IN A RECENT briefing of the Development Budget Coordination Committee on the P5.768 trillion national budget for 2024, our colleague and good friend Senator Nancy Binay narrated an interesting anecdote about her office’s toilet paper. Sen. Nancy noted that the quality of the toilet paper, which costs a mere P7 per roll, was so bad that it would stick to one’s hand when wet. She said this particular office supply, while cheap, was imported and was inferior to the quality being produced by local manufacturers. The point she was trying to make was that even though Philippine-made toilet paper may be more expensive, if the quality is significantly better, then consumers would end up using less and as a consequence, this would be more economical than the imported product.
Senator Binay brought up the issue to ask about the government’s policy on patronizing Philippine-made products. This is also in consonance with our Tatak Pinoy or proudly Filipino advocacy that has now progressed to become a bill and a priority measure of the Marcos administration. The point of our colleague is valid and has actually become normal practice for many countries. Government should take the lead in promoting and supporting Philippine-made products and we can do this by giving preference to domestic manufacturers, subject to our existing laws on procurement.
We can start by simply complying with our own laws on procurement. The implementing rules and regulations of Republic Act No. 9184 or the Government Procurement Reform Act contains a provision requiring the procuring entities to give preference to materials and supplies produced, made and manufactured in the Philippines and that the award shall be made to the lowest domestic bidder, provided his bid is not more than fifteen percent in excess of the lowest foreign bid. To remind our government agencies about this provision and to put emphasis on the importance of supporting our local industries, we include this in the general provisions of the annual General Appropriations Act.
A constant feedback that we get from the local suppliers, particularly the small players, is that they have a difficult time complying with the requirements for bidding. They are required to have a track record and a certain number of supply contracts that are very difficult for them to comply with, especially when they are still small and relatively new in the business.
Both the Government Procurement Policy Board and the Procurement Service of the Department of Budget and Management (PS-DBM) point to eligibility issues as the main culprit for the local companies’ inability to participate in government bidding processes. One of the most important requirements for the prospective bidders is the domestic bidders certificate issued by the Department of Trade and Industry.
PS-DBM informed us during the briefing that the requirements for the prospective bidders include experience, meaning if they have entered into similar contracts before and if they have been in operation for a certain period as identified by the procuring entity. This period could be anywhere from three to five years. This is the biggest barrier to entry for many of the suppliers, especially the small and medium enterprises and start-ups. I suggested that we introduce a gradation in the number of years required as experience for bidders, depending on the nature of goods or services that they will provide. Complex services like the construction of power plants would necessitate longer track records while the supply of simple, common use products such as toilet paper could be granted to smaller and newer suppliers.
Our Tatak Pinoy bill contains a provision on domestic preference. It states that preference and priority should be given to domestically-produced and manufactured products, supplies and materials, which meet the specified or desired quality. We have also filed a bill to institutionalize the certification program of domestic bidders. Both measures are consistent with the provision of the General Agreement on Tariffs and Trade that excludes government procurement from international trade rules for as long as the products purchased are for governmental purposes and not with a view to commercial resale or with a view to use in the production of goods for commercial sale. We want to create a demand for Filipino products and services and government must do its part in this effort.
We make this appeal to our government procuring entities: let us help our small and medium enterprises to participate in these supply contracts so that they can gain the necessary experience. Government should take the lead in providing opportunities for our entrepreneurs. We should make it a policy to procure common supplies from local players. Our consumers have leveled up, the local producers have responded by leveling up, and it seems our government is the only one that has yet to level up.
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Sen. Sonny Angara has been in public service for 18 years—9 years as Representative of the Lone District of Aurora, and 9 as Senator. He has authored, co-authored, and sponsored more than 330 laws. He is currently serving his second term in the Senate.
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Email: sensonnyangara@yahoo.com| Facebook, Twitter & Instagram: @sonnyangara/PN
