Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

HOUSE BILL No. 1244

Introduced by HONORABLE LUIS RAYMUND F. VILLAFUERTE, JR.

EXPLANATORY NOTE

Public-Private Partnerships are gaining ground all over the world in
extending the ability of governments to provide key services in difficult
economics by tapping private sector resources. In most countries. PPP
contractual arrangements are aimed at overcoming public sector constraints
such as lack of capital or lack of public sector capacity. resources and
specialized expertise to develop. manage and operate infrastructure assets.
PPPs are now commonly utilized to accelerate economic growth. development
and infrastructure delivery — these ultimately result in quality service and
overall good governance.

The Philippines recognizes the indispensable role of private sectors vis-a-vis
PPPs. In fact, the country is one of the pioneers in private sector participation in
major infrastructure projects in Asia. Republic Act No. 6957 otherwise known as the
Built-Operate-Transfer (BOT) Law passed in 1990 was the first of its kind in the region.
In 1994, Republic Act NO. 7718 amended the BOT Law and introduced new variants
of private sector infrastructure or development projects. On 9 September 2010.
former President Benigno S. Aquino III signed Executive Order No. 8, as amended by
Executive Order No. 136, 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-. Executive Order No. 8 established the PPP Center to conduct project
facilitation and assistance to implementing agencies in addressing impediments in the
implementation of PPP programs and projects, among its other

functions


Despite these developments, the Philippines still lags behind other countries in
providing public infrastructure. The massive pipeline of key infrastructure deals is a
reflection of how much money the country needs to invest to improve the quality of
life in the country. With this issue at hand. funding mechanisms for public-private
partnership (PPP) contracts must be expanded, ' In order to tap capital markets for

Maraggan, Lorenz S *Groups make final push proposed PPP Acr. Business Mirror. Manila Ph"ippines. 8
April 2016. URL’ ph'groups-make-final-push-for-proposed-ppp-act)
infrastructure financing. there is a need to enact amendments to the existing BOT

This re-filed version of the bill takes inspiration from House Bill No. 6331 filed
during the 16th Congress. It intends to update and replace the BOT Law by
incorporating the valuable lessons learned from successful and failed projects in the
past. as well as global best practices in PPP. It further seeks to accelerate public
infrastructure development by strengthening the PPP institutional framework:
providing financial and technical support through the Project Development and
Monitoring Facility (PDMF); optimizing project risks and obtaining government
support; expanding the PPP contractual arrangements; providing for transparent and
competitive bidding: setting standard contents and implementation of PPP projects

for transparency. consistency. and predictability; and granting incentives to PPP
projects

Moreover. it recognizes and strengthens the autonomy Of local government
units to enter into PPP contractual arrangements. There is a need to arm the LGUs
with technical expertise to properly prepare. monitor and implement PPP projects at
the local level_ A report by the Asian Development Bank (ADB) noted that many
LGUs encounter snags in implementing PPP projects related to infrastructure, power
generation and bulk water supply in their respective communities because of the
lack of technical and financial resources to carry out these initiatives.

President Rodrigo Roa Duterte himself stated in his 10-point socio-economic
agenda that Public-Private Partnerships play a key role in promoting economic and
social development and accelerating annual infrastructure spending to account for
5% of gross domestic product (GDP).

Thus, the immediate approval of this bill is earnestly sought

\ Le
LUIS MUND F. VI/LAFUERTE, JR.


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

HOUSE BILL No. 1244

Introduced by HONORABLE LUIS RAYMUND F. VILLAFUERTE, JR.

AN ACT INSTITUTIONALIZING AND STRENGTHENING PUBLIC-
PRIVATE PARTNERSHIPS, AND APPROPRIATING FUNDS
THEREFOR

Be it enacted by the Senate and House or Representatives of the Philippines in
Congress assembled:

SECTION 1. Short Title. — This Act shall be known as the *Public-Private
Partnership Act of 2017".

SECTION 2. Declaration of Policy. — It is the declared policy of the State to
recognize the indispensable role of the private sector as the main engine for national
growth and development, create an enabling environment for Public-Private
Partnerships (PPP). and provide the most appropriate incentives to mobilize private
resources for the purpose of financing, design. construction, operation. and
maintenance of infrastructure projects and services normally financed and undertaken
by the government. Such incentives. aside from financial incentives as provided by
law, shall include provision of liberalized government regulations and procedures in
support of the Project Proponent.

The State recognizes the long-term nature of private investment in infrastructure
projects and mitigation of risks by ensuring that the validity and enforceability of
contracts are respected through the due process of law.

The State affirms open. transparent. and competitive selection as the central
tenet of government procurement in securing private investment in public infrastructure
projects. It shall secure private investments through transparent and competitive
selection process and bidding procedures.

SECTION 3. Definition of Terms. - As used in this Act:

(a) Approving Body refers to an entity authorized to approve PPP Projects in
accordance with Section 7 of this Act:


(b)

(c)

(d)

(e)

(g)

(h)

Availability-based PPP refers to a PPP where the Implementing Agency commits
to make predetermined payments for contractually-defined performance
delivery;

Concession-based PPP refers to a PPP where the Implementing Agency grants
the Project Proponent the right to recover its investment, operating. and
financing costs by charging the public a user fee or tariff;

Concession Period refers to the period of construction and / or operation of an
Infrastructure Facility:

Construction refers to rehabilitation. improvement. expansion, alteration,
installation, building of a new Infrastructure Facility. and related works and
activities, including the necessary supply of equipment, materials. labor. and
Services and related items;

Contingent Liability refers to obligations of the government arising from a valid
PPP Contract whose occurrence. timing. and amount depend on some
uncertain future event or circumstance;

Contractor refers to any Private Person, who may or may not be the Project
Proponent. and who shall undertake the actual Construction of an Infrastructure
Facllity of a PPP Project;

