MANILA, Philippines — Xuzhou Construction Machinery Group, a foreign pandemic supplier that cornered deals worth P2.23 billion with the government, has ties with President Rodrigo Duterte that go back as far back as 2017, Sen. Risa Hontiveros said Thursday.
XCMG is the same Chinese firm that told the Senate Blue Ribbon Committee last week that it does not pay income taxes in the Philippines despite the fact that it is the Department of Budget and Management's fourth-most favored supplier as of September 2021.
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The firm's chairman Wang Min met with Duterte in Malacañang on February 27, 2017, according to a post on a Chinese automobile news website that Hontiveros' office found.
The website, Qiche-China, credits the China Truck Network as its source.
That same year, Duterte met with executives of Pharmally Pharmaceutical Corp. and his former economic adviser Micheal Yang in Davao City.
"From February 23 to 27, Wang Min, Chairman of XCMG Group, led a XCMG delegation to a successful visit to the Philippines," the news release reads in Chinese. "On the afternoon of the 27th, Philippine President Duterte cordially received Chairman Wang Min."
Photos of the meeting were also included in the post.
"Chairman Wang Min also conducted in-depth and friendly exchanges with Philippine ministers and senior officials, and executives of Chinese partner companies, reached broad consensus and established new cooperative relations," the news release further reads.
Hontiveros: Why favor suppliers who are fugitives, tax evaders?
"The one who was warmly received in 2017 in Malacanang, is now a tax evader," Hontiveros said in a statement written partially in Filipino. "Why are the companies that responded to the pandemic in the Philippines all violators of the law? It is not far-fetched to imagine that we have so many COVID-19 cases due to questionable medical suppliers."
"We have repeatedly said at the hearing that it does not mean that because there is an emergency, there is no process to follow. Nor should companies be given contracts just because they are favored by the president," Hontiveros said. "Contracts should be given based on merit and capacity."
In addition to paying no income tax in the country, XCMG is not registered with the Bureau of Customs and Securities and Exchange Commission, official documents obtained by Senate Minority Leader Franklin Drilon show.
"Let's go back to the question of why due diligence was not done. At Pharmally, there are executives who are fugitives but are still given billions of contracts," she added. "This XCMG, a tax evader, was also given a contract."
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"It does make us wonder whether, on the part of PS-DBM, this is pure negligence or deliberate obstruction."
Xuzhou country manager Robin Han told senators last week that the firm only secured clearance with DBM's procurement service which handled its clearance with the BOC and deducted 12% value-added tax from their payment.
This took senators by surprise, including Blue Ribbon chairman Richard Gordon, who said he had never heard of DBM handling clearances for a foreign firm before.
Xuzhou country manager Han claimed that the firm does not pay income taxes because it "does not accept payments here." The firm pays income taxes in China, he told senators.
But Mon Abrea, a certified public accountant who was present at the hearing disputed this, saying the firm should have paid 25% income tax as a non-resident foreign corporation.