Republic of the Philippines
House of Representatives
Queson City, Metro Manila

Seventeenth Congress
First Regular Session

1346

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 turn 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.


Hence, reforms to the BOT processes are necessary to better address the
needs of public-private partnerships (PPP) investors. For the country to bulla on its
recent economic gains and to ensure the proper investment environment in our
country, the private sector must be further encouraged to make investments
through a modernized and enhanced PPP law.

This bill seeks to create an enabling environment for PPPs by providing
liberalized government regulations and procedures, and by expanding the coverage
of PPP to include joint ventures, and operation and maintenance contracts. Among
them, under the bill, temporary restraining orders, preliminary injunctions or
preliminary mandatory injunctions against any PPP project cannot be issued by any
other court except the Supreme Court but with a validity period of only six months.

Moreover, this measure proposes the following policy and procedural
amendments to the law :

1) 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;

2) 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;

3) 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; and,

4) 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,

Finally, with the additional incentives provided under this bill, we can attract
more PPPs to help the government hasten and improve the construction of public
infrastructure and services to boost the growth of the Philippine economy.

This bill was filed in the 16" Congress and was approved by the Committee
‘on Public Works and Highways. It was then approved on Third Reading by the body
but, however, was re-committed for approval on 2™ Reading on some technical
issues. Unfortunately, it was never passed for lack of material time.

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

Representative
2" District, Antipolo City


pw

Republic of the Philippines
Bouse of Repre
Queson City, Metro Manila

_ Seventeenth Congress
First Regular Session

1346

House Bill No. _>

Introduced by HON. ROMEO M. ACOP

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

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

SECTION 1.This Act shall be known as the “Public-Private Partnership Act”.

SEC. 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 private 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 protects the public interest by ensuring fair and reasonable pricing and timely
delivery of quality infrastructure, goods and services through equitable risk allocation inherent in
projects implemented under this Act,

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.

SEC. 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)  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,

(4) 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;


(e)

oO

(k)

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 circumstanc

Contractor refers to any person, who may or may not be the project proponent, and
who shall undertake the actual construction of an infrastructure facility of a PPP

project;

Cooperation Period refers to the period of operation of an infrastructure facility.
Facility Operator refers to a person registered with the Securities and Exchange
Commission or Department of Trade and Industry, who may or may not be the
project proponent, who is responsible for all aspects of operation and maintenance of
an infrastructure facility, including the collection of tolls, fees, rentals or charges
from facility users;

Government Undertakings refer to any form of support, contribution, assistance,
Viability Gap Funding (VGF), among others, which the government may provide to a
solicited PPP project;

Grantors refer to an implementing agency and another government agency that own
the project assets or franchise;

Implementing Agency refers to any of the various units of the Government of the
Republic of the Philippines, including a department, bureau, office, instrumentality,
government owned or controlled corporation (GOCC) as defined under Republic Act
No. 10149, otherwise known as GOCC Govemance Act of 2011 state universities and

colleges (SUCs), or a local government or a distinet unit therein;


0)

(m)

(n)

(0)

(p)

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 govemmental or proprietary

’) 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, warehouse:

information technology systems and_ infrastructure,

education and health facilities, sewerage, drainage, and
ii) infrastructure related service ~ includes dredging, climate change mitigation and
adaptation measures and other related services;

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:

Person refers to an individual, sole proprietorship, partnership, corporation or any
other form of organization, whether domestic or foreign;

Project Cost refers to total capital cost, financing and other expenses for the design,
construction, operation, and maintenance of an infrastructure facility of a PPP project
Project Proponent refers to the private person who shall have contractual

responsibility to undertake a PPP project:


(@)

()

(s)

0)

(u)

Rate of Return 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;

Services refer to services for or related to infrastructure facilities such as construction
supervision, management, operation and maintenance and related services, and other
technical services, which may be included as part ofa PPP project;

Solicited PPP Project refers to priority projects identified by the implementing
agency

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.

Viability Gap Funding (VGE)refers to such financiai support tne 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.

