offices and agencies, including state

2.2 Government Procurement Reform universities and colleges,

Act-2 government-owned and/or -controlled
corporations, government financial
Topic: Republic Act No. 9184 (10 institutions and local government units,
January 2003, effective 26 shall, in all cases, be governed by these
principles:
January 2003), otherwise known
as the “Government (a) Transparency in the procurement
Procurement Reform Act” process and in the implementation of
procurement contracts.

(b) Competitiveness by extending

Legislative Intent/Purpose: equal opportunity to enable private
contracting parties who are eligible and
It is the declared policy of the State to
qualified to participate in public bidding.
promote the ideals of good
governance in all its branches, (c) Streamlined procurement process
departments, agencies, subdivisions, that will uniformly apply to all
and instrumentalities, including government procurement. The
government-owned and/or -controlled procurement process shall be simple
corporations, and local government and made adaptable to advances in
units. modern technology in order to ensure
an effective and efficient method.
It is the commitment of the State to
promote good governance and its effort (d) System of accountability where
to adhere to the principles of both the public officials directly or
transparency, accountability, equity, indirectly involved in the procurement
efficiency, and economy in its process as well as in the implementation
procurement process. of procurement contracts and the private
parties that deal with government are,
It is the policy of the State that
when warranted by circumstances,
procurement of Goods, Infrastructure
investigated and held liable for their
Projects and Consulting Services shall
actions relative thereto.
be competitive and transparent, and
therefore shall undergo competitive (e) Public monitoring of the
bidding. procurement process and the
implementation of awarded contracts
with the end in view of guaranteeing that
General principles these contracts are awarded pursuant to
the provisions of RA 9184 and its
All procurement of the national implementing rules and regulations, and
government, its departments, bureaus,
that all these contracts are performed case of GOCCs and GFIs,
strictly according to specifications. and SUCs; the budget
approved by the Sanggunian
through an appropriations
Scope and Application ordinance in the case of
LGUs.
RA 9184 shall apply to all procurement
of any branch, agency, department, For Foreign-funded Procurement, the
bureau, office, or instrumentality of the ABC refers to the cost estimate
Government of the Philippines (GoP), prepared by the Procuring Entity and
including government-owned and/or approved by the foreign
-controlled corporations (GOCCs), government/foreign or international
government financial institutions (GFIs), financing institution as specified in the
state universities and colleges (SUCs), Treaty or International or Executive
and local government units (LGUs). Agreement.

The following are not procurement ● Bid. Refers to a signed offer

activities under R.A. 9184 and its IRR: or proposal to undertake a
contract submitted by a bidder
● Lease of government-owned in response to and in
property as lessor for private consonance with the
use; requirements of the Bidding
● Hiring of Job Order Workers; Documents. The term “Bid”
● Disposal of Property and shall be equivalent to and be
Other Assets of the used interchangeably with
Government. “Proposal” and “Tender.”
● Bidder. Refers to a
contractor, manufacturer,
Definition of Terms supplier, distributor and/or
consultant who submits a bid
● Approved Budget for the in response to the
Contract (ABC). Refers to requirements of the Bidding
the budget for the contract Documents.
duly approved by the HoPE, ● Bidding Documents. Refer
as provided for in the General to the documents issued by
Appropriations Act (GAA), the Procuring Entity as the
continuing, and automatic basis for bids, furnishing all
appropriations, in the case of information necessary for a
national government agencies prospective bidder to prepare
(NGAs); the corporate budget a bid for the Goods,
for the contract approved by Infrastructure Projects and/or
the governing board, in the
 Consulting Services required limited to: (i) advisory and
by the Procuring Entity. review services; (ii)
● BAC – refers to the Bids and preinvestment or feasibility
Awards Committee studies; (iii) design; (iv)
● Common-Use Supplies and construction supervision; (v)
Equipment (CSE). Refer to management and related
those goods, materials and services; and (vi) other
equipment that are used in technical services or special
the day-to-day operations of studies.
Procuring Entities in the ● Domestic Bidder. Refers to
performance of their any person or entity offering
functions. unmanufactured articles,
● Competitive Bidding. Refers materials or supplies of the
to a method of procurement growth or production of the
which is open to Philippines, or manufactured
participation by any articles, materials, or supplies
interested party and which manufactured or to be
consists of the following manufactured in the
processes: (1) advertisement, Philippines substantially from
(2) pre-bid conference, (3) articles, materials, or supplies
eligibility screening of of the growth, production, or
prospective bidders, (4) manufacture, as the case may
receipt and opening of bids, be, of the Philippines.
(5) evaluation of bids, (6) ● Domestic Entity. Refers to
post-qualification, and (7) an individual or a sole
award of contract. The terms proprietor who is a citizen
“Competitive Bidding” and of the Philippines or a
“Public Bidding” shall have partnership, corporation,
the same meaning and shall cooperative, or association
be used interchangeably. duly organized under the
● Consulting Services. Refer laws of the Philippines and
to services for infrastructure of which at least seventy five
projects and other types of percent (75%) of the
projects or activities of the interest or outstanding
GoP requiring adequate capital stock belongs to
external technical and citizens of the Philippines,
professional expertise that habitually established in
are beyond the capability business and habitually
and/or capacity of the GoP to engaged in the manufacture
undertake such as, but not or sale of the merchandise
 covered by his bid, and the indebtedness with private
business has been in foreign banks or with foreign
existence for at least five (5) governments, agencies, or
consecutive years prior to instrumentalities of such
the advertisement and/or foreign governments, foreign
posting of the Invitation to financial institutions, or other
Bid. international organizations
● Expendable Supplies. Refer with whom, or belonging to
to articles which are (a) countries with which, the
normally consumed in use Philippines has diplomatic
within one (1) year or (b) relations, as may be
converted in the process of necessary and upon such
manufacture or construction, terms and conditions as may
or (c) those having a life be agreed upon, to enable the
expectancy of more than one GoP to finance, either directly
(1) year but which shall have or through any government
decreased substantially in office, agency or
value after being put to use instrumentality or any
for only one (1) year (e.g., government-owned and
medicines, stationery, fuel, controlled corporation,
and spare parts). industrial, agricultural or other
● Foreign-funded economic development
Procurement. Refers to the purposes or projects
acquisition of goods, authorized by law.
consulting services, and the ● Goods. Refer to all items,
contracting for infrastructure supplies, materials and
projects by the GoP which are general support services,
wholly or partly funded by except Consulting Services
Foreign Loans or Grants and infrastructure projects,
pursuant to a Treaty or which may be needed in the
International or Executive transaction of public
Agreement. businesses or in the pursuit
● Foreign Grants. Refer to of any government
grants with no repayment undertaking, project or
obligations and are provided activity, whether in the nature
in monetary form, goods, of equipment, furniture,
works, and consultancy stationery, materials for
services, among others. construction, or personal
● Foreign Loans. Refer to property of any kind, including
loans, credits, and non-personal or contractual
 services, such as, the repair ● Philippine National. Refers
and maintenance of to an individual or a sole
equipment and furniture, as proprietor who is a citizen
well as trucking, hauling, of the Philippines or a
janitorial, security, and related partnership, corporation, or
or analogous services, as well association organized
as procurement of materials under the laws of the
and supplies provided by the Philippines of which at least
Procuring Entity for such sixty percent (60%) of the
services. The term “related” or capital or interest is owned
“analogous services” shall by citizens of the Philippines,
include, but is not limited to, or cooperatives registered
lease of office space, media with the Cooperative
advertisements, health Development Authority.
maintenance services, and ● Procurement. Refers to the
other services essential to the acquisition of goods,
operation of the Procuring consulting services, and the
Entity. contracting for infrastructure
● Head of the Procuring projects by the Procuring
Entity (HoPE). Refers to: (i) Entity. In case of projects
the head of the agency or involving mixed
body, or his duly authorized procurements, the nature of
official, for NGAs and the the procurement, i.e.,
constitutional commissions or Goods, Infrastructure
offices, and other branches of Projects or Consulting
government; (ii) the governing Services, shall be
board or its duly authorized determined based on the
official, for GOCCs, GFIs and primary purpose of the
SUCs; or (iii) the local chief contract. Procurement shall
executive, for LGUs: also include the lease of
Provided, however, That in an goods and real estate.
agency, department, or office ● Procuring Entity. Refers to
where the procurement is any branch, constitutional
decentralized, the head of commission or office, agency,
each decentralized unit shall department, bureau, office, or
be considered as the HoPE, instrumentality of the GoP
subject to the limitations and (NGA), including GOCC, GFI,
authority delegated by the SUC and LGU procuring
head of the agency, goods, infrastructure projects
department, or office. and consulting services.
 In the preparation of the indicative APP,
the end-user or implementing units of
Procurement by Electronic the Procuring Entity shall formulate their
Means and the Philippine respective Project Procurement
Government Electronic Management Plans (PPMPs) for their
Procurement System different programs, activities, and
(PhilGEPS) projects (PAPs).

