Senate recommends graft charges vs. Duque, Morales, PhilHealth execs

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Metro Manila (CNN Philippines, September 1) — A Senate panel has recommended criminal and administrative raps against Health Secretary and PhilHealth board chair Francisco Duque, ex-PhilHealth President Ricardo Morales and other officials over the fraud mess in the state health insurer, Senate President Tito Sotto said Tuesday.

Sotto presented the report of the Senate Committee of the Whole which stated that Duque, Morales and some senior vice presidents should be held accountable for anomalies such as the "shady" implementation of cash advances or the interim reimbursement mechanism.

Lawmakers have questioned the IRM's implementation which was intended to help hospitals continue operations amid the COVID-19 pandemic. However, the money was distributed to 279 facilities before requirements were completed. The requirements were met by June 11, but the agency already released over ₱14 billion from March 25, Sotto said.

The committee also found that the funds released exceeded the estimated costs for COVID-19 treatment.

"PhilHealth estimated 3.3 billion pesos for the cost of COVID for the entire 2020," said Sotto. "Pero ang budget na nilagay nila ay [But the budget they placed was] 26.8 billion pesos."

The funds were also questionably released to non-COVID-19 facilities, such as B. Braum Avitum Dialysis Centers.

B. Braum's branches received ₱45 million even though some of its facilities do not have dialysis machines or isolation areas and can only provide outpatient care. B. Braum had earlier denied conniving with PhilHealth, but the Senate is convinced that a "ghost patients" scheme is involved and recommended an investigation.

For this, the senate panel recommended charges of malversation, illegal use of public funds and graft against Duque, Morales, Executive Vice President Arnel de Jesus, SVP for Fund Management Sector Renato Limsiaco and SVP Health Finance Policy Sector Israel Pargas as well as other employees involved.

The committee also proposed to charge Duque, Morales, De Jesus, Limsiaco, Pargas and involved employees for violation of the Internal Revenue Code due to PhilHealth's failure to withhold taxes related to the IRM. CNN Philippines is striving to get comments from PhilHealth officials identified in the report.

Moreover, senators want healthcare institutions that got their IRM shares to liquidate the funds and return the unutilized amounts, Sotto said.

Duque told to resign

In the committee report, senators also called for President Rodrigo Duterte to appoint a new Health Secretary.

"With the evidence brought before us, basically our recommendation is for him (Duque) to resign because he was 'big brother,'" Senate Majority Leader Miguel Zubiri told CNN Philippines' The Final Word. "He was the person in charge of PhilHealth as chairman."

Duque in response said it was "unfortunate" that his name was included in the recommendations, maintaining that he had no signature on the IRM's board resolution nor was he present in the deliberations on the program.

"This is not the best time for the Executive to have a difference with the Legislative branch," said Duque in a statement, adding that he would cooperate in any inquiry. "Certainly I intend to clear my name."

Overpriced IT

The committee also recommended charges of falsification, fraud, concealment of documents, graft, and violation of the government procurement act against the corporation's IT department officials.

Sotto said SVP for Information Management Sector Jovita Aragona and Acting Senior Manager Calixto Gabuya should be charged for proposing to buy network switches at ₱320,000 per unit even though they awarded much cheaper models at ₱62,424. The more expensive model was already obsolete and unavailable in the market, the committee found.

"Ipinipilit talaga nila na Cisco 2960XR ang binibili nila para lang majustify ang mas mataas na presyo kahit na ang totoo ay Cisco 9200 na mas mura ang binibili," said Sotto.

[Translation: They are insisting that they were purchasing the Cisco 2960XR to justify that the price is higher even though the truth is cheaper Cisco 9200 is being bought]

The committee also wants PhilHealth to start outsourcing its IT services to a reputable company, Sotto added.


The panel raised too that resigned SVP for Legal Sector Rodolfo Del Rosario should be charged for negligence and graft for failing to act on the agency's pending cases.

The committee found that out of 7,452 cases against healthcare facilities in PhilHealth, only 5,327 of them or 71.48 percent were acted upon since the year 2000. There were also 4,792 cases against healthcare workers of which only 45.97 percent were cleared in the last 19 years.

The department also failed to implement penalties such as in the case of Perpetual Succour Hospital. PhilHealth was supposed to suspend the hospital's accreditation and have them pay a fine of ₱10,000 but instead the hospital was made to pay ₱100,000 without suspension.

Del Rosario had explained during the hearings that the change of penalty was due to an approved board resolution but the Senate maintained that the board does not have the power to amend penalties of cases decided by a court.

The committee also pushed for PhilHealth officials from the CEO to the regional vice presidents to submit their courtesy resignation to give way to a revamp of the agency's management. The panel recommended reassignment of officials every three years.

Senators also suggested more involvement of the Commission on Audit in PhilHealth's affairs over reports that the commission had trouble obtaining documents from the corporation, which led to inconsistent reports on PhilHealth's financial standing.