Contractors' License Law establishment and regulation

Philippine Licensing Board for Contractors

Section 2 establishes the Philippine Licensing Board for Contractors under the office of the Board of Examiners.
The Board consists of a Chairman and two other members, appointed by the President of the Philippines with the consent of the Commission on Appointments.
Section 3 requires each Board member to be: (a) of recognized standing in contracting for ten years, or more; (b) a citizen and resident of the Philippines for at least eight years immediately prior to appointment; (c) at least thirty-five years of age; and (d) of good moral character.

Board terms, removal, and vacancies

Section 4 sets the term of office for the Chairman and members at three years.
The first appointed Board members shall hold office on staggered terms: Chairman for three years, one member for two years, and the other member for one year.
The President may remove any member for neglect or dereliction of duty, incompetence, malpractice, or unprofessional, unethical, immoral or dishonorable conduct under Section 4.
During investigation, the President may suspend the member under investigation and designate a temporary member under Section 4.
Vacancies are filled only for the unexpired term under Section 4.

Board powers, meetings, and annual report

Section 5 vests the Board with authority to issue, suspend, and revoke licenses of contractors.
Section 5 empowers the Board to investigate violations of the Act and regulations as may come to its knowledge.
Section 5 authorizes the Board to issue subpoena and subpoena duces tecum to secure witness appearance in connection with charges before the Board.
Section 5 authorizes the Board, with the President’s approval, to issue rules and regulations, adopt a code of ethics, and use an official seal to authenticate official documents.
Section 6 requires the Board to meet at least once a month, and allows the Chairman to convene meetings or the two other members to request meetings in writing.
Section 8 requires the Board, at the end of each fiscal year, to submit a detailed report of activities and proceedings to the President and Congress.

Compensation and per diem limits

For every meeting attended, Section 7 sets the Chairman’s per diem at fifty pesos.
For every meeting attended, Section 7 sets each member’s per diem at twenty-five pesos.
Section 7 limits total monthly compensation so that no Chairman or member may receive more than four hundred pesos in any one month.

Definitions and coverage limits

Section 9 defines “Persons” to include an individual, firm, partnership, corporation, association, other organization, or any combination of them.
Section 9 defines a “Contractor” (synonymous with “builder”) as any person who undertakes, offers, bids to, or purports to undertake, or who by oneself or through others constructs, alters, repairs, adds to, subtracts from, improves, moves, wrecks, or demolishes buildings, highways, roads, railroads, excavations, or other structures, projects, developments, or improvements, including erecting scaffolding and related works; it also states the term includes subcontractor and specialty contractor.
Section 9 defines general engineering contractors by their principal business involving fixed works requiring specialized engineering knowledge and skill, listing specified divisions/subjects.
Section 9 defines general building contractors as those whose principal business is the construction of structures for support, shelter, enclosure, or for persons, animals, chattels, or movable property, requiring in construction the use of more than two unrelated building trades or crafts, including enumerated structure types and related fixed works.
Section 9 defines “specialty contractor” as one whose operations pertain to construction work requiring special skill and whose principal contracting business involves specialized building trades or crafts.
Section 10 provides that the Act does not apply to an authorized representative of the Republic of the Philippines, or an incorporated town, city, province, or other municipal or political corporation or subdivision.
Section 11 excludes from coverage the sale or installation of finished products, materials, articles, or merchandise not actually fabricated into and not becoming a permanent and fixed part of the structure.
Section 12 excludes construction, alteration, improvement, or repair of personal property.
Section 13 excludes minor work on one undertaking/project by one or more contracts with an aggregate contract price of less than ten thousand pesos for labor, materials, and all other items.
Section 13 denies the minor-work exemption when the work is only part of a larger or major operation or when division of the operation is made in contracts of amounts less than ten thousand pesos for the purpose of evading or otherwise violating the Act.
Section 14 excludes a registered civil engineer or licensed architect acting solely in professional capacity.
Section 15 excludes a person who only furnishes materials or supplies without fabricating them into, or consuming them in, the performance of the work of the contractor.

Classifications and limits on operations

Section 16 provides that contracting business includes: general engineering contracting, general building contracting, and specialty contracting.
Section 17 authorizes the Board to adopt reasonable rules to effect contractor classification consistent with construction industry usage and procedure.
Section 17 authorizes the Board to limit the field and scope of a licensed contractor to the classification(s) in which the contractor is classified as defined under Section 9.
Section 17 allows a licensee to apply for classification in more than one classification if qualifications are met.
Section 17 provides that no additional application or license fee is charged for qualifying or classifying in additional classifications.
Section 18 permits a specialty contractor to execute a contract involving two or more crafts or trades when performance in the other crafts or trades is only incidental or supplemental to the specialty for which the contractor is licensed.

