FIFTEENTH CONGRESS 
) 
CONGRESS OF THE PHILIPPINES ) 
Second Regular Session 
) 
Senate Bill No. 3090 
Introduced by Senator Edgardo J. Angara 
EXPLANATORY NOTE 
., 
:, \ 
,'~ 
,';' .i~l! I r r " i 1" ," j' 
.. .. l.1r ~ 
"11 
DEC 15 
!J 4 :39 
, i~V: i /,/ 
·c 
This bill seeks to enhance the pUblic-private partnership for infrastructure 
development in the Philippines, in line with the Philippine Development Plan and the 
thrust and priorities of the current administration. 
The state recognizes the role of the private sector in propelling national growth 
and development through financing the construction, operation and maintenenace of 
projects normally undertaken by government. The state is committed to encouraging 
investment in public infrastructure by providing due incentives for companies (hat wish 
to participate. 
However, interest in pUblic-private parntership has been scarce in the past 
decade due to various policy and fiscal difficulties, not the least of which are 
shortcomings in the earlier RA 7718 or the Philippine Build and Operate Transfer (BOT) 
Law. 
This bill seeks (0 revive private sector participation by filling the gaps of the 
BOT Law. It seeks (0 establish a legal framework that courts investment through 
adequate protection of rights and the consistent enforcement of contracts. It also seeks to 
uphold competitive bidding as the core of government procurement policy. When 
enacted, this bill will make public-private partnership more hospitable to investors, and 
thus stimulative of national development. 
In view of the foregoing, the passage of this bill is earnestly sought. 


FWTEENTH CONGRESS 
) 
CONGRESS OF THE PHILIPPINES ) 
Second Regular Session 
) 
'11 
DEC 15 f)1 :39 
Senate Bill No. 30 9 0 
/ ) 
Pl~'~- '",I,' _ 
'-''l,/. 
dv 
_________________ 
--!!.,'-!.:' .~' :':"'C-:.'_":''':' 
'.~" \-'--
Introduced by Senator Edgardo ,T, Angara 
AN ACT ENHANCING THE PUBLIC l'RIV A TE PARTNERSHIP (PPP) IN 
INFRASTRUCTURE DEVELOPMENT IN THE PHILIPPINES 
Be it enacted by the Senale and the House ol Representatives of the Philippines in 
Congress assembled: 
1 
Section r Short Tit/e.- This Act shall be known as the "Public-Private Partnership in 
2 
Infrastructure Development Act of 20 1_" 
3 
4 
Sec, 2. Declaration olPolicies.-lt is hereby declared the policy of the State to: 
5 
6 
a, Recognize the indispensable role of the private sactor as the main engine for 
7 
national growth and development; 
8 
b, Create an enabling environment for public-private partnership (PPP) projects, 
9 
that is, private sector investment in public infrastructure for efficient provision 
10 
of public services; 
11 
c, Recognize the long term nature of private investment in infrastructure and 
12 
services and to mitigate the associated risks by ensuring that the validity and 
13 
enforceability of contracts are respected through the due process of law; 
14 
cL Encourage private investment in public infrastructure and/or public services 
15 
that: 
16 
17 
I, Yields value for money for the State by allocating risks to the party best 
18 
ableto manage them; 
19 
2, Is affordable in light of overall budgetary sustainability, forward 
20 
commitment in realtion to the public expenditure and the potential returns 
21 
on the private sector investment; 
22 
3. Maximizes the benefits of the private sector efficiency, expertise, 
23 
flexibility and innovation; 
24 
4, Is financialy viable; and 
25 
5, Is desired in light of economic and social benefits and costs; 
26 
e, Ensure a consistent approach among government agencies at both national and 
27 
local levels in the adjudication, design, assessment, solicitation and 
28 
management of projects; and 
29 
f. 
