Gatchalian wants to ease foreign restrictions on public works projects
MANILA, Philippines – Senator Sherwin Gatchalian filed a bill that aimed to give equal opportunity to foreign and domestic investors to bid for public works projects of the government.
Senate Bill No. 1009 proposed to amend the “already antiquated” Commonwealth Act No. 541 (CA 541), which regulated the awarding of contracts for construction or repair of public infrastructure.
Gatchalian, also the vice chairman of the Senate Committee on Economic Affairs, said amending this 78-year-old law was already long overdue. He added that the proposed bill would contribute to the Duterte government’s ambitious Build, Build, Build program, as it would attract more foreign investors to the country.
Section 1 of CA 541 states that no foreign bids shall be allowed for the construction of all infrastructure required for the national defense of the Philippines. The preference shall be given to Filipino or American contractors and domestic entities.
The senator proposed to remove these restrictions and instead mandate the state to extend equal opportunities to eligible and qualified bidders to public works projects of the government, in order to attract both domestic and foreign investments. He added that this would "improve market dynamism, encourage innovation, and reward good performance."
Gatchalian noted that public construction grew by only 8% from 2010 to 2015, while private construction grew by 58%. He said this wide gap was due to the lack of genuine competition in the public construction industry.
“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,” Gatchalian said.
The senator further said that the law’s restrictive policy has discriminated in favor of domestic businesses with substantial market power and political influence.
"The enactment of this measure will encourage and attract foreign firms that possess the capacity to construct vital projects and are capable of sharing technical expertise with local firms to enter the Philippine construction market,” he added. – Rappler.com