House tackles foreign role in infrastructure projects

January 18, 2018

Deliberations at the House of Representatives on the possible anti-competitiveness of construction laws continued as the committee on economic affairs chaired by Rep. Arthur Yap discussed the Build, Build, Build (BBB) program and foreign participation in the construction industry.

“The Philippine Competition Commission has presented a study that showed in Southeast Asia, we are one of the most expensive—if not the most expensive— [countries in which to build] infrastructure. And for a country very much lacking in infrastructure, do our laws help or not?"Yap said.

Rep. Luis Raymund Villafuerte cited laws on procurement of projects that inhibit local industry players from accepting projects and keeping pace with the boom infrastructure projects spurred by the BBB program.

He stressed the need to recalibrate the computation of net financial contracting capacity (NFCC) to increase the capability of local contractors.

The panel also deliberated on what constitutes as acceptable the extent of foreign participation in local projects.

Trade Undersecretary Ruth Castelo said the department supports the entry of foreign contractors if the P1 billion equity requirement is retained to protect smaller local contractors.

“We have many small- and medium-sized contractors. We have around 8,500 of them. The bigger ones only comprise about 1,500 contractors,” said Castelo.

Villafuerte argued that the addition of a foreign component often drives up the cost of a project. Projects are sometimes awarded to foreign entities despite the presence of capable local firms.

Rep. Bayani Fernando of Marikina was bullish on the ability of local entities to carry out large-scale projects.

“Let the Filipino contractors look for the right [foreign] partners who may have the technology. Or let the Filipino contractors buy the technology, if it is for sale... Otherwise, we’ll be engulfed and in the end the Filipino contractors will have no more jobs to do,” he said. DMS