Nat'l ID supplier appeals contract termination, warns of rollout delays

AllCard Inc. (ACI), the company contracted by the Bangko Sentral ng Pilipinas (BSP) for the printing of Philippine Identification System (PhilSys) or National ID cards, is appealing the termination of its contract with the central bank, saying it has complied with its obligations.

In a motion for reconsideration addressed to the BSP’s Monetary Board, ACI said it “has diligently complied with the contractual obligations set forth in the Lot 1 Contract, as per the BSP’s Technical Specifications and Terms of Reference.”

“We have provided the necessary equipment, technical and maintenance support personnel, and conducted training for BSP and Philippine Statistics Authority personnel, as required,” the company said.

In a termination notice seen by GMA News Online, the BSP, in a decision dated August 15, cited several reasons such as “failure to deliver any or all of the goods specified in the contract, amounting to more than 10% of the contract price” and “failure to perform other obligations under the contract.”

It was also indicated that, as of June 30, 2024, the cumulative liquidated damages due from ACI have reached more than 10% of the contract price. 

However, ACI said that the “decision to terminate our contract may stem from erroneous information or reports.“

The company said that the termination may be based on inaccurate or incomplete information, “given that there has been no breach of contract.”

“We respectfully request a comprehensive review of our performance under the contract,” ACI said.

The company said it was tasked with producing 116 million National ID cards.

ACI warned that the contract termination could severely disrupt the rollout and distribution of the IDs, which are crucial for national security and public service.

“The termination of the contract will have significant adverse effects on the production and distribution of 116 million Philippine Identification Cards. As this project is vital for national security and public service, any disruption may cause delays that could affect millions of Filipinos,” the company said.

Moreover, ACI said the decision to terminate the contract will lay waste to approximately 60 million already produced cards, resulting in substantial financial loss and inefficiencies.

“We are taken aback by the Monetary Board’s decision to terminate the contract. This move is not only unjust and unfair but also detrimental to the smooth implementation of Republic Act 11055,'' ACI president Roy Ebora said.

“The abrupt termination of our contract with the BSP casts uncertainty over the future of the National ID project, potentially causing significant delays in the issuance of IDs that millions of Filipinos depend on for access to essential services,” Ebora added.

“AllCard has been a steadfast partner in the printing of National ID cards since 2020. We humbly appeal to the BSP to allow us to finish the job and to honor the contract,” he said.

In a text message to GMA News Online, BSP Governor Eli Remolona Jr. said that “the contract is subject to a pending arbitration between BSP and ACI.”

“In light of the confidentiality of arbitration, BSP is prohibited from disclosing matters relating to the proceedings,” Remolona said. — VBL, GMA Integrated News