The senior vice chair of the House Committee on Appropriations on Monday hinted at a “possible overpricing” in the procurement of COVID-19 test kits by the Department of Health (DOH) through the Procurement Service of the Department of Budget and Management (PS-DBM) during the previous administration.
Rep. Stella Luz Quimbo, a representative of Marikina’s second district, made the observation while presiding over the committee’s ongoing oversight hearing on the budgetary performance of the DOH and the Philippine Health Insurance Corporation (PhilHealth) for the first quarter of fiscal year 2024 and prior years.
As the committee scrutinized the alleged irregularities in the transfer of P47.6 billion of DOH funds to PS-DBM for COVID-19 supplies, Quimbo noticed a disparity in the prices of test kits with the same brand and type, based on the DOH’s procurement list.
“Napansin ko po may mga pagkakataon na pare-pareho ang test type, pare-pareho ang brand, pero iba-iba ang naging presyo, and the price difference was as high as about P500. For example, may price difference na P2,083 versus P1,562,” Quimbo said.
(I noticed that in many instances the test type was the same, the brand was the same, but the price was different, and the price difference was as high as about P500. For example, there is a price difference of P2,083 versus P1,562)
DOH Secretary Teodoro Herbosa, who served as special adviser of the National Task Force Against COVID-19 during the previous administration, explained that certain items changed their prices over time.
“So, I guess we need to look at the date that some items are procured because they were changing the cost as the pandemic was ongoing,” Herbosa said, to which former DOH Secretary Francisco Duque III agreed.
Quimbo noted it was the committee’s first inquiry into possible overpricing related to the P47.6 billion in DOH funds transferred to PS-DBM.
“We go through the items here in the list of prinocures, we have noticed that there are different cases and this is the third case. The third case is the situation where the brand is the same, but why is there such a disparity in price?” Quimbo said.
Duque did not provide a direct response, explaining that the documents pertaining to the timelines of the transaction are with the PS-DBM, as “they were the ones who directly transacted with the suppliers.”
It was learned during the hearing that PS-DBM handled the transactions with the suppliers, following instructions and specifications from the DOH. This system, however, has raised questions about why the DOH did not consolidate its orders to secure better pricing.
“My understanding is that, this is my layman’s understanding that instructions to bid would come from the DOH. So meaning to say, you tell the specification, bid it now, because the question is why didn’t you also put together all the needs?” Quimbo said.
Quimbo also questioned the pricing of the test kits in comparison to the global market rates at the time of purchase.
“And actually sir, ang next question pa nga doon, how much was the price in the world market at the time of that purchase? That’s the next question because it could be as low as 8 dollars. ‘Yan ang next question, hindi po ba?” Quimbo said, addressing Duque.
(And actually sir, the next question is, how much was the price in the world market at the time of that purchase? That’s the next question because it could be as low as 8 dollars. That’s the next question, no right?)
House Deputy Majority Leader and Iloilo Rep. Janette Garin said the controversy could have been avoided if the DOH had not delegated its procurement of COVID-19 commodities to PS-DBM.
“It is actually a function that DOH should not delegate because the DOH has the pool of network when it comes to manufacturers, when it comes to pricing of other countries,” Garin pointed out.
“In a pandemic where commodities are quite new, we cannot base the pricing on traders or the market price in the Philippines because these commodities are not available in our country,” she added.
Garin, a former DOH Secretary, also criticized the absence of a Memorandum of Agreement (MOA) between the DOH and PS-DBM regarding the procurement of COVID-19 supplies, which could have prevented current issues.
“The reason why we have been asking why there was no MOA from Secretary Duque, because that MOA could have saved the DOH with all this hullabaloo. The MOA will contain the items that will be procured, the safeguards, the quality check, and even the pricing,” Garin said.
Garin emphasized the necessity of a MOA in fund transfers to ensure transparency and accountability. “The context of transfer of funds like to PS-DBM and PITC (Philippine International Trading Corporation) and even PITC Pharma, the MOA is always included because it’s a procurement through a procurement entity. You make a purchase, you transfer money, there is an MOA that will put all the parameters through safeguard. And the DOH can still oversee because that is its budget, that is people’s money coursed through the DOH.”
She added: “We are not procuring ballpen, paper, erasers. We are procuring devices, commodities and medical supplies that are quite highly specialized. That is why there is a big difference between procurement from PS-DBM, buy ballpen, paper , erasers, pencils at PS-DBM, as compared to procurement through PS-DBM where you requested PS-DBM to procure on your behalf. That means you are purchasing specialized items from DOH.