APP shall include the following:

To promote transparency and efficiency,
information and communications a) Name of Procurement Project;
technology shall be utilized in the
conduct of procurement procedures. b) Procurement Management Office
Accordingly, there shall be a single (PMO)/end-user/implementing unit;
portal that shall serve as the primary c) Method of Procurement;
source of information on all government
procurement. The PhilGEPS shall serve d) Schedule of identified procurement
as the primary and definitive source activities as reflected in the APP form
of information on government approved by the GPPB; 7 e) Source of
procurement. funds;

2.2 (a) Procurement Planning and f) Indicative ABC; and

Preparation of Bidding Documents g) Other relevant descriptions of the

project, if applicable.
Procurement Planning
All procurement shall be within the
Preparation of Bidding
approved budget of the Procuring
Entity and should be meticulously and Documents
judiciously planned by the Procuring Form and Contents of Bidding
Entity. Documents
No procurement shall be undertaken The Bidding Documents shall be
unless it is in accordance with the prepared by the Procuring Entity
approved APP, including approved following the standard forms and
changes thereto. The APP must be manuals prescribed by the GPPB. The
consistent with the duly approved yearly Bidding Documents shall include the
budget of the Procuring Entity and shall following:
bear the approval of the HoPE or
second-ranking official designated by a) ABC;
the HoPE to act on his behalf.
b) Invitation to Bid/Request for
Expression of Interest;
c) Eligibility Requirements; compatible with the existing fleet or
equipment of the same make and brand,
d) Instructions to Bidders, including
and to maintain the performance,
scope of bid, documents comprising the
functionality and useful life of the
bid, criteria for eligibility, bid evaluation
equipment.
methodology/criteria in accordance with
the Act, and post-qualification, as well
as the date, time and place of the
pre-bid conference (where applicable), Access to Information
submission of bids and opening of bids; In all stages of the preparation of the
e) Terms of Reference, for Consulting Bidding Documents, the Procuring Entity
Services; shall ensure equal access to
information. Prior to their official release
f) Scope of work, where applicable; to prospective bidders, no aspect or part
of the Bidding Documents shall be
g) Plans/Drawings and Technical
divulged or released to any prospective
Specifications;
bidder or person having direct or indirect
h) Form of Bid, Price Form, and List of interest in the project to be procured, or
Goods or Bill of Quantities; to any party, except those officially
authorized in the handling of the
i) Delivery Time or Completion
documents.
Schedule;
2.2 (b) Pre-procurement Conference,
j) Form, Amount, and Validity Period of
Bid Security; Advertisement of Invitation to Bid, and

k) Form, Amount, and Validity of Pre-bid Conference

Performance Security and Warranty;
and Pre-procurement Conference

l) Form of Contract and General and Prior to the advertisement or the

Special Conditions of Contract. issuance of the Invitation to Bid/Request
for Expression of Interest for each
procurement undertaken through a
competitive bidding, the BAC, through
Reference to Brand Names
its Secretariat, shall call for a
Specifications for the procurement of pre-procurement conference. The
Goods shall be based on relevant pre-procurement conference shall be
characteristics, functionality and/or attended by the BAC, the Secretariat,
performance requirements. Reference the unit or officials, including consultants
to brand names shall not be allowed hired by the Procuring Entity, who
except for items or parts that are prepared the Bidding Documents and
the draft Invitation to Bid/Request for
Expression of Interest for each below, procurement of Infrastructure
procurement. Projects costing Five Million Pesos
(₱5,000,000.00) and below, and
During this conference, the participants,
procurement of Consulting Services
led by the BAC, shall:
costing One Million Pesos
a) Confirm the description and scope of (₱1,000,000.00) and below.
the contract, the ABC, and contract
duration;
Advertising and Contents of the
b) Ensure that the procurement is in
accordance with the PPMP and APP; Invitation to Bid/Request for
Expression of Interest
c) Determine the readiness of the
procurement at hand, including, among Contents of the Invitation to Bid/Request
other aspects, the following: for Expression of Interest The Invitation
to Bid/Request for Expression of Interest
(c.i)The availability of appropriations shall provide prospective bidders the
(c.ii)completeness of the Bidding following information, among others:
Documents and their adherence to a) For the procurement of:
relevant general procurement guidelines
● Goods, the name of the
d) Review, modify and agree on the contract to be bid and a brief
criteria for eligibility screening, description of the goods to be
evaluation, and post-qualification; procured;
e) Review and adopt the procurement ● Infrastructure Projects, the
schedule, including deadlines and name and location of the
timeframes, for the different activities; contract to be bid, the project
and background and other
relevant information regarding
f) Reiterate and emphasize the the proposed contract works,
importance of confidentiality and the including a brief description of
applicable sanctions and penalties, as the type, size, major items,
well as agree on measures to ensure and other important or
compliance with the foregoing. relevant features of the works;
and
● Consulting services, the name
Note: The holding of a of the contract to be bid, a
pre-procurement conference may not general description of the
be required for small procurements, project and other important or
i.e., procurement of Goods costing relevant information;
Two Million Pesos (₱2,000,000.00) and
b) The name of the project, identification Advertising and Posting of the
and number of lots or items specific to Invitation to Bid/Request for
the bidding, as well as the basis of
Expression of Interest
evaluation of the project, lots, or items,
where applicable; The Invitation to Bid/Request for
Expression of Interest shall be:
c) A general statement on the criteria to
be used by the Procuring Entity for the a) Posted at any conspicuous place
eligibility check, the examination and reserved for this purpose in the
evaluation of bids, post-qualification, premises of the Procuring Entity
and award; concerned for seven (7) calendar days
as certified by the head of the BAC
d) The date, time and place of the
Secretariat of the Procuring Entity
deadline for the submission and receipt
concerned; and
of the eligibility requirements, the
pre-bid conference if any, the b) Posted continuously in the
submission and receipt of bids, and the PhilGEPS website, the website of the
opening of bids; e) ABC for the project, Procuring Entity concerned, if available,
lot, or item to be bid; and the website prescribed by the
foreign government/foreign or
f) The source of funding;
international financing institution, if
g) The place, time and website where applicable, for seven (7) calendar days
the Bidding Documents may be secured starting on date of advertisement.
or downloaded, and, where required, the
price of the Bidding Documents;

h) The contract duration or delivery

Pre-bid Conference
schedule; For contracts to be bid with an ABC of
i) The name, address, telephone One Million Pesos (₱1,000,000.00) or
number, facsimile number, e-mail and more, the BAC shall convene at least
website addresses of the concerned one (1) pre-bid conference to clarify
Procuring Entity, as well as its and/or explain any of the requirements,
designated contact person; and terms, conditions, and specifications
stipulated in the Bidding Documents.
j) Such other necessary information For contracts to be bid with an ABC of
deemed relevant by the Procuring less than One Million Pesos
Entity; (₱1,000,000), pre-bid conferences may
be conducted at the discretion of the
BAC. Subject to the approval of the
BAC, a pre-bid conference may also be
conducted upon written request of any prescribed in the Bidding
prospective bidder. Documents:

