PenroRuaruce AcReerrlenr

This Performance Agreement has been executed pursuant to the PERFoRMANcEEveluatrorir Svsreu FoR rHE GOCC SEcroR (GCG MC No. 2013-02 [Re-lssuedl) between the -

GOVERNANCE COMMISSION FOR GoCCs (GCG)

-and-

P|TC PHARMA,INC. (PPt)

WITNESSETH: THAT -

The Parties agree to the following terms:

1. Period. - This Agreement shall be effective beginning from the execution ofthis Agreement and ending upon the determination by the GovernanceCommission of the eligibility of PPI for the FY 2015 PBB and PBl.

Chafter Statement and Strategy Map. - PPI's Charter Statement andStrategy Map for the Period specified in Section t hereof, shall be asfollows:

B I | ill|ilil|ilililitililil rlltll tlr illl|ru til[l !

Etficiency in procurement and

dlstribution

THTMI:

(b)Daraar'

fr..i"'ffiII n.,"* II gov.mmfll II *rnnrorocrl I

| 'eraunmrt II oolliuton I

I provldm po II to rftnl* md I

I qu*ty mntr II ngancl t I

linprmur Illrdlhcondtom I

t3l-c*wr.. Ilr.,** I

I erclrlro .na I

I r",*oa, I

I Rtut *. lt., Ie!

Access to qu.lity oss€nd.lmedlclnes

\

PITC Pharma, lnc.

I1"IrsgsJ

+t---{--___*w,aPtlr e:m;olIE rr*

Provide Access to Atfordable Essential

Medicines throulh Publk Entties/tacllities

s{tbln dl. orFnhadods

tridrility6row Seles

Achieve Cuitomer

Satislacdon

Ensure a Transparent and tair

Eusiness Process for Suooliers

Dellvsr Responsive and

Iimely Services to Customers

Develop ortanilrtional

Competsn(ies

VlSlON: By 2020,we will be the Preferled Procurement0rganizationfor

the Pharmaceutical Needs of the Government

3. Measurement2015 attachedbased on theTargets, to wit:

PERFoRMANcE AcREEMENT FoR CY 2015l2of 5GCG and PPI

of Pefiormance. - Based on the Performance Scorecardhereto as Annex A, the PPI's Performance tor 2015 shall be

following Measures/Performance lndicators and Annual

COMPONENT WEIGHTRATINGSCALE

20'15TARGET

Foo-

EJ

otJ)

sol Provide Access to Affordable Essential Medicine through Public Entities/ Facilities

SM1

Participate in all DOH, PHIC and PCSObidding. Present price list, price of winningbidder should be comparable or lower thanthe price offered by PPI for Oncology andVaccine

15%Actual/ Target

x Weight 90lo

SM2

Number of PHIC-Contracted andMedicine Access Sites served/Number of PHIC-Contracted andMedicine Access Sites served

DOHTotalDOH

10o/oActual/ Target

x Weight

SM3Number of Local Government Units (LGUS)served by PPI Province - 80, Municipalities

- 1,496; Cities - '12210%

Actual/ Targetx Weight

'l ,104

Sub-total 35o/o

J

zzl!

so2 Grow Sales

SM4 Amount of Sales net of Vat 20%Actual/ Target

x WeightP900 Million

so3 Sustain the Organization's Viability

SM5 Positive EBITDA 10loActual/ Target

x WeightP36 Million

Sub-tota, 30%

EutoJoEulYF.J)

