Ticaret.gov.tr
EMBASSY OF THE REPUBLIC OF TURKEY 30/12/2010
OFFICE OF THE COMMERCIAL COUNSELLOR MANILA
REPUBLIC OF THE PHILIPPINES
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COUNTRY PROFILE FOR CONSTRUCTION SERVICES
TABLE OF CONTENTS
I. General Economic Information……………………………………………………………………. 4
a. 2010 Philippine Economic Figures….……………………………………………...……… 4
b. Bilateral Trade Relationships………………………………………………………….…… 6
c. 2011 Economic Forecast…………………………………….………………………...…… 7
II. Construction Sector……………….……………………………………………………………….. 7
a. Second Quarter 2010 Construction Sector Information…………………………..…..…… 7
b. Infrastructure for 2010 and Allocation for Succeeding Years……………………………... 10
c. Construction Materials Wholesale Price Index (November 2010) …………………………10
d. Important Projects up for bidding, short and long terms……………………………...…… 11
e. Work Opportunities…………………….………………………………………………….. 11
f. Instruments can be used for market access …………………………………………………11
g. Limitations, Advantages, Risks for Foreign Companies………………………………..…. 12
h. How do projects get financed? ……………………………………………………….……. 12
i. Role of Public/Private sector cooperation and role of BOT Model in investment………… 13
j. Is there shortage of machine, equipment and skilled employees? ........................................ 14
k. Cooperation in which countries can provide advantage
for our companies in Market Access ……………………………………………………….15
l. Which countries actively participate? …………………………………………………….. 21
m. Rank of Construction Sector in Philippine Economy…………………………………….. 21
n. Building Standards……………………………………………………………………….. 21
III. Technical Consultancy Sector……………………………………………………………………… 22
a. Information on Technical Consultancy Sector in the Philippines…………………………. 22
b. 2011 Forecasts……………………………………………………………………...……… 23
c. Work Opportunities………………………………………………………………..…….… 24
d. Other Useful Information ……………………………………….…………………………. 24
IV. Construction, Technical Consultancy and Foreign Investment Regulations………………...…….. 28
a. Summary of Construction & Technical Consultancy Regulations………………………… 28
b. Summary of Foreign Investment Regulations………………………………………...…… 29
c. Summary of Foreign Employment in the Philippines…………………………………..….. 29
V. Bilateral Cooperation Opportunities…………………….…………………………………………. 30
a. Projects supported by Financial Organizations………………………………………..…… 30
b. Projects in other countries, supported by financial organizations wherein Turkish and Philippine companies entered into cooperation……………………………………….…… 30
c. Countries in which Philippine construction companies and technical consultants have projects………………………………………………………………………………………30
VI. Opinion and Evaluation………………………………………………………………...………….. 31
VII. List of Law Firms ……………………………………………………………………………..… 31
VIII. Related Addresses………………………………………………………………………………. 32
IX. References………………………………………………………………………………………….. 34
I. General Economic Information
A. 2010 Philippine Economic Figures
a. Country Identity of the Philippines
National Name :Republic of the Philippines
Capital :Manila
Form of Government :Democratic
Official Language :Filipino, English
Religion :Predominantly Christian by 95%, 5% Muslims
Currency :Philippine Peso (PhP)
Peso-US$ Exchange Rate :PhP 43.4919 (1 – November Average)
Area :Total: 300,000 sq km (115,000 sq miles)
Land :298,170 sq km
Water :1,830 sq km
Population :93.51million (Projected – low assumption, 2)
Female :46.50 million (Projected – low assumption, 2)
Male :47.00 million (Projected – low assumption, 2)
Population Growth Rate :1.9% (2)
Population Density :312 persons per sq km
Working Days / Office Hours :Government and private offices are open either from 8:00 a.m. to 5:00 p.m. or from 9:00 a.m. to 6:00 p.m., Mondays to Fridays, with lunch break from noon to 1 p.m. Some private offices hold office on Saturdays from 9:00 a.m. to 12:00 noon. Generally, commercial banks transact business from 9 a.m. to 3 p.m. and savings banks from 9 a.m. to 5 p.m. Mondays to Fridays. Most shopping malls, department stores, and supermarkets are open from 10:00 a.m. to 8:00 p.m. daily.
Ports and Harbors :There are 25 major ports. Manila is the busiest Philippineport for international shipping, followed by Cebu and Iloilo. Other ports and harbors include Batangas, Cagayan de Oro, Davao, Guimaras Island, Iligan, Jolo, Legaspi, Masao, Puerto Princesa, San Fernando, Subic Bay, and Zamboanga.
Major Cities :The largest urban area in the country is Metro Manila, located in Luzon. The cities within Metro Manila include Manila, the capital city and the country's major commercial port, and Makati, the country's foremost business and commercial centre and the office location for most of the big national and multinational banks and corporations operating in the Philippines. Quezon City, also located in Metro Manila, is the largest city in the Philippines. Other large cities include Cebu City on Cebu Island and Davao City on Mindanao Island.
Time Difference with Turkey :5 hours
Average working hours :Eight (8) hours per day or 48 hours per week
Official Statutory Holidays :January 1 (New Year's Day), April 1 (Maundy
Thursday), April 2 (Good Friday), April 9 (Day of Valor), May 1 (Labor Day), June 14 (Independence Day), August 30 (National Heroes' Day), November 29 (Bonifacio Day), December 25 (Christmas Day), December 27 (Rizal Day) (4)
International Dialing Code :+63
b. Economic Figures
GNP :US$ 101.26 billion (1, Jan – Jun 2010)
GNP Growth Rate :8.2% (1, Jan – Jun 2010)
GNP per Capita :US$ 1,082.2 (1, Jan – Jun 2010)
GDP :US$ 88.08 billion (1, Jan – Jun 2010)
GDP Growth Rate :7.9% (1, Jan – Jun 2010)
GNP Annual Growth Rate per Industry
Agriculture, Fishery, & Forestry :-2.9% (1, Jan – Jun 2010)
Industrial :15.9% (1, Jan – Jun 2010)
Manufacturing :16.2% (1, Jan – Jun 2010)
Construction :15.7% (1, Jan – Jun 2010)
Services :6.7% (1, Jan – Jun 2010)
Inflation Rate :4.0% (1, Jan – Oct 2010)
Wholesale Price Index :201.6 (2, Aug 2010 )
Consumer Price Index :166.1 (2, Oct 2010)
Labor Force :39 million (2, Jul 2010)
Labor Force Participation Rate :64.0% (2, Jul 2010)
Employment Rate :93.1% (2, Jul 2010)
Unemployment Rate :6.9% (2, Jul 2010)
Overseas Workers :8.58 million (6, Dec 2009)
Overseas Workers Deployed :788,000 (1, Jan – Jun 2010)
Capital Formation :PhP 979.21 billion (1, Jan – Sept 2010)
Fixed Capital :PhP 1.02 trillion (1, Jan – Sept 2010)
Changes in Stock :PhP -39.93 billion (1, Jan – Sept 2010)
Foreign Trade Volume :US$ 68.34 billion (1, Jan – Aug 2010)
Exports :US$ 32.98 billion (1, Jan – Aug 2010)
Imports :US$ 35.36 billion (1, Jan – Aug 2010)
Trade Balance (deficit) :US$ -2.38 billion (1, Jan – Aug 2010)
Foreign Trade with Turkey :US$ 109.08 million (5, Jan – Aug 2010)
Exports to Turkey :US$ 62.89 million (5, Jan – Aug 2010)
Imports from Turkey :US$ 46.15 million (5, Jan – Aug 2010)
Turkey Share in RP Foreign Trade :0.16% (Jan – Aug 2010)
Share in PH Exports :0.19% (Jan – Aug 2010)
Share in PH Imports :0.13% (Jan – Aug 2010)
Current Account Balance :US$ 4.406 billion (1, Jan – Jun 2010)
Current Account Balance (as % of GDP) :5.0 (1, Jan – Jun 2010)
Current Account Balance (as % of GNP) :4.4 (1, Jan – Jun 2010)
Outstanding Debt :PhP 4.60 trillion (1, end of Jul 2010)
Outstanding Debt (as % of GDP) :56.5 (1, end of Jun 2010)
Domestic Debt :PhP 2.63 trillion (1, end of Jul 2010)
Domestic Debt (as % of GDP) :32.0 (1, end of Jun 2010)
Foreign Debt :PhP 1.98 trillion (1, end of Jul 2010)
Foreign Debt (as % of GDP) :24.5 (1, end of Jun 2010)
Net Foreign Direct Investments :US$ 1,027 million (1, Jan – Aug 2010)
Net Foreign Portfolio Investments :US$ 1,420 million (1, Jan – Sept 2010)
Selected Accounts
Exports (as % of Imports) :93.27 (5, Jan –Aug 2010)
Exports (as % of GDP) :26.9 (1, Jan – Jun 2010)
Exports (as % of GNP) :40.2 (1, Jan – Jun 2010)
Imports (as % of GDP) :29.8 (1, Jan – Jun 2010)
Imports (as % of GNP) :39.7 (1, Jan – Jun 2010)
1) Central Bank of the Philippines (BSP)
2) National Statistics Office (NSO)
3) National Statistical Coordination Board (NSCB)
4) Office of the President (OP)
5) Undersecretariat for Foreign Trade (UFT)
6) Commission on Filipino Overseas (CFO)
c. 2010 (First Semester)Summary of Philippine Economy
Despite the El Niño phenomenon that scorched the Agriculture sector, a synergistic confluence of factors resulted in two consecutive quarters of GDP growth of over 7.0 percent. The peaceful national elections, improved investors confidence especially among local investors, the global economic recovery, increased capital expenditure of government and a low base fueled the domestic economy to a scintillating 7.9 percent growth in the second quarter of 2010 from 1.2 percent last year.
