Procurement Risk:

Moderate

Score:

53/100

Government Policy

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Q57 63/100

Does the country have legislation covering defence and security procurement with clauses specific to corruption risks, and are any items exempt from these laws?

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Legal framework Score: NS / 100
This indicator is not assigned a score in the GDI. Legislation exists and is clear and comprehensive in nature. See for example the Republic…
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Corruption risks Score: 100 / 100
Corruption risks are identified in legislation and are also specified in bidding documents [1]. Legislation has introduced two measures to ensue transparency and accountability.…
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Effectiveness Score: 25 / 100
Audit reports reveal there have been instances where the Defence Department has not conducted procurements in line with legislation [1, 2]. In some of…
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Q58 58/100

Is the defence procurement cycle process, from assessment of needs, through contract implementation and sign-off, all the way to asset disposal, disclosed to the public?

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Formal procedures Score: 100 / 100
The defence procurement cycle process is formalised through Republic Act 10349, Revised Armed Forces of the Philippines Modernization Program. The acquisition process involves the…
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Transparency Score: 25 / 100
Some elements of the defence procurement cyle are disclosed, albeit not in an entirely disagregated form or with a high level of specificity; this…
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Implementation Score: 50 / 100
There are policies and procedures within the implementation process but they are not very specific and are not always followed through [1, 2, 3,…
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Q59 67/100

Are defence procurement oversight mechanisms in place and are these oversight mechanisms active and transparent?

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Independence Score: 75 / 100
The power of Congress to conduct investigation is recognized by the 1987 Constitution under Section 21, Article VI. Both Senate and House committees on…
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Effectiveness Score: 50 / 100
While the Congressional Oversight Committee on Defense Acquisitions, referred to in 59A, has not been created in the current 18th Congress [1], inquiry related…
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Transparency Score: 75 / 100
The Commission on Audit (COA) has been effective in its reporting of procurement audit and has questioned the defence department about some of its…
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Q60 63/100

Are potential defence purchases made public?

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Policies Score: 75 / 100
Planning is made available in accordance with the updated “Horizons” modernisation programme and periodic white papers and press announcements; information is increasingly being made…
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Notice of planned purchases Score: 50 / 100
In 2018, the government confirmed the approval of Horizon 2 (2018-2022) of the country’s military modernisation plan [1, 2]. The announcement came from the…
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Q61 63/100

Are actual defence purchases made public?

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Comprehensiveness Score: 75 / 100
Defence purchases are made publicly available in accordance with Republic Act No. 9184 and are subject to audit by the COA. Purchases are also…
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Accessible data Score: 50 / 100
The level of accessiblity with respect to data tends to vary: at times, data may be released in an accessible and comprehensive manner that…
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Capability Gap and Requirements Definition

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Q62 38/100

What procedures and standards are companies required to have – such as compliance programmes and business conduct programmes – in order to be able to bid for work for the Ministry of Defence or armed forces?

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Formal policies Score: 25 / 100
In accordance with Section 47 of the IRR of RA 9184, all bidding documents must be accompanied by a sworn affidavit stating that the…
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Consistent implementation Score: 50 / 100
Policies and laws have a mixed record of implementation, as evidenced by media reports on some procurement issues [1, 2, 3, 4].
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Q63 75/100

Are procurement requirements derived from a national defence and security strategy, and are procurement decisions well-audited? Are defence purchases based on clearly identified and quantified requirements?

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Procurement requirements Score: 75 / 100
Whilst major procurement requirements do adhere to strategic objectives, some deals may occasionally deviate from these and be more strongly motivated by shorter-term political…
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Scrutiny Score: 50 / 100
Whilst mechanisms for scrutiny do exist (for example congressional committees, audits and the media), the level of scrutiny is not as high or consistent…
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Purchases Score: 100 / 100
Purchases are systematically based on priorities that are outlined; absent are the political and institutional variables mentioned earlier [1, 2, 3, 4, 5, 6].
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Tender Solicitation, Assessment and Contract Award

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Q64 38/100

Is defence procurement generally conducted as open competition or is there a significant element of single-sourcing (that is, without competition)?

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Open competition Score: 25 / 100
In 2015, the Commission on Audit reported that less than 40% of defense procurement are conducted as open competition [1]. Review of the procurement…
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Scrutiny of single/restricted competition procedures Score: 50 / 100
The Commission on Audit (COA) has the power to question the competition procedure selected and has done so on a number of ocassions [1,…
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Q65 50/100

Are tender boards subject to regulations and codes of conduct and are their decisions subject to independent audit to ensure due process and fairness?

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Conflicts of interest Score: 50 / 100
The Government Procurement Reform Act specifically notes that members of the Bid and Awards Committee (BAC) must have unquestionable integrity and be proficient in…
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Audit Trail Score: 0 / 100
The BAC Secretariat is required to prepare a Procurement Monitoring Report that covers major activities from pre-procurement conference to acceptance/turnover, including the standard and…
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Transparency Score: 100 / 100
The Government Procurement Law added two entities to ensure transparency and accountability. First, it created an electronic portal that serves as the primary and…
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Scrutiny Score: 50 / 100
As noted in 65A, the BAC is required to invite at least two observers (one from a duly recognised private group in a sector…
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Q66 75/100

Does the country have legislation in place to discourage and punish collusion between bidders for defence and security contracts?

