EU wants gov’t to ease limit on infra projects

MANILA, Philippines - The European Union (EU) is pushing for the lowering of the P1 billion threshold for government infrastructure projects open to foreign contractors as a reduction would allow the country to promote greater competition as well as attract more foreign direct investments (FDIs).

Speaking at the 52nd annual meeting of the Philippine Economic Society, EU Ambassador to the Philippines Guy Ledoux said the Philippines could get a bigger share of FDIs, particularly from the bloc, through encouraging greater participation of foreign contractors to state infrastructure projects.

Ledoux said that while the EU backs the Department of Public Works and Highways’  (DPWH) plan to open government infrastructure projects amounting to P1 billion and above to foreign contractors by next year, lowering the threshold is expected to bring about greater benefits.

“DPWH Secretary (Rogelio) Singson’s ambition and the Government Public Procurement Board resolution to fully liberalize foreign bids for infrastructure project above P1 billion is welcome and it would be useful to understand how this would work in practice. In addition, bringing down that threshold would probably benefit the government even more – allowing more competition also for smaller projects,” he said.

Improving the legal framework for foreign bidders by allowing foreign companies to bid at a more equal footing is seen to help the country get a bigger share of FDIs from the EU.

“A procurement market open to foreign bidders is a key asset to significantly upgrade the level of competition and ensure better value for money,” Ledoux said.

He also said the Philippines could attract more FDIs by joining the Government Procurement Agreement (GPA) as an observer to be able to show its engagement towards transparency, non-discrimination and international competition and benchmark its own policies against international ones.

The GPA, a plurilateral agreement within the framework of the World Trade Organization, aims to mutually open government procurement markets among its 15 parties.

Ledoux said the government could also facilitate companies by implementing the so-called Apostille Convention.

 “This would do away with the sometimes burdensome requirements for legalising documents. It’s an easy facilitating measure that works both ways and I am happy with the commitment we have received towards this goal last June,” he said.

The Philippines has made progress in terms of attracting FDIs with inward stocks rising to 25 billion euros in 2013 from 10 billion euros in 2004.

Latest data from the Bangko Sentral ng Pilipinas showed that FDIs to the Philippines grew 59 percent to $4.306 billion in the January to August period from $2.709 billion in the same period last year.

Most of investment stocks in the Philippines have its origin in the EU, but the country only accounts for a fraction of over 200 billion euros that European companies invest around the world every year.

“My wish is that more European companies will find their way to the Philippines to contribute to help create jobs and added value to your economy. Besides building quality infrastructure, open public procurement also helps to save Filipinos tax payers’ money,” Ledoux said.