COA upholds P195-M disallowance vs ports authority over COVID-19 spending

MANILA, Philippines – The Commission on Audit (COA) has upheld its notice of disallowance it issued against the Philippine Ports Authority (PPA) in 2023 over a P195-million payment for health and laboratory services during the COVID-19 pandemic.

In a 12-page decision dated February 25, 2026, the commission’s en banc sustained its finding that the payment was allegedly irregular because its release was not within the allowed procedures.

According to COA, the money in question came from the balance of P520 million financial assistance released to the PPA as a grant to sectors like the shipping industry.

The PPA spent P320 million to defray dockage and lay-up fees of domestic shipping vessels and free COVID-19 tests for returning Filipino seafarers. However, the PPA left a P200-million unspent balance.

The PPA entered into an agreement with Firstaide Inc. for a P199.94-million procurement of COVID-19 viral transport of medium test kits and laboratory services for the seafarers. From August 5, 2021, to January 19, 2022, the PPA paid the health service provider P195.94 million net of withholding tax.

State auditors later said the unobligated funds should have been returned to government funds since Republic Act No. 11519 only extended the releasing of funds under the Bayanihan to Recover as One Act up to June 30, 2021.

Those held liable for the disallowance were PPA general manager Jay Daniel Santiago, acting manager Eric Dimaculangan, former manager Prime Elvin Siosana, assistant manager for comptrollership Russel Babadilla, and Firstaide Inc.

Firstaide, however, protested the disallowance and asked for a refund. The COA partially granted the appeal and ruled that Firstaide is entitled to compensation for the services it delivered.

“In this case, despite the impropriety of the contract, Firstaide Inc. is still entitled to the reasonable value of the deliveries and services to PPA,” the commission said.

Upon closer look, the COA said Firstaide was paid for 54,659 seafarers, but the audit team found only 52,465 were valid. The rest were invalid due to a deficiency in documentation.

Therefore, the COA said the valid charges only amounted to P188.08 million and ordered the refund of the P7.86 million difference. – Rappler.com