Privatization by mortage

BACKBENCHER
Rod Kapunan
5/7-8/2011



The one economic assumption this government believes is for as long as it does not indulge in corruption, it enjoys the high moral ground to accuse others of corruption. The problem however is that it reflects more of this administration’s shortsightedness. President Benigno Aquino III has failed to reckon that should his government fail to act on the massive corruption committed by the previous administration, it automatically it makes his own government equally notorious.

We have to restate this because there is nothing that could mollify the public from arriving at that conclusion. Failure to investigate and prosecute those responsible is to acquiesce into the criminal acts committed by its predecessor. We are referring to the loan agreement entered into by the Lung Center of the Philippines with the Land Bank of the Philippines.

A report submitted by Elizabeth M. Savella, the audit team leader of the Commission on Audit dated March 18, 2011 to Angeline A. Rojas, chief of the Accounting and Budget Division of the LCP, of which copy was furnished the current Executive Director, Dr. Jose Luis J. Danguilan, found some interesting items that could add to the long list of corruption attributed to its erstwhile head, Dr. Juanito A. Rubio, the enterprising doctor turned “tianggero”. Maybe Doctor Rubio is ingenious in many ways, but overstepped in exercising his powers unmindful that in the event the hospital fails to pay, it could be levied and sold by the lender Bank, a process that would make a mockery of the power of Congress to privatize or dispose by sale government corporations and their assets.

The unnumbered and undated Board Resolution states that “in the November 29, 2006 meeting of the Board of Trustees of the Specialty Hospital authorized Dr. Juanito A. Rubio, Medical Director of the LCP to source out, transact, approve funding source from banks for the acquisition of LCP radiotherapy equipment...” Note that the meeting happened not on the date the Resolution was signed. Rather, from November 29, 2006 or the date the Board allegedly met up to that period when the Loan Agreement was formalized on September 25 and December 23, 2009, respectively, it practically gave Dr. Rubio a carta blanche authority as to when he would wish to secure the vote of the ex officio chairman. Interestingly Dr. Esperanza Cabral was made to appear to have allegedly signed the Resolution as ex officio chairwoman sometime in November 2006, a position reserved to the Secretary of Health, when at that time, she has yet to be appointed Secretary.

To make matters worse, the loan agreement was finalized more than three years after the Board allegedly approved said Resolution as shown by the date it was signed separately on September 25, 2009 by Lolita T. Silva, the Assistant Vice President/Head of the Public Sector Department and by Doctor Rubio signing it on December 23, 2009. The dubiousness of the document was highlighted by the fact that it was acknowledged by two lawyers on separate dates in two separate acknowledgements, with one notarizing Silva’s version in Manila, while the lawyer for Rubio notarizing his version in Quezon City, considering that the loan agreement is not a unilateral contract. With that, one could logically deduce that the acknowledgment was prepared ahead of the loan agreement.

The report also stated that the Purchase Order dated April 22, 2009 came ahead of the Notice of Loan Approval dated August 19, 2009. Stated differently, Doctor Rubio made a purchase order even before the loan could be approved. Of course, there were other items considered as highly irregular as when it noted that the procurement of the radiotherapy equipment was bidded for the 3rd time with Golden Precision Medical Equipment, Inc. (GPMEI), and in that instance was awarded the contract. Allegedly, on the 2nd bidding, the procurement failed to push through although the bidding was already on the stage of post qualifying the selected bidder.

Besides, there were no pertinent documents that were attached to the voucher. The minutes of the pre-bid conference that allegedly transpired on February 24, 2009 stated there was an approved budget of P170 million for the purchase of said equipment. The amount was reiterated in the minutes for the opening of bids dated March 9, 2009. Both documents were prepared by Consolacion M. Balderosa, head of the Bids and Awards Committee Secretariat and by Dr. Joseph Leonardo Obusan, LCP-BAC Chairman. That same day the BAC approved Resolution No. 0004-2009 declaring GPMEI the winner although no other company participated in the bidding.

Discrepancies further shrouded the bidding because on March 13, 2009, Dr. Rubio notified GPMEI of the award stating therein the price of P160,192,270.00 which was lower than the winning bid of P170 million. Despite that, the Loan Agreement which was signed months later, specifically on September 25 and December 23, 2009, still appropriated P200 million reiterating the amount stated in the undated and unnumbered Board Resolution.

Most damaging was that the loan agreement was carried out without securing the prior approval of the President and with the concurrence of the Monetary Board of the BSP as provided in Section 15 of the General Appropriations Act. The reason is to prevent government agencies, like hospitals, from being privatized by levy should the borrower incur a default with the architects behind the scheme going scot-free. Clearly, the action taken by Dr. Rubio was ultra vires or an act beyond the scope of his authority.

Specifically, National Housing Authority Resolution No. 209 dated May 29, 1979 ratifying the Deed of Donation of the 12 hectare property states that in the event of dissolution of the donee-LCP, the parcel of land shall automatically revert back to the donor-NHA. This explains why P.D. No. 1823 did not authorize the administrators of LCP to mortgage said property even for the avowed purpose of purchasing hospital equipment. For that President Marcos only extended to it the privilege of tax exemption, to accept assistance from government agencies, and to receive subsidy and donations.

Given this, the Aquino administration can make a fresh start by filing charges of plunder, and graft and corruption against Dr. Rubio and those who affixed their signature in that questionable Board Resolution and Loan Agreement. Prosecuting them would do justice to poor Filipino patients who could only rely on the services of government hospitals for help.

(rodkap@yahoo.com.ph)