Ways Philippine agencies buy, and their peso limits

A draft for a lawyer to review, not yet final.

General information, not legal advice. The notice and the current rules always count. The Government Procurement Policy Board can adjust these limits.

Last checked against the official sources on 06-Nov-2026.

Short answers

What is small value procurement in the Philippines? A way of buying where the agency requests at least three price quotations. The limit is ₱2,000,000 for national agencies and lower for some local governments. One quotation is enough for the agency to proceed.

What is direct acquisition? A way of buying where the agency buys directly, with no canvass or request for quotations, when the approved budget does not exceed ₱200,000.

What is the small value procurement limit for local governments? It depends on the type and income class. It runs from ₱2,000,000 for 1st class provinces and cities down to ₱200,000 for 4th and 5th class municipalities and ₱100,000 for barangays.

How long is a government procurement notice posted? An invitation to bid is posted for 7 calendar days. A request for quotation above ₱200,000 is posted for at least 3 calendar days. At ₱200,000 and below, small value procurement needs no posting.

Is one quotation enough in small value procurement? Yes. The agency must request at least three, but receiving one is enough to proceed with evaluation.

Who decides how an agency buys? The agency's Bids and Awards Committee recommends the mode to the head of the agency. The head of the agency decides the award.

What are the limits at a glance?

Three modes matter most for peso limits. These figures come from the Implementing Rules and Regulations (IRR) of Republic Act (RA) 12009: Section 32 for Direct Acquisition, Section 34 for Small Value Procurement and Section 27 for Competitive Bidding. "ABC" means the Approved Budget for the Contract.

Below a limit, an agency can still choose Competitive Bidding. Above ₱2,000,000, other modes can still apply if their own conditions are met. Direct Contracting and Negotiated Procurement for emergencies, for example, have no such peso ceiling in their sections.

What is the small value procurement limit for local governments?

It depends on the type of local government unit (LGU) and its income class.

For barangays, the limit is ₱100,000. These limits apply to goods, infrastructure projects and consulting services.

Who decides how an agency buys?

The BAC recommends the mode to the Head of the Procuring Entity (HoPE). The mode is also part of the agency's Annual Procurement Plan. For modes other than the competitive ones, the BAC may delegate the work to the end-user or the procurement unit.

The Government Procurement Policy Board (GPPB) has a decision tree to help agencies choose. It is only a guide and does not settle which mode must be used.

Which goods must agencies buy centrally first?

Common-use supplies and equipment. These are everyday goods listed in the Electronic Catalogue of the Philippine Government Electronic Procurement System (PhilGEPS). Agencies must buy them from the Procurement Service of the Department of Budget and Management (PS-DBM), subject to availability. They may buy elsewhere in set cases, such as zero stock. SVP covers goods not available in PS-DBM. Direct Acquisition covers common-use items not available there.

How does Small Value Procurement work?

The agency asks for price quotations and awards to the best responsive offer.

1. The end-user sends the BAC a request with the specifications and the ABC.

2. Above ₱200,000, the agency posts the Request for Quotation (RFQ) or Request for Proposal for at least 3 calendar days. It posts on PhilGEPS, on its website if it has one, and in a conspicuous place at its premises.

3. The BAC sends the RFQ to at least three suppliers.

4. Anyone who responded to a required posting may also take part.

5. One quotation is enough to proceed. If none arrives, the agency may extend the deadline.

6. The BAC prepares an Abstract of Quotations listing who responded and at what price.

7. The BAC recommends the award and the HoPE approves it.

A pre-bid conference is optional. The rule requiring bid security names competitive modes and does not name SVP. The documents are in our guide to bid documents.

The 2026 GPPB edition of the IRR confirms in a footnote that purchases below ₱200,000 need no posting, even though SVP runs up to ₱2,000,000.

How does Direct Acquisition work?

The agency buys directly from a known and reputable source, with no canvass or RFQ. It covers non-common-use goods, common-use goods not available in PS-DBM, and services. The purchase must be reflected in the Annual Procurement Plan.

The HoPE may authorize the end-user to buy based on any of these:

• The supplier is registered with PhilGEPS.
• The goods are on an electronic commerce platform for delivery or pick-up on the date set.
• The goods are off the shelf and available right away.

The source must issue an invoice that follows Bureau of Internal Revenue rules, or other proof of delivery and payment acceptable to the Commission on Audit.

Note on exactly ₱200,000. The Act and the IRR say "not exceeding" ₱200,000. The GPPB decision tree asks "less than" ₱200,000. The decision tree describes itself as only a guide.

What is the timeline for Competitive Bidding?

Each step has a set period. Days below are calendar days.

If a deadline falls on a non-working day, it moves to the next working day.

Bids stay valid for the period in the bidding documents, up to 120 days from opening.

What securities does Competitive Bidding need?

Bid security goes in with your bid. Performance security comes after award.

You may also use a Bid Securing Declaration, which is a written undertaking instead of money.

What other modes might a small business meet?

Each has its own conditions.

• Limited Source Bidding. Direct invitation to pre-selected suppliers for highly specialized items. Posted for at least 3 calendar days.
• Direct Contracting. For proprietary goods, or goods from an exclusive dealer with no suitable substitute.
• Repeat Order. A further order from a previous winning bidder. It must be within 6 months of the Notice to Proceed, at no more than 25% of each item's quantity, and at the same or a lower unit price.
• Direct Sales. An agency buys non-common-use goods from a supplier that delivered them to another agency under a completed bid contract. It must be started within 6 months of acceptance.
• Negotiated Procurement, Two Failed Biddings. After two failed biddings, the BAC may negotiate. At least three suppliers are invited, and those who respond to the posting may join. The posting is at least 3 calendar days.
• Negotiated Procurement, Emergency Cases. For calamities and cases where immediate action is needed to protect life or property or restore vital services.
• Negotiated Procurement, Community Participation. Direct purchase of goods from local farmers and fisherfolk, and simple infrastructure with local community or social groups. Organized groups include microenterprises.
• Negotiated Procurement, Sagip Saka. For agricultural and fishery products from accredited farmers and fisherfolk enterprises.
• PhilGEPS Electronic Marketplace. Agencies can buy goods there from qualified merchants. PS-DBM evaluates merchants, and asks for a Platinum certificate and a track record statement among other documents.

Can an agency split a purchase to stay under a limit?

No. Splitting a contract into smaller amounts to get around the rules is not allowed. Buying per unit, by lot or by package is allowed, subject to budget, quantity, availability, delivery sites and market capacity.

About Verisio

Verisio is a private service that helps businesses find government opportunities and prepare for them. It is not a government website or a procurement portal. Posting, bid receipt, award and payment stay with the agency and PhilGEPS.