Press Release
October 15, 2007

Transcript of Procurement Process Consultation
of Senator Mar Roxas with experts (Excerpts)

Recap of events at the briefing

MAR: There seems to be agreement that opening [Republic Act] 9184 [Government Procurement Reform Act] might lead to unintended consequences, that opening 9184 in an effort to make it stronger might in fact lead to situations to make it weaker. We also take note of the consensus that really, our default process requires competitive bidding, requires a price challenge, as a mechanism for ensuring we get value for money

Third, we also see that in contemporary history, we get into trouble when we go outside of that principle of price challenge and competitive bidding. Therefore our solution is to find a way such that there is some sort of review if we go out of that process. The only question now is whether we amend the ODA Law [RA 8182], whether we amend the GAA and put it in a special provision in the GAA - I'm not sure if that captures all the transactions or not Do we put it as an amendment to 9184 which we are advised may not be very wise, and there might be some other bills.

I think that the general advice is when we go outside of that basic principle of competitive bidding, price challenge, there ought to be some review and it ought not to be left simply to the executive branch, [wherein] Congress is an afterthought, after the fact.

That's the first part, dealing with the procurement side. Now we have to deal with the choosing side. Because the procurement side is what attaches a value or a cost to the project. Equally important is our choosing what is it really that we actively go after? What is our prioritization? MTPDP is a shopping list of a thousand items. And ten-point agenda is so general that just about anything can enter that. And SONA, likewise, SONA changes on an annual basis, and oftentimes does not repeat last year's priority.

In terms of maximizing our resources, there ought to be some kind of process, and I go to NEDA-ICC, because I'm very disturbed that there seems to be an abandonment of this check and balance role. It seems that the custodian of the longer-term prioritization process always has historically been NEDA-ICC. In contemporary history, in Cory Aquino's time and all the other NEDA secretaries until very recently.

How do we or where do we put a step so that the project prioritization is very, very clear. I thought it was going to be in the annual procurement plan, but ZTE was not in the annual procurement plan In 2007, NBN is not in it. 2005 does not contain, 2006 does not contain.

How priority could this have been that for three annual procurement plans where the government lists everything that is important to it, this thing was not in it, and then out of the blue, it is so important that we borrow 15 billion pesos, and the President flies off to Boao for the signing of this? How do we institutionalize this prioritization process so that it's a priority, and we now seek financing pursuant to our priority. Because if our priority is subject to the lender's prioritization, then it becomes China's prioritization and not our prioritization.

If you think about it, that I think is what we are looking for. How do we strengthen the procurement process to attain what is consensusnot only in today's hearing but even from a national policy point of viewwhich is, our preferred option is always where there is price challenge bidding. If it is outside of that, it must conform to certain rules.

Therefore, the question is, instances such as NBN-ZTE, which is outside of the normal procurement process, how do we subject that to some sort of scrutiny other than what is there right now, because what is there right now has been so clearly seen to be inadequate, if not incompetent.

Kung hindi nagkaroon ng brouhaha na nawala ang kontrata, kung hindi nagkaroon ng reklamo itong si Joey de Venecia, wala na ito. We will wake up three years from now and magbabayad na lang tayo ng utang dito. That's the point. How do we make sure na hindi na mauulit itong uri ng mga contract na ito?

[Press briefing after consultation]

MAR: Talaga naman na ang patakaran ng pamahalaan natin, yung policy ng pamahalaan natin ay lahat ng pagbibili ng kahit anuman at dapat dumaan sa bidding o tinatawag na price challenge. Iyan talaga ang pinaka-basic na principle sa ating Procurement Law. Samantala, mayroong mga exceptions, at itong ZTE/NBN at itong Cyber Ed at iba pa, kasama na ang Northrail, ay dumaan diyan sa mga exception na iyan, kung saan kasama yung Kongreso kasama lang dito sa decision making sa pag-appropriate ng interes sa pagbayad ng mga utang na ito. Meaning after the fact na ang pag-review.

May interpretasyon ang batas na nagsasabi na maaaring gumitna ang Kongreso dito sa pamamagitan ng General Appropriations Act, pero sa palagay ko, halos huli na ang lahat by that time. Dapat amyendahan ito, o maghanap tayo ng pamamaraan para ante mano, bago magsimula lahat ng mga pag-uutang na ito, ay magkaroon na ng consensus, ng approval, yung Kongreso na 'ito nga ang aming priority,' at whether by local sources o kaya ODA, o kaya BoT, o kaya executive agreement , maaaring ituloy na ang paghahanap ng pondo rito sa mga projects na ito.

Where do you see congressional intervention being done?

