Manila, August 20 (Engineering Daily) -- A bill "An Act to Regulate the Awarding of Contracts for Construction or Repair of Public Works" has been filed to remove investment restriction of foreign contractors on bidding for local public projects. It is for the reason that firms with over 75 percent Filipino ownership are only allowed to bid for the local public projects under the current law.
Senator Sherwin Gatchalian of Senate committee on economic affairs states the amendment is timely given the 'Build, Build, Build' program of the current government and he added that traffic jams in Philippines is attributed to insufficient road infrastructure. But he remarks foreign contractors are required for the government to establish massive infrastructures.
CA541 by National Assembly is a legislation which prevents foreign contractors to be involved in Phillipinese business. It was enacted on May 26, 1940 when Philippines was politically and economically in turmoil. It was gaining its full independence, establishing the government and promoting local capital and industrialization. Therefore, domestic preference policy had been adopted by the government and dominantly awarded public projects to local construction associates.
Gatchalian said this domestic preference policy has confined competition in the construction industry within the Philippines for 78 years and has discriminated in favor of domestic businesses with substantial market power and political influence.
He also noted that between 2010 and 2015, public construction grew by only 8 percent while private construction grew by 58 percent.
"The lack of genuine competition in the public construction industry impairs public welfare as there are fewer incentives for existing domestic firms to innovate and puts at risk the delivery of reliable, safety-compliant and quality public works," he said.