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

Nineteenth Congress
First Regular Session

HOUSE BILL NO. 4529

Introduced by REP. ARNOLFO “ARNIE” A. TEVES, JR.

EXPLANATORY NOTE

Section 12, Article XII of the Constitution provides that the “State shail
promote the preferential use of Filipino labor, domestic materials and locally
produced goods, and adopt measures that help make them competitive.”

This preferential treatment policy has never been more important than
today, during this COVID-19 pandemic where many businesses are closed
and workers are displaced due to reduced operations. This policy
acknowledges that the government should help businesses to return to its
normal level of operation in order not to further harm the country’s economy.
Local goods are not inferior to those made abroad, and Filipinos must be
proud to promote these goods and services which are produced, made and
manufactured in the Philippines.

On November 7, 1936, Commonwealth Act No. 130 entitled “An Act to
Give Native Products and Domestic Entities the Preference in the Purchase of
Articles for the Government" was enacted. On January 26, 2003, Republic
Act No. 9184, otherwise known as the “Government Procurement Reform
Act" took effect. Section 4 thereof states:

“SEC. 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 agreement affecting the
subject matter of this Act to which the Philippine government is a
signatory shall be observed.” (Emphasis supplied)

Further, Section 43 of Republic Act No. 9184 also provides that:

"SEC. 43. Procurement of Domestic and Foreign Goods. -
Consistent with the country’s obligations under international
treaties or agreements, goods may be obtained from domestic or
foreign sources and the procurement thereof shall be open fo all
eligible suppliers, manufacturers and distributors. However, in the
interest of availability, efficiency and timely delivery of goods, the
procuring entily may give preference to the purchase of
domestically-produced and manufactured goods, supplies and
materials that meet the specified or desired quality.”

While Republic Act (RA) No. 9184 makes reference to Commonwealth
Act (CA) No. 138, this is basically more on the procurement of foreign and
domestic goods, and the bidding process, wherein the procuring entity shall
give preference to materials and supplies produced, made and
manufactured in the Philippines, subject to some conditions, and the award
shall be made to the lowest domestic bidder, provided the lowest domestic
bid is not more than fifteen percent (15%) in excess of the lowest foreign bid.
However, CA 138 provides graduated amounts of bids that should be offered
by the lowest Filipino bidder vis-d-vis the lowest foreign bid before the award
will be made to the lowest Filipino bidder. Also, the amounts of bids which are
mentioned in CA 138 are no longer practical and applicable given the
current value of the peso against the US dollar. It is about time that CA 138
be repealed and Sections 4 and 43 of RA 9184 be amended to strengthen
the policy of giving preference to Filipino goods, subject to international
treaties or agreement wherein the Philippines is a signatory.

Thus, this proposed measure seeks to institutionalize the Filipino first policy
in the government procurement system, and to establish the parameters,
wherein all government institutions, departments and agencies must procure
their supplies and products as well as services from Filipino suppliers. It also
provides that all government-sponsored or government-issued supplies to
beneficiaries have al least seventy percent (70%) local added value. It is


only when there are no available locally made supplies that they can
procure those from abroad.

This proposed bill also requires that the materials needed are not only
locally produced but also locally-sourced. This guarantees that local
industries will have a fair chance in the delivery and supply of government
needed goods, products and materials. Local enterprises are encouraged to
invest more in local manufacturing due to the increased demand which will
eventually result in job generation as a necessary offshoot of the expanded
business activities.

Hence, the swift passage of this bill is earnestly sought.

HON. ARNOLFO “ARNIE” A. TEVES, JR.


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

Nineteenth Congress
First Regular Session

.. .
HOUSE BILL NO. 4829

Introduced by REP. ARNOLFO “ARNIE” A. TEVES, JR.

AN ACT
INSTITUTIONALIZING THE PREFERENTIAL TREATMENT IN THE PROCUREMENT OF
MATERIALS AND SUPPLIES PRODUCED, MADE AND MANUFACTURED IN THE
PHILIPPINES BY 100% FILIPINO OWNED COMPANIES.

Be it enacted by the Senate and House of Representatives of the Philippines
in Congress assembled:

SECTION 1. Short Title. - This Act shall be known as the “Buy Filipino
Product Act.”

SEC. 2. Declaration of Policy. - It is the policy of the State to instill
patriotism and nationalism among the people. Public officials and employees
shall at all times be loyal to the country and promote greater Filipino role in
the country’s economy. For this purpose, all government offices shall give
preference to domestically produced and manufactured goods or supplies.

SEC. 3. Coverage. - All heads of departments, bureaus, offices and

agencies of the National Government, including local government units,


government-owned or -conirolled corporations, government financial
institutions, state universities and colleges, and military and police units,
authorized to requisition, purchase, contract or make disbursements for
articles, materials and supplies for public use, public biddings or public works,
shall give preference in the procurement of materials and supplies,
produced, made and manufactured in the Philippines that meet the
specified or desired quality in accordance with the provisions of existing laws
and treaties or international agreements.

SEC. 4. local Added Value. - All government-sponsored or
government-issued supplies to beneficiaries shall have at least seventy
percent (70%) local added value.

For purposes of this Act, supplies refer to materials and equipment
necessary in the transaction of the official business of the procuring entity
and used in its day to day operations.

SEC. 5. Certification Requirement. — In order to be qualified to
participate in the bidding process, suppliers are required to show proof of
compliance to the requirement mentioned in Section 4 of this Act.

The Department of Trade and Industry shall issue the certification to
qualified suppliers or vendors who want to participate in the procurement

process.


SEC. 6. Availability of Local Materials. - The materials needed to
produce the government-sponsored or government-issued supplies shall be
locally sourced. In case of non-availability of materials locally, it is required
that a certification from the Department of Trade and Industry stating that
locally made and sourced materials are not available, before a supplier can
participate in any government procurement bidding.

SEC. 7. Domestic and Foreign Bids. - Whenever several domestic and
foreign bidders shall participate in the bidding to supply articles, materials
and equipment mentioned in Section 3 of this Act, the award shall be given
to the domestic bidder offering the lowest bid, provided the amount of the
bid is not more than twenty five percent (25%) in excess of the lowest bid
offered by a foreign bidder.

SEC. 8. Procurement of Imported Goods. — The procurement of imported
goods may be allowed if local products, materials and supplies are not
manufactured domestically in sufficient quantity or comparable quality and
‘at reasonable prices.

SEC. 9. Implementing Rules and Regulations — Within sixty (60) days
after the approval of this Act, the Government Procurement Policy Board
shall, jointly with the members of the Oversight Committee created under

Section 74 of Republic Act No. 9184, formulate the necessary rules and


regulations for the proper implementation of this Act. The said rules and
regulations shall be approved by the President of the Philippines. Within thirty
(30) days from the approval of the implementing rules and regulations, the
standard forms for government procurement shall be formulated and

approved.

SEC. 10. Repealing Clause. - Commonwealth Act No. 138, entitled “An
Act to Give Native Products and Domestic Entities the Preference in the
Purchase of Articles for the Government" is hereby repealed. Sections 4 and
43 of Republic Act No. 9184, otherwise known as the “Government
Procurement Reform Act,” and all other laws, decrees, rules and regulations
inconsistent with the provisions of this Act are hereby modified or amended
accordingly.

SEC. 11. Effectivity. - This Act shall take effect fifteen (15) days after its

publication in the Official Gazette or in a newspaper of general circulation.

Approved