Gatchalian seeks amendment to 78-year-old law preventing foreign contractors from bidding for gov’t infra projects

(Eagle News)—Senator Sherwin Gatchalian has filed a bill seeking to remove restrictions preventing foreign contractors from bidding for locally-funded government public works projects.

Under  Commonwealth Act No .541, only firms with 75% Filipino ownership or more are allowed to bid.

In a statement, Gatchalian said that in filing Senate Bill No. 1907 that seeks to amend the 78-year-old  Commonwealth Act, he seeks to “provide a more level playing field and extend equal opportunities to eligible and qualified domestic and foreign bidders…”

“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, noting the government’s Build, Build, Build program.

He said the Commonwealth Act was also 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.”

As such, he said “the principle of competitiveness enshrined in the 1987 Constitution and in the Philippine Competition Act was not a priority in the minds of the National Assembly that enacted” the law at that time.

The result, he said, was that competition in the construction industry in the Philippines has “discriminated in favor of domestic businesses with substantial market power and political influence” for 78 years.

Proof, he said, was 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.