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By Camille A. Aguinaldo, July 19 2018; Business World
Image Credit to CNN Philippines
SENATOR Sherwin T. Gatchalian said he plans to file a measure that would allow foreign contractors to participate in public construction projects in support of the government’s Build, Build, Build program.
“We will file a legislative measure to allow foreign contractors to participate in government projects,” he told reporters after the Senate hearing on foreign investment laws, noting reported delays in infrastructure projects due to limitations in the capability of domestic contractors.
“The direction is to build more infrastructure… In order to have simultaneous construction projects, foreign contractors should be allowed join government projects,” he added.
He said Commonwealth Act No. 541, which gives preference to Filipino or US contractors to handle the construction and repair of public works, also needs amending.
At the Senate hearing, Bases Conversion and Development Authority (BCDA) President and CEO Vivencio B. Dizon said foreign contractors may fast-track public construction projects and introduce innovative methods to the industry.
“The BCDA fully supports the position of NEDA (National Economic and Development Authority) and the government’s economic team to ease restrictions on the foreign investment negative list, especially in the area of public construction,” he said.
He said foreign contractors bring to the table “depth of expertise,” especially for larger infrastructure projects.
“It gives local players the additional know-how and technology… It is also good for the government because it obviously improves the construction timeline. We can build faster because of the use of these new technologies,” he said.
European Chamber of Commerce of the Philippines (ECCP) Executive Director Florian Gottein said lifting the restrictions against foreign contractors would spur interest from European companies to participate in the Build, Build, Build program.
“It makes it easier for us to promote the Philippines for the opportunities we see in the Philippines to those companies,” he said.
The 10th Foreign Investments Negative List (FINL) issued in 2015 sets a maximum of 25% for foreign equity in public works funded domestically, which means foreign contractors can only participate via joint ventures with Filipino-owned companies.
Contracts for the construction and repair of domestically funded public works are being considered for liberalization by Malacañang as per Memorandum Circular No. 16 issued in November. The government has yet to issue the 11th FINL.