The Philippine government is aggressively advancing the
acceleration of infrastructure and development of industries
that will yield robust growth across the Philippines.
Infrastructure projects are among the top priorities of the
government with public spending on infrastructure projects
targeted to reach between PHP8 trillion and PHP9 trillion ($154
billion to $173 billion) between 2017 and 2022.
The existing administration's effort to address the
infrastructure gap is encapsulated in its 'Build, Build, Build'
programme. Under this initiative, the government intends to
build, among other things, roads, bridges, railways, urban mass
transport, airports, and seaports nationwide. It is envisioned
this will result in a more efficient movement of goods and
people, an increase in the productive capacity of the economy,
and sustained inclusive growth throughout the country. The
government's continued focus on prioritising infrastructure
development will allow the Philippines to continue in its
position as the fastest growing economy in Asia.
Together with the infusion of funds for infrastructure,
foreigners have expressed strong interest in participating in
the Philippine construction industry. The Philippine
Contractors Accreditation Board (PCAB) has introduced the
quadruple A category (AAAA) licence, a new category of the
regular licence, which is issued to contractors with more than
40% foreign equity. A 100% foreign-owned domestic construction
corporation with at least PHP1 billion in paid-in equity is
eligible to apply for an AAAA category licence.
The PCAB also issues special licences to foreign contractors
for government infrastructure projects: 1) that are
foreign-financed or internationally funded with international
bidding; 2) where the participation of foreign contractors is
allowed under the terms of a bilateral agreement between the
Philippine government and the foreign government or an
international financing institution; or 3) that are implemented
in accordance with Republic Act number 7718, or the
Build-Operate-Transfer Law, as amended.
Foreign contractors can also enter into joint ventures or
consortiums with Filipino contractors in order to benefit from
the knowledge of the local industry and to share and allocate
risks. The PCAB issues special licences to joint ventures or
consortiums for a single, specific project or undertaking.
For property development projects, foreigners that wish to
own land in the Philippines must do so in partnership with a
Filipino or a qualified Philippine entity. Land ownership is
restricted to Filipinos or corporations that are at least 60%
Filipino-owned. Foreigners may generally lease private land for
25 years, renewable for another 25 years. If the foreigner is
investing in the Philippines, it may lease private land for up
to 75 years (50 years, renewable for another 25 years).
This article is intended for informational purposes only and
should not be considered legal advice.
|Sylvette Y Tankiang
||Maria Concepcion P Simundac