The Department of Information and Communications Technology (DICT) is rolling out a blockchain-based system intended to monitor the implementation of the 2026 national budget. The project is backed by a private sector grant from technology company Polygon.
The initiative is not undergoing the standard public bidding process, as it is structured as a grant-funded arrangement. This has raised questions about how existing procurement laws apply to the project.
In a legal commentary, Atty. Buko Dela Cruz examined whether a government agency may validly enter into a service contract without public bidding on the basis that there is “no cost to the government.” He stated that the short answer is no.
Dela Cruz cited Republic Act 12009, or the New Government Procurement Act signed on July 20, 2024, which updated Republic Act 9184 to strengthen efficiency, sustainability and transparency in public procurement. The law designates public bidding as the primary mode of procurement for goods, infrastructure projects and consulting services. Its implementing rules highlight transparency, fairness and competitiveness in all government transactions.
He also referred to Section 3(e) of Republic Act 3019, the Anti-Graft and Corrupt Practices Act, which prohibits public officials from causing undue injury to any party or granting unwarranted benefits to private entities through manifest partiality. Entering into a service contract without competitive bidding, he wrote, may raise compliance concerns if the selection process is not conducted through transparent standards.
Dela Cruz added that describing a project as having “no cost to the government” does not automatically exempt it from procurement requirements when a contract, memorandum of agreement or similar formal arrangement is involved.
The DICT’s blockchain budget tracking initiative, funded through a private grant and not subjected to public bidding, has brought attention to how procurement rules apply to grant-funded service agreements within government agencies.