Build capacity of government agenvies and local government units (La Us) to 
30 
avail themselves of investment opportunities, 
31 
32 
Sec. 3, Scope olConlractua/ Arrangements.- For this purpose, the government agencies 
33 
including government owned and controlled corporations (OOCCs) and LOUs may 
34 
select ftrom the list of contractual arrangements provided below: Provided, however, 
35 
each agency may adopt other contracttual arrangements that may be decided upon 
36 
during contract negotiations; Provided finally that new contractual arrangements not 
37 
listed under this Act may be adopted but shall be approved by the Investment 
38 
Coordination Committee (lCC»). The contractual arrangements are as follows: 
39 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
35 
36 
37 
38 
39 
40 
41 
42 
43 
44 
45 
46 
47 
48 
49 
50 
51 
52 
53 
54 
55 
56 
57 
a. Build-Operate-and-Transfer (BOT)- A contractual arrangement whereby the 
project proponent undertakes the construction, including financing, of a givem 
infrastructure facility, and the operation and maintenance thereof. The project 
proponent operates the facility over the fixed term during which it is allowed 
to charge facility users appropriate toll fees, rentals and charge not exceeding 
those proposed in its bid or as negotiated and incorporated in the contract to 
enable the project proponent to recover its investment, and operating and 
maintenance expenses in the project. The project proponent shall transfer the 
facility to the government agency or LOU concerned at the end of the fixed 
term which shall not exceed fifty (50) years; Provided, that in case of an 
infrastructure or development facility the operation of which requires a public 
utility franchise, the proponent must be Filipino or, if a corporation, must be 
duly registered with the Securities and Exchange Commission (SEC), and 
owned up to at least sixty percent (60%) by Filipinos. 
The BOT shall include a supply-and-operate situation, which is a 
contractual arrangement whereby the supplier of equipment and machinery for 
a given infrastructure facility, if the interest of the government so requires, 
operates the facility and in the process provide technology transfer and 
training to Filipino nationals. 
b. Build-and-Transfer (BT)- A contractual arrangement whereby the project 
proponent undertakes the financing and construction of a given infrastructure 
or development facility and after its completion turns it over to the 
government agency or LOU concerned, which shall pay the proponent on an 
agreed scheduel its total investments expended on the projects, plus a 
reasonable rate of return thereon. This arrangement may be employed in the 
construction of any infrastructure or development project, including, critical 
facilities which for security or strategic reasons must be operated by the 
govemment. 
c. Build-Own-and-Operate (BOO)- A contractual arrangement whereby the 
project proponent is authorized to finance, construct, own, operate and 
maintain an infrastructure or development facility from which the proponent is 
allowed to recover its total investment, operating and maintenance costs plus 
reasonable return thereon by collecting tolls, fees, rentals or other charges 
from the facility users; Provided, that all such projects, upon recommendation 
of ICC, shall be approved by the President of the Philippines as chair of the 
NEDA Board. Under this project, the proponent that owns the assets of the 
facility may assign its operation and maintenance to a facility operator. 
d. Build-Lease-and-Transfer (BLT)- A contractual arrangement whereby a 
project proponent is authorized to finance and construct an infrastructure or 
development facility and upon its completion turns it over to the government 
agency or LOU concerned on a lease arrangement for a fixed period after 
which ownership of the facility is automatically transferred to the government 
agency or LOU concerned. 
e. 
Build-Transfer-and-Operate (BTO)- A contractual an'angement whereby the 
public sector contracts out the building of an infrastructure facility to a 
private entity such that the contractor builds the facility on a turn-key basis, 
assuming cost overrun, delay, and specified performance risks. 
Once the facility is commissioned satisfactorily, title is transferred to the 
implementing agency. The private entity, however, operates the facility on 
behalf of the implementing agency under an arrangement. 
2 


1 
f. 
Contract-Add-and-Operate (CAO)- A contractual arrangement whereby the 
2 
project proponent adds to an existing infrastructure facility which it is renting 
3 
from the government. It operates the expanded project over an agreed 
4 
frabchise period. There mayor may not be, a transfer arrangement in regard 
5 
to the facility. 
6 
7 
g. 
Development-Operate-and-Transfer (DOT)-
A contractual arrangement 
8 
whereby favorable conditions external to a new infrastructure project, which 
9 
is to be built by a private project proponent, are integrated into the 
10 
arrangement by giving that entity the right to develop adjoining property, and 
11 
thus, enjoy some of the benefits the investment creates such as higher 
12 
property or rent values. 
13 
14 
h. 
Rehabilitate-Operate-and-Transfer 
(ROT)-
A 
contractual 
arrangement 
15 
whereby an existing facility is turned over to the private sector to refurbish, 
16 
operate and maintain for a franchise period, at the expiry or which the legal 
17 
title to the facility is turned over to the government. The term is also used to 
18 
describe the purchase of an existing facility from abroad, imprting, 
19 
refurbishing, erecting and consuming it within the host country. 
20 
21 
i. 
Rehabilitate-Own-and-Operate (ROO)- A contractual arrangement whereby 
22 
an existing facility is turned over to the private sector to refurbish and operate 
23 
with no time limitation imposed on ownership. As long as the operator is not 
24 
in violation of its franchise, it can operate the facility in perpertuity. 