Cooperation Period refers to the period of operation of an Infrastructure Facility,
which period. in the case of public utilities requiring a franchise. shall be in
accordance with law,

(Facility Operator refers to a Private Person registered with the Securities and

(i)

(k)

Exchange Commission or Department of Trade and Industry (DT!), who may or
may not be the Project Proponent, who is responsible for all aspects of
operation and maintenance of an infrastructure Facility, including. but not
limited to, the collection of tolls, fees, rentals. or charges from facility users;

GOCC refers to a government-owned or controlled corporation as defined in
Republic Act (RA) No. 10149, otherwise known as GOCC Governance Act of
2011;

Government Undertakings refer to any form of support. contribution, assistance.
Viability Gap Funding, among others, which the government may provide to a
Solicited PPP Project;

(Grantors refer to Implementing Agency and another government agency that own the

project assets or franchise;


(m)

(n)

(0)

(p)
(a)

(r)
(s)

(t)

(u)

(w)

ICC refers to the Investment Coordination Committee of the National Economic
and Development Authority (NEDA) Board;

Implementing Agency refers to any of the various units of the Government of the
Republic of the Philippines, including a department, bureau, office,
instrumentality. GOCC as defined under RA No. 10149, state universities and
colleges (WCs). or a back government. or a distinct unit therein:

Infrastructure Facility and Related Service refers to any facility and infrastructure
related service identified by the government in relation to or as necessary for the
discharge of its functions, whether governmental or proprietary:

(1) _ Infrastructure Facility — includes power plants, highways, ports, airports,
canals, dams, hydropower projects. water supply. _ irrigation.
telecommunications facilities. railroads and railways, transport systems,
reclaimed land. industrial estates or townships. housing. government
buildings, tourism projects, markets, slaughterhouses, warehouses,
information technology systems and infrastructure, education and health
facilities, sewerage, drainage. and other infrastructure and development
projects as may be authorized by the Implementing Agency pursuant to
this Act;

(2) _ Infrastructure-related Service — includes dredging. climate change
mitigation and adaptation measures. and other related services;

IRR refers to the implementing rules and regulations of this Act:

LGU refers to any local government unit defined under RA No. 7160, otherwise
known as the Local Government Code;

Local PPP Project refers to a PPP Project that will be undertaken by an LGU:

National PPP Project refers to a PPP Project that will be undertaken by the
national government:

PDMF refers to the Project Development and Monitoring Facility created under
Section 8 of this Act;

PPP PBAC refers to the PPP Pre-qualifications. Bids, and Awards Committee;

PPP Center refers to the Public-Private Partnership Center of the Philippines
created under Executive Order (EO) No. 8. series of 2010, as amended:

PPP Contract refers to the contract between the Implementing Agency and the
Project Proponent for the design, financing, construction, operation, or
maintenance, or any combination thereof, of an Infrastructure Facility under a
PPP project:


PPP Pr*ct refers to a project undertaken under this Act:

(y) Priority Project refers to a project identified by an Implementing Agency that
may be undertaken under this Act as a PPP Project and is consistent with the
Philippine Development Plan (PDP) or its equivalent at the local level;

(z) Private Person refers to a individual, sole proprietorship. partnership,
corporation. or any other form of organization. whether domestic or foreign;

(aa) Project Cost refers to the total cost to be expended to plan. develop. and
construct the project to completion stage including but not limited to cost of
feasibility studies. engineering and design. construction. equipment, land and
right-of-way. taxes imposed on sad cost, and development cost: Provided.
That in cases of Operation and Maintenance Contracts. this shalll refer to total
cost. financing. and other expenses for operation and maintenance of
theinfrastructure Facility.

(bb) Project Proponent refers to the Private Person who shall have contractual
responsibilty to undertake a PPP Project;

(cc) Public-Private Partnership refers to a contractual arrangement between the
Implementing Agency and the Project Proponent for the financing, design.
construction. operation. and maintenance. or any combination thereof. of an
Infrastructure Facility. in which the Project Proponent bears significant risk,
management responsibility. or both;

(6d)Rate of Retum refers to the Project Proponent's expected return from the
project: Provided. That in case of an unsolicited proposal. the appropriate
Rate of Return shall be determined by the appropriate Approving Body prior
to the call for proposals based on the prevailing cost of capital in the domestic
and international markets. the risk profile and the gearing ratio;

(ee) Services refer to services for or related to infrastructure facilities such as,
construction supervision. management. operation, and maintenance and
elated services. and other technical services, which may be included as part
of a PPP Project;

(solicited PPP Project refers to Priority Projects identified by the Implernenting


(ge) Unsolicited PPP Project refers to a project proposal submitted by a Private
Person, which is not in response to a formal solicitation or request issued
by the Implementing Agency, and

(hh) Viability Gap Funding (VGF) refers to such financial support the government
may provide to a Concession-based PPP Project with the objective of
making user fees affordable while improving the commercial attractiveness
of the project. excluding costs of right-of-way, resettlement. and real estate
taxes.

