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Report in BSCE Elective I

Januel G. Villapando
1. What is the PCAB?

The Philippine Contractors Accreditation Board (PCAB) was formed by virtue of

RA 4566 passed by Congress in 1965. R.A. 4566 was amended by P.D. No. 1746 provides
that no contractor (including sub-contractor and specialty contractor) shall engage in
the business of contracting without first having secured a PCAB license to conduct
business. It is an offense to engage in contracting business without a license first being
obtained. All architects and engineers preparing plans and specifications for work to be
contracted in the Philippines shall stipulate in their invitation to bidders, whether a
resident of the Philippines or not, and in their specifications that it will be necessary for
any bidder, whether contractor, sub-contractor or specialty contractor, to have a license
before his bid is considered. The purpose of the Contractors License Law (R.A. 4566) is
to ensure, for the safety of the public, that only qualified and reliable contractors are
allowed to undertake construction in the country. The law also aims to promote for the
benefit of the public and private sectors and for the national interest, the orderly growth
of the contracting sector and the upgrading of construction capability.

2. Make a report on the functions of PCAB, its regulation and


Functions of PCAB

Specifically, the Authority have the following powers and objectives:

o Evolve an overall strategy and exercise centralized authority for the
optimum development of the construction industry;
o Monitor and study the operations of the construction industry both here
and abroad, to identify its needs, problems and opportunities and to
recommend and/or implement policies, legislations, programs and
measures to support the development of the industry;
o Rationalize investments in the construction industry in accordance with
national investment priorities and development needs;
o Establish criteria for the classification and categorization of contractors
which accurately reflect their contracting capacity and performance
o Enforce relevant and reasonable rules and requirements, as well as,
implement practicable and efficient procedures for prequalification of
public projects;
o Recommend and encourage the adoption of equipment and realistic
contract conditions for construction;
o Seek the adoption of credit and other financing policies necessary for
sustaining the continued and orderly development of the construction
industry and for supporting Filipino contractors particularly those
involved in overseas constructions;
o Identify and recommend other incentives necessary to support overseas
o Establish procedures, guidelines and criteria for fair and expeditious
adjudication and settlement of claims and disputes in contract
o Promote construction manpower training to supplement the manpower
training efforts of the private sector, through the centralization of
programming and coordination of activities of all government agencies;
o Establish a funding mechanism with the private sector to promote and
develop the construction industry;
o Perform such other functions necessary to achieve its objectives.

PCAB (RA No. 4566, s. 1965)

o Issue, suspend and revoke licenses of contractors;
o Investigate such violations on RA No. 4566 and the regulations thereunder
as may come to its knowledge and issue subpoena and subpoena duces
tecum to secure appearance of witnesses in connection with the charges
presented to the Board;
o Adopt a code of ethics for contractors;
o Adopt reasonably necessary rules and regulations to affect the
classification of contractors in a manner consistent with established usage
and procedure as found in the construction business, and may limit the
field and scope of the operations of a licensed contractor to those in which
he is classified to engage;
o Classify and qualify applicants for contractors licenses by written or oral
examination, or both, and require an applicant to show at least two years
of experience in the construction industry, and knowledge of the building,
safety, health and Philippine laws and the rudimentary administrative
principles of the contracting business, deemed necessary for the safety of
the contracting business and the public; and
o Discharge such other powers and duties affecting the construction
industry in the Philippines.

POCB (PD No. 1167, s. 1977)