so4 Achieve Customer Satisfaction

SM6 Overall satisfaction rating 5%Actual/ Target

x WeightAbove

Satisfactory

so5 Ensure a Transparent and Fair Business Process for Supplies

SM7 Number of suppliers participating in

procurement activities for trade goods SYoActual/ Target

x WeightJO

Sub-total 10%

v>ouJootro.JzEIIJF

=

so6 Expand Product Lines and Business Partnerships

SIVI 8 New product lines and packages introduced SYoActual/ Target

x Weight3

SM9 New business partnerships 5o/oActual/ Target

x Weight3

so7 Oeliver Responsive and Timely Services to Customers

SM 10Percentage of orders delivered on time forDOH, PHIC, and PCSO

5o/oActual/ Target

x Weight90%

Sub-total ,t5%

I

2\=*E14oJZ

so8 Develop Organizational Competencies

st\,l 11 Units achieving their targets 5%Actual/Target

x Weight5

so9 lnstitutionalize a Quality Management System

\Try

si/t 12 ISO Certafication 50k All or Nothing

rsoCertificationall sites allprocesses

Sub-total 10%

TOTAL 100%

PERFoRMANcE AcREEMENT FoR CY 2015l3ot5GCG and PPI

It is understood that the GOCC must achieve a weiqhted-averaqe of atleast 90% to be eligible to grant any Performance-Based Bonus.

4. Strategic lnitiatives. - PPI hereby commits to undertaking the followingkey programs and/or projects identified as having a significant impact on itsPerformance Scorecard (PES Form 2) attached hereto as Annex B, to wit:

(a) Strategic lnitiative 1 - Lobbying for the Establishment of theNational Procurement Strategy for Medicines

(b) Strategic lnitiative 2 - PITC Pharma, lnc. and PS-DBMPartnership to Ensure Availability and Accessibility of Medicinesin the Public Sector

(c) Strategic lnitiative 3 - Seminar on Updates on Procurement Law(RA9184) and other Related GPPB lssuances, and lssuance ofGuidelines on the Conduct of Bids and Awards Committee (BAC)Activities

The Commitment herein includes obtaining all necessary approvals, ifapplicable, such as those for Major Development Projects under GCG MCNo. 2013-03. PPI shall include updates on the foregoing Strategic lnitiativesin its submission of quarterly monitoring reports to the GCG.

5. Quafterly Submission of Pefiormance Monitoring. - PPI shall submit a

quarterly monitoring report to the GCG within thirty (30) calendar days fromthe close of each quarter using the monitoring report attached hereto asAnnex C.

6. Good Governance Conditions. - ln addition to the covered portions of thePerformance Scorecard, the GOCC must fully comply with the Good

Governance Conditions enumerated under GCG MC No. 2013-02 (Re-

lssued), GCG MC No. 2014-02, and GCG MC No. 2014-03 namely:

6.1. Conditions Common to National Govemment Agencies and GOCCs:

(a) Transparency Seal;

(b) PhiIGEPS Posting;

(c) Cash Advance Liquidation;

(d) Citizen's Charter or its equivalent; and

(e) Compliance with the submission and review requirementscovering Statement of Assets, Liabilities and Networth (SALN);

6.2. Conditions SpecrTlc fo GOCCs Covered by R.A. No. 10149:

(a) Satisfaction of all statutory liabilities, including the payment ofall taxes due to the Government, and declaration and paymentof all dividends to the State as of the end of the applicablecalendar year, whenever applicable. Liabilities that are stillunder dispute and there has been no final and executory

\ .r*ry

7.

PERFoRMANcE AGREEMENT FoR CY ,Z::::,i;,

judgmenUdecision as of the date of the release of the PBB bythe GOCC shall be excluded for the purpose of this provision.

(b) Submission and execution of concrete and time bound actionplans for addressing Notices of Disallowances and AuditObservation Memoranda from the Commission on Audit(COA), if any.

(c) Adoption ol a "Manual of Corporate Govemance" pursuant toSection 42 of the CoDE oF CoRpoRArE Govenrerce ronGOCCs (GCG MC No. 2012-07) that is approved by GCG anduploaded on the GOCC's website.

(d) Compliance with posting on the GOCC's website theinformation enumerated under Section 43 of GCG MC No.2012-07.

(e) Adoption of a No Gtrr Poucv approved by the GCG anduploaded on the GOCC's website pursuant to Section 29 ofGCG MC No. 2012-07.