For the first semester, GNP grew by 8.2 percent, the highest since 8.9 percent in the second semester of 1988.
As for the seasonally adjusted estimate of the GDP, it grew by 1.3 percent from 3.8 percent the previous quarter slowed down by the continuing decline of Agriculture, Fishery and Forestry (AFF). The AFF sector declined by 0.2 percent while Industry, the main growth driver for two consecutive quarters, grew at a slower pace of 3.5 percent from 5.1 percent the previous quarter. Services sectors likewise decelerated to 0.4 percent from 4.4 percent. Likewise, GNP slowed down to a 1.8 percent quarter on quarter growth from 2.0 percent.
B. Bilateral Trade Relationships
|Type of Agreement |Status |
|Trade Agreement |Signing : 09 March 1995 |
| |Official Gazette : 25 May 1995 / 22293 |
| |Entry into force : 18 September 1996 |
|Memorandum of Agreement between the Philippine Chamber of Commerce and industry (PCCI) and |Signing : 09 March 1995 - Ankara |
|the Union of Chambers and Commodity Exchanges of Turkey (UCCET) | |
|The Reciprocal Promotion and Protection of Investments |Signing : 22 February 1999 - Manila |
| |Official Gazette: 22 July 1999 / 22883 |
|Economic and Technical Cooperation Agreement |Signing : 22 February 1999 - Manila |
| |Official Gazette : 08 July 1999 / 23749 |
| |Entry into force : 29 November 1999 |
|Summary Record of the Preparatory Meeting for the |Signing : 28 July 2005 - Manila |
|First Session of the Republic of the Turkey-the Philippines Joint Economic Commission | |
|Avoidance of Double Taxation and the Prevention |Signing: 19 March 2009 - Ankara |
|of Fiscal Evasion with Respect to taxes on Investment | |
|Source: Embassy of the Republic of Turkey - Manila and Philippines - Office of the Press Secretary |
C. 2011 Economic Forecast
According to the International Monetary Fund (IMF), the Philippine economy will grow at a faster pace of 4.5 percent next year (2011). IMF Head of Mission, Vivek Arora said in a briefing at Bangko Sentral ng Pilipinas headquarters that attaining this growth is very possible and can be achieved. As for inflation, it was mentioned that it will remain comfortably within the target range and balance of payments to remain in surplus (VS, 2010).
The Asian Development Bank (ADB) also made its projection at pegged the country’s GDP growth at 4.6% and inflation at 4.4% for 2011. The ADB said that the downside risks to the Philippines’ 2010-2011growth forecast include uncertainty over the strength and pace of the global economic recovery and the La Niña-induced floods that can damage farm production.
The Philippine government has to increase its tax collections and improve the business climate to sustain growth over the long term. The ADB added that the government has to invest in infrastructure and improve governance to attract more investments, create jobs and cut the 30 percent poverty incidence in the country (Biz Progress, 2010).
As for the Bangko Sentral ng Pilipinas, they have projected the Philippine’s GDP at 7-8 percent and inflation at 4.0 percent +/- 1 percentage point, for the year 2011. Relative to the previous estimates, the average baseline inflation forecasts for 2010 and 2011 are lower due mainly to the downward revision in the Consumer Price Index (CPI) path given lower actual inflation in May and June. The lower oil price projections, owing mainly to the decline in international futures prices of oil, also contributed to the reduction in the inflation forecasts (Monetary Board, 2010).
II. Construction Sector
a. Second Quarter 2010 Construction Sector Information
The country’s construction projects from approved building permits summed up to 28,389 during the second quarter of 2010. This reflects a 1.2 percent annual decrease from 28,726 constructions projects during the same period in 2009.
Residential type building in the second quarter of 2010 recorded a total of 22,033, slightly lower by 0.4 percent than last year’s total residential construction of 22,122. Similarly, non-residential construction for the period slumped 4.1 percent to 3,020 from 3,148 non-residential constructions during the same quarter of 2009.
Moreover, construction for additions, alterations and repairs with a combined total of 3,336, dropped 3.5 percent from 3,456 reported on a quarter-on-quarter basis. Figure 1 compares the number of construction projects by type for the second quarters of 2009 and 2010.
Total value of construction during the second quarter of 2010 rose 39.3 percent to PHP49.1 billion from its previous quarter value of PHP35.2 billion. Value of residential building construction also exhibited an increase of 25.2 percent amounting to PHP25.2 billion from PHP20.2 billion registered during the same quarter of 2009. Similarly, value of non-residential construction, remarkably posted a growth of 71.6 percent amounting to PHP20.4 billion from PHP11.9 billion registered during the same period of 2009.
In addition, combined value for additions, alterations and repairs estimated at PHP3.4 billion, also increased by 8.4 percent from PHP3.2 billion reported during the same period of 2009. Figure 3 compares the aggregate value of construction by type for the second quarters of 2009 and 2010.
During the second quarter of 2010, value of non-residential construction was PHP20.4 billion pesos with a total floor area of 2.4 million square meters. This translates to an average cost of PHP8,453 per square meter.
Commercial type dominated all other types of non-residential construction numbering to 1,723 or 57.1 percent of the total. Value of construction for this type was estimated at PHP13.6 billion covering a total floor area of 1.5 million square meters or an average cost of PHP8,948 per square meter.
Institutional building construction, which ranked a far second, recorded to 520 (17.2%), with construction value of PHP3.2 billion and a total floor area of 363.8 thousand square meters or an average cost of PHP8,788 per square meter.
The least number of non-residential constructions was reported for agricultural type with 116 or 3.8 percent of the total. Construction value was estimated at PHP137.4 million covering a total floor area of 59.4 thousand square meters, translating to an average cost of PHP2,315 per square meter. Figure 5 shows the number and value of non-residential construction by type for the second quarter of 2010.
