,;iemlltr 
FIFTEENTH CONGRESS OF THE REPUBLIC ) 
(~ffu£ of t~p,..jirrubr\! 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
'11 
FEB 22 
All :36 
SENATE 
S. B. No. 2710 
HE(:Elli!:;D l'3V:f-
Introduced by Senator Ralph G. Recto 
EXPLANATORY NOTE 
During the State of the Nation Address of President Benigno Aquino III, he emphasized the 
importance of encouraging public-private partnerships (PPPs) as a means to develop the country's 
infrastructure in all sectors. 
With very little fiscal space in this year's national budget to even make a dent in the 
country's infrastructure backlog, President Aquino has declared that strengthening laws that provide 
incentives to PPPs will be a priority legislative policy during his administration. 
It is therefore of prime importance to revisit Republic Act No. 6957, as amended by Republic 
Act No. 7718, Entitled "An Act Authorizing the Financing, Construction, Operation and 
Maintenance of Infrastructure Projects by the Private Sector, and for Other Purposes" or what is 
otherwise called the "Build-Operate-Transfer" (BOT) law. 
This bill is aimed at further improving the BOT law by expanding its coverage and providing 
more incentives to the private sector who become partners of the government in infrastructure 
projects. 
One salient feature of this bill is the classification of infrastructure projects as "Projects of 
National Significance" which, when classified as such, will enjoy incentives such as exemption from 
real property tax, restrictions on imposable local taxes and automatic grant of business permits, 
among others. 
This bill also protects these projects from being the subject of judicial reliefs such as 
temporary restraining orders (TROs), preliminary injunctions and preliminary mandatory injunctions. 
Another feature of the measure is the creation of a so-called "Public-Private Partnership 
Guaranty Fund" that is aimed at defraying the cost of compensation to project proponents in the 
event that the government agency or government-owned-and-controlled corporation (GOCC) 
concerned fails to comply or is prevented from complying with its obligations. 
The bill also states that unsolicited project propos!,ls may be submitted but the government 
agency or GOCC can do the following: use the unsolicited proposal as the basis for public bidding; 
accept the unsolicited proposal on a negotiated basis; or reject the proposal. 
All of these features work to strengthen the BOT 'law and encourage more PPPs in national 
and local infrastructure projects. 
With these in mind, the passage of this bill is earnestly sought. 
o 


FIFTEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
) 
'11 
FEB 22 All :36 
SENATE 
S.B.No. 2710 
Introduced by Seuator Ralph G. Recto 
AN ACT 
AMENDING CERTAIN SECTIONS OF REPUBLIC ACT NO. 6957, AS AMENDED BY 
REPUBLIC ACT NO. 7718, ENTITLED "AN ACT AUTHORIZING THE FINANCING, 
CONSTRUCTION, OPERATION AND MAINTENANCE OF INFRASTRUCTURE 
PROJECTS BY THE PRIVATE SECTOR, AND FOR OTHER PURPOSES," 
APPROPRIATING FUNDS FOR THE SAID PURP0SE, AND FOR OTHER PURPOSES 
Be it enacted by the Senate and the House of Repres.entatives of the Philippines in Congress 
assembled. 
1 
SECTION 1. Section 4-A of Republic Act No. 6957, as amended by Republic Act No. 7718, 
2 
is hereby amended to read as follows: 
3 
"SEC. 4-A. Unsolicited proposals. - Unsolicited proposals for projects may be 
• 
4 
[accepted by any government agency or local gov~rnment uoit on a negotiated basis: 
5 
Provided, That, all the following conditions are met: (1) such projects involve a new 
6 
concept or technology andlor are not part of the list of priority projects, (2) no direct 
7 
government guarantee, subsidy or equity is required, and (3) the government agency 
8 
or local government unit has invited by publication, for three (3) consecutive weeks, 
9 
in a newspaper of general circulation, comparative or competitive proposals and no 
10 
other proposal is received for a period of sixty (60) working days: Provided, further, 
11 
That in the event another proponent submits a lower price proposal, the original 
12 
proponent shall have the right to match that price within thirty (30) working days 1 
13 
SUBMITTED. 
