Thursday, January 31, 2013

Philippine Contractor’s Accreditation Board (PCAB)

By Gloria H. Grejalde
Easing restrictions on foreign investors, the Philippine Contractor's Accreditation Board (PCAB), an implementing Board of the Construction Industry Authority of the Philippines (CIAP), has allowed foreign contractors a 100 percent foreign equity to undertake projects as among its proposed amendment to the Contractor's License Law.

The quadruple "A" or "AAAA" category which requires investment of at least P1 billion and allows foreign contractors to come in with 100 percent foreign equity was introduced. However, these qualified foreign contractors may only undertake projects of at least P10 billion and above.

During its public hearing and consultation held at the PTTC Training Center in Roxas Boulevard on Wednesday, the PCAB also presented the proposed amendments to the Implementing Rules & Regulations (IRR) of the Contractor's License Law (Republic Act 4566) which, include among others, the provision of 60-40 percent Filipino-Foreign Equity Requirements for the issuance of regular contractor's license to implement private contracts.

The proposed amendments on the 60-40 percent Filipino-foreign equity requirements were as follow:

1. The 60 percent-40 percent Filipino-foreign equity participation shall be in terms of peso value of the total contribution based on shares subscribed, whether common or preferred, voting or non-voting and based on the total paid-up or paid-in capital;

2. All shares held by Filipinos within the required ratio of at least 60 percent shall not be assigned or encumbered in favor of foreigners and should any of the shareholders be a juridical person, the 60 percent-40 percent requirement on the corporation shall also be applied;

3. Of firms with 60 percent-40 percent Filipino-foreign equity participation, only those who qualify for at least Category "A" may be granted a regular license. The regular license for Categories "B", "C", "D" and Trade shall be limited to Filipino citizens or juridical persons with a hundred (100 percent) Filipino equity;

4. Along with the 60 percent-40 percent Filipino-foreign participation is the exercise of equivalent management control in the Board of Directors and to include stockholder's voting rights and appointment of a Filipino Authorized Managing Officer;

In instances where the existing AMO is a foreigner, the corporation is given grace period until 30 June 2014 to replace the foreigner with a Filipino Authorized Managing Officer. In exceptional cases as may be determined by the Board, new applicants may be allowed to nominate a foreign Authorized Managing Officer for a maximum of two (2) years from the grant of the license, after which a Filipino Authorized Managing Officer shall be appointed." (PCAB Board Resolution No. 65, Series of 2011, as approved in a Special Board Meeting on November 5, 2012 under CIAP Board Resolution No. 08 Series of 2012).

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