Deliberations at the House of Representatives on the possible anti-competitiveness of current construction laws continued as the Committee on Economic Affairs chaired by Rep. Arthur Yap (3rd District, Bohol) discussed the “Build, Build, Build” (BBB) program and foreign participation in the country’s construction industry.
“The Philippine Competition Commission has presented a study that showed that 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, nakakatulong ba [ang mga batas na] ito o hindi?” Yap said.
Rep. Luis Raymund Villafuerte (2nd District, Camarines Sur) 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.
“Sa sobrang daming projects ngayon, ‘yong mga nag-pe-perform na local contractors, nakikigamit ng lisensya sa [contractors na] malaki. Pero ang mga gumagawa naman talaga ay ‘yong maliliit na walang NFCC capability,” Villafuerte said.
The panel also deliberated on what constitutes as acceptable with regards to the extent of foreign participation in local projects.
Department of Trade and Industry (DTI) Undersecretary Ruth Castelo said their agency supports the entry of foreign contractors if the P1-billion equity requirement is retained, protecting 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 (1st District, Marikina), for his part, 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.
Meanwhile, Engr. Alex Bote of the Department of Public Works and Highways (DPWH) presented to the committee the status of implementation of big-ticket infrastructure developments under the BBB program with a target to spend P8-trillion by 2022.
The committee’s deliberations proceed from House Resolution 898, which mandates an inquiry into the desired economic policy direction of the Philippines regarding foreign participation in the ownership and operation of corporations and firms engaged in the construction business.
The panel voted to continue the discussion and further solicit the input of industry stakeholders in its next meeting.