TABLE 1: Comparative Construction Statistics by Type of Building: Philippines,
Second Quarter 2010 and 2009
(Value in thousand Pesos, Floor Area in Square Meter)
==============================================================================
SECOND | SECOND |
TYPE OF BUILDING QUARTER | QUARTER | PERCENT
2010 | 2009 | CHANGE
------------------------------------------------------------------------------
TOTAL
Number 28,389 28,726 -1.2
Floor Area 5,599,500 4,314,869 29.8
Value 49,082,420 35,223,077 39.3
Average Cost per Floor Area 8,766 8,163 7.4
RESIDENTIAL
Number 22,033 22,122 -0.4
Floor Area 3,010,235 2,665,941 12.9
Value 25,238,196 20,164,097 25.2
Average Cost per Floor Area 8,384 7,564 10.8
Single House
Number 19,945 17,621 13.2
Floor Area 1,744,175 1,696,155 2.8
Value 12,871,209 12,156,267 5.9
Average Cost per Floor Area 7,380 7,167 3.0
Duplex
Number 335 362 -7.5
Floor Area 52,558 50,244 4.6
Value 359,200 343,832 4.5
Average Cost per Floor Area 6,834 6,843 -0.1
Apartment / Accessoria
Number 1,605 4,099 -60.8
Floor Area 396,937 561,545 -29.3
Value 2,567,278 3,431,955 -25.2
Average Cost per Floor Area 6,468 6,112 5.8
Residential Condominium
Number 23 17 35.3
Floor Area 803,208 355,060 126.2
Value 9,347,367 4,214,578 121.8
Average Cost per Floor Area 11,638 11,870 -2.0
Others
Number 125 23 443.5
Floor Area 13,357 2,937 354.8
Value 93,139 17,462 433.4
Average Cost per Floor Area 6,973 5,946 17.3
NON-RESIDENTIAL
Number 3,020 3,148 -4.1
Floor Area 2,415,354 1,459,830 65.5
Value 20,417,264 11,896,794 71.6
Average Cost per Floor Area 8,453 8,149 3.7
Commercial
Number 1,723 1,963 -12.2
Floor Area 1,517,678 878,671 72.7
Value 13,579,829 5,834,740 132.7
Average Cost per Floor Area 8,948 6,640 34.7
Industrial
Number 311 266 16.9
Floor Area 474,501 205,661 130.7
Value 2,938,544 1,209,356 143.0
Average Cost per Floor Area 6,193 5,880 5.3
Institutional
Number 520 521 -0.2
Floor Area 363,815 315,819 15.2
Value 3,197,177 3,734,308 -14.4
Average Cost per Floor Area 8,788 11,824 -25.7
Agricultural
Number 116 114 1.8
Floor Area 59,360 59,679 -0.5
Value 137,413 234,430 -41.4
Average Cost per Floor Area 2,315 3,928 -41.1
Others
Number 350 284 23.2
Floor Area
Value 564,299 883,959 -36.2
Average Cost per Floor Area
ADDITIONS
Number 1,257 1,162 8.2
Floor Area 173,911 189,098 -8.0
Value 1,332,178 1,379,681 -3.4
Average Cost per Floor Area 7,660 7,296 5.0
ALTERATIONS / REPAIR
Number 2,079 2,294 -9.4
Floor Area
Value 2,094,780 1,782,503 17.5
Average Cost per Floor Area
------------------------------------------------------------------------------
Source: Industry Statistics Division
Industry and Trade Statistics Department
National Statistics Office
Republic of the Philippines
|Table 2: Infrastructure Allocation for the last five years and the succeeding years |
|List of |Total |Prior |PROPOSED ALLOCATION (In Thousand Pesos) |
|Projects |Cost |Years | |
| | |
b. Construction Materials Wholesale Price Index (November 2010)
On an annual basis, the movement of CMWPI in NCR at 4.9 percent in November was the same rate recorded in October. A higher annual price hike was noted in the index of sand, stone and gravel at 4.2 percent in November from 3.8 percent in October; asphalt, 15.9 percent from 7.8 percent; and structural steel, 7.0 percent from 6.3 percent. Slower annual price adjustments were however registered in the indexes of cement, plywood and fuels and lubricants. The annual price changes for the rest of the commodity groups remained at their last month's rates while those for blasting materials and machinery and equipment rental were still zero. (National Statistics Office, November 2010)
c. Important Projects up for bidding, both short and medium terms (houses, malls, work centers, irrigation, dams, power plants, roads, railways, bridges, highways, seaports, airports, sports facilities, recreation areas, hotels)
In the Philippines, bidding participation is very limited for foreign construction companies. Foreign bidders are only allowed to participate in foreign funded projects. Below is the list of projects in the Philippines that encourages foreign contractors to participate in.
i. Public-Private Partnerships - for the Aquino Administration, the government is more focused in moving the PPP program to speed up the infrastructure programs of his administration. (Infrastructure 2010 (DTI))
ii. ADB Projects (ADB – 2010 Approved Projects for the Philippines)
iii. World Bank (World Bank – 2010 Business Opportunities)
Projects that involve houses in the Philippines are normally given to local contractors. As for malls, work centers, hotels, sports facilities or recreation areas, foreign contractors may enter into partnerships with a Filipino contracting firm or architectural house in order for them to get into these projects.
d. Work Opportunities
Work Opportunities in the Construction Industry depend on the Project Proponents, whether local or foreign entity. Usually, hiring of foreign nationals or companies depend on whoever wins the project. For instance, if a foreign entity has an existing BOT/PPP contract with the Philippine government, they are entitled to hire foreign nationals for their projects. So it is up to the project handler to decide who to hire. They do it directly, just in accordance with the Philippine law. Same goes if a local company that has an existing project needs of a foreign company as a partner or a consultant, it is up to them to process and go through the employment procedures of a foreign national.
e. Instruments that can be used for Market Access
i. Participation in Construction Trade Fairs and Expositions – the Philippine construction industry is heavily relying on a company’s reputation. They would enter into contracts with a company that has an extensive project profile and a renowned background. This for them is security in terms of delivery the project on time and the quality of work they bring in. So, it is only necessary for new players to introduce themselves and showcase their works in a proper venue such as construction trade fairs and expositions either held locally or internationally.
ii. Invitations for Filipino construction firms to visit world class projects done and delivered by Turkish construction companies – as mentioned above, Turkish construction firms have to establish their reputation in terms of showing off their projects to Filipino counterparts. So bringing the Fi
iii. lipino contractors, architects and engineers to where the reputable projects are located is another tool to entice them to partner with Turkish construction companies.
iv. Entering into Biddings of Foreign Funded Projects in the Philippines – The Philippines is a recipient of various foreign funds, both loans and grants so it is highly recommended for Turkish construction companies to participate in various biddings in the Philippines. Relatively, bidding may not be that easy for Turkish companies since they are competing mostly with Japanese, Koreans, and Chinese construction companies in the Philippines, which already have the proximity advantage. However, participating in these activities will give mileage to Turkish companies in terms of contacts in the Philippine construction industry and the possibilities of partnerships are very much anticipated.
f. Limitations, Advantages, Risks for Foreign Companies
Generally, foreign companies planning to put up a company in the Philippines are only limited to 40 percent ownership. However, if they chose to invest within the Investment Priorities Plan of the Government, then they are allowed to full ownership. (2010 Investment Priorities Plan and 2010 IPP General Policies and Specific Guidelines)
Foreign companies or nationals that have contracts with the Philippine government or any registered Filipino company of course have to follow the laws of the Philippines. They are bound by their contract and their stay is limited only to the duration approved by the Department of Labor and Employment.
Foreign firms have the advantage on technical data because mostly these foreign firms have extensive knowledge in advance technologies, modern equipment and machineries; and have done remarkable projects in other parts of the world. Meanwhile, Filipino contractors were limited in terms of machineries and equipment to deliver projects on time and of course they have to work on a limited budget, which sometimes result to poor quality of materials, either intentional or not. Having the best and most advanced equipment and technologies make the foreign companies required especially on projects of valuable importance to the country such as power plants, railways, bio tech facilities and many others.
Investing in the Philippines or in any other country guarantees risks, it is normal in any business. It is so happen that investment in the Philippines is more complicated despite the fact that rules and regulations are laid out. Foreign companies are exposed to corruption. There will surely be instances where in the foreign companies are vulnerable to extortion in order for permits to be processed or papers be signed, whether they are dealing with private or government agencies.
