Keep a tight watch on Pharmally

With the 2022 elections drawing near and the Duterte administration’s approval rating in fighting corruption dropping by 12 points in the latest survey, Malacañang appears to be slowly distancing itself from the Senate probe into Pharmally Pharmaceutical Corp.’s multibillion-peso contracts with the government.

After weeks of devoting a substantial part of his “Talk to the People” briefings to attacks against the senators pursuing the probe, President Rodrigo Duterte has quieted down. On Saturday, his spokesperson, Harry Roque, assured the public that the administration will run after Pharmally and its officials if it is proven that they did not pay the proper taxes after obtaining P8.7 billion worth of contracts to supply face masks, face shields and other pandemic equipment to the government. Roque said the government would not tolerate companies with tax liabilities.

This came after Senate Minority Leader Franklin Drilon presented documents sourced from the Bureau of Internal Revenue (BIR) showing that in 2020, Pharmally did not pay income taxes and even claimed a tax credit worth more than P96 million.

It was in the same year that the Procurement Service-Department of Budget and Management (PS-DBM) awarded to Pharmally and several other companies contracts to deliver personal protective equipment supplies to the government.

The documents presented in the Senate probe showed that key officials of Pharmally, its suppliers, along with former presidential economic adviser Michael Yang and the former head of the PS-DBM, Lloyd Christopher Lao, did not file proper income tax returns for several years.

Isn’t this much worse than the case involving ousted Supreme Court chief justice Ma. Lourdes Sereno, who was booted out for not filing her Statement of Assets, Liabilities and Net Worth for a number of years?

The documents also showed that Pharmally corporate secretary Mohit Dargani and co-owner Twinkle Dargani paid a measly P97,241 and P1,000 in income tax, respectively, for 2020. The amounts of their taxable income were, however, “unreadable.”

No records were found for Pharmally chairman Huang Tzu Yen from 2019 while all the income tax returns of Pharmally director Linconn Ong were “unreadable.”

Yang, who supposedly financed and guaranteed Pharmally to Chinese suppliers, had income tax returns in 2019 and 2020 but those were “unreadable.” Lao appeared to have no 2020 income tax return.

If you were a hardworking employee whose monthly payroll has substantial income tax deductions, wouldn’t you find it revolting that these businessmen who bagged lucrative government contracts and are living extravagantly paid measly sums in income tax or may not have paid anything at all?

Indeed, the BIR has serious work to do with them. Tighten the noose on tax cheats. Collect the proper amount of taxes from them and hold them to court.

BIR, don’t make Roque a liar. In his press briefing last Saturday, the Palace spokesman said: “Huwag po kayong mag-alala, hindi po natutulog sa pansitan ang ating BIR. Kung talagang may kulang pong taxes, hahabulin po natin ‘yan (Don’t worry, the BIR isn’t negligent. If there are really unpaid taxes, we will go after it). And that is guaranteed.”

Roque sounded as if he was trying to appease the public as a consequence of the declining approval rating of the Duterte administration in addressing corruption in government.

According to Pulse Asia’s latest survey, conducted from Sept. 6 to 11 and released on Oct. 6, the Duterte administration’s score in handling the problem declined to 52% from the 64% recorded in June.

Sonny Africa, executive director of IBON Foundation, attributed the “worsening dissatisfaction” with the administration’s fight against corruption to the controversy involving the questionable contracts obtained by Pharmally, allegedly through Yang’s ties to the Palace.

With the legal troubles Pharmally and the people involved in the contracts are facing, the public should be vigilant about other deals, particularly with regard to those seeking election in 2022. While election laws prohibit persons, organizations and companies holding contracts with the government from donating to the election campaign of candidates, they may be able to find ways to make sure they don’t land in jail in the next administration.

The views in this column are those of the author and do not necessarily reflect the views of VERA Files.

This column also appeared in The Manila Times.