Negosentro | How to Be a Legitimate Building and Infrastructure Contractor in the Philippines: Complete Guide to Licenses, Accreditations, and Budget
The construction industry in the Philippines is booming — from residential homes and commercial buildings to massive infrastructure projects under Build Better More. If you’re planning to enter this lucrative sector, the first and most important step is legitimacy.
Being a legitimate contractor is not just about having skills or manpower; it requires government registration, licenses, and accreditation to operate legally and win both private and government projects.
In this guide, we’ll walk you through everything you need to know about becoming a legitimate building and infrastructure contractor in the Philippines — from the step-by-step process, required documents, licenses, accreditation, and the budget you need to prepare.
Why Legitimacy Matters in the Construction Business
Many small builders in the Philippines start informally, taking on projects without permits or proper licensing. While this may work short-term, it exposes contractors to serious risks:
Ineligibility for big-ticket projects (especially government-funded infrastructure)
Penalties and shutdowns from the Philippine Contractors Accreditation Board (PCAB)
Loss of client trust and reputation
Legal liabilities in case of accidents or disputes
By going legitimate, you gain:
Eligibility for larger projects
Legal protection
Access to financing and government incentives
Stronger credibility with clients
Step 1: Register Your Business
Before applying for any contractor licenses, you must first establish your company legally.
Choose a business structureSole Proprietorship – Register with the Department of Trade and Industry (DTI)Partnership or Corporation – Register with the Securities and Exchange Commission (SEC)
Secure Barangay Clearance – Go to your local Barangay Hall where your business will be located.
Get a Mayor’s Permit / Business Permit – Apply at the City or Municipal Hall. Requirements usually include barangay clearance, a lease contract or proof of business address, and SEC/DTI registration.
Register with the Bureau of Internal Revenue (BIR)Get your Certificate of Registration (BIR Form 2303)Apply for authority to print receipts and invoices
Budget Range for Business Registration: ₱10,000 – ₱20,000
Step 2: Apply for a PCAB License
The Philippine Contractors Accreditation Board (PCAB), under the Construction Industry Authority of the Philippines (CIAP) and the Department of Trade and Industry (DTI), regulates contractors.
To operate legally as a building or infrastructure contractor, you must secure a PCAB Contractor’s License.
Types of PCAB Licenses
Regular License – For Filipino-owned companies (at least 60% Filipino ownership). Allows nationwide operation and participation in both private and public projects.
Special License – For foreign-owned firms or joint ventures. Typically project-specific.
PCAB Licensing Categories
PCAB classifies contractors based on financial capacity, experience, and equipment:
Small A / Small B – For projects up to ₱15M (ideal for startups)
Medium A / Medium B – For projects ₱100M–₱300M
Large A / Large B – For projects above ₱1B
PCAB License Requirements
Duly accomplished PCAB application form
SEC/DTI registration documents
Business permit and BIR registration
List of completed and ongoing projects
Technical qualifications (PRC licenses of engineers, architects, project managers)
Financial statements audited by a CPA
Proof of ownership of equipment (or lease agreements)
Key personnel profiles
PCAB Application Fees (Approximate)
New Application Fee: ₱8,000 – ₱10,000
Processing Fee: ₱4,500 – ₱8,000
License Fee: ₱10,000 – ₱150,000 depending on category
Estimated Total Budget for PCAB License: ₱40,000 – ₱200,000
Step 3: Secure Other Required Permits and Accreditation
Beyond the PCAB license, contractors need additional accreditation depending on project type:
1. PhilGEPS Registration (for Government Projects)
The Philippine Government Electronic Procurement System (PhilGEPS) is mandatory for contractors bidding on government-funded projects.
Requirements: Business registration, PCAB license, tax clearance
Annual Fee: ₱5,000 (Platinum membership)
2. DOLE Compliance (Occupational Safety & Health)
The Department of Labor and Employment (DOLE) requires compliance with DO 198-18 (OSHC Law), including:
Appointing a Safety Officer
Providing Personal Protective Equipment (PPE)
Submitting construction safety and health programs (CSHP)
3. PAG-IBIG, PhilHealth, and SSS Employer Registration
Mandatory for companies hiring employees.
4. Environmental Compliance (if applicable)
For projects that may impact the environment, apply for permits with the DENR.
Step 4: Build Your Technical and Financial Capacity
PCAB will assess not just your documents but also your ability to deliver projects. To strengthen your application:
Hire licensed professionals – engineers, architects, foremen
Acquire equipment – at least basic construction tools and machinery
Maintain financial capacity – audited financial statements and proof of capitalization
💡 Pro Tip: Even if you’re starting small, align with suppliers and subcontractors to show capacity.
Step 5: Estimate the Capital and Budget You Need
Starting a construction contracting firm requires significant capital. Here’s a breakdown:
Expense Category
Estimated Cost (₱)
Business Registration
10,000 – 20,000
PCAB License (Small A/B)
40,000 – 200,000
Office Setup
50,000 – 150,000
Equipment & Tools
200,000 – 500,000
Initial Manpower Salaries
100,000 – 300,000
Insurance & Bonds
50,000 – 100,000
Marketing & Website
30,000 – 80,000
Estimated Starting Capital: ₱500,000 – ₱1,500,000 (depending on scale)
Step 6: Market Your Contractor Services
Once you’re licensed, the next step is finding projects. Some strategies include:
Registering in PhilGEPS for government bidding
Networking with developers, architects, and engineers
Creating a professional website to showcase projects
Joining contractor associations like the Philippine Constructors Association (PCA)
Digital marketing (SEO, Facebook Ads, LinkedIn) to attract private clients
Step 7: Maintain Compliance and Renew Licenses
Legitimacy doesn’t stop at registration. To stay compliant:
Renew your PCAB License annually
Keep BIR tax filings up to date
Maintain safety and labor compliance (DOLE, SSS, PhilHealth, Pag-IBIG)
Update your PhilGEPS membership
Non-compliance can result in suspension or cancellation of licenses.
Final Thoughts
Becoming a legitimate building and infrastructure contractor in the Philippines is not an overnight process. It requires:
Proper business registration
Obtaining a PCAB license
Securing additional permits and accreditations
Preparing enough capital and equipment
Building a solid technical team
While the upfront cost may seem high, the credibility, opportunities, and long-term stability you gain make it worthwhile.
If you want to thrive in the construction industry, legitimacy is the foundation that sets you apart from informal contractors. With the right strategy, compliance, and commitment, your contracting firm can grow from handling small builds to becoming a major player in infrastructure projects nationwide.
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