Republic of the Philippines
Bouse of Representatives 3.0 JUL 2013

Queson City, Meteo Manita (ue

Sixteenth Congress

First Regular Session

House Bill No.2022_

Introduced by HON. ROMEO M. ACOP

EXPLANATORY NOTE

The function of modern and efficient infrastructures in the economic development
of the country is crucial and an imperative, These goods and services generate benefits
which justify their traditional provision by the government. However, chronic budgetary
deficits have compelled the government to tum to the private sector for funding of public
infrastructures, Republic Act No. 6957, also known as the ‘Build-Operate-and-Transfer’
(BOT) Law, as amended by Republic Act No. 7718, serves as the statutory basis for the
public-private-partnership (PPP) program of the government.

Following the enactment of the law, increased private investments through the
BOT-PPP program spawned a number of infrastructure projects mostly in the power
and transport sectors. However, the program's momentum slowed down due to legal
and procedural problems encountered in the implementation of the projects. There were
also reports of corruption and abuse of discretion on the part of public officials of
concerned agencies involved in the transactions. These negative experiences with the
implementation of the BOT Law necessitate the need to address various issues relating
to the legal framework of the law, on instituting ample protection to the investments
infused by the private sector, and on the responsibilities of the participating institutions
involved in the project cycle.

/


law:

2)

3)

4)

5)

This measure proposes the following policy and procedural amendments to the

Facilitating the mitigation of risks attached to private investments by ensuring that
the validity and enforceability of contracts involving BOT projects are respected
through due process of law;

The government should secure private investments through open and
competitive bidding procedures permitting non-competitive procedures, such as
unsolicited proposals, only in exceptional circumstances allowed in the law.
However, it may be used as basis for public bidding by the concerned
government agency and the original proponent may be reimbursed by the
winning bidder of its necessary and reasonable costs such as expenses for
feasibility studies;

Before the awarding of contracts to the private proponents, implementing
agencies and approving bodies must satisfy themselves that the project
specifications and parameters agreed upon have been faithfully observed. With
this objective, the approval of the contract shall be strictly subject to review and
shall primarily be in consideration of the draft contract, feasibility study and
similar documents submitted for the purpose. Reviewing officers found violating
this provision may be held administratively liable for dereliction of duty, while
private proponents and their representatives may be criminally liable for similar or
conspiratorial acts;

While the government and the private sector may agree on project-specific risks-
sharing schemes, commercial and market risks that appropriately belong to the
private sector, particularly revenue losses or shortfalls, must not be covered by
government guarantees. Guarantees create contingent liabilities which imply
future claims for payments that would burden the fiscal standing of the
government;

Granting the President the authority to classify infrastructure projects as ‘Projects
of National Significance’ which will entitle the proponents to incentives such as
exemption from real property taxes and automatic grants of business permits
The status also insulates the projects from being subject to judicial relief; and,


6) Finally, to promote transparency In governance, signed contracts and related
documents, being imbued with public interest, should be made available to the

general public.

For the foregoing reasons, the immediate passage of this bill is earnestly urged.

ROMEO M. ;OP MNSA
epresentative

2"™ District, Antipolo City



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Republic of the Ibilippines
House of Representatives
Queson City, Metco Manila

Sixteenth Congress

First Regular Session

2022

House Bill No.

Introduced by HON, ROMEO M. ACOP

AN ACT
STRENGTHENING PUBLIC-PRIVATE PARTNERSHIP (PPP)
IN INFRASTRUCTURE AND DEVELOPMENT PROJECTS,
FURTHER AMENDING FOR THE PURPOSE REPUBLIC ACT NO. 6957, AS
AMENDED, OTHERWISE KNOWN AS AN ‘ACT AUTHORIZING THE FINANCING,
CONSTRUCTION AND OPERATION AND MAINTENANCE OF INFRASTRUCTURE
PROJECTS BY THE PRIVATE SECTOR’

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

SECTION 4. Section 1 of Republic Act No. 6957, as amended by Republic Act No.
7748, otherwise known as an ‘Act Authorizing the Financing, Construction, Operation
and Maintenance of Infrastructure Projects by the Private Sector’, is hereby further
amended to read as follows :

SECTION 1. 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 and provide the most appropriate incentives to mobilize private resources
for the purpose of financing the construction, operation and maintenance of
infrastructure and development projects normally financed and undertaken by the
Goverment. Such incentives, aside from financial incentives as provided by law, shall
include MITIGATION OF RISKS BY ENSURING THAT THE VALIDITY AND
ENFORCEABILITY OF CONTRACTS ARE RESPECTED THROUGH DUE PROCESS
OF LAW, AND providing a climate of minimum government regulations and procedures
and specific government undertakings in support of the private sector. IT SHALL ALSO
BE THE POLICY OF THE GOVERNMENT TO SECURE PRIVATE INVESTMENTS
THROUGH TRANSPARENT AND COMPETITIVE SELECTION PROCESSES AND
BIDDING PROCEDURES : PROVIDED, THAT NON-COMPETITIVE PROCEDURES
SHALL ONLY BE PERMITTED IN EXCEPTIONAL CIRCUMSTANCES AS ALLOWED
UNDER THIS ACT.

