Introduction

This Factsheet outlines the current progress in advancing Sustainable Public Procurement (SusPP) in the Philippines, based on a desk review. The review applies an analytical framework of six Pillars (or "building blocks") of SusPP systems.

The Framework is designed to make clear that countries do not need to follow a linear step-by-step path to build effective GPP systems. Rather it is important to examine local contexts and prioritize the Pillars with the most potential in the country. No matter where a country starts, a balanced approach to implementation calls for progress on all Pillars to some degree.

This Factsheet is organized as follows:

• "Country Overview" section with executive summary, indicative maturity rating, key achievements, potential pathways forward and timeline of key events related to advancing sustainable public procurement.
  
• "State of Play & Forward Looking Analysis" section that summarizes the research findings from the desk review for each Pillar theme.
  
• "Key Stakeholders Driving the Agenda" explores opportunities for ADB teams to open discussions with country counterparts and add value to the work of partners.
  

The Factsheet is intended to be a living document that will be revised and improved as new information is uncovered and advances are made. It is designed to support the ADB training programs on SusPP.

The Philippines Development Plan 2023-2028 specifically recognizes green public procurement as a policy priority, as a concept that has had national policy support since 2004. Quezon City, in particular, is leading the way on “clean construction”, working to reduce the embodied emissions associated with construction of buildings and infrastructure by 50% by 2030.

Climate change poses significant risks to the country. Made up of an archipelago with over 7,500 islands, the Philippines is ranked as the most vulnerable country to climate change and natural hazards. On average 20 typhoons occur annually, causing rising sea levels that could displace millions and warming oceans that threaten sea life, an important food source for the nation.

Significant infrastructure investments are at risk due to the country’s vulnerability to climate change, especially water-related hazards. During Typhoon Odette in 2021, 36% of seaports were rendered inoperational and some municipalities had limited communications services for six weeks. Mainstreaming resiliency and sustainability considerations in infrastructure planning and investment is a key priority, including by promoting innovative technologies including nature-based solutions.

>> Snapshot of Sustainable Procurement Maturity Level

Maturity Level:

Intermediate Stage

Key Achievements

• Long-standing policy commitment to implement GPP Program since 2004
  
• Comprehensive GPP Roadmap developed in 2017 with implementation pathway
  
• Green market readiness confirmed for several local market sectors
  
• Technical specifications and ecolabelling criteria developed for 50+ product categories
  
• Training of trainer programs on GPP conducted
  
• Entry points identified in Quezon City for clean construction
  
• Monitoring system in place to track individual green contracts and GPP adoption at the agency level
  

Work underway

• GPP training program supported by GIZ
  

Potential pathways forward

• Expansion of training to raise awareness and capacity across government agencies and procurers Mainstreaming GPP trainings can widen the reach of advocating for GPP.
  
• Development of additional technical specifications for additional product categories, especially related to infrastructure and construction
  
• Continued monitoring of GPP implementation and updating of the GPP Roadmap as needed
  

>> Timeline of Implementation of Sustainable Procurement Activities

2003

2004

2013

2015

2016

2017

2021

2023

GPPB Resolution No. 25: Recognized the Public Procurement Roadmap 2017-2022 and approved list of Prioritised CSE and Non CSE products

Resolution No. 15, ​series of 2013: ​Approved the ​inclusion of GPP ​in procurement ​rules and ​procedures and ​set up formal ​technical and ​inter-agency ​bodies in support ​of GPP

Government Procurement Reform Act passed to modernize the national procurement system

Quezon City ​joins Global ​Lead City ​Network on ​Sustainable ​Procurement

Quezon City ​Green Public ​Procurement ​Ordinance of ​2021 requires at ​least one ​environmental ​criteria

Philippine ​Development ​Plan (PDP) ​2023-2028 ​recognizes ​SusPP as tool ​to expand ​domestic ​green ​markets

Executive Order ​No. 301/2004 ​(EO 301/2004): ​Established a ​Green ​Procurement ​Program in all ​Government ​Agencies

Philippine Development Plan (PDP) 2016-2022

set nation’s aspirations of inclusive and sustainable development including through public procurement

Pillar 1: Government Vision & Awareness of SusPP

Governments that establish a clear policy vision on SusPP can ​accelerate the shift from procurement as an administrative to ​strategic function, making clear how SusPP can deliver on ​important national social and environmental goals.

