Anti-red tape in crisis law

We have imbibed from our Chinese ancestors the philosophy that every crisis has also opportunities to do good or get better. Thus, Filipinos are seemingly undaunted by this prevailing public health crisis brought about by the 2019 coronavirus disease (COVID-19) pandemic.

In virtual presser at Malacanang last week, it was announced that all government agencies will prioritize local companies in the procurement of medical supplies and personal protective equipment (PPEs) for the country’s COVID-19 counter measures. This is most welcome amidst the bleak manufacturing and jobs outlook due to the strictest and longest lockdowns and community quarantines in the Philippines since March 15 this year.

In fact, President Rodrigo Duterte issued Proclamation No.1021 extending the period of the “state of calamity” for one-year– effective Sept. 13, 2020 – unless otherwise lifted earlier.

So it is most welcome for the Procurement Service of the Department of Budget and Management (PS-DBM) announced the adoption of a “domestic preference” policy in procuring all COVID-19 related goods, based on the “Bayanihan to Recover as One Act,” or Bayanihan-2.

The policy of “domestic preference” means that PS-DBM will award contracts to domestic COVID-19 manufacturing firms to spur business activity, stimulate employment and generate taxes for government while this public health crisis persists. This is timely since more Filipino companies are now capable of making and supplying high-quality PPEs that meet local and international standards. During the early days of the COVID-19 outbreak, our government mostly relied on PPE imports from China since no local companies can supply the massive PPE requirements of our health care workers and other frontliners.

There are now more than 350 domestic suppliers and manufacturers capable of joining government’s procurement of PPEs, testing kits, and other medical supplies. Of this number, about 300 are Philippine Government Electronic Procurement System (PhilGEPS) registered, with businesses in testing instruments; medical apparel; personal safety and protection; paper products; solvents; cleaning and janitorial supplies; including plastic and chemical industries. About 44 of them have also participated in PS-DBM’s previous procurements of COVID-19 response goods.

It also showed there are 26 local companies that officially expressed intent to bid during the implementation of Bayanihan-2, which runs from Sept. 11 to Dec. 19, 2020.

While hundreds of local companies are ready and willing to join government’s bidding, they have no Domestic Bidders (DoBid) preference certification from the Department of Trade and Industry - Competitiveness Bureau (DTI-CB). This is a prerequisite for this procurement process. As of October 7, 2020, DTI-CB has only granted four DoBid certificates.

It’s perplexing though why only a handful of Filipino firms were given DoBid certifications. Was it due to lack of information? Inability to meet requirements? Red tape? Or are there deliberate efforts to exclude our local micro, small, medium enterprises (MSMEs) from the bid?

Under Section 4(u) of Bayanihan 2, the power to issue DoBid certificates was assigned to DTI. The agency is mandated to ensure that items being offered to government by local bidders are “substantially composed of articles, materials, or supplies that are grown, produced, or manufactured in the Philippines.”

These certificates are invaluable because it’s almost a guarantee that government can award the contract to a local supplier even if its quoted price is higher than the lowest foreign bidder. The law states that when the bid submitted by the lowest domestic bidder with DoBid is not more than 15 percent over the lowest foreign bid, domestic preference is applied and the contract can be awarded to the domestic bidder.

With sole authority to issue DoBid certificates, DTI can – if it so chooses – pick winners and losers. But as of this writing, only four companies were given the privilege to hold DoBid certificates. Three of the four DoBid holders are members of the Confederation of Philippine Manufacturers of PPEs (CPMP), the group most critical of government’s decision to purchase China-made PPEs.

While there’s no doubt these firms invested significant sums or re-purposed their factories to produce local PPEs, it behooves upon DTI to ensure the open participation of as many local suppliers as possible. After all, business promotion and job creation are the primary goals of Bayanihan-2 as envisioned by President Duterte.

From what we gathered from the business community, hundreds of local suppliers are only too eager to join the public bidding for COVID supplies. However, they’re hampered by the perennial problem of red tape. Some companies complain they have to wait for months to get certified by the Food and Drug Administration (FDA), only to be told later they stil lack certain requirements.

Worse, these local suppliers that include MSMEs are being asked to get certifications on a piecemeal basis. Thus, it further prolongs the waiting period. To date, many firms can’t apply for DoBid certificates because their FDA applications are still pending.

But all hope is not lost. The Senate have unanimously approved on third and final reading Senate Bill No. 1844, an Act Authorizing the President to Expedite the Processing and Issuance of National and Local Permits, Licenses, and Certifications in Times of National Emergency.During the special sessions last week, the House of Representatives – under its new leadership – followed suit and quickly approved their own version last Friday.

Once signed into law, it will grant anti-red tape powers to the President, including imposing stiffer fines and imprisonment during national emergencies such as the current COVID-19 pandemic. But must government agencies – particularly DTI and FDA – wait for this anti-red tape in crisis law before they shape up?

All  they need to do is live up to the letter and spirit of Bayanihan-2 Law. This is how Filipinos together can really recover as one.