Legal BlogPCAB License for Contractors

July 16, 2013

A writer of a famous journal allegedly remarked that 70 percent of contractors were bad, 20 percent were good, and 10 percent were ugly. Perhaps, the figures could explain the reason behind the creation of the Philippine Contractors Accreditation Board (PCAB) in 1965.

The PCAB was formed pursuant to RA 4566 (Contractor’s License Law). The law aims to ensure the safety of the public and the growth of the contracting sector. Hence, the law provides that contractors must first secure a PCAB license before engaging into the business of contracting.

A contractor may engage in any of these four classifications: general engineering, general building, specialty, and trade. Specialty classification has the most number of sub-classifications, which includes foundation work, waterproofing work, and communication facilities among others. This classification requires a financial capacity requirement that ranges from PHP 900,000 to PHP 90,000,000. Moreover, trade classification has the lowest financial capacity requirement which is PHP 45,000.

The four classifications are based on the technical experience of the contractor’s sustaining technical employee/s (STE). PCAB defines an STE as “a constructor’s nominee from among his technical personnel, who is approved as such by the board and whose training and experience are to sustain the constructor’s classification eligibility and/or to accrue to the constructor’s credit rating in categorization.”  A contractor may have more than one classification provided that one is designated as his principal classification.

Furthermore, a contractor may apply for license under any of these seven categories: AAA, AA, A, B, C, D, and TRADE. The contractor’s category may be determined based on financial capacity, experience of STE, and overall credit points.

After determining the proper classification and category, a contractor may submit all relevant documents either at the PCAB counter in Makati City or its equivalent regional or provincial offices.

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