By Gliceria N. Cademia | Services Division | DTI-Export Marketing Bureau

28 March 2018

Published also in Business Mirror

THE Department of Trade and Industry’s Export Marketing Bureau (EMB) in collaboration,  with the Construction Industry Authority of the Philippines’s (CIAP) Philippine Overseas and Domestic Construction Board, held the Overseas and Domestic Construction Industry Information and Capacity Building Sessions during Worldbex2018 at SMX Convention Center, Pasay City on March 16.

Maria Teresa S. Loring, division chief of EMB,  delivered her welcome remarks underscoring that with the EMB and CIAP’s collaboration, it aims to further assist new companies and the more established ones to make their entry into the international market.

The participants were apprised on topics, such as EMB services, understanding free-trade agreements (FTA) in trade in services and Ripples Plus.  The Development Bank of the Philippines discussed its financing program, while PCAB explained the PCAB registration and licensing procedure, Contractors Performance Evaluation System and CIAP Document 102, which refers to the uniform general condition of contract for private construction.

The EMB is mandated to oversee the development, promotion, and monitoring of Philippine exports.  It provides would-be exporters and current exporters the enabling environment to make them globally competitive.

To support its services, it provides export assistance; business matching; coffee accreditation and export documentation. It handles trade complaints through its Export Trade Complaints Committee; coffee accreditation and export documentation; and export accreditation under the Export Development Act. Likewise, it provides market and product consultancy; conducts outbound/inbound business missions; and maintains a knowledge processing unit for export and import statistics.

Its four major programs are the Philippine Export Competitiveness Program, Doing Business in Free Trade Areas, Doing Business with the EU Using GSP+, the Regional Interactive Platform for Philippine Exporters and the Halal Export Industry Development and Promotion Program.

The FTA agreement addresses the elimination of tariffs among and between partner economies and other nontariff restrictive regulations of commerce on substantially all the trade between countries or group of countries for products and services governed by Gatt Article XXIV and Gats Article V.

The perceived benefit for the construction industry is greater market access in six Asean FTA partners (i.e. Australia, New Zealand, China, South Korea, India and Japan).  Additionally, there is an ongoing discussion on the movement of natural persons to have a more relaxed process under Mode 4.

Loring said service exporting is different from product exporting where a product is shipped out of the country. In services like construction, the design or drawing can be done through online platform; which falls under Mode 2, hence qualifies as a service export.  The four modes of supply in services where discussed:  1) Cross Border Supply, which includes any goods or services being transmitted online; 2) Consumption Abroad, which includes foreign students studying in the Philippines and tourist and foreigners awaiting services in the country; 3) Commercial  Presence, which involves investment in another country and establishing a satellite office or marketing office anywhere in the world, and 4) Movement of Natural Persons, which includes people doing a certain activity for a specific period in a company based  in another country.

The overseas Filipino workers sector falls under Mode 4. However, their income is not considered as export revenue since it is classified as salaries and wages.  Only professionals are sent as a  natural person by a Filipino company for a temporary period of time to perform the services abroad for a contract closed with a foreign company/client is combined exports revenue under Mode  1.

Participants were advised to get familiarized also on the WTO classification of their services to get engaged to more networks from partner economies to connect and maximize the benefit from Free Trade Agreement (FTA).

She encouraged contractors and professionals to register at APEC and ASEAN registry of engineers to allow them to join overseas projects in APEC Engineer economies looking for without having to undertake further examination or interview. In some cases, they may also be able to obtain discounted dual membership in both accredited professional Organization (APO) and an equivalent engineering society or institution overseas.

Eleven general areas of practice are currently available for registration in APEC Registry of Engineers: Agricultural Engineering, Civil/Structural Engineering, Chemical Engineering, Electrical Engineering, Electronics and Communications Engineering, Sanitary and Environmental Engineering, Geodetic Engineering, Mechanical Engineering, Metallurgical Engineering, Mining Engineering, and Naval Architecture and Marine Engineering.

The Regional Interactive Platform for PH Exporters (RIPPLES) Plus, a flagship project of EMB is designed to increase exports and investments and intensify small and medium enterprises (SMEs) development efforts. It aims to expand the supply base of internationally competitive Philippine export products and services by extending strategic firm level interventions to participating companies to make them export ready and/or enhance their export capacity and competitiveness and to establish and maintain a database of exporters/ manufacturers from all over the country

The Development Bank of the Philippines has a financing program to support the National Government’s Build, Build, Build program.  DBP offers a maximum loan amount up to 70 percent of awarded contract/s or allowable ranges of contract cost (ARCC) whichever is lower. The eligible borrowers are contractors duly licensed by the Philippine Contractors Accreditation Board (PCAB) under classification General Engineering, Building and Specialty Contracting with license under quadruple A, Triple A, Double A and A,B,C,D, and Trade categories.

The eligible projects are social infrastructure, residential buildings, non-residential buildings, transport infrastructure, water supply, wastewater, sanitation and other utility infrastructure, communications infrastructure, waste infrastructure, power and energy infrastructure.

The CIAP’s Philippine Contractors Accreditation Board (PCAB) is mandated to issue, deny, suspend or revoke contractors licenses per RA 4566. It issues a regular license to constructor-firms of Filipino sole proprietorship, or partnership/ corporation with at least 60% Filipino equity participation and duly organized and existing under and by virtue of the laws of the Philippines, and a special license to a joint venture, a consortium, a foreign constructor or a project owner which shall authorize the licensee to engage only in the construction of a single specific project.

CPES is a system of grading the performance of a constructor for a specific kind of project using a set of criteria being implemented by CIAP’s Philippine Domestic Construction Board (PDCB). It is embodied in R.A. 9184 which provides that “All procuring entities implementing infrastructure projects are mandated to evaluate the performance of their contractors using the NEDA-Approved CPES Guidelines regardless of contract amount and funding source. CPES shall be done during construction and upon completion of each government project”.

CIAP Document 102

CIAP document 102 is a uniform general condition of contract for private construction.   It contains terms and conditions ordinarily established in construction contracts and was formulated to provide the procedures, guidelines, and criteria to be used by parties in a construction Contract, or use as reference to the Contract to address deficiencies and/or any ambiguity.

In case of disagreements, CIAP resolves disputes through Construction Industry Arbitration Commission (CIAC) which is tasked to provide the industry with the necessary alternative dispute resolution facilities for the speedy and equitable settlement of claims and disputes arising from, or connected with, construction contracts in the Philippines.

Maria Teresa S. Loring, Division Chief of the Department of Trade and Industry’s Export Marketing Bureau (DTI-EMB) discusses FTA’s and Services Trade during Overseas and Domestic Construction Industry Information and Capacity Building Sessions at SMX Convention Center, Pasay City on March 16, 2018.