Closing the Floodgates of Corruption: The New Government Procurement Act and its Role in Combating Bid-Rigging in the Philippines

Atty. Benzon A. Rambayon and Pauline S. Herrera | September 23, 2025

Recent severe flooding in Luzon, including Metro Manila, caused by successive tropical storms and the southwest monsoon, affected millions of Filipinos, damaged homes, businesses, and roadways, and even resulted in casualties. While flooding has long been a recurring problem in the Philippines, a more insidious issue has come to light.

On July 28, 2025, during his fourth State of the Nation Address (SONA), President Ferdinand Marcos Jr. exposed alarming irregularities in the use of public funds for flood control projects. Of the ₱545 billion released for these projects since July 2022, roughly ₱100 billion—or about twenty percent (20%)—was funneled to just 15 contractors, with five firms cornering projects nationwide.[1] This revelation prompted physical inspections that uncovered ghost projects in Bulacan, and the ensuing probe has since broadened beyond the executive branch, with lawmakers, civil society, and journalists exposing the depth of alleged corruption. Billions of pesos are now suspected to have been lost through kickback schemes involving government officials and favored contractors.[2] 

Despite the established framework under the R.A. No. 9184 or the Government Procurement Reform Act, collusion among contractors and government officials, bid-rigging, and corruption have remained endemic in the country.

Thus, on July 20, 2024, R.A. No. 12009 or the New Government Procurement Act (NGPA) was signed into law and took effect on August 13, 2024, while its Implementing Rules and Regulations (IRR) were approved on February 4, 2025, and became effective on February 25, 2025. This legislation represents the most comprehensive overhaul of procurement laws since the passage of R.A. No. 9184.

The critical question now is whether the new mechanisms introduced under the NGPA can finally curb bid-rigging and corruption in government procurement.

What’s New in R.A. No. 12009 and its IRR?

Governing Principles and Scope

While the governing principles under R.A. No. 9184 focused only on transparency, competitiveness, accountability, and public monitoring, the governing principles under the NGPA and its IRR explicitly center on principle-based transparency, competitiveness, efficiency, proportionality, accountability, participatory procurement, sustainability, and professionalism.[3]

Similar to the old law, the NGPA applies to all procurement of goods, infrastructure projects, and consulting services, regardless of the source of funds, whether local or foreign, by all branches and instrumentalities of the national government, its departments, bureaus, offices, and agencies, including SUCs, GOCCs, GFIs, and LGUs. The law also explicitly recognizes foreign-funded procurement rules if required by international agreements.[4]

Procurement modes

The old law limited procurement modes to competitive bidding and alternatives such as limited source bidding, direct contracting, repeat order, shopping, and negotiated procurement. The NGPA, however, expanded the list with more updated conditions provided in the IRR. The expanded list now includes competitive dialogue, unsolicited offers with bid matching, direct acquisition, direct sales, and direct procurement for science, technology and innovation.[5]

Award criteria

Under the old law, price was primarily the determinant for the procuring entity, which had to ensure that contracts were awarded at the most advantageous prevailing price for the government.[6] Under the NGPA, non-price factors may now be considered in evaluating bids. Life Cycle Assessment (LCA) and Life Cycle Cost Analysis (LCCA) will be used to support strategic procurement management and ensure the smart and prudent use of government resources, subject to appropriate guidelines that will be issued by the Government Procurement Policy Board (GPPB).

LCA, for example, is used to assess the potential environmental and social impacts of goods, prioritize the most significant risks and opportunities for mitigation, determine the winning bidder during bid evaluation, and establish criteria for comparing potential market solutions.[7]

LCCA, on the other hand, shall be applied to calculate the total cost of acquisition, operation, maintenance, disposal, and to identify the evaluation criteria of the project or asset to enable procuring entities to determine long-term financial implications of their procurement projects, allowing them to select the most cost-effective approach that results in savings and financial sustainability of projects.[8]

Transparency add-ons

Transparency under the old law was characterized by posting opportunities on the Philippine Government Electronic Procurement System (PhilGEPS). The Bids and Awards Committee (BAC) also made the minutes of bid openings available to the public upon written request and payment of a fee.[9] Under the NGPA, stronger transparency measures were added, including the mandatory video recording of all procurement-related conferences for competitive bidding for goods costing above ₱10 million, infrastructure projects above ₱20 million, and consulting services above ₱5 million, and livestreaming of the preliminary examination and opening of bids. Procuring entities must ensure that copies of the video recording are stored for at least five years and made available to the public upon request and payment of a fixed fee. [10]

Beneficial ownership disclosure

The NGPA requires the disclosure of beneficial owners (the natural persons who ultimately own, control, or dominantly influence the entity) of bidding entities. All bids must be accompanied by a sworn affidavit of the bidder affirming that it is not related to the Head of the Procuring Entity, Procurement Agent, members of the BAC, the Technical Working Group (TWG), the BAC Secretariat, the head of the Project Management Office (PMO) or the End-User/Implementing Unit, or the project consultants, by consanguinity or affinity up to the third civil degree. Failure to disclose such relationships can result in disqualification of the bid, and blacklisting penalties in certain cases.[11] 