SECTION 4. Contractual Arrangements. — PPP Projects may be
undertaken through any of the following contractual arrangements, and such other
variations as may be approved by the ICC:

(a) Build-and-Transfer refers to a contractual arrangement whereby the Project
Proponent undertakes to finance and construct a given Infrastructure
Facility and after the completion thereof. to tum it over to the Implementing
Agency concemed. which shall pay the Project Proponent on an agreed
schedule its total investments expended on the project, plus the Rate of
Return thereon. This arrangement may be employed in the Construction of
any Infrastructure Facility. including critical facilities which. for security or
strategic reasons. must be operated directly by the government;

(b) Build-Lease-and-Transfer refers to a contractual arrangement whereby a
Project Proponent undertakes to finance and construct an Infrastructure
Facility and upon its completion tums it over to the Implementing Agency
concerned on a lease arrangement for a Cooperation Period, after which
ownership thereof is automatically transferred to the Implementing Agency
concerned:

(c) Build-Own-and-Operate refers to a contractual arrangement whereby a
Project Proponent is authorized to undertake a PPP Project. specifically, to
finance, construct. own, operate. and maintain an Infrastructure Facility
from which the Project Proponent is allowed to recover its total investment.
operating and maintenance costs plus a rectum thereon by collecting tolls.
fees. rentals. or other charges from facility users;

(d) Build-Operate-and-Transfer refers to a contractual arrangement whereby the
Project Proponent undertakes a PPP Project and transfers ownership of the
Infrastructure Facility to the Implementing Agency at the end of the
Cooperation Period:

(e) Build-Transfer. And-Operate refers to a contractual arrangement whereby
the Implementing Agency contracts out the Construction of an Infrastructure
Facility to the Project Proponent. Once the facility is commissioned
satisfactorily. ownership is transferred to the Implementing Agency. The
Project Proponent. however, operates the Infrastructure Facility on behalf of
the Implementing


(f) Contract-Add-and-Operate refers to a contractual arrangement whereby. the

Project Proponent adds to an existing Infrastructure Facility which it is
renting from the government. It operates the expanded Infrastructure
Facility over an agreed Cooperation Period. There may, or may not be. a
transfer arrangement in regard to said facility;

(g) Develop-Operate-and-Transfer refers to a contractual arrangement whereby

favorable conditions external to a new PPP Project which is to be built by a
Project Proponent are integrated into the arrangement by giving that entity
the right to develop adjoining property, and thus, enjoy some of the benefits
the investment creates such as higher property or rent values;

(h) Joint Venture refers to a contractual arrangement whereby a Private Person

or a group of Private Persons. and an Implementing Agency. contribute
money. services. assets. or a combination of any or all of the foregoing, to
undertake a PPP Project, with the intention to share profits, risks, and
losses. Assets may include equipment, land. intellectual property or
anything of value:

(Operations and Maintenance Contract refers to a contractual arrangement

(i)

(k)

whereby the Project Proponent undertakes the day-to-day operation and

maintenance of an Infrastructure Facility owned by the Implementing

Agency. The Project Proponent shall undertake the acquisition or provision

and upgrading of equipment. systems and other items related to operation

and maintenance. The Project Proponent shall be compensated in the form

of @ performance based management of service fee during the Cooperation
riod:

Rehabilitate-Operate-and Transfer refers to a contractual arrangement
whereby an existing Infrastructure Facility is turned over to the Project
Proponent to refurbish. improve. operate and maintain for a Cooperation
Period, at the expiry of which the ownership of the facility is transferred to the
Implementing Agency, and

Supply-and-Operate refers to a contractual arrangement whereby the
supplier of equipment and machinery for a given Infrastructure Facility. if the
interest of the government so requires. operates such facility. Foreign firms
Who are allowed to operate the facility shall provide technology transfer and
training to Filipino nationals.

SECTION 5. Authority or Implementing Agencies. — Implementing

Agencies. in accordance with their respective charters, are hereby authorized to
undertake PPP Projects with any Project Proponent in accordance with the
provisions of this Act.


In undertaking a PPP Project under this Act. a GOCC or any of its subsidiaries
shall secure the approval of the head of department or agency to which the GOCC is
attached. If the procurement thereof is undertaken by the department or agency. the
governing board of the GOCC shall adhere to the approval of the Approving Body and
shall give its full cooperation in bidding the project.

SECTION 6. Priority Projects. — Priority Projects that will be implemented under
this Act shall be consistent with the PDP or its equivalent at the local level.

The Implementing Agencies shall submit their list Of PPP Projects or any update
thereto to the PPP Center for information. Each proposed PPP Project to be
implemented under this Act shall be subject to the approval of the Approving Body, if
applicable.

The PPP Center shall ensure that Congress and the general public are provided
with adequate. timely. and relevant information pertaining to these Priority Projects:
Provided, That the release of proprietary information. which shall be defined in the IRR
of this Act, is not contrary to existing laws.

SECTION 7. Approval of PPP Projects. — The approval of PPP Projects under
this Act shall be in accordance with the following:

A. National Projects. National PPP Projects shall be approved by the ICC or by the
NEDA Board. or both, depending on the Project Cost as prescribed in the IRR of
this Act. Such approval shall be followed by the Implementing Agency or Grantor
concerned.

B. For National PPP Projects that have impact on a particular region, the
Implementing Agency shall secure the endorsement of the concemed Regional
Development Council (ROC) prior to submitting the project for approval to the
Approving Body. The RDC shall have thirty (30) calendar days from receipt of
the request of the Implementing Agency within which to issue its endorsement;
otherwise, the same shall be deemed automatically endorsed by the ROC.

C. Local Projects. Local PPP Projects shall be approved by the local sanggunians.
and. depending on the Project Cost as may be prescribed in the IRR, confirmed
by the local development councils.

The confirmation of the project by the local development council concerned shall
be based on a review of the project documents submitted to it by the I-GU concemed,
which includes the feasibility study and the draft contract on the project. and shall
ensure that said project documents are in full compliance with the requirements set
forth under this Act.

SECTION 8. Project Development and Monitoring Facility (POME). — The
PDMF is hereby established and shall be used for the procurement of advisory and
support services related to the preparation, structuring, probity management,
Procurement, financial close, and monitoring of implementation of PPP Projects.


A. Funding Source. The PDMF Fund referred to under EO No. 8, series of 2010. as
amended by EO No. 136. series of 2013. shall be transferred to the PDMF
under this Act- The PDMF may be funded through and such amount as may be
needed and included in the General Appropriations Act, Official Development
Assistance or other sources.

