The PGH Imbroglio battle for directorship board control traced to questionable deal?

Posted on March 10, 2010


The PGH Imbroglio: Battle for Directorship, Control of UP Board Traced to Questionable Deal

By MARYA SALAMAT; published on March 8, 2010

MANILA — The Philippine General Hospital (PGH) — the country’s hospital of last resort especially for indigent patients, a key training hospital for students of the University of the Philippines, and the premier public hospital in the country — is currently embroiled in a mess over who should be its rightful director. It now has two directors, Dr. Jose Castillo Gonzales and Dr. Rolando Enrique Domingo, holding office in separate rooms in PGH in Manila and vying for legitimacy.

Dr. Gonzales has threatened to file charges in court over his ouster, which happened less than two months after he was sworn in. His term is supposed to end on Dec. 2012.

Dr. Domingo, 41, said he cannot be expected to “forcefully drag the elder Dr. Gonzales from the director’s office,” but he told Bulatlat he hopes the situation will “normalize” soon as he “can only wait for a reasonable amount of time.” He declined to say how long is a “reasonable amount of time” for him, except that “it varies from day to day.”

Meanwhile, the Board of Regents (BOR), the UP system’s highest policy-making body that has put the two competing hospital directors in such awkward position, is itself in a schism.

Composed of 11 members or regents, the BOR has two co-chairs (Emmanuel Angeles chair of the Commission on Higher Education or CHED and UP president Emerlinda Roman), three Malacañang appointees (Abraham Sarmiento, Nelia Gonzalez and Francis Chua), two regents from Congress (Senator Manuel Roxas II and Rep. Cynthia Aguilar-Villar) and four regents chosen each by the faculty, staff, alumni and students (Prof. Judy Taguiwalo, Clodualdo Cabrera, Alfredo Pascual, and Charisse Bañez, respectively).

The BOR has become bitterly divided, with the four regents chosen by the UP faculty, staff, alumni and students — or what has been described as the UP-community-based or “organic” regents — on one side, and four regents composed of three Malacañang appointees (“inorganic”) plus Roman on the other.

Their differences became especially acrimonious in the choice of a new PGH director since December last year. It led to accusations that Roman had deliberately delayed the release of formal appointment papers and the swearing in of the BOR’s first duly elected new PGH director, Dr. Gonzales. Because of the delay in Dr. Gonzales’s appointment and formal takeover of the directorship of PGH, Roman was also criticized for having tried to overturn the majority decision of the BOR based on the lone protest of Sarmiento, one of the three Malacañang-appointed regents.

Dr. Gonzales had been voted in by six regents (four votes from the staff, alumni, faculty and students, one from the chairman of CHED and one from the Senate). Meanwhile, five regents composed of Roman, the three Malacañang appointees and the regent from the House of Representatives voted for Dr. Carmelo Alfiler, who had already served the two maximum terms allowed for a PGH director.

Dr. Gonzales was consequently sworn in only last Jan. 7, three weeks after he was voted as new director replacing Alfiler on Dec. 18 last year, and only after hospital and university workers, staff and faculty had protested the delay.

“New year means planning and setting thrusts, strategies and new programs,” Jossel Ebesate, head nurse at UP-PGH and national executive vice president of the All-UP Workers’ Union, told Bulatlat. With Dr. Gonzales’s late swearing in and clouded directorship, it meant that much of the strategizing and programming of PGH have so far been put on hold, he said.

Last Feb. 25, Dr. Gonzales’s directorship was suddenly terminated when the BOR, led by Roman and the Malacañang appointees, made two unprecedented decisions in UP. One, they revoked the appointment of Dr. Gonzales, the first time a UP official was removed even if there are no questions regarding his or her qualifications. Two, they removed the student regent from the BOR for not being enrolled. The issue regarding the status of the student regent was already discussed and deliberated upon during the December 18 BOR meeting before the regents voted on the PGH directorship. The BOR then resolved that the student regent could vote.

