Duterte urged to certify bills spurring entry of foreign contractors as urgent

Senator Win Gatchalian has urged President Rodrigo Duterte to certify as urgent three bills he recently filed seeking to encourage foreign contractors to participate in locally-funded public works projects.

In a statement on Sunday, Gatchalian noted that the proposed cash-based budgeting for 2019 calls for an “urgent need to foster true competition in government public works projects by liberalizing the entry of foreign contractors into the industry.”

Gatchalian filed three bills which respectively aim to lift investment restrictions that prevent foreign contractors from bidding on government public works projects (Senate Bill No. 1907), remove the nationality requirement in the granting of licenses for contractors in construction (SB 1909), and dismantle the domestic preference policy of the Government Procurement Reform Act (GPRA) to encourage the entry of foreign suppliers (SB 1921).

A cash-based budgeting system, according to the senator, limits contractual obligations and disbursement of payments for goods delivered and services rendered only within the fiscal year.

This would give government agencies the obligation to complete all contracts initiated in 2019 by the end of the year, regardless of possible delays.

Gatchalian emphasized that one of the main causes of delays in construction and other public works projects is the lack of contractors and suppliers.

“Lifting restrictions and providing a more level playing field in public works projects will encourage the entry of foreign players, which in turn will enable the government to deliver on its much-needed infrastructure initiatives,” he said.

Gatchalian expressed particular concern with the Commission on Higher Education’s (CHEd) capital outlay for infrastructure, which suffered massive budget cut from P48 million in 2018 to a measly P6.9 million next year due to the new cash-based system.

The senator, however, clarified that he is in favor of the cash-based system as “it will instill discipline among agencies” and curb underspending.

“I am for a cash-based system. I see the logic of a cash-based system because this is meant to really solve underspending by speeding up spending on government projects. If you look at the utilization of most agencies, only 60 to 70 percent of their annual budgets are utilized,” he said. /je