(f) Compliance with the deadlines and submission of reportsthrough the lntegrated Corporate Reporting System (ICRS)pursuant to GCG MC No. 2014-02.

. (g) Compliance by all members of the Governing Board with thesubmission of all required forms for the Director PerformanceReview (DPR) pursuant to GCG MC. No. 2014-03 andimplementing issuances pursuant thereto.

(h) Submission of Corporate Operating Budgets (COBs):

i. For GOCCs receiving national government budgetarysupport, COBs shall be submitted to the Department ofBudget and Management (DBM) for review and approvalon or before the deadline indicated in DBM NationalBudget Memorandum No. 120 on "Budget Call for FY2015,'

ii. For GOCCs without national government budgetarysupport, COBs shall be submitted to the GovernanceCommission using the same deadline as provided in DBMNational Budget Memorandum No. 120.

PPI hereby undertakes to have its Performance Scorecard rated by its

customers and solicit feedback on how the same may be improved. PPI shalldetermine the most effective method for accomplishing the said purpose.Such information shall be reported to GCG together with the quarterlymonitoring report. The rating shall not affect the performanceindicators/measures in PPI's Performance Scorecard, and shall be usedsolely as a reference by GCG and PPI during Performance AgreementNegotiations/Renegotiations.

PPI shall timely inform GCG of all audit observations and notices ofdisallowances within seven (7) working days from the time it receives it

receives the same from the Commission on Audit (COA) prior to the regularpublication of the final annual audit report. Accordingly, PPI shall copy furnishthe Governance Commission copies of all written communications betweenPPI and COA on such matters, inform GCG of the schedule of its exitinterview with COA seven (7) working days before the schedule or as soon aspracticable, and other efficient means of inter-agency coordination.

B.

\ T-+

PERFoRMANcE AGREEMENT FoR CY ,Z::::,";;

Failure to timely disclose such matters to the Governance Commission priorto the same becoming public information or the submission of the applicationfor the Performance-Based Bonus (PBB) or Performance-Based Incentive(PBl) may be considered as non-compliance with the Good GovernanceCondition of submitting Concrete and Time Bound Action Plans on findings ofCOA, rendering the Governing Board tNELtGtBLE to apply for the PBl, withoutprejudice to a further determination on the impact of the same on the GOCCsPBB application.

9. Nothing herein shall be construed as limiting the authority of GCG to initiaterenegotiations and/or revoke Performance Agreements in accordance withexisting laws, rules and regulations.

DONE, this 12th day of December 2014, in the City of Makati, Philippines.

GOVERNANCE COMMISSION FOR PITC PHARMA,INC.

MA. LO

ILo,^--Jr,ralaroEr-a E. rc NAc roI clmmissioner

RAINIER B. BUTALIDCommissioner Board Member

J"L,kLber

GOCCsHoRITY oF THE CoMMISSION:

:VILLANUEVA

AURORA I!II(

Chairman

Performance Scorecard 201 5

PITC PHARMA, INC.

Fot!=)ooc)

sol Provide Access to Affordable Essential Medicine through Public Entities/ Facilities

SM1

Participate in all DOH, PHICand PCSO bidding. Presentprice list, price of winningbidder should be comparable orlower than the price offered byPPI for Oncology and Vaccine

15o/oActual/ Target

Weightnla nla nla 90%

SM2

Number of PHIC-Contractedand DOH Medicine AccessSites served/ Total Number ofPHIC-Contracted and DOHMedicine Access Sites served

AbsoluteNumber

10% Actual/ Target xWeight

100%

(16 outof 16)

72Yo

(18 out of25)

88o/o

(22 out of 251

1O0o/o

(25 out of 25)

Number of Local GovernmentUnits (LGUS) served by PPIProvince - 80; Municipalities -1,496; Cities - 122