SEC. 4.Contractual Arrangements. PPP Projects may be undertaken through any of

the following contractual arrangements

(a)Build-and-Transfer refers to a contractual arrangement whereby the project proponent

undertakes the financing and construction of a given infrastructure facility and after
the completion thereof, turns it over to the implementing agency concerned, which

shall pay the project proponent on an agreed schedule its total investments expended


(b)

(c)

(d)

(ce)

(f)

on the project, plus a rate of retum 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:
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 concemed on a lease
arrangement for a cooperation period, after which ownership thereof is automatically
transferred to the implementing agency concemed;
Build-Own-and-Operate refers to @ contractual arrangement whereby a project
Proponent is authorized to undertake a PPP project, specifically to finance, construct,
wn, operate and maintain an infrastructure facility from which the project proponent
1s allowed to recover its total investment, operating and maintenance costs plus a
Tetum thereon by collecting tolls, fees, rentals or other charges from facility users:
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:
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 agency:
Contract-Add-and-Operate refers to 2 contractual arrangement whereby, the project

Proponent adds to an existing infrastructure facility which it is renting from the


(g)

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;

Develop-Operate-and-Transfer refers to @ 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:

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 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 a performance-based management or service fee during
the cooperation period;

Rehabilitate-Operate-and-Transfer refers to a contractual arrangement whereby an

existing infrastructure facility is tured 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

(k) 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,

Other variations may be allowed upon prior approval by the Investment Coordinating

Committee (ICC).

SEC. 5. Authority of 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.

SEC. 6. Priority Projects. Priority projects that will be implemented under this Act shall
be consistent with the Philippine Development Plan 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


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.

SEC. 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
National Economic Development Authority (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
For national projects that have impact on a particular region, the implementing agency
shall secure the endorsement of the concemed Regional Development Council (RDC)
prior to submitting the project for approval to the Approving Body. The RDC shall
have thirty (30)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 RDC.

B. 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, ICC, and the NEDA Board.

The confirmation of the project by the local development council concemed shall be
based on a review of the project documents submitted to it by the local government
unit 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: Provided, 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 concemed 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 cost based on its total cost under the

IRR of this Act for the purpose of evading the required approval under the appropriate
category shall be dealt with administratively and criminally under this Act and its IRR,
and other existing applicable laws. Such act committed by the private project
proponent and its concemed 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.

SEC. 8. Project Development and Monitoring Facility (PDMF). 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 Executive Order (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.


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 National Economic and Development Authority (NEDA)
Department of Finance (DOF), Department of Budget and Management (DBM) and
the PPP Center

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

Procedure. The procurement of consulting services for the PDMF shall be conducted

through Republic Act (RA) 9184, otherwise known as the Government Procurement

Reform Act, and its associated implementing rules and regulations (IRR), subject to

existing laws on the practice of professions reserved 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

SEC. 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
When a project proponent submits an unsolicited proposal, the implementing agency may
either:
(1) Accept the unsolicited proposal on a negotiated basis, subject to the following
conditions
(a) No direct government guarantee, VGF, government subsidy or equity, or
right-of-way is required; Provided, That the implementing agency shall
facilitate the acquisition of the right-of-way; and
(b) Guided by the principles of transparency and competitiveness, the
implementing agency has invited the submission of comparative proposals
by publication 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: Provided, That, no other proposal is received
within a period not 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
(2) 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:

(a) 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

(b) paid in full by the winning project proponent as a requirement for the
award of the contract.

(3) 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 furnish it with a copy of the
proposal. The PPP Center shall provide assistance to the implementing agency in the evaluation
of unsolicited proposal

SEC. 10. Public Bidding of Projects

(1) Upon approval of PPP projects as mentioned in Section 7 of this Act, the head of the
implementing agency concemed 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

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 shall be transparent and competitive,
including the conduct of one-on-one meetings with prequalified bidders.

