PUBLIC-
PRIVATE
PARTNERSHI
P
Defining Public-Private Partnership
Objectives General Forms of PPP
PPP Contractual Arrangements
Eligible Types of PPP Projects
Advantages of PPP
PPP Processes
DEFINING
PUBLIC-PRIVATE PARTNERSHIP
defined as a contractual agreement between the Government and a private
firm targeted towards financing, designing, implementing and operating
infrastructure facilities and services that were traditionally provided by the
public sector.
PPP offers monetary and non-monetary advantages
for the public sector. It addresses the limited
funding resources for local infrastructure or
development projects of the public sector thereby
allowing the allocation of public funds for other local
priorities. It is a mechanism to distribute project
risks to both public and private sector.
HISTORY OF
PUBLIC-PRIVATE PARTNERSHIP
1986- government divested itself from non-essential business-related
assets acquired during the Marcos era and enacted Presidential
Proclamation No. 50 in December 1986, which created the Asset
Privatization Trust (APT) and the Committee on Privatization (COP) to
handle this move.
1987- Congress passed the 1987 Philippine Constitution. It defined the
role of the private sector as a valuable partner in achieving the
development goals of the country. Section 20, Article II specifically states
that, “the State recognizes the indispensable role of the private sector as
the main engine of national growth.”
HISTORY OF
PUBLIC-PRIVATE PARTNERSHIP
1990-The passage of Republic Act 6957 entitled, “An Act Authorizing the
Financing, Construction, Operation and Maintenance of Infrastructure
Projects by the Private Sector, and for other Purposes,” also known as the
Build-Operate-Transfer (BOT) Law brought the participation of the private
sector into the frontline of development efforts.
1993- President Fidel V. Ramos issued Memorandum Order No. 166
directing the Coordinating Council of the Philippine Assistance Program
(CCPAP) of the Office of the President to establish a BOT Center with the
CCPAP Chairman as BOT Action Officer.
HISTORY OF
PUBLIC-PRIVATE PARTNERSHIP
2002- President Gloria Macapagal-Arroyo signed Executive Order 144. It
converted the CCPSP into the BOT Center and lodged it under the
Department of Trade and Industry’s (DTI) Industry and Investment Group
(IIG). Its task was to promote and market not just BOT projects, but
transform Public‐ Private Partnerships (PPP) as the cornerstone of the
national infrastructure development plan.
2010- President Aquino signed Executive Order No. 8 entitled
“Reorganizing and Renaming the Build-Operate-and-Transfer (BOT) Center
to the Public-Private Partnership (PPP) Center of the Philippines and
Transferring its Attachment from the Department of Trade and Industry to
the National Economic and Development Authority and for Other
Purposes.”
HISTORY OF
PUBLIC-PRIVATE PARTNERSHIP
2013- Executive order No. 136 was issued mandating the creation of the
PPP Governing Board chaired by the Socioeconomic Planning Secretary,
with the Finance Secretary as co-Chair. Included as members of the Board
are the Secretaries of Budget and Management, Justice, Trade and
Industry, the Executive Secretary and the Private Sector co-chair of the
National Competitiveness Council.
The PPP Governing is the overall policy-making body for all PPP-related
matters, including the Project Development and Monitoring Facility. It shall
be responsible for setting the strategic direction of the Philippine PPP
Program while creating an enabling policy and institutional environment
for PPPs in the Philippines.
PUBLIC-PRIVATE PARTNERSHIP
CENTER OF THE PHILIPPINES
• is mandated to facilitate and coordinate the country’s PPP
program.
• manages a revolving fund called the Project Development and
Monitoring Facility (PDMF)
• provides Implementing Agencies (IAs) technical advisory support
in project development and management and monitors the
implementation of PPP priority projects.
• tasked to formulate policy guidelines for PPP transactions, and
develop and manage a central database of all PPP programs and
projects.
PUBLIC-PRIVATE
PARTNERSHIP TODAY
In June 2016, the Duterte administration presented its 10-
point socio-economic agenda. Part of the agenda is to
accelerate annual infrastructure spending to account for
5% of GDP, with Public-Private Partnerships playing a key
role. The new government also envisions to implement
more infrastructure projects around the country to
generate more employment opportunities and boost
economic activities to attain inclusive growth in every
region.
REPUBLIC ACT NO.
11966
PUBLIC-PRIVATE
PARTNERSHIP (PPP) CODE
OF THE PHILIPPINES
An act enacted on December 05, 2023 stating that The
State recognizes the indispensable role of the private
sector, encourages private enterprise, and provides
incentives to needed investments. To this end, the State
shall provide an enabling environment for the private
sector to mobilize its resources to finance, design,
construct, operate, and maintain infrastructure or
development projects and services.
REPUBLIC ACT NO.