Funding is another issue, if it is foreign funded then there wouldn’t be any difficulty getting paid but somehow if it is purely government funding, there might be some issues in terms of payment so it is better to go over the project contract carefully and make sure that the terms and conditions are clearly mapped out. For instance, the International Airport 3 has been done years ago but the foreign company that has gotten the contract has an existing lawsuit against the Philippine government since there were discrepancies with their contract and remains unsettled plus case pending.
g. How do projects get financed?
i. Philippine Government: the funds for the projects that they do come from the National Budget, which is distributed through the Department of Public Works and Highways. They identify the priority projects aligned to the platforms laid out by the current administration. Congressmen are also awarded budget through the Public Development Assistance Fund (PDAF) that they get to choose which areas of development has to be given appropriations such as health, education and infrastructure. They have the funds to build farm to market roads for their district and allot budget for other forms of construction like roads, public market, gymnasiums, play grounds, parks, etc. You may refer to “Table 2: Infrastructure Allocation for the last five years and the succeeding years” for the allocation of the Philippines government for the coming years.
ii. ADB/World Bank: they fund projects on member countries to aid these countries of any difficulty, in any field as per their proposal. They have funds for loans, grants and technical assistance depending on the project proposal submitted to them by member countries.
h. Role of Public Private Sector Cooperation and Role of BOT model in the investment
The roles of both public and private sector in the BOT program are essential to attain success in delivering projects. Normally, projects are financed and operated by the public sector but the government realizes the necessity to entertain private entities in fulfilling more comprehensive goals especially in infrastructure projects. Now, projects are open to private sector either wholly or partly to both local and foreign companies.
The BOT Program of the Philippines opens up to private sector projects including but not limited to, power plants, highways, ports, airports, canals, dams, hydropower projects, water supply, irrigation, telecommunications, railroads and railways, transport systems, land reclamation projects, industrial estates or townships, housing, government buildings, tourism projects, markets, slaughterhouses, warehouses, solid waste management, information technology networks and database infrastructure, education and health facilities, sewerage, drainage, dredging, and other infrastructure and development projects as long as authorized by the appropriate agency or Local Government Unit, pursuant to this and in accordance to the BOT law. Now, projects shall be undertaken through contractual arrangements as defined under the law or as may be approved by the President of the Philippines.
iii. BOT Models (BOT Law RA 6957)
1. Build, Operate and Transfer
2. Build and Transfer
3. Build, Own and Operate
4. Build, Lease and Transfer
5. Build, Transfer and Operate
6. Contract, Add and Operate
7. Develop, Operate and Transfer
8. Rehabilitate, Own and Operate
iv. BOT Projects (BOT Projects)
v. BOT Procurement Process
a. Public Bidding (Solicited Mode)
The Implementing Agencies (IAs) or the Local Government Units (LGUs) chooses to procure their priority infrastructure and development projects through transparent and competitive public bidding process. The IA/LGU requests for bids for its priority infrastructure projects, approved by the approving body, from project proponents that are pre-qualified through the bidding process.
IAs/GUs involved in BOT proponent selection can use either of two options:
1. Pre-qualification prior to the issuance of the request for proposals.
(BOT Law Bidding Process Option 1)
2. The process of pre-qualification is included in the request for proposals. (BOT Law Bidding Process Option 2)
b. Unsolicited Mode
The IA/LGU may accept unsolicited proposals from project proponent to undertake infrastructure or development projects on a negotiated basis provided that all of the following conditions are met:
1. Project involves new concept or technology and/or is not part of the list of priority projects;
2. No direct government guarantee, subsidy or equity is required; and
3. The IA/LGU has invited by publication, for three (3) consecutive weeks, in a newspaper of general circulation, comparative or competitive proposals.
The original proponent has the right to match the better price proposal submitted by a comparative proponent. (BOT Law Bidding process for Unsolicited proposals)
vi. The Public – Private Partnership Program under the BOT Law
The Aquino Administration recently re-launched the Public Private Partnership Program under the Build-Operate-Transfer (BOT) Law. The current administration sees this as an effective tool for infrastructure in the Philippines to be developed faster.
In fact, last November 17 – 19, 2010, President Aquino presented to foreign participants an initial ten (10) projects under the PPP Program. Eight projects belong to the Department of Transportation and Communications (DOTC) and two others to the Department of Public Works and Highways (DPWH).
As for DOTC the projects that they will initially pursue under the PPP program include the privatization of the operation and maintenance of the Light Rail Transit (LRT) Line 1 and of the Metro Rail Transit (MRT) Line 3, LRT 1 South Extension and privatization through concession, LRT Line 2 East Extension Project, the New Bohol Airport Development, Puerto Princesa Airport Development, New Legaspi Airport Development, and the Privatization of Laguindingan Airport Operation and Maintenance. The Department estimated that for the eight projects, the government will have to earmark around $1.3 billion, while the private sector has to provide at least $1 billion.
On the other hand, DPWH is pushing for the $262 million financing of the 27.5-kilometer Cavite side section of the Cavite-Laguna Expressway, and $253.33 million worth of investment for the Ninoy Aquino International Airport Expressway Phase II. (Philippines Public-Private Partnership Projects)
i. Is there shortage of machine, equipment and skilled employees?
There is no record whether there is a shortage of equipment or machineries because once a contractor (a company) has been awarded of the project, the responsibility of providing all the machineries and equipment in order to finish the construction project on the date agreed upon by both parties relied heavily on the contractor themselves. So it is the sole responsibility of the contractor to acquire the necessary equipment and machineries for the project. The main concern of the project giving office is for the contractor to deliver the said project on the agreed date.
As for skilled employees, the Philippines have enough supply. Services is one part that the Philippines can bank on, they even have excess supply to send overseas. As for consultants, there are projects that do hire foreign consultants especially on projects that is foreign funded, or under the BOT system which requires foreign participation.
j. Cooperation in which countries can provide advantage for our companies in market access.
