Speech of Trade and Industry Secretary Alfredo E. Pascual at the Board of Directors Induction Ceremonies, Council of Engineering Consultants of the Philippines (CECOPHIL) | Department of Trade and Industry Philippines

20 March 2024 (Wed), 6:30 PM Marco Polo Hotel

Esteemed members and leaders of CECOPHIL, led by President Engineer Dr. Ernie de Castro, respected figures in the construction industry, my colleagues in the service of the public, and our honored guests gathered here tonight—warmest greetings to you all.

It fills me with great pride to witness the induction of the board members for CECOPHIL 2024. Your assumption of office marks a commitment to the council and the very essence of engineering. Thomas Tredgold, an esteemed English engineer, aptly described engineering over a hundred years ago as “the art of directing the great sources of power in nature for the use and convenience of mankind.” This evening is a celebration of that art.

My heartiest congratulations go out to each newly inducted board member. You are now part of a tradition that is as much about building structures as it is about building a brighter future for all.

As your fellow advocate for progress, I am privileged to be a part of your induction ceremony. Engineers, renowned for their jovial spirit, genuinely understand the delicate balance between stress and support—much like President Ernie de Castro, a structural engineer whose expertise enables him to elevate tension without compromising stability.

DTI and CECOPHIL

On behalf of the Department of Trade and Industry (DTI), I extend our most profound appreciation for CECOPHIL’s exceptional engineering consulting services, which benefit local businesses, multinational corporations, governmental bodies, and the private sector. The Filipino engineering community, encompassing engineers and skilled carpenters, welders, plumbers, and glaziers, has constructed marvels not just here but across the globe. This has earned significant foreign exchange for our country and created countless job opportunities for Filipinos.

CECOPHIL’s proficiency and valuable contributions have raised the bar for the construction industry’s standards and practices. Notably, many of you serve as accredited arbitrators with the Construction Industry Arbitration Commission (CIAC), reflecting an unwavering commitment to resolving disputes fairly and maintaining high industry standards.

As we observe Women’s Month, I want to acknowledge the council’s Women in Engineering Baseline Survey. This initiative underscores your dedication to fostering a culture of diversity and inclusiveness within the engineering profession, a commitment that is essential to our collective advancement.

Construction Industry

The construction sector is a cornerstone in President Ferdinand Marcos Jr.’s vision of a renewed Philippines—a Bagong Pilipinas. The DTI is steadfast in its goal to create a conducive environment for investments that yield high-quality, sustainable employment opportunities, enhancing the livelihoods of the Bagong Pilipino.

Construction is a sector that creates a ripple effect of economic benefits when invigorated through infrastructure projects such as roads, bridges, ports, and airports. For every billion pesos invested, approximately 4,000 jobs are generated, outpacing the manufacturing, tourism, and transport logistics sectors. As of January 2024, the construction industry has provided direct and indirect employment to over 4.5 million individuals.

Moreover, the construction industry significantly strengthens the supply chain, fostering deep backward linkages with over 60 sectors and forward connections with more than 20 key industries, including real estate and mining. It is a catalyst for national progress. According to the Philippine Statistics Authority (PSA), construction contributed 8.8% to our GDP in 2023. It was responsible for 64% of the Gross Capital Formation (GCF), highlighting its central role in economic growth.

Policies and Measures

Thus, under the guidance of President Marcos Jr., the Philippines is accelerating annual infrastructure spending to 5% of GDP. Presently, the government is programming 185 high-impact flagship infrastructure projects, embodying our ‘Build, Better, More’ philosophy, now worth over 9 trillion pesos.

About 36% of these projects are in progress, with the remainder in various preparatory and approval stages. Of these, 45 projects are harnessing the potential of public-private partnerships (PPP), with the remaining relying on official development assistance (ODA), the national budget through the General Appropriations Act (GAA), or a combination of financing solutions.

