EIGHTEENTH CONGRESS OF THE) 
REPUBUC OF THE PHILIPPINES ) 
Second Regular Session 
)
SENATE 
S. No. 2091
March
DATE
TIME¥NDEX
Introduced by Senator Manuel "Llto" M. Lapid
AN ACT
AMENDING SECTIONS 35, 37, 38, 39 AND 40 OF REPUBLIC ACT NO. 4566, 
OTHERWISE KNOWN AS THE "CONTRACTORS' LICENSE LAW", MODIFYING 
THE CONTRACTORS' LICENSE RENEWAL PROCESS, INCREASING FEES, AND 
IMPOSING PENALTIES FOR VIOLATIONS THEREOF
EXPLANATORY NOTE
The construction industry Is as one of the Important sectors of our economy. 
Based on the 2018 Construction Industry Performance Highlights1 released by the 
Construction Industry Authority of the Philippines, the industry's share to the total 
employment of the country stood at 9.4% or about 3.848 Million workers and its 
contribution to the GDP amounted to 6.8%. The report also noted that the 
construction sector contributed 33.9% to the overall capital investments or Gross 
Capital Formation (GCF) In the country.
Owing to its crucial role and contribution to the national economy, the industry 
is regulated by government primarily through the Philippine Contractors' Accreditation 
Board (PCAB). Under Republic Act No. 4566, or the "Contractors' License Law", as 
amended by Presidential Decree No. 1746, no contractor may engage in the business 
of contracting in the country without first having secured a PCAB license to conduct 
business. The said law sets out the guidelines, rules and regulations that applicants 
for license must meet and license holders must continue to abide by In order to 
maintain such privilege.
https://ciap.dti.gov.ph/sites/default/files/publications/2018%20CIPP.pdf


However, the original law, R.A. 4566 is already more than 50 years old, and 
the last amendment to it occurred in 1980 which merely entailed renaming and 
reorganization. Because of this, some of the features, procedures, and amounts of 
referred to in the law are already outdated and in need of reform and improvement 
to keep up with the changing times.
Thus, this proposed measure seeks to amend and update the Contractors' 
License Law by increasing the amounts imposed as penalties for its violation and the 
fees collectible for the issuance or renewal of licenses. The Board will be provided with 
the power to adjust, subject to consultation with the relevant stakeholders, the said 
figures not more than once every three years, but in no case shall the penalty be 
adjusted or increased by more than 15%. To support its operations, the Board will 
also be given authority to retain, utilize or apply all the fees, fines and other charges 
collected by it under the law. The bill will provide flexibility by allowing contractors 
who have been operating in good standing for 25 years or more, to renew their license 
every three years, and for those operating in good standing for 10 years but not more 
than 25 years, renewal may be made every two years.
In view of this, early passage of this bill is sought.
(9
pEL "LiTO" M. LAPID
Senator H


EIGHTEENTH CONGRESS OF THE) 
REPUBLIC OF THE PHILIPPINES ) 
Second Regular Session )
SENATE
S. No. 2091
March
DATE
TJME¥NDEX
Introduced by Senator Manuel "Lito" M. Lapid
AN ACT
AMENDING SECTIONS 35, 37, 38, 39 AND 40 OF REPUBLIC ACT NO. 4566, 
OTHERWISE KNOWN AS THE "CONTRACTORS' LICENSE LAW", MODIFYING 
THE CONTRACTORS' LICENSE RENEWAL PROCESS, INCREASING FEES, AND 
IMPOSING PENALTIES FOR VIOLATIONS THEREOF
Be it enacted by the Senate and the House of Representatives of the Philippines 
in Congress assembled:
1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
SECTION 1. Section 35 of Republic Act No. 4566, as amended, otherwise known 
as the "Contractors' License Law" is hereby further amended to read as follows:
"Section 35. Penalties. Any contractor who, for a price, commission, 
fee or wage, submits or attempts to submit a bid to construct, or 
contracts to or undertakes to construct, or assumes charge in a 
supervisory capacity of a construction work within the purview of this 
Act, without first securing a license to engage in the business of 
connoting in this country; or who shall present or file the license 
certificate of another, give false evidence of any kind to the Board, 
or any member thereof In obtaining a certificate or license, 
impersonate another, or use an expired or revoked certificate, or 
license, shall be deemed guilty of misdemeanor, and shall, upon 
conviction, be [sentenced to pay a fine of not less than five hundred 
pesos but not more than five thousand pesos] PENALIZED WITH 
A FINE OF NOT LESS THAN ONE HUNDRED THOUSAND 
PESOS (PHP 100,000.00) OR THE EQUIVALENT OF POINT 
ONE PERCENT (0.1%) OF THE PROJECT COST, WHICHEVER 
IS HIGHER. IN ADDmON, THE OFFENDING CONTRACTOR 
SHALL BE PROHIBITED FROM GAINING A CONTRACTING 
LICENSE FOR A PERIOD OF NOT LESS THAN ONE (1) YEAR."


