PM No. 001-2015

Requesting Entity: United Nations Development Programme (UNDP)

Issues Concern: Request for a Resolution Stating that the Funds Received from the Government of the Philippines (GPH) to Finance UNDP Development Support Services are not Covered by the Provisions of Republic Act (RA) No. 9184



Whether UNDP could receive government funds without going through the process required under the Procurement Law

As a general rule, RA 9184 shall apply to the procurement of infrastructure projects, goods, and consulting services, regardless of source of funds, whether local or foreign x x x. For as long as public funds are utilized or is contemplated to be spent for any procurement activity, it shall, by force, fall within the ambit of the present procurement law.

An exception to this general rule is our faithful compliance to our international obligations under the time-honored principle of international law, pacta sunt servanda, which is, in fact, embodied in Section 4 of RA 9184 as it provides that any treaty or international or executive agreement affecting the subject matter of the Act to which the Philippine government is a signatory shall be observed.

The Convention of the Privileges and Immunities of the UN of 1946 (General Convention) was acceded to by the Philippines on 28 October 1947. Section 2 thereof provides that the UN, its property and assets wherever located and by whomsoever held, shall enjoy immunity from every form of legal process. On the other hand, the Standard Basic Assistance Agreement (SBAA) entered into force on 12 December 1977 upon notification from the Government of the Philippines of its ratification . Article IX, paragraph 1 thereof mandates the GPH to apply to the UN and its organs, including the UNDP, their property, funds and assets, among others, the provisions of the General Convention.

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[C]ontributions of the GPH to the UNDP becomes part of UNDP's financial resources and as assets of UNDP, are exclusively subject to UNDP's Financial Regulations and Rules that contains the applicable procurement regulations and rules

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We recognize the provisions of the SBAA in faithful observance of international obligations (pacta sunt servanda), such that procurement by UNDP utilizing funds received from the GPH pursuant to the SBAA is not governed by RA 9184 and its IRR, but by the UNDP Financial Regulations and Rules, subject to limitations contained in the Project Documents that may be concluded by the parties, such as but not limited to, thus;

a. The Procuring Entity lacks capacity to undertake the specific procurement project;

b. UNDP is capable of delivering the procurement requirements of the Procuring Entity in an efficient and timely manner; and

c. The request for assistance involves highly technical or highly complex procurement projects.