Republic of the Philippines
House of Representatives
Quezon City, Metro Manila

EIGHTEENTH CONGRESS
Second Regular Session

H.B.No.__7889

Introduced by Representative AURELIO “DONG” D. GONZALES, JR.

AN ACT
FURTHER AMENDING REPUBLIC ACT NUMBER 4566, OTHERWISE KNOWN
AS THE “CONTRACTOR’S LICENSE LAW,” AS AMENDED, PROVIDING FOR
THE TYPES, ADDITIONAL CONDITIONS, AND REQUIREMENTS IN THE.
ISSUANCE OF A CONTRACTOR'S LICENSE, AND FOR OTHER PURPOSES

EXPLANATORY NOTE

The sovereign Filipino People, in promulgating the 1987 Constitution, mandated that
the State “shall promote the preferential use of Filipino labor, domestic materials and locally
produced goods, and adopt measures that help make them competitive (Article XII, Section 12,
1987 Constitution),” and that a trade policy shall be pursued that “serves the general welfare
and utilizes all forms and arrangements of exchange on the basis of equality and reciprocity
(Article XII, Section 13, 1987 Constitution).”

The abovestated Constitutional dicta impelled this representation to introduce this bill,
which seeks to prioritize Filipino contractors and workers in the construction industry, but
without closing barriers to the entry of foreign contractors. Under this measure, regular licenses
shall be issued to qualified Fil
business for multiple projects, if such license remains valid. Foreign contractors may also

ino contractors which will enable them to engage in the

engage in the construction business, but under a special license, and for a single specified
undertaking only, in recognition of the substantial distinctions that make real differences
between Filipino and foreign contractors.


This notwithstanding, a regular license may still be issued to foreign contractors under
specific instances provided by the bill. Both local and foreign contractors will be able to
participate in the market on a more level and equitable playing field, which is expected to fuel
the country’s economic rebound after the pandemic and contribute to the expansion and
sustainable growth of the industry.

Further ensuring that the intercourse of trade is founded on reciprocity between States
as dignified equals, the bill provides that foreign contractors shall not be considered for the
grant of a license unless their country or State of Origin allows Filipino contractors to practice

within their territory on the same basis as its subjects or citizens.

In view of the foregoing, the immediate passage of the bill is earnestly sought.

HON. BL Kner D. GONZALES, JR.

Representative
3" District, Province of Pampanga


EIGHTEENTH CONGRESS OF THE
REPUBLIC OF THE PHILIPPINES
Second Regular Session

H. B. No. 7889

Introduced by Representative AURELIO “DONG” D. GONZALES, JR.

AN ACT
FURTHER AMENDING REPUBLIC ACT NUMBER 4566, OTHERWISE KNOWN:
AS THE “CONTRACTOR’S LICENSE LAW,” AS AMENDED, PROVIDING FOR
THE TYPES, ADDITIONAL CONDITIONS, AND REQUIREMENTS IN THE
ISSUANCE OF A CONTRACTOR’S LICENSE, AND FOR OTHER PURPOSES

Be it enacted by the Senate and House of Representatives of the Philippines in Congress
assembled:

SECTION 1. Republic Act Number 4566, as amended, otherwise known as Contractor’s
License Law, is hereby further amended by inserting a new Section 24 to read as follows:

“Section 24. License Types. License means the authority granted by the
Philippine Contractors Accreditation Board (the “Board”), with conformity of
the Construction Industry Authority of the Philippines (the “Authority”), for a
person to engage in construction contracting in the Philippines. There shall be
two (2) types of licenses designated as regular and special licenses.”

“Regular licenses are those issued to domestic construction firms which shall
authorize the licensee to engage in construction contracting within the field and
scope of his license classifications for as long as the license validity is
maintained through annual renewal, unless the renewal is denied or the license
is suspended, cancelled, or revoked. Regular licenses are reserved for and issued
only to Filipino citizens or Filipino partnerships and corporations with at least
sixty percent (60%) Filipino equity except for circumstances provided under
Section 25 hereof.”

“Special licenses are issued to joint ventures, consortia, foreign constructors, or
project owners and project owners undertaking by himself, sans the service of a
constructor, the construction of a project intended for sale, lease, commercial or
industrial use, or any other income generating purpose. It authorizes the licensee
to engage only in construction of a single specific project or undertaking. The
special license for foreign firms shall be subject to other conditions required by
law or implementing rules and regulations, Annual renewal shall be required for
as long as the project or undertaking is in progress. Validity of the special
license shall cease when the project or undertaking is completed.”


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SEC. 2. Republic Act No. 4566, as amended, is hereby further amended by inserting a new
Section 25 to read as follows:

“Section 25. Regular License for Contractors with More than Forty Percent
(40%) Foreign Equity. Regular licenses may be issued to contractors with more
than forty percent (40%) foreign equity when the cost of the project or
undertaking is as follows:”

“(a) At least Five Billion Pesos (Php 5,000,000,000.00) for vertical private
project or undertaking; or”

“(b) At least Three Billion Pesos (Php 3,000,000,000.00) for horizontal
private project or undertaking.”

SEC. 3. Republic Act No. 4566, as amended, is hereby further amended by inserting a new
Section 26 to read as follows:

“Section 26. Foreign Reciprocity. No foreign contractor shall be granted a
license to practice construction contracting in the Philippines, unless the country
or state of which the foreign contractor is a subject or citizen specifically permits
Filipino contractors to practice within its territorial limits on the same basis as
the subjects or citizens of said foreign country or state under reciprocity and
under international agreements: Provided, That such foreign contractor shall
duly establish its business in the Philippines, and shall ensure technology
transfer and capacity building of local contractors and workers.”

SEC. 4. Renumbering Clause. — The succeeding sections of Republic Act No. 4566 are hereby
renumbered accordingly.

SEC. 5. Implementing Rules and Regulations. ~ The Philippine Contractors Accreditation
Board, in coordination with the Construction Industry Authority of the Philippines, and in
consultation with other stakeholders, shall issue the implementing rules and regulations within
thirty (30) days from the effectivity of this Act.

SEC. 6. Separability Clause. ~ If, for any reason, any part or provision of this Act is declared
invalid or unconstitutional, the remaining parts or provisions not affected thereby shall remain
in full force and effect.

SEC. 7. Repealing Clause. — All laws, presidential decrees, executive orders, rules and
regulations contrary to or inconsistent with the provisions of this Act are hereby repealed or
modified accordingly.

SEC. 8. Effectivity. — This Act shall take effect fifteen (15) days after its publication in the
Official Gazette or in any newspaper of general circulation.

Approved,