The government was able to buy only P660-million worth of medical grade personal protective equipment (PPEs) from local manufacturers, which are still suffering from excess capacity due to poor local demand as government procurement policy favors the cheapest price being offered by importers.
Marites Jocson Agoncillo, executive director of Confederation of Wearable Exporters of the Philippines (CONWEP), said that members of the Confederation of Philippine Manufacturers of PPEs (CPMP) were able to supply PPEs to the government only for the period November-December last year. CONWEP is the parent organization of CPMP.
“Because we were able to only join the government procurement process around end 2020 (Nov/Dec) period, from this only two members out of 5 generated contracts worth around P660 million. Apple to apple analysis, one of our repurposed firm on face mask was not able to ‘qualify’ or generate contract during the December/Nov bidding,” said Agoncillo.
So far, Agoncillo said CPMP members still suffer from excess capacity as they were not able to participate in the previous biddings in June and July 2020 of the Department of Budget and Management for the PPE supplies for the Department of Health.
CPMP is composed of 7 companies that repurposed their manufacturing plants into the production of PPEs following efforts by the Board of Investments and Department of Trade and Industry to establish a local PPE manufacturing to supply the huge demand in the domestic market and government. CPMP members responded to the call of the DTI and invested $35 million dollars to repurpose their operations into PPE factories. The group even committed to further expand with additional $36 million on anticipated higher government procurement of their products.
But government procurement, however, is dictated by the bidding system that prioritizes the lowest price bid. Agoncillo, said they were not privy to the price point difference between local and imported PPEs. “We were not privy to this data . What we know is that we still have excess capacities after the contract awards from the government . CPMP members were able to supply a portion of the government procurement , for this we are grateful,” she said.
But at the Senate hearing on Wednesday, Senate economic affairs committee chairman Senator Imee Marcos cited a report and said that “a very cursory review of all the winning bids will show that the same few companies continue to win them every bidding round.”
According to the senator, while the procurements were cheaper, the winning bidders allegedly offered non-medical grade PPEs, as opposed to those locally made that have passed international standards.
Marcos further said that of the government’s latest procurement worth P4.8 billion, local PPE manufacturers only got 14 percent of total bid.
Agoncillo also said that the entire CONWEP, which is composed of garment, shoes and bags manufacturers, retrenched 25,400 workers from June to December last year due to the lockdown.
The CPMP commitment was supposed to employ 7,500 but only three member firms were able to hire 3,500 workers because of their difficulty to hit projected capacity could due to lack of local demand of their products.
Agoncillo emphasized that what the local industry wants is the passage of four bills pending in Congress that would mandate government agencies to buy from local producers, especially during the pandemic.
“These bills are being supported by the BOI and DTI,” she said. There were four bills filed in the Senate and two versions of the same were filed in the lower house around 2nd/3rd quarter of 2020.
She urged for the crafting of a local procurement law similar to that of Thailand, Japan and US that focused on developing their respective critical PPE manufacturing industry.
DTI Secretary Ramon M. Lopez also said that his agency strongly backs these bills because the current government procurement policy is through competitive bidding process, which favors the cheapest product.
He noted that had the government was able to procure the DOH PPE supply from local factories, it could have saved some 3,500 workers.
The DTI chief cited how the CPMP members have repurposed from zero capacity to 3 million per month of PPEs (coveralls) and from 2 million face masks a month to 6 million units at present upon their prodding.