DBM issues new rules on vehicle purchases

MANILA, Philippines — The Department of Budget and Management (DBM) has issued additional guidelines on the government’s centralized procurement of motor vehicles mainly aimed at prohibiting the purchase of luxury cars.

Janet B. Abuel, DBM officer in charge, on May 16 issued Budget Circular 2019-3, which serves as the implementing rules and regulations of Administrative Order (AO) No. 14 signed by President Duterte last December.

AO 14 reiterated the ban against buying and using luxury cars among government offices, including state universities and colleges (SUCs), government-owned and -controlled corporations (GOCCs), government financial institutions (GFIs), as well as local government units (LGUs).

The latest DBM circular was a follow-through to the initial guidelines contained in Budget Circular 2019-2 issued by former Budget Secretary and now Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno, which also clarified certain provisions of AO 14.

Allowable displacement

The Diokno-approved circular listed down the allowable engine displacements of vehicles that government agencies can purchase and laid down the rules on who approves requests to buy motor vehicles.

As vehicles are now included in the list of common-use supplies and equipment of the DBM-attached Procurement Service (PS)—the centralized body handling government procurement, the new budget circular mandated vehicles serving the following purposes to be included in the centralized acquisition: exercise of executive functions; transport of personnel, equipment, supplies, products and materials; transport of sick and/or injured persons; patrol operations; and firefighting operations.

However, “motor vehicles that are used exclusively for the internal and external safety or defense of the state and require highly specialized and customized specifications shall be exempted from the centralized procurement through the PS,” the DBM said.

The exemption from centralized procurement of government vehicles covered heavy armored fighting vehicles and military trucks and tanks deployed in combat operations.

Exempted

Also, “motor vehicles which are to be used in foreign posts, the procurement of which in the country of assignment/deployment is deemed more practical and economical, shall likewise be exempted from the centralized procurement through the Procurement Service,” the DBM added.

For all other types of vehicles, the DBM said “government agencies are not restricted or prohibited from engaging the services and expertise of the PS in procuring their motor vehicle requirements.”

In December last year, the DBM said AO 14 was issued to “ensure that the acquisition of government motor vehicles will be guided by the principles of functional suitability, affordability and practicability.”

“The new system will also ensure that the guidelines on the technical specifications of motor vehicles are up to date, and will prohibit the acquisition of luxury motor vehicles in all national government agencies, including GOCCs, GFIs, SUCs, as well as LGUs,” the DBM had said.

“A centralized procurement system is consistent with the government’s objective to adopt economies of scale in its operations by purchasing from legally, technically and financially capable sources in economic lot sizes, observing cost-efficient specifications and making prompt payments. Such a system will also economize the procurement of government vehicles by streamlining and rationalizing the approval process for requests in an efficient manner,” according to the DBM.

AO 14 nonetheless does not cover the following: vehicles used for security of the President and Vice President; vehicles donated to the Philippine government or any of its agencies by foreign governments; vehicles used for visiting foreign dignitaries; and vehicles acquired using funds from existing official development assistance programs.