Manila Bulletin

Con­struc­tion sec­tor full open­ing op­posed

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Lo­cal con­trac­tors have joined hands to strongly op­pose a bill that would fully open the con­struc­tion busi­ness to for­eign­ers, say­ing it will spell the demise of the lo­cal con­struc­tion in­dus­try which em­ploys more than 4 mil­lion Filipinos.

House Bill (HB) 7337 seeks to amend Repub­lic Act (RA) 4566 or the Con­trac­tors’ Li­cense Law by al­low­ing for­eign firms to ob­tain a reg­u­lar li­cense that was orig­i­nally exclusive to com­pa­nies with at least 60 per­cent Fil­ipino equity.

DMCI pres­i­dent and CEO Jorge Con­sunji warned that re­mov­ing ex­ist­ing reg­u­la­tions fa­vor­ing Fil­ipino con­trac­tors will “open the flood­gates to un­reg­u­lated en­try of for­eign-owned con­struc­tion com­pa­nies.”

“This will kill the lo­cal con­struc­tion in­dus­try, and the en­try of un­qual­i­fied for­eign con­trac­tors cause a dan­ger to pub­lic safety,” Con­sunji told the House Com­mit­tee on Trade and In­dus­try dur­ing its re­cent vir­tual hear­ing on HB 7337.

The com­mit­tee’s chair and au­thor of the bill, Valen­zuela City Rep. Wes Gatchalian, claimed the mea­sure would level the play­ing field in the con­struc­tion in­dus­try to en­cour­age com­pe­ti­tion, trans­fer of tech­nol­ogy and shar­ing of knowl­edge be­tween Fil­ipino and for­eign con­trac­tors.

But Con­sunji said it is im­por­tant to bal­ance ex­tend­ing equal op­por­tu­ni­ties to for­eign con­trac­tors and pro­tect­ing lo­cal play­ers, es­pe­cially those in the mi­cro, small and medium en­ter­prises (MSMEs).

“While the pro­posed bill seeks to pro­vide a level play­ing field, this must be bal­anced to pro­tect the coun­try’s vul­ner­a­ble sec­tors and work­force, par­tic­u­larly the MSMEs that have been heav­ily im­pacted by the on­go­ing pan­demic,” Con­sunji said.

Philip­pine Con­struc­tors As­so­ci­a­tion Pres­i­dent Will De­cena shared the same con­cerns for the MSME sec­tor, which makes up some 97 per­cent of lo­cal con­trac­tors.

“The un­reg­u­lated en­try of for­eign con­trac­tors will ad­versely af­fect small and medi­um­sized Fil­ipino con­trac

tors. We will even de­prive Filipinos of job op­por­tu­ni­ties in our own coun­try,” De­cena pointed out.

He en­cour­aged the House panel to be mind­ful in safe­guard­ing and en­sur­ing the sur­vival of lo­cal play­ers and the more than 4 mil­lion work­ers in the in­dus­try.

“We re­it­er­ate that for­eign con­trac­tors have the ten­dency to bring their own peo­ple even for jobs than can be per­formed by Filipinos,” he said.

In order to af­ford for­eign and lo­cal play­ers a level play­ing eld, DATEM, Inc. chair and CEO Levi Espir­itu said in­dus­try con­cerns, such as rec­i­proc­ity, tech­no­log­i­cal trans­fer, ca­pac­ity-build­ing and com­pli­ance with lo­cal rules and reg­u­la­tions, should be fully ad­dressed.

Espir­itu said the gov­ern­ment must as­sure that what­ever in­cen­tives and priv­i­leges ex­tended to for­eign con­trac­tors are like­wise given to lo­cal con­trac­tors. “Cor­re­spond­ingly, for­eign con­trac­tors should com­ply with what­ever reg­u­la­tory re­quire­ments such as, but not lim­ited to, pay­ment of nec­es­sary taxes; putting up of equity and in­vest­ments; and struc­tural war­ranties for ma­te­ri­als, man­power, and equip­ment, which also are re­quired for lo­cal con­trac­tors,” Espir­itu said.

Un­der Sec­tion 3.1 of RA 4566, com­pa­nies with at least 60 per­cent Fil­ipino equity par­tic­i­pa­tion can be granted a reg­u­lar li­cense, which gives them con­tin­u­ing au­thor­ity to en­gage in many con­tract­ing ac­tiv­i­ties through­out the year. For­eign

rms can only be granted spe­cial li­cense, and they need to have a sep­a­rate li­cense for each con­tract ac­tiv­ity.

How­ever, this IRR pro­vi­sion was re­cently voided by the Supreme Court for be­ing “a de­ter­rent to the for­eign play­ers in the con­struc­tion in­dus­try.” (Bernie Cahiles-Magkilat)

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