MBC bucks exclusive use of local materials for infrastructure projects

Published by rudy Date posted on March 16, 2009

MANILA, Philippines – The Makati Business Club (MBC), the country’s most powerful business organization, announced they are not in favor of mandating all contractors to strictly use locally made products for the infrastructure projects under the government’s pump priming program.

“We don’t agree to that. That will breed inefficiency,” MBC executive director Alberto Lim told The Star in an interview.

Under the proposal, contractors are required to use Filipino made products even if they are more expensive than imported products. The law will state that local materials will be used as long as the price is only 25 percent higher than imported ones.

“This will make us 25 percent less efficient and it is not consistent with our goal of stimulating the economy,” Lim further explained.

Lim said it would be better if protectionist policies be not advocated especially in times of economic crisis.

Earlier, the Federation of Philippine Industries (FPI) said the government should require all infrastructure projects to be funded by the P330 billion stimulus package to use locally made products even if it means increasing the project cost by 25 percent.

FPI president Jesus L. Arranza said lawmakers are hesitant to include the Buy Pinoy Buy Local in the economic stimulus package because it might send the wrong signal to other nations that the Philippines is advocating protectionism.

“I talked to Malacañang and several congressmen and senators about this but they said we cannot do this because we are advocates of free trade,” Arranza said. “They are worried that there might be a backlash if we make buying local products a requirement.”

He said the government is worried about the repercussions given because requiring firms to purchase local products would diminish the demand for imported products and would adversely affect income of nations exporting to the country.

However, the staunchest supporter of free trade and globalization, the United States, has inserted a similar provision to their economic stimulus package, Arranza revealed.

“If they can do it, so can we,” he said. “I will write to the people who told me that this could not be done that America is doing this.”

Arranza said it is time to protect our own industries given the worldwide crisis. He said the impact on the local economy would be greater if domestic goods and service providers will be prioritized over overseas products and contractors.

In the past, the government has used international contractors to build various infrastructure projects like the train systems and several road projects. Arranza said local contractors are capable of doing good roads and bridges. “We have the technology here. It’s juts a matter of tapping them.” – Ma. Elisa P. Osorio, Philippine Star

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