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Hontiveros shows gov’t contracts for overpriced Chinese PPEs

Senator Risa Hontiveros on Tuesday showed close to a dozen contracts for the government's procurement of personal protective equipment (PPEs) from April to May, to support her claim that those bought from China were overpriced.

“You want evidence? Here are 11 pieces. DBM [Department of Budget and Management] should plainly explain these contracts. Huwag nilang linlangin ang taumbayan gamit ang pagpapa-ikot ng maling impormasyon. What we need is clarity,” Hontiveros said in a statement.

The opposition senator, who repeatedly claimed that the procured PPEs during the onset of the pandemic were overpriced and that the government lost P1 billion as a result, pointed out that only four out of these 11 contracts were awarded to local suppliers.

Enclosed in her statement were copies of notices of award and contract agreements containing the following information:

  • April 3, 2020
    • Xuzhou Construction Machinery Group Imp. and Expo. Co. Ltd.
      • 250,000 sets of PPE at P2000 each
      • P446 million
  • April 3, 2020
    • Wen Hua Development Industrial Co.Limited
      • 42,000 sets of PPE at P1,768 each
      • P74.3 million
  • April 7, 2020
    • Chunshen Company Limited
      • 588,000 sets of PPE at P1,767 each
      • P1.04 billion
  • April 22, 2020
    • Nikka Trading (Makati City)
      • 50,000 sets of PPE at P1,980 each
      • P99 million
  • April 24, 2020
    • Pacific Field Ltd.
      • 28,000 sets of PPE at P1,900 each
      • P53.2 million
  • May 6, 2020
    • Pharmally Pharmaceutical Corporation (Taguig City)
      • 2,000,000 sets of PPE at P1,910 each
      • P3.8 billion
  • May 7, 2020
    • Xuzhou Construction Machinery Group Imp. and Exp. Co. Ltd.
      • 1,000,000 sets of PPE at P1,898 each
      • P1.9 billion
  • May 11, 2020
    • Wen Hua Development Industrial Co., Limited
      • 800,000 sets of PPE at P1,716 each
      • P1.3 billion
  • May 11, 2020
    • Shanghai Puheng Medical Equipment Co., Ltd
      • 200,000 sets of PPE at P1,716 each
      • P343 million
  • May 11, 2020
    • Wamrus Trading Inc. (Las Pinas City)
      • 20,000 sets of PPE at P1,898 each
      • P37.9 million
  • May 19, 2020
    • Hafid N' Erasmus Corporation (Taguig City)
      • 30,000 sets of PPE at P1,700 each
      • P51 million

Hontiveros said the cheapest PPE costs only P1,700, those from  Hafid N' Erasmus Corporation, but the DBM signed more contracts with Chinese companies.

DBM explanation

The Procurement Service of the Department of Budget and Management (PS-DBM) for its part, earlier explained that the capacity of the supplier to meet the demand during that time was a factor.

"Binase natin iyon sa initial capacity kasi tinatanong din namin ilan ba ang kaya mo i-supply, pag nag-bid kami. Puwede tayong mag-award kahit milyon-milyon sa local eh, the question is can they perform? Kasi based din iyan sa capital nila, they have to invest capital," Budget Undersecretary Lloyd Christopher Lao said.

"Di lang ho ganoong kadali ito. Even if you want to supply, if you don't have capital, paano ka makaka-supply sa amin? Magka-capital ka niyan," he added.

Lao said the government actually awarded a contract to Hafid N’ Erasmus Corporation again for another 250,000 sets of PPEs which it just delivered this month.

Moreover, the PS-DBM said the government saved P800 million from the purchase of the Chinese PPEs.

Lao also said the PPEs made in China were the cheapest and best options for the Philippines during the first months of the COVID-19 pandemic response, saying the prices offered by local suppliers were too high.

But Hontiveros rejected this explanation.

"Huwag din sabihin ng DBM na walang kakayanan nung umpisa ng pandemya ang lokal na mga kumpanya. As early as February 6, binalita na na ang Bataan-based firm called Medtex ay kayang gumawa ng 2 million face masks monthly. At meron din silang sister company under the Medtec Group of Companies na nagproproduce ng PPEs. Bakit hindi sa mga katulad nila nag-negotiate ang DBM? Bakit inuna ang foreign companies?” she said.

Prize freeze

Hontiveros also referred to a Department of Health department circular imposing a price freeze on medical supplies needed for the COVID-19 response, which covered the period of March 23 to April 13.

She stressed that this price freeze meant that the eight components of procured PPE sets could only cost a maximum total of P945.

"Of the 11 contracts, three of these are in the same time period as DOH’s price freeze. Almost P1,000 lang dapat ang cost ng isang PPE set kung sa local companies binili. But no, DBM opted to transact with Chinese firms. Kaya kung tutuusin, ang P1 billion overpricing is highly conservative. Mukhang mas malaki at mas malalim pa ang pangungupit," she said.

Further, Hontiveros took a swipe on Anakalusugan party-list Representative Mike Defensor's comment that her claims are only meant to serve as a "smokescreen" to mask the overpricing during the administration of former President Benigno Aquino III.

She dared the congressman to file a case against the previous administration.

“Representative Mike Defensor also came out to defend DBM, claiming that what the agency procured was cheaper than that procured by the previous administration. If that’s the case, then pa-imbestigahan at kasuhan nila," she said.

"As Senator during the current administration, I am simply exercising our Congressional oversight. May nakita kaming mali, kaya kinukwestiyon,” she added.

Lao also said the previous administration acquired PPEs prior to the COVID-19 pandemic at double the current prices.

Some of the PPE suppliers tagged in the overpricing allegation earlier said their transactions with the government were aboveboard. — BM, GMA News