SECTION 2. Section 4 of Republic Act No. 6957, as amended by Republic Act No.
7718, is hereby further amended to read as follows :

SECTION 4. Priority Projects - All concemed government agencies, including
government-owned and controlled corporations and local government units, shall include
in their development programs those priority projects that may be financed, constructed,
operated and maintained by the private sector under the provisions of this Act. It shall be
the duty of all concemed government agencies to give wide publicity to all projects
eligible for financing under this Act, including publication in national and, where
applicable, international newspapers of general circulation once every six (6) months
and official notification of project proponents registered with them.

The list of all such national projects must be part of the development programs of the
agencies concerned. The list of projects costing up to Three Hundred Million pesos ( P
300,000,000 ) shall be submitted to the ICC of NEDA for its approval and to the NEDA
Board for projects costing more than Three Hundred Million pesos (P 300,000,000 )
The list of projects submitted to ICC of the NEDA Board shall be acted upon within thirty
(30) working days.

The list of local projects to be implemented by the local government units concemed
shall be submitted, for confirmation, to the municipal development council for projects
costing up to Twenty Million pesos, those costing above Twenty up to Fifty Million pesos,
to the provincial development council; those costing up to Fifty Million, to the city
development council; above Fifty Million up to Two Hundred Million pesos, to the
regional development councils; and those above Two Hundred Million pesos, to ICC of
NEDA[]; PROVIDED, THAT 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 LOCAL
GOVERNMENT UNIT CONCERNED, WHICH SHALL INCLUDE, BUT NOT LIMITED
TO 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 AND ITS
IMPLEMENTING RULES AND REGULATIONS; PROVIDED FURTHER, THAT ANY
CONCERNED REVIEWING OFFICER/S FOUND IN VIOLATION OF THIS PROVISION
SHALL BE ADMINISTRATIVELY LIABLE WITH GRAVE NEGLECT OF DUTY AND
SHALL BE DEALT WITH IN ACCORDANCE WITH EXISTING LAWS.

ANY ACT ON THE PART OF THE LOCAL GOVERNMENT UNIT CONCERNED AND
ITS RESPONSIBLE OFFICIALS, OR CONCERNED OFFICERS OF THE PRIVATE
PROJECT PROPONENT, WHICH RESULTS TO OR IS AIMED AT DOWNGRADING
THE CATEGORY OF THE PROJECT BASED ON ITS TOTAL COST UNDER THIS
SECTION FOR THE PURPOSE OF EVADING THE REQUIRED APPROVAL UNDER
THE APPROPRIATE CATEGORY SHALL BE DEALT WITH ADMINISTRATIVELY
AND CRIMINALLY UNDER THIS ACT AND OTHER EXISTING APPLICABLE LAWS.
SUCH ACT COMMITTED BY THE PRIVATE PROJECT PROPONENT AND ITS
CONCERNED OFFICERS SHALL CAUSE THE RESCISSION OF ITS CONTRACT
FOR THE SAID PROJECT WITHOUT COMPENSATION AND SHALL BE
PERPETUALLY DISQUALIFIED FROM PARTICIPATING IN ANY BIDDING, OR
OTHER CONTRACTUAL ARRANGEMENT, FOR ANY GOVERNMENT PROJECT.

SECTION 3. Section 4-A of Republic Act No. 6957, as incorporated by Republic Act
No. 7781, is hereby amended to read as follows :

SECTION. 4-A Unsolicited Proposals - Unsolicited proposals for projects may be [
accepted ] SUBMITTED. THE [ by any ] goverment agency, GOCC, or local
government unit [ on a negotiated basis ] concerned may either :

4) USE THE SOLICITED PROPOSAL AS THE BASIS FOR PUBLIC BIDDING AS
PROVIDED IN SECTION 5 OF THIS ACT. IF A FINAL AWARD TO A WINNING
BIDDER IS MADE ON THE BASIS OF THE UNSOLICITED PROPOSAL WITHIN
ONE (1) YEAR FROM THE SUBMISSION THEREOF, AS DETERMINED BY
NEDA, THE ORIGINAL PROPONENT MAY BE REIMBURSED FOR COSTS
INCURRED IN ITS PREPARATION, INCLUDING, BUT NOT LIMITED TO, THE
COST OF ANY FEASIBILITY STUDIES UNDERTAKEN : PROVIDED, SUCH
REIMBURSEMENT :

