Position Paper of Timpuyog Pilipinas On the Strengthening of Contractor Qualification Standards in Public Flood Control and Other Infrastructure Projects

Introduction

Timpuyog Pilipinas, true to its advocacy of transparency, good governance, and integrity in public service, presents this position paper as a call to action for our Senators to enact meaningful reforms in public procurement. The issue at hand goes to the very core of nation-building: ensuring that government infrastructure projects are awarded only to contractors with genuine financial capacity and credibility.

Recent hearings have revealed a critical gap in the current procurement system. It has become apparent that the Net Financial Contracting Capacity (NFCC) is being used as the main basis for granting contracts to contractors. While NFCC is meant to serve as a safeguard, in practice it has become a technical tool that allows entities with limited capitalization to qualify for multimillion-peso projects. This disconnect between declared financial strength and actual capital capacity has opened the door for weak contractors to secure projects they cannot responsibly deliver.

 

The Problem

Under existing regulations, corporations may rely on their NFCC even if their paid-up capital stock falls short. Partnerships and sole proprietorships may likewise declare figures that do not reflect real financial stability. This loophole has allowed undercapitalized entities to participate in massive construction projects, often relying on connections, collusion, or under-the-table arrangements rather than proven capability.

The consequences are grave. Projects are delayed, substandard work proliferates, and public funds are wasted. Moreover, the bidding process becomes vulnerable to corruption, since financially weak bidders must often resort to bribery or political patronage to secure contracts.

 

The Proposal

Timpuyog Pilipinas strongly urges the Senate to pass a law that tightens qualification standards for contractors. Specifically:

1. Capitalization Requirement – Contractors must have actual paid-up capital (for corporations), declared capital (for partnerships), or net worth (for sole proprietorships) that is higher than the amount of the project they are bidding for.
2. Enhanced NFCC Standard – The NFCC must be at least 50 percent higher than the value of the project being bid out. This ensures that only firms with genuine financial depth and stability can qualify.

These reforms will ensure that only financially capable contractors—those with actual resources and a proven foundation—are allowed to compete.

 

Expected Benefits

By raising the bar for contractor qualification, the government achieves three critical outcomes:

• Reduced Corruption – With only a smaller pool of truly qualified contractors competing, the incentive for bribery diminishes. Contractors with real money and resources will compete on merit, not on connections.
• Improved Quality of Projects – Contractors with sufficient capital are better able to deliver quality work, invest in skilled manpower, and finish projects on time.
• Efficiency and Fairness – Even if a qualified contractor loses a bid, more projects will remain open for future bidding. The competition shifts from a bloated field of underqualified firms to a lean pool of credible contenders.

In this way, infrastructure projects become less about who has influence and more about who has true capacity.

 

Call to Action

Timpuyog Pilipinas calls on the Senators of the Republic to champion this reform. Our nation can no longer afford a procurement system that rewards the undercapitalized and penalizes the truly capable. The Filipino people deserve infrastructure projects that are not tainted by corruption, not compromised by mediocrity, and not delayed by incompetence. 

This reform is not simply a matter of tightening rules. It is a statement of principle: that only those with proven financial strength and integrity should be entrusted with building our bridges, our roads, and our nation’s future.

 

Conclusion

As an organization committed to federalism, national unity, and good governance, Timpuyog Pilipinas believes that true progress cannot be achieved without strong foundations of integrity in public procurement. The proposed law on contractor qualifications is one such foundation.

Let us raise the standards. Let us demand capacity. Let us ensure that public funds are spent wisely and transparently. For in doing so, we do not only build roads and bridges—we build trust in government, and we build a stronger Philippines.

 

Timpuyog Pilipinas

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