According to a recent World Bank report, the Philippine economy is projected to recover from the effects of the COVID-19 pandemic and to grow at an annual rate of 5.9% through 2022.
There is an expected surge in construction projects in the next few years, both in the public and private sectors, which will result in a corresponding increase in investor interest for such projects. As the number of construction projects grows, the risk of disputes arising from these projects likewise increases.
In anticipation of these potential disputes, it is useful for all stakeholders in a construction project (e.g., the owner/employer, the engineer/architect, the contractor/subcontractor and the project managers) to be aware of and be familiar with the Philippine legal framework governing construction, as well as the common issues that arise in connection with construction projects and some of the best practices to manage, if not avoid altogether, such disputes. The Philippines has a unique legal framework for construction disputes, which should be taken into account when drafting contracts and for purposes of ensuring proper resolution of disputes arising therefrom.
Objective of this primer
While it is hoped that this will be helpful to the various stakeholders involved in construction projects in the Philippines, this primer is nevertheless only a high-level presentation of the various features of Philippine construction law and of common issues encountered in construction projects, intended to assist parties in managing and avoiding disputes in construction projects in the Philippines. Given the broad range of issues that may arise from the negotiation and implementation of construction projects, this primer is not intended as a substitute for seeking legal advice.
For questions and additional information on this primer, contact the authors.