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PCAB Chairman Ramon Allado: PCAB Licensing and the Rule of Law

It is seldom that one is given a second chance in any endeavor in life. Much more, a chance to redeem itself after a dismissal that left a bitter taste in his path--and was very difficult to swallow--the bitter taste of being named in certain sectors as corrupt. But by virtue of one's function that men go out of purpose but to maintain a level playing field for Filipinos in their own country against foreign contractors.You know there have been times over the past several months that I have questioned the wisdom of my acceptance of the appointment. It is the thought, however,that I was appointed by the president whose main platform was an honest to goodness campaign for good governance that has sustained me. The other important factor for my continued service is the fact that the PCA has been pulling behind the PCAB in its press to deliver quality service to the industry. From day 1, that’s December 17, 2010, when we were sworn in, PCA has been very supportive. Let me take this opportunity therefore to thank PCA thru its current leadership, Pres. Levy Espirtu, its vice presidents Jun Elepano and Vic Lahoz, secretary Will Decena and treasurer Jun Castillo, and also its directors, and the staff, all the committee members, affiliates, chapters.

I’d like to thank you for your support.Thank you for making my return to PCAB a fulfilling experience. I hope that as in love, my experience will be lovelier the second time around.

But what have we done so far?

For starters, we erased the6-month backlog of applications that was left by the vacancy of June 24, 2010to December 17, when there was no PCAB. We also reduced the processing time of applications by implementing an approval system by referendum done via email.

How does this work?

After an application is received,it is pre-screened and evaluated by the staff. After which, a matrix is prepared by the staff. This is the very same matrix that we are presented with every board meeting.

Ngayon po di na kailangan maghintay lagi ng board meeting. This matrix, as soon as it is processed, mapa-isa,dalawa, tatlo, dalawampu, ibibigay na po sa aming tatlo yan. And if any of us have any questions or comments, we relay it back to the staff. Within day orso, sumasagot po ang staff. If thereare no questions, a simple “no objection” response from at least two members ofthe board will tell now the staff that the license can be printed. Kung renewal lang po yan, it requires only one signature. So the staff inquires kung sino sa tatlong members ng board ang available and we set a day kung kailan po mapipirmahan ang lisensya.

If it requires three signatures,like a special license, it will probably take two or three days because everyonehas to sign. So unless your application is something complicated, like restoration or new application na dinaman amnesty, you should not accept a reason given by the staff na di pa po nagboboard meeting. If they say boss di pa po naaksyunan yung application niyo for renewal because the board has not met, kalokohan po iyon because now, with the simple system, the board does not need to physically meet to approve your application.

Ang ginagawa po ng board during board meeting is merely confirms what they have previously approved during the referendum system. I am happy to report that in the renewal period of 2011-2012, the PCAB was able to process 90percent of all renewals within the 10 working day period precisely because ofthis system. A modest saving in time and resources was realized by the fact that no temporary licenses were issued in this fiscal year.

 I’m also happy to report that 85 percent ofall renewals were approved by July 15, 2011. In fact, I’m also happy to report that we have already exceeded collections for 2010 by quite a big amount.

How did we achieve this?

Again, by simply requiring applicants to pay the required fees upfront. We also achieved this by conscientiously collecting all what we call “additional license fees”. It’s a penalty. If you do not renew on time, automatically, you're assessed a P5, 000 penalty. But we don’t call it a penalty. We just call it “additional license fee”. We also embarked on a streamline delivery system that will reduce your transaction time with the PCAB. With the upfront payment and self-addressed stamp or courier envelope, you or your representatives will only have to pay us a visit in Makati or any of the PCAB windows in the regions and the provinces where you are dealing with us only once. This will reduce not only time but the cost of doing business with PCAB in general. We have also paid attention to the special licenses especially local, joint ventures and consortiums that we know you need before submittals. These are now processed in less than 10 working days.

Again, I will repeat, when youcall the PCAB, please do not accept the answer that the board has not met yet as the reason why your application for renewal or special license has been pending. Unless your application is a complicated one or it is for a new or upgraded license, the board need not meet physically. We are also embarking on initiatives to give incentives to contractors who pay their taxes. Mayroon pong board resolution na for every P100,000 na payment in taxes, you get an additional 10 points. We also give points to ISO certified companies. By the way, for your info, the PCABquality management system has been certified by Certification International Philippines as compliant with ISO 9001-2008.

 We have also embarked on a program to professionalize the industry further and make it globally competitive. Today, each contractor holding a PCAB license is expected to have the AMO attend a 40-hourbasic occupational safety and health seminar for construction site safety officers. The purpose of which is to invite a culture of safety in the industry. Likewise, as a means to assure that all contractors comply with all the statutory and regulatory requirements as well as awareness of the industry’s best practices, we have embarked on a 16-hour AMO seminar which is now a requirement in the renewal of licenses for 2012-2013.