11966
PUBLIC-PRIVATE
PARTNERSHIP (PPP) CODE
OF THE PHILIPPINES
It is further declared that the State shall protect the public
interest by providing affordable, accessible, and efficient
public services. In order to achieve better quality of Public-
Private Partnership (PPP) Projects at lower costs, the State
shall ensure equitable risk allocation in PPP Projects, and
that all PPP Projects yield sufficient Value for Money (VFM),
promote sustainability, and advance public welfare.
REPUBLIC ACT NO.
11966
PUBLIC-PRIVATE
PARTNERSHIP (PPP) CODE
OF THE
The PPP PHILIPPINES
Code shall cover the following:
1.all contractual agreements between Implementing Agencies (IA) and Private Partner
to finance, design, construct, operate, and maintain, or any combination or any
combination or variation thereof, for infrastructure or development projects and
services,
2.joint ventures as defined in the Code,
3.toll operation agreements,
4.lease agreements providing for rehabilitation, operation, and/or maintenance,
including the provision of working capital and/or improvements to, by the Private
Partner of an existing land or facility owned by the government for a period of time
covering more than 1 year,
5.lease agreements when such lease is a component of a PPP project, and
6.all other contractual arrangements which possess characteristics or elements of a
PPP as defined under this Code, or as may be approved by the appropriate
Approving Body.
REPUBLIC ACT NO.
11966
PUBLIC-PRIVATE
PARTNERSHIP (PPP) CODE
OF THE PHILIPPINES
The new law excludes projects:
1.implemented under R.A. 9184 or the Government Procurement
Reform Act, management contracts, service contracts, divestments
or dispositions,
2.corporatization,
3.incorporation of subsidiaries with private sector equity,
4.onerous donations,
5.gratuitous donations, and
6.joint venture agreements involving purely commercial arrangements
that neither provide nor include public infrastructure or development
services.
REPUBLIC ACT NO.
11966
PUBLIC-PRIVATE
PARTNERSHIP (PPP) CODE
OF THE PHILIPPINES
All Implementing Agencies are authorized to identify, develop, assess,
evaluate, approve, negotiate, award, and undertake PPP Projects with
the private sector. An IA refers to any of the following:
1.Department, bureau, office, instrumentality, commission, authority of
the national government,
2.State universities and colleges (SUCs),
3.Local universities and colleges (LUCs),
4.Local government units (LGUs), or
5.Government owned-or-controlled corporations (GOCCs).
Elements of Public-
Private Partnership
• Strategic mode of procurement
• A contractual agreement between the public sector and
the private sector
• Shared risks and resources
• Value for Money (VfM)
• Outcome orientation
• Acceleration of infrastructure provision and faster
implementation
General Forms of
PPP
1.Availability PPP
A form of PPP wherein the public authority contracts with a private
sector entity to provide a public good, service or product at a constant
capacity to the implementing agency (IA) for a given fee (capacity fee)
and a separate charge for usage of the public good, product or service
(usage fee).
2. Concession PPP
A form of PPP wherein the government grants the private sector the
right to build, operate and charge public users of the public good,
infrastructure or service, a fee or tariff which is regulated by public
regulators and the concession contract.
PPP Contractual
Arrangements
• Build-and-transfer (BT)
• Build-lease-and-transfer (BLT)
• Build-operate-and-transfer (BOT)
• Build-own-and-operate (BOO)
• Build-transfer-and-operate (BTO)
• Contract-add-and-operate (CAO)
• Develop-operate-and-transfer (DOT)
• Rehabilitate-operate-and-transfer (ROT)
• Rehabilitate-own-and-operate (ROO)
Eligible Types of PPP
Projects
• Highways, including expressways, roads, bridges, interchanges, tunnels, and related
facilities;
• Railways or rail-based projects that may or may not be packaged with commercial
development opportunities;
• Non-rail based mass transit facilities, navigable inland waterways and related
facilities;
• Port infrastructures like piers, wharves, quays, storage, handling, ferry services and
related facilities;
• Airports, air navigation, and related facilities;
• Power generation, transmission, sub-transmission, distribution, and related facilities;
• Telecommunications, backbone network, terrestrial and satellite facilities and related
service facilities;
• Information technology (IT) and data base infrastructure, including modernization of
IT, geo-spatial resource mapping and cadastral survey for resource accounting and
planning;
• Irrigation and related facilities;
Eligible Types of PPP
Projects
• Education and health infrastructure;
• Land reclamation, dredging and other related development facilities;
• Industrial and tourism estates or townships, including ecotourism projects
such as terrestrial and coastal/marine nature parks, among others and
related infrastructure facilities and utilities;
• Government buildings, housing projects;
• Markets, slaughterhouses, and related facilities;
• Warehouses and post-harvest facilities;
• Public fishports and fishponds, including storage and processing facilities;
• Environmental and solid waste management related facilities such as, but
not limited to, collection equipment, composting plants, landfill and tidal
barriers, among others; and
• Climate change mitigation and adaptation infrastructure projects and related
facilities.
