Republic of the Philippines bia.
HOUSE OF REPRESENTATIVES " RECEIVED
Constitution Hills, Quezon City (0) CATE: sUN 30 ath

TIME:_2'18 0,

EIGHTEENTH CONGRESS Ww at ap j
First Regular Session Ser, INDEX: &

7044

HOUSE BILL NO. __*

Introduced by REP. FAUSTINO ‘INNO’ A. DY V

EXPLANATORY NOTE

In the last five years, the Philippine construction industry surged in growth.
According to one study', the industry expanded by 9.4% in real terms in 2019. This growth,
the study adds, resulted from the State’s investment in public infrastructure under the Build,
Build, Build (BBB) Program. Under this program, the State aims to build 75 flagship projects
to strengthen our national infrastructure, Last year, the State added 25 more projects to the
program, meaning the State now aims to construct 100 flagship projects. From this,
researchers forecast the steady and continued growth of the Philippine construction industry.

But as our construction industry grows, so too shall the volume of waste it produces.
In one study, scientists computed that construction waste amounts to 30% of solid waste
produced by a country.? In another study, scientists measured that up to 10% of the weight of
materials purchased for construction projects end up as waste.* The same study revealed that
between 50% to 80% of this waste could be recycled — but it is not

The numbers speak for themselves: waste from construction and demolition is a
wasteful problem. It is wasteful because readily-recycled materials are thrown away —
materials such as paper, plastic, lumber, asphalt, concrete, and stone. It is a problem because
the volume of this waste will only grow as the construction industry continues to grow. More
waste means more trash dumped, more trees felled, more mountains quarried, and more
taxpayers’ money squandered. Moreover, the problem will only worsen if the State fails to
act now and do something about it. Hence, this measure.

IData (2020). Construction in the Phillppines - Key Trends ond Opportunities to 2024. Global Information, Inc
;www.glresearch,com/report/time?37680-constr lippines-key-tren nities.html,

tt
3d,

2 Ferguson, et al (1995). Managing and Minimizing Construction Waste: A Practical Guide. Institute of Civil Engineers,
London.

4 Kofoworola, etal (2008). Estimation of Construction Waste Generation and management in Thailand. King Mongkut's
University of Technology. hts: iencedirect,com/science/article/pli/S0956053X08002341

Sid.



This bill aims to reduce waste from construction and demolition by granting the
following economic incentives:

First. Exempting from import taxes equipment used for recycling
construction and demolition waste;

Second. Allowing tax credits on the purchase of said equipment in
the Philippines;

Third. Exempting from taxes all donations to people and entities
recycling construction and demolition waste;

Fourth. Directing government-owned banks to help finance
businesses recycling said waste; and

Lastly. Giving financial grants to local governments with DENR-
approved programs for recycling said waste

The purpose of this bill is in line with the mandate of the Constitution to protect and
advance the right of every Filipino — whether living or yet to be born — to a balanced and
healthful ecology.

In view of the foregoing, the passage of this measure is earnestly sought.



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Constitution Hills, Quezon City

EIGHTEENTH CONGRESS
First Regular Session

HOUSE BILL No. _7044

Introduced by REP. FAUSTINO ‘INNO’ A. DY V

AN ACT
PROMOTING THE RECYCLING OF CONSTRUCTION AND DEMOLITION
WASTES AS COMPONENTS IN BUILDING MATERIALS AND PROVIDING
INCENTIVES TO ALL INDIVIDUALS AND ENTITIES ENGAGED THEREIN

Be it enacted by the Senate and House of Representatives of the Philippines in Congress
assembled:

SECTION 1. Short Title. — This Act shall be known as the “Recycled Construction
Materials Act.”

SECTION 2. Declaration of Policy. — It is the policy of the State to protect and advance the
right of the people to a balanced and healthful ecology in accord with the rhythm and
harmony of nature. Towards this end, the State adopts measures to provide economic
incentives and assistance for individuals and entities to develop and establish facilities that
recycle construction and demolition wastes as components of building or construction
materials.

SECTION 3. Scope. - This Act covers all individuals and entities, duly registered with the
Department of Environment and Natural Resources (DENR), that are engaged in the
recycling of construction and demolition wastes from buildings and other infrastructures.

For purposes of this Act, the term construction and demolition waste refers to materials from
the operation of worksite construction, repair, accretion, expansion or renovation activities, ot
construction of buildings and civil infrastructures which consist of concrete, wood, plastic,
paper, ceramics, bricks, tiles, plaster, and other similar materials.

SECTION 4. Incentives for Recycling of Construction Materials. ~ Any individual or
entity who engages in the recycling of construction and demolition wastes for use in building
and structural applications is entitled to the following incentives consistent with the


provisions of Republic Act No. 9003, otherwise known as the “Ecological Solid Waste
Management Act of 2000:”

a) Tax and duty-free exemption on imported capital equipment and machinery. ~ Within
the first ten (10) years upon issuance of a certification to operate a recycling business,
individuals or entities shall enjoy tax and duty-free importation of machinery,
equipment, materials, and spare parts used exclusively, directly and actually needed in
the recycling facilities for transformation into recycled materials for use in
construction: Provided, That the importation of such machinery, equipment,
materials, and spare parts are subject to the following conditions:

1. They are not manufactured domestically in sufficient quantity, of comparable
quality, and at reasonable prices.

2. Prior approval of the Board of Investments of the Department of Trade and
Industry for the importation of such machinery, equipment, materials, and spare

parts.

4) Tax credit on domestic capital equipment. ~ A tax credit equivalent to fifty percent
(50%) of the value of the national internal revenue taxes and customs duties that
would have been waived on the machinery, equipment, materials, and spare parts, had
these items been imported, shall be given to a recycling plant or construction
company owner, subject to the same conditions and prohibition cited in the preceding
paragraph.

©) Tax and duty exemption of donations, legacies, and gifts. — All legacies, gifts, and
donations to individuals or entities for the support and maintenance of the program for
effective recycling of construction and demolition wastes shall be exempt from all
internal revenue taxes and customs duties, and shall be deductible in full from the
gross income of the donor for income tax purposes.

4d) Financial assistance program. — Government financial institutions such as the
Development Bank of the Philippines, Land Bank of the Philippines, and other
government institutions providing financial services shall, in accordance with and to
the extent allowed by the enabling provisions of their respective charters or applicable
laws, accord high priority in extending financial services to business enterprises or
private entities engaged in the use of recycled components in construction materials.

©) Extension of grants to local government units. ~ Provinces, cities and municipalities,
whose recycled construction materials programs have been duly approved by the
DENR or have been commended by the DENR for adopting innovative recycling
activities, are entitled to receive grants for the purpose of developing their technical
capacities toward actively participating in the program for effective and sustainable
recycling of construction materials.

SECTION 5. Registration and Certification of Recycling Entities. — Individuals and
entities engaged in recycling activities shall register with the DENR through the
Environmental Management Bureau. Upon registration, a certification shall be issued to each
individual or entity to serve as the basis of their entitlement to incentives provided under this
Act.

SECTION 6. Implementing Rules and Regulations. ~ Within ninety (90) days from the
effectivity of this Act, the Secretary of Environment and Natural Resources shall, in


coordination with the Secretary of the Interior and Local Government, formulate the
necessary rules and regulations to implement the provisions of this Act.

SECTION 7. Repealing Clause. — All laws, presidential decrees, executive orders, and rules
and regulations inconsistent with the provisions of this Act are hereby repealed, amended or

‘modified accordingly.

SECTION 8. Effectivity. — This Act shall take effect fifteen (15) days after its publication in
the Official Gazette or in a newspaper of general circulation.

Approved,