To protect Filipino contractors and workers, government lawyers have asked the Supreme Court (SC) to reconsider its decision that effectively allows foreign construction firms to obtain regular licenses to engage in public or private projects in the country.
In a motion for reconsideration, the Office of the Solicitor General (OSG) told the SC that the limitations on the participation of foreign firms in construction projects should be retained.
It said: “Allowing the issuance of regular license to foreign contractors would result to unbridled influx of foreign contractors to the detriment of local contractors in micro, small, and medium enterprises (MSMEs), including the concerned professionals and Filipino workers, among others.”
“The entry of foreign contractors with their undue advantage will not only displace current professionals and workers in the industry, but will reduce employment opportunities for returning Overseas Filipino Workers (OFWs),” it said.
“Undeniably, MSMEs comprising of 97 percent of the registered contractors who are reeling from debilitating effects of the pandemic will further be subjected to foreign competitors whose wider supply chain networks and support from their respective governments will put them at a disadvantage,” it added.
The OSG’s motion was filed in behalf of the Philippine Contractors Accreditation Board (PCAB).
Sought to be reversed in the OSG’s motion is the SC’s decision that declared unconstitutional Section 3.1 of the Implementing Rules and Regulations (IRR) of Republic Act No. 4566 which classifies the licenses that may be issued by PCAB to contractors into regular and special license.
Under Section 3.1 of the IRR, companies with at least 60 percent Filipino equity participation can be granted a regular license that would allow them continuing authority to engage in many contracting activities throughout a one-year period.
The same section provides that foreign firms can only be granted special license, and they need to have a separate license for each contract activity.
However, it its decision, the SC declared that the provision in Section 3.1 was “a deterrent to the foreign players in the construction industry.”
Also, the SC agreed with the Philippine Competition Commission (PCC) that nullifying the nationality requirement in the licensing scheme would level the playing field for local and foreign firms to undertake construction activities in the Philippines.
Solicitor General Jose C. Calida said the SC decision was untimely because of the effect of the COVID-19 pandemic in the country, particularly on the unemployment rate.
Calida said that foreign contractors normally bring their own nationals to work in their projects, thus, denying Filipinos the employment opportunities.