A) SHALL BE IN THE AMOUNT TO BE DETERMINED BY NEDA, BUT NOT
EXCEEDING THREE PERCENT (3%) OF THE TOTAL PROJECT COST,
EXCLUDING ANY PROJECT COSTS WHICH WILL BE BORNE BY THE
GOVERNMENT, SUCH AS, BUT NOT LIMITED TO, THE COST OF RIGHT-OF-
WAY ACQUISITIONS; AND,

B) SHALL BE PAID IN FULL BY THE WINNING BIDDER AS A REQUIREMENT
FOR THE AWARD OF THE CONTRACT;


2) ACCEPT THE UNSOLICITED PROPOSAL ON A NEGOTIATED BASIS : Provided,
that all the following conditions are met

1) 10K
2) wx
3) x

3) REJECT THE PROPOSAL.

SECTION 4. Anew section is hereby added after Section 6 of Republic Act No.6957,
as amended by Republic Act No. 7718, and numbered as Section 6-A, to read as
follows :

SECTION 6-A PROHIBITION AGAINST GOVERNMENT GUARANTEES OR
PAYMENTS - NOTWITHSTANDING ANY AGREEMENT TO THE CONTRARY, IN NO
CASE SHALL THE NATIONAL GOVERNMENT OR LOCAL GOVERNMENT UNIT
CONCERNED GUARANTEE OR COMPENSATE ANY LOSS OR SHORTFALL IN THE
PROJECTED REVENUES OR INCOME OF THE PROPONENT AS INDICATED IN
THE APPROVED CONTRACT OR AS ADJUSTED IN ACCORDANCE WITH THE
PROVISIONS OF THIS ACT. NOR SHALL ANY PROPONENT, AT ANYTIME, BE
ENTITLED TO ANY FORM OF SECURITY FROM THE GOVERNMENT, INCLUDING
BUT NOT LIMITED TO, COST SHARING, CREDIT ENHANCEMENT, DIRECT OR
INDIRECT GOVERNMENT SUBSIDY OR EQUITY.

SECTION 5. A new section is hereby added after Section 10 of Republic Act No.
6957, as amended by Republic Act No. 7718, and numbered as Section 10-A, to read
as follows :

SECTION 10-A PROJECTS OF NATIONAL SIGNIFICANCE - UPON THE
CERTIFICATION AND RECOMMENDATION OF NEDA, THE PRESIDENT MAY
CLASSIFY CERTAIN PROJECTS UNDERTAKEN UNDER THIS ACT AS PROJECTS
OF NATIONAL SIGNIFICANCE, WHICH SHALL BE ENTITLED TO THE FOLLOWING
INCENTIVES :

1) ALL REAL PROPERTIES WHICH ARE ACTUALLY AND DIRECTLY USED FOR
THE PROJECT SHALL BE EXEMPT FROM ANY AND ALL REAL PROPERTY
TAXES LEVIED UNDER REPUBLIC ACT NO. 7160, OTHERWISE KNOWN AS
THE ‘LOCAL GOVERNMENT CODE OF 1991’;

THE TOTAL OF ALL LOCAL TAXES IMPOSED BY A PROVINCE, CITY OR
MUNICIPALITY PURSUANT TO REPUBLIC ACT NO. 7160 ON THE PROPONENT
SHALL NOT EXCEED FIFTY PERCENT (50%) OF ONE PERCENT (1%) OF
GROSS SALES OR RECEIPTS OF THE PRECEDING CALENDAR YEAR;

2)


3) THE NECESSARY BUSINESS PERMITS, INCLUDING ANY RENEWALS
THEREOF, SHALL BE DEEMED TO HAVE BEEN AUTOMATICALLY GRANTED
OR ISSUED TO THE WINNING PROJECT PROPONENT UPON TENDER OF THE
REQUIRED TAXES AND FEES TO THE APPROPRIATE LOCAL GOVERNMENT
UNIT.

FOR PURPOSES OF THIS SECTION, IN ORDER FOR A PROJECT TO QUALIFY AS
A PROJECT OF NATIONAL SIGNIFICANCE, THE FOLLOWING CONDITIONS MUST
BE PRESENT :

4) THE TOTAL COST OF THE PROJECT IS AT LEAST FIVE BILLION PESOS ( P
5,000,000,000 ); AND,

2) THE PROJECT IS LOCATED IN OR AFFECTS AT LEAST TWO (2)
PROVINCES.

SECTION 6. Sections 11, 12, 13, 14 and 15 of Republic Act No. 6957, as amended,
are hereby renumbered as Sections 13, 14, 15, 16 and 17 respectively.