o Formulate strategies and programs for developing the Philippine overseas
construction industry;
o Regulate and control the participation of construction contractors in
overseas construction projects;
o Coordinate its strategies and policies with those of the National Economic
and Development Authority (NEDA), Philippine Export Council (now
Export Development Council), Philippine Export and foreign Loan
Guaranty Corporation (Philguarantee), Overseas Employment
Development Board (now Philippine Overseas Employment
Administration, and all relevant agencies of the government involved in
the development and promotion of the overseas construction industry.
The strategies formulated by the Board shall be incorporated into the
National Export Strategy;
o Administer the grant of incentives under PD No. 1167;
o Receive, process and approve, on such terms and conditions it may deem
necessary to promote the objectives of PD No. 1167, applications of
construction contractors for registration under PD No. 1167, and to
impose and collect reasonable fees which shall be used exclusively to meet
the operating and administrative expenses of the Board and in promoting
its objectives;
o Identify, in coordination with the Department of Foreign Affairs, Overseas
Employment Development Board (now the Philippine Overseas
Employment Administration), and the Department of Trade (now the
DTI), the projects, opportunities, and the countries where construction
contractors may operate;
o Determine, with the assistance of the representatives of the private
construction industry and the Department of Public Works,
Transportation and Communication (now the DPWH and DOTC), from
among those interested construction contractors who will be allowed to
bid for overseas projects.
o Determine from among the registrants those who will avail of and are
eligible for the incentives provided under PD No. 1167 and cause the
granting of the same;
o Check, verify, and evaluate at regular intervals, through the facilities of
appropriate existing agencies, the performance of construction contractors
engaged in overseas projects;
o Check and verify periodically, with the assistance of other
instrumentalities of government, through the inspection of the books or
by requiring regular reports or by some other methods deemed most
effective, on the compliance by construction contractors with the
provisions of PD No. 1167 and the rules and regulations issued
o Authorize, upon the recommendation of the Department of Trade, the
exportation of construction materials and equipment, subject to existing
rules on exportation;
o After due notice and hearing, cancel the registration of, or suspend or
cancel, or caue the suspension or cancellation, wholly or partly, of the
enjoyment of incentives, and other benefits by any Filipino contractor,
including the imposition of penalties as provided for under PD 1167, for:
i. Failure by the contractor to maintain the qualifications required;
ii. Violation of any provision of this Decree and of other laws granting
incentives and benefits to such contractors, or of the rules and
regulations issues thereunder, or of any law or decree for the
protection of labor; and
iii. Unjustified abandonment, incompetent management and
administration of any overseas project awarded to such contractor
o Recommend or participate, subject to the approval of appropriate
authorities, in the negotiation of bilateral or multi-lateral agreements that
would facilitate the entry of contractors in overseas markets and to protect
the interest of Filipino contractors and their workers operating overseas;
o Obtain, collate and evaluate information necessary for the effective
discharge of its primary purpose and the proper exercise of its powers and
functions; and
o Generally, exercise all the powers necessary or incidental to attain the
purposes of PD No. 1167, including the promulgation of its internal rules
and procedures governing meetings, organization and staffing.

PDCB (PD No. 1746, s. 1980)

o Formulate and recommend appropriate polices and guidelines for pre-
qualification, bidding and contract award for public infrastructure
o Monitor and evaluate information on the status of public construction
projects, as well as on the performance and contracting capacity of
contractors engaged in such projects;
o Formulate and recommend approximate and standardized contract
terms/conditions and guidelines for determining contract price
adjustments in private construction; and
o Formulate and recommend rules and procedures for the adjudication and
settlement of claims and disputes in the implementation of contracts in
private construction.

CIAC (EO No. 1008, s. 1985)

o Formulate and adopt an arbitration program for the construction industry;
o Enunciate policies and prescribe rules and procedures for construction
arbitration; and
o Supervise the arbitration program, and exercise such authority related
thereto as regards the appointment, replacement or challenging of

CMDF (PD 1746)

o Draw up overall construction manpower development plan and relevant
o Develop and implement manpower training programs for the
construction industry
o Formulate and adopt construction skills and standards and establish skills
testing and certification facilities in coordination with the National
Manpower and Youth Council;
o Recommend appropriate policies and measures to rationalize training and
export of trained manpower in the construction industry in coordination
with the Ministry of Labor and other pertinent government agencies;
o Develop a funding mechanism in cooperation with the construction
industry to enable it to carry out its functions by collecting fees and
undertaking income generating activities;
o Borrow from financing institutions as may support its operations

