In March, the WTO conducted its 5th review of the Philippines' trade policies and practices. Since its last Trade Policy Review (TPR) review, the Philippines has carried out various reforms. Nonetheless, WTO members pointed to the need for further efforts, including in its government procurement system. Of particular concern is a nationality requirement that restricts participation by foreign-owned entities in public procurement. The Philippines is not a signatory of the WTO Government Procurement Agreement (GPA), or even an observer; nor has it implemented any trade agreement that opens its procurement. Based on the TPR, this post examines key elements of the Philippine procurement system. Since the early 2000s, the Philippines has undertaken reforms aimed at establishing an open, transparent and competitive government procurement regime. Its Government Procurement Reform Act of 2003, which consolidated its procurement framework, together with its 2016 Implementing Rules and Regulations govern all types of procurement of goods, services and construction works, including foreign-funded procurement unless otherwise provided by international treaties or agreements. Its law and regulations apply to the procurement of all government agencies, including local public units and autonomous regions, state universities, public corporations and public financial institutions. The Government Procurement Policy Board, “an independent inter-agency body with private sector representation” formulates the country's procurement policy and facilitates implementation of its rules and regulations. In general, the Philippines procurement system is decentralized with each procuring entity carrying out its own procurement. However, all procuring entities must procure their common-use supplies and equipment from the Procurement Service of the Department of Budget and Management. To promote transparency, the Philippine Government mandates the use by all procuring entities of the Philippine Government Electronic Procurement System (PhilGEPS) in all their procurement activities. All suppliers must also register on that system at http://www.ps-philgeps.gov.ph/egp/supplier.html. The Philippines restricts participation by foreign suppliers in its procurement by applying nationality requirements. In order for foreign firms to participate in procurement of goods and consulting services, Philippine citizens must own at least 60% of the firm. Infrastructure projects require 75% Filipino ownership. The WTO Secretariat’s report set out the four circumstances in which foreign bidders are eligible to participate in a government procurement in the Philippines:
- when allowed under any treaty or international agreement;
- when the foreign bidder is a citizen, corporation or association of a country whose laws or regulations grant reciprocal rights to their Philippine counterparts;
- when the goods sought to be procured are not available from local suppliers; or
- when there is a need to prevent situations that thwart competition or restrain trade.