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Philippine Standard Time

Issue Paper

Construction sector is a key sector in the economy. It is a major direct contribution to economy. In terms of GDP, construction sector’s gross value accounts for 7.1% of GDP or PHP2.35 trillion/USD43.7 billion in 2018; and average of 6% of GDP for 2010-17. In terms of employment, it had 9.4% share or 3.8 million persons employed in the sector in 2018. It also has indirect contribution as input to infrastructural investment across other sectors. Steady economic growth in recent years, and government-led infrastructure investment under the Build, Build, Build program helped expenditure in the construction industry expand, by 15.9% in 2018. Demand drivers are the Build, Build, Build program, strong demand for condos, duplexes, and quadruplexes notably Chinese investors (Oxford Business Group 2019).

In this sector, contractors basically refer to the companies or firms that undertake construction. The basic definition of contractor is “A contractor is responsible for providing all of the material, labor, equipment (such as engineering vehicles and tools) and services necessary for the construction of the project.” The main regulation governing contractors is the Contractors License Law or R.A. 4566 as amended by P.D. No. 1746. This is to ensure only qualified and reliable contractors are allowed to undertake construction in the country, to ensure safety of the public and growth of the industry. Contractors are required to get license under the Philippine Contractors Accreditation Board (PCAB) -- Construction Industry Authority of the Philippines, Department of Trade and Industry (DTI). This is the key government agency with regards to the construction industry.

Researcher: Paulina Kim C. Pacete

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