THE 
GOVERNMENT 
AGENCY, 
GOCC 
OR 
LGU 
14 
CONCERNED MAY EITHER: 
15 
(1) 
USE THE UNSOLICITED PROPOSAL AS THE BASIS FOR 
16 
PUBLIC BIDDING AS PROVIDED IN SECTION 5 OF THIS ACT. IF A 
17 
FINAL AWARD TO A WINNING BIDDER IS MADE ON THE BASIS OF 
18 
THE UNSOLICITED PROPOSAL WITHIN ONE (1) YEAR FROM THE 
19 
SUBMISSION THEREOF, AS DETERMINED BY NEDA, THE ORIGINAL 
20 
PROPONENT OF THE UNSOLICITED PROPOSAL MAY BE REIMBURSED 
21 
FOR COSTS INCURRED IN ITS PREPARATION, INCLUDING, BUT NOT 
1 


1 
LIMITED 
TO, 
THE 
COST 
OF 
ANY 
FEASIBILITY 
STUDIES 
2 
UNDERTAKEN, PROVIDED SUCH REIMBURSEMENT: (1) SHALL BE IN 
, 
3 
THE AMOUNT TO BE DETERMINED BY NEDA, BUT NOT EXCEEDING 
4 
THREE PERCENT (3%) OF THE TOTAL p,ROJECT COST, EXCLUDING 
5 
ANY 
PROJECT 
COSTS 
WHICH 
WILL 
BE 
BORNE 
BY 
THE 
6 
GOVERNMENT SUCH AS, BUT NOT LIMITED TO, THE COST OF RIGHT-
7 
OF-WAY ACQUISITIONS; AND (2) SHALL BE PAID IN FULL BY THE 
8 
WINNING BIDDER AS A REQUIREMENT'FOR THE AWARD OF THE 
9 
PROJECT; 
10 
(2) 
ACCEPT THE UNSOLICITED PROPOSAL ON A NEGOTIATED 
11 
BASIS: PROVIDED, THAT, ALL THE FOLLOWING CONDITIONS ARE 
12 
MET: 
(1) 
SUCH 
PROJECTS 
INVOLVE 
A 
NEW 
CONCEPT 
IN 
13 
TECHNOLOGY AND/OR ARE NOT PART OF THE LIST OF PRIORITY 
14 
PROJECTS, (2) NO DIRECT GOVERNMENT GUARANTEE, SUBSIDY OR 
, 
15 
EQUITY OR ANY FORM OF PAYMENT OR SECURITY FROM THE 
16 
GOVERNMENT IS REQUIRED AS PROVIDED IN THE IMMEDIATELY 
17 
SUCCEEDING SECTION, AND (3) THE GOVERNMENT AGENCY OR LGU 
18 
HAS INVITED BY PUBLICATION FOR· THREE (3) CONSECUTIVE 
19 
WEEKS, 
IN 
A 
NEWSPAPER 
OF 
GENERAL 
CIRCULATION, 
20 
COMPARATIVE OR COMPETITIVE PROPOSALS AND NO OTHER 
21 
PROPOSAL IS RECEIVED FOR A PERIOD TO BE DETERMINED BY 
22 
NEDA, BUT NOT TO EXCEED ONE (1) YEAR: PROVIDED, FURTHER, 
23 
THAT IN THE EVENT ANOTHER PROPONENT SUBMITS A PROPOSAL 
24 
LOWER IN PRICE, THE ORIGINAL PROPONENT SHALL HAVE THE 
25 
RIGHT TO MATCH THAT PRICE WITHIN THIRTY (30) WORKING 
26 
DAYS; OR 
27 
(3) REJECT THE PROPOSAL." 
28 
SEC. 2. RA 6957, as amended by RA 7718, is hereby amended by inserting a new section 
29 
after Section 4-A to read as follows: 
30 
"SEC. 4-B. PROHIBITION AGAINST GOVERNMENT GUARANTEES OR 
31 
PAYMENTS. 
-
NOTWITHSTANDING ANY AGREEMENT TO THE 
32 
CONTRARY, THE PROJECT PROPONENT OF AN UNSOLICITED 
33 
PROPOSAL ACCEPTED BY THE GOVERNMENT ON A NEGOTIATED 
34 
BASIS IN ACCORDANCE WITH SECTION <I-A (2) ABOVE SHALL NOT, 
35 
AT ANYTIME, BE ENTITLED TO ANY, FORM OF PAYMENT OR 
36 
SECURITY FROM THE GOVERNMENT, INCLUDING, BUT NOT LIMITED 
37 
TO, COST SHARING, CREDIT ENHANCEMENT, DIRECT OR INDIRECT 
38 
GOVERNMENT GUARANTEE, SUBSIDY OR EQUITY." 