A program to have many of our fellow professionals in the construction industry to come to the fold of the law has been launched. As you very well know, a considerable number of contractors continue to operate without a license. Many of these contractors even support our operations as subcontractors or specialty contractors. PCAB hopes that we can count on you to help us professionalize the industry by exerting our influence on these unlicensed contractors to legalize their positions. The board has embarked on an information campaign to improve professional organizations, dealers of equipment and materials, even politicians, to outline to them the law that governs professional licensing and registration.

 One of the things that we found out during AMO seminars, maraming AMO ang hindi alam paano sila kukuha ng lisensya. At least if you attend the seminar, you will know the procedures and how to get a license. The poster campaign that was launched by PCAB and PCA Metro. What PCA Metro will do is post this in all offices of building officials.It is a simple poster stating who should have licenses. We’re working it out.According to Bertie, 2,500 posters have already been delivered to PCAB. We aretargeting by the end of October that all these posters will be posted in all offices of building officials.

An amnesty program was initiated last July 1, 2011 and this is expected to end on December 31, 2011. We hope that you encourage all your unlicensed contractor friends as well as specialty and subcontractors and the like to avail of the program. This is a simple program that requires only four simple steps for the requirements. The first is an application letter. It can be downloaded in the PCAB website and the PCA Metro website, and hopefully in the PCA website. The second is upfront payment of fees, which requires P10, 000 additional license fee for penalty. So even if you’ve been operating for the past 10 years without a license, you will only be charged two years. The third requirement is a bank certificate showing that you have P45, 000 in capital. And the last requirement is a PCAB licenseapplication, duly accomplished. And for the purpose of availing the amnesty,they will not be required to take initially the AMO examination.

Wala rin pong required na sustaining technical employee dito. You will receive category license within 10 working days after submittal of these four requirements. What PCAB strategizes on this is a campaign for the first three quarters of information, then the last quarter two quarters of amnesty come2012 starting January will go after not only contractors but project owners that hire unlicensed contractors. We can go after them under Executive Order913 which goes after violators of DTI laws. This is our program to inform,reach out to, and eventually penalize unlicensed contractors.

Over the past nine months, theboard has passed close to 30 board resolutions to help how you deal with us.These are all published in the DTI website at and hopefully we will be posting this in the PCAwebsite.

Where do we want to go?

Our goal in PCAB is to further reduce processing times and the overall cost of doing business with PCAB. Howdo we intend to do that? First is by encouraging contractors to organize and affiliate with national organizations like the PCA. Very early on, we passed aboard resolution accrediting contractors and professional organizations as extensions to the PCAB public assistance desk. This is a very powerful tool available to both the PCA and PCAB. Your members and your officers can followup all pending applications with PCAB by simply sending a text or email. The assurance is you get a response within 48 hours. I assure you within 48 hours you will get a response.

Your association can also endorse an application to PCAB because all accredited organizations can train personnel that can do pre-screening and evaluation of all types of applications. If the president and the secretary of your association endorse an application, PCAB will no longer pre-screen or evaluate the application. It will ask the applicant to immediately pay for the upfront fees and process the application immediately. Ganun po kalakas ang mga accredited associations.

We will also utilize these associations to help us verify the documents and other information that will be received from applicants. These partners are also expected to report unlicensed practitioners of the profession of construction contracting. Likewise, we will ask accredited organizations like PCA and its chapters and affiliates to organize seminars like the AMO seminar. I am happy to report that the PCA was instrumental in helping us complete, pilot and improve the course outline forth is very important seminar. So far, over 500 have attended initially the one in Pasig with 30 participants and the succeeding ones in Davao, we had round two in Davao and one very big one in Cebu. So far over 500 have attended the seminar. And with the help of PCA, its chapters and affiliates, we hope that affordable seminars will be organized for at least another 2,500 AMOs before the end of the year.   We’ll continue to partner with contractor associations so that the feedback mechanism that will support our quest for continual improvement of services is established. After all, who will best tell the PCAB what they need than the contractors themselves. The PCAB will continue to implement policies, advocacies and use quality management mechanisms installed in PCAB to continually improve its services.

We hope to reduce processing timefor new applications by at least 30 percent. At the moment the average is 30 working days. We hope to reduce it to 20 working days before the end of the year. We also are expanding and strengthening the PCAB windows at the Department of Trade and Industry regional and selected provincial offices.  In cooperation with the DTI regional operations group, an inventory and training of PCAB staff is on-going.  Also with the launch of the CIAP windows in Cebu and Davao city, full-time CIAP personnel will be assigned to handle not only our licensing needs but other CIAP activities. We will continue to invite contractors to deal with the PCAB/CIAP windows nearest to their location. We are also launching the PCAB website initially as a major tool for dissemination of information in as much as the DTI portal is rich in info. Again, with the help of PCA, the PCAB website will be launched before the end of the year. It is therefore our hope and our wish that when this partnership is fully developed, the use of third party advisers and facilitators will become a thing of the past, with the strengthened CIAP windows and CIAP windows in the regions and the provinces together with the associations with PCAB the official advisers and facilitators. It is also our hope and our wish that we, contractors, will transform how we do business with PCAB. A simple request is that let’s file our applications for renewal early and in compliance with the voluntary number voting system. Also, refrain from dealing with fixers and also to report them to us.  These are all the short term advocacies that we will embark on. For where do we want to begin in three to five years’ time? For one thing, our rules have to be thoroughly examined so we can be attuned to the times and the current practices not only in our country but worldwide. We start with the Implementing Rules and Regulations of RA 4566which is our basic law. For you who are not aware, the current IRRs were written way back in 1989 and they have not been revised since. We need to revisit also other basic laws that give us our mandates. RA 4566, and PD 1746.Both laws, although generally relevant, must at the very least be updated. Again,this is where we need the help of our industry. We should hear from you on where we should lead our industry in the coming years.