In the wake of disruptions caused by the pandemic, our response has been proactive and targeted toward enhancing the ease of doing business within the construction sector. The Philippine Contractors Accreditation Board (PCAB), attached to DTI, has been at the forefront of this initiative, pioneering the digitalization of the licensing process. With the launch of the online licensing portal at pcab.construction.gov.ph, we have taken significant strides in simplifying and expanding access to these services. We invite you to utilize this platform and share your insights to refine the process further.

In 2022, the Supreme Court affirmed its 2020 decision that allows foreign construction firms to acquire regular licenses to participate in public and private projects across the country. We encourage you to engage in the ongoing PCAB public consultations on the necessary revisions to the implementing rules and regulations governing the licensing process.

The Philippine government has streamlined the approval processes for national government and corporate projects below PHP 2.5 billion, removing the need for Investment Coordination Committee (ICC) approval except for some instances.

The government also institutionalized PPP and consolidated its legal frameworks when the President signed the Public-Private Partnerships Code (Republic Act 11966) in December 2023. This law raised the NEDA Board approval threshold from PHP 2.5 billion to PHP 15 billion. It covers diverse contractual arrangements between agencies and private partners, including financing, design, construction, operation, and maintenance of infrastructure projects.

The Philippine PPP Program is open to international investors who meet our stringent technical, financial, and legal standards. Projects can be financed through foreign and local sources and may employ international or Filipino contractors.

The Amended Foreign Investments Act (Republic Act 11647) and the 12th Foreign Investment Negative List (FINL) outline foreign equity limits for various sectors. For instance, these allow up to 25% foreign equity in defense-related structures and up to 40% in infrastructure projects, public utilities, land ownership, and condominium units.

With the amendments to the Public Service Act, sectors such as telecommunications and transport have been opened to 100% foreign ownership, while utilities remain capped at 40%.

The construction sector could also benefit from various tax and other incentives under the 2022 Strategic Investment Priority Plan (SIPP) and the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, depending on their specific activities.

Global Competitiveness

To ensure the Philippine construction sector’s global competitiveness, the Construction Industry Authority of the Philippines (CIAP), a DTI-attached agency, is championing development and marketing strategies to foster innovation and competitiveness on the world stage.

The CIAP, together with the DTI’s Philippine Overseas Construction Board (CIAB-POCB), the Export Marketing Bureau, and the Board of Investments, are actively collaborating with CECOPHIL and the Information Technology and Business Process Association of the Philippines (IBPAP). We aim to establish a consortium of companies specializing in construction services, engineering, and design for international promotion. Your involvement in this endeavor is highly welcomed.

We are engaging with industry stakeholders through CIAP and other organizations. One of our key advocacy efforts is championing the Philippine Construction Industry Roadmap 2020-2030, which aligns with President Marcos Jr.’s Build Better More Program.

This year, we are intensifying trade negotiations with partner countries. Our Free Trade Agreements (FTAs) include market access for services including professional services such as engineering, construction, and even consulting services. By committing market access, this means that a trading partner country guarantees the entry of these service providers and professionals. Thus, instead of our professionals like engineers being employed in the other country, they can set up their own offices or consulting firms as long as market access has been committed in the FTA.

Closing

In closing, as CECOPHIL persists in its construction endeavors, I call upon you to lend your expertise and vision toward creating a sustainable, inclusive, and progressive Philippines. Your participation is crucial as we lay the foundations for a nation built to last and ready to embrace the future.

Your role in this grand undertaking is pivotal. As we continue to advance and as your work endures, remember that each blueprint you draw, and each structure you raise demonstrates the indomitable spirit of the Filipino people and our shared aspiration for a more prosperous nation.

Tonight, as we stand on the threshold of new beginnings, let us affirm our collective resolve to design and construct a future as resilient, innovative, and forward- looking as the minds gathered here tonight.

Mabuhay tayong lahat! ♦

Date of release: 20 March 2024

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