As the two new directors slug it out in the PGH, the battle within the BOR further heats up as progressive student organizations protest the removal of their elected student regent “on the basis of technicality and harassments.” The All-UP Workers Alliance said in a statement that Roman used a “fake majority” to replace the new duly elected PGH director and kick out a student regent .

In his March 5 Philippine Daily Inquirer column Raul Pangalanan, former dean of the UP College of Law, questioned the status of the three Malacañang appointees, including Sarmiento who raised questions on the capacity of the student regent to vote. Pangalanan wrote that the three Malacañang appointees who voted to terminate Gonzales’s appointment have expired terms as they were appointed by President Gloria Macapagal-Arroyo as “Acting Member, Board of Regents” for more than a year already. Pangalanan cited Administrative Code, Executive Order 292, which provides that “in no case shall a temporary designation exceed one year.” All three had been in the BOR for more than a year, including Sarmiento who was appointed on Sept. 29, 2008. “They were all essentially impostors on Dec. 18, trying to oust the student regent who enjoyed an authentic mandate,” Pangalanan wrote.


In the first place, why is the “Roman empire,” as Roman’s leadership is now being called by protesters in UP, dead set on putting a PGH director of its own choice? Why go through all the involved hassles of reversing the BOR’s vote for a qualified, already serving and all-too-willing PGH director like Dr. Gonzales?

One of the biggest reasons, according to the UP All Workers Alliance, appears to lie in the multi-million peso lease contract signed by UP through Roman and Daniel Mercado Medical Center (DMMC) through its president and CEO Edwin M. Mercado. The “historic signing” of the “dream come true,” as then UP-PGH director Dr. Carmelo Alfiler described it in their website, happened on June 18, 2009, after almost four years of bidding and negotiations.

During this long period of bidding and negotiations, a lot of terms were changed in the previously widely embraced Faculty and Medical Arts Building (FMAB), said Ebesate. “Many in UP-PGH had been okay with the first envisioned FMAB,” he said, when it was largely just meant to house clinics and research offices for lease to UP doctors and faculty members.

But as negotiations with DMMC went on, the FMAB later included having concessions for pharmacy, laboratory, radiology and other diagnostic exams. These would directly compete against the PGH’s services, noted the All-UP Workers’ Union. The proposed lease also lengthened from 15 to 25 years, excluding one and a half years for conversion, rehabilitation and development of the site. The covered area was also broadened from 3,400 square meters to 3,900.

When Roman finally signed the lease contract last year, the UP-PGH’s leased premises, referring to the three-storey concrete building known as the PGH Dispensary Building situated within the PGH Complex in the UP Manila campus, covers a “leasable floor area of 4,941.93 square meters, more or less, from the ground floor to the third floor roof deck of the building.”

UP leased to DMMC this portion of the Dispensary Bldg for practically P202.1 ($4) per square meter, said Ebesate, when the Philippine National Bank in an almost similar location pays rent of P456 ($9.90) per square meter since the 1990s.

Given the changes on the FMAB contract provisions, the All-UP Workers’ Alliance tried to block the signing of the contract for a better deal that would not be disadvantageous to the PGH.

“We protested (against the lease contract) due to (its) possible implications on hospital operations,” said Ebesate. He explained that the PGH pharmacy, which gives PGH some P24 million to P30 million per year to the charity fund for indigents, as well as pays for the salaries of more than 200 employees, risk losing revenues to the looming pharmacy operation of DMMC.

It doesn’t look wise to risk losing up to P30 million on the PGH’s pharmacy operations alone in exchange for the expected P12 million annual rent for the first five years, Ebesate said. And we’re talking here of the pharmacy alone. The lease contract signed by Roman also allows DMMC to operate or lease to concessionaires laboratory, radiology and other diagnostic exam, which are already being offered in PGH.

The workers’ union in UP filed a motion for reconsideration appealing the contract of lease but it was negated when the BOR approved the lease contract in August 2009. From October to November last year, the union studied the new UP Charter (RA 9500) and found out that UP had failed to comply with some basic processes on contracts and leases of UP properties.

