Construction sector hits Revilla bill

Published April 20, 2021, 8:00 AM

by Bernie Cahiles-Magkilat

The construction sector yesterday warned that Senate Bill 1809 filed by Senator Ramon Revilla Jr., who seeks to open the industry to foreign competition, will be a “death knell” for  domestic players who have not enough capital to match foreign firms.

Wilfredo L. Decena, president of Philippine Constructors Association (PCA) said the bill if passed into law “will effectively open the construction industry to foreign contractors without providing any further regulations.”

PCA President Wilfredo Decena

Senate Bill 1809, filed by Senator Ramon Revilla Jr. on September 2020, seeks to amend the Contractor’s License Law (RA. 4566).  The PCA said that the proposed amendment to the law allowing “persons, regardless of nationality or citizenship” properly licensed and registered with proper authorities to practice construction contracting in the Philippines will it very difficult for local firms to compete. 

“Firstly, this bill seeks to promote competition in the industry and in doing so, increase capability and promote possible transfer of technology. Secondly, this bill updates the fees and penalties to make it applicable in present trends. Thirdly, it seeks to adjust the validity of licenses to respond to the call of industry players and in turn encourage them to do business in the country,” Decena said. 

In allowing foreign contractors to practice locally, Revilla’s bill has proposed that no contractor shall engage in the business of contracting without first having secured a Philippine Contractors Accreditation Board (PCAB) license to conduct business with conformity with the Construction Industry Authority of the Philippines (CIAP).

SBN 1809 stated that foreign contractors who wish to practice in the Philippines can do so if they meet the criteria set by the PCAB, in conformity with CIAP. Such foreign contractor shall duly establish its business in the Philippines, and shall ensure technology transfer and capacity building of local contractors. 

  Revilla said existing fees have not been amended since the law’s enactment back in 1965. The adjusted fees, based on Revilla’s proposal, is P5,000 for an original license, P6,000 for an examination of an applicant, and P5,000 for annual renewal.

Revilla proposes that a license be valid for one year from its issuance, and may be renewed by filing an application for renewal at least one month before its expiry date.

However, the PCA in a position paper submitted to the Senate said that while other countries have taken steps to protect their local industry, some sectors in the Philippines are pushing for the further opening up of the local construction industry. 

“The unregulated entry of foreign contractors, especially at this time when the construction industry is bleeding from the COVID-19 pandemic, will adversely affect small and medium-sized Filipino contractors and deprive Filipino workers of job opportunities in their own country,” said Decena.

Instead of further opening the market to foreign competition, he said, the government should focus on providing opportunities and growth paths, specially for MSME contractors, including developing the talent capacity of the local workforce to help the recovery and growth of the construction sector. The global industry local workforce is currently experiencing a skilled workforce shortage exacerbated by the health and safety measures against the pandemic.

The PCA itself has introduced capacity building programs under its Philippine Constructors Academy.

PCA further quoted Department of Public Works and Highways Undersecretary Cathy Cabral who cited the P1 trillion allotment by the government for infrastructure projects in 2021 alone.

This bolstered PCA’s hopes for a full recovery of the construction sector despite the new surge in COVID-19 cases.

Last year, the construction sector contracted by 9.8 percent due to lockdown measures implemented to stem the spread of the pandemic. It has since seen points of recovery with current numbers from the Philippine Statistics Authority (PSA) showed 4.2 million Filipinos are employed in construction up from 3.7 million in 2020. Analytics firm Fitch Solutions forecasts the industry will grow by 9.5 percent in 2021, expecting the Philippines to effectively contain the spread of the virus.

To continue their works despite the lockdowns, contractors implemented operational adjustments. 

“We asked our people to work from home…monitoring was done remotely using 360-degree cameras, and we provided barracks for our workers. Our digital activities were really accelerated…due to COVID-19,” said Robert Jose Castillo, President and CEO of construction firm EEI Corporation in the discussion explaining some of the adjustments introduced during the pandemic.

In addition, Jorge A. Consunji, President and CEO of D.M. Consunji Inc., has urged to consider construction workers as economic frontliners and should be given priority in the government vaccination rollout.