8. _ Institutional Arrangement. The PDMF Shall be managed and administered by the
PPP Center as a revolving fund. In order to sustain the PDMF. the PPP Center
may collect and receive fees and recover costs expended through PDMF in
accordance with the guidelines to be approved by the PPP Governing Board.
Such amount shall be retained and authorized to be used by the PPP Center for
the purposes indicated herein.

‘A PDMF Committee is hereby created which shall approve applications for
PDMF support submitted by Implementing Agencies. It shall be composed of
representatives from the NEDA, Department of finance (OOF), Department of Budget
and Management (DBM) and the PPP Center.

The PPP Center shall serve as Secretariat for the PDMF Committee.

C. Procedure. The procurement of consulting services for the PDMF shall be
conducted through RA 9184. otherwise known as the Government Procurement
Reform Act. and its IRR, subject to existing laws on the practice of professions
Teserved to Filipino nationals. An open registry of consultants may be
established for ready availability of consulting expertise. Registration is not
tantamount to a finding of eligibility. and non-registered consultants shall be
allowed to bid. The procedures for such procurement shall be prescribed in the
IRR of this Act. consistent with R.A. No. 9184 and its associated IRR.

The PPP Center is not precluded from adopting a set of rules for the
engagement and consulting services funded by an international financing institution or
through official development assistance.

Subject to approval of the PPP Governing Board, the PDMF Committee shall
also formulate. prescribe and recommend policies. procedures and guidelines for the
use of PDMF and recovery of costs charged to the fund.

SECTION. 9. Unsolicited Proposals. — Unsolicited proposals may be considered
for projects that are not part of the list of Priority Projects or which involve a new
Concept or technology: Provided, that if the Implementing Agency concerned is an I-GU.
it may adopt its own guidelines in evaluating unsolicitedProposal

When a Project Proponent submits an unsolicited proposal, the Implementing
Agency may either:

A. Accept the unsolicited proposal on a negotiated basis, subject to the following
conditions:

(1) No direct government guarantee. VGF. govemment subsidy or equity. or
right-of-way is required: Provided, That the Implementing Agency shall
facilitate the acquisition of the right-of-way;


(2) Guided by the principles of transparency and competitiveness. the
Implementing Agency has:

(Published the invitation to pre-qualify and to bid for three (3) consecutive
weeks in a newspaper of general circulation, as well as posting in
the websites of the PPP Center and of the Implementing Agency,

(i) Conducted a competitive bidding within a period stated in the IRR of
this Act, which should not be less than three (3) months nor more
than six (6) months from the date of last publication in a newspaper
of general circulation. In the event another proponent submits a
superior counter-proposal within the period referred to above and it
is accepted by the Approving Body. the original proponent shall
have the right to outbid; and

(iii) Determined the winning bid based on the best financial proposal
‘submitted, including the bid of the original proponent.

B. _ Use the unsolicited proposal as the basis for public bidding as provided in Section
10 of this Act. upon approval by the Approving Body. the original proponent
thereof shall be reimbursed of the cost incurred in the preparation of the
proposal. such as the cost of any feasibility study undertaken: Provided, That the
reimbursement is:

(1) in an amount specified in the IRR of this Act. not to exceed three (3%)
percent of the Project Cost excluding those which are borne by the
Implementing Agency, such as, the cost of right-of-way acquisitions; and

(2) paid in full by the winning Project Proponent as a requirement for the
award of the contract.

C. _ Reject the proposal. If the Implementing Agency fails to act on the proposal within
the period stated in the IRR of this Act, the project proposal shall be deemed
rejected. without prejudice to any liability that the erring or negligent officials or
employees may incur under existing laws.

Within ten (10) working days from receipt of the unsolicited proposal, the
Implementing Agency shall inform the PPP Center in writing of such receipt and
famish it with a copy of the proposal. The PPP Center shall provide assistance to
the Implementing Agency in the evaluation of unsolicited proposal

SECTION 10. Public Bidding of Projects. -
A. Publication. Upon approval of PPP Projects as mentioned in Section 7 of this Act,
the head of the Implementing Agency concerned shall immediately cause the
publication of a notice inviting all prospective Project Proponents to participate
in a transparent and competitive public bidding. once every week for three (3)
consecutive weeks, in at least two (2) newspapers of general circulation and in
at least one (1) local newspaper. which is circulated in the region, province, city


or municipality where the project is implemented. The notice must also be
posted continuously in the websites of the Implementing Agency and the ppp
Center.

B. Public Bidding. The public bidding shall be conducted under a single or two stage
system. The pre-qualification documents. technical, and financial proposals
shall be submitted in at least three (3) separate envelopes. The procedures for
Public bidding, which shall be transparent and competitive. including the conduct
of one-on-one meetings with pre-qualified bidders, shall be outlined in the IRR
of this Act.

C. Award. The contract shall be awarded to the bidder who has passed the
Prequalification stage after having satisfied the minimum financial
organizational, and legal standards required under this Act; has passed the
technical proposal evaluation, and has submitted the most favorable financial
bid based on the parameters defined in the bid documents. Affordable user fees
and efficient public services shall be of paramount importance in awarding PPP
Projects.

D. Single Complying and Responsive Bid. In case of a single complying and
responsive bidder. the Implementing Agency may award the PPP Contract to

that bidder upon its compliance with the post-award requirements under the
bidding rules of the PPP project.

A bid is considered a single complying and responsive bid submission if it falls
under any of the following Circumstances:

0) If after advertisement, only one bidder applied for pre-qualification and it
meets the pre-qualification requirements, after which it is required to
submit a bid or proposal which is subsequently found by the Implementing
Agency to be complying;

(2) If. after advertisement. more than one bidder applied for pre-qualification
but only one meets the pre-qualification requirements. after which it

submits a bid or proposal which is found by the Implementing Agency to
be complying;

(3) If, after pre-qualfication of more than one bidder. only one submits a bid
which is found by the Implementing Agency to be complying; or

(4) If, after pre-qualification. more than one bidder submits bids but only one is
found by the Implementing Agency to be complying.

