COA uncovers ‘overpriced’ PhilHealth’s P2.1B IT project

COA uncovers ‘overpriced’ PhilHealth’s P2.1B IT project

MANILA – The Commission on Audit has accordingly uncovered recently a grossly “anomalous” information technology project of the Philippine Health Insurance Corporation (PhilHealth) costing billions of pesos.

What is ironic government auditors said, was the fact that the overpriced proposed P2.1-billion IT project of PhilHealth was accordingly designed to arrest fraud and scams by corrupt PhilHealth personnel.

It was in itself fraught with irregularities the government auditors said.

The auditors claimed that one particular component of the project that was red-flagged as “anomalous” by COA and PhilHealth’s resident auditors in three separate reports, was a planned procurement of various equipment worth P734 million.

This was not contained in the original budget proposal submitted by the state insurer the auditors explained.


COA auditors discovered that the budget for five “ICT (information and communications technology) resources” made up of computers, scanners and other items, was accordingly overpriced by P98 million.

Internal auditors claimed a “syndicate” was allegedly operating in the state-run corporation and that equipment and computer programs that PhilHealth was planning to buy were highly overpriced they said.

For instance, the auditors said, an Adobe software costs only P168,000 per unit but it was listed as P21 million each in the proposed budget submitted by PhilHealth’s IT sector.

That is a whopping 12,400-percent increase from its original price, the auditors said in their report also in May.

As if these were not enough, the price of items of “application servers and licenses” was also jacked up to P40 million from its initial budget of P25 million, the internal auditors said.

Unimpeachable sources familiar with the COA reports said the said irregularities at PhilHealth were the very reason why lawyer Thorrsson Montes Keith quit his post as the agency’s antifraud officer recently.

It may be recalled that the IT project sparked a “shouting match” among PhilHealth executives during an online meeting last July 22, a day before Keith resigned.

On his resignation letter to PhilHealth president and CEO Ricardo Morales, Keith cited “widespread corruption” as one of the reasons he was quitting his job at PhilHealth. He did not make further elaboration.

Last year, PhilHealth also came under fire amid reports the state-owned insurance company lost P154 billion through various forms of fraud, such as reimbursements for “ghost dialysis,” overpayments, false claims and “upcasing” of common ailments.

And President Duterte might again express of being “grossly disappointed” in his State of the Nation Address tomorrow, Monday (27 July 2020).

Last year, the Chief Executive claimed in his SONA that the government had been “conned of millions of pesos, which could be used to treat illnesses and possibly save the lives of many.”

“The recent uncovering of the massive fraud perpetrated against the public health insurance system proves that corruption is pervasive,” said Mr. Duterte, who had promised to stop corruption in the first six months of his presidency.

Days after his 2019 SONA, President Duterte sacked top officials of PhilHealth and appointed Morales, a retired army general, to head the state insurer, describing him as “a man of integrity” and gave him “marching orders to prioritize ridding the agency of corruption.”

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