President Rodrigo Duterte has allowed the national government and local governments to pay more than 15% of advance market commitments, the limitation set by government procurement rules.

Presidential Spokesman Harry Roque announced on Thursday, February 18, that Duterte has signed a memorandum order allowing such payments, a document that his vaccine czar and mayors have asked for so they won’t be accused of flouting laws.

“The Palace confirms that President Rodrigo Roa Duterte signed today, February 18, 2021, the memorandum order on exceeding the 15% limit on advanced payments for the procurement of COVID-19 vaccines,” said Roque.

He added that Duterte also certified as urgent bills establishing a vaccine indemnity fund, a fund which would be used to shoulder hospital care or medical assistance to people who would experience side effects from taking a COVID-19 vaccine. 

The Palace is yet to release both documents.

Vaccine czar Carlito Galvez Jr has long spoken of the 15% limit as one of the obstacles faced by the national government in securing early supplies of vaccines from manufacturers. This is because pharmaceutical firms had asked for as much as 50% payment of advance market commitments in order to set aside doses for governments.

The Implementing Rules and Regulations of the Government Procurement Reform Act says that an advance payment “shall be made only after prior approval of the President, and shall not exceed fifteen percent (15%) of the contract amount, unless otherwise directed by the President.”

Duterte’s task force had found one way to skirt around this complication by using funds to be loaned by multilateral lending agencies like the Asian Development Bank and the World Bank. That these funds are considered development assistance would make them exempt from the rule, according to some members of the Cabinet, including Roque.

The tripartite deals with private companies had also been one way around the rule as it would be the private sector shouldering the advanced payments.

Companies were the first Philippine entities to secure vaccine doses, from British-Swedish firm AstraZeneca.

Why only now?

Yet Duterte’s memorandum order comes 3 months after Galvez had asked for such a crucial document from the President.

Days after, the President had verbally approved the payment of advance market commitments (AMCs) by government.

While the national government has managed to get loans to pay AMCs and has already paid its contribution to the Covax Facility, local governments had asked for an exemption to the 15% limit since they are negotiating directly with pharmaceutical firms.

Doses secured by cities are expected to arrive in the second quarter of 2021 but this would depend on whether or not LGUs can comply with the vaccine deals, which include the payment of AMCs. – Rappler.com