Davao StartUp Week 2026 Convener Richard Day posted this on Facebook last week: “How might we eliminate procurement barriers so government agencies can easily buy and adopt government-funded R&D and startups?”
My short answer to his question is this: “Our government systems are not as innovative as the startups they support. I believe it is intentionally designed that way so that the usual suppliers and contractors get the contracts because they have a system in place for the SOP already. But government should put its money where its mouth is.”
Imagine spending millions of pesos developing a brilliant solution to a real problem—a new water purification system for rural barangays, a low-cost medical device, or an app that tracks construction projects in real time —only to watch it collect dust because the very agencies that funded it can’t figure out how to buy it.
That’s not a hypothetical. In the Philippines, it’s the default setting. We invest heavily in public research and development (R&D), yet our own bureaucracy is the biggest obstacle to turning that investment into real-world impact. The government should be the first and most enthusiastic customer of its own innovations, but instead, it remains chained to a procurement system designed for the last century.
The evidence is everywhere. Despite government funding, Philippine R&D is routinely hampered by complex procurement rules, bureaucratic delays, and missing markets that make technology transfer nearly impossible. We have the talent and the ideas. What we lack is a procurement framework nimble enough to let a startup or a research team actually sell their new product to the government that helped create it. This is exactly the gap that Republic Act No. 12009, the New Government Procurement Act, was supposed to close.
On paper, RA 12009 is a game-changer. It took effect in August 2024, and its Implementing Rules and Regulations (IRR) followed in February 2025. Crucially, Section 37 creates a “Direct Procurement for Science, Technology and Innovation” mode, allowing agencies to buy directly from qualified startups or procure “pre-commercial goods” to stimulate innovation and early market engagement. The National Innovation Council (NIC) even approved supplemental guidelines in late 2025 to streamline this process, explicitly aiming to reduce delays and let startups participate in government programs.
So why does it feel like nothing has changed? Because the gap between a law on paper and a purchase order on a desk is a treacherous one. In July 2026, the Government Procurement Policy Board had to issue a public advisory withdrawing a draft version of the IRR that had been circulating, reminding everyone to use only the official February 2025 version. If the central body overseeing procurement is still sorting out which rulebook to follow, what chance does a small startup have?
The transitory period, initially meant to smooth the shift, has become a crutch for agencies that are simply comfortable with the old, slower, and more familiar ways. They default to the lowest bidder and the thickest folder of documents, not the most innovative solution.
The deeper, uglier truth is that the system isn’t broken by accident. It is working exactly as designed for a powerful set of incumbents. The traditional procurement model — heavy on pre-qualification documents, large capitalization requirements, and long-standing “suki” relationships — is a fortress that protects established suppliers and contractors. These are the same players who have spent decades perfecting the art of winning government contracts, often through connections that have little to do with the quality of their goods.
Senate hearings have exposed how lawmakers allegedly “pre-arrange” projects, with Bids and Awards Committees disqualifying rivals on technicalities to favor chosen contractors. A 2025 report found that nearly 20,000 government contracts were awarded to firms with ties to public officials.
This cozy arrangement between politicians and traditional suppliers is the single greatest barrier to innovation. A startup with a brilliant, untested but potentially transformative product cannot compete in an arena where the game is rigged before the bidding even starts.
The “first customer” role that government should play is instead handed to the same old contractors who deliver the same old solutions, often at inflated prices. The result is a double loss: the public overpays for mediocrity, while the brilliant ideas from our own R&D labs and incubators are left to die on the vine. We are effectively subsidizing the past while starving the future.
Breaking this cycle requires more than just an IRR. It demands a deliberate, political commitment to change the incentive structure.
First, we need to aggressively operationalize the direct procurement provisions. Agencies must be given clear, public targets for procuring from startups and for pre-commercial R&D, and they should be rewarded for doing so, not buried in audits for trying something new.
Second, we must radically simplify the eligibility requirements for startups — accepting alternative proofs of capability and providing advance payments or milestone-based funding, just as the NIC’s stakeholder consultations have recommended.
Third, we need to flood the procurement process with sunlight. Real-time, open-data publication of all contracts, bidders, and beneficial owners would make it far harder for politicians to steer deals to their favored contractors. We should also impose strict conflict-of-interest rules, disqualifying firms linked to lawmakers and their relatives from bidding on projects in their districts.
The Philippines has all the ingredients for a vibrant, innovation-driven economy. Our scientists, engineers, and entrepreneurs are not the problem. The problem is a procurement culture that fears a new idea more than it fears another overpriced, underperforming contract from a familiar friend.
The change won’t come from another circular. RA 12009 gave us the legal tools to change this. The StartupPH registry is already live. We just need the political will to use them. We need to stop treating startup procurement as a pilot project and start treating it as a standard operating procedure (SOP).
Right now, the incentives point in the wrong direction. To flip them sooner rather than later, we need to make startup procurement the path of least resistance—and the path of least political risk—for the people actually signing the purchase orders.
The next procurement circular should not be another set of guidelines. It should be a scoreboard: agency, startup, contract value, date signed. Publish it. Rank the agencies. And let the ones still buying from the same old contractors explain why.
When the government needs a solution, it should look first to the brilliant ideas it already paid to create. To our lawmakers and agency heads: stop protecting the old guard. Open the door to our own innovators. Make the government the first customer of Filipino genius—not the last customer of Filipino mediocrity.
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