One of President Duterte’s friends has quietly thrived under this administration – until the Commission on Audit found outrageously overpriced pandemic supplies which the government bought from a small new firm with less than a million pesos in paid-up capital. This little-known company, which has reaped P8.7 billion worth of contracts, happens to be linked to Michael Yang, Duterte’s staunch friend.

The Yang-Duterte personal friendship, the effect of which has spilled into government affairs, is emblematic of the way the President governs. He rewards his friends with positions and access, showing utang na loob (debt of gratitude) – which Duterte likes to invoke – and allowing them to use these for personal gain.

Let’s trace how the story of this friendship, now under the glare of the spotlight, began and bloomed through the years.

In 1999, when Duterte was Davao City mayor, he was first introduced to Yang by Randy Usman, a Maranao tribe deputy mayor. “He wanted to come in here [Davao] to sell cell phones, on consignment, even for just P10 a day. He put up a DCLA mall, which was cheap, to create jobs,” Duterte said in 2019. “He [Yang] wanted to ask permission [from me].”

“All the Chinese who needed loans, that was his business. He had such a big block, an entire block in Davao, he bought it. He owns all the department stores,” Duterte said on another occasion, proud of the achievements of a businessman who would later become his close friend.

Yang’s businesses grew, making him a wealthy man. He seemed to seamlessly gravitate towards people in power and developed ties with both Chinese and Philippine government officials.

In late 2015, when Duterte decided to run for president, he made a trip to Xiamen to visit Yang. It was there where Yang’s company, Full Win, was headquartered. Duterte was given a tour of the building.

Yang was to meet again with Duterte almost a year later when his friend, who became president of the Philippines, went on a state visit to Beijing in October 2016. Yang was among those who joined Duterte’s lunch with the “Friends of the Philippines Foundation,” a group of Chinese nationals who were keen on donating a drug rehabilitation facility to the Philippine government.

The Foundation, represented by real estate magnate Jose Kho, would eventually donate the P500-million Bukidnon drug rehabilitation center which Duterte and Kho inaugurated in August 2018.

Before that, Yang and Kho were granted a private meeting with Duterte in Malacañang in January 2017. In March of the same year, Yang was in a meeting between Duterte and executives of Pharmally International Holdings in Davao, a Malacañang video footage shows.

(Later, we will see the connection between Pharmally International Holdings to Pharmally Pharmaceutical Corporation, which fattened itself with billions of pesos in government contracts.)

Yang enjoyed access to Duterte and has twice hosted the President and top government officials in private gatherings in Hong Kong and China, according to Rappler’s report. He was among those invited to the Malacañang state banquet held for visiting Chinese president Xi Jinping in 2018.

This friendship paved the way for Yang’s ascent to the halls of Malacañang. In 2018, Duterte appointed him “presidential economic adviser.” It was unclear then what expertise and skills Yang would bring to the Office of the President.

In fact, Duterte denied Yang was his economic adviser, saying he couldn’t possibly appoint a Chinese citizen to the government. But Rappler obtained copies of Yang’s contracts in late 2018 showing that he was indeed appointed the President’s economic adviser initially for the first six months in 2018 and later extended for another six months, for a pay of P1 a year. The contracts used Yang’s Chinese name, Yang Hong Ming.

Yang apparently flaunted his new position. He gave away calling cards with the seal of the Office of the President. He was unmindful of an executive order which states that the seal should be “exclusively used to represent the President of the Philippines.”

He set up his chandeliered office in Makati, with the sign, “Office of the Presidential Economic Adviser,” emblazoned in gold, hanging on a wall. On another wall was a gallery of photographs of Yang with Duterte and other government officials, a mighty display of his influence.

When Yang was alleged to be involved in the illicit drug trade, Duterte immediately cleared him, pointing to Yang’s connections to Chinese officials. How could he be a drug dealer when his circle consists of important Chinese public figures?

Duterte said Yang was part of the entourage of Premier Li Keqiang who visited the Philippines in late 2017. He was also close to then Chinese Ambassador Zhao Jianhua, who slept in Yang’s house whenever he was in Davao, the President revealed.

Yang’s contacts

The public would later learn from Duterte himself, in a recent late-night talk aired on national TV, that Yang was valuable because of his contacts with big businesses in China. He described Yang as “pagador” – Bisaya for paymaster – of Chinese businessmen interested in investing in the Philippines, impervious to the shady meaning of the word.

Apparently, Yang was supposed to invite Chinese businessmen to invest in the country. But it appears that Yang invited himself, as the huge controversy over Pharmally Pharmaceutical Corporation shows. With capital of P625,000 and set up only in 2019, it bagged P8.7 billion worth of contracts from the government for face masks, face shields and personal protective equipment or PPEs in 2020.

It turns out that a majority shareholder of Pharmally, Singaporean Huang Tzu Yen, is linked to Yang through a network of corporations. He sits as a director in another company, Pharmally Biological Company Inc., along with two other associates of Yang. “Huang’s co-directors in this firm are close associates of Yang – they sit as incorporators in several companies led by Yang himself,” Rappler reported. You can read more of the interlocking connections here.

A recent twist to Pharmally came out in the open when Senator Risa Hontiveros disclosed in a press conference that Huang Tzu Yen and other business associates of Yang are wanted in Taiwan for financial crimes. Hontiveros showed news clips and screenshots from Taiwan’s Ministry of Justice website.

Huang Wen Lie, father of Huang Tzu Yen, and Zheng Bingqiang are wanted for securities fraud, embezzlement, and stock manipulation. The older Huang is the chairman of Pharmally International Holding Company while Zheng is the president of Fu Du Sheng Group where Yang is chairman.

Remember the March 2017 meeting of Duterte with Pharmally International Holding Company executives in Davao City? Apart from Yang, Huang Wen Lie and Zheng were also present.

What a shadowy network!

Knowing how Duterte is as a leader, I don’t think Yang and Pharmally are an isolated case in his administration.