On-chain honesty, off-chain irony: Questions about DBM’s blockchain bids

DECODED: TECH, TRUTH, AND THREATS

By Art Samaniego

Recently, I wrote an email to the Department of Budget and Management (DBM) raising what seemed like an irony, as the blockchain project for its Action Document Releasing System (ADRS) had already been launched in July 2025. Yet, the invitation to bid for the project was posted on PhilGEPS afterward.

It turns out that the latest posting was not for the original project, but for its renewal and expansion, now valued at P21 million per year, totaling P63 million for three years. Since DBM has yet to reply to my query, I am writing this follow-up piece to highlight the lingering questions about the process.

When the DBM unveiled its blockchain-powered project titled “Subscription to Immutable and Verifiable Attributes (Blockchain) for the Department of Budget and Management Action Document Releasing System (ADRS),” in July 2025, it was hailed as a groundbreaking move for government transparency. The system tokenizes budget documents, such as Special Allotment Release Orders (SAROs) and Notices of Cash Allocation (NCAs), as immutable records on-chain, allowing anyone to verify their authenticity via an online portal.

The project was implemented through a Service provider, which won the initial contract as the sole bidder in 2024. The winning bidder then tapped a technology partner to develop and implement the blockchain solution.

While the outcome was historic, as it made the Philippines one of the first governments to operationalize blockchain for budget control, the procurement process itself raises difficult questions.

From sole bidder to a P63-million renewal

The initial contract was awarded at P 7.999 million, with only one company participating in the bidding. While compliant with procurement law, the lack of competition was a red flag. It suggested that the technical requirements were so narrowly defined or the solution so proprietary that other suppliers could not meaningfully participate.

Fast forward to today, DBM is preparing for a P63 million renewal and expansion, with pre-bid and opening of bids set for September 2025. The stakes are much higher, not just financially but in terms of public accountability. Will this second round of bidding finally invite competition, or will it simply extend the incumbent’s dominance?

The dilemma

The system is built on a Layer 2 blockchain protocol customized by a technology partner. This presents a fundamental challenge. If the ADRS already runs on the technology partner’s protocol, how can DBM guarantee a level playing field for other prospective bidders? Can new suppliers realistically compete if integration or continuity requires exclusive access to a proprietary platform?

Unless DBM addresses this head-on, the September bidding risks becoming another formality.

Some questions that DBM needs to answer, issues that go beyond technicalities, and strike at the heart of procurement fairness.

Technology & standards: Is the customized protocol mandatory, or can other blockchain Layer 2 protocols be considered? If alternatives are allowed, how will interoperability with existing records be maintained?

Ownership and intellectual property: Who owns the ADRS code, smart contracts, and registries, DBM or the technology partner? If another bidder wins, will they gain access to these assets, or will they need to start from scratch?

Procurement fairness: Will the Terms of Reference be drafted broadly enough to allow genuine competition, or will they implicitly favor the incumbent solution?

Long-term governance: Who will manage the blockchain registry in the future? Is it DBM’s internal IT team, the technology partner, or a neutral third party? And if another provider takes over, will continuity of public access be guaranteed?

Blockchain without fair procurement is just hype

DBM deserves credit for pioneering the use of blockchain in governance. The ADRS shows how technology can safeguard transparency and accountability in budget processes. But technology alone is not enough.

If the procurement process is structured in a way that only one player can realistically participate, then transparency exists only on-chain and not in the contracting process that sustains it.

Transparency beyond the ledger

Blockchain is meant to guarantee immutability and transparency in government documents. But if the procurement process itself is exclusionary, then the technology risks becoming a showcase rather than a reform.

DBM deserves praise for pioneering the use of blockchain in governance. But as it prepares to spend ₱63 million of public funds, it must ensure that competition is genuine, standards are open, and the system is future-proof. Otherwise, we will have immutable records, but a procurement process that looks very much like business as usual.

While the Department of Budget and Management acknowledged my inquiry, no official response has been provided as of this writing.

What I know is that the ADRS project has indeed minted records onto the blockchain, creating a finished contract and a real-world blockchain use case. But we must be clear about its limits. The system places documents, such as Special Allotment Release Orders (SAROs) and Notices of Cash Allocation (NCAs), on-chain, ensuring they cannot be tampered with once released.

That is a start, but it is not full budget transparency. True accountability begins not at the release of funds, but at the moment a budget is first discussed and allocated. Citizens deserve to see how public money flows from planning to approval to actual disbursement, not just the paperwork after the fact.

In short, the present system puts the records on blockchain, but not the money. It’s an important milestone, but it’s still limited. If DBM wants blockchain to rebuild trust truly, the chain must capture not just immutable documents but the entire budget trail from proposal to peso spent.

As of this posting, I am still awaiting DBM’s official response to my inquiry.