2 


1 
SEC. 3. RA 6957, as amended by RA 7718, is hereby amended by inserting a new section 
2 
after Section 10 to read as follows: 
3 
"SEC. 10-A. PROJECTS OF NATIONAL SIGNIFICANCE. -
UPON 
4 
CERTIFICATION 
AND 
RECOMMENDATION 
OF 
NEDA, 
THE 
5 
PRESIDENT MAY CLASSIFY CERTAIN PROJECT UNDERTAKEN 
6 
UNDER THIS ACT AS PROJECTS OF NATIONAL SIGNIFICANCE, 
7 
WHICH SHALL BE ENTITLED TO THE FOLLOWING INCENTIVES: 
8 
A. ALL REAL PROPERTIES WHICH ARE ACTUALLY AND DIRECTLY 
9 
USED FOR THE PROJECT SHALL BE EXEMPT FROM ANY AND 
10 
ALL REAL PROPERTY TAXES LEVIED UNDER REPUBLIC ACT 
11 
NO. 7160; 
12 
B. THE TOTAL OF ALL LOCAL TAXES IMPOSED BY A PROVINCE, 
13 
CITY OR MUNICIPALITY IN METRO MANILA PURSUANT TO 
14 
REPUBLIC ACT NO. 7160 ON THE PROJECT PROPONENT SHALL 
15 
NOT EXCEED FIFTY PERCENT (50%) OF ONE PERCENT (1%) OF 
16 
GROSS SALES OR RECEIPTS OF THE PRECEDING CALENDAR 
17 
YEAR; 
18 
C. THE 
NECESSARY 
BUSINESS 
PERMITS, 
INCLUDING 
ANY 
19 
RENEWALS THEREOF, SHALL BE' DEEMED TO HAVE BEEN 
20 
AUTOMATICALLY GRANTED OR ISSUED TO THE WINNING 
21 
PROJECT PROPONENT UPON TENDER OF THE REQUIRED 
22 
TAXES AND FEES TO THE APPROPRIATE LGU. 
, 
23 
FOR PURPOSES OF THIS SECTION, IN ORDER FOR A PROJECT TO 
24 
QUALIFY AS A PROJECT OF NATIONAL SIGNIFICANCE, THE 
, 
25 
FOLLOWING CONDITIONS MUST OCCUR: 
26 
1. 
THE TOTAL COST OF THE PROJECT IS AT LEAST FIVE 
27 
BILLION PESOS (PHP5,000,OOO,000.00); AND 
28 
2. 
THE PROJECT IS LOCATED IN OR AFFECTS AT LEAST TWO (2) 
29 
PROVINCES." 
30 
SEC. 4. RA 6957, as amended by RA 7718, is hereby amended by inserting a new Section 
31 
11 to read as follows: 
32 
"SEC. 11. PROHIBITION ON THE ISSUANCE OF TEMPORARY 
33 
RESTRAINING 
ORDERS, 
PRELIMINARY 
INJUNCTIONS 
AND 
34 
PRELIMINARY MANDATORY INJUNCTIONS. 
- NO COURT, EXCEPT 
35 
THE 
SUPREME 
COURT, 
SHALL 
ISSUE 
ANY 
TEMPORARY 
36 
RESTRAINING 
ORDER, 
PRELIMINARY 
INJUNCTION 
AND 
37 
PRELIMINARY 
MANDATORY 
INJUNCTION 
AGAINST 
THE 
38 
GOVERNMENT, OR ANY OF ITS SUBDIVISIONS, OFFICIALS OR ANY 
3 


1 
PERSON OR ENTITY, WHETHER PU~LIC OR PRIVATE, ACTING 
2 
UNDER THE GOVERNMENT'S DIRECTION, TO RESTRAIN, PROHIBIT 
3 
OR COMPEL THE FOLLOWING ACTS WITH REGARD TO PROJECTS 
4 
OF 
NATIONAL 
SIGNIFICANCE 
UNDER 
THE 
IMMEDIATELY 
5 
PRECEDING SECTION: 
6 
A. ACQUISITION, CLEARANCE AND DEVELOPMENT OF THE RIGHT-
7 
OF-WAY AND/OR SITE OR LOCATION; 
'8 
9 
B. BIDDING OR AWARDING; 
C. COMMENCEMENT, 
PROSECUTION, 
10 
IMPLEMENTATION AND OPERATION; 
EXECUTION, 
11 
D. TERMINATION OR RESCISSION OF THE CONTRACT; AND 
• 
12 
E. THE UNDERTAKING OR AUTHORIZATION OF ANY OTHER 
13 
LAWFUL ACTIVITY NECESSARY OR IN CONNECTION WITH THE 
, 
14 
EXECUTION OR IMPLEMENTATION OF THE PROJECT. 
