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FIFTEENTH CONGRESS OF THE REPUBLIC 
) 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
SENATIl') 
S. No. 
i:::4,::;,5 
Introduced by Senator Miriam Defensor Santiago 
EXPLANATORY NOTE 
Republic Act No. 9184, otherwise Imown as the "Govermnent Procurement Reform Act", 
was enacted primarily to eradicate graft and corruption in the government procurement system. 
The law likewise aims to minimize wastage and maximize utilization of our government's 
meager resources. 
The passage of R.A. No. 9184 was hailed as a milestone that marked our government's 
commitment to reform public procurement. 
According to news reports, the law 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. 
R.A. No. 9184, Section 4 states: "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 andlor 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 matter of this Act to which the Philippine Government 
is a signatory shall be respected." The intent of the law is very clear - to bring within its scope 
both domestically-funded and foreign-funded projects. 
R.A. No. 9184, Section 31, on the other hand, 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 govermnent from entering into highly onerous and overpriced contracts 
and, consequently reduce opportunities for graft and corruption. Unfortunately, while this 
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particular provision is being strictly enforced as regards domestically-funded projects, the same 
is not true with foreign-funded projects. 
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 matter of this Act to which the Philippine Government is a signatory shall be 
respected. " 
The Department of Justice (DOJ) recently declared that the National Broadband Network 
(NBN) project is valid and thus, exempted from the coverage ofR.A. No. 9184. This was 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 with the Cyber Education 
Project (CEP) and other future projects that will be contracted by the government. 
Exempting foreign-funded projects from the coverage of R.A. No. 9184, particularly in 
allowing bids or tenders over and above the Approved Budget for the Contract (ABC), would 
defeat the pu~pose and the spirit of the law. There would be no genuine reform to speak of and 
the government procurement system will remain graft ridden. Moreover, it will amount to 
umlecessary wastage of government resources. 
This bill seeks to remove any ambiguity in the interpretation of the scope and application 
of R.A. No. 9184 by amending Section 4 to make it very clear that: 
• 
It applies to all government procurement activities, regardless of the source of funds, 
whether local or foreign, and 
• 
Only treaties or international or executive agreements entered into by the government 
prior to its enactment shall be exempt from its coverage. 
This bill was originally filed by President Benigno S. Aquino III during the Fourteenth 
(' 
Congress. 
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• 
• 
FIFTEENTH CONGRESS OF THE REPUBLIC 
) 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
SENATE 
~ 
S. No. 242 
<) 
, I'IWNH) I'N ~'~. 
Introduced by Senator Miriam Defensor Santiago 
1 
~Acr 
2 
AMENDING SECTION 4 OF REPUBLIC ACT NO, 9184, OTHERWISE KNOWN AS THE 
3 
"GOVERNMENT PROCUREMENT REFORM ACT," 
Be it enacted by the Senate and the Hause af Representatives af the Philippines in 
Congress assembled: 
4 
Section 1. Section 4 (Scope and Application) of Republic Act No, 9184 shall be amended 
5 
to read as follows: 
6 
"Section 4, Scope and Application. -
This Act shall apply to the 
7 
Procurement ofInfrastructure Projects, Goods and Consulting Services, regardless 
8 
of source of funds, whether local or foreign, by all branches and instrumentalities 
9 
of government, its depatiments, offices and agencies, including government-
10 
owned and/or controlled corporations and local government units, subject to the 
11 
provisions of Commonwealth Act No, 138, Any treaty or international or 
12 
executive agreement affecting the subject matter of this Act [to which] 
13 
ENTERED INTO BY the Philippine Government [is a signatory] BEFORE 
14 
THE PASSAGE OF THIS ACT shall be respected," 
15 
Section 2, Effectivity Clause, - This Act shall take effect fifteen (15) days after its 
16 
publication in at least two (2) national papers of general circulation, 
Approved, 
1