MANILA, Philippines – The Bangko Sentral ng Pilipias (BSP) has terminated its contract with the supplier of national IDs, All Card Incorporated (ACI), as delays continue to hound the delivery of millions of physical cards.

“The Bangko Sentral ng Pilipinas has terminated the contract with AllCard Incorporated for the Supply, Delivery, Installation, and Commissioning of Lot 1 Lease of Card Production Equipment for National ID Cards,” the BSP said in an official statement.

The BSP’s Monetary Board, which sources told Rappler decided on the termination about a month ago, cited multiple failures on the part of ACI as the reasons for ending the contract. These include a failure to deliver raw materials, a failure to maintain the leased printing machines, a failure to comply with instructions, and a failure to provide a realistic catch-up plan, based on a document seen by GMA News Online.

ACI was tapped by the BSP for the production of 116 million national ID cards. Under the P2.1-billion Lot 1 contract, ACI was supposed to lease printing machines to the BSP.

The central bank, which also prints the country’s banknotes, is in charge of printing the physical national ID cards, while the Philippine Statistics Authority (PSA) collects the data and manages the Philippine Identification System or PhilSys database.

National Statistician Dennis Mapa said that the PSA “trusts the assessment and decision of the BSP to terminate its contract with their supplier for the national ID card production.”

The central bank, in its official statement, also confirmed that the contract “is subject of a pending arbitration between BSP and ACI.”

Besides the cancelled contract, the BSP still has its P495-million Lot 2 contract with ACI for the personalization of the national ID cards. The BSP has yet to comment on how the recent termination would affect this other contract.

ACI earlier lost a bid to supply plastic cards for driver’s licenses, partly due to concerns about their ability to deliver in light of the issues with the national ID. After losing the bid, ACI obtained a temporary restraining order, which further aggravated the shortage of plastic card driver’s licenses.

What happens now?

While the BSP and ACI settle their legal dispute, tens of millions of Filipinos will still be left waiting for a physical national ID to be delivered to them.

Mapa said that the PSA “is taking necessary measures for the continuous issuance of National IDs,” although he did not clarify whether the contract cancelation could further delay deliveries.

As of August 2, 2024, PSA data show that 89,117,450 Filipinos already registered in PhilSys, which was nearly 97% of the 92 million target. However, less than 53 million cards have been delivered, which means that 36 million Filipinos who have already registered have yet to receive their physical national IDs.

In the meantime, Filipinos can use their ePhilID, which can be obtained from registration centers, and the digital national ID, which PSA launched earlier in June. These may serve as a valid proof of identity and age, just like the physical national ID card.

Filipinos who have registered under PhilSys can download their digital national ID on the national-id.gov.ph website or through the eGov PH mobile app.

Days before the termination of the contract became public, the BSP also issued a memo that required all banks and licensed financial institutions to accept the national ID — both its physical and digital version — as an official government-issued identification document, and “a valid and primary proof of identity, subject to authentication.” – Rappler.com