DTI seeks capital limit on foreign contractors’ entry in PH

The Department of Trade and Industry  (DTI) is strongly batting for a limit on the capital requirement for foreign contractors to protect the small and medium contractors.

Trade and Industry Secretary Ramon M. Lopez stressed this during the Senate budget hearing when asked on the impact on small Filipino contractors the Supreme Court’s ruling liberalizing the entry of foreign-owned firms in the construction services sector in the country.

“If we can put a threshold for a certain level reserved for Filipinos,” said Lopez. He said that companies with capitalization of up to P100 million are defined as medium and those with higher capitalization are considered large.

“Offhand that should be a threshold, but large firms obviously be open for competition,” he said. He added that putting a threshold also protects local firms dealing with small foreign contractors as it would be difficult to run after foreign firms for liability issues and other problems that may arise in the future.

Lopez explained that being the country’s premier investment promotion agency, the opening of the construction services sector would be a welcome development as it should spur foreign investments  in the construction services sector.

But he also stressed the need to protect and develop the capability of local construction services firms who may be displaced because foreign firms are more capable and competitive.

Thus, DTI is supporting a move by the private construction industry and the Philippine Contractors Accreditation Board (PCAB) to appeal the SC decision.

As the country’s competitive watchdog, the Philippine Competition Commission (PCC) lauded the SC decision, declaring certain anti-competitive regulations implementing the Contractors’ License Law unconstitutional. It said the decision paves the way for a level playing field for local and foreign firms to undertake construction activities in the Philippines.

PCC Chairperson Arsenio Balisacan cited that with the

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