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
SEC. 2. Section 37 of Republic Act No. 4566, as amended, is hereby further 
amended to read as follows:
"Secb'on 37. Individual License. It is unlawful for any person who Is 
a responsible managing partner, officer or employee of a licensed 
partnership, corporation, firm, association or other organization to 
individually engage in the constructing business [of] OR individually 
act In the capacity of a contractor within this jurisdiction without 
having a license In good standing to so engage or act. ANY PERSON 
FOUND IN VIOLATION OF THIS PROVISION SHALL BE 
PENALIZED WITH A FINE OF NOT LESS THAN FIFTY 
THOUSAND PESOS (PHP 50,000.00) OR THE EQUIVALENT OF 
POINT ONE PERCENT (0.1%) OF THE PROJECT COST, 
WHICHEVER IS HIGHER. IN ADDITION, THE OFFENDING 
PARTY SHALL BE PROHIBITED FROM GAINING A 
CONTRACTING LICENSE FOR A PERIOD OF NOT LESS THAN 
ONE (1) YEAR.
"THE BOARD, IN CONSULTATION WITH ITS STAKEHOLDERS,
IS AUTHORIZED TO ADJUST THE PENALTY NOT MORE THAN 
ONCE EVERY THREE (3) YEARS, BUT IN NO CASE SHALL THE 
PENALTY BE ADJUSTED OR INCREASED BY MORE THAN 
nFTEEN PERCENT (15%) OF THE FINE."
SEC. 3. Section 38 of Republic Act No. 4566, as amended, is hereby further 
amended to read as follows:
"Section 38. Joint licenses. It is unlawful for any two or more 
licensees, each of whom has been issued a license to engage 
separately in the capacity of a contractor, to jointly submit a bid or 
otherwise act in the capacity of a contractor without first having 
secured an additional license for acting in the capadty of such a joint 
venture or combination in accordance with the provisions of this Act 
as provided for an individual, partnership or corporation. 
LICENSEES FOUND IN VIOLATION OF THIS PROVISION 
SHALL EACH BE PENALIZED WITH A FINE EQUIVALENT TO 
POINT ONE PERCENT (0.1%) OF THE PROJECT COST. IN 
ADDITION, THE OFFENDING LICENSEES SHALL BE 
AUTOMATICALLY DISQUALIFIED FOR AWARD OF 
CONTRACT.
"THE BOARD, IN CONSULTATION WITH ITS STAKEHOLDERS,
IS AUTHORIZED TO ADJUST THE PENALTY NOT MORE THAN 
ONCE EVERY THREE (3) YEARS, BUT IN NO CASE SHALL THE 
PENALTY BE ADJUSTED OR INCREASED BY MORE THAN 
FIREEN PERCENT (15%) OF THE FINE."