The pre-bid conference shall be held at a) Class “A” Documents

least twelve (12) calendar days before
Legal Documents
the deadline for the submission and
receipt of bids, but not earlier than i) Registration certificate from SEC,
seven (7) calendar days from the Department of Trade and Industry
PhilGEPS posting of the Invitation to (DTI) for sole proprietorship, or CDA
Bid or Bidding Documents. for cooperatives.

ii) Mayor’s/Business permit issued by

the city or municipality where the
Supplemental/Bid Bulletins
principal place of business of the
Requests for clarification(s) on any part prospective bidder is located, or the
of the Bidding Documents or for an equivalent document for Exclusive
interpretation must be in writing and Economic Zones or Areas.
submitted to the BAC of the Procuring
In cases of recently expired
Entity concerned at least ten (10)
Mayor’s/Business permits, it shall be
calendar days before the deadline set
accepted together with the official
for the submission and receipt of
receipt as proof that the bidder has
bids. The BAC shall respond to the said
applied for renewal within the period
request by issuing a Supplemental/Bid
prescribed by the concerned local
Bulletin, duly signed by the BAC
government unit.
Chairperson, to be made available to all
those who have properly secured the iii) Tax clearance by the Bureau of
Bidding Documents, at least seven (7) Internal Revenue (BIR).
calendar days before the deadline for
Technical Documents
the submission and receipt of bids.
iv) Statement of the bidder of all its
2.2 (c) Receipt and Opening of Bids
ongoing government and private
contracts, including contracts
Receipt and Opening of Bids awarded but not yet started, if any,
Eligibility Requirements for the whether similar or not similar in
Procurement of Goods and nature and complexity to the contract
Infrastructure Projects to be bid.

For purposes of determining the v) Statement of the bidder’s Single

eligibility of bidders using, only the Largest Completed Contract (SLCC)
following documents shall be similar to the contract to be bid,
required by the BAC, using the forms
2.2 (d) Bid Evaluation and Post The ABC shall be the upper limit or
Qualification ceiling for acceptable bid prices. If a
bid price, as evaluated and calculated
in accordance with this IRR, is higher
Preliminary Examination of Bids
than the ABC, the bidder submitting
The BAC shall open the first bid the same shall be automatically
envelopes in public to determine disqualified. There shall be no lower
each bidder’s compliance with the limit or floor on the amount of the
documents required to be submitted award
for eligibility and for the technical
requirements. For this purpose, the
BAC shall check the submitted Post-Qualification
documents of each bidder against a
checklist of required documents to Objective and Process of
ascertain if they are all present, using Post-Qualification
a non-discretionary “pass/fail”
The Lowest Calculated Bid/Highest
criterion, as stated in the Instructions
Rated Bid shall undergo
to Bidders. If a bidder submits the
post-qualification in order to
required document, it shall be rated
determine whether the bidder
“passed” for that particular
concerned complies with and is
requirement. In this regard, bids that
responsive to all the requirements
fail to include any requirement or are
and conditions as specified in the
incomplete or patently insufficient
Bidding Documents.
shall be considered as “failed.”
Otherwise, the BAC shall rate the Within five (5) calendar days from
said first bid envelope as “passed.” receipt by the bidder of the notice
from the BAC that the bidder has the
Immediately after determining
Lowest Calculated Bid or Highest
compliance with the requirements in
Rated Bid, the bidder shall submit to
the first envelope, the BAC shall
the BAC its latest income and
forthwith open the second bid
business tax returns, and other
envelope of each remaining eligible
appropriate licenses and permits
bidder whose first bid envelope was
required by law and stated in the
rated “passed.” The second envelope
Bidding Documents. Failure to
of each complying bidder shall be
submit any of the post-qualification
opened within the same day.
requirements on time, or a finding
against the veracity thereof, shall
disqualify the bidder for award.
Ceiling for Bid Prices
The post-qualification shall verify,
validate, and ascertain all statements
made and documents submitted by exceptional cases, the
the bidder with the Lowest Calculated post-qualification period may be
Bid/Highest Rated Bid, using extended by the HoPE, but in no case
non-discretionary criteria, as stated shall the aggregate period exceed
in the Bidding Documents. forty-five (45) calendar days for
Goods and Infrastructure Projects, or
If the BAC determines that the bidder
thirty (30) calendar days in
with the Lowest Calculated
Consulting Services. In case of
Bid/Highest Rated Bid passes all the
post-disqualification of the bidder
criteria for post-qualification, it shall
with the lowest calculated bid/highest
declare the said bid as the LCRB or
rated bid, the BAC shall be given the
HRRB, and recommend to the HoPE
same fresh period to conduct the
the award of contract to the said
post-qualification of the next lowest
bidder at its submitted bid price or its
calculated bid/highest rated bid until
calculated bid price, whichever is
a bidder is post-qualified or failure of
lower or, in the case of quality-based
bidding is declared.
evaluation procedure, submitted bid
price or its negotiated price, A request for reconsideration may be
whichever is lower. If, however, the filed by the bidder with the HoPE
BAC determines that the bidder with within three (3) calendar days from
the Lowest Calculated Bid/Highest receipt of the notice of disapproval.
Rated Bid fails the criteria for The HoPE shall resolve with finality
post-qualification, it shall the request for reconsideration within
immediately notify the said bidder in seven (7) calendar days from the
writing of its post-disqualification filing thereof and furnish the bidder a
and the grounds for it. copy of the resolution immediately
from its promulgation.
Immediately after the BAC has
notified the first bidder of its
post-disqualification, and
notwithstanding any pending request Failure of Bidding
for reconsideration thereof, the BAC The BAC shall declare the bidding a
shall initiate and complete the same failure when:
post-qualification process on the
bidder with the second Lowest a)No bids are received;
Calculated Bid/Highest Rated Bid.
b)All prospective bidders are
The post-qualification process shall declared ineligible;
be completed in not more than twelve
c)All bids fail to comply with all the
(12) calendar days from the
bid requirements or fail
determination of the Lowest
post-qualification, or, in the case of
Calculated Bid/Highest Rated Bid. In
Consulting Services, there is no Valid joint venture agreement (JVA);
successful negotiation; or in case the prospective bidder is a
joint venture
d)The bidder with the LCRB, HRRB,
SCRB or SRRB refuses, without
justifiable cause, to accept the award
of contract, and no award is made. Eligibility Criteria
The following shall be eligible to
participate in the bidding:
vi) In the case of procurement of
Infrastructure Projects, a valid a) Duly licensed Filipino citizens/sole
Philippine Contractors Accreditation proprietorships;
Board (PCAB) License or Special b) Partnerships duly organized under
PCAB License in case of Joint the laws of the Philippines and of
Ventures, and registration for the which at least sixty percent (60%) of
type and cost of the contract to be the interest belongs to citizens of the
bid. Philippines;
Financial Documents c) Corporations duly organized under
vii) The bidder’s audited financial the laws of the Philippines, and of
statements, showing, among others, which at least sixty percent (60%) of
the bidder’s total and current assets the outstanding capital stock belongs
and liabilities, stamped “received” by to citizens of the Philippines;
the BIR or its duly accredited and d) Cooperatives duly organized under
authorized institutions, for the the laws of the Philippines; or
preceding calendar year which
should not be earlier than two (2) e) Persons/entities forming
years from the date of bid themselves into a joint venture, i.e., a
submission. group of two (2) or more
persons/entities that intend to be
viii) The bidder’s computation of Net jointly and severally responsible or
Financial Contracting Capacity liable for a particular contract:
(NFCC). Provided, however, That Filipino
However, in the case of procurement ownership or interest of the joint
of Goods, a bidder may submit a venture concerned shall be at least
committed Line of Credit from a sixty percent (60%).
Universal or Commercial Bank, in lieu
of its NFCC computation.
Foreign bidders may be eligible to
(b) Class “B” Document participate under any of the following
circumstances in accordance with failure of bidding, or (b) monopoly
the guidelines issued by the GPPB: that will defeat the purpose of
competitive bidding, the Procuring
a)When provided for under any
Entity, in lieu of the above, may
Treaty or International or Executive
require the following:
Agreement;
a)The bidder should have completed
b)When the foreign supplier is a
at least two (2) similar contracts and
citizen, corporation or association of
the aggregate contract amounts
a country, the laws or regulations of
should be equivalent to at least the
which grant reciprocal rights or
percentage of the ABC as required
privileges to citizens, corporations or
above; and
associations of the Philippines;
(b) The largest of these similar
c)When the goods sought to be
contracts must be equivalent to at
procured are not available from local
least half of the percentage of the
suppliers; or
ABC as required above.
d) When there is a need to prevent
situations that defeat competition or
restrain trade. Net Financial Contracting
Capacity