Progress to date:

The Philippines has set its vision to make GPP the norm in public ​procurement in the medium to long term. The country has a long-history of ​supportive policies for GPP, starting with the creation of its first national GPP ​Program in 2004, reinforced with further policies in 2013 and most recently in ​2022. The Philippine Green Public Procurement Roadmap, adopted in 2017, ​emphasises that “no separate track for green” will be introduced, rather the ​goal is public procurement that is green throughout. To achieve this, a ​systematic, staged approach to implementation is set out:

• starting with 10 Common-Use Supplies and Equipment (CSE) and 10 non-​CSE categories;
  
• encouraging procurers to select at least one green core criterion and ​learn-by-doing;
  
• add more product categories with time, prioritised based on a “radar” ​system that considers six factors: market readiness, environmental ​impact, cost implications, practicability, support to government ​environmental objectives and support to the local economy.
  

The adoption of GPP is recognized as aligning with many of the country’s ​policy aspirations outlined in the Philippine Development Plan (PDP) 2023-​2028. The PDP recognizes that in the post-COVID era, achieving the country’s ​climate ambitions will be difficult. It calls for action to promote resource-

efficient and cleaner production, particularly in the energy, transport and ​industry sectors. GPP is specifically recognized as a tool that can expand ​market opportunities for domestic manufacturing and production of green ​and climate-smart technology products.

The country’s GPP Roadmap admits that GPP for infrastructure projects is a ​complex aspiration that would need a separate roadmap as well as regulatory ​reform. In the meantime, GPP can be readily integrated into minor building ​upgrades in the field of repair work, lighting, paints, gardening, air conditioning, ​furniture and green building materials. Other potential ”green” entry points for ​building construction (e.g. office buildings, educational facilities, social ​housing projects) are noted, specifically the installation of solar panels and ​compliance with the green building standards.

Quezon City has emerged as a leader in setting a vision of “clean ​construction”, as a member of the C40 Cities Climate Leadership Group and ​Global Lead City Network on Sustainable Procurement. The City developed its ​own Green Public Procurement Policy in 2021. A 2022 study set out seven ​“highly recommended” measures in Quezon City, providing entry points for ​infrastructure projects to shift to clean construction:

• adapt and refurbish structurally sounds buildings rather than demolish
  
• build physical waste processing infrastructure , including material reuse ​facilities, recycling centres and local materials disposal routes
  
• cultivate a flourishing local sustainable materials sector
  
• build to future design standards for heating and flooding
  
• create low carbon and resilient streetscapes
  
• collect and share data on clean construction initiatives and lessons learnt
  
• develop clean construction training, guidelines and tools.
  

Pillar 2: Legal & Regulatory Framework

Procurement law reform can be key to clear obstacles to implementation by establishing "value for money", not "lowest price", as a core procurement objective, and authorizing procurement approaches suited to SusPP.

Progress to date:

Public procurement in the Philippines is regulated by the Government Procurement Reform Act (2003) and its Implementing Rules and Regulations (last updated in 2021). The GPRA established a modern procurement system aligned with international standards that achieves anti-corruption goals and sets up a robust e-procurement system.

While current procurement legislation does not hinder adoption of GPP, amendments have been called for to remove potential obstacles. In particular:

• The law mandates that contracts are awarded based on the Lowest Calculated and Responsive Bid for goods and infrastructure projects. Amendments may be needed to allow officials to consider life-cycle costs and procure based on overall “value for money.”
  
• The law does not allow reference to brand names as requirements in bidding documents since it will limit competition. This clause has been interpreted to include “eco-labels”, and made procurers hesitant to adopt GPP.
  