1 
SEC. . 4. Section 39 of Republic Act No. 4566, as amended, Is hereby further
2 
amended to read as follows:
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
"Section 39. Fee. The amount of fees prescribed by this Act shall be 
as follows:
"(a) [Fifty] FIVE THOUSAND pesos (PHP 5,000.00) for an
original license;
(b) [Sixty] SIX THOUSAND pesos (PHP 6,000.00) for
examination of an applicant;
(c) [Fifty] FIVE THOUSAND pesos (PHP 5,000.00) for an annual 
renewal.
"THE BOARD IS AUTHORIZED TO COLLECT, RETAIN AND 
UTILIZE OR APPLY ALL FEES, FINES, AND OTHER CHARGES 
COLLECTED BY IT UNDER THIS ACT TO AUGMENT ITS 
OPERATIONS, THE PROVISIONS OF LAW TO THE CONTRARY 
NOTWITHSTANDING.
"THE BOARD, IN CONSULTATION WITH ITS STAKEHOLDERS, 
IS AUTHORIZED TO ADJUST THE FEES NOT MORE THAN 
ONCE EVERY THREE (3) YEARS, BUT IN NO CASE SHALL THE 
FEES BE ADJUSTED OR INCREASED BY MORE THAN FIFTEEN 
PERCENT (15%)."
21 
SEC. 5. Section 40 of Republic Act No. 4566, as amended, is hereby further
22 
amended to read as follows:
23
24 
"Section 40. Renewal. A license [may be renewed by the filing of a
25 
renewal application with the registrar not later than June thirtieth of
26 
each fiscal year, accompanied by the annual renewal fee.] ISSUED
27 
PURSUANT TO THE PROVISIONS OF THIS ACT SHALL BE
28 
VALID FOR ONE (1) YEAR FROM THE DATE OF ITS APPROVAL.
29 
A license renewed thereafter shall be subject to [an additional] A
30 
RENEWAL fee of [Twenty] RVE THOUSAND Pesos (PHP
31 
5,000.00) PURSUANT TO SECTION 39 OF THIS ACT.
32
33 
"IN CASE THE CONTRACTOR HAS BEEN IN OPERATION IN
34 
GOOD STANDING FOR TWENTY-FIVE (25) YEARS OR MORE,
35 
IT MAY RENEW ITS LICENSE EVERY THREE (3) YEARS. IF IT
36 
HAS BEEN IN OPERATION IN GOOD STANDING FOR TEN (10)
37 
YEARS BUT NO MORE THAN TWENTY-FIVE (25) YEARS, FT
38 
MAY RENEW ITS LICENSE EVERY TWO (2) YEARS. IF IT HAS
39 
BEEN IN OPERATION IN GOOD STANDING FOR LESS THAN


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
TEN (10) YEARS, ITS SHALL RENEW ITS LICENSE EVERY 
YEAR.
"APPLICATIONS AND ALL OTHER REQUIREMENTS FOR 
LICENSE RENEWAL MAY BE FILED WITH THE BOARD OR ITS 
DESIGNATED AGENCIES EITHER IN PERSON OR THROUGH 
ONLINE NOT EARLIER THAN NINETY (90) DAYS AND NOT 
LATER THAN THIRTY (30) DAYS BEFORE THE EXPIRATION OF 
THE LICENSE.
"THE BOARD, IN CONSULTATION WITH ITS STAKEHOLDERS, 
IS AUTHORIZED TO ADJUST THE FREQUENCY OF RENEWAL 
OF LICENSES NOT MORE THAN ONCE EVERY THREE (3) 
YEARS."
Section 6. Repealing Clause.—N\ laws, presidential decrees, executive orders, 
proclamations, rules and regulations, or any part thereof, which are inconsistent with 
the provisions of this Act are hereby repealed or modified accordingly.
Section 7. Separability Clause. - If any provision or part of this Act, or the 
application thereof to any person or circumstance, Is held unconstitutional or invalid, 
the remainder of this Act shall not be affected1 thereby.
Section 8. Effectivity Clause.—IYas Act shall take effect fifteen (15) days from 
its publication in the Official Gazette or in at least two (2) newspapers of general 
circulation.
Approved,