Single Largest Completed The computation of a bidder’s NFCC

must be at least equal to the ABC to
Contract
be bid, calculated as follows:
The bidder must have completed,
NFCC = [(Current assets minus
within the period specified in the
current liabilities) (15)] minus the
Invitation to Bid, an SLCC that is
value of all outstanding or
similar to the contract to be bid, and
uncompleted portions of the projects
whose value, adjusted to current
under ongoing contracts, including
prices using the Philippine Statistics
awarded contracts yet to be started,
Authority (PSA) consumer price
coinciding with the contract to be bid.
indices, must be at least fifty percent
(50%) of the ABC. However, in the The values of the domestic bidder’s
case of Expendable Supplies, said current assets and current liabilities
SLCC must be at least twenty five shall be based on the latest Audited
percent (25%) of the ABC. Financial Statements submitted to
the BIR. For purposes of computing
If, at the outset and after conducting
the foreign bidders' NFCC, the value
market research, the Procuring Entity
of the current assets and current
can already determine that imposing
liabilities shall be based on their
the same will likely result to: (a)
Audited Financial Statements ii)Statement of all Ongoing
prepared in accordance with Government and Private Contracts;
international financial reporting
iii)Statement of SLCC;
standards.
iv)NFCC Computation or committed
If the bidder submits a committed
Line of Credit;
Line of Credit, in lieu of the NFCC, it
must be at least equal to ten percent v)JVA or the Duly Notarized
(10%) of the ABC to be bid: Provided, Statement in accordance with
That if the same is issued by a Section 23.1(b) of this IRR, if
foreign Universal or Commercial applicable;
Bank, it shall be confirmed or
authenticated by a local Universal or vi)Bid security in the prescribed
Commercial Bank. form, amount and validity period;

vii)Technical Specifications, which

may include production/delivery
Submission and Receipt of Bids schedule, manpower requirements,
and/or after-sales service/parts, if
Bidders shall submit their bids
applicable;
through their duly authorized
representative using the forms viii)Omnibus Sworn Statement in
specified in the Bidding Documents accordance; and
in two (2) separate sealed bid
ix) For foreign bidders claiming
envelopes, or two (2)
eligibility by reason of their country’s
password-protected Bidding
extension of reciprocal rights to
Documents in compressed archive
Filipinos, a certification from the
folders, in case of electronic bid
relevant government office of their
submission, and which shall be
country stating that Filipinos are
submitted simultaneously.
allowed to participate in their
The first shall contain the technical government procurement activities
component of the bid, including the for the same item or product.
eligibility requirements, and the
second shall contain the financial
component of the bid. Bids, including the eligibility
requirements submitted after the
The first envelope shall contain the
deadline shall not be accepted by the
following technical
BAC. The BAC shall record in the
information/documents, at the least:
minutes of bid submission and
i)PhilGEPS Certificate of Registration opening, the bidder’s name, its
and membership; representative and the time the late
bid was submitted or in case of the notice of award, enter into
online or electronic bid submission, contract with the Procuring Entity
generate a Bid receipt page for the and furnish the performance security
official time of late submission which
can be saved or printed by the
bidder. Bid Validity
Unsealed or unmarked bid Bids and bid securities shall be valid
envelopes, or in case of electronic for a reasonable period as
bid submission, Bidding Documents determined by the HoPE concerned,
not in compressed archive folders which shall be indicated in the
and are not password- protected, Bidding Documents, but in no case
shall be rejected. shall the period exceed one hundred
twenty (120) calendar days from the
date of the opening of bids.
Modification and Withdrawal of
Bids
Bid Opening
A bidder may modify its bid, provided
that this is done before the deadline The BAC shall open the bids
for the submission and receipt of immediately after the deadline for the
bids. Bid modifications received after submission and receipt of bids. The
the applicable deadline shall not be time, date, and place of the opening
considered and shall be returned to of bids shall be specified in the
the bidder unopened. Bidding Documents.
A bidder may, through a letter,
withdraw its bid before the deadline
for the receipt of bids. Withdrawal of 2.2 (e) Award, Implementation and
bids after the applicable deadline Termination of Contract
shall be subject to appropriate
sanctions. Contract Award
The BAC shall recommend to the HoPE
the award of contract to the bidder with
Bid Security
the LCRB, HRRB, SCRB, or SRRB after
All bids shall be accompanied by a the post-qualification process has been
bid security, payable to the Procuring completed.
Entity concerned as a guarantee that
Within a period not exceeding fifteen
the successful bidder shall, within
(15) calendar days from the
ten (10) calendar days from receipt of
determination by the BAC of the bidder
with the LCRB, HRRB, SCRB, or SRRB, appropriate government approving
and the recommendation to award the authority. All notices called for by the
contract, the HoPE or his duly terms of the contract shall be effective
authorized representative shall approve only at the time of receipt thereof by the
or disapprove the said recommendation. successful bidder.

