Stakeholders of the construction industry have opposed moves to lift restrictions on the entry of foreign players into the sector.
This sentiment was aired by various groups to the Senate Bill 1008 and related bills that aim to further open up of domestic construction industry.
They said it would be “untimely” to add more players to the local construction market amid the new coronavirus disease 2019 (COVID-19) and would spell the demise of the micro, small and medium enterprises (MSMEs) in the construction sector .
The committee had been hearing
“MSMEs comprising 97 percent of registered contractors who are reeling from the debilitating effects of the pandemic will further be subjected to foreign competitors whose wider supply chain networks and support from their respective governments will put them at a disadvantage,” said CIAP in its 13-page position paper.
CIAP is chaired by Department of Trade Secretary Ramon Lopez with the following as board members: Labor and Employment Secretary Silvestre Bello III, Public Works and Highways Secretary Mark Villar, and Transportation Secretary Arthur Tugade, and the chairpersons of the four implementing boards under the authority, plus a private sector representative.
The Society of Philippine Electrotechnical Constructors and Suppliers Inc. comprised of licensed electrical construction companies said without the necessary safeguards and programs to develop and strengthen the local industry, opening up the sector “would have an adverse impact on our members, most of whom are MSMEs.”
The need for safeguards for the local industry is also echoed by the Association of Carriers and Equipment Lessors whose members are part of the construction equipment supply distribution chain.
There are over 15,000 licensed contractors in the country which provide around 4.2 million employment, accounting for 10 percent of total employment in the country and making it the biggest direct job contributor to the country in the last 10 years.
“The entry of foreign contractors with their undue advantage will not only displace current professionals and workers in the industry, but will dampen employment opportunities for returning overseas Filipino workers,” CIAP said.
The Organization of Socialized and Economic Housing Developers of the Philippines whose members had been responsible for socialized housing for the less-privileged noted that the proposed legislations would increase the cost of constructing houses as 100 percent foreign constructors would likely bring in high-salaried foreign engineers and managers.
“OSHDP developers operate on a government-mandated price ceiling, and as a result, are very sensitive to increases in the cost structure,” the group told the Senate Committee.
According to a position paper presented by the Philippine Constructors Association (PCA), such legislation “would critically impact local players — particularly the MSME sector, which make up some 97 percent of local contractors.” PCA represents the country’s construction sector with chapters nationwide and affiliate members from various support industries.
In a separate position paper, PCA Marivalley president Wilfredo Reyes said his members which are mostly MSMEs are particularly worried that the proposed bills tend to allow the entry even of wholly-owned foreign MSME constructors which would bring foreign workers, further exacerbating the current situation of a labor surplus in the industry due to depressed demand and massive repatriation of overseas Filipinos amid the global pandemic.
PCA pointed out it is not averse to the entry of foreign construction companies which are already allowed to operate under existing laws and regulations.
“What we are concerned about would be the unregulated entry of foreign-owned construction companies without the necessary safeguards and programs for the local construction industry.”
CIAP added the liberalization of the construction industry has been accepted and addressed through the years by the formulation and implementation of corresponding laws, policies, and regulations such as the Special Licenses for Joint Ventures, Consortia and Foreign Contractors, and the Regular License with Annotation for Quadruple A companies, allowing wholly-owned or foreign corporations to regularly engage in projects. (I. Isip)
