The Supreme Court (SC) has sustained its 2020 decision that effectively allowed foreign construction firms to secure regular licenses to engage in public or private projects in the country.
In a resolution made public last March 3, the SC junked the motion for reconsideration filed by the Philippine Contractors Accreditation Board and various petitions and motions filed by several construction associations and privately-owned construction firms.
The resolution was issued on the petition filed by PCAB against Manila Water Company, Inc.
The controversy stemmed from the petition of Manila Water for PCAB to accredit its foreign contractors to undertake its contracts for the construction of necessary facilities for its waterworks and sewerage system.
When PCAB denied Manila Water’s plea, the water company brought the issue before the trial court which ruled in its favor, prompting the PCAB to appeal the lower court’s ruling before with the high court.
In its March 10, 2020 decision, the SC affirmed with modification the trial court’s order and resolution.
“Wherefore, the motions for Leave to Intervene are denied and the admission of the Motions for Reconsideration-in-Intervention and Petitions-in Intervention is declined. The Motion for Reconsideration is likewise denied,” the SC ruled.
The SC declared “void Section 3.1 (a) paragraph 2, Rule 3; Section 3.1 subparagraph (bb), Rule 3; and Section 12.7, Rule 12 of the 1989 Revised Rules and Regulations Governing Licensing and Accreditation of Contractors in the Philippines, implementing Republic Act No. 4566 or Contractors’ License Law.”
“These regulations defining nationality-based licensing categories were adopted by PCAB in excess of its authority,” the SC held.
It also resolved that the “PCAB’s reliance on Section 14, Article XII of the Constitution is misplaced as it pertains to the regulation of practice of profession by natural persons based on nationality rather than to the business of construction by juridical entities, whether corporations, partnerships or sole enterprises.”
PCAB filed a motion in behalf of PCAB to reconsider the 2020 decision.
Acting PCAB’s counsel, the OSG pleaded the 15-member bench to retain the limitations on the participation of foreign firms in construction projects.
The chief state lawyer also pointed out that the decision was untimely because of the effect of the Covid-19 pandemic in the country, particularly on the unemployment rate.
It said that foreign contractors normally bring their own nationals to work in their projects and, thus, denying Filipinos the employment opportunities.
At the same time, the OSG said in its motion that the law mandates the issuance of special license to address the current demands for the Philippines to be globally competitive and balance the participation of foreign contractors.
The OSG’s motion was supported by the Philippine Constructors Association, Inc. (PCA), Cebu Contractors Association, Inc., and Davao Constructors Association Center, Inc.