NPM 029-2009

Requesting Entity: Philippine Economic Zone Authority (PEZA)

Issues Concern: Domestic Preference



Manner of application of Domestic Preference.

[T]he Flag Law recognizes two instances for the application of domestic preference, viz: (1) for unmanufactured and manufactured articles consisting of, or using, substantially, materials grown or produced in the Philippines, respectively; and (2) for domestic entities as defined under CA 138. Thus, it is posited that the procuring entity can opt to apply the domestic preference on the basis either of the nationality of the bidder or, of the country of origin and/or place of manufacture of the goods to be procured, as may be appropriate and/or warranted by the circumstances.

[T]he term "domestic preference" as understood under the Flag Law pertains to the premium given to (1) domestic entities; and, to (2) domestic bids, when they are completed against (1) foreign entities, and (2) foreign bids, respectively, assuming that all the participating bidders concerned passed the eligibility requirements under R.A. 9184.

Relatedly, we would like to inform you that the GPPB is presently deliberating on the proposed revisions to the IRR of R.A. 9184. One of the issues noted is the application of C.A. 138 as it relates to Section 43 of R.A. 9184 and its IRR-A.