IMF backs procurement bill

The International Monetary Fund (IMF) expressed support for the passage of the proposed procurement law.

House Bill (HB) 4809, "An Act Providing for the Modernization, Standardization and Regulation of the Procurement Activities of the Government and for other Purposes" is scheduled for second floor deliberations when Congress resumes regular sessions in July.

An IMF investigative team was in Manila recently and among the many issues that it raised as "critical" is the passage of the proposed bill. A procurement law is believed to help the National Government in keeping its expenditures within targets.

Most critical will be a legislative framework for streamlining the bureaucracy, as well as the proposed new procurement law," IMF team leader Joshua Felman said. "They (measures) could reduce waste and thereby free up large amounts for budgetary resources for redeployment to priority projects."

Felman said they were concerned about the ability of the National Government to meet its 2002 budget deficit target of P130 billion. However, the IMF admitted that it was easier to make cuts in the expenditures rather than meet the revenue collection targets.

"These efforts on the revenue side will need to be supplemented by reforms on the spending side," the team leader said, adding that aside from meeting deficit targets the National Government must solve the growing non-performing loan (NPL) ratio of the country’s banking system.

President Arroyo certified in early June as urgent the passage of the procurement reform bill. Mrs. Arroyo said the immediate enactment into law of the proposed bill is needed "to address" the public emergency borne out of the pervasive malady of graft and corruption that has long plagued the government procurement system, impaired public service efficiency, and stunted national capacity for economic growth."

The National Government reportedly lost at least P21 billion yearly on corruption in the procurement level above.