By Adella Chua. Original post on website of Southeast Asia Hivos (here)
Legazpi City, the capital of Albay province (Philippines), is relatively open and progressive compared to other local government units in the country. It is a hall of fame awardee for the Seal of Local Governance. It has been named Most Business Friendly City and has been recognized both for its competitiveness and climate practice. It has institutionalized a Performance Governance System scorecard to measure its achievements. It is known as one of the most popular convention sites in all of Luzon.
It follows that the city is receptive to the idea of fostering transparency in its public procurement practices. The chief local executive, Mayor Noel Rosal, has long expressed his support and pursuance of open contracting in the city. The city’s ordinance on freedom of information, being drafted by the council, already contains specific provisions pertaining to open contracting.
But as Layertech Labs has learned during the two years it has been working with the city government to establish a publicly accessible portal containing procurement information, securing top-level buy-in is not all there is to it. With regard to open contracting and public procurement, support and commitment have to come from all levels of the LGU and other stakeholders.
Frei Sangil, Layertech co-founder and CEO, says the May 2019 elections and the subsequent changes in people’s positions complicated their task, because they had already worked with some individuals only to see them get transferred to other units.
Some employees of the city government’s Bids and Awards Committee had varying reactions to the idea of making procurement records available to the general public. Those who had been in their posts for many years, were defensive or dubious at the outset about collaborating with Layertech. After all, the brains behind Layertech were young adults who had yet to establish their clout and credibility. Others, while willing, were hampered by poor filing systems, lack of infrastructure, or limited tech know-how.
Thus, amid the other demands of the project, Sangil and her team had to take some time to explain the merits of open contracting to them to ensure their full support.
Getting the business sector on board
Explaining OC to the new city council was made easier for Layertech now that they had a new result to show. Layertech had built a portal, OCDex.tech, a portal containing basic procurement information that is available to the public.
Layertech explained to the new government officials that opening up on procurement using this portal had been a good idea.
The transparency of the portal had improved trust with citizens and investors had become more keen to work with the city council.
One of the main resources available in the portal is the Business Intelligence (BI) report that Layertech had developed with Bicol University. Responding to the buzz and curiosity of the business community, specifically the Albay Chamber of Commerce and Industry, this study used data from PhilGEPS, the Philippine portal for procurement data, to paint a picture of the procurement situation not only in Legazpi but the entire Albay province.
Having information that shows the bigger picture is proving to be interesting for the business community. They could see their own business in relation to what the city/ provincial government needs, and is actually procuring.
“Investors would want to work with the city inevitably if they have this,” says Sangil. “This has been useful to businesses at a practical level. Since [the business community] saw this, it became a major driving force in the entire effort.”
Sangil says the BI report greatly helped them gain support not only from the business owners and executives who stood to benefit from the information, but also from the LGU employees who held the private sector leaders in high regard.
Spreading the word
But this enthusiasm didn’t immediately translate to areas outside of the capital. “We were lucky here in Legazpi,” says Sangil. Other local government units across Albay province have a very different procurement environment, and even more contrasting attitudes toward making procurement information open to the public.
What can be done, then, to work with LGUs that may not be as open and progressive? Sangil believes champions are necessary to initiate transparency. “I can see a greater role for media in such undertakings.”
Unfortunately in the province, “media” always comes with a negative connotation: It’s never just “media,” per se, but “media of (such-and-such politician).” Many journalists are known, not exactly for being impartial and objective, but as blatant supporters of political players. Reporting on public procurement often takes on a he-said-she-said nature as one politician accuses a rival of favoring contractors or bending the rules. “You read stuff like Politician A punched Politician B because the promised 20% kickback on a project was not delivered.”
There are pockets of good practice – for instance, some reports do focus on issues, not personalities, in the contracting process. “Some are able to report objectively. I think it is important that news organizations can support their own media,” Sangil says.
2020 – and beyond – vision
Why do businesses bribe, in the first place?
A study by Layertech revealed that businesses feel they must give bribes to facilitate transactions with government. “Because it’s faster. Because it makes you more sure of the outcome. Assuming that it’s a legitimate strategy, it means that the mechanism is so slow and so inefficient so that even if businesses shell out that additional cost by giving bribes, it will make things better for them,” Sangil says.
But if the system is improved, bribery will be nothing but an extra cost. “Bribe money will just mean losses for the company instead of something to guarantee profits.”
Sangil has learned that not all inefficiency is necessarily due to corruption, and says the most important aspect for sustainability is an open mindset, and continuous education of the people.
We should not lose sight of the goal, which is to strengthen the mechanism.
Hivos’ support for Layertech Labs and its initiative in Legazpi City is borne out of Hivos’ commitment to push for transparency in public procurement as a way of ensuring good governance and encouraging greater participation of the private sector.
The project with Hivos is set to be concluded mid-2020.
“Until this time and onward, we want to focus on establishing the practical use of the technology,” according to Sangil. They also want to build further technical capacity for scraping data, cleaning it, and making sure it can be used for visualization and analysis.
Sangil has also pondered the root causes of the problems which Layertech seeks to help solve. “I am a firm believer in design. To get people to use something, you have to embed usefulness and practical use in the design of a product.”