Professionalization and ethics framework

While the old law provided training programs to develop the capacity of the BAC, BAC Secretariats, and TWGs of Procuring Entities, the NGPA goes further. The Government Procurement Policy Board must now ensure the professionalization of procurement practitioners by developing a competency framework to identify the required skills, knowledge, and attributes of procurement positions, a certification framework to enhance procurement competencies through continued professional development, and a code of ethics for public procurement professionals.[12]

Mechanisms under the NGPA to Mitigate Bid-Rigging

“Bid rigging” occurs when competitors coordinate their actions to manipulate the outcome of a bidding process to their benefit. It is prohibited under R.A. No. 10667, or the Philippine Competition Act. The current probe into the alleged ghost flood control projects reveals that while some contractors consistently win bids, others reportedly profit by serving as “losing bidders.” A former government contractor has even revealed how public works projects are allegedly manipulated from the very start of the bidding process, pointing to collusion among lawmakers, contractors, and Department of Public Works and Highways (DPWH) officials.[13]

With the ghost flood projects as backdrop, the NGPA’s reforms suggest several mechanisms to mitigate bid-rigging and prevent similar anomalies. Specifically, beneficial ownership disclosure makes it more difficult for sister companies to conceal their interrelationships. This allows oversight bodies to spot repeated awards and intervene accordingly. Such a safeguard directly addresses situations like that of contractor Sarah Discaya, who admitted to owning nine construction firms that participated in DPWH projects—at times even submitting bids against one another for the same contracts.[14]

Moreover, the shift from the “most advantageous prevailing price” to a value-for-money approach that considers LCA and LCCA, when applicable, also weakens cover-bidding strategies that rely on artificially low bids (final detailed criteria are implemented through GPPB guidelines). Furthermore, the mandatory video recording of bid proceedings allows observers to access records and verify discrepancies.

Finally, procurement practitioners must now meet competency standards, with corresponding sanctions and penalties for any misrepresentation, collusive behavior, malicious multi-entity bidding by related interests, and false beneficial ownership entries.

Key Takeaways

The NGPA equips public procurement with practical safeguards that, if applied consistently, would have made the patterns revealed in the flood control controversy far harder to execute or conceal. Its combination of principle-based governance, digital transparency, expanded evaluation methods, and stronger oversight mechanisms provides a framework that, if properly implemented, could significantly reduce bid-rigging, ghost projects, and other procurement abuses.

Its effectiveness, however, will depend on execution. To ensure that the NGPA lives up to its promise, not only the oversight bodies such as the Commission on Audit, the Office of the Ombudsman, and the Philippine Competition Commission, but also the civil society and the citizens themselves, must play an active role in flagging irregularities in government procurement. If enforced faithfully, the NGPA may finally close the floodgates of corruption—not only in flood control but in Philippine public procurement as a whole.

[1] Brian James Lu, From ghost month to ghost projects, Philippine News Agency (2025) available at https://www.pna.gov.ph/opinion/pieces/1093-from-ghost-month-to-ghost-projects.

[2] Jean Mangaluz, List: Ongoing probes into anomalous flood control projects, Philippine Star (2025) available at https://www.philstar.com/headlines/2025/09/16/2473237/list-ongoing-probes-anomalous-flood-control-projects.

[3] Rep. Act No. 12009, sec. 3.

[4] Rep. Act No. 12009, sec. 4.

[5] Rep. Act No. 12009. Sec. 26.

[6] Rep. Act No. 9184, sec. 36.

[7] Rep. Act No. 12009 Rules & Regs., sec. 13.2.

[8] Rep. Act No. 12009 Rules & Regs., sec. 13.3.

[9] Rep. Act No. 9184, sec. 29.

[10] Rep. Act No. 12009 Rules & Regs., sec. 38.3.

[11] Rep. Act No. 12009 Rules & Regs., sec. 81.1.

[12] Rep. Act No. 12009 Rules & Regs., sec. 46.2.

[13] Andrea Taguines, How bids are rigged in flood control projects: a former contractor speaks, ABS-CBN News (2025) available at https://www.abs-cbn.com/news/nation/2025/9/12/how-bids-are-rigged-in-flood-control-projects-a-former-contractor-speaks-2005.

[14] Vince Angelo Ferreras, Sarah Discaya admits owning 9 construction firms that bid for the same projects, GMA News (2025) available at https://www.gmanetwork.com/news/topstories/nation/957675/sara-discaya-9-construction-firms-bidding-for-same-project/story/.

Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views and opinions of the Firm or any of its partners. This article shall not be construed as official legal advice from the Firm.

Atty. Benzon A. Rambayon is an associate lawyer who earned his Bachelor of Arts in Consular and Diplomatic Affairs from De La Salle-College of Saint Benilde (magna cum laude) and his Juris Doctor from the University of the Philippines College of Law.

Pauline S. Herrera is a paralegal who earned her Bachelor of Science in Legal Management from San Beda University, where she is also currently pursuing her Juris Doctor degree.

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