Stricter procurement policy could shrink pool of bidders, GPPB says

A PROPOSED measure disqualifying relatives of public officials from entering government contracts could narrow the pool of eligible bidders, the Government Procurement Policy Board (GPPB) said on Tuesday, warning it could potentially reduce competition.

In a House Committee on Revision of Laws hearing, the GPPB said the proposed prohibition on relatives within the fourth degree of consanguinity or affinity may unintentionally reduce the available pool of suppliers eligible to participate in government bidding.

Katrina Margarita D. Lopez, GPPB division chief, noted that some companies could be disqualified despite having no direct influence over a specific procurement project.

“One of the governing principles of procurement would be competition,” Ms. Lopez told lawmakers, adding that procurement laws also seek to secure the “most advantageous” contracts for government.

The committee was tackling House bills seeking to disqualify relatives of public officials, as well as entities with beneficial ownership linked to them, from entering into government contracts.

The Department of Economy, Planning, and Development (DEPDev) also warned that broader disqualification rules in procurement could have unintended effects.

“The bills are timely as recent corruption controversies have created a need to rebuild trust in government through a clear and credible institutional response that enforces transparency and accountability,” Joy Divina Gracia, governance staff at DEPDev said.

She, however, noted it could reduce competition considering the number of personnel across all levels of government.

She also said that the focus should be on strengthening institutional capacity and data systems rather than expanding the ban.

“Strengthening institutional capacity and contractor information systems may be as important and more effective than expanding disqualification rules,” Ms. Gracia said, adding that better procurement data and monitoring systems would help identify irregularities and improve transparency.

Party-list Rep. Jose Manuel I. Diokno said that the reduction in the number of bidders may be temporary and that it is possible that more will participate in the bidding once the system becomes more transparent.

“As I understand the situation now, there is really a small pool of companies that contract with the government,” he said.

He added that one of the reasons for this is the public perception that it is necessary to have “connections” or influence within the government to obtain a project.

“One of the reasons for that might also be because of the perception that they need to have connections or influence inside to get the bid,” Mr. Diokno said in both English and Filipino.

According to Mr. Diokno, once the proposals become a law and the procurement process becomes more open, other companies will be more encouraged to participate because the awarding of contracts will no longer be based on connections.

Earlier in the hearing, Mr. Diokno also expressed support for the consolidated bills, saying stricter conflict of interest rules are needed to strengthen transparency, accountability, and integrity in government service.

Meanwhile, the Securities and Exchange Commission (SEC) also backed the proposals, particularly regarding the provision on “beneficial ownership” of companies.

The SEC explained that under Memorandum Circular No. 15, Series of 2025, not only direct shareholders can be considered beneficial owners but also people who have “ultimately effective control” over a corporation.

This includes those who have control through voting rights, board election powers, contractual arrangements, nominee agreements, dominant influence, and other mechanisms of control over a company, the agency added. — Pexcel John Bacon