‘Buy local’ procurement questioned by industry

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 environmentfriendly 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. —