PM 003-2003

Requesting Entity: National Power Corporation

Issues Concern: Exemption of the Oil Procurement of the National Power Corporation from the Filipino Ownership/ Equity Requirement Provided under Executive Order No. 40, Series of 2001, its Implementing Rules and Regulations, and Republic Act No. 5183



Exemption from the Applicability of the 60/40 Filipino Ownership/Equity Requirement:
The relevant provisions of R.A. 5183 and R.A. 9162 only allow exceptions from the sixty percent (60%) Filipino ownership/equity requirement to address the principle of reciprocity among States and the availability of local goods, respectively. However, the reason of NPC in declaring a failure of bidding and requesting for an exception is the fact that only one supplier can comply with the Filipino ownership/equity requirement, which according to NPC, defeats the purpose of competition.

When this matter was raised during the 3rd GPPB meeting, the members unanimously agreed that the GPPB cannot grant exemptions from the Filipino nationality requirement over and above those provided in existing laws, such as, R.A. 5183 and R.A. 9162.

In view of the foregoing, we suggest that NPC still pursue the conduct of a public bidding and, should it decide to open the same to foreign suppliers, these foreign suppliers must comply with Section 1 of R.A. 5183, which would necessarily require a certification from the foreign bidder’s country of origin that its laws or regulations grant similar rights or privileges to citizens of the Philippines.