In case of approval, the HoPE shall

immediately issue the Notice of Award
to the bidder with the LCRB, HRRB, Period of Action on
SCRB or SRRB. In the event of Procurement Activities
disapproval, which shall be based only
The procurement process from the
on valid, reasonable, and justifiable
opening of bids up to the award of
grounds as provided for under Section
contract shall not exceed three (3)
41, the HoPE shall notify the BAC and
months, or a shorter period to be
the bidder in writing of such decision
determined by the Procuring Entity
and the grounds for it.
concerned. All members of the BAC
Within ten (10) days from receipt of by shall be on a “jury duty” type of
the winning bidder of the Notice of assignment until the Notice of Award is
Award, the following conditions should issued by the HoPE in order to complete
be complied before the contract may be the entire procurement process at the
awarded: earliest possible time. The term “jury
duty” shall be understood to mean a
a)Submission of the required documents state by which the members give utmost
within ten (10) calendar days from priority to BAC assignment over all the
Notice of Award other duties and responsibilities until the
b)Posting of performance security; requirements for the said assignments
at hand are completed.
c)Signing of the contract; and

d)Approval by higher authority, if

required. Section 41. Reservation Clause
The HoPE reserves the right to reject
any and all bids, declare a failure of
Notice to Proceed bidding, or not award the contract in the
The concerned Procuring Entity shall following situations:
issue the Notice to Proceed together a)If there is prima facie evidence of
with a copy or copies of the approved collusion between appropriate public
contract to the successful bidder within officers or employees of the Procuring
seven (7) calendar days from the date Entity, or between the BAC and any of
of approval of the contract by the the bidders, or if the collusion is
between or among the bidders consultants with known experience and
themselves, or between a bidder and a proven capability on the requirements of
third party, including any act which the particular contract. This alternative
restricts, suppresses or nullifies or tends method of procurement may be
to restrict, suppress or nullify employed under any of the following
competition; conditions:

b)If the BAC is found to have failed in a) Procurement of highly specialized

following the prescribed bidding types of goods (e.g., sophisticated
procedures; or defense equipment, complex air
navigation systems, coal) and consulting
c) For any justifiable and reasonable
services where only a few suppliers or
ground where the award of the contract
consultants are known to be available,
will not redound to the benefit of the
such that resorting to the competitive
GoP, as follows:
bidding method will not likely result in
(i) if the physical and economic any additional suppliers or consultants
conditions have significantly changed so participating in the bidding; or
as to render the project no longer
b) Procurement of major plant
economically, financially, or technically
components where it is deemed
feasible, as determined by the HoPE;
advantageous to limit the bidding to
(ii) if the project is no longer necessary known qualified bidders in order to
as determined by the HoPE; or maintain uniform quality and
performance of the plant as a whole.
(iii) if the source of funds for the project
has been withheld or reduced through
no fault of the Procuring Entity.
Direct Contracting or single source
2.2 (f) Alternative Modes of procurement is a method of
procurement of Goods that does not
Procurement
require elaborate Bidding Documents.
The supplier is simply asked to submit a
Alternative Methods of price quotation or a pro-forma invoice
Procurement together with the conditions of sale. The
offer may be accepted immediately or
after some negotiations. Direct
Limited Source Bidding, otherwise contracting may be resorted to by
known as selective bidding, is a method concerned Procuring Entities under any
of procurement of Goods and of the following conditions:
Consulting Services that involves direct
a) Procurement of Goods of proprietary
invitation to bid by the Procuring Entity
nature which can be obtained only from
from the list of pre-selected suppliers or
the proprietary source, i.e. when
patents, trade secrets, and copyrights d)Repeat orders shall not exceed
prohibit others from manufacturing the twenty-five percent (25%) of the
same item; quantity of each item in the original
contract.
b) When the procurement of critical
components from a specific supplier is a
condition precedent to hold a contractor
Shopping is a method of procurement
to guarantee its project performance, in
of Goods whereby the Procuring Entity
accordance with the provisions of its
simply requests for the submission of
contract; or
price quotations for readily available
c) Those sold by an exclusive dealer or off-the-shelf goods or ordinary/regular
manufacturer which does not have equipment to be procured directly from
sub-dealers selling at lower prices and suppliers of known qualifications.
for which no suitable substitute can be
obtained at more advantageous terms to
the GoP. Negotiated Procurement is a method
of procurement of Goods, Infrastructure
Projects and Consulting services,
Repeat Order, when provided for in the whereby the Procuring Entity directly
APP, is a method of procurement of negotiates a contract with a technically,
Goods from the previous winning bidder, legally and financially capable supplier,
whenever there is a need to replenish contractor or consultant in any of the
goods procured under a contract following cases:
previously awarded through Competitive
● Two Failed Biddings. Where
Bidding. Repeat orders shall likewise be
there has been failure of
subject to the following conditions:
competitive bidding or Limited
a)Unit prices of the repeat order must be Source Bidding for the second
the same as or lower than those in the time.
original contract: Provided, That such ● Emergency Cases. In case
prices are still the most advantageous to of imminent danger to life or
the GoP after price verification; property during a state of
calamity, or when time is of
b)The repeat order will not result in
the essence arising from
splitting of contracts, requisitions, or
natural or man-made
purchase orders
calamities or other causes
c)the repeat orders shall be availed of where immediate action is
only within six (6) months from the necessary to prevent damage
date of the Notice to Proceed arising to or loss of life or property, or
from the original contract; and to restore vital public services,
 infrastructure facilities and agency of the government
other public utilities. (i.e., Servicing Agency) that
● Take-Over of Contracts. has the mandate to deliver
Take-over of contracts, which goods or services or to
have been rescinded or undertake infrastructure
terminated for causes projects or consultancy
provided for in the contract services as required by the
and existing laws, where Procuring Entity.
immediate action is necessary
to prevent damage to or loss
of life or property, or to restore 2.2 (g) Disclosure of Relations
vital public services,
infrastructure facilities and Disclosure of Relations
other public utilities.
● Small Value Procurement. All bids shall be accompanied by a
Procurement of Goods, sworn affidavit of the bidder that it is
Infrastructure Projects and not related to the HoPE, members of
Consulting Services, where the BAC, the TWG, and the BAC
the amount involved does not Secretariat, the head of the PMO or the
exceed the threshold, i.e One end-user or implementing unit, and the
Million Pesos (Php project consultants, by consanguinity
1,000,000.00) in case of or affinity up to the third civil degree.
NGAs, GOCCs, GFIs, SUCs, Failure to comply with the
and Autonomous Regional aforementioned provision shall be a
and Fifty Thousand Pesos ground for the automatic
(Php 50,000.00) in case of disqualification. Relation to the
barangays. aforementioned persons within the third
● Lease of Real Property and civil degree of consanguinity or affinity
Venue. Lease of real property shall automatically disqualify the bidder
and venue for official use. from participating in the procurement of
● Adjacent or Contiguous. contracts of the Procuring Entity
Where the subject contract is notwithstanding the act of such
adjacent or contiguous to an persons inhibiting themselves from
ongoing Infrastructure Project the procurement process. On the part
or Consulting Service where of the bidder, this provision shall apply
the consultants have unique to the following persons:
experience and expertise to a) If the bidder is an individual or a sole
deliver the required service. proprietorship, to the bidder himself;
● Agency-to-agency.
Procurement from another b) If the bidder is a partnership, to all its
officers and members;
c) If the bidder is a corporation, to all its d) A bidder has a relationship, directly
officers, directors, and controlling or through third parties, that puts
stockholders; them in a position to have access to
information about or influence on the
d) If the bidder is a cooperative, to all its
bid of another bidder or influence the
officers, directors, and controlling
decisions of the Procuring Entity
shareholders or members; and
regarding this bidding process. This will
e) If the bidder is a joint venture, the include a firm or an organization who
provisions of items (a), (b), (c), or (d) lends, or temporarily seconds, its
shall correspondingly apply to each of personnel to firms or organizations
the members of the said which are engaged in consulting
services for the preparation related to
joint venture, as may be appropriate. procurement for or implementation of
the project if the personnel would be
involved in any capacity on the same
All bidders also found to have project;
conflicting interests with each other
shall be disqualified to participate in e) A bidder submits more than one bid
the procurement at hand, without in this bidding process. However, this
prejudice to the imposition of does not limit the participation of
appropriate administrative, civil, and subcontractors in more than one bid;
criminal sanctions. A bidder may be f) A bidder who participated as a
considered to have conflicting interests consultant in the preparation of the
with another bidder in any of the events design or technical specifications of the
described in paragraphs (a) through (c) Goods and related services that are the
below and a general conflict of interest subject of the bid;
in
g) A bidder who lends, or temporarily
any of the circumstances set out in seconds, its personnel to firms or
paragraphs (d) through (j) below: organizations which are engaged in
a) A bidder has controlling consulting services for the preparation
shareholders in common with another related to procurement for or
bidder; implementation of the project, if the
personnel would be involved in any
b) A bidder receives or has received any capacity on the same project;
direct or indirect subsidy from any
other bidder; h) If a consultant combines the function
of consulting with those of contracting
c) A bidder has the same legal and/or supply of equipment;
representative as that of another bidder
for purposes of this bid; i) If a consultant is associated with,
affiliated to, or owned by a contractor or
a manufacturing firm with departments advise purchasers, of such assets; or a
or design offices offering services as consultant hired to prepare terms of
consultants unless such consultant reference for a project shall not be
includes relevant information on such recruited for the project in question.
relationships along with a statement in
the technical proposal cover letter to the 2.1 The Philippine Competition Act-2
effect that the consultant shall limit its
role to that of a consultant and disqualify Topic: Republic Act (RA) No.
itself and its associates from work in any 10667 (July 21, 2016), otherwise
other capacity that may emerge from the known as the “Philippine
project (including bidding for any part of Competition Act"
the future project).

