Legal Mandate

Legal Bases

• 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 President.

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 ½%) 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.

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.

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):

1. 1. Philippine Contractors Accreditation Board (PCAB) – to assume the functions of the abolished Philippine Licensing Board for Contractors under RA 4566 (Contractors License Law)
   2. 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.
   3. Philippine Domestic Construction Board (PDCB) – to formulate, recommend and implement policies, rules, regulations and guidelines and adjudicate disputes arising from public construction projects.
   4. 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.

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.

However, under Section 18 (d) of EO No. 133, the CMDF was transferred from the CIAP to the National Industrial Manpower Training Council (NIMTC).

• 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.

Functions

• Specifically, the Authority have the following powers and objectives:

1. 1. 1. Evolve an overall strategy and exercise centralized authority for the optimum development of the construction industry;
      2. 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;
      3. Rationalize investments in the construction industry in accordance with national investment priorities and development needs;
      4. Establish criteria for the classification and categorization of contractors which accurately reflect their contracting capacity and performance capability;
      5. Enforce relevant and reasonable rules and requirements, as well as, implement practicable and efficient procedures for prequalification of public projects;
      6. Recommend and encourage the adoption of equipment and realistic contract conditions for construction;
      7. 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;
      8. Identify and recommend other incentives necessary to support overseas construction;
      9. Establish procedures, guidelines and criteria for fair and expeditious adjudication and settlement of claims and disputes in contract implementation;
      10. 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;
      11. Establish a funding mechanism with the private sector to promote and develop the construction industry;
      12. Perform such other functions necessary to achieve its objectives.

The other CIAP IAs functions are as follows:

PCAB (RA No. 4566, s. 1965)

• Issue, suspend and revoke licenses of contractors;
• 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;
• Adopt a code of ethics for contractors;
• Adopt reasonably necessary rules and regulations to effect 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;
• 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
• Discharge such other powers and duties affecting the construction industry in the Philippines.

POCB (PD No. 1167, s. 1977)

• Formulate strategies and programs for developing the Philippine overseas construction industry;
• Regulate and control the participation of construction contractors in overseas construction projects;
• 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;
• Administer the grant of incentives under PD No. 1167;
• 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;
• 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;
• 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.
• 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;
• Check, verify, and evaluate at regular intervals, through the facilities of appropriate existing agencies, the performance of construction contractors engaged in overseas projects;
• 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 thereunder;
• Authorize, upon the recommendation of the Department of Trade, the exportation of construction materials and equipment, subject to existing rules on exportation;
• 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

• 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;
• Obtain, collate and evaluate information necessary for the effective discharge of its primary purpose and the proper exercise of its powers and functions; and
• 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)

• Formulate and recommend appropriate polices and guidelines for pre-qualification, bidding and contract award for public infrastructure projects;
• 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;
• Formulate and recommend approximate and standardized contract terms/conditions and guidelines for determining contract price adjustments in private construction; and
• 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)

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

CMDF (PD 1746)

• Draw up overall construction manpower development plan and relevant strategies
• Develop and implement manpower training programs for the construction industry
• Formulate and adopt construction skills and standards and establish skills testing and certification facilities in coordination with the National Manpower and Youth Council;
• 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;
• 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;
• Borrow from financing institutions as may support its operations