When government awards billions of pesos in procurement contracts, what happens next may result in taxpayers’ money spent honestly and efficiently, or wasted in rigged bids, padded costs, and sham projects that drain public coffers.

Government spending through procurement lies at the heart of governance. The procurement process determines who builds the nation’s roads and bridges, supplies hospitals and schools, equips offices, delivers public services, etc.

The World Bank has identified corruption in public procurement as one of the highest impact areas of mis-governance. Globally, governments spend an average of 13 percent to 20 percent of GDP on public procurement. Of that, estimates suggest that between 10 percent to 25 percent of the value of contracts can be lost to corruption — through bribes, overpricing, kickbacks, or use of conduits.

But in the Philippines, the cost of corruption may be higher than the global average, with persistent reports in the past indicating that no less than 40 percent of the contract amount can be pocketed. If ₱100 billion is spent, for instance, a staggering ₱40 billion is simply drained off, enriching the corrupt and their cohorts, while leaving taxpayers shortchanged.

The need for reforms overhauling the government procurement system, therefore, is imperative. When procurement is efficient and honest, public funds are spent wisely and maximized. If it is corrupt and opaque, the staggering losses continue to mount and accountability collapses.

“Procurement is the second biggest item and a very important part of the budget, it has to be efficient and economical,” former Finance Secretary and now Monetary Board member Dr. Benjamin Diokno said in last week’s Kapihan sa Manila Hotel, as he emphasized the need for procurement reform and professionalization of the procurement workforce.

Without professional standards, procurement offices will remain havens for incompetence or collusion. In many parts of the world, successful procurement depends on trained specialists, not on officials pulled into procurement duties. Procurement is treated as a professional career discipline with specialized training, ethical grounding, and strong focus on value-for-money.

“We need to develop that cadre of procurement specialists,” Dr. Diokno said. “In other countries, their procurement specialists are trained early on with the right values, honesty, integrity, and competency… We need meritocracy in government.”

Full digitalization is also imperative. While the Philippines already uses PhilGEPS (Philippine Government Electronic Procurement System), to post bid notices online, there is need for a more advanced, end-to-end digital platform — from planning to payment — where every transaction leaves a digital trail.

To address systemic weakness, Dr. Diokno said the full implementation of RA 12009 or the New Government Procurement Act (NGPA) enacted last year is essential to promote efficiency, effectiveness, value for money, and a "fit-for-purpose" approach in public procurement.

Among its crucial provisions is the “proportionality principle” which prevents agencies from imposing excessive requirements on bidders, making the process fairer and more inclusive.

The law also removes the rigid hierarchy of procurement modes, allowing agencies to use the most efficient method rather than being forced to start with competitive bidding every time—a system that has too often rewarded manipulation instead of merit.

The NGPA also enhances procurement planning through market scoping, lifecycle costing, and pooled procurement — tools that help ensure government agencies don’t overpay or overorder. The law introduces new procurement methods (such as Competitive Dialogue, Direct Acquisition, and Unsolicited Offer with Bid Matching) to make the system more flexible and responsive to modern needs.

It likewise embeds sustainable and green procurement, a timely addition that considers social, environmental, and economic factors. This is crucial in an era when public spending must not only be honest but also climate-conscious.

The NGPA introduces two new evaluation methods — Most Economically Advantageous Bidder (MEAB) and Most Advantageous Bid (MAB) — to ensure that decisions are based not only on the lowest price but also on quality, technical merit, and longterm value.

Reforming procurement is not just about plugging leaks—it’s about restoring public trust. A transparent, efficient, and technology-driven system could finally make “value for money” more than just a slogan.

Procurement reform can be deemed quite a success if these questions are answered affirmatively: Are bid opportunities advertised widely and early, or do only a few firms consistently win? Are awarded contracts consistent with market-based cost estimates and well-designed specifications? When big infrastructure is built, is it actually delivered on time, on budget, and performing as promised?

Are procurement records publicly available, in machine-readable form, so watchdogs can scrutinize them? And is there a professional cadre of procurement specialists accountable for integrity and results?

In an era when many Filipinos are increasingly skeptical of government integrity, procurement reform offers a concrete path forward. It’s not just about plugging leaks — it’s about restoring public trust through a transparent, efficient, and technology-driven procurement system. ([email protected])