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Game changer: Anti-monopoly body cheers SC for removing local contractors’ unfair advantage over foreign rivals

The Philippine Competition Commission (PCC) expects consumers to benefit from the Supreme Court’s decision to level the playing field between local and foreign construction firms.

“This is a game-changing ruling that unlocks the benefits of competition through effective competition advocacy. With fair competition in the construction industry, Filipinos obtain more value from taxpayers’ money through lower priced and better quality infrastructure projects,” said PCC Chair Arsenio M. Balisacan after the SC certain anti-competitive regulations1 implementing the Contractors’ License Law unconstitutional..

“With the regulatory barrier struck down, competition among contractors should fall squarely on merit and not based on undue advantage based on nationality alone,” he added.

In a 14-1 vote, the high court voided the nationality requirement in licensing rules set by the Philippine Contractors Accreditation Board (PCAB).

Prior to the ruling, regular licenses for multiple projects per year were reserved only for local firms, while foreign contractors were only granted a special license per project. Based on PCC’s study, a foreign contractor would have to spend 12 times more for license applications than a local firm in order to engage in the same level of activity.

The ruling stemmed from the dispute between PCAB and Manila Water Company Inc., where PCC intervened as amicus curiae (friend of the court) with its mandate to issue advisory opinions on competition matters and advocate pro-competitive government policies.

The SC cited PCC’s amicus curiae brief that the nationality-based restrictions by PCAB effectively barred entry of foreign contractors and violates the state’s constitutional policy against unfair competition.

PCC said the decision would encourage contractors to enter the market, produce and price their products competitively, provide consumers with more choices in carrying out infrastructure projects, and open the construction sector to new technologies and global best practices.

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