PUBLIC perception is that there is a lot of corruption involved in government procurement, much like there is a lot of suspicion in the purchasing department of private firms.  This is the reason we have an exhaustive bidding process in all government agencies to ensure that discretion and the supposed accompanying corruption is minimized, if not eliminated. 

However, there are still numerous loopholes in the system that allows favoring certain suppliers.  Giving a particular supplier some advance information and making the delivery dates very tight in the official terms of the bid could be enough to guarantee the award to the favored supplier. Sometimes, even during the prequalification process, certain requirements that would limit who can bid may eliminate suppliers who could provide the government a better deal.

Making the required specifications so tight that it is tailor fit to a certain brand or supplier could practically limit the purchase to a specific product or from a particular supplier.  Another technique is to require nonstandard specifications making more reputable suppliers back out from the bidding altogether or allows the bid price to move to a higher plane since the product is not readily available. 

Even when the bid is won, that is not the end of the story. The winning bidder still needs to get paid and this in itself is a drawn-out process.  There are acceptance procedures, post-delivery inspection and a variety of documentary requirements.  All these things would be a serious challenge, particularly if you were not a well-connected supplier.

In a lot of cases, legitimate local manufacturers are discouraged by the myriad of rules, regulations and requirements in the bidding process.  While we do have a flag law that allows local suppliers a 15-percent price differential from imported products, this is not fully implemented or the government agency doing the bidding is not even aware of this particular provision.  Every time this provision is not implemented, we all stand to lose. 

Philippine-made products as compared to simply importing the product provides for more benefits to the local economy and more revenues for the government.  Obviously, something locally made would require a manufacturing facility or plant as compared to an importer or trader which at most just requires a warehouse.  Naturally, locally- made products will provide for more local employment, need raw materials which may be secured locally, use up utilities such as electricity and water, and pay more taxes. 

Philippine-made products will also provide more revenues to both the local and national government not just in the form of taxes but also for the various fees and permits.  Taxes paid are for VAT, withholding taxes, income taxes and so on.  Not to mention the taxes and other fees from the local suppliers of the Philippine manufacturer. 

Philippine-made products not only reduce our dependence from other countries and provide us with national security.  It is also a matter of national pride that we have our own manufacturing capability, producing our own products and even having our products reach the international markets.  Therefore, is a 15-percent differential provided for in the flag law too much?  I don’t think so. If anything it is too little and therefore should be at least religiously applied in all government bidding.

Our government is the largest institution in our country and would have a tremendous impact in uplifting and stimulating our economy if only it would promote locally-manufactured products by giving an honest preference for them.  The multiplier effect of a vibrant local manufacturing industry will provide for more jobs, particularly to Filipinos who do not have the qualifications to work in the services sector like the BPO, or the resources to become an OFW.  Perhaps our best chance to get Filipinos out of poverty is to revive our local manufacturing industry, and government procurement of locally-made products is a significant move in this direction.

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