Advantages of PPP
• PPPs encourage the injection of private sector
capital. Private sector funding may be tapped to
augment ODA funds and the government budget to
implement critical government projects.
• PPPs make projects affordable. Government
spending will be less if the project is undertaken as a
PPP, since the private sector funds their share of the
project (including operation and maintenance) during
the duration of the concession.
Advantages of PPP
• PPPs deliver value for money capital. Value for
money (VfM) is achieved when the government
obtains the maximum benefit from the goods and
services it both acquires and provides.
• Each risk is allocated to the party who can best
manage or absorb it. PPPs enable the government
to take on fewer risks due to shared risk allocation.
Generally, the private sector takes on the project’s
life cycle cost risk, while the government assumes
site risks, legislative and government policy risks,
among others.
Advantages of PPP
• PPPs force the public sector to focus on outputs
and benefits from the start. The government
focuses on providing quality infrastructure and services
by setting each project’s minimum performance
standards and specifications (MPSS).
• With PPPs, the quality of service has to be
maintained for the entire duration of the
cooperation period. Project execution will be more
rigorous as project ownership belongs to the project
proponents. The public sector only pays when services
are delivered satisfactorily among others.
Advantages of PPP
• PPPs encourage innovation. PPPs maximize the use
of private sector skills. It utilizes higher levels of private
sector efficiency, specialization, and technology.
Solicited
Proposals
A solicited proposal refers to projects identified by the
implementing agency (IA) from the list of their priority
projects.
In a solicited proposal, the IA formally solicits the submission
of bids from the public.
The solicitation is done through the publication of an
invitation for interested bidders to submit bids, and selection
of the private proponent is done through a public competitive
process.
Unsolicited
Proposals
The private sector project proponent submits a project
proposal to an IA without a formal solicitation from the
government. An unsolicited proposal may be accepted for
consideration and evaluation by the IA, provided it complies
•with conditions.
It involves a new concept or technology and/or it is not part of the list of priority
projects in the Philippine Investment Program (PIP) [Medium Term Public Investment
Program, Comprehensive and Integrated Infrastructure Program (CIIP)] and the
Provincial/Local Investment Plans;
• It does not include a Direct Government Guarantee, Equity or Subsidy;
• It has to go to ICC for the determination of reasonable Financial Internal Rate of
Return (FIRR) and approval to negotiate with the Original Proponent; and
• After successful negotiation, proceed to publication and request for competitive
proposals according to Swiss Challenge Rules.
PPP Processes
• the process of developing and implementing a PPP
is typically preceded by identifying a priority public
investment project.
• in this process some or all proposed public
investment projects may be screened, to
determine whether they may provide more value
for money if implemented as a PPP.
Stages in Developing and
Implementing the PPP
Stage 1 - Structuring and appraising the PPP.
The proposed PPP structure and appraisal
analysis is often pulled together in a business case to
demonstrate why the PPP project is a good
investment decision.
Stages in Developing and
Implementing the PPP
Stage 2- Designing the PPP contract.
This involves developing the commercial
principles into contractual terms, as well as setting
out the provisions for change and how the contract
will be managed, such as dispute resolution
mechanisms.
Stages in Developing and
Implementing the PPP
Stage 3- Implementing the PPP transaction.
The government selects the private party that will
implement the PPP. This usually involves preparing for
and conducting a competitive procurement process.
The transaction stage is complete when the project
reaches financial close. Once the PPP has reached
financial close, the government must manage the PPP
contract over its lifetime. This involves monitoring and
enforcing the PPP contract requirements, and
managing the relationship between the public and
Examples of how the PPP process
defined in a range of countries
• In Chile, the Concessions law (CL 2010b, Chapters II and III,
Articles 2-14) presents a thorough description of the PPP process
including the preliminary proposal by the contracting agency, the
tender process and implementation.
• In Egypt, the Ministry of Finance has published a step-by-step
guide to developing PPPs (EG 2007). The guide assists the relevant
Ministries through the PPP process, from identifying a project
through developing a business case and the procurement process.
Examples of how the PPP process i
defined in a range of countries
• An ADB publication on PPP projects in Korea (Kim et al. 2011,
61–72) includes a detailed description of the PPP implementation
process for different types of PPP, including unsolicited projects.
• The PPP Guidelines of the Government of Malaysia (
Dobbs et al. 2013, 11) provides an overview of its PPP process.
• The Implementing Rules and Regulations of the Philippines
BOT Law set the PPP process in the Philippines.
THANK
YOU!
