DTI bats for mandatory gov’t local procurement

Trade and Industry Secretary Alfredo E. Pascual said local producers will not only be given the token “margin of preference” but a “first crack” in government procurements as agencies will be required to source locally available supplies.

Pascual said this as DTI is set to launch in the next few months the still unnamed e-commerce platform for all local micro small and medium enterprises (MSMEs) from which government agencies must source their supplies.

Pascual explained that the planned e-commerce platform will be differentiated from other similar platforms through some unique features such as the e-catalogue and credit facility.

The e-catalogue is a directory of products and services available from local producers and their prices.

“If available from local producers, they (government entities) must buy,” he said noting that the current system only ensures “margin of preference” during bidding for local producers.

Pascual stressed that local producers will not just be afforded “margin of preference” in government procurement but government agencies will be mandated to buy locally available supplies from the DTI e-commerce platform.

“This is a sure way of government helping develop MSMEs as government is the biggest procurer in the Philippines,” he pointed out.

As prices are also published, he said “there is no opportunity for under the table deals and hopefully cut out corruption.”

Although the e-commerce platform is still a government instrumentality or owned by the government via the National Development Co. (NDC), the DTI-investment arm, Pascual said it will not be run by the government but by a private corporation to ensure it will not be affected by changes in political leadership.

On the credit facility feature, Pascual said that data of participants can be digitized and processed through AI to assess the credit standing of a merchant based on sales or procurement. The participant can use his credit score to justify his credit worthiness when he applies for financing from the credit facility.

Pascual further explained that the planned government e-commerce platform will not compete or replace existing commercial platforms, but rather a vehicle or mechanism to help MSMEs participate in the digital economy.

The platform will have learning component for MSMEs and it will be their staging point to digitize and in setting up digital storefront because this has a national scope that they can grow further.

“The e-commerce platform we’re setting up is a vehicle to help MSMEs for the digital economy,” he pointed out. This means educating the MSMEs into digitalization so there is a “learning component” like understanding digital payment system. He noted that the exposure of MSMEs is still small.

Thus, he emphasized the importance to help MSMEs upsize, upskill, and upscale so they can move up from being micro to small, to medium, and eventually become large enterprises. The platform is especially helpful for MSMEs in regions that are lagging behind, he said.