The union then wrote the BOR requesting them to “remedy a serious oversight” and correct the “patent violation” of certain provisions of the UP Charter. Following the charter, they suggested having a “fairness opinion report by an independent third-party body” and approval or confirmation of the contract by ¾ of all the members of the BOR.

Until the requirements of the UP Charter are satisfied, the All-UP Workers’ Union also requested the “immediate cancellation of the said lease contract” in the November 2009 meeting of the BOR.

There was no response from Roman. Instead she, along with the three Malacañang-appointed regents, moved to extend Alfiler’s term, whose second term ended in December 2009. When it failed, they moved to replace the newly appointed PGH director, Dr. Gonzales.

The Director’s Stand

As new director, Dr. Jose Gonzales had declared that “because of its implications on the hospital operations, the FMAB should not have that capability,” referring to the pharmacy, laboratory, radiology and other diagnostic examinations.

On the other hand, Dr. Enrique Domingo believes the FMAB and the lease contract should continue. “And it will continue unless the court says it must stop from proceeding,” he said. They are “awaiting solution of legal questions” posed by the union against the lease contract, Domingo added. When asked to comment on the opinion released by the Department of Justice (DoJ) early last month, Dr. Domingo said he has yet to see a copy of it.

In the eventuality of a court ruling on the contract, Dr. Domingo said, “We will abide with the court ruling.” But until there is no court ruling, he said, the signed contract and notice to proceed must be followed. “It’s going to be completed,” he emphasized.

Dr. Domingo told Bulatlat the lease contract has appropriate safeguards and would not disadvantage the PGH. “If there are similar functions, it should not compete. The hospital’s income will not be reduced,” he said. He also said the private pharmacy’s pricing will “not undermine PGH price.”

Dr. Domingo used to be deputy director under Dr. Carmelo Alfiler for three years.

The rehabilitation and construction work at the FMAB started last year. Its construction work is now “ongoing, full-blast,” said Dr. Domingo. FMAB is expected to be operational by 2011.

The Lease Contract and the UP Charter

The All-UP Workers Union and the chair of CHED, who both agreed that the UP Charter covers the lease contract for developing the FMAB, had asked the DoJ for a legal opinion late last year. The latter responded on February 9, but a copy of it made its way only recently to the UP and PGH unions.

In summary, the justice secretary rejected the UP’s claims that the non-impairment clause would not apply to the said lease contract, for the simple reason that UP was still in the middle of negotiations when the UP Charter of 2008 was passed. Even if UP has approved the Terms of Reference long before the new charter was passed, the DOJ noted that the situation now may be different, “there may be certain provisions in the TOR that are no longer applicable or needs to be revisited in order to be beneficial to all parties involved.”

Lastly, the DOJ pointed to Section 22(F) of the new UP Charter which states that, “any plan to generate revenues and other sources from land grants and other real properties entrusted to the national university, shall be consistent with the academic mission and orientation of the national university as well as protect it from undue influence and control of commercial interest: Provided, that such programs, projects or mechanisms shall be approved by the Board subject to a transparent and democratic process of consultation with the constituents of the national university; (underscoring by the DOJ).

Unfortunately, Justice Secretary Devanadera’s opinion is, as she herself said, “merely advisory, has no binding effect” on members of the UP community and DMMC. She commented on this matter “for information and guidance only” of the chair of CHED, Mr. Emmanuel Angeles, “because of the public interest involved in the issue.”

“Did UP comply with the law?” asked Ebesate and Benjamin Santos, president of All-UP Workers’ Union, Manila chapter. If not, UP, led by Roman, is liable for graft and corrupt practices, they said.

The PGH director’s role is crucial in the present FMAB project, said UP-PGH’s union leaders. It is, after all, the PGH who had proposed it, and it will likewise be the PGH who can first say whether the project should stop or proceed. Under Dr. Gonzales as PGH director, there is a possibility he would stop the FMAB project. Under Dr. Domingo, the project can only be impeded by a court ruling. (

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