THE Philippine Competition Commission (PCC) is seeking the help of the Department of Trade and Industry (DTI) in revising rules that currently make it difficult for foreign construction firms to do business here in the country.

Commissioner El Cid R. Butuyan told BusinessWorld that the commission reached out to the DTI earlier in January for possible revisions in the nationality requirement for the licensing of contractors.

The PCC filed an amicus curiae (friend of the court) brief with the Supreme Court on Dec. 19 by way of commenting on an ongoing case between the Philippine Contractors Accreditation Board (PCAB) and the Manila Water Company, Inc. (MWCI).

“What we did recently is to send the amicus curiae in the hope that through DTI will be able to address this,” he said in a phone interview on Monday.

“In terms of possibilities the related agencies can technically revise or issue new rules. But this is already pending in the SC. So we need to weigh that,” he said, adding that any revision of rules in the part of DTI, which has authority over PCAB, would not have as much “assurance” as an SC ruling.

DTI Secretary Ramon M. Lopez could not be reached for comment.

The issue involves a provision in the implementing rules and regulations (IRR) of RA 4566, also known as the Contractor’s License Law.

In its brief, PCC asked the high court to nullify section 3.1 of the IRR, which licenses local contractors on a yearly basis, while requiring foreign contractors to seek licenses for each new construction project. This, in essence, is anti-competitive, PCC said.

Mr. Butuyan said that, while PCC is open to other means to address the issue, a decision from the high court would have a domino effect on other government agencies faced with similar circumstances.

The PCAB issues two types of license to contractors — Regular and Special.

The Regular license is issued to domestic contractors and is valid for a year. The Special license is issued to joint ventures, consortia, or foreign contractors and is valid for individual projects only.

Citing PCAB data, PCC said that out of the 1,600 Special licenses issued in 2015, only 20 were issued to foreign firms while four were issued to joint ventures or consortia with foreign participation.

This is part of PCC’s efforts to conduct a “regulatory lookback,” which pertains to a review of existing policies to see which are anti-competitive.

“We think sometimes the anti-competitive environment results from government rules rather than from the behavior of companies,” he explained.

01 February 2017
By Roy Stephen C. Canivel