MAR: We will continue to look for this. That is the advice of those who have advocated very strongly for a strong Procurement Law. We will make a judgment as to whether in fact it is feasible or not, and whether it is advisable. Notwithstanding that there could be other mechanisms put in place, such as amendments to the ODA Law, or an annual special provision, or general provision in the General Appropriations Act that would serve to curtail or limit the executive's ability to go out and borrow money for projects that have not been approved by Congress.

How will these limitations affect lender-driven projects?

MAR: Kung mayroon ngang kondisyon na bago makautang ang executive dito sa mga lender-driven projects dapat dumaan sa Kongreso, una mababawasan ito, pangalawa dadaan ito sa some sort of examination bago ngang matuloy ang mga projects na ito. Halimbawa, dito sa ZTE, kung hindi nawala ang kontrata, kung hindi nagkaroon ng alegasyon ng bribery, tuloy-tuloy na lang ito at mabubulaga na lang tayo na nagbabayad tayo ng utang para sa isang project na hindi naman pala priority natin.

On a stronger financial situation at present

MAR: In the early days, kung makapatak tayo ng 12 billion dollars in reserves, hooray, nagtatatalon na ang gobyerno noon. Ngayon mahigit na sa 30 billion dollars ang ating reserves. Noong panahon na iyon, yung ating mga utang was 220, 240 billion pesos a year, ang budget deficit. Ngayon, nasa 60 billion, at patungo sa break even if not next year, the following year. So both in the foreign exchange side and on the fiscal deficit side, ibang-iba ang ating katayuan.

Pangatlo, sa interest rates. At the time, T-bill rates, yung pag-uutang ng gobyerno, pumatak sa 7, 8 percent per annum. Kaya kung may nag-offer sa iyo ng ODA na 3%, tuwang-tuwa ka. Kahit may chance na mas mahal ito ng kaunti, yung savings na uutang ka 7% domestic sa 3% ODA, tatanggapin mo na lang. Kulang dollar mo, mababa interes, kukunin mo. Ngayon, ang T-bill ay nasa 3%. Wala kang foreign exchange risk, dadaan ka sa bidding, so you get the best price possible, bakit mong pipilitin na uutang ka 3% foreign na walang bidding kung ikumpara na maka-3% ka rin dito sa domestic na may bidding. Maaari tayong maging mas mapili sa uutangin natin kahit ang mukha ay ODA or concessional, kase mababa nga interest rate natin dito, matibay yung ating deficit situation at madami tayong dollar.

Revival of Charter Change

MAR: I have not seen the order or the proclamation or the statement, whatever form it might be in. If in fact that's the case, I think that it's a sign of wanting to move people's attentions from the present political problems that confront the administration, the executive, at this point. Maybe they were advised by their counsel that the executive privilege, once brought to the courts will not hold ground, so maybe that's why there's another political front that is being opened. I look upon this as an assault on the quietness or regularity with which we ought to be governing, especially since the administration is touting strong economic fundamentals. This is in a way self-defeating.

On Gov. Ed Panlilio's allegations of receiving P500,000 from Malacañang

MAR: It's his decision to do with it [money] as Fr. Panlilio pleases. I would advise Fr. Panlilio that a panunuhol is two steps. Maaari na panunuhol ito mula sa nagbigay, pero kung hindi naman niya ito tanggapin sa konsepto ng nagbigay at binigay ito bilang tulong sa kanyang mga constituents, at wala itong epekto sa kanyang mga desisyon na kung tama o mali sa ating bansa, sa palagay ko'y hindi naman mali iyon. Ang panunuhol lamang ay kung ito yung kondisyon nito at tinanggap niya ang mga kondisyon.

Kung halimbawa gumawa siya ng lugaw kitchen na makakatulong sa kanyang mga constituents, okey rin lang iyan. Kung gusto niyang isauli, okay rin lang iyan. I think that for Father Panlilio, may extra step siguro, kung saan galing yung pera Is this a budgetary appropriation? Is this President's Social Fund? Is this party funds? Until now, Malacañang is saying na hindi nangyari

Will you support Sen. Lacson's call for investigation on this?

MAR: We'll see the contents of the resolution. I think that's important. And since the budget has been passed by the House, I think that even as part of the budget process, we can ask. If in fact this happened, just roughly, 200 [congressmen] times 200,000 pesos P40 million. 200 times 500 is P100 million. So ang laki ng perang ito.

Will you call the congressmen?

MAR: I don't even know if that is feasible. Regardless of what happens in the investigation, the people have made up their minds. I think that our people know that first, it happened, second, it happened in a large scale, and third, that is probably why they have a low opinion of politics, politicians, government and the executive.

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