Legal Bases of PCAB

Presidential Decree (PD) No. 1167 (Developing and Regulating the Overseas
Construction Industry, Providing Incentives Therefore, and for Other
Purposes) dated 27 June 1977, otherwise known as the Overseas Construction
Incentives Decree created the Philippine Overseas Construction Board
(POCB) and placed under the control and supervision of the Office of the
o The PD provided incentives for duly registered Filipino overseas
contractors, i.e. (a) tax credit; (b) deduction from gross overseas income; or
at their option (c) pay one and one-half percent (1 %) tax on their
overseas gross income.
PD No. 1746 (Creating the Construction Industry Authority of the Philippines)
dated 28 November 1980 created the CIAP to promote, accelerate and regulate
the growth and development of the construction industry in conformity with
national goals.
o The Board was then composed of the Minister of Industry as Chairman,
the Chairmen of the Philippine Contractors Accreditation Board,
Philippine Overseas Construction Board, Philippine Domestic
Construction Board, and Construction Manpower Development
Foundation; the President of the Philippine Contractors Association, and a
representative from the private construction sector, as members.
o Under Section 3 of said PD, the CIAP shall be attached to the then
Ministry of Industry (now DTI) for policy and program coordination. It
shall exercise authority, jurisdiction and supervision over the following
agencies which shall act as its implementing arms (IAs):
i. Philippine Contractors Accreditation Board (PCAB) to assume the
functions of the abolished Philippine Licensing Board for
Contractors under RA 4566 (Contractors License Law)
ii. Philippine Overseas Construction Board (POCB) to formulate,
policies, plans, programs and strategies for developing the
Philippine overseas construction industry; regulate and control the
participation of construction contractors in overseas construction
projects; and administer the grant of incentives for Filipino
overseas contractors.
iii. Philippine Domestic Construction Board (PDCB) to formulate,
recommend and implement policies, rules, regulations and
guidelines and adjudicate disputes arising from public construction
iv. Construction Manpower Development Foundation (CMDF) to
formulate an overall construction manpower development plan
and strategies and develop and implement manpower training
programs for the construction industry; among others.
EO No. 679 (Expanding the Composition of the Board of Directors of the
Construction Industry Authority of the Philippines) dated 21 April 1981
included the then Minister of the Public Highways and Minister of Public Works
[now the Secretary of the Department of Public Works and Highways (DPWH)]
and the Minister of Transportation and Communications [now the Secretary of
the Department of Transportation and Communication (DOTC)] as members of
the Authority.

EO No. 768 (Amending Further the Composition of the Board of Directors of

the Construction Industry Authority of the Philippines) dated January 19
1982 included the then Minister of Labor and Employment [now Secretary of
Department of Labor and Employment (DOLE)] and the President of the
Philippine Contractors Association as members of the CIAP.

EO No. 1008 (Creating an Arbitration Machinery in the Construction Industry

Authority of the Philippines) dated 04 February 1985 created the Construction
Industry Arbitration Commission (CIAC) as an arbitrary machinery for the
construction industry. Under Section 3 of this EO, the CIAC was placed under
the administrative supervision of the PDCB.

EO No. 133 (Reorganizing the Department of Trade and Industry, its Attached
Agencies, and for other Purposes) dated 27 February 1987 reorganized the
Ministry of Trade and Industry into the DTI.
o Under Section 18 (c), the CIAP was retained as an attached agency of the
DTI, provided that said Authority shall review annually the capability
and trustworthiness of the entities accredited by it.
o However, under Section 18 (d) of EO No. 133, the CMDF was transferred
from the CIAP to the National Industrial Manpower Training Council
EO No. 292 (Instituting the Administrative Code of 1987) dated 25 July 1987
maintains the same provisions for the CIAP and CMDF under EO No. 133.
The DBM approved on 10 October 2013 the Rationalization Plan of the CIAP and
CMDF which was submitted pursuant to EO No. 336, dated 4 October 2004.

Example of Contractors License