SECTION 7. Anew section to be numbered as Section 11 is hereby added to read as
follows :

SECTION 11. PROHIBITION ON THE ISSUANCE OF TEMPORARY RESTRAINING
ORDERS, PRELIMINARY INJUNCTIONS AND PRELIMINARY MANDATORY
INJUNCTIONS - NO COURT, EXCEPT THE SUPREME COURT, SHALL ISSUE ANY
TEMPORARY RESTRAINING ORDER, PRELIMINARY INJUNCTION OR
PRELIMINARY MANDATORY INJUNCTION AGAINST THE GOVERNMENT, OR ANY
OF ITS SUBDIVISIONS, OFFICIALS OR ANY PERSON OR ENTITY, WHETHER
PUBLIC OR PRIVATE, ACTING UNDER THE GOVERNMENT’S DIRECTION, TO
RESTRAIN, PROHIBIT OR COMPEL THE FOLLOWING ACTS WITH REGARDS TO
PROJECTS OF NATIONAL SIGNIFICANCE :

4

ACQUISITION, CLEARANCE AND DEVELOPMENT OF THE RIGHT-OF-WAY
AND/OR SITE OR LOCATION;

BIDDING OR AWARDING;

COMMENCEMENT, PROSECUTION, EXECUTION, IMPLEMENTATION AND
OPERATION;

TERMINATION OR RESCISSION OF THE CONTRACT; AND,

THE UNDERTAKING OR AUTHORIZATION OF ANY OTHER LAWFUL ACTIVITY
NECESSARY OR IN CONNECTION WITH THE EXECUTION OR
IMPLEMENTATION OF THE PROJECT.

2
3)

4)
5)


THIS PROHIBITION SHALL APPLY IN ALL CASES, DISPUTES OR
CONTROVERSIES INSTITUTED BY A PRIVATE PARTY, INCLUDING, BUT NOT
LIMITED TO, CASES FILED BY BIDDERS OR THOSE CLAIMING TO HAVE RIGHTS
THROUGH SUCH BIDDERS INVOLVING PROJECTS OF NATIONAL SIGNIFICANCE
; EXCEPT, WHEN THE MATTER IS OF EXTREME URGENCY INVOLVING A
CONSTITUTIONAL ISSUE, SUCH THAT UNLESS A TEMPORARY RESTRAINING
ORDER IS ISSUED, GRAVE INJUSTICE AND IRREPARABLE INJURY WILL ARISE.
THE APPLICANT SHALL FILE A BOND, IN AN AMOUNT TO BE FIXED BY THE
COURT, WHICH BOND SHALL ACCRUE IN FAVOR OF THE GOVERNMENT IF THE
COURT SHOULD FINALLY DECIDE THAT THE APPLICANT WAS NOT ENTITLED
TO THE RELIEF SOUGHT.

ANY TEMPORARY RESTRAINING ORDER, PRELIMINARY INJUNCTION OR
PRELIMINARY MANDATORY INJUNCTION ISSUED IN VIOLATION OF THIS
SECTION IS VIOD AND OF NO FORCE AND EFFECT.

SECTION 8. Anew section to be numbered as Section 12 is hereby added to read as
follows

SECTION 12. PENAL PROVISIONS - ANY PERSON WHO COMMITS ANY OF THE
ACTS HEREUNDER PROSCRIBED SHALL BE PUNISHED WITH IMPRISONMENT
FROM A MINIMUM OF THREE (3) YEARS TO A MAXIMUM OF SIX (6) YEARS :

A) REPRESENTATION BY A PROJECT PROPONENT THAT IT HAS THE
NECESSARY CAPITALIZATION TO COMMENCE, COMPLETE AND IMPLEMENT
THE PROJECT WHEN THE SAME IS FALSE IN MATERIAL RESPECTS;

B) FALSIFICATION OR INSERTION OF CERTAIN PROVISIONS IN THE FINAL
CONTRACT WHICH ARE MATERIALLY AND SUBSTANTIALLY DIFFERENT
FROM THE APPROVED DRAFT CONTRACT WHICH FORM PART OF THE
GOVERNMENT AGENCY’S / LGUS REQUEST FOR APPROVAL OR
CONFIRMATION.

SECTION 9. Separability Clause. - If any provision of this Act is declared invalid or
unconstitutional, the provisions not affected thereby shall continue to be in full force and
effect.

SECTION 10. Repeating Clause. - All laws, decrees, orders, rules and regulations or
parts thereof which are inconsistent with the provisions of this Act are hereby repealed
or modified accordingly.

SECTION 11. Effectivity Clause. - This Act shall take effect fifteen (15) days after its
publication in the Official Gazette or in at least two (2) national newspapers of general
circulation.

Approved.