Malaluan is a trustee of the Action for Economic Reforms. He is also a
practicing lawyer. This piece was published in the Yellow Pad column of
Business World, 12 April 2004 edition.

The May 2004 elections would have ushered in the bringing up to
standards of the country’s elections—if only plans had worked out. It
would have been the first attempt to implement an automated election
system on a nationwide scale, the high point in the Commission on
Election’s (COMELEC) modernization program. Voters would cast their
votes by shading the ovals opposite their chosen candidates among the
list of all candidates contained in security-marked and
municipality-coded ballots. At the close of the polls, the ballots
would have been brought immediately to centralized counting centers,
where automated counting machines (ACM) would appreciate the votes,
automatically add the votes to each candidate’s total votes, and print
out the election returns for each precinct and/or the total votes
obtained by each candidate for all the ballots that passed through the

The electorate must have been eagerly waiting to try such a system for
the first time. Not only would have they been spared the tedious task
of writing the names of their candidates for the national and local
positions, they would also have been spared the long wait for the
results of a manual count where many election irregularities are known
to occur. The teachers who compose the board of election inspectors at
the polling precincts could have also been relieved of having to do the
manual count. Such manual count often extends up to the late hours of
the evening and exposes teachers to harassment by election partisans,
including facing nuisance cases that can drag beyond the elections.

To be sure, an automated system will not be fail-safe, as any system in
the Philippines goes, but the electorate will take any system that
could be better than the historically problematic manual exercise.

But the process of election modernization has been difficult, expensive
and controversial. The modernization program traces its beginnings to
“Operation MODEX” (Modernization and Excellence) in 1992. MODEX aimed
to modernize the electoral process from voting to proclamation,
systematize the method of registration, clean up and update the list of
voters, and provide continuing election education to the public.
Unfortunately, MODEX was stricken heavy blows that crippled its

Strike one: the computerization of voters registration controversy

Republic Act 8189 or “The Voter’s Registration Act of 1996” was passed
into law in June 1996. This law provided for a new general registration
of voters in 1997, adopted a system of continuing registration
thereafter, mandated the creation and computerization of a permanent
list of voters, and authorized the issuance of identification cards to
registered voters.

As part of the implementation of RA 8189, the COMELEC approved the
Voter’s Registration and Identification System Project (VRIS) to
computerize and clean up the list of voters in time for the 2004
elections. Under the system, the fingerprint of registered voters shall
be digitally entered into the system and a tamper-proof identification
card shall be issued to them.

In 1999, the supply of the information technology requirements for the
VRIS was bid out. Photokina Marketing Corporation (PHOTOKINA), with a
bid amount of 6.588 billion pesos, was declared the winning bidder and
given the notice of award in September 2000. Pending the formal
execution of the contract, then COMELEC Chairman Harriet O. Demetriou
expressed objections to the contract. Succeeding Chairman Alfredo L.
Benipayo went one step further, announcing the scrapping of the VRIS
with a view to replacing it with a new program. It was at this point
that PHOTOKINA sought the intervention of a Quezon City Regional Trial
Court (RTC) to compel the formal execution of the contract, which in
turn granted PHOTOKINA’s prayer for a writ of preliminary mandatory
injunction. This was questioned by Chairman Benipayo and Commissioners
Resurreccion Borra and Florentino Tuason, Jr. before the Supreme Court.

The Supreme Court, aside from ruling that a petition for mandamus was
not a proper remedy to enforce the bid award, proceeded to rule on the
substantive issues of the case. It declared the proposed contract void
and not binding upon the COMELEC on grounds that the bid award violated
Constitutional and statutory provisions requiring government agencies
to limit their expenditures within the appropriations made by law for
the fiscal year. In the PHOTOKINA case, the bid award of P6.588 billion
was way above the P1 billion appropriated by Congress for the project.

With the PHOTOKINA contract falling through, the COMELEC in 2003
instead implemented the Voters’ Validation Project, using Data Capture
equipment to encode the voter’s photo, signature, fingerprints and
other data. Information technology (IT) professional Gus Lagman
criticized this subsequent project as a “big waste of taxpayer money”
because of, among others, the projected low voters’ participation in
re-registration. The COMELEC has yet to fully account for the impact of
the project on the voters list.

Strike 2: The Mega Pacific Deal

For the modernization of voting and canvassing, the COMELEC as early as
1993 contracted the services of consultants to evaluate alternative
voting and canvassing technologies. This was followed by a 15-day
inspection trip by a COMELEC team to the United States to conduct a
survey of the alternative systems.

After several limited pilot tests, the COMELEC geared up for full
automation in the 2004 elections. The project found legal basis in
Republic Act 8436 (Election Modernization Act) passed into law in
December 1997. In January 2003, along with the registration/validation
of voters’ project and electronic transmission of election results, the
COMELEC invited bidders for the supply of equipment required for
automated counting and consolidation of votes. The COMELEC awarded the
contract for automated counting and consolidation of votes to Mega
Pacific Consortium in April 2003.

In January 2004, less than four months from election day, came the
bombshell: The Supreme Court declared the automation contract void. The
Supreme Court made the finding that: The contract was awarded to Mega
Pacific Consortium, an entity that did not participate in the bidding;
the actual contract was signed by Mega Pacific eSolutions, Inc., a
company that joined the bidding but had not met the eligibility
requirements; and the computer hardware and software failed to pass
performance standards at the time of the award.

The law on contracts is that void contracts have no force and effect
from the very beginning, as if they had never been entered into, and
which cannot be validated by either time or by ratification. If the
obligations under the void contract have been performed, the
restoration of what has been given is in order.

On the basis of the nullity of the PHOTOKINA and the Mega Pacific
contracts as well as by the legal effect of void contracts, it would
appear that the public interest has been protected, and for which the
legal institutions deserve to be commended.

But there is a catch somewhere. Unlike the award to PHOTOKINA where the
contract was yet to be executed, the Mega Pacific contract had been
executed and the obligations partially performed. It appears from
reports that Mega Pacific had delivered Automated Counting Machines to
the COMELEC, which machines are still in the COMELEC’s possession. The
COMELEC, for its part, is reported to have already paid some P1.03
billion to Mega Pacific out of the P1.3 billion contract price. While
the law requires the parties to restore each other to their original
condition, this legal principle will have to contend with reality. The
feasibility of COMELEC being restored of the money paid to Mega Pacific
faces serious obstacles. For one, the Supreme Court decision itself
asserts, despite admissions to the contrary by the respondents in the
case, that it “has not seen any joint and several undertaking” by
members (Mega Pacific eSolutions Inc., the Korean firm SK C&C,
WeSolv, Ltd., and ePLDT) of the Mega Pacific Consortium.
With the status of the consortium uncertain, the COMELEC might have
recourse only against the contracting party of record, which is Mega
Pacific eSolutions. That entity appears to have been incorporated only
for the project, and we can presume that it has limited capitalization.
What could happen is that after a long legal tussle, the only assets
left to Mega Pacific from which to enforce the restoration are the very
same automated counting machines that COMELEC is unable to use in these

Perhaps we have been hit by so many anomalies in this country that we
cannot help but wince at this case. But, as in the past, it looks like
we’ll just bear it.