The contract shall be awarded to the bidder who has passed the pre-qualification 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

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

(2) A bid is considered a single complying and responsive bid submission if it falls under
any of the following circumstances

(a) If, after advertisement, only one bidder applied for prequalification and it
meets the prequalification requirements, after which it is required to submit
a bid or proposal which is subsequently found by the implementing agency
to be complying;

(b) If, after advertisement, more than one bidder applied for prequalification but

only one meets the prequalification requirements, after which it submits a


(c)

(a)

bid or proposal which is found by the implementing agency to be
complying;
If, after prequalification of more than one bidder, only one submits a bid

which is found by the implementing ag

ncy to be complying; or

If, after prequalification, more than one bidder submits bids but only one is

found by the implementing agency to be complying,

(3) In all stages of the procurement process, the following protest protocol shall be

strictly followed:

(a)

(b)

Decisions of the Prequalification, Bids and Awards Committee (PBAC) may
be questioned by filing a motion for reconsideration within a period
prescribed in the IRR of this Act

The decision of the 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 concemed and paying a
non-refundable appeal fee in an amount equivalent to no less than ¥ of 1%

of the project cost within a period prescribed in the IRR of this Act

If the head of the implementing agency in the immediately precedit
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


(c) The decision of the Department Secretary in the immediately preceding
paragraph (b) may be questioned by the filing of an appeal to the Office of
the President

(4) PPP PBAC ~ The head of the implementing agency shall create a PPP PBAC 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
PBAC 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 PBAC constituted
for national PPP projects shall also include other relevant govemment agencies as may be
determined in the IRR of this Act.

In no case shall any appeal taken from any decision rendered pursuant to this Act stay or
delay the bidding process. An appeal must first be resolved before any project is awarded

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 may proceed to negotiate with 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

SEC. 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.

SEC. 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.

SEC. 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 LGU

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

SEC. 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

SEC. 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
concemed. 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

SEC.16, Prohibition on the Issuance of Temporary Restraining Orders or Injunctions
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:

(a) Bidding, rebidding or declaration of failure of bidding of PPP projects, either
national or local;

(b) Qualification or disqualification of bidders:

(c) Awarding of PPP contract;

(d) Acceptance of any unsolicited PPP project proposal, even if not acted upon by the
implementing agency concemed under Section 9 of this Act;

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

(8 Construction, operation and maintenance of any PPP project;


(g) Commencement, executi

n, implementation, termination or rescission of any PPP
contract; and
(h) Undertaking or authorization of any other lawful activity necessary for such PPP
project or 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.

‘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.

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

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

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.

SEC. 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,

SEC. 18. Project Supervision. Every PPP project undertaken under the provisions of
this Act shall be in accordance with the designs, plans, specifications, standards, and costs
approved by the implementing agency and Approving Body, and shall be under the supervision
of the implementing agency concemed.

SEC. 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.

SEC. 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 LGU 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 Republic Act 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:(i) the total project cost falls within the threshold set by the ICC; (ii) the project has
direct and indirect economic impact which shall not be less than the threshold set by the ICC;
(ii) the project will have direct and indirect economic impact beyond the LGU where it is
located; and (iv) the project can create new jobs

SEC. 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.

SEC. 22. Institutionalization of PPP Center. To achieve the goals of this Act, the PPP
Center created under Executive Order No. 8, series of 2010, as amended by Executive Order No.
136, series of 2013, is hereby institutionalized. It is hereby 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:

(a) Assist implementing agencies in identifying, developing, prioritizing and

maintaining a pipeline of PPP projects

(b) Provide advisory services, technical assistance, trainings, and capacity development

toi

plementing agencies in all PPP-related matters, and act as a procurement agent

upon the request of an implementing agency

(c) 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;


(e)

(0)

(h)

(i)

G)

(k)

(0)

(m)

(n)

(0)

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.

