Bill to ease restrictions on foreign contractors

Published August 9, 2018, 3:23 PM

by Patrick Garcia

By Mario Casayuran

Senator Sherwin T. Gatchalian, chairman of the Senate energy and economic affairs committee, yesterday called for the lifting of investment restrictions in a 78-year-old law that prevents foreign contractors from bidding on locally-funded government public works projects.

Sen. Sherwin T. Gatchalian (Senate of the Philippines / MANILA BULLETIN)
Sen. Sherwin T. Gatchalian
(Senate of the Philippines / MANILA BULLETIN)

In filing Senate Bill 1907, Gatchalian said he seeks to “provide a more level playing field and extend equal opportunities to eligible and qualified domestic and foreign bidders to participate in the bidding by the government for public works projects.”

“This bill should be considered in the context of positioning the Philippines more competitively and attracting new investments in the construction industry, to enable the government to deliver the much-needed infrastructure that would support the country’s initiatives in providing a business climate conducive to investments in the country,” he said.

The Gatchalian measure seeks to amend Commonwealth Act No. 541 (CA 541) or “An Act to Regulate the Awarding of Contracts for Construction or Repair of Public Works,” to extend equal opportunities in awarding or negotiating contracts to eligible and qualified domestic and foreign contractors.

Under the current laws, only firms with 75 percent Filipino ownership or more are allowed to bid on locally-funded public works.

“This amendment is timely and very much needed given that the current thrust of the government is infrastructure development via the Build, Build, Build Program,” Gatchalian said.

“The reason we have traffic jams is because we are sorely lacking in roads and bridges, hence the need for a massive infrastructure program. But for simultaneous construction to happen, we need to have foreign contractors who can also participate in government projects,” he added.

Gatchalian said CA 541 was enacted on May 26, 1940 “at a time when the Philippines was still transitioning to full independence, setting up its own government, promoting local capital and industrialization, and establishing the basis for national defense while World War II was looming.”