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

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NINETEENTH CONGRESS
First Regular Session

Sey”

House Bi. No, 1207
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Introduced by REP. FAUSTINO ‘INN¢

y A. DYV

EXPLANATORY NOTE

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The Philippine construction industry is expected to record a growth of 20.7% in
2022, driven by an improvement of economic conditidns, consumer and business
confidence and foreign direct investment. Between 2023 and 2025, the industry is
forecast to record a real annual average growth of 7!6%, with real construction
expected to surpass its pre-pandemic value by 2023. Supporting this growth is the
government's investment in public infrastructure under the FY 2022 General
Appropriations Act, the Build, Build, Build (BBB) Program and the AmBisyon Natin
2040 programme.! '

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 measurcd 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." i

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

2 GlobatData (2021). Construction inthe Philippines - Key Trends and Opportunities to 2025. Global Information, Inc.
itoss//www giiresea rch.com/report/time237680-cons truction-philippines-kay-trends-opportunities.htmt
"Ferguson, et al (1995). Managing and Minimizing Construction Waste: A Practical Guide. Institute of Civil Engineers,
London

* Kofoworola, et al (2008). Estimation of Construction Waste Generation and management in Thailand. King Mongkut's
University of Technology. hi nww sciencedin ‘ence /artcle/oii/50956053X08002341

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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.

‘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, gifts and legacies in
support of the program for 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.

EXCSTINO * 10’ A.DYV


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

NINETEENTH CONGRESS
First Regular Session

House Bit. no. 1207

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

AN ACT
PROMOTING THE RECYCLING OF CONSTRUCTION AND DEMOLITION
WASTES AS COMPONENTS IN BUILDING MATERIALS AND PROVIDIN'
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 ftom 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, or construction of buildings and civil infrastructures which consist of


conerete, 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 sparé 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

b) 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.

c) 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.

d

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.



e) 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 1

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, i