DTI chief Lopez responds to construction firms' woes amid metal price surge

Published June 20, 2021, 3:55 PM

by Ellson Quismorio

Department of Trade and Industry (DTI) Secretary Ramon Lopez just gave a timely assist to local construction companies amid the alleged skyrocketing of metal prices in the ongoing coronavirus disease (COVID-19) pandemic.

DTI Secretary Ramon Lopez (Ali Vicoy / File photo / MANILA BULLETIN)
Information reaching the Manila Bulletin says that Lopez has endorsed a letter from the House of Representatives to the National Economic and Development Authority (NEDA) regarding the surge on metal prices and how it has impacted the business of domestic construction firms.

Reports said prices of metal have climbed by almost 200 percent in the past few months–a supposed effect of the limited imports coming from China as well as the high prices of steel and iron ore products in the global market.

The letter, written by Deputy Speaker Bernadette Herrera of Bagong Henerasyon Party-List, requested DTI to consider the possibility of implementing price adjustments in government construction contracts in light of the global metal price surge.

But Lopez said it is the NEDA, not the DTI, that determines contract price adjustments or escalations pursuant to Republic Act (RA) 9184 or the Government Procurement Reform Act.

Lopez subsequently forwarded Herrera’s letter to NEDA and the Government Procurement Policy Board (GPPB) under the Department of Budget and Management (DBM) and Department of Public Works and Highways (DPWH) for appropriate action.

Lopez said applications for contract price escalations are covered by Section 61 of the Implementing Rules and Regulations (IRR) of RA 9184, which provides that contract price adjustment may only be considered during extraordinary circumstances and upon prior approval of the GPPB.

Such requests, he said, shall be submitted to NEDA together with the endorsement of the procuring agency, which in this case is the DPWH.

For the DTI chief, the prevailing COVID-19 pandemic falls within the definition of “extraordinary circumstance” as contemplated in Appendix 15, Section 4.3 of the said IRR.

He added that the DTI “commits to assist in the process, particularly on providing inputs, if needed, to supplement or validate data on ‘Price Indices’ as contained in Annex A of Appendix 15 of the said IRR”.

Lopez also recommended that a policy discussion be initiated by the GPPB or NEDA to determine how to expeditiously address contract price adjustments during the period of public health emergencies without the necessity for each contractor to individually seek NEDA confirmation of price escalation.