Philhealth-Red Cross Agreement Questioned | Inquirer News

MANILA, Philippines – Health Secretary Francisco Duque III and officials from Philippine Health Insurance Corp. (PhilHealth) can be charged with corruption and embezzlement of public funds for entering into a “grossly irregular” agreement with the Philippine Red Cross ( PRC) to conduct COVID-19 tests, according to two separate legal opinions from the state insurer’s own attorneys.

In a report presented to the board of directors of the state insurance firm, PhilHealth’s legal advisor, Alfredo Pineda II, said that the memorandum of agreement (MOA) that former PhilHealth president and CEO Ricardo Morales signed with the People’s Republic China on May 5, had no legal basis and provided preferential treatment. to the humanitarian organization headed by Senator Richard Gordon.

The nine-page executive summary dated Oct. 13, a copy of which the Inquirer obtained Sunday, echoed the content of the Sept. 25 review issued by Rogelio Pocallan Jr., senior manager of PhilHealth’s internal legal department.

He said that PhilHealth, which was established specifically to provide health insurance coverage to Filipinos, had no obligation to pay for the cost of COVID-19 testing and to fund the PRC testing program.

“Considering the apparent flaws and even the irregularity or potential illegality of the MOA, the possibility of rescinating the MOA should also be considered by senior management and the legal sector … as discussed and suggested … Pocallan,” Pineda said in his report, which was also presented to Morales’ successor, Dante Gierran.

“Temporarily suspend the provisions and further implementation of the MOA, and hold on hold any and all additional payments and disbursements of corporate public funds related to the MOA,” the report adds.

A source, who asked not to be identified for lack of authority to speak to the media, said Pineda’s report prompted Gierran to seek legal opinion from the Department of Justice (DOJ) on the questionable contract.

Last week, Attorney General Menardo Guevarra confirmed that the DOJ had already submitted its own review of the agreement to PhilHealth. “But we prefer to let them reveal the opinion of the Department of Justice if they must,” he said.

Pineda said PhilHealth’s advance payment of P100 million to the People’s Republic of China was considered “illegal disbursement and embezzlement of public funds,” as the huge amount was released without mandatory board authorization.

Very irregular

“[T]The MOA between PhilHealth and PRC is very irregular, as there was no clear legal justification within the specific provisions of the PhilHealth letter to enter the MOA and grant [PRC] with advance payments, ”Pineda said.

“There is no legal justification within the specific provisions of the PhilHealth letter for … granting advance payments even if only to ensure liquidity for the People’s Republic of China, a private non-profit institution organized for alleged altruistic purposes,” he said.

“PhilHealth does not have a legal mandate under its statute to seek and convince private entities to participate in the provision of health care services, including mass testing of Filipinos for COVID-19,” he reiterated.

Furthermore, Pineda said that the Republic Law No. 11469, or the Bayanihan to heal as a single law, and the subsequent memorandum issued by Executive Secretary Salvador Medialdea explicitly stated that “any commitment to the People’s Republic of China will be subject to reimbursement. “.

“[The law] did not allow any advance payment to be issued to the People’s Republic of China … ‘Reimbursement is the act of reimbursement of expenses or losses incurred … There is no other legal and / or technical definition of reimbursement that can be interpreted and misrepresented to justify the advance payment ”. he said.

Pineda noted that the PhilHealth board, headed by Duque as ex officio chairman, belatedly issued Board Resolution No. 2521 on May 14, which allowed Morales to represent the state insurer in the agreement with the People’s Republic of China.

“The eventual ratification / confirmation … after the fact of the release of public funds … is, to say the least, highly irregular, if not totally ‘ultra vires’ and illegal,” the report says.

“The post facto approval by the PhilHealth board, in fact, can be taken as an indirect admission of the lack of authority and illegality of the disbursement of the P100 million advance fund,” he added.

Responsible Duke

He said that while Duque did not sign the board resolution and other similar orders, he would not exonerate him of any responsibility.

“Despite the fact that the chairman is a non-voting member of the PhilHealth board, it does not justify or exempt the signature of the chairman of the board on PhilHealth board resolutions and shares their decisions and their corresponding responsibilities, ”Pineda said.

He noted that Morales, who resigned amid the Senate investigation into mounting corruption allegations against him and other PhilHealth executives, approved the deal without first seeking a contract review as required by the agency’s internal rules and procedures.

PhilHealth’s legal department also did not issue a contract certification before the agreement with the People’s Republic of China was finalized, he added.

He said that the PhilHealth negotiating panel, led by then-Senior Vice President of the Legal Sector, Rodolfo del Rosario Jr., tried to introduce amendments to the original agreement to “rectify its flawed provisions”, but the People’s Republic of China “has already taken a position. inflexible in maintaining the existing MOA. ” And demanded full payment of PhilHealth’s remaining financial obligations.

“Even assuming for the sake of argument that PhilHealth can legally enter the challenged MOA with the People’s Republic of China, a reading of the specific provisions of the MOA would easily show that the … provisions of the MOA were designed to be highly favorable to the Republic. People’s China, “he said.

Graft case

“Therefore, the PhilHealth board can potentially expose itself to an anti-theft case … for entering into a contract highly disadvantageous to the government, misconduct and other criminal violations for misuse and mismanagement of public funds,” he said.

In his separate legal opinion, Pocallan said the People’s Republic of China had already collected P1.6 billion from the state insurer for conducting hundreds of thousands of swab tests, including those that were performed on returning overseas Filipino workers.

“This means that of the alleged P910 million limit provided in the MOA ratified by the PhilHealth board, the corporation reissued the amount of P690 million without prior board approval and thus another act of embezzlement. public, ”Pineda said.

Before filing the legal opinion, President Duterte promised last week that the P930 million owed by PhilHealth to the People’s Republic of China would be paid for the swab testing services, and requested that the non-profit organization resume testing. .

The People’s Republic of China had suspended testing until paid, stranding many Filipino workers returning abroad in quarantine hotels and affecting the Department of Health’s monitoring of the COVID-19 situation.

Government debt now P1.1B

On Sunday, Gordon said the government’s debt to the People’s Republic of China was P1.1 billion, not P930 million.

“PhilHealth’s debt is now P1.1 billion, so [P930 million] is not sufficient. That doesn’t even include interest. But we need to get paid to get new supplies, ”Gordon said in a radio interview.

He said the People’s Republic of China would accept the payment of P930 million, but the balance should be paid “within three days.”

Surigao del Norte representative Robert Ace Barbers said Sunday that the People’s Republic of China should “stop blackmailing” the government because the non-profit organization “had no right to impose on the government and demand payment for the alleged tests. made to people “.

“On the one hand, it became known that the People’s Republic of China does not have a valid contract with PhilHealth [for] the alleged mass tests performed on people, “Barbers said in a statement. –WITH REPORTS FROM DJ YAP AND NESTOR CORRALES INQ

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