NINETEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
S.Bn No.
SENATE
943
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RECEIVES S'/;
Introduced by SEN. WIN GATCHALIAN
AN ACT
RELAXING INVESTMENT RESTRICTIONS AND AFFORDING EQUAL 
OPPORTUNITIES TO ELIGIBLE AND QUALIFIED DOMESTIC AND FOREIGN 
BIDDERS TO PARTICIPATE IN THE BIDDING FOR THE GOVERNMENT'S PUBLIC 
WORKS PROJECTS, AMENDING COMMONWEALTH ACT NO. 541, AS AMENDED BY 
LETTER OF INSTRUCTIONS NO. 630, AND FOR OTHER PURPOSES
EXPLANATORY NOTE
Commonwealth Act No. 541 (C.A. 541), also called "An Act to Regulate the 
Awarding of Contracts for Construction or Repair of Public Works," was enacted in 
1940, a time when the Philippines was still transitioning to full independence, setting­
up its own government, promoting local capital and industrialization, and establishing 
the basis for national defense while World War II was looming. Clearly, the principle 
of competitiveness as enshrined today in the 1987 Constitution and Republic Act No. 
10667, otherwise known as the "Philippine Competition Act," was diluted and not a 
priority in the minds of the then National Assembly when a domestic preference policy 
was adopted by the Government in the awarding of public works projects to the local 
construction industry.
For seventy-eight years, such domestic preference policy has confined 
competition in the construction industry within our territorial boundaries and has 
discriminated in favor of domestic businesses with substantial market power and 
political influence. From 2016 to 2021, public construction posted an average annua!


growth of 13.8%, while private construction grew by 0.9% annually, translating to an 
overall average annual growth of 4.4%.1 The growth in public construction is primarily 
attributable to the Build Build Build program of the previous administration. Despite 
this development in public construction, the lack of genuine competition in the industry 
impairs public welfare as there are fewer Incentives for existing domestic firms to 
innovate and puts at risk the delivery of reliable, safety-compliant and quality public 
works.
Accordingly, this bill should be considered in the context of positioning the 
Philippines more competitively and attracting new investments in the construction 
Industry to enable the Government to deliver the mucii-needed infrastructure that 
would support the country's initiatives in providing a business climate conducive to 
investments in the country. In this light, this bill seeks to provide a more level playing 
field and extend equal opportunities to eligible and qualified domestic and foreign 
bidders to participate in the bidding by the Government for public works projects. It 
is hoped that the enactment of this measure will encourage and attract foreign firms 
that possess the capacity to construct vital projects and are capable of sharing 
technical expertise with local firms to enter the Philippine constfiiction market.
IN GATCHALIAN
1 PSA National Accounts, using 2018 constant prices
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NINETEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
]
SENATE
S.B. No. 943
Wki* of tlif trft.'irp
*22 Mil -1
RE€£lVIEtr:
Introduced by SEN. WIN GATCHALIAN
AN ACT
RELAXING INVESTMENT RESTRICTIONS AND AFFORDING EQUAL 
OPPORTUNITIES TO ELIGIBLE AND QUALIFIED DOMESTIC AND FOREIGN 
BIDDERS TO PARTICIPATE IN THE BIDDING FOR THE GOVERNMENT'S 
PUBLIC WORKS PROJECTS, AMENDING COMMONWEALTH ACT NO. 541, 
AS AMENDED BY LETTER OF INSTRUCTIONS NO. 630, AND FOR OTHER
PURPOSES
Be it enacted by the Senate and the House of Representatives of the 
Phiiippines in Congress assembled:
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SECTION 1. A new Section 1 of Commonwealth Act No. 541 (C.A. 541), also
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known as "An Act to Regulate the Awarding of Contracts for the Construction or Repair
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of Public Works," as amended by Letter of Instructions No. 630, is hereby inserted to
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read as follows:
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"SEC. 1. STATEMENT OF POLICY. - THE STATE RECOGNIZES THE
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IMPORTANCE OF THE EFFICIENT DELIVERY OF RELIABLE, SAFETY-
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COMPLIANT AND QUALITY PUBLIC WORKS TO NATIONAL
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DEVELOPMENT. IT ALSO RECOGNIZES THAT HEALTHY COMPETITION
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CAN FURTHER DEVELOP THE CONSTRUCTION INDUSTRY AND OPTIMIZE
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THE CONSTRUCTION CAPABILITY OF THE COUNTRY TO EFFICIENTLY
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DELIVER SUCH PUBLIC WORKS.


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IT IS THUS THE POLICY OF THE STATE TO EXTEND EQUAL 
OPPORTUNITIES TO ELIGIBLE AND QUALIFIED BIDDERS TO PUBLIC 
WORKS PROJECTS OF THE GOVERNMENT AND TO ATTRACT DOMESTIC 
AND FOREIGN INVESTMENTS IN THE CONSTRUCTION INDUSTRY TO 
IMPROVE MARKET DYNAMISM, ENCOURAGE INNOVATION, AND REWARD 
GOOD PERFORMANCE."
SEC. 2. Section 1 of C.A. 541 is hereby renumbered and amended to read as
follows:
SEC. [4] 2. All branches, offices, and subdivisions of the Government and 
all government-owned or controlled companies, authorized to contract 
and make disbursements for the construction or repair of LOCALLY- 
FUNDED public works, INCLUDING THE CONSTRUCTION OF DEFENSE- 
RELATED STRUCTURES, shall EXTEND EQUAL OPPORTUNITIES [give 
preferences] in awarding OR NEGOTIATING contiact for such works to 
ELIGIBLE AND QUALIFIED FILIPINO AND FOREIGN [RHpifle-^ 
American] contractors. [arHEi-domcGtic entities when-the lowest bid of a 
domestic bidder is- not more-than 
per centum'm excess of the
lowest foreign bid: Provided, However, Thot or the constructiop-efTaiadj
air, and sea-coast defenses, arsenals/ bar-racks,- dcaetsT-ha-ng-ars;- landing 
fields,"quarters,-hospitals, and- all other buildings and structur-es-required
for.the national defense oR-the Philippines, ne-foreign bids shall be
SEC. 3. Section 2 of C.A. 541 is hereby repealed.
SEC. 4. Separability Clause. - If any portion of this Act is declared invalid or 
unconstitutional, the portions or provisions which are not affected shall remain valid 
and subsisting.
SEC. 5. Repealing Clause. - All laws, decrees, executive issuances, rules and 
regulations inconsistent with this Act are hereby repealed or modified accordingly.


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SEC. 6. Effectivity. - This Act shall take effect fifteen (15) days after its
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publication in the Official Gazette or in a newspaper of general circulation.
Approved,