. Legally, it must be the President. That is why the President made that statement that he ordered the transfer,” Drilon said then at the height of an investigation by the Senate Blue Ribbon committee.
‘OVERRIDING CONSIDERATION’
Duque defended the fund transfer, saying that because of the pandemic, “we deemed it best to rely on the expertise of the PS-DBM and its network of suppliers for sourcing of the much-needed PPE (personal protective equipment) along with other essential goods and services for emergency response, given the lives of our healthcare workforce depended on the procurement of PPEs (personal protective equipment).”
“In doing so, we were guided by the authority of PS-DBM granted by various laws and regulations,” Duque told the panel, citing Executive Orders 385 and 285, Letter of Instruction, Administrative Order 17 of 2011, and Section 53 of the Procurement law.
Duque said the DOH’s “overriding consideration was to prevent, if not mitigate the risk for our healthcare workers waiting for local suppliers whom we knew had no capacity, initially, to supply large volumes of PPEs and other COVID-19 supplies needed.”
“We could not negligently put the lives of our healthcare workers at risk of widespread infections and countless deaths, possibly leading to the collapse of the entire healthcare system,” he said.
In its 2020 annual audit report, the COA flagged several “deficiencies” in the DOH’s use of P67.32 billion in COVID-19 funds, including the unspent P11.89 billion for the procurement of medical equipment and supplies, payment of benefits of health workers, and the P41.46 billion transferred to PS-DBM without the required memorandum of agreement and other supporting documents.
In their complaint, Hontiveros and Gordon noted that out of the funds received by PS-DBM from DOH, P11.5 billion was paid to Pharmally Pharmaceutical Corp. for the supply of face shields, face masks, test kits and other medical items for the government’s pandemic response.
Pharmally, which was financed by Duterte’s then economic adviser Michael Yang, a Chinese citizen, was then questioned because the supply contracts were awarded to it despite the company’s lack of sufficient capital.
Last month, the Ombudsman also affirmed an earlier ruling finding probable cause to file graft cases before the Sandiganbayan against Lao, former PS-DBM overall deputy ombudsman Warren Lex Liong, and former PS-DBM procurement management officer Paul Jasper de Guzman, along with other officials.
Pharmally president Twinkle Dargani, treasurer and secretary Mohit Dargani, directors Linconn Ong and Justine Garado and board member Huang Tzu Yen were also ordered charged.
‘I HAVE AUTHORITY’
During the House hearing, Duque told Iloilo Rep. Janette Garin, a deputy majority leader, that he personally had authority to order the fund transfer then as Health secretary.
“Madam Chairperson, it is within my authority to effect the fund transfer. I do not deny that,” he told panel vice chair Marikina Rep. Stella Quimbo, who presided over the hearing.
However, Garin pressed Duque on whether the decision was unilateral: “The question is did you unilaterally decide to transfer P47.6 billion to PS-DBM?” to which he replied: “No is the answer. I’m just complying with the rule of the PS-DBM. Again, I do not want to belabor the laws that authorize the PS-DBM to procure in a state of public health emergency materials.”
Duque further explained that the decision was based on recommendations from the Inter-Agency Task Force for the Management of Emerging Infectious Diseases (IATF), which he also headed.
“But I would like to reiterate that it is within my authority to effect the transfer because of the public health emergency where there were not enough CSEs (common-use supplies and equipment), PPEs (personal protective equipment), and other COVID pandemic supplies,” Duque said.
“So we wanted just to make sure, Madam Chairperson, that the lives of our people are protected and that the risks are mitigated from our people possibly then at the height of the pandemic that nobody knew about, that would have resulted in the millions of infections and countless deaths of our healthcare workers,” he added.
Garin also told Duque the Duterte government’s handling of the COVID-19 pandemic further burdened the people, citing the exorbitant cost of COVID-19 testing, which PhilHealth initially set at P8,150, in contrast to the P2,000 to P2,500 recommended by World Health Organization (WHO).
“So the point here is the pandemic became an opportunity para lalong maghirap ang tao (for the people to suffer more),” said Garin, herself a former health secretary under the last Aquino administration.
Garin also raised serious concerns over the government’s handling of COVID-19 loans, emphasizing the burden on the public and the lack of accountability for the borrowed funds.
It was learned during the hearing that the government secured a total of $2.21 billion for the Philippine COVID-19 Emergency Response Project (PCERP) and the Health System Enhancement to Address and Limit COVID-19 (HEAL) in 2021 and 2022.
“So if you translate that to pesos, considering the P51 conversion rate (in 2021), that’s tantamount to P112,719,180,000. But because the conversion rate has increased, … instead of P112.7 billion, naging P129.3 billion na siya. Ganun po kalaki ang utang natin (That’s how big our debts is),” Garin said.