Licensing examinations and eligibility

Section 19 authorizes the Board to investigate, classify, and qualify applicants for contractors’ licenses through written and/or oral examinations, as rules require.
Section 20 requires an applicant to show at least two years of experience in the construction industry and knowledge of the building, safety, health, and lien laws of the Philippines and basic administrative principles for contractor safety as the Board deems necessary.
Section 20 allows qualification through a responsible managing officer appearing personally before the Board, proving the officer is a bona fide responsible officer and exercises authority over contracting business in specific ways: (1) technical and administrative decisions; and (2) hiring, supervising, promoting, transferring, laying off, disciplining, or discharging employees.
Section 21 requires written notice to the Board within ten days if the individual who qualified for the license ceases to be connected with the licensee, or if certain persons tied to an approved/denied/revoked/suspended license situation become associated or employed by the licensee.
Section 21 allows the notice to entitle the concerned license to remain in force within a reasonable period determined by Board rules.
Section 22 mandates that if the licensee fails to notify within the ten-day period, the license is ipso facto suspended.
Section 22 allows restoration by filing an affidavit with the Board stating the originally qualifying person has been replaced by a qualified individual and that the required conditions are met, including that the replacing individual can comply and that the replacement has not had a license suspended or revoked due to lack of good character and has not been connected with a licensee whose license was suspended or revoked for lack of good character.
Section 23 provides that upon payment of the corresponding fee and filing of the application, and after examination and investigation as required, the Board shall issue a license within fifteen days after approval of the application, permitting contracting for the remaining part of the fiscal year.
Section 24 provides that surviving member(s) of a licensed partnership may continue under the partnership license until its expiration if an application for permission is made to the registrar within thirty days after the death and is approved by the Board.
Section 25 allows active contractors engaged in the construction industry at the Act’s effectivity and licensed for the last five years to receive a license without examination upon application.

Renewal, disassociation, records, and changes

Section 26 requires the Board to publish at least once a year in a newspaper of general circulation a list of contractors’ names and addresses, and the licenses issued, suspended, or revoked, plus other information the Board deems proper.
Section 26 allows furnishing copies of these lists upon request to firms or individuals upon payment of a reasonable fee as fixed by the Board.
Section 27 requires all licensees to report to the Board all changes of personnel, name, style, or addresses recorded under the Act within thirty days after changes are made.
Section 40 requires renewal applications to be filed with the registrar not later than June thirtieth of each fiscal year with the annual renewal fee.
Section 40 imposes an additional fee of Twenty Pesos for a license renewed after June thirtieth.
Section 41 prohibits renewal if the license has been under suspension for more than one year immediately preceding the filing of the renewal application.

Fees for licenses and examinations

Section 39 sets the fee for an original license at Fifty pesos.
Section 39 sets the fee for examination at Sixty pesos.
Section 39 sets the fee for annual renewal at Fifty pesos.

Disciplinary grounds and proceedings

Section 28 lists causes for disciplinary action, including: willful and deliberate abandonment without lawful and/or just excuse of a project or operation; willful material and substantial departure from or disregard of plans/specifications prejudicial to another without the required consent; willful misrepresentation of a material and substantial fact by an applicant in obtaining a license; aiding/abetting unlicensed persons to evade the Act or knowingly combining/conspiring with unlicensed persons, or allowing one’s license to be used by an unlicensed person with intent to evade; failure to comply with the Act; willful or fraudulent acts causing another injury or damage; and participation in an act or omission by a partnership/corporation/firm/association in which the licensee is a responsible managing partner/employee/officer that constitutes a disciplinary cause.
Section 29 provides that the Board shall investigate on its own motion or upon a verified written complaint by any person, and may suspend or revoke a license for any act or omission constituting a disciplinary cause.
Section 30 provides prescription rules for filings: accusations must be filed within one year after the alleged act or omission, except for accusations alleging violation of Section 28(c), which may be filed within two years after discovery by the Board of alleged fraud or misrepresentation facts.
Section 31 provides that after suspension, the Board may lift suspension upon proof of compliance with Board requirements and conditions.
Section 31 provides that after revocation, the license shall be renewed or reissued within one year after final decision of revocation upon proof that losses caused by the act/omission have been fully satisfied and conditions imposed by the decision have been complied with.
Section 32 provides that lapsing/suspension by operation of law, by Board order/decision or other competent authority, or voluntary surrender of a license does not deprive the Board of jurisdiction to proceed with investigation or disciplinary proceedings or to render decisions suspending or revoking the license.

Enforcement, injunctions, and criminal penalties

Section 33 makes it the duty of all duly constituted law enforcement officers of the national, provincial, city, municipal governments, and political subdivisions to enforce the Act and report violations to the Board.
Section 34 requires the Board, if an unlicensed contractor engages or attempts to engage in contracting, to have the right to institute the proper action in court and secure a writ of injunction without bond restraining the unlicensed contractor.
Section 35 makes it a misdemeanor for any contractor who, for a price, commission, fee, or wage, submits or attempts to submit a bid to construct; contracts to or undertakes to construct; or assumes charge in a supervisory capacity of construction work under the Act’s purview, without first securing a license to engage in the business of contracting in the country.
Section 35 makes it a misdemeanor to present or file another’s license certificate, give false evidence to the Board or any member to obtain a certificate/license, impersonate another, or use an expired or revoked certificate or license.
Section 35 imposes a fine of not less than five hundred pesos but not more than five thousand pesos upon conviction.
Section 36 requires architects and engineers preparing plans and specifications for work to be contracted in the Philippines to include in their invitation to bidders and specifications a copy of the Act, or portions needed to convey that bidders must have a license before their bid is considered.

Individual and joint venture licensing rules

Section 37 makes it unlawful for any responsible managing partner, officer, or employee of a licensed partnership/corporation/firm/association/organization to individually engage in contracting business or act as a contractor in the jurisdiction without a license in good standing.
Section 38 makes it unlawful for two or more licensees, each licensed to engage separately as contractors, to jointly submit a bid or otherwise act as a contractor without first securing an additional license for acting as a joint venture or combination as required for an individual, partnership, or corporation.

Separability, repeal, and effectivity

Section 42 establishes a separability clause: if any provision is held unconstitutional, the other provisions remain unaffected.
Section 43 repeals all Acts or parts of Acts inconsistent with the Act.
Section 44 provides that the Act takes effect upon its approval.