DOJ Opinion No. 121, s. 1999

DOJ OPINION NO. 121 , s. 1999 December 27, 1999 Hon. Jose Trinidad Pardo Secretary Department of Trade and Industry 631 Sen. Gil Puyat Avenue Makati City Sir : This opinion of this Department is requested on "whether or not the deletion/delisting of the phrase 'private domestic construction contracts' from the 3rd Regular Foreign Investment Negative List, in effect: cdlex "a) Disallows any foreign equity in private domestic construction contracts (strictly applying the Constitutional prohibition on practice of profession by foreigners as amplified by par. 2 of List A of the Regular Foreign Investment Negative List); or "b) Allows 40% of foreign equity in private domestic construction contracts as an exception to par. 2 of List A using as basis Section 3.1 (a) of the PCAB Rules to implement Section 20 of R.A. 4566 which explicitly allows the corporate practice of construction." The request, it appears, stemmed from the issuance on August 11, 1998 of Executive Order No. 11 (Approving the Third Regular Foreign Investment Negative List) which among others, deleted/delisted the phrase "private domestic construction contracts" under the heading "Up to 40% foreign equity" of list A of the Negative List but retained the activity "services involving the practice of licensed professions" under the heading "No foreign equity" of the same List A. It is claimed that Section 20 of the Contractors' License Law (R.A. No. 4566) expressly provides for the corporate practice of construction a service which allegedly necessarily involves the practice of engineering, architecture and other allied professions; and that Section 3.1 (a) of the Rules and Regulations Governing Licensing and Accreditation of Contractors in the Philippines, duly approved by the President, explicitly prescribes a minimum nationality requirement of 60% Filipino equity for the issuance of regular licenses to firms engaged in the corporate practice of construction, which is allowed under Section 20 of R.A. No. 4566. Hence, the query. This Department regrets that it cannot render the opinion requested for the following reasons: First . The issues raised herein undeniably involve the interpretation and/or application of the pertinent provisions of the Foreign Investments Act of 1991 (R.A. No. 7042, as amended) and R.A. No. 4566 (The Contractors License Law), and the respective rules and regulations promulgated thereunder. Under Section 13 of R.A. No. 7042 and under Section 5 of R.A. No. 4566, the power to promulgate the rules and regulations implementing the said laws, and corollarily, the power to interpret the provisions thereof, pertain to the NEDA, in consultation with the Board of Investments (BOI) and Securities and Exchange Commission (SEC), with respect to R.A. No. 7042, and to the Philippine Licensing Board for Contractors, subject to the approval of the President, in regard to R.A. No. 4566. This Department has consistently refrained from passing upon issues which fall within the primary jurisdiction of another office or agency over which this Department exercises no revisory authority, unless upon the latter's request (Sec. of Justice Opn. No. 105, current series, citing opinions; No. 99, current series). Second . By settled policy and precedents, and as a matter of official courtesy, the Secretary of Justice does not give his comments and/or opinion on matters involving an executive issuance, in this case, E.O. No. 11, unless upon the request of the Office of the President. It is suggested that clarification on the issues raised be secured from the Office of the President and/or the National Economic and Development Authority, the latter being the agency authorized to make amendments to the Regular Foreign Investment Negative List. prcd Very truly yours, (SGD.) JUSTICE SERAFIN R. CUEVAS Secretary