THE government has now given contractors for state projects a guarantee that cost adjustments can now be made for projects whenever extraordinary inflation affects projects.

Budget Secretary Rolando Andaya said the Department of Budget and Management  and the National Economic and Development Authority  are already in agreement on a new formula that will allow contractors cope with high oil and construction materials prices.

“We have updated the formula. It’s still two standard deviation but we have changed the parameters,” Andaya said on the sidelines of the Special Philippine Development Forum (PDF) on Wednesday.

Under the updated formula, contractors for government projects may now file for cost adjustments if prices of construction materials or other construction costs post at least a 5-percent increase from the time of bidding.

Neda Infrastructure, Regulation and Contract Review Services assistant director general Ruben Reinoso earlier said the agency formulated guidelines for Republic Act 9184, or the Government Procurement Reform Act

Under these guidelines, contractors can be entitled to price adjustments provided that the escalation of costs average at least 10 percent.

Reinoso said on the sidelines of the PDF that the new formula will help contractors mainly because the increase or decrease in construction materials, for example, do not follow the increase or decrease in nationwide inflation.

He explained that in 2007, despite the fact that the country only posted a full year inflation of 2.8 percent, prices of steel have already posted a 200-percent increase due to China’s steel requirements.

Reinoso added that cement has also increased by 20 percent due to higher oil prices this year while year-to-date headline inflation in July was only at 8.3 percent.

Meanwhile, Andaya said that the new formula will already be adopted by the Government Procurement Policy Board  for all ongoing and future projects.

Previously, industry sources said projects included in the country’s Comprehensive and Integrated Infrastructure Program ( may suffer delays due to the rapid increase in oil and construction material prices that forced contractors to discontinue work in most projects under the program.

Sources said contractors would only continue or start work on the projects if they will be given an assurance by the government that they can ask for price adjustments in project costs.

In the latest Construction Materials Wholesale Price Index released by the National Statistics Office (NSO) posted a year-on-year growth rate of 13.5 percent in June 2008 in the National Capital Region.

The NSO attributed this to higher annual growth rate increases in all commodity groups, except for lumber, asphalt, plumbing fixtures, exterior electrical equipment/supplies, interior electrical fixtures and devices, tileworks, blasting materials, electrical rough-in materials and UPVC water pipes.

BOI to consult foreign chambers over new foreign investment negative list

THE Board of Investments (BOI) is now taking a lead role in the crafting of the new foreign investment negative list (FINL) that takes effect in January next year, and will start consulting with the different foreign chambers in the country on the matter.

Contractors get govt assurance on cost adjustments in state projects

THE government has now given contractors for state projects a guarantee that cost adjustments can now be made for projects whenever extraordinary inflation affects projects.

97% of patents granted in RP belong to foreign applicants

FOREIGN companies are still the ones are taking advantage of patent protection in the country due to the lack of awareness on the intellectual property system among Filipinos.

DOE has yet to convert Forum Energy’s GSEC 101 into service contract

THE Department of Energy (DOE) said Wednesday it has yet to issue an approval for the conversion of Forum Energy Philippines Corp.’s (Forum Energy) geophysical survey and exploration contract (GSEC) 101 over Northwest Palawan to a full service contract. 

Mactan international airport’s terminal building to be upgraded to increase capacity

THE Mactan-Cebu International Airport is embarking on a P300-million renovation and upgrading of its lone terminal building in order to increase its capacity and improve services.

Damaged transformers in Bulacan now being replaced by Transco

STATE-RUN National Transmission Corp. (Transco) said it had arranged the transfer of three 200-megavolt ampere transformers from its Kadampat substation in Labrador, Pangasinan, to temporarily replace the damaged transformers at Transco’s San Jose substation in Bulacan.

Scientists’ review of draft import risk analysis delays reopening of Aussie market to RP cavendish bananas

THE reopening of Australia’s market to Philippine cavendish bananas will have to wait a little longer as the Eminent Scientists Group (ESG) would need to review the revised draft import risk analysis (IRA) on the importation of local bananas recently completed by Biosecurity Australia (BA).

Fiber devt agency to propagate abaca growing in Cordilleras

BAGUIO CITY—The Fiber Industry Development Authority (FIDA) has made Baguio its new home, launching its office here last week after moving central operations from San Fernando, La Union.

Transformer in Mindanao geothermal power plant down–EDC

GEOTHERMAL giant Energy Development Corp. (EDC), formerly Philippine National Oil Co.-Energy Development Corp. (PNOC-EDC), reported Tuesday that the 75 megavolt-ampere (MVA) transformer at the Mindanao I Geothermal power plant has been damaged.