‘Buy local’ procurement questioned by industry

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BUSINESS GROUPS at the weekend asked Congress to revisit the domestic-supplier preference rules in the proposed New Government Procurement Act, saying the practice could weaken competition and discourage participation in government bidding.

In a joint statement on Friday, the business groups said the provision in Senate Bill No. 2593 “may inadvertently weaken the administration’s goal of fostering competition among potential suppliers.”

“This limits the diversity of the pool of competitors from which the government can even select the best value-for-money option — one that balances quality, performance, sustainability, and cost,” the groups said.

Legislators are seeking to modernize procurement to rid the system of corruption and unwarranted delays.

The proposed New Government Procurement Act aims to streamline the procurement process from 120 days to 27 days.

It also seeks to give preference to bids that feature locally manufactured and environment-friendly goods, articles, and materials.

Citing the complexity of supply chains, business groups said it would be difficult to classify products or services as simply “local” or “domestic.”

“If a Filipino supplier forms part of a foreign provider’s supply chain but is not necessarily the dominant player in that relationship, the domestic preference rule works against the Filipino supplier in such a case,” according to the groups.

They added that “if the bid of a domestic bidder is higher than the lowest foreign bidder but within a 25% margin, the domestic bidder wins.”

The bill could also hamper the development of other industries, like defense and state-owned enterprises, which “will be forced to purchase from Filipino-owned firms with higher prices.”

Preferential treatment would also limit the government’s options for digitalization amid President Ferdinand R. Marcos, Jr.’s earlier directive to digitalize vital services in government agencies.

“The administration’s goal of whole-of-government digitalization means accessing innovative and secure solutions from technology-forward companies that can provide solutions at scale,” the groups said.

The bill is still being debated in the Senate plenary. The House of Representatives passed its version of the measure on third and final reading last year.

House Senior Deputy Speaker and Pampanga Rep. Aurelio D. Gonzales, Jr. told reporters last week that the new procurement law will be passed in time for the President’s State of the Nation Address in July.

The measure, which is also backed by the Budget department, is included in the Legislative Executive Development Advisory Council’s (LEDAC) priority measures for approval this year.

Signatories to the statement include the Makati Business Club (MBC), American Chamber of Commerce of the Philippines (AmCham), European Chamber of Commerce of the Philippines (ECCP), Japanese Chamber of Commerce and Industry of the Philippines (JCCIP), Korean Chamber of Commerce Philippines (KCCP), and the Foundation for Economic Freedom (FEF). — Beatriz Marie D. Cruz