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  1. MAPS Initiative
  2. Assessments
  3. Country cases
  4. Philippines

Quick facts

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Countries: Philippines
Year of assessment: 2019
Procurement value: US$ 43 billion

Principal organisation: Government Procurement Policy Board (GPPB)

Main partners:

The World Bank (WB), Asian Development Bank (ADB)

Background

The Philippines initiated a comprehensive assessment of its public procurement system using the MAPS methodology in July 2019. This assessment was a response to the recognition of the vital role that public procurement plays in public services delivery, good governance, and economic sustainability. The Philippines, like many countries, allocates a significant portion of its budget to public procurement, accounting for around 60 percent of the total budget, which amounts to approximately US$43 billion. This substantial expenditure is driven by ambitious infrastructure projects, such as the 'Build, Build, Build Program,' with a planned budget of US$171 billion.

Over the past two decades, the Philippines has undertaken several reforms to strengthen its legal and institutional framework for public procurement. Key milestones include the enactment of Republic Act (RA) in 2003, the establishment of the Government Procurement Policy Board (GPPB) as the regulatory body, the introduction of the Agency Procurement Compliance and Performance Indicators (APCPI) system, and the creation of the Philippine Government Electronic Procurement System (PhilGEPS) for publishing bidding opportunities and contract awards. Despite these achievements, significant challenges remain, particularly in areas like eligibility and participation rules, procurement approaches to maximize value for money, the absence of an independent complaints review body, and concerns about PhilGEPS' operational efficiency.

Process

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The MAPS assessment of the Philippine Public Procurement System began in mid-October 2019. The assessment process involved various stages and relied on multiple sources of information beyond legal documents. These sources included interviews with key stakeholders and the review of procurement files. Despite facing disruptions and limitations due to the COVID-19 pandemic, the collaboration and support from the Department of Budget and Management (DBM), GPPB-TSO, and other stakeholders ensured the successful completion of the assessment.

 

Key results and impacts

  • The key recommendations stemming from the assessment were:

    • Addressing eligibility requirements for foreign bidders was highlighted, as these requirements could hinder competition in the procurement market.
    • Promoting the use of life cycle costing (LCC) and sustainability criteria in bid evaluations was emphasized to achieve better value for money.
    • Improving procurement planning and enhance competition.
    • Strengthening contract management, as a significant number of assessed contracts experienced time overruns.
    • Compliance with PhilGEPS was another area identified for improvement, with the expectation that the modernized Philippine Government Electronic Procurement System (mPhilGEPS) would enhance compliance and data availability.
    • Establishing an independent administrative procurement review body was recommended to enhance transparency and effectiveness, aligning with international best practices.

    Looking forward, the Philippines aims to align its public procurement reforms with the challenges and opportunities presented by the COVID-19 pandemic. These reforms include capitalizing on past efforts to improve the legal and regulatory framework, translating green public procurement strategies into practice, modernizing PhilGEPS, and optimizing procurement planning strategies introduced since 2019 to achieve savings of public funds, estimated at 26-29 percent of total procurement spend.

    The Philippine Congress is currently working on amendments to the national procurement law, following the specific recommendations made in the MAPS assessment. The proposed amendments include adopting a fit-for-purpose approach in procurement to tailor management, oversight and control levels to the complexity of projects, a particularly pertinent consideration given the government's significant procurement involvement in expansive infrastructure initiatives such as Build Better More. Initiatives like the beneficial ownership disclosure and sustainable procurement partnerships with international organizations like the World Bank further underscore the commitment to bolstering procurement practices. Read more about the reform efforts here.