E. Protest. In all stages of the procurement process. the following protest protocol
shall be strictly followed:

1) Decisions of the PPP PBAC may be questioned by filing a motion for
reconsideration within a period prescribed in the IRR of this Act.


2) The decision of the PPP PBAC on the motion for reconsideration in the
immediately preceding paragraph may be further questioned by the filing
of an appeal to the head of the Implementing Agency concerned. the fee
for which is prescribed in the IRR of this Act.

If the head of the Implementing Agency in the immediately preceding
paragraph is not a Department Secretary. the decision of the head of the
Implementing Agency may be further questioned by filing an appeal to the
Secretary of the Department to which the Implementing Agency is attached
within a period prescribed in the IRR of this Act.

3) The decision of the Department Secretary in the immediately preceding
paragraph (2) may be questioned by the filing of an appeal to the Office of
the President within fifteen (15) working days from receipt thereof.

In no case shall any appeal taken from any decision rendered pursuant to this
Act stay or delay the bidding process: Provided, however. That appeal must first be
resolved before any Notice of Award.

F. Failure to Comply or Execute the Contract. If the winning bidder fails to comply
with any post-award requirement or fails to enter into a contract with the
Implementing Agency, the latter shall consider the next technically and
financially qualified bidder. without prejudice to availment of other legal
remedies by the Implementing Agency such as the forfeiture of bid security. the
withdrawal of Notice of Award, or both.

G. PPP BAC. The head of the Implementing Agency. shall create a PPP BAC which
shall be responsible for all aspects of the pre-bidding and bidding process in the
case of solicited proposals, and for the comparative bidding process in the case
of unsolicited proposals. The PPP BAC shall be chaired by at least a third
ranking regular official of the said agency and its composition shall be specified
in the IRR Of this Act: Provided, That the PPP BAC constituted for National PPP
Projects shall also include other relevant government agencies as may be
determined in the IRR of this Act. The creation of a PPP PBAC in case of
coGrantors shall be prescribed in the IRR of this Act.

SECTION 11. Private Legal and Medical Assistance. — All the PPP PBAC
members and other public officials providing services to the PPP PBAC shall be
authorized to engage the services of private lawyers. or shall be provided with free legal
assistance. where a civil. criminal. or administrative action is filed against them by
reason of the performance of their official functions or duties. unless they are finally
adjudged in such action or proceeding to be liable for gross negligence or misconduct or
grave abuse of discretion. The PPP PBAC members shall also be entitled to medical
assistance for injuries incurred in the performance of their functions.

SECTION 12. Contract Termination. — In the event that a contract is revoked.
cancelled or terminated. either contracting party shall compensate the other party
pursuant to terms as defined in the contract.

SECTION 13. Issuance of Administrative Franchise, License or Permit. — Once
a PPP Contract is duly executed, the regulator. licensing authority or LGUs shall


automatically grant in favor of the Project Proponent an administrative franchise.
license permit, or any other form of authorization required for the implementation of a
PPP Project subject to submission by the Project Proponent of the requirements by the
regulator. licensing authority or I-GU.

Any provision of law to the contrary notwithstanding, it shall be mandatory on
the part of the regulator, licensing authority or LGUs to accept and approve the
application for administrative franchise, license or permit. Failure to act on a proper
and complete application thereof within thirty (30) working days from receipt of the
same shall be deemed as approval thereof.

SECTION 14. Expansion or Extension of an Existing Infrastructure Facility. —
Subject to conditions specified in the IRR of this Act and upon prior approval by the
Approving Body, the Project Proponent of an existing PPP Infrastructure Facility may
be allowed to expand or extend the same even without further bidding: Provided, That
the cost thereof shall not exceed twenty-five percent (25%) of the price-adjusted
original

Project Cost: Provided, further, that any subsequent expansion or extension shall no
longer be allowed.

SECTION 15. Contracts and Public Disclosure. — Copies of all PPP Contracts
concluded under this Act shall be considered public documents. However, any
Proprietary information or information relating to security or national security matters
contained in the PPP Contract and its annexes may be kept confidential for a limited
Period, as may be determined by the Implementing Agency but not to exceed five (5)
years.

The determination of whether or not such contracts shall be kept confidential, as
well as the terms and duration of confidentiality, shall be the responsibility of the
Implementing Agency concerned. The Implementing Agency shall transmit to the PPP
Center for records and monitoring purposes, a copy of the duly executed contract.
within thirty (30) working days from its complete execution.

SECTION 16. Prohibition on the Issuance of Temporary Restraining Orders or
Injunctions, —

A No temporary restraining order. preliminary injunction, or preliminary mandatory
injunction shall be issued by any court. except the Supreme Court, against any
Implementing Agency. its officials or employees. or any person or entity,
whether public or private acting under the government direction. to restrain,
prohibit or compel the following acts:

(1) Bidding. rebidding or declaration of failure of bidding of PPP Projects, either
national or local;

(2) Qualification or disqualification of bidders;
(3) Awarding of PPP Contract;

(4) Acceptance of any unsolicited PPP Project proposal. even if not acted upon
by the Implementing Agency concerned under Section 9 of this Act


(5) Acquisition, clearance. development of the right-of-way, site or location of
any project;

(6) Construction. operation and maintenance of any PPP Project:

(7) Commencement, execution, implementation, termination or rescission of
any PPP Contract and

(8) Undertaking or authorization of any other lawful activity necessary for such
PPP Project ot contract:

Provided, further. That the temporary restraining order. preliminary injunction or
preliminary mandatory injunction issued by the Supreme Court shall be effective for a
period not to exceed six (6) months.

