Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City
NINETEENTH CONGRESS
First Regular Session
HOUSE BILL NO.________
______________________________________________________________________________
Introduced by Representative BERNADETTE HERRERA
AN ACT
STRENGTHENING PUBLIC-PRIVATE PARTNERSHIPS AND APPROPRIATING
FUNDS THEREFOR
Explanatory Note
While the existing Build-Operate-Transfer (BOT)/Public-Private Partnership (PPP) Law has
successfully generated several PPP projects, there is a need to strengthen the said law by making
PPP projects more commercially attractive to private investors and beneficial to the users and the
Government. PPP is suitable for major infrastructure projects that are financially viable to the
private sector and affordable by the facility users, such as expressways, railways, airports,
energy, water resources, and information and communication technology projects. PPP can
complement the limited Government budget resources for infrastructure which can then be
reallocated to more social-oriented and non-financially viable projects.
Among the current major issues that should be addressed are the following:
a.
Issues on accessibility to people and environmental sustainability of PPP Projects.
b. Inadequate transparency in PPP transactions.
c.
Need to include Joint Venture in the PPP Act.
d. Insufficient awareness on other modes of financing PPP Projects.
e.
Limited approving authorities and thresholds for National and Local PPP Projects.
f.
Need for clear guidance on bid parameters to be used by the Implementing Agencies.
g. Need for clear guidelines on forms of subsidy and maximum limit for solicited PPP Projects.
September 8, 2022
10:48 am
4584


h. Consideration of priority projects for unsolicited proposals.
i.
Delays in infrastructure delivery.
This Bill will address these issues through a new PPP Act which has the following key
provisions:
a.
Declaration of Policy: (1) foster private participation through a competitive climate with
reduced costs of doing business, proper incentives and government undertakings; (2) protect
public interest through affordable, accessible, and efficient public services; (3) provide fair and
reasonable pricing and timely delivery of quality infrastructure through equitable risk allocation;
(4) ensure that PPP Projects yield sufficient value for money; (5) integrate environmental
sustainability and value for communities; (6) determine appropriate financing by considering
budget availability, timelines, stakeholder commitments, and market capacity; (7) affirm open,
fair, transparent, and competitive selection in securing private investment in PPP.
b. Scope: includes Joint Ventures within the coverage of the proposed new law.
c.
Priority Projects: (1) applies the following principles in identifying priority projects:
effectiveness
in
meeting
government
objectives,
value
for
money,
accountability
and
transparency,
consumer
rights,
affordability,
public
access,
safety,
security;
(2)
uses
Multi-Criteria Analysis.
d.
Approval of PPP Projects: (1) increases approval thresholds; (2) sets parameters in
determining Project Cost. (3) authorizes PPP Center to approve projects up to P5 billion; (4)
approval of local PPP projects by Sanggunians; (5) guidelines in setting financial bid parameters.
e.
Solicited Proposals: (1) provides for open, fair, transparent, and competitive public
bidding; (2) allows government undertakings with prior approval; (3) affordable user fees and
efficient services in awarding a contract; (4) allows electronic bid submission.
f.
Unsolicited Proposals: (1) allows unsolicited proposals involving priority projects (2)
automatic conversion of unsolicited proposal for a priority project requiring government
undertaking into a solicited bid; (3) use of best-and-final-offer system in comparative challenge;
(4) reimbursement of development costs incurred by the original proponent.
g.
Contract Management and Risk Mitigation and Contingent Liabilities: (1) requires a
Contract Management and Risk Mitigation Plan; and (2) caps the amount of contingent
liabilities.


