Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

TWENTIETH CONGRESS
First Regular Session

HOUSE BILL No. 1474

Introduced by Representative Crispin Diego “Ping” D. Remulla

AN ACT
GIVING PREFERENCE TO DOMESTIC BIDDERS PARTICIPATING IN.
GOVERNMENT PROCUREMENT PROJECTS, AND FOR OTHER PURPOSES

EXPLANATORY NOTE

ino workers and local businesses deserve more opportunities to take part in
building the nation. Article XII, Section 12 of the 1987 Constitution states that “The State shall
promote the preferential use of Filipino labor, domestic materials and locally produced goods,
and adopt measures that help make them competitive.” The Constitution clearly states that the
government should prioritize the use of Filipino labor, local materials, and goods made in the

Philippines.

Unfortunately, local suppliers face tough competition from foreign companies that may
have more resources or lower prices. This proposed measure aims to provide qualified local
suppliers and manufacturers with a fair opportunity to win government contracts. By giving
local producers more chances to take part in government projects, we can boost our economy,

create more jobs, and support homegrown industries.

This

is a step toward building a stronger and more self-reliant Philippines that would

benefit the future generation.


In view of the foregoing, the approval of this measure is earnestly sought.

CRISPIN DIEGO “PING” D. REMULLA


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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

TWENTIETH CONGRESS
First Regular Session

HOUSE BILL NO. 1474

Introduced by Representative Crispin Diego “Ping” D. Remulla

AN ACT
GIVING PREFERENCE OT DOMESTIC BIDDERS PARTICIPATING IN
GOVERNMENT PROCUREMENT PROJECTS, AND FOR OTHER PURPOSES

Be it enacted by the Senate and the House of Representatives of the Phil
assembled:

spines in Congress

SECTION 1. Short Title. — This Act shall be known as the “Domestic Bidders
Preference Act”.

SEC. 2. Declaration of Policy. - Section 12, Article XII, of the Constitution declares
that the "State shall promote the preferential use of Filipino labor, domestic materials and
locally produced goods, and adopt measures that help make them competitive." To this end,
the State shall provide an enabling environment for the domestic private sector to mobilize its
resources to promote Filipino labor, domestic materials, and locally produced goods. As
enunciated in the Constitution and other economic policies, the government shall foster local
participation in the procurement process by providing preference to products made in and/or
sourced from the Philippines.

It is further declared that the State shall pursue a policy of maintai

balance between its obligations under international treaties or agreements and enhancement of

a reasonable

‘competitiveness of Philippine trade and local industries. These may include implementation of
programs/projects/activities intended to improve the quality of industry outputs and services,
as well as the domestic entities productivity, through improvement in business systems and

process and the flow of inputs and outputs.


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SEC. 3. Definition of Terms. — The following terms used in this Act shall have the

meanings stated below:

(a) Bidder — refers to a manufacturer, supplier, or distributor who submits a bid in
response to the requirements of the Bidding Documents;

(b) Director — refers to the Competitiveness Bureau Director;

(c) Domestic Bidder ~ refers to any person or entity offering unmanufactured articles,
materials or supplics of the growth or production of the Philippines, or
manufactured articles, materials, or supplies manufactured or to be manufactured
in the Philippines substantially from articles, materials, or supplies of the growth,
production, or manufacture, as the case may be, of the Philippines;

(d) Foreign Bid ~ refers to any offer of articles, materials or supplies not manufactured
or not to be manufactured in the Philippines, substantially from articles, materials.
or supplies of the growth, production, or manufacture, as the case may be, of the
Philippines;

(e) Goods ~ refers to all items, supplies, and materials which may be needed in the
transaction of public businesses or in the pursuit of any government undertaking,
project or activity, whether in the nature of equipment, furniture, stationery,
materials for construction, or personal property of any kind;

(®) Grown refers to products produced by cultivation such as crops, or products that
are grown, raised, and harvested;

(g) Manufactured — means conversion of raw materials into marketable form through
physical, mechanical, chemical, electrical, biochemical, biological or other means
or by a special treatment or a series of actions. It shall include transformation which
can be geometric or compositional, or both. Merely packing or packaging shall not
qualify as manufactured;

(h) Produced ~ creation of or formation of goods through a natural process:

(i) Procuring Entity — refers to any branch, constitutional commission or office,
agency, department, bureau, office, or instrumentality of Government of the
Philippines, including Government-Owned or -Controlled Corporation,
Government Financial Institutions, State University and College, and local
government units procuring goods, infrastructure projects and consulting services;

(j) Secretary — refers to the Secretary of the Department of Trade and Industry:


(k) Secretariat — refers to the Supply Chain and Logistics Management Division of the
Competitiveness Bureau tasked to provide the assessment, verification, and
recommendation to the Committee for approval or disapproval.