The contract with the consultant

selected to undertake the project shall Legislative Intent:
contain an appropriate provision to such
effect; or Pursuant to the constitutional goals for
the national economy to attain a more
j) If there is a conflict among consulting equitable distribution of opportunities,
projects, the consultant (including its income, and wealth; a sustained
personnel and subcontractors) and any increase in the amount of goods and
subsidiaries or entities controlled by services produced by the nation for the
such consultant shall not be recruited for benefit of the people; and an expanding
the relevant project. The duties of the productivity as the key to raising the
consultant depend on the circumstances quality of life for all, especially the
of each case. While continuity of underprivileged and the constitutional
consulting services may be appropriate mandate that the State shall regulate or
in particular situations where no conflict prohibit monopolies when the public
exists, a consultant cannot be recruited interest so requires and that no
to carry out a project that, by its nature, combinations in restraint of trade or
shall result in conflict with a prior or unfair competition shall be allowed, the
current project of such consultant. State shall:
Examples of the situations mentioned
are when a consultant engaged to (a) Enhance economic efficiency and
prepare engineering design for an promote free and fair competition in
infrastructure project shall not be trade, industry and all commercial
recruited to prepare an independent economic activities, as well as establish
environmental assessment for the same a National Competition Policy to be
project; similarly, a consultant assisting implemented by the Government of the
a Procuring Entity in privatization of Republic of the Philippines and all of its
public assets shall not purchase, nor political agencies as a whole;
(b) Prevent economic concentration Definition of Terms
which will control the production,
distribution, trade, or industry that will (a) Acquisition refers to the purchase
unduly stifle competition, lessen, of securities or assets, through
manipulate or constrict the discipline of contract or other means, for the purpose
free markets; and of obtaining control by:

(c) Penalize all forms of (1) One (1) entity of the whole or part of
anti-competitive agreements, abuse another;
of dominant position and (2) Two (2) or more entities over
anti-competitive mergers and another; or
acquisitions, with the objective of
protecting consumer welfare and (3) One (1) or more entities over one (1)
advancing domestic and international or more entities;
trade and economic development.
(b) Agreement refers to any type or
form of contract, arrangement,
understanding, collective
Scope and Application recommendation, or concerted action,
whether formal or informal, explicit or
RA 10667 shall be enforceable against
tacit, written or oral;
any person or entity engaged in any
trade, industry and commerce in the (c) Conduct refers to any type or form
Republic of the Philippines. It shall of undertaking, collective
likewise be applicable to international recommendation, independent or
trade having direct, substantial, and concerted action or practice, whether
reasonably foreseeable effects in formal or informal;
trade, industry, or commerce in the
Republic of the Philippines, including (d) Commission refers to the Philippine
those that result from acts done outside Competition Commission
the Republic of the Philippines. (e) Confidential business information
It shall not apply to the combinations refers to information which concerns or
or activities of workers or employees relates to the operations, production,
nor to agreements or arrangements sales, shipments, purchases, transfers,
with their employers when such identification of customers, inventories,
combinations, activities, agreements, or or amount or source of any income,
arrangements are designed solely to profits, losses, expenditures;
facilitate collective bargaining in (f) Control refers to the ability to
respect of conditions of employment. substantially influence or direct the
actions or decisions of an entity,
whether by contract, agency or the consumer or the customer, by
otherwise; reason of the goods and/or services’
characteristics, their prices and their
(g) Dominant position refers to a
intended use; and
position of economic strength that an
entity or entities hold which makes it (2) The relevant geographic market
capable of controlling the relevant comprises the area in which the entity
market independently from any or a concerned is involved in the supply and
combination of the following: demand of goods and services, in
competitors, customers, suppliers, or which the conditions of competition
consumers; are sufficiently homogenous and
which can be distinguished from
(h) Entity refers to any person, natural
neighboring areas because the
or juridical, sole proprietorship,
conditions of competition are different in
partnership, combination or association
those areas.
in any form, whether incorporated or
not, domestic or foreign, including those 2.1 (a) Prohibited Acts-2
owned or controlled by the government,
engaged directly or indirectly in any Anti-Competitive Agreements
economic activity;
(a) The following agreements, between
(i) Market refers to the group of goods or among competitors, are per se
or services that are sufficiently prohibited:
interchangeable or substitutable and the
object of competition, and the (1) Restricting competition as to price, or
geographic area where said goods or components thereof, or other terms of
services are offered; trade;