B. Bond. The applicant for such temporary restraining order. preliminary injunction or
preliminary mandatory injunction shall file a bond, in an amount to be fixed by

the court. The bond shall accrue in favor of the government if the court should
finally decide that the applicant was not entitled to the relief sought.

C. Void. Any temporary restraining order, preliminary injunction or preliminary
mandatory injunction issued in violation of this Section is void and of no force
and effect.

D. Application. The foregoing prohibition shall apply in all disputes. cases. or
controversies instituted by any and all parties. including cases filed by bidders,
Implementing Agencies or those claiming to have rights through such bidders or
Implementing Agencies involving a PPP Project or contract.

E. Liability. In addition to civil and criminal liabilities as may be incurred under
existing laws. any judge who shall issue a temporary restraining order,
preliminary injunction or preliminary mandatory injunction in violation of this
section, shall be disciplined by the Supreme Court and suffer the penalty of
removal from office.

SECTION 17. Assignment of Assets for PPP Projects. — A regulatory agency
that owns public infrastructure or right-of-way that is intended for a PPP Project shall
assign the same to the department exercising administrative supervision over it, or to
the department to which it is attached. in order that such department may enter into a
PPP Contract involving such public infrastructure or right-of-way.

No regulatory body shall be allowed to enter into any PPP Contract that they
regulate.

SECTION 18. Project Supervision and Monitoring. - Every PPP Project
undertaken under the provisions of this Act shall be in accordance with the designs,
plans. specifications. standards-and-easy approved by the Implementing Agency and
Approving Body. and the cost as approved by the appropriate Approving Body, and
shall be under the supervision of the Implementing Agency concerned.


SECTION 19. Investment Incentives. — Among other incentives. PPP Projects
in excess of One Billion Pesos (PhP1.000.000,000) may be entitled to incentives as
provided by the Omnibus Investment Code, upon prior endorsement of the PPP Center
and registration by the Project Proponent with the Board of Investments.

SECTION 20. Projects of National Significance. — upon certification and
recommendation by the ICC, and prior consultation with the Department of Interior and
Local Government (DILG) and the I-GU concerned. the President may classify certain
projects. such as energy. toll road. mass transit. water. sewerage, and such other
projects undertaken under this Act as projects of national significance. which shall be
entitled to the following incentives:

(a) All real properties which are actually and directly used for the project shall
be exempt from any and all real property taxes levied under RA No. 7160,
otherwise known as the Local Government Code;

(b) All projects of national significance shall likewise be exempt from any and
all local taxes, fees and charges; and

(c) Automatic grant or issuance of the necessary business permits, including
renewals thereof, in favor of the winning Project Proponent.

For a project to qualify as a project of national significance, it shall meet the
following criteria:

(a) The total Project Cost falls within the threshold set by the ICC;

(b) The project has direct and indirect economic impact which shall not be less
than the threshold set by the ICC;

(c)_ The project will have direct and indirect economic impact beyond the LGU
where it is located: and

(d) The project can create new jobs.

SECTION 21. Exemption from Payment of Transfer Taxes. — For all PPP
Projects. the transfer of ownership of Infrastructure Facility to the Implementing
Agency shall be exempt from capital gains tax. documentary stamp tax and all taxes
and fees. whether from national or local, related to the transfer thereof.

SECTION 22. Institutionalization or PPP Center. —

A. Functions. To achieve the goals of this Act, the PPP Center is hereby
institutionalized and authorized to adopt its current organizational structure,
absorb its existing employees, and upgrade its human resource component,
as may be necessary. Towards a more efficient and effective performance of
its mandate, the PPP Center shall have the following powers and functions:

(1) Assist Implementing Agencies in identifying. developing. prioritizing and
maintaining a pipeline of PPP Projects;

(2) Provide advisory services. technical assistance. trainings, and capacity
development to Implementing Agencies in all PPP-related matters, and
act as a procurement agent upon the request of an Implementing

Agency:
(3) Manage and administer the PDMF as provided in Section 8 Of this Act;


(4) Work with Implementing Agencies in setting procurement and
implementation timelines for approved PPP Projects;

(5) Recommend plans. policies and implementation guidelines related to

PPP, in consultation with appropriate oversight committees or agencies,
Implementing Agencies, private sector and other relevant stakeholders;

Facilitate, monitor. and evaluate the implementation of PPP programs and

projects developed by the Implementing Agencies;

(7) Report to the Office of the President and Congress on the implementation
of the PPP programs and projects of the government at the end of each
year:

(8) Serve as a link between the government and the private sector.

(9) Promote and market PPP programs and projects. in collaboration with
other government promotion agencies;

(10) Sit as member of NEDA-infrastructure Committee (INFRACOM). ICC. and
other inter-agency bodies where a PPP Project is a major concern;

(11) Issue advisory opinions and interpret the provisions of this Act and its IRR,
relating solely to technical aspects of PPP;

(12) Serve as the central repository of all executed PPP Contracts and any
subsequent amendment or supplement thereto, including settlement
agreements, entered into by Implementing Agencies;

(13) Provide and transmit copies of duly executed PPP Contracts to Congress;

(14) Act as Secretariat to the PDMF Committee, PPP Governing Board. and
ICC insofar as PPP Projects are concerned,

(15) Maintain an integrated projects’ bank to serve as an interactive database
of all current and past projects;

(16) Review PPP Contracts for National PPP Projects prior to execution;

(17) Act as a procurement agent upon the request of the Implementing Agency.
‘and

(3

(18) Perform such other functions as may be necessary to achieve the
objectives and purposes of this Act

B. Administrative Relationship. The PPP Center shall report directly to the PPP
Governing Board and shall be attached to the NEDA for purposes of policy
and program coordination.