SEC.4. Application. — Only a domestic bidder may file an application for certification
for domestic preference. The application shall be filed at the Supply Chain and Logistics
Management Division of the Competitiveness Bureau.

SEC.S5. Evaluation. — Verification of the origin of the goods sought to be certified shall
be done through ocular inspection of the site where the goods were grown, produced or
manufactured. The Secretariat shall submit an Inspection Report to the Committee containing
statement as to whether the goods offered for bidding satisfy or do not satisfy the requirements
for a Domestic Bidder's Certificate and the basis for such finding.

SEC.6. Approval or Denial of Application. ~ After evaluation, if the Secretariat finds
that an applicant conforms to and meets the requirement for a Domestic Bidder's Certificate,
the Director shall approve the application and issue the corresponding Certificate.

If the application is denied, the Director shall issue a written notification specifying the
grounds for the denial of the application.

Where no request for reconsideration is filed, the denial of the application shall become
final. The denial shall be without prejudice to re-filing of application.

SEC.7. Determination of Substantial Compliance. — Prospective bidders shall only be
granted a Domestic Bidder's Certificate and apply for domestic preference when the goods,
supplies, or materials offered for bidding are substantially grown, produced, or manufactured
in the Philippines.

7.1. In determining whether the goods are substantially grown and produced in the

Philippines, the following general principles shall be considered:

7.1.1. The origin of the product shall be disputably presumed as that which is
indicated in the label;

7.1.2. Livestock born and raised within the Philippines are deemed originated
in the Philippines; and

7.1.3. Plants grown and produced within the Philippines are deemed originated
in the Philippines.

7.2. In determining whether the goods are substantially manufactured in the Philippines,

the following general principles shall be considered:

7.2.1. Manufacture of industrial goods or processing of agricultural products
into (a) semi-finished/intermediate goods for use as inputs in the production of


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other goods, or (b) finished products for final consumption, shall be deemed
manufactured or processed in the Philippines.

7.2.2. Casting or molding, forming, machining, or joining/assembly of raw
materials, and the production of discrete parts to transform materials from one

form to another valuable form encompasses manufacturing. Mere packing or

packaging shall not constitute manufacturing. Simple processing covering any
or a combination of activities such as cleaning, sorting, shredding, pulverizing,
grinding, crushing, compacting, dissolving and filtration shall also not be
considered manufacturing.

SEC.8. Composition of Committee. - A Committee of Three shall be established to
review the recommendation of the Secretariat, and to grant or deny each application.

‘The Committee shall be composed of the head of agency of the Competitiveness Bureau
as Chair, with third level officials from any of the following Department of Trade and Industry
agencies: Regional/Provincial Offices, Bureau of International Trade Relations, Board of
Investments, Competitiveness and Ease of Doing Business Group, Consumer Protection Group
and Management Services Group.

Except for the officials and staff of the Competitiveness Bureau, the Committee
members and technical staff shall be entitled to receive an honorarium subject to the existing
rules and regulations issued by the Department of Budget and Management and the
Commission on Audit, charged to the Competitiveness Bureau.

SEC.9. Domestic Bidders Certificate. — (a) The Certification shall remain valid for a
period of two (2) years. It shall include the scope, validity, remarks or conditionalities. It is
non-transferable and limited only to the products specified in the scope.

(b) Subject to notice and hearing, the Certificate shall be revoked for any of the
following grounds:

i. Making material false statement in the application required of the Bidder when
a true statement would have warranted the Secretariat's denial or to recommend

Certification;

Making false representations as a matter of fact, whether or not the same
results in damage or legal injury to a third party, after the Certification has been

issued; and

Any other circumstance analogous to the foregoing.


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SEC. 10. Capacity Building for Domestic Suppliers. - The DTI, in coordination with
the DBM, shall establish training programs, access to credit, and technical support mechanisms
to improve the competitiveness of Domestic Bidders.

SEC.11. Implementing Rules and Regulations. — The Department of Trade and
Industry shall formulate and issue the necessary rules and regulations to implement the
provisions of this Act within sixty (60) days from its effectivity.

SEC.12. Repealing Clause. — All general and special laws, acts, city charters, executive
orders, presidential proclamations, issuances, rules and regulations, or parts thereof which are
contrary to or inconsistent with any of the provisions of this Act are hereby repealed, amended,
or modified accordingly.

SEC.13. Separability Clause. ~ If any portion or provision of this Act is subsequently
declared invalid or unconstitutional, other provisions hereof which are not affected thereby
shall remain in fall force and effect.

SEC.14. Effectivity Clause. — This Act shall take effect fifteen (15) days after its
publication in the Official Gazette or in a newspaper of general circulation.

Approved,