(j) Merger refers to the joining of two (2) (2) Fixing price at an auction or in any
or more entities into an existing entity or form of bidding including cover bidding,
to form a new entity; bid suppression, bid rotation and market
allocation and other analogous practices
(k) Relevant market refers to the of bid manipulation;
market in which a particular good or
service is sold and which is a (b) The following agreements, between
combination of the relevant product or among competitors which have the
market and the relevant geographic object or effect of substantially
market, defined as follows: preventing, restricting or lessening
competition shall be prohibited:
(1) A relevant product market
comprises all those goods and/or (1) Setting, limiting, or controlling
services which are regarded as production, markets, technical
interchangeable or substitutable by development, or investment;
(2) Dividing or sharing the market, entities have no such object and the
whether by volume of sales or price established was in good faith to
purchases, territory, type of goods or meet or compete with the lower price of
services, buyers or sellers or any other a competitor in the same market selling
means; the same or comparable product or
service of like quality;
(c) Agreements other than those
specified in (a) and (b) which have the (b) Imposing barriers to entry or
object or effect of substantially committing acts that prevent competitors
preventing, restricting or lessening from growing within the market in an
competition shall also be prohibited: anti-competitive manner except those
Provided, Those which contribute to that develop in the market as a result of
improving the production or distribution or arising from a superior product or
of goods and services or to promoting process, business acumen, or legal
technical or economic progress, while rights or laws;
allowing consumers a fair share of the
(c) Making a transaction subject to
resulting benefits, may not necessarily
acceptance by the other parties of other
be deemed a violation of the Philippine
obligations which, by their nature or
Competition Act.
according to commercial usage, have no
An entity that controls, is controlled by, connection with the transaction;
or is under common control with another
(d) Setting prices or other terms or
entity or entities, have common
conditions that discriminate
economic interests, and are not
unreasonably between customers or
otherwise able to decide or act
sellers of the same goods or services,
independently of each other, shall not be
where such customers or sellers are
considered competitors.
contemporaneously trading on similar
terms and conditions, where the effect
may be to lessen competition
Abuse of Dominant Position substantially: Provided, That the
It shall be prohibited for one or more following shall be considered
entities to abuse their dominant position permissible price differentials:
by engaging in conduct that would (1) Socialized pricing for the less
substantially prevent, restrict or lessen fortunate sector of the economy;
competition:
(2) Price differential which reasonably or
(a) Selling goods or services below cost approximately reflect differences in the
with the object of driving competition out cost of manufacture, sale, or delivery
of the relevant market: Provided, That in resulting from differing methods,
the Commission’s evaluation of this fact, technical conditions, or quantities in
it shall consider whether the entity or
which the goods or services are sold or supplier which have no direct
delivered to the buyers or sellers; connection with the main goods or
services to be supplied;
(3) Price differential or terms of sale
offered in response to the competitive (g) Directly or indirectly imposing
price of payments, services or changes unfairly low purchase prices for the
in the facilities furnished by a goods or services of, among others,
competitor; and marginalized agricultural producers,
fisherfolk, micro-, small-, medium-scale
(4) Price changes in response to
enterprises, and other marginalized
changing market conditions,
service providers and producers;
marketability of goods or services, or
volume; (h) Directly or indirectly imposing unfair
purchase or selling price on their
(e) Imposing restrictions on the lease or
competitors, customers, suppliers or
contract for sale or trade of goods or
consumers, provided that prices that
services concerning where, to whom, or
develop in the market as a result of or
in what forms goods or services may be
due to a superior product or process,
sold or traded, such as fixing prices,
business acumen or legal rights or laws
giving preferential discounts or rebate
shall not be considered unfair prices;
upon such price, or imposing conditions
and
not to deal with competing entities,
where the object or effect of the (i) Limiting production, markets or
restrictions is to prevent, restrict or technical development to the prejudice
lessen competition substantially. of consumers, provided that limitations
that develop in the market as a result of
Note: The following are not prohibited or
or due to a superior product or process,
rendered unlawful under the Philippine
business acumen or legal rights or laws
Competition Act:
shall not be a violation of the Philippine
(1) Permissible franchising, licensing, Competition Act.
exclusive merchandising or exclusive
distributorship agreements such as
those which give each party the right to Note: There is no prohibition on having
unilaterally terminate the agreement; or a dominant position in a relevant market
or on acquiring, maintaining and
(2) Agreements protecting intellectual
increasing market share through
property rights, confidential information,
legitimate means that do not
or trade secrets;
substantially prevent, restrict or lessen
(f) Making supply of particular goods or competition. Moreover, any conduct
services dependent upon the purchase which contributes to improving
of other goods or services from the production or distribution of goods or
services within the relevant market, or
promoting technical and economic Commission shall be considered void
progress while allowing consumers a and subject the parties to an
fair share of the resulting benefit may administrative fine of one percent
not necessarily be considered an abuse (1%) to five percent (5%) of the value
of dominant position. of the transaction.

2.1 (b) Mergers and Acquisitions-2 Should the Commission deem it

necessary, it may request further
Review of Mergers and information that are reasonably
Acquisitions necessary and directly relevant from the
parties to the agreement before the
The Commission shall have the power
expiration of the thirty (30)-day period
to review mergers and acquisitions
referred. The issuance of such a request
based on factors deemed relevant by
has the effect of extending the period
the Commission.
within which the agreement may not
be consummated for an additional
sixty (60) days, beginning on the day
Compulsory Notification after the request for information is
(Section 17) received by the parties: Provided,
That, in no case shall the total period for
Parties to the merger or acquisition
review by the Commission of the subject
agreement wherein the value of the
agreement exceed ninety (90) days
transaction exceeds one billion
from initial notification by the parties.
pesos (P1,000,000,000.00) are
prohibited from consummating their When the above periods have expired
agreement until thirty (30) days after and no decision has been
providing notification to the promulgated for whatever reason, the
Commission in the form and containing merger or acquisition shall be
the information specified in the deemed approved and the parties may
regulations issued by the Commission: proceed to implement or consummate
Provided, That the Commission shall it..
promulgate other criteria, such as
increased market share in the In the case of the merger or acquisition
relevant market in excess of of banks, banking institutions,
minimum thresholds, that may be building and loan associations, trust
applied specifically to a sector, or across companies, insurance companies,
some or all sectors, in determining public utilities, educational
whether parties to a merger or institutions and other special
acquisition shall notify the Commission. corporations governed by special
laws, a favorable or no-objection ruling
An agreement consummated in violation by the Commission shall not be
of this requirement to notify the construed as dispensing of the
requirement for a favorable (b) The information that must be
recommendation by the appropriate supplied for notified merger or
government agency under Section 79 of acquisition;
the Corporation Code of the Philippines.
(c) Exceptions or exemptions from the
notification requirement; and

Effect of Notification (Section (d) Other rules relating to the notification

18) procedures.

If within the relevant periods stipulated,

the Commission determines that such Prohibited Mergers and
agreement is prohibited and does not
Acquisitions (Section 20)
qualify for exemption, the Commission
may: Merger or acquisition agreements that
substantially prevent, restrict or
(a) Prohibit the implementation of the
lessen competition in the relevant
agreement;
market or in the market for goods or
(b) Prohibit the implementation of the services as may be determined by the
agreement unless and until it is modified Commission shall be prohibited.
by changes specified by the
Commission.

(c) Prohibit the implementation of the Exemptions from Prohibited

agreement unless and until the pertinent Mergers and Acquisitions
party or parties enter into legally (Section 21)
enforceable agreements specified by
the Commission. Merger or acquisition agreement
prohibited under Section 20 may,
nonetheless, be exempt from prohibition
by the Commission when the parties
Notification Threshold (Section establish either of the following:
19)
(a) The concentration has brought about
The Commission shall, from time to or is likely to bring about gains in
time, adopt and publish regulations efficiencies that are greater than the
stipulating: effects of any limitation on competition
that result or likely to result from the
(a) The transaction value threshold and
merger or acquisition agreement; or
such other criteria subject to the
notification requirement of Section 17; (b) A party to the merger or acquisition
agreement is faced with actual or
imminent financial failure, and the
agreement represents the least considering the technological
anti-competitive arrangement among possibilities, extent to which substitutes
the known alternative uses for the are available to consumers and time
failing entity’s assets required for such substitution;

Note: The acquisition of the stock or (b) The cost of distribution of the
other share capital of one or more good or service, its raw materials, its
corporations solely for investment and supplements and substitutes from
not used for voting or exercising control other areas and abroad, considering
and not to otherwise bring about, or freight, insurance, import duties and
attempt to bring about the prevention, non-tariff restrictions; the restrictions
restriction, or lessening of competition in imposed by economic agents or by their
the relevant market shall not be associations; and the time required to
prohibited. supply the market from those areas;

(c) The cost and probability of users

or consumers seeking other markets;
Finality of Ridings on Mergers and
and Acquisitions
(d) National, local or international
Merger or acquisition agreements that restrictions which limit access by users
have received a favorable ruling from or consumers to alternate sources of
the Commission, except when such supply or the access of suppliers to
ruling was obtained on the basis of fraud alternate consumers.
or false material information, may not be
challenged.

