Press Release
November 12, 2015

Senator Marcos Calls For Amendments To Laws Governing Foreign Corporations Engaged In Infrastructure Construction

Senator Ferdinand "Bongbong" Marcos Jr., through Senate Resolution No. 1623, called for a Senate inquiry to clarify the ambiguity of foreign corporations owning and operating businesses that pertain to construction in the country.

Should the inquiry result in amendments to the existing law, Republic Act (RA) No. 4566 or the Contractor's License Law, this will most likely result to an increase in job generation and foreign direct investments, a policy that ultimately benefits Filipinos.

According to the Senator who is Chair of the Senate Committee on Public Works, neither Republic Act No. 4566 nor the 1987 Constitution itself sets any clear and categorical limits for foreign corporations and entities engaged in the construction business in the country.

Under Republic Act No. 4566, the Philippine Contractors Accreditation Board (as amended by Presidential Decree No. 1746) or the PCAB is authorized to "adopt reasonably necessary rules and regulations to effect the classification of contractors in a manner consistent with established usage and procedure as found in the construction business, and may limit the field and scope of the operations of a licensed contractor to those in which he is classified to engage."

Marcos said that the PCAB itself has proposed amendments to the Implementing Rules and Regulations (IRR) of the said law to address the apparent ambiguity.

Meanwhile, the Securities and Exchange Commission (SEC) has issued a legal opinion in 2009 that a one hundred percent (100%)-foreign-owned construction firm, without being the project proponent, can undertake the "construction stage" of an infrastructure project, subject to certain minimum paid-up capital requirements.

"The establishment of foreign equity restrictions in certain fields of economic activity is an important question of national policy which needs to be thoroughly and extensively discussed and studied by Congress, in consultation with appropriate government agencies and key stakeholders in the Philippine construction industry and other relevant private sector groups," Marcos concluded.

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