C. Executive Director. The PPP Center shall be headed by an Executive Director
with the rank equivalent to an Undersecretary. who shall be appointed by the
President of the Philippines for a fixed term of six (6) years, upon
recommendation of the PPP Governing Board: Provided. That the term of the
first Executive Director appointed under this Act shall expire at noon of June
30, 2022. and the term of the next Executive Director shall commence on the
said hour and date: Provided further. That in case a vacancy occurs before
the expiration of the term. the person appointed to such vacancy shall serve
only the unexpired term of the predecessor. The Executive Director shall
perform the following functions:

(1) Undertake the day-to-day management and supervise the operations of
the PPP Center;


(2) Recommend to the PPP Governing Board such policies and measures
which are deemed necessary for the effective exercise and discharge of
the powers and functions of the PPP Center.

(3) Sit as some ex-officio. non-voting member of the PPP Governing Board.
INFRACOM. ICC and other inter-agency bodies where a PPP Project is
a major concer: and

(4) Perform such other functions as may be assigned by the PPP Governing
Board.

SECTION 23. PPP Governing Board. - The PPP Governing Board, hereinafter
referred to as the Board. is hereby created. It shall be the overall policy-making body
for all PPP-related matters. including the PDMF. It shall be responsible for setting the
strategic direction of PPP programs and projects and in creating an enabling policy
and institutional environment for PPP

The Board shall be composed of the following:
(a) The Secretary of Socio-Economic Planning as Chairperson:
(b) The Secretary of the DOF as Vice-Chairperson:
(c) The Secretary of the DBM;

(d) The Secretary of the Department of Justice; (The Secretary of the DTI;
(f) The Executive Secretary,

(g) The Secretary of the Interior and Local Government;

{h) The Executive Director of PPP Center, and

(The Private sector as Co-chairperson of the National Competitiveness
Council (NCC), as members.

The principal members of the Board may designate their respective alternates,
who shall be the official next-in-rank to them and whose acts shall be considered the
acts of their principals.

The presence of the Chairperson and four (4) other members of the Board
shall constitute a quorum and a majority vote of the member's present shall be
necessary for the adoption of any issuance, order. resolution. decision or other act of
the Board in the exercise of its functions. The Board shall act as a collegial body. In
the conduct of meetings. the Chairperson shall not vote except to break a tie.

The Board shall act on any matter for its consideration not later than thirty (30)
days from the date of submission thereof.

SECTION 24. Mandatory Inclusion of Alternative Dispute Resolution (ADR)
Mechanisms in PPP Contracts. — All PPP Contracts shall stipulate therein the use of
ADR mechanisms. The contracting parties shall be given complete freedom to
choose which ADR mechanisms shall govern their dispute, as well as the rules or
procedures to be followed in resolving the same.


SECTION 25. Creation of a PPP Contingent Liability Fund. - To ensure fiscal
sustainability and negotiate better financing terms of PPP Projects. there is hereby
created a PPP Contingent Liability Fund to be used for the payment of contingent
liabilities arising from PPPs in accordance to its contract terms.

The target amount in the PPP Contingent Liability Fund is to be determined by
the Development Budget Coordination Committee (DBCC) using risk-adjusted
methods or such other means that estimate the exposure of the Government of the
Philippines to PPP Contingent Liabilities.

The PPP Contingent Liability Fund shall be funded from the following sources:
(a) concession fees;
(b) Implementing Agency reimbursements:

(c)__ interest earings from the PPP Contingent Liability Fund; aryl (d) National
Government contributions.

National Government contributions shall cover only the difference between the
target amount of the PPP Contingent Liability Fund. and the current value of the fund.
The DOF shall regularly monitor review the viability of the PPP Contingent Liability
Fund in relation to the magnitude of PPP Projects undertaken by government, and if
necessary. recommend the increase in the target amount of the PPP Contingent
Liability Fund and the reason therefore. All National Government contributions to the
PPP Contingent Liability Fund shall be included in the proposed DOF budget.

When the value of PPP Contingent Liability Fund is in excess of the target
amount. the excess funds may, upon the recommendation of the DBCC, be transferred
to the general fund of the National Government

The Implementing Agency must seek confirmation from the DOF that the
National Government can bear the additional contingent liabilities associated with the
Project. taking into consideration fiscal sustainability.

Further. to foster accountability and efficiency in implementing PPP Projects. it
is mandatory for Implementing Agencies to enter into a recourse agreement with t=
DOF before any payment can be drawn from the PPP Contingent Liability Fund for
contingent liabilities that have materialized within contract terms.

The Bureau of the Treasury shall maintain the PPP Contingent Liability Fund in
the Treasury Single Account. Interest earnings therefrom shall accrue to the PPP
Contingent Liability Fund.


SECTION 26. Penal Provision. — Any person, whether private individual or
public officer or employee. who commits any of the acts hereunder prescribed, shall
be punished by imprisonment from a minimum of three (3) years to a maximum of six
(6) years and one (1) day:

(a) Representation that the Project Proponent has the necessary capitalization
to commence. complete and implement the project when the same is false
in material respects; and

(b) Falsification or insertion of certain provisions in the execution of the
contract which are materially and substantially different from the approved
final draft contract

SECTION 27. Miscellaneous Provisions. -

A. Safeguard Mechanisms to Protect Public Interest. In order to improve
transparency and to promote bankability and social acceptability of PPP
Projects. the following mechanisms shall be observed:

(1) Whenever applicable, the Implementing Agency shall assess the
affordability of fee or tariff. and conduct a willingness-to-pay survey
among the users of the Infrastructure Facility;

(2) The Implementing Agency shall conduct public consultation or dialogue
with all potential stakeholders. including the users. in all stages of the
PPP Project; and

(3) The Implementing Agency and the PPP Center shall post in their
respective websites the approved starting fare or user fee in a PPP
Project as well as the approved parametric formula on fare increases or
adjustments. if applicable.

