By Genalyn Kabiling
President Duterte has authorized the increase in the amount of advance payments for the government’s procurement of goods and services needed to address the coronavirus emergency.
Under Memorandum Order No. 48, the President adjusted the ceiling on advance payment to 30 percent of the contract amount, from the 15 percent stated in government’s procurement law, to hasten the delivery of goods and services by suppliers and contractors.
The same memorandum, signed last April 20, imposes a 50 percent maximum limit on advance payment for lease contracts of real properties that will be used for quarantine centers and other medical facilities.
“It is imperative to undertake timely and adequate meters to complement our healthcare facilities, support our health workers in containing the further spread of the COVID-19 virus, and provide for the basic needs of our countrymen during his public health emergency,” the memo read.
“The COVID-19 outbreak is unlike any other calamity or emergency that confronted our country in recent years, as it has already dealt an incomparable blow to the overall health and security of the population and the economy and continues to threaten more lives and livelihoods,” it added.
The President’s decision to relax the rules on government payments came following the recommendation of the Government Procurement Policy Board. A board resolution recently recommended to the President the allowable rates of advance payment for the procurement of goods and services and lease of property under the Republic Act No. 11469 (Bayanihan law).
The latest Palace order has invoked the Bayanihan law that grants the President’s temporary emergency authority to undertake the procurement of goods, services, and lease of property as the need arises in the most expeditious manner.
Under the memo, the President said an advance payment not to exceed 30 percent of the contract amount shall be allowed for the procurement of goods such as personal protective equipment sets, medical equipment and supplies, medicines, testing kits, among others.
The same payment scheme is allowed in the procurement of goods and services for social amelioration measures; establishment, construction and operation of temporary medical facilities; utilities, telecommunications and other critical services in quarantine centers and other health-related sites.
The President also allowed a single advance payment, not to exceed 50 percent of the contract, for the lease of real properties that will house health workers or serve as quarantine sites, relief and aid distribution locations or temporary medical facilities “provided that the requirement of a down payment is a standard industry practice.”
All procuring entities have been directed by the President to release the advance payment to the supplier, contractor or lessor within three working days from the award of the contract.
The memo noted that market study done by the budget department showed that suppliers of medical supplies and PPEs prioritize buyers who are willing to make advance payment of at least 30 percent of the contract amount.