Cooperation with Philippine Bilateral Donors
|No. |Country |Thrust and Areas of Assistance |Forms of Assistance |Terms and Conditions |Geographic Focus |
|1 |Australia |Country Strategy Program aims to reduce poverty and achieve |Grants and technical| |Southern |
| | |sustainable |assistance to | |Philippines, |
| | |equitable development. Focuses on four key areas of cooperation |government & direct | |particularly |
| | |namely |financial and | |Mindanao |
| | |health, education, rural incomes and environment with emphasis on |technical assistance| | |
| | |governance and gender-related issues |to NGOs and POs | | |
| | | |under bilateral, | | |
| | | |regional and | | |
| | | |multilateral schemes| | |
|2 |Austria |health, infrastructure and transportation | * soft project | * 4-4.5 percent | |
| | | |loan |interest rate | |
| | | |* mixed credit |* payable in 12 years | |
| | | | |* 1-2 years grace | |
| | | | |period | |
| | | | |(the terms and | |
| | | | |conditions vary | |
| | | | |depending on the | |
| | | | |Austrian supplier of | |
| | | | |the goods & offer of | |
| | | | |Austrian bank) | |
|3 |Belgium | * emergency grant aid and direct support to NGOs and | * grants |State-to-state loan | |
| | |multilateral organizations |* Belgian |* IR: 0% | |
| | |* support to agrarian reform, health, education, and assistance to|(state-to-state |* maturity period of | |
| | |micro-cottage industries |loan) |20 years (inclusive of| |
| | | |* Belgian |10 years grace period)| |
| | | |Supersubsidy | | |
| | | |Facility |Supersubsidy Facility | |
| | | | |* IR: 0% | |
| | | | |* maturity period of | |
| | | | |13 years | |
| | | | |* grace period of 24 | |
| | | | |mos. after takeover | |
| | | | |* other charges: | |
| | | | |insurance premium, | |
| | | | |commitment fee, | |
| | | | |front-end fee | |
|4 |Canada |governance, development of small & medium enterprises, social |financial | | |
| | |development |(commercial loan) | | |
| | | |and technical | | |
| | | |assistance (grants) | | |
|5 |Czech Republic | * environment - waste treatment facilities, water treatment | * grant |IR: 2.5% (1.5% higher | |
| | |facilities, incinerators |* commercial window |than LIBOR rates w/c | |
| | |* agri - sugar industry, grains terminal |* loan fund |has an average of 7% | |
| | |* health - hospital buildings, supply of very sophisticated | |IR) | |
| | |equipment | | | |
| | |* industry - canning plant, ports construction | |Payment prd: 6-8 years| |
| | |* power sector - diesel generators for small power plants | |+ deferred payment of | |
| | | | |6 months after loan | |
| | | | |approval | |
|6 |Denmark |water supply and treatment, health and hospital upgrading, waste |mixed credit |Mixed credit | |
| | |water | |financing: 65% export | |
| | |treatment and renewable energy, agri-industry | |credit, 35% grant | |
| | | | | | |
| | | | |IR: 0%, 8-15 years | |
| | | | |maturity period, grace| |
| | | | |period of 6 months | |
| | | | |after commissioning | |
| | | | | | |
| | | | |Other charges: 0.375% | |
| | | | |management fee and | |
| | | | |1.25% commitment fee | |
|7 |Finland |social and environment-related projects, i.e., water and sewage |concessional credit |IR: 0%, payable in 10 | |
| | |disposal and management, water supply management, upgrading of |facility |years, with 6 months | |
| | |hospitals and forestation projects | |to 2 years grace | |
| | | | |period | |
|8 |France |health, social security, environment, equipping of hospitals, |mixed credit: 60% |soft loan: 1.5 % | |
| | |public and urban city administration, agriculture |soft loan, 40% |interest rate, payable| |
| | | |commercial loan |in 25 years inclusive | |
| | | | |of 6 years grace | |
| | | | |period | |
| | | | | | |
| | | | |commercial loan: | |
| | | | |interest based on CIRR| |
| | | | |for French Franc | |
| | | | |prevailing during | |
| | | | |contract signing, | |
| | | | |payable in 10 years | |
| | | | |with no grace period | |
|9 |Germany |industrial and community-based environmental management, natural |soft program and |soft loan: 0.75 | |
| | |resources management, health and family planning, vocational |project loan grant: |percent interest rate,| |
| | |education (e.g. seafarers training), water management |financial and |payable in 40 years | |
| | | |technical assistance|exclusive of ten years| |
| | | |for projects and |grace period | |
| | | |pre-investment | | |
| | | |studies |other charges: 0.25% | |
| | | | |commitment fee | |
|10 |Italy | * agriculture |soft loan | * 1 percent | |
| | |* education | |interest rate | |
| | |* energy | |* payable in 22 years | |
| | |* environment | |* 5 years grace period| |
| | |* health | | | |
| | |* infrastructure development | | | |
| | |* telecommunications | | | |
|11 |Japan |(1) Strengthening of the economic structure for sustainable growth|Japan Bank for |JBIC: (23rd Yen Loan | |
| | |and the removal of impediments to such growth: |International |Package) 1.8 percent | |
| | |(a) appropriate macroeconomic management |Cooperation (JBIC) |interest rate for | |
| | |(b) strengthening of the economic structure |- program loans, |capital component | |
| | |(c) improved economic infrastructure |project loans |(0.75 percent for | |
| | | | |consultancy | |
| | |(2) Mitigation of disparities |Japan International |component), payable in| |
| | |(a) agriculture and rural development |Cooperation Agency |40 years inclusive of | |
| | |(b) improved basic living conditions |(JICA) - techincal |10 years grace period;| |
| | | |cooperation (i.e. |for environment | |
| | |(3) Environmental conservation and disaster management |development studies,|related projects, | |
| | |(a) provision of environmental measures |expert dispatch); |0.75% interest rate | |
| | |(b) disaster management |grant aid (i.e. |for capital component | |
| | | |general grant aid, |and consultancy | |
| | |(4) Human resources development and institution building |commodity |component, payable in | |
| | |(a) improved quality of and access to primary and secondary |assistance) |40 years inclusive of | |
| | |education | |10 years grace period | |
| | |(b) improved technical and technological education | | | |
| | |(c) improved administrative capacity and institution building | |Special Yen Loan | |
| | | | |Package: 1 percent, 40| |
| | | | |years inclusive of 10 | |
| | | | |year grace period | |
|12 |Korea, South |telecommunications, transport & energy sectors |1. Concessional Loan| * 3.0-5.0 percent | |
| | | |(Economic |interest rate | |
| | | |Development |* payable in 30 years | |
| | | |Cooperation Fund) |* inclusive of 10 | |
| | | | |years grace period | |
| | | |2. Grants & |* 0.1% service charge | |
| | | |Technical Assistance|* generally tied | |
| | | |- grants: provision |procurement conditions| |
| | | |of equipment, | | |
| | | |project aid, | | |
| | | |disaster aid | | |
| | | |- t.a.: development | | |
| | | |study, technical | | |
| | | |training, dispatch | | |
| | | |of experts, dispatch| | |
| | | |of Korean | | |
| | | |volunteers, dispatch| | |
| | | |of medical doctors | | |
|13 |Kuwait |Infrastructure Development |Project Loans |case to case basis | |
|14 |Netherlands, The |biodiversity of marine resources, conservation of environment |grant: financial and| | |
| | | |technical assistance| | |
|15 |New Zealand | * Rural development |Cash grants and | | |
| | |* natural resources management |technical assistance| | |
| | |* community development |to government, NGOs | | |
| | |* education and training |& POs under | | |
| | | |bilateral | | |
| | |Emphasis on integrating environment, poverty alleviation, human |assistance. | | |
| | |resource development, women in development considerations and | | | |
| | |governance |Regional assistance | | |
| | | |and contributions to| | |
| | | |multilateral | | |
| | | |organizations | | |
|16 |Norway | * (proposed) maritime development |soft project loan |Soft project loan: | |
| | |* infrastructure | | | |
| | |* poverty alleviation |grant: financial |* IR: ARR-based, | |
| | |* health and nutrition |assistance |maturity period of 10 | |
| | | | |years | |
| | | | |* grace period of 6 | |
| | | | |months | |
|17 |Spain |- financial cooperation: waste water and solid waste management, |- financial |mixed credit: 50 | |
| | |air & maritime safety, renewable energy, water supply levels I & |cooperation (mixed |percent soft loan | |
| | |II, basic health |credit) |(1-2.5% interest rate,| |
| | | | |payable in 30 years | |
| | |- grants: poverty alleviation (health, water supply, food |- technical |inclusive of 10 years | |
| | |security), support to peace process, transfer of technology, |cooperation (grants)|grace period) and 50 | |
| | |education and cultural cooperation, presentation of historical | |percent commercial | |
| | |heritage | |loan (6-8% commercial | |
| | | | |/ credit under the | |
| | | | |prevailing OECD | |
| | | | |consensus rate) | |
|18 |Sweden |promotion of technology transfers |soft loan grant: |soft loan: 10-15 years| |
| | | |financial and |maturity, interest | |
| | | |technical assitance |rate fees depends on | |
| | | | |agreement | |
|19 |United Kingdom |infrastructure specifically transportation, water supply, power |mixed credit (Aid |35 percent full grant | |
| | | |and Trade Provision |and 65 percent loan | |
| | | |(ATP) facility) |component (interest | |
| | | | |rate based on of the | |
| | | | |OECD consensus rate), | |
| | | | |payable in 10 years | |
| | | | |(in 20 semi-annual | |
| | | | |installments) with | |
| | | | |grace period of 6 | |
| | | | |months | |
|20 |United States of |Strategic Objective (SO) 2 - a more stable and competitive economy|grants: technical |commodity loan | |
| |America |leading to the following results: (i) financial institutions |assistance projects |assistance: 3 percent | |
| | |stabilized and deepened, (ii) trade and investment made more | |interest rate for | |
| | |competitive and dynamic, and (iii) economic governance improved. |PL480 Title I |first 5 years and 4 | |
| | | | |percent thereafter, | |
| | |SO3 - reduced fertility and improved maternal and child health | |payable in 21 years | |
| | |leading to the following results: (i) increased public sector | |inclusive of 5 years | |
| | |provision of sustainable family planning / maternal child health | |grace period | |
| | |services targeted at the poor, (ii) increase private sector | | | |
| | |provision of contraceptives and FP/MCH services, (iii) threat of | | | |
| | |HIV/AIDS and other selected infectious diseases reduced. | | | |
| | | | | | |
| | |SO4 - environmental resources management improved leading to the | | | |
| | |following results: (i) biodiversity conserved in selected critical| | | |
| | |watersheds, (ii) reduced emissions of greenhouse gasses. | | | |
| | | | | | |
| | |SO6 - objectives of democracy and governance integrated into the | | | |
| | |entire portfolio by using best practices in advocacy and | | | |
| | |participation as critical means to achieve other program | | | |
| | |objectives. | | | |
| | | | | | |
| | |Special Objectives: (i) rapid increase of HIV/AIDS prevented and | | | |
| | |(ii) assistance to amerasians | | | |
| | | | | | |
| | |PL480 Title I (Commodity Loan) | | | |
k. Which countries actively participate in this sector?