AbsoluteNumber

10o/oActual/ Target x

Weight13 950 1 ,104

Sub-fota, 35%

)ozztr

so2 Grow Sales

SM4 Amount of Sales net of Vat AbsoluteAmount 20Yo

Actual/ Target xWelght

P63.73Million

P344.64Million

P541.96Million

P900 Million

-T-

==

Component

Formula weight Rating System "' "r:ili",

Baseline Deta(if applicable)

2013

Target

Objective/M easu re 2012 2014 2015

ppt l2of3Pertormance Scorecard 2015 (Annex A)

so3 Sustain the Organization's Viability

SM5 Positive EBITDA AbsoluteAmount 10%

Actual/ Target xWeight

(P21.70)Million

P15.29Million

P17.62 Million P36 Million

Sub-total 30'/,

Et!o.J

IulYFo

so4 Achieve Customer Satisfaction

SM6 Overall satisfaction rating 5%Actual/ Target x

Weight nla AboveSatisfactory

AboveSatisfactory

AboveSatisfactory

so5 Ensure a Transparent and Fair Business Process for Supplies

SM7Number of suppliersparticipating in procurementactivities for trade goods

AbsoluteNumber 5%

Actual/ Target xWeight

41 27 38

sub-total 10%

TIJooEo-J

2Et!Fz

so6 Expand Product Lines and Buainess Partnerships

SM8 New product lines andpackages introduced

AbsoluteNumber

Actual/ Target xWeight

nla 2 3

SM9 New business partnerships AbsoluteNumber 5%

Actual/ Target xWeight nla 4 2

--<-Je

€

ComponentBaseline Data(if applicable)

2013

Target

Objective/Measure Formula Weight Rating System "/Data

Provider 2012 2014 2015

PP, l3of 3Performance Scorecard 2015 (Annex A)

so7 oeliver Responsive and Timely Services to Customers

S[il 10Percentage of orders deliveredon time for DOH, PHIC, andPCSO

Number oforders

delivered ontime/ Totalnumber ofOrders forDelivery x

100

5%Actual/ Target x

Weight80% 75% 85./" 90%

Sub-total 150

!Eotoozo=zEllJJ

so8 Develop Organizational Com petencies

SM 11 Units achieving their targetsAbsoluteNumber 5%

Actual/Target xWeight

nla nla nla 5

so9 lnstitutionalize a Quality Management System

SM 12 ISO Certification 5% All or Nothing nla

Sales OrderProcessing,ReceivablesManagement

andProcurement

Manuals

Completion ofAwareness

andDocumentation

Training

tsoCertificationall sites allprocesses

Sub-total 10%

TOTAL 1O0o/.

a/ But not to exceed the weight assigned per indicator{

a€

Formula Weight Rating System "/

Baseline Data(if applicable)

- Dag zofi zo13Provtoer

Strategic lnitiatives Profile (Annex B)

PITC Pharma, lnc.

I. STRATEGIC INITIATIVE PROFILE I

l. Name of Project: Lobbying for the Establishment of the National ProcurementStrategy for Medicines

2. Contact Person/Project Team Head: Vice President Jose A. Cortez

3. Project Description:

A National Procurement Strategy for Medicines (NPSM) is being proposed by theDepartment of Health (DOH) to ensure an efficient, effective and seamlesssystem of procurement in the DOH and local government units (LGUs) that willsecure the availability of good quality and affordable essential medicines. Thestrategy aims to steer medicines procuring agencies towards the adoption andenforcement of minimum standards for medicines selection, procurement anddistribution of quality assured medicines along the entire pharmaceutical supplyand distribution chain of the public sector. A component of the strategy is todesignate PITC Pharma, lnc. as the central government procurement facility formedicines.

4. Project Milestones:

ActivitiesTimeline

Budget FundingSource

StatusSta rt End

Consultative Meetingsamong NCPAM,NCDPC, HEMS,COBAC, MMD, BIHC,Philhealth, PPl, LGUsand civil societyrepresentatives

Feb2013

July2013

P20,000 CorporateOperatingBudget(coB)

Fiveconsultativemeetingsbeen held.