2.1 (c) Disposition of Cases-2 Control of an Entity

In determining the control of an entity,
Relevant Market the Commission may consider the
following:
For purposes of determining the
relevant market, the following factors, Control is presumed to exist when the
among others, affecting the parent owns directly or indirectly,
substitutability among goods or services through subsidiaries, more than one
constituting such market and the half (1/2) of the voting power of an
geographic area delineating the entity, unless in exceptional
boundaries of the market shall be circumstances, it can clearly be
considered: demonstrated that such ownership does
not constitute control. Control also exists
(a) The possibilities of substituting
even when an entity owns one half (1/2)
the goods or services in question, with
others of domestic or foreign origin,
or less of the voting power of another competition in the relevant market
entity when: caused by the alleged agreement or
conduct, and if such impact is
(a) There is power over more than one
substantial and outweighs the actual or
half (1/2) of the voting rights by virtue
potential efficiency gains that result from
of an agreement with investors;
the agreement or conduct;
(b) There is power to direct or govern
(c) Adopt a broad and forward-looking
the financial and operating policies of
perspective, recognizing future market
the entity under a statute or agreement;
developments, any overriding need to
(c) There is power to appoint or make the goods or services available to
remove the majority of the members consumers, the requirements of large
of the board of directors or investments in infrastructure, the
equivalent governing body; requirements of law, and the need of our
economy to respond to international
(d) There is power to cast the majority competition, but also taking account of
votes at meetings of the board of past behavior of the parties involved and
directors or equivalent governing prevailing market conditions;
body;
(d) Balance the need to ensure that
(e) There exists ownership over or the competition is not prevented or
right to use all or a significant part of substantially restricted and the risk that
the assets of the entity; competition efficiency, productivity,
(f) There exist rights or contracts innovation, or development of priority
which confer decisive influence on areas or industries in the general
the decisions of the entity. interest of the country may be deterred
by overzealous or undue intervention;
and

Determination of (e) Assess the totality of evidence on

Anti-Competitive Agreement or whether it is more likely than not that the
Conduct entity has engaged in anti-competitive
agreement or conduct including whether
In determining whether anti-competitive the entity’s conduct was done with a
agreement or conduct has been reasonable commercial purpose such as
committed, the Commission shall: but not limited to phasing out of a
product or closure of a business, or as a
(a) Define the relevant market
reasonable commercial response to the
allegedly affected by the
market entry or conduct of a competitor.
anti-competitive agreement or conduct;

(b) Determine if there is actual or

potential adverse impact on
Market Dominant Position Forbearance
In determining whether an entity has The Commission may forbear from
market dominant position, the applying the provisions of the Philippine
Commission shall consider the Competition ACt, for a limited time, in
following: whole or in part, in all or specific cases,
on an entity or group of entities, if in its
(a) The share of the entity in the
determination:
relevant market and whether it is able
to fix prices unilaterally or to restrict (a) Enforcement is not necessary to the
supply in the relevant market; attainment of the policy objectives;

(b) The existence of barriers to entry (b) Forbearance will neither impede
and the elements which could competition in the market where the
foreseeably alter both said barriers and entity or group of entities seeking
the supply from competitors; exemption operates nor in related
markets; and
(c) The existence and power of its
competitors; (c) Forbearance is consistent with public
interest and the benefit and welfare of
(d) The possibility of access by its
the consumers.
competitors or other entities to its
sources of inputs; TRUTH IN LENDING ACT

(e) The power of its customers to switch REPUBLIC ACT No. 3765
to other goods or services;
AN ACT TO REQUIRE THE DISCLOSURE
(f) Its recent conducts; and OF FINANCE CHARGES IN CONNECTION
WITH EXTENSIONS OF CREDIT.
(g) Other criteria established by the
regulations. Section 1. This Act shall be known as the
"Truth in Lending Act."
There shall be a rebuttable presumption
Section 2. Declaration of Policy. It is hereby
of market dominant position if the
declared to be the policy of the State to
market share of an entity in the relevant
protect its citizens from a lack of awareness of
market is at least fifty percent (50%), the true cost of credit to the user by assuring a
unless a new market share threshold is full disclosure of such cost with a view of
determined by the Commission for that preventing the uninformed use of credit to the
particular sector. detriment of the national economy.

Section 3. As used in this Act, the term

(1) "Board" means the Monetary Board of the

Central Bank of the Philippines.
(2) "Credit" means any loan, mortgage, deed regulations prescribed by the Board, the
of trust, advance, or discount; any conditional following information:
sales contract; any contract to sell, or sale or
contract of sale of property or services, either (1) the cash price or delivered price of the
for present or future delivery, under which part property or service to be acquired;
or all of the price is payable subsequent to the
(2) the amounts, if any, to be credited as down
making of such sale or contract; any
payment and/or trade-in;
rental-purchase contract; any contract or
arrangement for the hire, bailment, or leasing (3) the difference between the amounts set
of property; any option, demand, lien, pledge, forth under clauses (1) and (2);
or other claim against, or for the delivery of,
property or money; any purchase, or other (4) the charges, individually itemized, which
acquisition of, or any credit upon the security are paid or to be paid by such person in
of, any obligation of claim arising out of any of connection with the transaction but which are
the foregoing; and any transaction or series of not incident to the extension of credit;
transactions having a similar purpose or
effect. (5) the total amount to be financed;

(3) "Finance charge" includes interest, fees, (6) the finance charge expressed in terms of
service charges, discounts, and such other pesos and centavos; and
charges incident to the extension of credit as
the Board may be regulation prescribe. (7) the percentage that the finance bears to
the total amount to be financed expressed as
(4) "Creditor" means any person engaged in a simple annual rate on the outstanding
the business of extending credit (including any unpaid balance of the obligation.
person who as a regular business practice
make loans or sells or rents property or Section 5. The Board shall prescribe such
services on a time, credit, or installment basis, rules and regulations as may be necessary or
either as principal or as agent) who requires proper in carrying out the provisions of this
as an incident to the extension of credit, the Act. Any rule or regulation prescribed
payment of a finance charge. hereunder may contain such classifications
and differentiations as in the judgment of the
(5) "Person" means any individual, Board are necessary or proper to effectuate
corporation, partnership, association, or other the purposes of this Act or to prevent
organized group of persons, or the legal circumvention or evasion, or to facilitate the
successor or representative of the foregoing, enforcement of this Act, or any rule or
and includes the Philippine Government or regulation issued thereunder.
any agency thereof, or any other government,
or of any of its political subdivisions, or any Section 6. (a) Any creditor who in connection
agency of the foregoing. with any credit transaction fails to disclose to
any person any information in violation of this
Section 4. Any creditor shall furnish to each Act or any regulation issued thereunder shall
person to whom credit is extended, prior to the be liable to such person in the amount of
consummation of the transaction, a clear P100 or in an amount equal to twice the
statement in writing setting forth, to the extent finance charged required by such creditor in
applicable and in accordance with rules and connection with such transaction, whichever is
the greater, except that such liability shall not
exceed P2,000 on any credit transaction.
Action to recover such penalty may be
brought by such person within one year from
the date of the occurrence of the violation, in
any court of competent jurisdiction. In any
action under this subsection in which any
person is entitled to a recovery, the creditor
shall be liable for reasonable attorney's fees
and court costs as determined by the court.

(b) Except as specified in subsection (a) of

this section, nothing contained in this Act or
any regulation contained in this Act or any
regulation thereunder shall affect the validity
or enforceability of any contract or
transactions.

(c) Any person who willfully violates any

provision of this Act or any regulation issued
thereunder shall be fined by not less than
P1,00 or more than P5,000 or imprisonment
for not less than 6 months, nor more than one
year or both.

(d) No punishment or penalty provided by this

Act shall apply to the Philippine Government
or any agency or any political subdivision
thereof.

(e) A final judgment hereafter rendered in any

criminal proceeding under this Act to the effect
that a defendant has willfully violated this Act
shall be prima facie evidence against such
defendant in an action or proceeding brought
by any other party against such defendant
under this Act as to all matters respecting
which said judgment would be an estoppel as
between the parties thereto.