For the BOT projects, the countries that actively participate are Singapore, Malaysia, China, Japan, USA, Switzerland, Denmark, UK, South Korea.
l. Rank of Construction Sector in Philippine Economy
Figure 1: Gross Domestic Product by Industrial Origin (Share)
Industry sector rebounded to 9.2 percent from negative 4.8 percent growth recorded the previous year. All subsectors of the sector contributed positively to the growth with the biggest contribution coming from Manufacturing with 9.25 percentage points followed by Construction with 11.14 percentage points; Electricity, Gas and Water, 8.08 percentage points; and, Mining & Quarrying and Construction, 4.56 percentage points.
Figure 2: Breakdown of Industry Sector
Construction accelerated to 11.1 percent from 2.0 percent recorded last year with Private Construction contributing the most to its growth.
m. Building Standards (National Building Code of the Philippines R.A.6541)
III. Technical Consultancy Sector
Before we breakdown the status of technical consultancy in the Philippines, it is best to look at the full scenario of foreign employment in the country. As you go over the tables below, you will notice that for 2009 the highest number of foreign employees came from Korea followed by Japan, then China. This could be attributed to various manufacturing companies in the Philippines, which has 37.8% share in terms of employing foreign nationals. The bulk of foreign employment came from this sector. This of course is related to foreign investments in the Philippines that give them access to bring in foreign nationals to run the local operations. These officers are of course given the higher management level, as managers, technical consultants and other important and key positions in the company.
As of 2009, the construction sector has a total of 611 foreign employments, which are all considered technical consultants, given that foreign assisted projects allow foreign national employment. This is surely on high management positions or technical consultancy posts.
A. Information on Technical Consultancy Sector in the Philippines
i. Employment Permits Issued to Foreign Nationals (by Nationality)
Alien Employment Permits (AEPs) issued to foreign nationals totaled 12,218 in 2009, this growth reflected the demand for foreign labor/services to enable the local economy to cope with the fast changing innovations and technological advancements in the global market.
The largest number of foreign nationals issued with AEPs during the period was recorded at 13,592 in 2007. Their number in the next two years, however, recorded annual decrease of 7.3% (-993) in 2008 and 3.0% (-381) in 2009.
|Table 3: Alien Employment Permits Issued by Nationality (2005 -2009) |
|NATIONALITY |2005 |2006 |2007 |2008 |2009 (p) |
|American |562 |665 |605 |657 |644 |
|British |403 |391 |384 |375 |302 |
|Chinese |1,370 |1,592 |1,754 |1,929 |1,776 |
|Indian |384 |438 |598 |640 |740 |
|Japanese |3,367 |3,469 |3,414 |2,953 |2,751 |
|Korean |2,499 |3,296 |3,713 |3,308 |3,007 |
|Malaysian |215 |332 |596 |497 |508 |
|Taiwanese |434 |486 |456 |439 |506 |
|Other Nationalities |1,589 |1,666 |2,072 |1,801 |1,984 |
|TOTAL |10,823 |12,335 |13,592 |12,599 |12,218 |
|"p" - Preliminary | | | | | |
|Source: Department of Labor and Employment - Bureau of Local Employment | |
ii. Alien Employment Permits Issued to Foreign Nationals (by Industry Group)
In 2009, foreign workers were accounted mainly in three sectors. Manufacturing sector employed more than one-third (37.8% or 4,623 out of 12,218) of the total foreign workers particularly in firms located in the industrial zones of the country (NCR, Regions III, IV-A and VII). Following were real estate, renting and business activities with 17.6% (2,150) and transport, storage and communications with 17.5% (2,134). The rest of the industries each shared less than 10%.
Figure 3: Employment Permits Issued by Major Industry Group for 2009
[pic]
iii. Alien Employment Permits Issued to Foreign Nationals (by Occupation)
Foreign nationals working in the country in 2009 were dominated by workers in white collar jobs with the occupation group of administrative, executive and managerial workers accounting for more than half (56.1% or 6,859 out of 12,218) of the total AEPs issued. Technicians and associate professionals comprised the second largest group at 36.4%. The professionals (5.9% or 718); service workers and shop and market sales workers (1.5% or 186); and farmers, forestry workers and fishermen (0.1% or 8) accounted for less than 10% each of the total.
Figure 4: Employment Permits Issued by Occupation for 2009
[pic]
B. 2011 Forecasts
In 2009, local Foreign Employment decreased as compared to both 2007 and 2008 due to the global economic crisis. Companies in the Philippines tried their hardest to stay afloat despite effects of global economic downturn. Plans of expansion were put on hold to remain resilient in these trying times, which majority of the industry players was able to successfully withstand. Though 2010 figures are not yet able as of this writing, it was expected that the figures increased, if not, remained stable.
For 2011, Foreign Employment is expected to increase due to various Public-Private Partnerships with Foreign companies. The same goes with foreign investments coming into the country. This could be attributed to an increase trust in the Aquino government promising transparency and incorruptible administration.
C. Work Opportunities
i. ASIAN DEVELOPMENT BANK (ADB – Consultancy Opportunities)
ii. WORLD BANK – For the World Bank, an interested consultant has to go over their Consultancy Procedures and check the active projects, for instance in the Philippines, to find out whether a consultant is required for a particular active project. (World Bank – Active Projects in the Philippines)
D. Other Useful Information
In any other investment, regardless of size and value, it is best to carefully study the programs and incentives to be given to a foreign company by the Philippine government. We highly recommend that any Turkish contractor that comes in to the Philippines must go through proper documentation and registration by the Philippine government.
For instance, a Turkish company is interested to enter into a PPP Project, and then it is best that they be registered in the Board of Investments (BOI) and request for assistance through them or the Build Operate Transfer (BOT) Center. The company not only gets the service due to them as an investor but they also get “first hand” information because of these reliable and reputable people from the government.
Additionally, knowing the proper organizations that provide financial support is also essential in terms of identifying projects. It will equip Turkish companies in planning out whether they would want to enter the Philippine construction industry. Below is the list of Multilateral Donors in the Philippines.
1. ASIAN DEVELOPMENT BANK (ADB)
Thrusts and Areas of Assistance: Poverty Reduction and Human Development
Specific Areas
▪ Agriculture / rural development; energy, transport
▪ Provision of basic social services such as education, health, sanitation, and housing
▪ Environment
▪ Governance
Forms of Assistance
▪ program loans
▪ project loans
▪ preparatory and advisory technical assistance
▪ regional technical assistance
Terms and Conditions
▪ Ordinary Capital Resources (OCR) - 6.7% for dollar loans
▪ 5.5% for multi-currency loans (pool-based variable lending rate)
▪ 20 years repayment
▪ 4-5 years grace period
▪ 0.75 percent commitment fee charged on undisbursed loan
▪ 1% front-end fee
2. EUROPEAN UNION (EU)
Thrusts and Areas of Assistance:
▪ Development Cooperation
Integrated Area Development (IAD) covering agricultural production and marketing, rural infrastructure, cooperatives and credit schemes, health, institutional strengthening for LGUs, environment protection (protected area and community-based forest management), and support to agrarian reform.