Legislative reform could include explicit mention of the GPP and related concepts (i.e. life-cycle costing, total cost of ownership) integrated into the Procurement Act and IRR, as well as the Generic Procurement Manual and Philippine Bidding Documents

Pillar 3: Institutions & Capacity

Progress to date:

The key institutions responsible for implementation of GPP in the country are:

• The Government Procurement Policy Board (GPPB) is an independent inter-agency body responsible for policy oversight, coordination and monitoring, with both government and private sector representation. The GPPB brings together 13 government agencies and private sector representatives.
  
• The GPPB Technical Support Office (GPPB-TSO) oversees the implementation of GPP including amendment of rules and regulations, training and communications, monitoring GPP compliance and coordination with the international community.
  
• The Department of Budget and Management (DMB) leads the day-to-day implementation of GPP, in particular for CSEs through the Philippine Government e-procurement system (PhilGEPS). The DMB plays a critical role in the adoption of GPP across the country, through its function to identify environmentally-friendly items, including equipment and construction materials, which can be economically purchased through central procurement at the scale needed to influence the market.
  
• The Department of Environment and Natural Resources (DENR) runs the national ecolabelling program, Green Choice Philippines (NELP-GCP). It also sets minimum environmental standards on vehicle emissions and industrial wastewater, and partners with the Philippine Green Building Council to develop green building codes.
  

The Capacity Development Division (CDD) of the GPPB offers training ​courses on GPP for both government procurement practitioners and the ​private sector. The GPP module has been integrated into the general training ​needs assessment for procurement training requests in the country. A total ​of 140 GPPB Recognized Trainers have completed trainings on GPP, along ​with an additional 40 Procuring Entities (as of December 2021).

Pillar 4: Market Practices

Market dialogue throughout the procurement process helps ​procuring entities to choose realistic sustainability criteria and ​ensure suppliers succeed in delivering on sustainability ​commitments over the contract duration.

Progress to date:

The Government of the Philippines recognizes that designing realistic ​pathways for GPP adoption requires the close collaboration of the private ​sector. Private sector representatives are invited as members of the central ​Government Procurement Policy Board (GPPB) and consulted to inform the ​solutions proposed by GPPB Technical Working Groups. When designing ​specifications for bidding documents, procurers are required to conduct a ​market survey to determine if there will be sufficient suppliers for the goods ​they wish to procure.

Since 2015, a “Government Vendor Engagement Day” has been held annually ​to present the upcoming procurement plan for the next year. Before enacting ​new technical specifications through the online procurement portal, ​PhilGEPS, suppliers have the opportunity to give feedback. This aims to avoid ​surprises regarding market readiness and availability of green items, both for ​the procuring entities and the suppliers. The theme of the 2022 Procurement ​Summit was “Building Strong Supplier Relationships towards Innovative and ​Sustainable Public Procurement”, with sessions focused on encouraging new ​business models for green products and services. The Summit highlighted ​green purchasing programs led by private sector companies such as ​McDonalds. An online green product directory has been proposed and is ​under development.

Market studies and consultations have identified several sectors in the ​Philippines ready to provide green products and services. These include: auto ​manufacturers and auto parts industry; pulp and paper industry; plastics ​industry; housing industry (e.g. pains, air conditioners, refrigeration, LED ​lights); and, furniture industry. A 2016 market study in these sectors came to ​positive conclusions regarding market readiness.

Pillar 5: Procurement Operations

Various tools and procurement approaches can be employed to ​help procurers more easily identify environmentally friendly ​goods and services and attract a competitive market response.

Progress to date:

The initial Green Public Procurement program launched in 2004 focused on ​advancing the national eco-label, Green Choice Philippines, to identify green ​products and technologies. However, the national procurement law prohibits ​references to brand names in bidding documents, which was interpreted to ​include ecolabels. This conflict hindered progress in GPP adoption for years.