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Legal framework Score: 100 / 100
The Government Procurement Reform Act (RA 9184) [1] (which also applies to the defence and security sector), its revised implementing rules and regulations [2]…
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Sanctions Score: 100 / 100
Article XXI of the revised IRR of RA 9184 empowers procurement officials to exclude companies and senior officials where there is a conviction or…
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Enforcement Score: 50 / 100
Cases are investigated but, even if they are found guilty, defendants are not always punished and in some cases are even promoted [1] and…
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Training Score: 50 / 100
Through its Technical Support Office, the GPPB has established a training programme to develop the capacity of procurement officials to address and resolve procurement…
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Contract Delivery and In-Service Support

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Q67 75/100

Are there mechanisms and procedures that ensure that contractors meet their obligations on reporting and delivery?

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Reporting policies & procedures Score: 100 / 100
Policies and procedures on how to monitor, assess and report a contractor’s service are outlined in the Procurement Reform Act RA 9184 [1]. Pursuant…
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Transparency Score: 25 / 100
Information on contract failures and modifications are rarely released but, in some cases, the media manages to obtain some details; further, as the oversight…
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Monitoring Score: 100 / 100
The BAC prepares a quarterly Procurement Monitoring Report that covers major activities from the holding of the pre-procurement conference to the issuance of notice…
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Enforcement Score: 75 / 100
Given that detailed monitoring reports are not publicly shared, it is difficult to assess how proactive procurement officials are in carrying out reporting and…
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Q68 88/100

Are there mechanisms in place to allow companies to complain about perceived malpractice in procurement, and are companies protected from discrimination when they use these mechanisms?

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Complaints mechanisms Score: 75 / 100
The Government Procurement Policy Board (GPPB) has released a resolution citing complaint mechanism for malpractice in both bidding and implementation stages [1]. Resolution No.…
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Effectiveness and Accessibility Score: NEI / 100
Based on the Blacklisting guidelines, initiating the suspension and blacklisting proceedings requires a “reasonable fee” [1]. Currently there are 58 companies in GPPB’s Blacklisted…
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Retaliation Score: 100 / 100
Companies trust the complaint mechanism and believe that they will not be discriminated against because a representative of the COA sits in on the…
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Q69 50/100

What sanctions are used to punish the corrupt activities of a supplier?

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Sanctions Score: 100 / 100
Procurement officers have the right to review the qualifications of a supplier at any stage of the procurement process. Suppliers who engage in corruption…
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Undue influence Score: 50 / 100
Cases are investigated but rarely prosecuted and, according to media reports, there is undue political influence in the decision-making process. A frigate acquisition project…
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Application of sanctions Score: 0 / 100
Despite confirmed offences by some suppliers, it is not clear if sanctions are imposed as in the case of the Korean firm involved in…
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Offset Contracts

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Q70 25/100

When negotiating offset contracts, does the government specifically address corruption risk by imposing anti-corruption due diligence on contractors and third parties?

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Legal framework Score: 50 / 100
Offset agreements are permitted under the Philippine government’s countertrade policy which is managed by the Philippine International Trading Corporation (PITC) under the Department of…
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Due diligence Score: 0 / 100
No specific due diligence or auditing requirements specific to the PITC were disclosed on its website or in documents made publicly available [1, 2,…
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Q71 33/100

How does the government monitor offset contracts?

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Policies & procedures Score: 50 / 100
Pursuant to Section 3 of Executive Order No. 12o of 1993, the Department of Trade and Industry though the Philippine International Trading Corporation (PITC)…
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Transparency Score: 50 / 100
Some details are provided, including on the PITC bid announcement page, although not to an adequate level and not on aspects such as planned…
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Monitoring Score: 0 / 100
No completion reports as specified were identified since a MOU was signed between the DND and PITC in 2017 [1, 2, 3, 4, 5].
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Enforcement Score: NEI / 100
Stated contractual obligations are specified but contract breaches are not directly addressed in a public manner; this being said, mechanisms such as the COA…
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Q72 0/100

What level of competition are offset contracts subject to?

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Score: 0 / 100
The Philippine government’s offset policy is managed by the Philippine International Trading Corporation (PITC) under the Department of Trade and Industry, but the agency…
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Agents / Brokers

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Q73 63/100

How strongly does the government control the company’s use of agents and intermediaries in the procurement cycle?

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Policies Score: 75 / 100
There are some controls over the use of agents and intermediaries. The Philippine Bidding Documents and IRR of Republic Act No. 9184 stipulates that…
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Enforcement Score: 50 / 100
No specific enforcement percentage has been publicly issued but wider problems with enforcement have been detailed in public media accounts on several occasions [1,…
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Financing Package

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Q74 25/100

Are the principal aspects of the financing package surrounding major arms deals, (such as payment timelines, interest rates, commercial loans or export credit agreements) made publicly available prior to the signing of contracts?

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Score: 25 / 100
Some details of the financing package surrounding major arms deals are disclosed on the DND’s website; namely, the identity of the provider and the…
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Seller Influence

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Q75 NS/100

How common is it for defence acquisition decisions to be based on political influence by selling nations?

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Prevalence: selling nations Score: NS / 100
This indicator is not assigned a score in the GDI. While acquisition decisions are chiefly determined by documents such as the AFP Modernisation Act…
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Justification Score: NS / 100
This indicator is not assigned a score in the GDI. Justification by the government is provided as required, including through DND releases and press…
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Prevalence: domestic pressures Score: NS / 100
This indicator is not assigned a score in the GDI. There is little evidence of independent domestic political pressures from interest groups within the…
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