December 3, 2020

DivinaLaw Senior Partner Atty. Enrique V. Dela Cruz Jr. was among the panel of experts featured in the first virtual discussion of the Philippine Construction Arbitration Conference 2020 organized by the Philippine Institute of Construction Arbitrators and Mediators (PICAM) held last November 26, 2020.

When asked for the possible advantages and disadvantages of allowing unrestricted access to foreign contractors, Atty. Dela Cruz had this to say:

“Based on my practice with several contractors and my experience in the legislative branch helping senators and congressmen formulate laws on this matter, we surveyed other countries and there is no country in the world that allows foreign contractors unregulated market access. You have to have restrictions.”

Saying that around 97 percent of the local licensed contractors are small to medium enterprises, Atty. Dela Cruz saw only disadvantages in allowing foreign contractors to compete at all levels. “Why would you want these foreign companies (wholly owned) to compete with these small to medium enterprises? This is the worst idea in the worst possible time.”

“I think we want them to compete in the big-ticket projects, those that require capitalization of at least 10 billion pesos and up because we want the technology transfer these firms can give us.”

Aside from the possible undue competition against SMEs, Atty. Dela Cruz also believed that allowing foreign contractors unregulated access would not be beneficial for the industry in the long run.

“Under the Article 1723 of the Civil Code, you can go after your contractors for at least 15 years after the construction. If these construction companies are not here, how can they be held accountable?”

Aside from Atty. Dela Cruz, the panel also included Construction Industry Arbitration Commission Commissioner Emilio Lolito Tumbocon, Atty. Roberto Dio, secretary general of the Philippine Dispute Resolution Center, and Dr. Ernesto de Castro, president and CEO of ESCA Inc., with Atty. Donemark Calimon, secretary general of Philippine International Center for Conflict Resolution, as moderator.

The discussion was held following a Supreme Court decision released last August that declared as unconstitutional a regulation by the Philippine Contractors Accreditation Board regarding the licensing of foreign contractors. A motion for reconsideration of the SC’s order has been filed by the Office of the Solicitor General.