(5)

have

Work with NCPAM onthe finalization of thedocument

August2013

Sept.2013

Writeshops with theNCPAM have beenconducted to craftthe AdministrativeOrder (AO).

Presentation of the draftAO during the RegionalConsultations

October2013

Jan.2014

P50,000 COB

Work on the approval ofthe AO by DOH Sec.Enrique T. Ona

March2014

June2014

Work with NCPAM andNCHP to develop acommunications plan tocreate awareness aboutthe facility

lmmediatelyafter approval ofthe AO

Conduct a massiveinformation campaignamong the LGUs, GAsand DOH-retainedhospitals

lmmediatelyafter approval ofthe AO

\Tft

P P I 12 ot 4Strategic lnitiatives Profile (Annex B)

5. easures Affected:

5.1 No. of targeted DOH-Retained Hospitals, LGUs, and National GovernmentAgencies (NGAs) served by PPI (Measure Nos. 2, 4 and 5)

5.2 Attain % sales growth year-on-year (Measure No.7)

II. STRATEGIC INITIATIVE PROFILE II

1. Name of Project : PITC Pharma, lnc. and PS-DBM Partnership to EnsureAvailability and Accessibility of Medicines in the Public Sector

2. Contact Person/Project Team Head: Josefina Leona O. Riel

3. Project Description:

A partnership between PS-DBM and PPI is being proposed to ensure availabilityof quality-assured low-priced essential medicines in all public facilities. Underthe proposed set-up, PS-DBM will carry in its 25 depots 30 essential medicinesthat are commonly ordered by local government units and government agencies.

4. Project Milestones:

ActivitiesTimeline

Budget FundingSource StatusStart End

Schedule ameeting withPS

April 8, 2013 A meeting between PPIPres. Bienvenido S.Bautista and PS-DBMExecutive DirectorEstanislao Granados washeld on April 8, 2013.

Prepare aproposal forthe PS-DBMPPIpartnership

April 9 April 12

Subm itproposal toPS.DBM

April 12,2013 The proposal addressedto Budget Sec. FlorencioAbad was sent to theoffice of Dir. EstanislaoGranados on April 15,

2013.

Follow-upstatus of theproposal withPS-DBM

April2013

Re-submitproposal tothe newExecutiveDirector ofPS-DBM

August 15, 2014 Atty Tommy Syquiaassumed office as PS-DBM Executive Directoron 28 July 2014.

Follow-upstatus of theproposal with

August30,2014

untilapproved

\Try

PS-DBM

Prepare MOAandlmplementingGuidelines

lmmediately afterapproval

P P I 13 ot 4Strategic lnitiatives Profile (Annex B)

Measures Affected:

5.1 No. of targeted DOH-Retained Hospitals, LGUs, and National GovernmentAgencies (NGAs) served by PPI (Measure Nos.2,4 and 5)

5.2 Attain % sales growth year-on-year (Measure No. 7)

III. STRATEGIC INITIATIVE PROFILE III

l. Name of Project : Seminar on Updates on Procurement Law (RA9184) andother Related GPPB lssuances, and

lssuance of Guidelines on the Conduct of Bids and Awards Committee (BAC)Activities

2. Project Team Head: Atty. Ben Ferdinand F. Cruz and Elizabeth V. Trillana

3. Project Description:

ln-house Seminar on Updates on Procurement Law (RA9184) and other relatedGPPB lssuances to be conducted by Atty. Ben Ferdinand F. Cruz.

Atty. Cruz shall prepare Guidelines on the Conduct of Bids and AwardsCommittee (BAC) Activities for discussion during the trainrng and to serve as areference for all the members of the BAC, and its Secretariat and TechnicalWorking Group in the proper conduct of, and observance of the rules on,government procurement.

