DTI completes consultations on IRR for contractors license

MANILA, Philippines - The Department of Trade and Industry (DTI) has completed its public consultations on proposed amendments to the implementing rules and regulations (IRR) of a law that requires contractors to secure licenses.

According to the DTI, its attached agency, the Philippine Contractors Accreditation Board (PCAB) has concluded the consultations on the proposed changes to the IRR of Republic Act (RA) 4566 or the Contractor’s License Law.

The PCAB is a body mandated to issue licenses to contractors under the Contractor’s License Law, and an implementing board of the Construction Industry Authority of the Philippines (CIAP).

The CIAP is a government agency tasked to promote, accelerate and regulate the growth and development of the construction industry based on Presidential Decree 1746.

The public consultations were held in Pasay City in January, and in Cebu City and Davao City earlier this month.

Among the proposed amendments to the rules presented by the PCAB during the public consultations is the scope of the 60-percent Filipino and 40-percent foreign equity requirement for a contractor to be issued a license to implement private projects.

Another proposed change presented during the consultations was the creation of a new license category to be known as AAAA, which would allow firms with 100 percent foreign equity to participate in big construction projects here, provided that the foreign contractor will invest at least P1 billion and it will only undertake projects worth at least P10 billion.

Currently, the PCAB issues licenses to contractors using seven categories based on the firm’s minimum capitalization.

During the consultations, industry players expressed the view that foreign contractors are essentially service providers and not investors, and so in pushing for amendments, the PCAB was urged to ensure that the principle of reciprocity will be honored.

Law firms meanwhile raised in the discussions that construction is no longer in the Foreign Investment Negative List (FINL) and asked for the basis of the restriction given that the Contractor’s License Law does not provide for it.

The FINL identifies investment areas or activities which may be opened to foreigners and those reserved to Filipino nationals.

The lawyers also cited the implementing rules cannot go beyond the law.

As for the Department of Labor and Employment, it expressed concern on the protection of local worker’s rights and noted that the overriding consideration of protection of labor should be met.

For its part, the National Economic and Development Authority reminded the stakeholders that the Philippines is party to international agreements and should honor commitments.

CIAP director-in-charge Jesus Motoomull said they are pleased that many participated in the consultations to understand the proposed changes to the IRR.

“These various inputs are relevant in the finalization of the IRR,” he said.

PCAB director-in-charge Ann Claire Cabochan said the comments gathered from the sessions conducted and position papers submitted by various stakeholders would be consolidated and endorsed to DTI Secretary Gregory Domingo.

“The amendments become effective only after approval by the Office of the President,” she said.