25 
26 
Sec. 4. Private Delivery of Public Infrastructure and/or Services. - (1) Any government 
27 
agency or LGU may contract with the private sector for the delivery of public 
28 
infrastructure and/or services in any of the following areas: 
29 
30 
a. 
Energy, including oil and gas; 
31 
b. 
Transport, including railways, roads, tunnels, bridges, ports, canals, channels, 
32 
airports, pipelines; 
33 
c. 
Water, including water storage and wastewater; 
34 
d. 
Communications; 
35 
e. 
Information Technology; 
36 
f. 
Education; 
37 
g. 
Health; 
38 
h. 
Tourism; 
39 
1. 
Culture, SpOlis, and Leisure Facilities; 
40 
J. 
Government Buildings, Industrial Estates and Townships, and Housing; 
41 
k. 
Markets, Warehouses, and Slaughterhouses; 
42 
l. 
Any other area as may be prescribed. 
43 
44 
(2) Contractual arrangements that may be utilized for the purposes of projects 
45 
contemplated in Section 3 shall be determined during the negotiations between the 
46 
government agency or LGU and the private sector. 
47 
48 
(3) For the purpose of this section and subsequent reference in the following sections 
49 
"prescribed" means prescribed in the IRR issued pursuant to this Act, except as 
50 
otherwise indicated. 
51 
52 
Sec. 5. Project Preparations. - (I) Each government agency or LGU shall within its 
53 
areas of responsibility prepare a project for approval by the approving authority 
54 
mentioned in Section 6 of this Act. 
55 
56 
(2) Prior to preparing a project for approval, the head of the concerned government 
57 
agency or LGU shall review or assess the following: 
3 


I 
2 
a. 
The risks associated with the proposed project taking into account the various 
3 
methods of sharing these risks; and 
4 
b. 
The economic and financial feasibility of the proposed project, including a 
5 
comparison of the costs and benefits of implementing the project in terms of 
6 
this Act with the costs of implementation in another form. 
7 
8 
(3) A government agency or LGU that lacks the capacity to prepare a project in the 
9 
manner prescribed, including the pre-bidding, bidding, contract management stages of 
10 
the project, can tap the Project Development Facility (PDF). The PDF will provide the 
II 
fund, the start-up capital of which shall come from the national government budget or 
12 
grants from donors of Official Development Assistance (ODA). In the case of a 
13 
government agency, the PDF shall be appropriated within its budget ceiling to enable 
14 
the government agency to solicit assistance or expert advise as necessary. In the 
15 
interest of sustainability, the winning bidder for a PPP project shall be required to 
16 
compensate for the cost that the government agency expended in developing its 
17 
proposal. In the case of LOUs, the Department of Finance (DOF) shall act as the 
18 
custodian of the PDF and the winning bidder for a LGU-initiated PPP project shall 
19 
likewise compensate the costs expended in developing the proposal. In the event that 
20 
resources from the PDF are expended in the developing the required assistance within 
21 
the prescribed period, the government agency or LOU shall report to the ICC and 
22 
NEDA Board, respectively. 
23 
24 
Sec. 6. Approving Authority. - The National Economic Development Authority (NEDA) 
25 
shall issue the necessary rules and regulations for the effective implementation of this 
26 
Act. To this end, the NED A Board, through the Investment Coordination Committee 
27 
(ICC), shall request national agencies and local government units to submit program 
28 
reports of PPP projects: 
29 
30 
(I) A national government agency that has identified and prepared a project in the 
31 
manner specified in Section 5 shall: 
32 
33 
a. Be required to endorse through the head of the government agency, the project 
34 
proposal and contract to the ICC. This endorsement shall serve as the first-pass 
35 
approval for the project and draft contract. All government agencies are 
36 
required to review technical, legal, financial, economic, and social implications 
37 
of the project and approve the same prior to endorsement to the ICC; 
38 
b. Submit projects of major national importance with a contract value above an 
39 
amount as may be prescribed, to the NEDA Board for approval; all other 
40 
projects to the ICC for approval. 
41 
42 
(2) All local government PPP projects shall be approved following the provisions of 
43 
the Local Government Code. 
44 
45 
Sec. 7. Implementing, Monitoring and Auditing Functions.- (1) A government agency 
46 
or LOU that has secured approval for a project in the manner provided in Sec. 6 of this 
47 
Act, shall be responsible for the implementation, management and supervision of the 
48 
project. Regular monitoring reports shall be submitted to the ICC for its information. 