4. Project Milestones:

ActivitiesTimeline

Budget FundingSource

StatusSta rt End

PrepareProgramSeminar-TrainingTrainingMaterials

ofJan.5,2015

Jan. 6,2015

P20,000.00 PPICorporateFunds

Prepare / lssueGuidelines onthe Conduct ofBids andAwardsCommittee(BAC)Activities

Jan. 7 ,

2015Jan.9,2015

ScheduleTraining andldentifyParticipants

January12,2015

January13,2015

\Try

PPI l4ot4Strategic lnitiatives Profile (Annex B)

ConductTraining

January 16, 2015

Distribute FeedBack Forms

January 16, 201 5

DistributeCertificate ofAttendance toall participants

January 16, 2015

MEASURES AFFEGTED:Number of suppliers participating in the procurement activity for trade goods

\ To'

Monitoring Report (Annex C)

PITC PHARMA, INC.

MONITORING REPORT OF PERFORMANCE TARGETS

F(Jc=JsooU'

sol Grow Revenues

SM ,I

Participate in all DOH,PHIC and PCSO bidding.Present price list, price ofwinning bidder should becomparable or lower thanthe price offered by PPIfor Oncology and Vaccine

15% 90% 90% 900k 90%

SM2

Number of PHIC-Contracted and DOHMedicine Access Sitesserved/ Total Number ofPHIC-Contracted andDOH Medicine AccessSites served

10%72o/o

(18 out of251

87%

(21 out of25].

88Yo

(22 oul of25\

101o/o

(25 out of25)

SM3

Number of LocalGovernment Units (LGUs)served by PPI Province -80; Municipalities - 1 ,496iCities - 122

AbsoluteNumber 10% 900 1,000 1,050 1 ,104

Sub-total 35%

-2€

2015Component Baseline

1"t Quarter 2nd Quarter Revised 3d Quarter 4th QuarterFull Year

Objective/Measure Formula Weight 2014 Target Actual Target Actual Target Target Actual Target Actual

PPI l2ol 3Monitoring Report (Annex C)

)ozzTL

so2 Grow Sales

SM4 Amount of Sales net ofVat

AbsoluteAmount 20o/o

P181.290Million

?522.239Million

P7 62.294Million

P900 006Million

so3 Sustain the Organization's Viability

SM5 Positive EBITDAAbsoluteAmount 10%

P7 .322Million

P25.394Million

P35.881Million

P36 Million

Sub-total 30%

tuloJorIUYF(,

so4 Achieve Customer Satisfaction

SM6 Overall satisfaction rating 5%Above

Satisfactory

sos Ensure a Transparent and Fair Business Process for Supplies

SM7

Number of suppliersparticipating inprocurement activities fortrade goods

AbsoluteNumber 5% 24 31 38

Sub-total 10%

<ahzuE()uro2E

so6 Expand Product Lines and Business Partnerships

SM8 New product lines andpackages introduced

AbsoluteNumber 5o/o 3

.4

=?

d2015

Component Baseline1"r Quarter 2nd Quarter Revised 3'd Quarter 4th Quarter

Full YearObjective/Measure Formula Weight 2014 Target Actual Target Actual Target Target Actual Target Actual

PP, 13of3Monitoring Report (Annex C)

SM9 New businesspartnerships

AbsoluteNumber 50k 3

so7 Deliver responsive and Timely Services to Customers

SM 10Percentage of ordersdelivered on time forDOH, PHIC, and PCSO

Number oforders

deliveredon time/

Totalnumber ofOrders forDelivery x

100

5o/o 90% 90% 90% 90%

Sub-tota, 15%

IIt(,zozzEr!J

so8 Develop Organizational competencies

SM .I1 Units achieving theirtargets

AbsoluteNumber 5% 5 5

so9 lnstitutionalize a Ouality Management System

SM 12 ISO Certification

tsoCertificationall sites allprocesses

Sub-tora/ 10%

TOTAL 1O0o/.

=-+

='

20'15Component Baseline

1"t Quarter 2nd Quarter Revised 3'd Quaner 4th QuarterFull Year

Objective/measure Formula Weight 2014 Target Actual Target Actual Target Target Actual Target Actual