Construction firm owners to be barred from contractor licensing board
MANILA, Philippines — All members of the Philippine Contractors Accreditation Board will now be barred from holding any ownership in construction firms to avoid a conflict of interest, Trade Secretary Cristina Roque said Wednesday, October 22.
The move, Roque said, is one of several reforms the Department of Trade and Industry (DTI) is rolling out to clean up the body that licenses builders amid ongoing government investigations into anomalous flood control projects.
Roque told reporters of the planned prohibition at a press conference after she appeared before the Independent Commission for Infrastructure (ICI) on Wednesday.
"We discussed several major changes, but we will still finalize everything," Roque said. "But [for] example, for the PCAB board, we already made some changes that a board member cannot own a construction company because it's conflict of interest."
Created through Republic Act 4566, the PCAB licenses and regulates all construction contractors operating in the Philippines. The accreditation is mandatory for any firm bidding on government infrastructure projects and is widely required for major private construction as well.
A member of the board, Roque said, "should have a construction background, meaning they could be an engineer part of a construction firm," but not own a construction firm.
All current PCAB board positions will soon be filled with new appointees pending presidential approval, Roque said. The agency will also get a new executive director.
"We've submitted a lot of names. First they have to have 10 years of experience," Roque said. "They are actually very well respected in the construction [industry]," she added.
PCAB drew criticisms from senators in September over their deemed “leniency” toward contractors involved in questionable flood control projects.
During a hearing of the Senate Blue Ribbon Committee, senators grilled then-PCAB chair Pericles Dakay over the agency’s failure to investigate or sanction firms accused of cornering flood control contracts and recycling blacklisted companies under new corporate names. Lawmakers, including Senators Erwin Tulfo and Vicente Sotto III, cited cases where firms previously suspended by the DPWH were later relicensed by PCAB.
Dakay is the owner and CEO of Dakay Construction and Development Corp.
New oversight
The DTI, Roque added, is also creating a new layer of oversight to the licensing process. Previously, PCAB board members had sole authority to approve licenses. Now, applications will first go through the Office of the Secretary for review before reaching the board.
"There's an additional check now in the Office of the Secretary to make sure we double check that they are really following the rules," Roque said.
The department is also considering barring relatives of blacklisted contractors from obtaining licenses, though Roque said this measure awaits recommendations from the ICI and Department of Public Works and Highways.
New license applications have stalled as the department develops stricter guidelines, Roque said, which has left legitimate businesses waiting for approval.
"Not everybody's fraud. Many people just want to do business," Roque said, noting that even legitimate contractors have been caught in the reform process. "They employ a lot of people. And they also have payables which means they also affect other industries."
The top 15 contractors that President Ferdinand Marcos Jr. earlier exposed for cornering billions worth of flood control projects will soon see their licenses revoked, Roque added.
"We're in the final stages already," the DTI secretary said, adding that appeals would likely not be possible.
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