▪ Economic Cooperation
Private Sector Linkages. Export and Investment Promotion and Business Promotion.
Forms of Assistance: Grants – Technical Assistance, Equipment
3. FOOD AND AGRICULTURE ORGANIZATION (FAO)
Thrusts and Areas of Assistance:
▪ Emergency assistance to agriculture
▪ Introduction of new and viable agri-technology
Forms of Assistance: Grants – Training, Equipment and Consultancy Services
4. INTERNATIONAL ATOMIC ENERGY ASSOCIATION (IAEA)
Thrusts and Areas of Assistance:
▪ Nuclear Science and Technology
Forms of Assistance: Grants – Technical experts, Equipment and Trainings
5. INTERNATIONAL FUND FOR AGRICULTURE DEVELOPMENT (IFAD)
Thrusts and Areas of Assistance:
Support to economic advancement of the rural poor, mainly by improving the productivity of on and off-farm activities
Forms of Assistance: Project Loans
▪ Highly concessional loans
▪ Intermediate loans
▪ Ordinary loans
Terms and Conditions
▪ Free of interest but w/ service charge of 0.75% per annum and a maturity period of 40 years, including grace period of 10 years;
▪ Carry a variable reference interest rate equivalent to 50% of the interest charged on WB loans and have a maturity period of 20 years, including a grace period of 5 years;
▪ Carry a variable reference interest rate equal to that charged by the WB and a maturity period of 15-18 years, including a grace period of 3 years.
6. INTERNATIONAL LABOR ORGANIZATION (ILO)
Thrusts and Areas of Assistance:
▪ Employment promotion and poverty alleviation
▪ Strengthening industrial relations systems and tripartism to promote growth, development and competitiveness
▪ Improvement of working conditions and environment, and social protection in favor of disadvantaged groups
▪ Human resource development
Forms of Assistance: Grants
▪ International policies and programmes
▪ Creation of international labor standards
▪ Trainings
▪ Education
▪ Research and publishing activities
7. UNITED NATIONS CHILDRENS FUND (UNICEF)
Thrusts and Areas of Assistance:
▪ child survival/development and protection
▪ health and nutrition
▪ water sanitation
▪ education
▪ gender and development
▪ local policy and institutional development
Forms of Assistance:
▪ financial grant for direct services
▪ technical assistance for support services
▪ communication
▪ coordination and monitoring
8. UNITED NATIONAS DEVELOPMENT PROGRAMME (UNDP)
Thrusts and Areas of Assistance:
▪ protection and regeneration of the environment
▪ sound governance
▪ poverty alleviation
▪ special initiatives for sustainable human development
Forms of Assistance: Grant – Financial Assistance
9. UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION (UNIDO)
Thrusts and Areas of Assistance:
▪ strategies, policies and institution-building for global economic integration
▪ environment and energy
▪ SMEs-policies, networking and basic technical support
▪ innovation, productivity and quality for international competitiveness
▪ industrial information, investment and technology promotion
▪ rural industrial development
▪ linking industry and agriculture
Forms of Assistance: Grant – Technical Assistance supporting various thrusts of the donor
10. UNITED NATIONS POPULATION FUND (UNFPA)
Thrusts and Areas of Assistance:
▪ sexual and reproductive health
▪ population and development
▪ adolescent fertility and youth development
▪ gender equality and empowerment of women
▪ responsible parenthood
Forms of Assistance: Technical Assistance to support government policies and programs related with reproductive health, population and sustainable development
11. THE WORDL BANK
Thrusts and Areas of Assistance:
Infrastructure, Human Development, Agri-Industrial Development, Poverty Alleviation, Social Services, Environment, Governance, Urban Development
Forms of Assistance:
▪ Grants - project preparation, sectoral and policy studies, capacity building, special facility for social development
▪ Loans - policy-based loans / program loans, investment loans
Terms and Conditions:
Pool-based variable lending rate, Payable in 20 years including five years grace period plus 0.75 percent commitment fee charged on undisbursed loan / undrawn balance, 1% front end fee
IV. Construction, Technical Consultancy and Foreign Investment Regulations
A. Summary of Construction and Technical Consultancy Regulations
Enterprises registered under the Omnibus Investments Code [Executive Order No. 226] are permitted to employ foreign nationals in supervisory, technical, or advisory positions during its first five years from registration. Those majority foreign-owned registered enterprises are allowed to employ foreign nationals as president, treasurer and general managers for an indefinite period of time. In the case of Offshore Banking Units [OBUs], they are allowed to employ foreign nationals as executives in their respective units. The same may be said for executives in area headquarters of multinational corporations.
For non-resident personnel of foreign firms, the entry visa requirements and description of the nature of the entry restriction must be a Pre-arranged Employment Visa. This is granted pursuant to Sec. 9(g) of the Philippine Immigration Law. This is available for employment in any executive or managerial position.
Restrictions on Employment of Foreign Technical or Managerial Personnel and Accompanying
Family Members:
A. Restrictions on positions:
[1] Registered foreign enterprises with the Board of Investments [BOI] may employ foreign nationals in supervisory, technical or advisory positions for a period not exceeding five [5] years from its registration, extendible for limited periods at the discretion of the BOI.
[2] BOI-registered majority foreign-owned enterprises may employ foreign nationals in the positions of president, treasurer or general manager beyond the period of five [5] years.
[3] Foreign nationals under the Corporation Code may be employed as members of the Board of Directors by way of election.
[4] Foreign enterprises located at the Subic Bay Freeport may employ foreign nationals in any position upon prior approval of the Subic Bay Metropolitan Authority [SBMA] for a period of five [5] years which may be extended from year to year.
[5] Foreign enterprises entering into government contracts and service for coal operations and exploration and development of oil and geothermal resources are allowed to employ foreign nationals in any position.
B. Restrictions on skills requirement:
Employment of foreign technicians in foreign enterprises in the Philippines is subject to the requirement that the skills they possess are not available in the Philippines. If there is none available in the Philippines, a pre-arranged employment visa may be extended to the foreign technician. Further, under the law, their employment should be accompanied by an understudy program wherein at least two [2] Filipino understudies should be trained on the skills for which they [foreign technicians] were engaged.
B. Summary of Foreign Investment Regulations (Philippine Foreign Investment Brief)
C. Summary of Foreign Employment in the Philippines (residence permit, duties, social security expenses
i. Alien Employment Permit (AEP) Procedures
1. Philippine Employer submits to the Department of Labor and Employment (nearest Regional Office relative to workplace) the AEP Application together with all the requirements such as:
a. Duly accomplished application form
b. Photocopy of passport, with visa or Certificate of Recognition for refugees
c. Contract of Employment/Appointment or Board Secretary's Certificate of Election
d. Photocopy of Mayor's Permit to operate business
e. Photocopy of current AEP (for renewal)
2. Employer pays the fee of Eight Thousand Pesos (approximately US$182) for each application for AEP with a validity of one (1) year, or a fraction of one year shall be paid to the DOLE-Regional Office upon filing of application. If employment is more than one (1) year, an additional Three Thousand Pesos (approximately US$68) shall be charged for every additional year of validity or a fraction thereof. In case of renewal, the applicant shall pay a fee of Three Thousand Pesos (approximately US$68) for each year of validity or a fraction thereof.
3. If DOLE accepts the application, they will then endorse the matter to the Philippine Bureau of Immigration for the entry to the Philippines of the foreign employee.
