NINETEENTH CONGRESS OF THE 
)
REPUBLIC OF THE PHILIPPINES 
)
First Regular Session 
)
SENATE
S.B. No. 319
of liif
■22 JUL12 AIO :18
RS'CEiVfcD BV
Introduced by Senator SONNY ANGARA
AN ACT
GIVING PREFERENCE TO DOMESTIC BIDDERS PARTICIPATING IN 
GOVERNMENT PROCUREMENT PROJECTS, AND FOR OTHER PURPOSES.
EXPLANATORY NOTE
The Tatak Pinoy initiative being pursued since the 18th Congress aims to 
highlight the ingenuity, creativity and innovativeness of Philippine workers, craftsmen, 
laborers and professionals in order to create a global demand for Philippine products 
and services. And through the various consultations held pursuant to said campaign, 
it was highlighted that the country has many Filipinos who need the support of the 
government to achieve the goal of being part of the Tatak Pinoy pxoqrdim.
As chair of the Senate Finance Committee, we have ensured that funding is 
available for various government programs aimed to improve Filipino products and 
businesses. However, the 
campaign is also about creating a demand for
Filipino products here and abroad, and ensuring that these products have been 
improved, and on par with global standards. As such, the government must do its part 
in creating demand for Filipino products and services.
This Act institutionalizes the Certification Program of Domestic Bidders as it is 
one of the measures by v;hich the government can help local entities by giving them 
preference during government procurement activities. The Government Procurement 
Reform Act and its Revised Implementing Rules and Regulations provide that the 
procuring entity shall give preference to materials and supplies produced, made and 
manufactured in the Philippines. The same law mandates the Department of Trade


and Industry to certify domestic bidders who claim preference in government 
procurement.
The institutionalization of said certificate of preference program not only aims 
to encourage all local suppliers and manufacturers. It also gives assurance that the 
government is one with all industries and sectors in supporting local labor and 
products while ensuring the well-being of the Filipinos. This policy will surely 
contribute to the realization of the goals of the Tatak Pinoy campaign. And a 
successful Tatak Pinoy campaign will improve the country's economic productivity 
and competitiveness, generate more decent jobs for Filipinos, particularly those in 
the countryside, and eradicate chronic poverty and inequality in the country.
In view of the foregoing, the passage of this bill is earnestly sought.
SONNY ANGARA


NINETEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
S.B. No
)
SENATE
319
Sennit
of t[]t #>rcrcrRrp
72 JUL12 A10:18
Introduced by Senator SONNY ANGARA
AN ACT
GIVING PREFERENCE TO DOMESTIC BIDDERS PARTICIPATING IN 
GOVERNMENT PROCUREMENT PROJECTS, AND FOR OTHER PURPOSES
Be it enacted by the Senate and the House of Representatives of the Philippines in 
Congress assembled:
1 
SECTION. 1. Short Title. - This Act shall be known as the "Domestic Bidders
2 
Preference Act".
3 
SEC. 2. Declaration of Policy. - Section 12, Article XII, of the Constitution
4 
declares that the "State shall promote the preferential use of Filipino labor, domestic
5 
materials and locally produced goods, and adopt measures that help make them
6 
competitive." To this end, the State shall provide an enabling environment for the
7 
domestic private sector to mobilize its resources to promote Filipino labor, domestic
8 
materials, and locally produced goods. As enunciated in the Constitution and other
9 
economic policies, the government shall foster local participation in the procurement
10 
process by providing preference to products made in and/or sourced from the
11 
Philippines.
12 
It is further declared that the State shall pursue a policy of maintaining a
13 
reasonable balance between its obligations under international treaties or agreements
14 
and enhancement of competitiveness of Philippine trade and local industries. These
15 
may include implementation of programs/projects/activities intended to improve the
16 
quality of industry outputs and services, as well as the domestic entities productivity,
17 
through improvement in business systems and process and the flow of inputs and
18 
outputs.
1


1 
SEC. 3. Definition of Terms, -The following terms used in this Act shall have
2 
the meanings stated below:
3 
(a)Bidder- refers to a manufacturer, supplier, or distributor who submits
4 
a bid in response to the requirements of the Bidding Documents;
5 
(b) Director-refQvs to the Competitiveness Bureau Director;
6 
(c) Domestic Bidder - refers to any person or entity offering
7 
unmanufactured articles, materials or supplies of the growth or
8 
production of the Philippines, or manufactured articles, materials, or
9 
supplies manufactured or to be manufactured in the Philippines
10 
substantially from articles, materials, or supplies of the growth,
11 
production, or manufacture, as the case may be, of the Philippines;
12 
(d) Foreign Bid - refers to any offer of articles, materials or supplies not
13 
manufactured or not to be manufactured in the Philippines, substantially
14 
from articles, materials, or supplies of the growth, production, or
15 
manufacture, as the case may be, of the Philippines;
16 
(e) Goods- refers to all items, supplies, and materials which may be needed
17 
in the transaction of public businesses or in the pursuit of any
18 
government undertaking, project or activity, whether in the nature of
19 
equipment, furniture, stationery, materials for construction, or personai
20 
property of any kind;
21 
(f) Grown - refers to products produced by cultivation such as crops, or
22 
products that are grown, raised, and harvested;
23 
(g) Manufactured - means conversion of raw materials into marketable
24 
form through physical, mechanical, chemical, electrical, biochemical,
25 
biological or other means or by a special treatment or a series of actions.
26 
It shall include transformation which can be geometric or compositionai,
27 
or both. Merely packing or packaging shall not qualify as manufactured;
28 
(h)Produced- creation of or formation of goods through a natural process;
29 
(i) Procuring Entity - refers to any branch, constitutional commission or
30 
office, agency, department, bureau, office, or instrumentality of
31 
Government of the Philippines, including Government-Owned or -
32 
Controlled Corporation, Government Financial Institutions, State


