LAWMAKERS should amend the Government Procurement law given the existing “difficulties” of startups to participate in government bidding, according to an official of the Department of Trade and Industry (DTI).
“This is really crucial because the government is one big customer. And since we’re promoting all these new products, creation of new services, government should be the first one to procure these products and this is actually being done in other countries,” Rafaelita M. Aldaba, DTI Undersecretary for Competitiveness and Innovation Group, told reporters on the sidelines of the Philippine Startup Week 2023 in Makati City on Monday.
Given the “existing difficulties” of startups to participate in government bidding, Aldaba said, “It’s almost impossible for them given all these constraints. Hence, it’s important that we be able to amend the procurement law.”
The Trade official pointed out the gap in the situation between startups and big firms in terms of complying with the necessary requirements to be able to participate in government bidding.
“We have these startups and they’re not comparable to large companies. The big companies—they have their own teams, legal teams who are preparing all the necessary requirements and documents for them to be able to participate in government bidding,” Aldaba stressed.
As to the progress on the amendments in the Congress, Aldaba said, “We’re discussing with Senator Angara the possibility of amending some of the provisions through the Tatak Pinoy bill because it’s in the advanced stage. It’s already approved [on] third reading…So [the next stage is with the] House [of Representatives] and then [the] plenary, so it’s more advanced compared to the Government Procurement.”
“Hopefully, we’ll be able to come up with some solutions that would support the participation of startups in government procurement through the Tatak Pinoy Bill,” the Trade official also noted.
Senate Bill No. (SBN) 2218 or the Tatak Pinoy Bill aims to ensure that “existing gaps in the industry can be addressed effectively, including the immediate needs of Micro, Small and Medium Enterprises (MSMEs), such as to global markets, improvements in manufacturing processes and digital transformation of businesses, among others.”
Section 5e of the SB 2218 or the provision on Public Fiscal Management and Government Procurement states:
“The Development Budget Coordination Committee [DBCC] shall ensure that programs and projects that result in the enhancement of the capabilities of local enterprises to produce and offer increasingly sophisticated products, goods and services shall be included in the expenditure priorities and the national government fiscal program.”
In government procurement activities, the bill gives preference to “domestically-produced and manufactured goods, supplies and materials” which meet the specified or desired quality.
Aldaba stressed that startups, which do not usually generate more sales compared to big firms, should not be burdened by requirements especially in the preliminary assessment stage.
“There are a lot of new platforms being introduced by startups which can be utilized by the government for as long as we’re able really to come up with a more flexible system that would enable us to procure from these new startups that are entering the market,” she said.
“So can you imagine the revenue impact and the economic impact that can be created if we’re able to support the products coming from our startup community?” She also noted.
Aldaba said the value of Philippine startups is currently at $3.5 billion. “Of course we are expecting it to grow. In the next five years, we want it to double, maybe around $10 billion by the end of the administration.”
“We are hoping to reach it, with all the different programs and policies, and infrastructure being built, in order for us to create a more dynamic and vibrant and robust startup ecosystem,” the Trade official said.