49 
50 
(2) Regular auditing shall likewise be conducted followiug Commission on Audit 
51 
(COA) guidelines. Reports may be required from the respective government 
52 
agency, LGU or COA as deemed necessary. 
53 
54 
Sec. 8. Competitive Bidding Procedures.- (1) Competitive bidding procedures shall 
55 
apply to all projects for which private investment is solicited in terms of this Act. 
56 
4 


I 
(2) Under exceptional cases, government agencies may resort to direct negotiations 
2 
under such conditions prescribed in Section 3 of RA 9184. LGUs may reSOIt to direct 
3 
negotiations under the conditions prescribed under the Local Government Code andlor 
4 
RA 9184 as may be applicable. Such conditions shall include a requirement that the 
5 
government agency or LGU must give public notice in the prescribed manner of: 
6 
7 
a. The intention to enter into direct negotiations; 
8 
b. The conclusion of negotiations to enter into a contract through direct 
9 
negotiations; and 
10 
c. The salient terms of the contract to be concluded. 
II 
12 
(3) A government agency will only entertain an unsolicited proposal provided that such 
13 
proposal is not contained in its prioritized projects in the Medium Term Philippine 
14 
Investment Program (MTPIP). In the case of LGUs, an unsolicited proposal may be 
15 
entertained provided it does not appear in the local development plan of the LGU 
16 
concerned. 
17 
18 
In addition, the unsolicited proposal to be acceptable is sibject to other conditions 
19 
as follows: 
20 
21 
a. The government agency or LGU has notified in wntmg the approving 
22 
authority within seven (7) working days of the receipt of the proposal; 
23 
b. The head of the government agency or LGU has conducted an assessment as 
24 
contemplated in Section 5(2) and has certified in writing to the approving 
25 
authority that it is capable of conducting all proceedings relating to the 
26 
proposal; 
27 
c. The head of the government agency or the LGU certified in writing that the 
28 
proposed project serves the public interest; 
29 
d. The proposal does not entail the provision of any form of government 
30 
guarantee, subsidy or undertakings as may be prescribed; 
31 
e. The proposal complies with such requirements for unsolicited proposals as 
32 
may be prescribed; and 
33 
f. 
The proponent has indicated its costs for developing the proposal in the 
34 
prescribed manner. 
35 
36 
(4) Notwithstanding compliance by any government agency or LGU with the 
37 
provisions of subsection (3) Section 8 of this Act, the ICC may direct a government 
38 
agency or LGU not to proceed with its consideration of an unsolicited proposal until 
39 
such time as the latter satisfies the approving authority that: 
40 
41 
a. It has access to adequate resources to properly assess the proposal, to conduct 
42 
the evaluation of comparative proposals, to conduct negotiations and to 
43 
oversee implementation; and 
44 
b. The proposal meets such requirements related to the public interest as may be 
45 
prescribed. 
46 
47 
(5) All unsolicited proposals shall be subject to the comparative proposals after 
48 
approval by the approving authority, in the manner as may be prescribed. 
49 
50 
(6) A government agency of LGU may, during its negotiation and before issuing a 
51 
request for comparative proposals, negotiate with the proponent that the latter be 
52 
compensated for the cost of developing the proposal and to submit the proposal to 
53 
competitive bidding procedures. The government agency of LGU shall introduce, as 
54 
part of the bidding conditions, a requirement that the winning bidder (if not the original 
55 
proponent) reimburse the original proponent of its costs in developing the proposal or 
56 
for such amount as the government agency or LGU and the proponent may agree 
57 
beforehand in writing. 
5 


I 
2 
(7) Non-compliance with the provision of subsection (3) hereof shall be ground for 
3 
declaring a contract null and void. 
4 
5 
Sec. 9 Contract and Public Disclosure.- (1) Reproduction of copies of all contracts 
6 
concluded in terms of this Act shall be the responsibility of the government agency or 
7 
LOD. The said government agency or LOU is required to forward a copy of the signed 
8 
agreement to the ICC for record purposes. 
9 
10 
(2) The grant of access to the signed agreements by the public shall be the 
II 
responsibility of the government agency or LOU. 
12 
13 
Sec. 10. Validity ofContracts.- (I) No party shall in any proceedings before any court, 
14 
allege the invalidity of any contract concluded under this Act on the grounds of non-
15 
compliance with the provision of this Act or its IRR after a period of of ninety (90) 
16 
days has elapsed from the date of publication of the approval of the government-
17 
procured project in the Official Oazette. 
