Phl can attract more capital via e-procurement, says EU

MANILA, Philippines - The European Union (EU) supports the Philippine government’s move to modernise e (electronic) – procurement citing that such would allow the Philippines to attract more foreign direct investments (FDI) from the EU bloc.

Speaking at the Fair Competition, Transparency and Procurement: Attracting EU Investment to the Philippines forum held yesterday, EU Ambassador to the Philippines Guy Ledoux said the Philippine government’s move to modernize the Philippine Government Electronic Procurement System (PhilGEPS), which serves as the platform for e-procurement, is seen as a positive development that would enable the Philippines to get more investments from the bloc.

Under the procurement law, all tenders must pass through the PhilGEPS to ensure accessibility and transparency of the procurement process.

“The recent decision to update the tool by 2016 is encouraging, as the increase of functionality of the system will further reduce procurement costs, provide audit trails and make available online services such as e-bidding and e-payment,” Ledoux said.

Budget Secretary Florencio Abad said in the same event the government has expanded the coverage of the PhilGEPS by providing information not just limited to public bid opportunities, but also the information on projects which have been awarded to allow suppliers, contractors and consultants to register and participate in the procurement process through an online platform, as well as let the public scrutinize the projects’ implementation.

Abad said the government has also started the campaign of cashless and check less transactions with the pilot of the cashless purchase card for government procurement currently being undertaken in the Department of Budget and Management, Department of National Defense and Armed Forces of the Philippines with Citibank.

“In this pilot phase, the cards will be used to purchase certain supplies or items necessary to the agencies’ operations, data from which are supplied in real time and with uniform accuracy,” he said.

As e-procurement is a trend worldwide, Ledoux said the government’s update of the PhilGEPS is a step in the right direction especially as the country wants to attract more investments.

He noted that while the Philippines is making progress in terms of attracting FDIs, some companies are reluctant to invest due to problems with procurement.

Problems faced include short timeframes between publication of tenders and bid submissions which do not allow foreign bidders to complete all the formal requirements, as well as complex formal requirements such as certifications and business licensing and disclosure requirements that include details of similar contracts performed in other countries or details on prices.

Inward FDI stocks to the Philippines have risen to €25 billion in 2013 from €10 billion in 2004, with most coming from the EU.

To attract more FDIs, Ledoux reiterated other measures that could be taken by the Philippines such as reduction of the P1 billion threshold of government infrastructure projects open to foreign contractors, as well as improving legal framework for foreign bidders by including all 28 EU member states in the reciprocity list in the Government Procurement Reform Act. 

The Philippines, he also said, could join the Government Procurement Agreement (GPA) as an observer, to show its engagement towards transparency, non-discrimination and international competition and benchmark its own policies against international ones.

The GPA is a plurilateral agreement within the framework of the World Trade Organization which aims to mutually open government procurement markets among its 15 parties.

Ledoux said the Philippine government could also facilitate companies by implementing the so-called Apostille Convention which would do away with the burdensome requirements for legalizing documents.

Abad said the government is also pushing other reforms such as the legislation of a Public Finance Management Law that would consolidate all policies and rules covering the budgeting process.

“We should be ready for submission (of the draft bill) within March,” he said.