Law News

Calida to SC: Disallow regular contractor licenses for foreigners

Solicitor General Jose Calida urged the Supreme Court (SC) to reverse its decision that allowed foreign construction firms to obtain regular construction licenses previously reserved only for Filipinos.


“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,” Calida said in a statement on Sunday, October 4.

Calida said the decision was already disadvantageous for local businesses on its own, but it dealt double the damage as it was handed down just before the coronavirus pandemic, which has left many firms struggling to survive.


What decision?

Last March 10, the SC voided a rule that foreign firms are only entitled to a special contractor's license when involved in a Philippine construction project.

In the case, the SC voted 14-1 and sided with the Manila Water Company, and also the Philippine Competition Commission (PCC), by upholding an earlier lower court ruling that declared as void Section 3, Rule 3, of the implementing rules and regulations (IRR) of Republic Act (RA) No. 4566.


The IRR of RA No. 4566 or the contractors' license law said a regular license is "reserved for and issued only to" local firms, either fully Filipino or at least 60%.


Calida's argument

The Office of the Solicitor General (OSG) asserted that the SC's intention of stopping a "deterrent to the foreign players in the construction industry" was based on "incomplete" and "outdated" information.

Citing data from the Philippine Contractors Accreditation Board, the OSG said that from July 2015 to December 2019, foreign construction companies directly participated in and won local projects with a cumulative value of P1.1 trillion.


Using the influx of Chinese firms as example, Calida added that foreign companies implement these major projects in the Philippines by heavily employing foreigners instead of Filipinos. –

By: Rappler