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MANILA, Philippines – The Attorney General’s Office (OSG) has asked the Supreme Court to reverse its decision that allows foreign contractors to obtain licenses and participate in government or private projects in the country.
In a statement Sunday, GSO said it filed a 29-page motion to reconsider, arguing that limitations on the participation of foreigners in the contracting industry should be maintained “to protect the interests of Filipino contractors and workers.”
The motion was signed by Attorney General José Calida, Assistant Attorney General Ma. Antonia Edita Dizon and State Attorney II Perfect Adelfo Chua Chen.
“Allowing the issuance of regular licenses to foreign contractors would result in an unbridled influx of foreign contractors to the detriment of local contractors in micro, small and medium-sized enterprises (MSMEs), including interested professionals and Filipino workers, among others”, said GSO. in the motion, which was made on behalf of the Philippine Contractor Accreditation Board (PCAB).
The motion comes after the Superior Court, in a decision promulgated on March 10 but published only on August 26, upheld a lower court ruling that declared a provision of Republic Law 4566 or the Rules and Regulations null and void. Regulations for the Implementation of the Contractor Licensing Act (IRR), which classifies the licenses that the PCAB can issue to contractors in regular and special licenses.
Under Section 3.1 of the TIR, companies with at least 60 percent Filipino equity participation can obtain a regular license, which gives them continued authority to engage in many contracting activities over a period of one year. . Foreign companies can only obtain a special license and must have a separate license for each contracting activity.
This regulation, according to the SC, is “a deterrent for foreign players in the construction industry.”
According to the GSO, the PCAB “welcomes” the entry of foreign contractors into the country, which means that the TIR “recognizes the issuance of a special license to address the current demands of the Philippines to be globally competitive and balance the participation of foreign contractors. “
GSO added that Section 3.1 of the IRR was later amended to allow the issuance of “regular license with annotation” to foreign companies with a capitalization of at least P1 billion.
Foreign contractors, said OSG, should compete with local industry in accordance with “adequate regulatory measures provided by PCAB” and that locally funded low-cost projects that do not require technical expertise or new technology should be reserved for local MSMEs. , which comprises 97 percent or 15,061 of the 15,533 licensed contractors in the country.
“If the provision attacked in the TIR is annulled, the easier entry of foreign contractors will allow foreign contractors to compete with local MSME contractors on relatively smaller projects,” warned OSG.
GSO also contradicted the claim that the regulation was an impediment to the entry of foreign players into the country, saying that, according to PCAB records, there were actually a “significant number” of foreign companies authorized to participate in projects. of private and national governmental construction. .
“Clearly, actual foreign participation contradicts the conclusion that Section 3.1 of the IRR of RA 4566 is effectively restrictive rather than purely regulatory. Such a conclusion is simply based on incomplete or outdated information presented by the PCC to demonstrate that the attacked regulation tends to discourage foreign players from entering the construction industry, ”said GSO.
GSO further argued that the TIR provision attacked “is sanctioned by Section 14, Article XII of the Constitution, which limits the exercise of the profession in the Philippines to Filipinos, except in cases prescribed by law.”
Apart from this, 10 members of the Philippine Constructors Association Inc. (PCA) also filed a motion for consideration in intervention before the High Court to reverse its decision on the matter.
/ MUF
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