Press Release
August 19, 2018

Gatchalian to Palace: Certify econ liberalization bills 'urgent' to speed up gov't infra works

Senator Win Gatchalian is urging President Rodrigo Duterte to certify as urgent three bills the lawmaker recently filed to ensure that public works projects will be started and completed within the calendar year.

"In light of the new cash-based budgeting system for 2019, there is now an even more urgent need to foster true competition in government public works projects by liberalizing the entry of foreign contractors into the industry," Gatchalian said.

Gatchalian recently 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 limits contractual obligations and disbursement of payments for goods delivered and services rendered only within the fiscal year. This means government agencies need to complete all contracts initiated in 2019 by the end of the year, regardless of possible delays.

"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," Gatchalian said.

"For projects to be completed in a shorter period of time, we need simultaneous construction to happen. And for that to happen, we need to have foreign contractors who can also participate in government projects," he added.

Gatchalian expressed particular concern with the Commission on Higher Education's (CHED) capital outlay for infrastructure, which was drastically slashed from P48 million in 2018 to a meager P6.9 million next year because of the new cash-based system.

"Thirty-five of our state universities did not get infrastructure funding because of the new cash-based system, meaning these universities have no funds to build new classrooms or buildings. This is unacceptable," he said.

The lawmaker, 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," he said.

"If you look at the utilization of of most agencies, only 60 to 70 percent of their annual budgets are utilized," he added.

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