h.
Project Supervision and Monitoring, Impact Evaluation, Value Engineering, and Building
Information Modelling: (1) institutional roles on these functions; (2) application of value
engineering; and (3) use of Building Information Modeling (BIM) or similar tool.
i.
Investment Incentives: grants existing incentives to PPP projects.
j.
Principles of Compensation for Private Proponent: sets the principles in determining the
methods and terms of compensation.
k.
Investment Recovery Scheme: (1) repayment mechanism for revenue-based and
availability-based PPP projects; and (2) guidelines in determining the maximum rate of return.
l.
Regulation of PPP Projects: through a regulatory body or contract.
m.
Variation, Expansion, or Extension of PPP Project: (1) allows contract variation; and (2)
allows expansion/extension of an existing project up to 50% without further bidding.
n. Contract Termination: gives contracting parties right to compensation in contract termination.
o. TROs and Injunctions: Includes proscription against issuance of such Orders and Injunctions.
p.
PPP Center: (1) expands its functions; and (2) attaches it to the Department of Finance.
q. Risk Management Fund: creates this Fund and strengthens its governance framework.
r.
Establishment of a PPP Unit: mandatory in every Implementing Agency
s.
Miscellaneous Provisions: (1) automatic grant by regulatory body of franchise, permits,
license, certificates, or similar authorizations; standardization of Real Property Tax (RPT)
valuation and exemption of Greenfield PPP Projects from payment of RPT; (2) exempts PPP


projects from payment of transfer taxes; (3) standard timelines and requirements for
endorsements, approvals, and permits; (4) mandatory dispute avoidance and alternative dispute
resolution mechanisms in contracts; (5) prohibits national Implementing Agency from
implementing a PPP project that it regulates; (6) allows alternative sources of financing like
Green Financing, corporate or project bonds and securities, and other forms of capital market
financing; and (6) land value capture strategies.
Early approval of this Bill is earnestly sought.
BERNADETTE “BH” HERRERA


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City
NINETEENTH CONGRESS
First Regular Session
HOUSE BILL NO.________
Introduced By Representative BERNADETTE HERRERA
___________________________________________________________________________
AN ACT STRENGTHENING PUBLIC-PRIVATE PARTNERSHIPS AND
APPROPRIATING FUNDS THEREFOR
Be it enacted by the Senate and the House of Representatives of the Philippines in Congress
assembled:
SECTION 1. Short Title. – This Act shall be known as the “Public-Private Partnership
(PPP) Act of 2021.”
SEC. 2. Declaration of Policy. – Section 20, Article II, of the Constitution provides that
the State recognizes the indispensable role of the private sector, encourages private enterprise,
and provides incentives to needed investments. Furthermore, it is the declared policy of the State
to recognize the private sector as the main engine for national growth and development, and
provide an enabling environment for private sector participation to mobilize private resources for
the purpose of financing, designing, constructing, operating and maintaining development
programs and projects normally undertaken by the government. Aside from financial incentives
as provided by law, the government shall foster robust private sector participation by ensuring a
competitive climate through reduced costs of doing business by providing cost-effective and
4584


time-saving government regulations and procedures and specific government undertakings in
support of the private sector without endangering the county’s fiscal strength.
It is further declared that the State shall protect the public interest by providing
affordable, accessible, and efficient public services. Subject to reasonable rules and under the
guiding principle of full public disclosure of all transactions, the State shall ensure fair and
reasonable pricing and timely delivery of quality infrastructure and services through equitable
risk allocation inherent in PPP Projects.
Furthermore, it is declared that the State shall ensure that all PPP Projects yield sufficient
value for money to optimize the use of resources in order to achieve better quality of PPP
Projects at lower costs. It shall also take appropriate measures to integrate environmental
sustainability and value for the communities involved in the evaluation, planning, and
implementation of PPP projects.
The State shall pursue a policy of maintaining a reasonable balance on infrastructure
financing through all means available that will most effectively meet the government’s
objectives. In optimizing value for money, the State shall determine the appropriate financing by
taking into account project drivers and constraints like budget availability, timelines, stakeholder
commitments, and market capacity. Alternative sources of financing may include appropriations,
official development assistance, and PPPs.
Finally, it is declared that the State shall affirm open, fair, transparent, and competitive
selection as the central tenet for securing private investment in PPP Projects. It shall implement a
policy of full public disclosure of all its transactions involving public interest, subject to
limitations under existing laws.