18 
19 
Sec. 11. Contract Termination.- In the event that a project is revoked, cancelled or 
20 
terminated by the government through no fault of the project proponent or by mutual 
21 
agreement, the project proponent shall be compensated by the government as provided 
22 
for in the contractual agreement. 
23 
24 
In cases where the government defaults on certain major obligations in the 
25 
contract and such failure cannot be remedied or if it can be remedied, shall remain 
26 
unremedied for an unreasonable length of time, the project proponent may, by prior 
27 
notice to the concerned government agency or LOU, specifying the turn-over date, 
28 
terminate the contract. The private proponent shall likewise be compensated by (he 
29 
government according (0 the provisions of the contractual agreement. 
30 
31 
Sec. 12. Investment Promotion. - There shall be established a build-operate-and-transfer 
32 
center to be attached as a unit to the Department of Trade and Industry (DTI) to be 
33 
known as the Public Partnership Center (PPC) which shall have the following 
34 
responsibilities: 
35 
36 
a. Promote and market the government's private-sector investment program, 
37 
including the formulation and implementation of a promotion and marketing 
38 
plan, providing service as an information center for investors/developers as well 
39 
as for government agencies; 
40 
b. Participate in the technical working group (TWO) that may be established by the 
41 
IRR Committee; 
42 
c. Perform business development and investment related activities in support of the 
43 
other functions and mandate of the DTI; and 
44 
d. Perform such other functions as may be prescribed under the IRK 
45 
46 
Sec. 13. Liabilily.- In accordance with Section 38, Chapter 9 of the Administrative 
47 
Code of 1987, the head of the government agency shall not be held liable for acts done 
48 
in the performance of his official duties, to undertake the purposes of implementing this 
49 
Act or its IRR unless there is a clear showing of bad faith, malice or gross negligence. 
50 
51 
Sec. 14. Implementing Rules and Regulations. - (1) The IRR issued by virtue of 
52 
Republic Act No. 6957 as amended by Republic Act No. 7718 shall reamin in full force 
53 
and effect until repealed. 
54 
55 
(2) The IRR committee may, subject to the approval of the NEDA Board and after 
56 
conducting public consultations and publication as required by law, issue the IRR to 
6 


I 
provide for the implementation of this Act in the most expeditious manner. The 
2 
committee may, as needed, update such IRR from time to time. 
3 
4 
(3) Without limiting the generality of the foregoing, the IRR may provide for: 
5 
6 
a. Contractual arrangements and repayment schemes that may be entered into 
7 
this Act; 
8 
b. Areas in which private investment may be solicited; 
9 
c. Institutional arrangements for bid management; 
10 
d. Manner of preparation and content of documents, including, clarifications and 
11 
pre-bid conferences; 
12 
e. Qualifications or proponents, contractors, bidders, and facility operators; 
13 
f. 
Procedures for competitive bidding; 
14 
g. Procedures for direct negotiation; 
15 
h. Procedures for unsolicited proposals; 
16 
i. 
Contract negotiation and award; 
17 
J. 
Contract approval and implementation; 
18 
k. Investment incentives, government guarantees, support and undertaking; 
19 
l. 
Contract management, coordination, monitoring and auditing; 
20 
m. The powers, functions and duties of concerned agencies; 
21 
n. Any other matter required for the expeditious implementation of this Act. 
22 
23 
(4) For the purposes of this section, "committee" means a committee created by the 
24 
President comprising one representative from each ofthe following: 
25 
26 
a. Department of Public Works and Highways (DPWH); 
27 
h. Department of Transportation and Communication (DOTC); 
28 
c. Department of Energy (DOE); 
29 
d. Department of Trade and Industry (DTI); 
30 
e. Department of Finance (DOF); 
31 
f. Department ofInterior and Local Government (DILG); 
32 
g. National Economic and Development Authority (NEDA); 
33 
h. Department of Budget and Management (DBM); and 
34 
i. Office of the President (OP). 
35 
36 
Sec. 15. Repealing Clause.- Any law, particularly Republic Act No. 6957 as amended by 
37 
Republic Act No. 7718, Presidential Decree, Executive Order, Rules and Regulations, 
38 
contrary to or inconsistent with this Act are hereby repealed or modified accordingly. 
39 
40 
Sec. J 6. Separabilily Clause. - If any provision of this Act is held invalid, the other 
41 
provisions not alIected thereby shall continue to be in full force and effect. 
42 
43 
Sec. 17. Effectivity Clause.- This Act shall take effect fifteen days after its publication in 
44 
the Official Gazette and in at least two (2) newspaper of general circulation. 
45 
46 
47 
Approved, 
48 
49 
7