Manila Bulletin

Constructi­on sector full opening opposed


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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