SEC. 3. Scope and Application. – This Act shall apply to all PPP Projects undertaken by
Implementing Agencies through PPP contracts with a Private Proponent, including Joint
Ventures, as defined under this Act. It shall likewise apply to and be enforceable among all
parties to said PPP contracts.
Implementing Agencies are hereby authorized to undertake PPP Projects through PPP
contracts with a Private Proponent in accordance with this Act.
SEC. 4. 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)
Blended Finance – refers to the strategic use of combined concessional funds from
development institutions or partners and commercial funds from lenders and private
investors to provide financing for PPP Projects.
(c)
Brownfield Project - refers to a project with existing development programs or
projects;
(d)
Co-financing – refers to collaborative financing of the same PPP Project by two or
more banks or other lending institutions.
(e)
Construction - refers to new construction, rehabilitation, improvement, expansion,
alteration, and related works and activities including the necessary supply and
installation of equipment, materials, labor and services, and related items;
(f)
Contractor - refers to any entity allowed under Philippine laws, which may or may
not be the Private Proponent, and which shall undertake the actual construction or
supply of equipment for the PPP Projects;


(g)
Cooperation Period - refers to the period during which the PPP contract is in effect;
(h)
Facility Operator - refers to an entity with legal personality authorized under existing
laws, which may or may not be the Private Proponent, that shall be responsible for all
aspects of operation and maintenance of a facility, including, but not limited to, the
collection of tolls, fees, rentals or charges from facility users;
(i)
Fair market value – refers to the estimated amount for which a property shall
exchange on the date of valuation between a willing buyer and a willing seller in an
arm’s length transaction which is a transaction between independent, unrelated parties
involving no irregularity, after proper marketing wherein the parties had each acted
knowledgeably, prudently, and without compulsion: Provided, that fair market value
may be higher than the value reflected in the Schedule of Market Values (SMV)
enacted by the concerned Sanggunian or any other valuation undertaken by a
government agency for whatever purpose prior to the transaction
(j)
Government Undertakings - refers to any form of contribution and support, which
the government may extend to a Private Proponent for the implementation of PPP
Projects;
(k)
Greenfield Project - refers to a pioneer development program or project;
(l)
Green Finance – refers to investments that create environmental benefits in support
of green growth, low-carbon, and sustainable development.
(m)
Implementing Agency - refers to a department, bureau, office, instrumentality,
commission, authority of the national government, state universities and colleges
(SUCs),
local
government units (LGUs), or government owned-or-controlled
corporation (GOCC) as defined in Republic Act No. 10149, including government


instrumentalities with corporate powers (GICP), government corporate entities
(GCE), government financial institutions (GFls), which is authorized to undertake any
PPP Project;
(n)
Joint Venture (JV) - refers to a contractual arrangement whereby both the
Implementing Agency and the Private Proponent contribute to pool resources
comprising of capital, services, or assets (including equipment, land or intellectual
property) to jointly undertake a specific investment activity. The investment activity
shall be for the purpose of accomplishing a specific goal with the end view of
facilitating private sector initiative in a particular industry or sector, and eventually
transfer the activity to either the private sector under competitive market conditions or
to the government. The JV involves a community or pooling of interests in the
performance of the investment activity, and each party shall have the right to direct
and govern the policies in connection therewith with the intention to share both
profits, and risks and losses subject to agreement by the parties. A JV may be
undertaken through a contract or by creating a JV entity;
(o)
Local PPP Project - refers to a PPP Project that shall be undertaken by an LGU;
(p)
National PPP Project - refers to a PPP Project that shall be undertaken by the
national government, GOCC, GICP, GCE, GFI, or SUCs;
(q)
Operation and Maintenance - refers to activities necessary and incidental to preserve
or restore the operational status of an asset or system based on specified performance
indicators;
(r)
PPP Project - refers to infrastructure or development programs, projects, activities,
facilities, and related services normally financed and undertaken by the public sector


