MALACAÑANG
ManilaBY THE PRESIDENT OF THE PHILIPPINES
Executive Order No. 278 February 2, 2004
PRESCRIBING GUIDELINES FOR PROJECT LOAN NEGOTIATIONS AND PACKAGING OF GOVERNMENT FOREIGN-ASSISTED INFRASTRUCTURE PROJECTS
WHEREAS, the 1987 Constitution and existing laws such as Commonwealth Act Nos. 138 & 541, Republic Act (RA) No. 5183, the Official Development Assistance (ODA) Act of 1996, as amended, and Republic Act (RA) No. 9184 (otherwise known as the Government Procurement Reform Act) mandate the government to give preference to qualified Filipinos in the grant of rights, privileges, and concessions covering the national economy and patrimony, including the purchase of materials, supplies, goods, and equipment as well as in the hiring of consultants, contractors, architects, engineers and other professionals necessary for a project's implementation;
WHEREAS, for recent foreign-assisted infrastructure projects bid out by various government agencies, there have been concerns raised by the Philippine Constructors Association (PCA) and the Confederation of Filipino Consulting Organizations (COFILCO) that Filipino constructors and consultants are experiencing difficulty in participating in the bidding of such projects due to various...
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Executive Orders
Prescribing Guidelines for Project Loan Negotiations and Packaging of Government Foreign-Assisted Infrastructure Projects
Executive Order No. 278
Summary of Executive Order No. 278
General Policy on Consultancy Services for Government Infrastructure Projects (Section 1):
- The government should fund consultancy services for infrastructure projects with local funds and resources as much as possible.
- Consultancy services shall be proposed for foreign assistance only when foreign funding is indispensable or local funds are insufficient.
- Consultancy services include: (a) pre-investment components like feasibility studies, (b) detailed engineering design, and (c) project management/supervision.
- Where Filipino capability is insufficient, Filipino consultants may hire or associate with foreign consultants, with the Filipino as the lead consultant.
- Where foreign funding is indispensable, foreign consultants must enter into joint venture with Filipino consultants.
Packaging of Government Infrastructure Projects (Section 2):
- Large infrastructure projects shall be packaged into separable work components without sacrificing technical integrity, considering Filipino capabilities.
- Complex or multi-disciplinary projects shall be packaged into separate work components. (Section 2.1)
- Packaging shall consider technical and financial capabilities and experience of Filipinos in domestic and international markets. (Section 2.2)
- Successful completion of a single project worth at least 50% of the contract value shall be acceptable as work experience requirement. (Section 2.3)
- Clustering of small and medium projects may be adopted if the resulting package is within Filipino contractors' capabilities. (Section 2.4)
- Contract splitting to evade laws and regulations is not allowed. (Section 2.5)
Pre-Loan Negotiations (Section 3):
- Prior to loan negotiations, a technical working group including at least one private sector representative shall be convened to provide inputs and ensure transparency.
Projects Preparation and Loan Negotiation Parameters (Section 4):
- Special tax privileges granted to a particular class/nationality shall be included in bid offers/financial proposals for evaluation and contract award. (Section 4.1)
- Loan agreements shall provide for joint venture associations between Filipino and foreign firms whenever economically viable to promote Filipino talents, enable technology transfer, and enhance competitiveness. (Section 4.2)
- Loan agreements shall not contain provisions that discriminate against Filipinos and limit their participation in the project. (Section 4.3)
Implementing Rules and Regulations (Section 5):
- The NEDA Infrastructure Committee (INFRACOM) shall promulgate the Implementing Rules and Regulations (IRR) within 60 days from the date of the Executive Order.
Repealing Clause (Section 6):
- All executive issuances, orders, rules and regulations inconsistent with this Order are repealed, amended, or modified accordingly.
Separability Clause (Section 7):
- If any provision of this Order is declared invalid or unconstitutional, the other provisions shall remain valid and subsisting.
Effectivity (Section 8):
- This Executive Order shall take effect 15 days after its publication in a newspaper of general circulation.
General Policy on Consultancy Services for Government Infrastructure Projects (Section 1):
- The government should fund consultancy services for infrastructure projects with local funds and resources as much as possible.
- Consultancy services shall be proposed for foreign assistance only when foreign funding is indispensable or local funds are insufficient.
- Consultancy services include: (a) pre-investment components like feasibility studies, (b) detailed engineering design, and (c) project management/supervision.
- Where Filipino capability is insufficient, Filipino consultants may hire or associate with foreign consultants, with the Filipino as the lead consultant.
- Where foreign funding is indispensable, foreign consultants must enter into joint venture with Filipino consultants.
Packaging of Government Infrastructure Projects (Section 2):
- Large infrastructure projects shall be packaged into separable work components without sacrificing technical integrity, considering Filipino capabilities.
- Complex or multi-disciplinary projects shall be packaged into separate work components. (Section 2.1)
- Packaging shall consider technical and financial capabilities and experience of Filipinos in domestic and international markets. (Section 2.2)
- Successful completion of a single project worth at least 50% of the contract value shall be acceptable as work experience requirement. (Section 2.3)
- Clustering of small and medium projects may be adopted if the resulting package is within Filipino contractors' capabilities. (Section 2.4)
- Contract splitting to evade laws and regulations is not allowed. (Section 2.5)
Pre-Loan Negotiations (Section 3):
- Prior to loan negotiations, a technical working group including at least one private sector representative shall be convened to provide inputs and ensure transparency.
Projects Preparation and Loan Negotiation Parameters (Section 4):
- Special tax privileges granted to a particular class/nationality shall be included in bid offers/financial proposals for evaluation and contract award. (Section 4.1)
- Loan agreements shall provide for joint venture associations between Filipino and foreign firms whenever economically viable to promote Filipino talents, enable technology transfer, and enhance competitiveness. (Section 4.2)
- Loan agreements shall not contain provisions that discriminate against Filipinos and limit their participation in the project. (Section 4.3)
Implementing Rules and Regulations (Section 5):
- The NEDA Infrastructure Committee (INFRACOM) shall promulgate the Implementing Rules and Regulations (IRR) within 60 days from the date of the Executive Order.
Repealing Clause (Section 6):
- All executive issuances, orders, rules and regulations inconsistent with this Order are repealed, amended, or modified accordingly.
Separability Clause (Section 7):
- If any provision of this Order is declared invalid or unconstitutional, the other provisions shall remain valid and subsisting.
Effectivity (Section 8):
- This Executive Order shall take effect 15 days after its publication in a newspaper of general circulation.