4. If approved, the Commissioner of the Immigration transmits his approval to the Department of Foreign Affairs (DFA).
5. DFA then authorizes the Consular Office (in the country of foreign employee) to issue the working visa.
6. The applicant must appear personally at the Consular Section of the Philippine Embassy and submit the following:
a. Passport valid for at least six (6) months;
b. Two completed application forms;
c. Four (4) identical pictures (passport size) of the applicant signed on the front bottom of each;
d. Medical and physical examination report by an authorized physician. It must also include the chest x-ray film, laboratory reports and a certificate that the applicant is free from AIDS. The medical examination report is acceptable only if submitted to the quarantine officer at the port of entry in the Philippines, together with the visa application, within six (6) months from the date the examination is conducted;
e. Police Clearance, issued by the police authorities of the place where the applicant resides. (Police Certificate based on fingerprint check); and
f. Visa Application Fee
7. If the spouse is accompanying or joining the principal in the Philippines within six (6) months from the date of the principal's admission, the spouse must submit their marriage certificate. Unmarried children under twenty-one (21) years of age accompanying or joining their parent in the Philippines within six (6) months from the date of the parent's admission, must submit their birth certificates showing the names of their parents.
ii. Duties
Once Alien Employee arrives in the Philippines, he/she has to report to the Bureau of Immigration to process his/her Alien Certificate of Registration (ACR) and pay US$50. An Alien employee is also obliged under the law to report every 6 months at the Bureau of Immigration for their permit renewal.
iii. Social Security
The Philippine Government imposes on all companies to pay all their employees’ social security under the Social Security Services (SSS). Both the Philippine Employer and Foreign Employee has to pay each of their share, highest fee per employee is P1,560 (US$35), sharing would be $10 from the employee and $25 from the employer. Though, it is highly recommended for Foreign Employees to acquire other modes of insurances from private and reputable companies.
V. Bilateral Cooperation Opportunities
A. Projects Supported by Financial Organizations (List of All Foreign Funded Projects in the Philippines)
B. Projects in other countries, supported by Financial Organizations wherein Philippine and Turkish companies entered into cooperation opportunities.
There is an opportunity for tie-ups between Turkish and Philippine companies in other countries especially that foreign funded projects are open to foreign companies so the possibility of a Filipino company and a Turkish company working together is certainly feasible.
C. Countries in which Philippine construction companies and technical consultants have projects. (POCB - List of Registered Contractors and the countries they serve)
VI. Opinion and Evaluation (Opinion, Proposal and Evaluation on Philippine Construction Market)
It is expected that the Philippine Construction Industry will boom in 2011 because of the Aquino government’s support through the Public-Private Partnership Program under the BOT Law of the Philippines. The government is serious in increasing the infrastructure development of the country with the help of the private sectors. They are fully aware that in order to realize infrastructure plans and visions they need the full financial support, technical assistance from private entities. So, this is a welcoming sign for foreign companies to enter the Philippine construction industry.
VII. List of Law Firms (Construction Practice)
A. Angara Abello Concepcion Regala & Cruz Law Offices
Address: 2/F ACCRALAW TOWER, Second Avenue corner 30th Street, Crescent Park
West Bonifacio Global City, 0399 Taguig City – Philippines
Tel. No.: (+63 2) 8308000
Fax No.: (+63 2) 4037007; 4037009
Email: accra@
Website:
B. Picazo Buyco Tan Fider & Santos
Address: 17th – 19th Floors Liberty Center, 104 HV Dela Costa St., Salcedo Village, Makati City – Philippines
Tel. No.: (+63 2) 8880999
Fax No.: (+63 2) 8881011 – 12; 8446167
Email: main@
Website:
C. Romulo Mabanta Buenaventura Sayoc & Delos Angeles
Address: 30th Floor, Citibank Tower, Citibank Plaza, 8741 Paseo De Roxas,
Makati City – Philippines
Tel. No.: (+63 2) 8480114
Fax No.: (+63 2) 8153172; 8103110; 8130906; 8180206; 3252889
Website:
D. Sycip Salazar Hernandez & Gatmaitan
Address: SSHG Law Centre, 105 Paseo de Roxas, Makati City – Philippines
Tel. No.: (+63 2) 9823500; 9823600; 9823700
Fax No.: (+63 2) 8173896; 8187562
Email Add: sshg@
Website:
E. Villaraza Cruz Marcelo & Angangco
Address: CVC Law Center, 11th Ave. cor. 39th St., Bonifacio Triangle, Bonifacio Global
City – Philippines
Tel. No.: (+63 2) 9886088
Fax No.: (+63 2) 9886000
Email Add: info@
Website:
F. Siguion Reyna Montecillo Ongsiako
Address: 4th & 6th Flrs., Citibank Center, 8741 Paseo de Roxas, Makati City – Philippines
Tel. No.: (+63 2) 8100281
Fax No.: (+63 2) 8191498
Email Add: general@srmo-
Website: srmo-
G. Ocampo & Manalo
Address: 6/F Pacific Star Building, Makati Ave. cor. Sen. Gil Puyat Ave. Makati City City – Philippines
Tel. No.: (+63 2) 7518889
Fax No.: (+63 2) 7518899; 7517799
Email Add: info@
Website:
VIII. Related Addresses
A. Government Offices
a. Department of Public Works and Highways
Bonifacio Drive, Port Area, Manila, Philippines
Tel. No: (+63 2) 3043000 / 3043221 (Office of the Secretary)
Email: asis.raul@.ph (Assistant Secretary Raul Asis)
a. Department of Trade and Industry
1. Build, Operate and Transfer Center
4th Floor, G.A. Yupangco Building 339 Sen. Gil Puyat Avenue 1200 Makati City,Philippines
Tel. Nos.: (+63 2) 8964697 / 8976826 / 8953893
Fax No.: (+63 2) 8968452
Email: info@.ph
Website: .ph
2. Philippine National Construction Corporation
EDSA corner Reliance Street, Mandaluyong City
Tel. Nos. (+63 2) 631-8431 / 631-5084
Email : pnccnet@.ph
Website: .ph
3. Construction Industry Authority of the Philippines
2/F & 5/F, Executive Center Bldg.
369 Gil Puyat Ave., cor. Makati Ave., Makati City
Tel. Nos.: (+632) 895.4424 / 895.6826
Fax No.: (+632) 897.9336
E-mail: ciapdti@
1. Philippine Overseas Construction Board
Tel. Nos: (+63 2) 8961831 / 33
Tel/Fax No: (+63 2) 8964569
Email: pocb@
Website:
2. Philippine Domestic Construction Board
Tel. No: (+63 2)8961831
4. Construction Manpower Development Foundation
GF Trade and Industry Building,
361 Sen. Gil J. Puyat Avenue, Makati City
Tel. No: (+63 2) 8901069
Fax No: (+63 2) 8901037
Email: cmdf_dti@
B. Associations
Philippine Constructors Association ()
3rd Floor, Padilla Bldg., Emerald Ave.,
Ortigas Center, Pasig City, Metro Manila
Tel. No.: (+63 2) 6313135 / 6312778
Fax No.: (+63 2) 6312788
Contact Person: Mr. Anthony L. Fernandez
Designation: President
Email: email@
Website:
C. Construction Magazines
Blu Print (Design and Architecture)
Mega Magazine Publication
Contact Person: Ms. Nikki Banzon
Tel. No.: (+63 2) 6312859 loc. 20 / 28 /42
Fax No.: (+63 2) 6312862
Website:
D. Financial Institutions
a. Asian Development Bank:
b. World Bank (International Monetary Fund):
c. United Nations in the Philippines: .ph
E. Other Websites for Philippine Construction
a. Philippine Builders:
b. Construction Directory:
IX. References
1. (Virola, 2010)
2. (Aide Memoire on Foreign Investment in the Philippines, 1998)
3. (Philippine Peojects)
4. (Government Initiative Boosting Construction Sector in Philippines)
5. Central Bank of the Philippines
6. National Statistics Office
7. Bureau of Export Trade Promotions
8. National Statistical Coordination Board
9. Office of the President of the Philippines
10. Undersecretariat for Foreign Trade
11. Philippine Overseas Construction Board
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