SENATE 
S . N o .  2160 
Introduced by Senator Benigno S. Aquino 111 
EXPLANATORY NOTE 
Republic Act 9 184, otherwise known as the “Government 
Procurement Reform Act”, dated January IO, 2003 was enacted primarily 
to eradicate graft and corruption in the government procurement system. 
The law likewise aims to minimize wastage and thus maximize utilization 
of our government’s meager resources. 
The passage of RA 9184 was hailed as a milestone that marked our 
government’s commitment to reform public procurement. It was even 
described as “one of the best in the world” by Joachim von Amsberg, 
World Bank Country Director for the Philippines and the East Asia and 
Pacific Region, during a televised round table discussion with PGMA, as 
published in the August 11, 2006 issue of The Philippine Star. 
Section 4 of RA 9184 states that “Scope and Application - This Act 
shall apply to the Procurement of Infastructure Projects, Goods and 
Consulting Services, regardless of source of funds, whether local or 
foreign, by all branches and instrumentalities of government, its 
departments, offices and agencies, including government-owned and/or- 
controlled corporations and local government units, subject to the provisions 
of Commonwealth Act No. I38. Any treaty or international or executive 
agreement affecting the subject mater of this Act to which the Philippine 
Government is a signato y shall be respected.” The intent of the law is 
very clear - to bring within its scope both domestically-funded and 
foreign-funded projects. 
Section 31 of RA 9184 provides that the Approved Budget for the 
Contract (ABC) shall be the upper limit or ceiling for bid prices, and that 
bid prices that exceed this ceiling shall be disqualified outright from 
further participating in the bidding. This provision is intended to prevent 
the government from entering into highly onerous and overpriced 
contracts and, consequently reduce opportunities for graft and 
corruption. Unfortunately, while this particular provision is being strictly 
enforced as regard domestically-funded projects, the same is not true 
with foreign-funded ones. 
Foreign lending institutions, however, claim that projects which 
they have funded through a loan agreement are exempt from the 
coverage of the law by invoking the provision under Section 4 which 
states that “Any treaty or international or executive agreement 


affecting the subject mater of this Act to which the Philippine 
Government is a signatory shall be respected.” 
The above-cited provision speaks of any treaty or international or 
executive agreement which the Philippine Government is already a 
signatory. It does not refer to those which the Philippine Government will 
enter into subsequent to the enactment of RA 9184. Thus, assuming for 
the sake of argument that loan agreements partake of the nature of 
international or executive agreement, only those loan agreements entered 
into prior to the passage of RA 9184 are exempt from its coverage and 
not those which the government will contract after the effectivity of the 
law. 
The Department of Justice (DOJ) just recently declared that the 
National Broadband Network (NBN) project is valid and thus exempted 
from the coverage of RA 9184 based on the interpretation that loan 
agreements partake of the nature of international or executive agreement 
and that it applies even to loan agreements contracted after the 
enactment of the said law. 
In view of this development, a similar 
opinion could be expected as regards the Cyber Education Project (CEP) 
and other future projects that will be contracted by the government. 
Exempting foreign-funded projects from the coverage of RA 9184, 
particularly in allowing bids or tenders over and above the Approved 
Budget for the Contract (ABC), would defeat the purpose and the spirit 
behind its enactment. There would be no genuine reform to speak of and 
the government procurement system will remain graft ridden. Moreover, 
it will amount to unnecessary wastage of government resources. 
This bill seeks to remove any ambiguity in the interpretation of the 
scope and application of RA 9184 by amending Section 4 thereof to make 
it very clear that it applies to all government procurement activities, 
regardless of source of funds, whether local or foreign, and that only 
treaties or international or executive agreements entered into by the 
government prior to its enactment shall be exempt from its coverage. 
In view of the foregoing, immediate passage of this bill is earnestly 
sought. 
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FOURTEENTHCONGRESSOFTHE 
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REPUBLIC OF THE PHILIPPINES 
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First Regular Session 
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Introduced by Senator Benigno S. Aquino 111 
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AN ACT AMENDING SECTION 4 OF REPUBLIC ACT 91 84, 
OTHERWISE KNOWN AS THE “GOVERNMENT PROCUREMENT 
REFORM ACT.” 
Be it enacted by the Senate and the House of Representatives of the 
Philippines in Congress assembled: 
Section 1. Section 4 (Scope and Application) of Republic Act 9184 
shall be amended to read as follows: 
“Section 4. Scope and Application - This Act shall apply to 
the Procurement of Infrastructure Projects, Goods and Consulting 
Services, regardless of source of funds, whether local or foreign, by 
all branches and instrumentalities of government, its departments, 
offices and agencies, including government-owned and/or- 
controlled corporations and local government units, subject to the 
provisions of 
Commonwealth Act No. 
138. Any treaty or 
international or executive agreement affecting the subject mater of 
this Act [to which] ENTERED INTO BY the Philippine Government 
[is a signatory] BEFORE THE PASSAGE OF THIS ACT shall be 
respected.” 
Section 2. Effectivity Clause - This Act shall take effect fifteen (15) 
days after its publication in at least two (2) national papers of general 
circulation. 
Approved,