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,

Serve as a link between the government and the private sector:

Promote and market PPP programs and projects, in collaboration with other
government promotion agencies:

Sit as member of NEDA-Infrastructure Committee (INFRACOM), ICC, and other
inter-agency bodies where a PPP project is a major concem:

'ssue advisory opinions and interpret the provisions of this Act and its IRR, relating
solely to technical aspects of PPP;

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;

Review PPP contracts prior to execution, and provide and transmit copies of duly
executed PPP contracts to Congress;

Act as Secretariat to the PDMF Committee, PPP Goveming Board, and ICC insofar
as PPP projects are concerned

Maintain an integrated projects’ bank to serve as an interactive database of all

current and past projects;


(p) Perform such other functions as may be necessary to achieve the objectives and
purposes of this Act
‘The PPP Center shall report directly to the PPP Governing Board and shall be attachedto

the NEDA for purposes of policy and program coordination.

SEC, 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:

(1) _ The Secretary of Socio-Economic Planning as Chairperson;

(2) _ The Secretary of the Department of Finance as Vice-Chairperson;

(3) The Secretary of the Department of Budget and Management:

(4) The Secretary of the Department of Justice;

(5) The Secretary of the Department of Trade and Industry;

(6) The Executive Secretary;

(7) The Secretary of the Interior and Local Government,

(8) The Executive Director of PPP Center; and

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

The principal members of the Board may designate their respective altemates, who shall be

the official next-in-rank to them, and whose acts shall be considered the acts of their princi

‘The presence of the Chairperson and four (4) other members of the Board shall constitute a

quorum and a majority vote of the members 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.

SI

. 24. 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 term of six 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, 2019 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:

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

(b) Recommend to the PPP Governing Board such policies and measures which he or
she deems necessary for the effective exercise and discharge of the powers and
functions of the PPP Center;

(©) Sit as an ex-officio member of the PPP Governing Board, INFRACOM, ICC and
other inter-agency bodies where a PPP project is a major concem ; and

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

SEC. 25. 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.

SEC. 26. Creation of a Public-Private Partnership (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;

©) interest earnings from the contingent liability fund; and

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 Department
of Finance (DOF) shall regularly monitor and review the viability of the PPP Contingent
Liability Fund in relation to the magnitude of PPP projects undertaken by govemment, 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 the 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 the 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
SEC. 27. Penal Provision. Any person, whether private individual or public officer or
employee, who commits any of the acts hereunder proscribed, 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;
(b) Falsification or insertion of certain provisions in the execution copy of the contract
which are materially and substantially different from the approved final draft
contract

SEC. 28. Miscellaneous Provisions.


(a) 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.

(b) Joint Venture Agreements.For joint venture arrangements, the ownership of the
infrastructure facility may be transferred to either the implementing agency or to the
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
retum on investment of either party shall be in proportion to their respective
contribution

(c) 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.

(d) Wind-up and Transfer Measures. The PPP contract shall provide, as appropriate, for

(i) Mechanisms and procedures for the transfer of assets to the implementing

agency;


(ii) 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;

(iii) ‘The transfer of technology required for the operation of the infrastructure
facility;

(iv) The training of the implementing agency's personnel or of a successor in
the operation and maintenance of the infrastructure facility; and

(v) 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

(e) 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

(f) Preferential Hiring of Filipino Workers. For the construction stage of infrastructure
facilities where the contractor is a foreigner, Filipino labor shall be employed or hired
in the different phases of construction where Filipino skills are available.

(g) Contracts, Procedures, And Authority Not Affected by this Act. This Act shall not
affect
(i) PPP contracts entered into, and selection procedures undertaken, by implementing

agencies prior to the effectivity of this Act in accordance with the relevant laws,

regulations, guidelines, and ordinances; and


(ii) The authority of LGUs to enact their own PPP ordinances that are not inconsistent

with this Act and its IRR

SEC, 29. 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 House
Committee on Public Works and Highways, the House Committee on Appropriations, the Senate
Committee on Public Works, and the Senate Committee on Finance.”

SEC. 30. 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.

SEC. 31. 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

Joss of seniority or rank or decrease in emoluments,

SEC. 32. Separability Clause. If any provision of this Act is held invalid, the other
provisions not affected thereby shall continue in operation

SEC. 33. Repealing Clause. Republic Act No. 6957, Republic Act 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, Joint Venture Guidelines issued by LGUs, and PPP Codes
issued by LGUs, 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.

SEC. 34. 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,