Two officials of the Philippine Health Insurance Corporation (PhilHealth) have been preventively suspended for six months without pay by the Office of the Ombudsman due to the reported corruption within the agency’s Information Technology (IT) department.

philhealth - 2 PhilHealth officials suspended over alleged IT anomalies

Senior Vice President and Chief Information Officer Jovita Aragona and Acting Senior Manager of the Information Technology and Management Department Calixto Gabuya Jr. have been charged for grave misconduct, gross neglect of duty, and conduct prejudicial to the best interest of the service.

In the complaint filed by the Ombudsman’s Special Task Force – PhilHealth, Field Investigating Office, Aragona and Gabuya were faulted for allegedly manipulating the IT department’s budget and purchasing several overpriced items that were grossly disadvantageous to the government.

PhilHealth’s Internal Audit Report on the inventory of hardware and software of the IT Department showed “discrepancies” in the representation of items submitted in the 2020 budget. These were not included in the Information System Strategic Plan (ISSP) that must be approved by the Department of Information Communication and Technology (DICT).

The Ombudsman said that the resources included in the budget proposal that do not appear in the ISSP amounted to P734,014,120.58. This amount represented 46.84 percent, more or less, of the total amount of the proposed budget.

The Ombudsman added that there was an apparent overpricing of IT equipment worth P98,500,000. There were even items split into two listings with different descriptions and specifications for a supposedly single item which amounted to P132.2 million.

“The vague description specification will allow the same item to be bought again the following year,” the order explained.

When PhilHealth was probed by the Senate, it was discovered that several IT equipment were “outstandingly overpriced” in comparison to the current market value.

The Commission on Audit (COA) Audit Query Memorandum No. 2020-0002 even flagged them over 24 network switches that were not utilized in various PhilHealth regional offices.

“COA found that the non-utilization of the network switches is disadvantageous to the government for failure of the PhilHealth officials concerned to test the product within the warranty period of the contract for possible manufacturing defects and/or malfunction,” the Ombudsman said.

Despite this non-utilization, the PhilHealth officials still procured 15 more units of the same network switches, which are overpriced at P358,000. Each switch cost only P62,000, but the government purchased it for P420,000 each. As a result, the government lost a total of P3,878,520.

“Respondents, by virtue of their positions, facilitated these anomalies,” the order said. “Further, they affixed their signatures on official documents causing the falsification of these documents, and procurement of IT equipment in gross violation of R.A. 9184, the COA rules and regulations, DICT Guidelines on the procurement of IT equipment, and other applicable laws, rules and regulations on the issuance of IT budget, to the great detriment of PhilHealth.”

Ombudsman Samuel Martires said in the consolidated order signed on November 5 that the preventive suspension is “immediately executory and shall not be interrupted within the period prescribed notwithstanding any motion, appeal, or petition that may be filed by respondents seeking relief from this consolidated order.”

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