Unlicensed Construction Contractors Beware

On 27 April 2022, President Rodrigo Duterte signed into law Republic Act No. 11711 (RA
11711), which amended the antiquated Republic Act No. 4566 (RA 4566) otherwise known
as the “Contractors’ License Law.” The amendments seek, among others, to promote the
growth of the contracting business, to upgrade the construction capability both in public
and private sectors, and to ensure that only licensed, competent, and dependable
contractors are allowed to render construction work, thereby ensuring the quality of
construction projects, buildings, and other public works and public safety.

RA 11711 expounded the prohibited acts under the Contractors’ License Law and imposed
harsher penalties therefor. Unlicensed contractors, who, for a price, commission, fee or
wage, submits or attempts to submit a bid to construct, or contracts to or undertakes to
construct, or assumes charge in a supervisory capacity of a construction work, would now
be penalized with a fine ranging from One Hundred Thousand Pesos (PhP100,000.00) to
Five Hundred Thousand Pesos (PhP500,000.00), plus one-tenth of one percent (0.1%) of
the project cost. They would also be prohibited from obtaining a contractor’s license for a
period of one (1) year. Similar penalties plus automatic revocation of existing license
would be imposed upon two (2) or more licensees who jointly submit a bid without
securing an additional license to act as a joint venture or combination. Further, any
person who presents or files the license certificate of another, gives false evidence to the
Philippine Contractors Accreditation Board (PCAB), impersonates another, or uses an
expired or revoked license would now be penalized with a fine of Five Hundred Thousand
Pesos (PhP500,000.00) to One Million Pesos (PhP1,000,000.00) and imprisoned for a
period of one (1) to six (6) years. The foregoing is a significant increase from the Five
Hundred Pesos (PhP500.00) to Five Thousand Pesos (PhP5,000.00) fine under RA 4566.

RA 11711 likewise increased the fees ten-fold for obtaining a license or a renewal thereof.
From Fifty Pesos (PhP50.00) to Sixty Pesos (PhP60.00), the prescribed fees are now: Five
Thousand Pesos (PhP5,000.00) for an original license; Six Thousand Pesos (PhP6,000.00)
for examination of an applicant; and Five Thousand Pesos (PhP5,000.00) for renewal. RA
11711 has also authorized PCAB, in consultation with its stakeholders, to adjust or increase
the fees by not more than fifteen percent (15%).

All contractors’ licenses shall be valid for one (1) year from date of issuance, but there is
good news for long-standing, well-established existing contractors. Those who have been
operating in good standing for twenty five (25) years or more may renew their licenses
every three (3) years, and those operating in good standing for ten (10) years or more may
renew their licenses every two (2) years.

Applications and all other requirements for license renewal may be filed with the PCAB,
either in person or online, not earlier than ninety (90) days but not later than thirty (30)
days before the expiration of the license. To apply online, register at the PCAB Online
Licensing Portal
at https://www.pcab.construction.gov.ph or https://www.pcabgovph.com. You may also
visit http://construction.gov.ph/program and services/contractors-licensing-and-
registration/ to know more about contractor’s licensing and registration.