By Melissa Luz T. Lopez,
Senior Reporter

THE GOVERNMENT can at best amend implementing rules to fast-track public bidding in response to President Rodrigo R. Duterte’s call to scrap the practice of awarding contracts to the lowest bidder, the Budget secretary said.

Secretary Benjamin E. Diokno said scrapping the bidding process for public works projects would need Congressional action, as procurement law specifically requires awarding projects to the lowest bidder.

Mr. Duterte has said that he wants all projects of the Philippines will be “something like a Swiss challenge,” which was his preferred route to eliminate corruption in the bidding process.

A Swiss challenge means the government will accept competing bids from other parties who can present a better deal compared to the original proposal, with the proponent later on entitled to make another offer.

“The concept of a Swiss challenge applies to unsolicited proposals… I think it does not apply to all projects,” Mr. Diokno told reporters in a chance interview. “That’s under the law, you have to amend the law if you want that.”

“We can change the implementing rules and regulations. It’s hard to push legislation, we’re not sure what will come out of Congress,” the Cabinet official added.

Republic Act 9184 or the Government Procurement Reform Act awards contracts to the “lowest calculated responsive bid” received from suppliers and developers.

For now, Mr. Diokno said the Department of Budget and Management (DBM) has drafted a system to categorize supplies for procurement as “low-cost, medium, and high-cost,” as they seek to provide some leeway for government agencies.

The Philippines likely missed the 3% deficit ceiling in 2017, Mr. Diokno added, with a surge in revenue partially offsetting the impact of increased government spending.

Mr. Diokno said the budget gap may have settled at “slightly below 3%” of gross domestic product (GDP) last year, ahead of the release of full-year figures.

This comes as underspending was reduced to “less than 2%,” lower than the 3.6% rate in 2016.

Preliminary figures from the Department of Finance released last month pegged the full-year fiscal gap at 2.6-2.8% of GDP, while economic growth came in at 6.7%.

This year, the government has programmed a 3% budget deficit, which is expected to allow GDP growth to come in at between 7-8%.

By Carmelito Q. Francisco,
Correspondent

DAVAO CITY — Renewable energy projects, particularly the manufacture of solar panels and the development of hydroelectric plants, are among the opportunities that foreign investors are looking into, the Mindanao business lobby said.

Arturo M. Milan, president of the Davao City Chamber of Commerce and Industry, Inc., said Chinese businessmen visiting the city in March have raised the possibility of investing in solar panel production and putting up hydroelectric plants.

“(Renewable) energy development is among the key areas that not only the Chinese are interested in,” Mr. Milan told BusinessWorld Monday on the sidelines of a media forum.

He added that members of a delegation from Hawaii who were in the city last week also wanted to explore the potential of the green power sector.

Last week, a business and government delegation from Kauai in Hawaii were in the city to sign a sister city agreement with the Davao local government.

Renewable energy is listed as one of the priority investment areas of the city government, with incentives such as tax holidays offered to investors.

Mr. Milan, however, said that government should look at how the investment climate in energy can still be enhanced, such as bringing incentives down to the household level.

“We need to look at how we can encourage homes to use solar panels instead of relying on electricity from their distributors,” Mr. Milan said.

Under the Renewable Energy Act of 2008, consumers who use solar panels should be able to avail of net metering, under which they are compensated for the excess electricity that their panels feed into the grid.

Another area of investment that foreigners want to explore, Mr. Milan said, is agricultural production and processing.

Kauai Mayor Bernard Carvalho, Jr., in his speech during the sister city signing event, said businessmen from his country are keen to invest in cacao and coffee, two commodities which are being pushed by Davao City and other local government units within the Davao Region.

The Chinese visitors, on the other hand, want agribusiness areas “where everything can be put in place.”

Mr. Milan explained that this means a site, such as economic zone, where it is possible to set up growing areas as well as processing facilities.

The Chinese delegation will consist of about 70 investors who will be making a push for China’s One Belt, One Road program.

Mr. Milan said the group will charter a flight from Shanghai using an airline that is considering regular direct flights to and from Davao.

In September 2016, Xiamen Airlines conducted a test flight from Xiamen to the city with about 80 passengers using a Boeing 737 aircraft.

City Tourism Operations Office data show that 9,231 Chinese tourists visited the city last year. The top foreign visitors were from the US with 20,779 and Japan with 12,510.

THE GOVERNMENT will finance with budget appropriations about 78% or P7.096 trillion of its ambitious infrastructure program, the National Economic and Development Authority (NEDA) said, signalling confidence in the economy’s prospects and capacity to pay with tax reform shoring up the state’s fiscal position.

In   statement, NEDA said the P9.04 trillion the national government hopes to spend over six years excludes infrastructure projects to be undertaken purely by local government units (LGUs), government-owned and controlled corporations (GOCCs), the private sector and other sources.

In the statement, Socioeconomic Planning Secretary Ernesto M. Pernia said the financing plan was firmed up after the NEDA Board’s Committee on Infrastructure (INFRACOM)-Cabinet Committee met on Feb. 7. The committee was chaired by Mr. Pernia and co-chaired by the secretary of Public Works and Highways with representatives from the Office of the President and the Departments of Transportation, Budget and Management, Finance, Trade and Industry, Energy, Agriculture, Tourism, and Information and Communications Technology.

INFRACOM made headway “in improving connectivity and promoting economic clusters in regional and sub-regional growth centers. This is consistent with the country’s National Spatial Strategy,” Mr. Pernia said.

The committee also approved its provisional work plan for 2018, the proposed draft implementing rules and regulations (IRR) of the National Transport Policy, and the guidelines for the utilization of the Project Development and Other Related Studies Fund for the conduct of feasibility studies, master plan formulations, analyses and other pre-investment activities, Mr. Pernia said.

In the statement, NEDA said regions outside Metro Manila are receiving a “big share” of infrastructure programs, noting that of the 4,985 infrastructure programs in the government program between 2017 and 2022, 3,911 projects, excluding the National Capital Region (NCR), are region-specific, while 98 are intra-regional.

“If you look at the data, the Autonomous Region in Muslim Mindanao has the highest number of projects. This dispels the notion that government projects are centered in Mega Manila,” Mr. Pernia said.

From 2017 to 2022, ARMM will get a total of 1,340 projects while Metro Manila will have 320 projects, he said.