8. Build-and-Transfer and Social Infrastructure PPP Projects. For PPP Projects
under the Build-and-Transfer scheme. as well as social infrastructure PPP
Projects. the Congress shall include the necessary appropriations to meet the
financial obligations arising from such projects on the fiscal year when the
obligation becomes due and demandable. Such appropriations shall be over
and above the annual budget of the Implementing Agency.

€. Joint Venture Agreements. For joint venture arrangements. the ownership of the
Infrastructure Facility may be transferred to either the Implementing Agency or
to Project Proponent: Provided. That in the latter case. the transfer shall be
made under competitive market conditions: Provided. further. That the equity
contribution of the Implementing Agency in a joint venture corporation shall in
no case exceed fifty percent (50%) of the outstanding capital stock of the
corporation: Provided, finally. That the return on investment of either party
shall be in proportion to their respective contribution.

D. Recovery of Investment. As may be agreed in the PPP Contract. the Project


Proponent may be allowed to collect tolls. fees. rentals, or charges. engage in
commercial development. receive VGF. and receive direct government
payments. among others. to recover investment.

£. Wind-up and Transfer Measures. The PPP Contract shall provide, as
appropriate. for:

(1) Mechanisms and procedures for the transfer of assets to the
Implementing Agency;

(2) The compensation to which the Project Proponent may be entitled in
respect of assets transferred to the Implementing Agency, or to a
successor, or purchased by the Implementing Agency;

(3) The transfer of technology required for the operation of the Infrastructure
Facility;

(4) The training of the Implementing Agencies personnel or of a successor in
the operation and maintenance of the Infrastructure Facility; and

(5) The provision, by the Project Proponent, of a warranty that the
Infrastructure Facility meets the project technical specifications. agreed
system features, and performance standards and services for a certain
period as may be defined in the IRR of this Act after the transfer of the
Infrastructure Facility to the Implementing Agency or to a successor.

F, Prescription. No one shall in any proceedings before any court or tribunal allege the
invalidity of any PPP Contract on the ground of non-compliance with the
provisions of this Act after a period of one (1) year has elapsed from the
signing of the PPP Contract.

G. Operation. The Private Person. whether or not the Project Proponent, that shall
actually operate and maintain the Infrastructure Facility. including but not limited
to the collection of tolls. fees. rentals, or charges from users of the Infrastructure
Facility. must be registered with the Securities and Exchange Commission.

H. Preferential Hiring of Filipino Workers. For the Construction Stage Of
Infrastructure Facilities where the Contractor is a foreigner. Filipino labor shall
be preferred in the employment and hiring in the different phases of
Construction.

'.Contracts, Procedures, And Authority Not Affected by this Act. This Act shall not
affect:

(1) PPP Contracts entered into. and procurement procedures for which the
invitation to pre-qualify and bid has been published. by Implementing
Agencies prior to the effectivity of this Act in accordance with the
relevant laws. regulations. guidelines. and ordinances; and

(2) The authority of LGUs to enact their own PPP ordinances. code or
guidelines provided that no statute will be infringed.

SECTION 28. Joint Congressional Oversight Committee. — A Joint
Congressional Oversight Committee is hereby created to oversee the implementation


of this Act. The Committee shall be composed of five (5) members each from the
Senate and House of Representatives to be designated by the Senate President and
the Speaker of the House of Representatives, respectively. The Committee shall be
jointly chaired by the respective Chairpersons of the Senate Committee on Public
Works, the Senate Committee on Appropriations, the Senate Committee on Economic
Affairs. and the Senate Committee on Finance. and the House Committee on Public
Works and Highways, the House Committee on Appropriations, and the House
Committee on Economic Affairs. To effectively monitor the implementation of this Act
the PDP and the priority list of national and local projects shall be submitted to the
Joint Congressional Oversight Committee.

SECTION 29. Implementing Rules and Regulations. — The members of the
PPP Governing Board shall designate their respective representatives who shall
constitute the IRR Committee. Within sixty (60) days from the effectivity of this Act, the
PPP Center shall formulate and prescribe, in consultation with the IRR Committee.
after public hearing and publication as required by law, the rules and regulations to
implement the provisions of this Act The IRR shall be approved by the PPP Governing
Board.

From time to time the PPP Governing Board may instruct the PPP Center. in
Consultation with the IRR Committee, to conduct, formulate and prescribe, after due
Public hearing and publication. amendments to the IRR, consistent with the provisions
of this Act.

SECTION 30. Transitory Provisions. — All unexpended funds for the calendar
year. properties, equipment. contracts and records of the PPP Center are hereby
retained. The amount necessary to carry out the organizational changes of PPP
Center provided in this Act shall be determined by the PPP Governing Board
Appropriations for succeeding years shall be incorporated in its budget proposals for
Congressional action,

All officials and employees of the PPP Center shall be retained and shall not
suffer any loss of seniority or rank or decrease in emoluments.

SECTION 31. Separability Clause. — If any provision of this Act is held invalid.
the other provisions not affected thereby shall continue in operation.

SECTION 32. Repealing Clause. — RA No. 6957, RA NO. 7718. sec. 3(a) of
Presidential Decree (PD) No. 1112, section 2 of PD No. 1894. and EO No. 8 (s. 2010)
as amended by EO 136 (S. 2013). EO 78 (s. 2012). section 8 of EO No. 423 (s. 2005).
2013 Revised Guidelines and Procedures for Entering into Joint Venture Agreements
Between Government and Private Entities are hereby repealed. All other laws, rules
and regulations or parts thereof inconsistent with the provisions of this Act are hereby
repealed or modified accordingly

SECTION 33. Effectivity Clause. - This Act shall take effect fifteen (15) days after
its publication in the Official Gazette or at least One (1) newspaper of general circulation.

Approved