1 
University and College, and local government units procuring goods,
2 
infrastructure projects and consulting services;
3 
(j) Secretary - refers to the Secretary of the Department of Trade and
4 
Industry;
5 
(k) Secretariat - refers to the Supply Chain and Logistics Management
6 
Division of the Competitiveness Bureau tasked to provide the
7 
assessment, verification, and recommendation to the Committee for
8 
approval or disapproval.
9 
SEC. 4. Application. - Only a domestic bidder may file an application for
10 
certification for domestic preference. The application shall be filed at the Supply Chain
11 
and Logistics Management Division of the Competitiveness Bureau.
12 
SEC. 5. Evaluation. - Verification of the origin of the goods sought to be
13 
certified shall be done through ocular inspection of the site where the goods were
14 
grown, produced or manufactured. The Secretariat shall submit an Inspection Report
15 
to the Committee containing a statement as to whether the goods offered for bidding
16 
satisfy or do not satisfy the requirements for a Domestic Bidder's Certificate and the
17 
basis for such finding.
18 
SEC. 6. Approval or Denial of Application. - After evaluation, if the
19 
Secretariat finds that an applicant conforms to and meets the requirement for a
20 
Domestic Bidder's Certificate, the Director shall approve the application and issue the
21 
corresponding Certificate.
22 
If the application is denied, the Director shall issue a written notification
23 
specifying the grounds for the denial of the application.
24 
Where no request for reconsideration is filed, the denial of the application shall
25 
become final. The denial shall be without prejudice to re-filing of application.
26 
SEC. 7. Determination of Substantial Compliance. - Prospective bidders
27 
shall only be granted a Domestic Bidder's Certificate and apply for domestic preference
28 
when the goods, supplies, or materials offered for bidding are substantially grown,
29 
produced, or manufactured in the Philippines.
30 
7.1. In determining whether the goods are substantially grown and produced
31 
in the Philippines, the following general principles shall be considered:


1 
7.1.1. The origin of the product shall be disputably presumed as that
2 
which is indicated in the label;
3 
7.1.2. Livestock born and raised within the Philippines are deemed
4 
originated in the Philippines; and
5 
7.1.3. Plants grown and produced within the Philippines are deemed
6 
originated in the Phiiippines.
7 
7.2. In determining whether the goods are substantialiy manufactured in the
8 
Philippines, the following general principles shall be considered:
9 
7.2.1. Manufacture of industrial goods or processing of agricultural
10 
products into (a) semi-finished/intermediate goods for use as
11 
inputs in the production of other goods, or (b) finished products for
12 
final consumption, shall be deemed manufactured or processed in
13 
the Philippines.
14 
7.2.2. Casting or molding, forming, machining, or joining/assembly of raw
15 
materials, and the production of discrete parts to transform
16 
materials from one form to another valuable form encompasses
17 
manufacturing. Mere packing or packaging shall not constitute
18 
manufacturing. Simple processing covering any or a combination
19 
of activities such as cleaning, sorting, shredding, pulverizing,
20 
grinding, crushing, compacting, dissolving and filtration shall also
21 
not be considered manufacturing.
22 
SEC. 8. Composition of Committee, - A Committee of Three shall be
23 
established to review the recommendation of the Secretariat, and to grant or deny
24 
each application.
25 
The Committee shall be composed of the head of agency of the
26 
Competitiveness Bureau as Chair, with third level officials from any of the following
27 
Department of Trade and Industry agencies: Regional/Provincial Offices, Bureau of
28 
International Trade Relations, Board of Investments, Competitiveness and Ease of
29 
Doing Business Group, Consumer Protection Group and Management Services Group.
30 
Except for the officials and staff of the Competitiveness Bureau, the Committee
31 
members and technical staff shall be entitled to receive an honorarium subject to the


1 
existing rules and regulations issued by the Department of Budget and Management
2 
and the Commission on Audit, charged to the Competitiveness Bureau.
3 
SEC. 9. Domestic Bidders Certificate. - (a) The Certification shall remain
4 
valid for a period of two (2) years. It shall include the scope, validity, remarks or
5 
conditionalities. It is non-transferable and limited only to the products specified in the
6 
scope.
7 
(b) Subject to notice and hearing, the Certificate shall be revoked for any of
8 
the following grounds:
9 
i. Making material false statement in the application required of the Bidder when
10 
a true statement would have warranted the Secretariat's denial or to
11 
recommend Certification;
12 
ii. Making false representations as a matter of fact, whether or not the same
13 
results in damage or legal injury to a third party, after the Certification has
14 
been issued; and
15 
iii. Any other circumstance analogous to the foregoing.
16 
SEC. 10. Implementing Rules and Regulations. - The Department of
17 
Trade and Industry shall formulate and issue the necessary rules and regulations to
18 
implement the provisions of this Act within sixty (60) days from its effectivity.
19 
SEC. 11. Repealing Clause. - All general and special laws, acts, city charters,
20 
executive orders, presidential proclamations, issuances, rules and regulations, or parts
21 
thereof which are contrary to or inconsistent with any of the provisions of this Act are
22 
hereby repealed, amended, or modified accordingly.
23 
SEC. 12. Separability Clause. - If any portion or provision of this Act is
24 
subsequently declared invalid or unconstitutional, other provisions hereof which are
25 
not affected thereby shall remain in full force and effect.
26 
SEC. 13. Effectivity Clause. - This Act shall take effect fifteen (15) days after
27 
its publication in the Official Gazette or in a newspaper of general circulation.
Approved,