In 2017, a new approach was taken with the development of technical ​specifications for the priority items. This approach focused on simplicity, ​noting that although “although comprehensive criteria are available, the best ​practice is to refer to a few, in some cases, only to a single criterion ​depending on the nature of the subject; paramount is the feasibility of the ​approach and a lighter green approach is often more appropriate than a dark ​green ambition that probably fails due to sophistication.” The technical ​specifications provide one to five green criteria per product category and ​encourage procurers to include at least one in bidding documents. The ​country plans to start with a focus on the initial set of 20 priority product ​categories and develop more technical specifications with time.

Other legislation sets out programs, incentives and minimum standards ​that can inform the design of green procurements. The Green Building ​Code (2015) sets out performance standards for energy efficiency, water ​efficiency, material sustainability, solid waste management, site ​sustainability and indoor environmental quality. The national ecolabel, ​Green Choice Philippines, has developed green product criteria for 40 ​product categories, including cement, batteries, fiber cement boards, ​ceramic tiles and automotive engine oil. The GPPB website acts as a ​central repository for knowledge products on green public procurement.

Pillar 6: Monitoring & Impact Measurement

Monitoring systems are essential to gather the information ​needed to keep SusPP implementation on course and ​communicate on the benefits achieved for the country.

Progress to date:

All government procurements are tracked through the online procurement ​portal, the Philippine Government Electronic Procurement System ​(PHILGEPS). The technical specifications currently proposed for the 20 ​priority items are designed to be feasible to meet and verify without ​unreasonable burden. Options for verification of green attributes include ​ecolabelling programs, such as Green Choice Philippines or through any of ​the nine testing facilities listed in the Philippine GPP Roadmap. Testing is ​recommended periodically, especially for large contracts. A relationship of ​trust between procurers and suppliers is emphasized as critical. In the case ​of faked product information, procurers can exclude suppliers from a ​contract, blacklist them from future contracts and request compensation ​payments.

The GPPB-TSO monitors the implementation of GPP across government ​through these measures:

• request for annual status reports on GPP implementation from all ​government agencies, which the GPPB compiles for submission to the ​House of Representatives, with agencies encouraged to target at least ​30% of their planned budget for green products & services;
  

• requiring procuring entities to tag contracts with green specifications ​through the Agency Procurement Compliance and Performance ​Indicators (APCPI) tool;
  
• regular updating of the GPP roadmap as may be necessary.
  

As of 2020, the following achievements had been made:

• Six out of ten CSEs with green specifications (record book, toilet ​paper, disinfectant spray, LED lights, detergent powder, and cleaner) ​and four out of ten Non-CSEs with green specifications (computer ​monitors, vehicles, copiers, air conditioners) have been implemented.
  
• Total spending on CSE products amounted to PhP 147,547,681.85 (USD ​7 billion) while spending on non-CSE products totaled PhP ​3,134,074,204.35 (USD 150 billion) from the period of 2017 to 2020.
  

Projects Supported by ADB

ADB is working with Government Public Procurement Board (GPPB) of the Philippines to support the readiness and implementation of the proposed amendment of the Government Procurement Reform Act 2003 (RA 9184), as well as monitoring and evaluation of the sustainable procurement impact.

Other Initiatives supported by National/International Agencies

EU Switch Asia - Multi-year support to advance GPP policy and training, ​including development of the 2017 GPP Roadmap and follow-up 2020 Status ​Report.

GIZ - Support to install a permanent SPP unit in the Government Public ​Procurement Board secretariat and train GPP Focal Points across government ​agencies.

Resources

ADB Member Fact Sheet, 2023. Philippines.

C40 Cities (2022). Making the Case for Clean Construction Quezon City.

EU Switch Asia (2022). Philippines Country Report: Current Status of ​Green Public Procurement Implementation.

Republic of the Philippines, Government Procurement Policy Board,

Green Public Procurement technical specifications for priority product ​groups.

Republic of the Philippines, Government Procurement Policy Board (2017). ​The Philippine Green Public Procurement Roadmap.

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