The following is a glimpse of some of the changes that have been proposed.

 The first is a three-year license validity which has been a long-standing plan to coincide with the inter-agency classification. Second, a revised inter-agency classification to allow for new classifications. Third, the creation of a quadruple A category. Extensive talks have already been done regarding this. We need feedback from the industry for this. Fourth is the creation of an engineering procurement and construction license classification or subclassification. Ito medyo masalimuot ang discussion dito because there are sectors that want to be totally open, there are sectors that do not want it open atall. Where do we go from there? Again, it's the industry that will decide wherewe have to go. Sixth, the considering specialty contractors that will be started. For example is ship building. Before, ship building was considered construction. But it was dropped ten years ago. Seventh, special licenses to allow new technology to be transferred. Eighth, online uploading, approval and verification of all types of license applications. These are all the policy changes that are being considered by PCAB. Unfortunately, again, we have to rely on organizations like the PCA for support and funding so that the proper studies are made. After which policy changes that require executive approval or a legislative measure can be proposed then approved by either the office of the president or enacted into law by the congress.

A very common question asked of us nowadays is why we do not allow private construction project owners or developers to choose their own contractors. Most specifically, why don’t we allow them to choose foreign contractors to do their construction work?  At the moment is that we cannot, because the IRRs do not allow for such a situation. The rules and the laws that define the mandate of PCAB do not allow us to grant licenses to these foreign contractors.If you want to, at the very least, a change in the IRR will have to be proposed and approved by the office of the president. Some legal experts even say that anew law has to be passed. Even the simple change in the validity of licenses from one to three years, some legal experts say, needs congressional approval.My question for you is, do we want to make these changes and are we ready forthe consequences that go with the change? I hope that you can deliver the answers soon. That is why I am especially grateful for this opportunity to dialogue with you.

The way projects are implemented in our country and the rest of the world are changing. Although engineering procurement and construction has been an old concept, more and more project owners are learning the advantages of this contractual arrangement. The PCABhas to be prepared for the implementation of more and more projects using this scheme.  At the moment, if you want to create an EPC classification, a change in the IRR has to be made because right now weare only allowed GE, GB and specialty classification. An alternative is to make EPC as a subclassification of the existing classifications. Again, we need feedbacks from you on these changes.

A common practice laid bare by the latest ETON accident requires that PCAB studies how its mandate of public safety and the development of the industry will apply. The ETON tower project did not have a general contractor, in the true sense of the word. Because in effect,the owner/developer who hired a project management firm and contracted with a network of specialty contractors, many of them unfortunately, unlicensed. And the owner/developer procured directly all the major materials and equipment. My question is who will answer for the public safety responsibilities of the contractors? And how does this contractual arrangement develop the construction industry? Maybe we should pick the minds of the members who are owners-developers and contractors at the same time for the answers to these questions. Again it boils down to what we want to do and where we want our industry to go. Hopefully, the answers will represent the whole industry. PCABdoes not hold the answers to these questions. It is you, the engineers and architects, material and equipment suppliers, contractors, both general and specialty, and the owners and developers. The industry that associations like the Philippine Constructors Association represents that must tell the PCAB what the industry wants and where it wants to go.

As far as the computerization project is concerned, the PCAB would like to thank PCA, special mention to executive director Lito Madrasto, for finding creative ways to fund the project. The project is not only to allow uploads and downloads and updates butlink the other government agencies for verification purposes. Initially it isnow visible to the DTI business name registry and the Security Exchange Commission.We can also link with the PRC. Hopefully links with the BIR can be made for thefinancial statements and ITRs. Eventually, the paper license will becomeirrelevant in as much as project owners, developers, and government agencieswill be able to access online not only the list of accredited contractors buttheir credentials as well.

Again, we thank PCA for theirsupport for this project. The roadmap that PCA has proposed is a very goodstarting point for our goal to strengthen the construction industry. It has tobe updated, however, to include the changes that have taken and are takingplace not only in the Philippines but all over the world. It is with this inmind that we would like to thank the PCA and seek a continued and strengthenedpartnership with you.

Kudos to your leadership!

Maraming salamat po.




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