15 
THIS PROHIBITION SHALL APPLY IN ALL CASES, DISPUTES OR 
16 
CONTROVERSIES INSTITUTED BY A PRIVATE PARTY, INCLUDING, 
17 
BUT NOT LIMITED TO, CASES FILED BY BIDDERS OR THOSE 
18 
CLAIMING TO HAVE RIGHTS THROUGH SUCH BIDDERS INVOLVING 
19 
PROJECTS OF NATIONAL SIGNIFICANCE. THIS PROHIBITION 
20 
SHALL NOT APPLY WHEN THE MATTER IS OF EXTREME URGENCY 
21 
INVOLVING A CONSTITUTIONAL ISSUE, SUCH THAT UNLESS A 
22 
TEMPORARY RESTRAINING ORDER IS ISSUED, GRAVE INJUSTICE 
23 
AND IRREPARABLE INJURY WILL ARISE. THE APPLICANT SHALL 
24 
FILE A BOND, IN AN AMOUNT TO BE FIXED BY THE COURT, WHICH 
25 
BOND SHALL ACCRUE IN FAVOR OF THE GOVERNMENT IF THE 
26 
COURT SHOULD FINALLY DECIDE THAT THE APPLICANT WAS NOT 
27 
ENTITLED TO THE RELIEF SOUGHT. 
28 
ANY 
TEMPORARY 
RESTRAINING 
ORDER, 
PRELIMINARY 
29 
INJUNCTION AND PRELIMINARY MANDATORY INJUNCTION ISSUED 
30 
IN VIOLATION OF THIS SECTION IS VOID AND OF NO FORCE AND 
31 
EFFECT." 
32 
SEC. 5. 
The succeeding sections of RA 6957, ,as amended by RA 7718, are hereby 
33 
renumbered accordingly. 
34 
SEC. 6. 
Public-Private Partnership (PPP) Guara~,ty Fund. 
- A PPP Guaranty Fund is 
35 
hereby created to defray the cost of compensation to proj ect proponents which enter into BOT 
36 
contracts, concession agreements or other contractual agreements with any national government 
37 
agency or GOCC pursuant to the provisions of Republic Act No. 6957, as amended, in the event 
• 
38 
that the government agency or GOCC fails to comply, or is prevented from complying, with its 
4 


1 
obligations under the aforementioned contracts or agreements as a result of any act of another 
2 
agency or branch of government: Provided, That no compensation shall be paid out of the PPP 
• 
3 
Guaranty Fund if the contract or agreement has bee"n determined to be unlawful or 
4 
unconstitutional by a final judgment of a court of competent jurisdiction. 
5 
The initial funding in the amount of Five Billion Pesos (P5,OOO,OOO,OOO.OO) for the creation 
6 
of the Fund shall be charged against the overall savings of the National Government. Thereafter, 
7 
the PPP Guaranty Fund may be replenished or increased by such amount as may be deemed 
8 
necessary in the General Appropriations Act. 
9 
SEC. 7. 
Separability Clause. - If any part or provision of this Act shall be held to be 
10 
unconstitutional or invalid, other parts or provisions hereof which are not affected thereby shall 
11 
continue to be in full force and effect. 
12 
SEC. 8. Repealing Clause. -
All laws, decrees, executive orders, rules and regulations and 
13 
other issuances or parts thereof which are inconsistent with this Act are hereby repealed or 
14 
modified accordingly. 
15 
SEC. 9. Effectivity. - This Act shall take effect fifteen (15) days after its publication in any 
16 
two (2) newspapers of general circulation. 
Approved, 
5