but which shall now be wholly or partly financed, designed, built, operated and
maintained by the private sector;
(s)
Private Proponent - refers to the private sector entity which shall have contractual
responsibility for the PPP Project. The Private Proponent may be Filipino or
foreign-owned, and may engage the services of a foreign Contractor or foreign
Facility Operator, subject to requirements and limitations provided under the
Philippine Constitution;
(t)
Subsidy - refers to an agreement whereby the Implementing Agency shall: 
a.
defray, pay for, or shoulder a portion of the Project Cost or the expenses and
costs in operating or maintaining the project;
b. contribute any property or assets to the project;
c.
waive or grant special rates on real property taxes on the project during the term
of the contractual arrangement; and/or
d. waive charges or fees relative to business permits or licenses that are to be
obtained for the construction of the project,
all without receiving payment or value from the Private Proponent and/or Facility
Operator for such payment, contribution, or support: Provided, That under no
circumstance shall the total subsidy exceed fifty percent (50%) of the total Project
Cost;
(u)
Viability Gap Funding (VGF) - refers to such financial support the government may
provide to a concession-based PPP Project with the objective of making fees


affordable, while improving the commercial attractiveness of the project, excluding
costs of right-of-way, resettlement, and real estate taxes.
SEC. 5. Public-Private Partnership. – A PPP is a contractual arrangement between the
Implementing Agency and the Private Proponent for the financing, designing, constructing,
operating and maintaining, or any combination thereof, of PPP Projects which are normally
provided
by
the
public
sector.
PPP Projects may be undertaken through contractual
arrangements,
including
joint
ventures,
authorized
under the Implementing Rules and
Regulations (IRR) of this Act.
SEC. 6. Priority Projects. – Implementing Agencies shall include in their development
plans, strategies, and investment programs priority PPP Projects. In identifying those projects,
the Implementing Agencies shall be guided by the following principles: effectiveness in meeting
government objectives, value for money, accountability and transparency, consumer rights,
affordability, public access, safety, and security. Priority projects shall be consistent with the
national and local development and investment plans.
The Implementing Agencies shall submit their list of PPP Projects or any update thereto
to the PPP Center, referred to in Section 22 of this Act, for information. Each proposed PPP
Project shall be subject to the approval of the appropriate Approving Body.
In addition, the Implementing Agency shall adopt methodological guidelines for project
screening as authorized by the PPP Governing Board pursuant to this Act. The guidelines shall
define
a
multi-criteria
analysis
that
integrates
financial,
economic,
technical,
legal,
environmental, and social standards to attract Blended Finance, Co-financing, and Green Finance
for Priority Projects.


The PPP Center shall ensure that the Congress of the Philippines and the public shall be
provided with adequate and timely information on PPP Projects.
SEC. 7. Approval of PPP Projects. – (a) The approval of PPP Projects under this Act
shall be in accordance with the following:
(1) National PPP Projects. National PPP Projects costing up to five billion pesos
(P5,000,000,000.00) shall be approved by the PPP Center unless overturned by the Investment
Coordination Committee of the National Economic and Development Authority (ICC-NEDA)
within thirty (30) days from the date of approval. Projects costing more than five billion pesos
(P5,000,000,000.00) shall be approved by the NEDA Board, upon prior recommendation by the
ICC-NEDA. The ICC-NEDA may, from time to time, update the aforementioned thresholds
when the need arises. Project cost shall be determined as follows:
(i)
For Greenfield Projects, it shall refer to the total capital expenditure;
(ii)
For Brownfield Projects, it shall refer to the sum of total capital expenditure
and remaining book value of the asset or system;
(iii)
For Operation and Maintenance agreements:
a.
It shall refer to the remaining book value of the asset or system in case
of concession-based PPP Project; and
b. It shall refer to the present value of total government payments in case of
availability-based PPP Project;
(iv)
For JV projects, it shall refer to the total amount of contributions of the
government to the project in present value with discount rate as prescribed
by the appropriate Approving Body. The said discount rates shall be
regularly published in the NEDA website.


(2) Local PPP Projects. Local PPP Projects shall be approved by the local Sanggunians,
regardless of the project cost, Provided, That Local PPP Projects involving Government
Undertakings using national government funds shall require the approval of the PPP Center for
projects up to five billion pesos (P5,000,000,000.00) in project cost and by the ICC-NEDA for
projects with project cost of above five billion pesos (P5,000,000,000.00). The disapproval of the
requested national Government Undertakings shall not preclude the local government from
pursuing
the
PPP
project
without
the
requested
national
Government
Undertakings,
notwithstanding
any laws, rules, or regulations to the contrary. National Government
Undertakings shall include, among others, the following items be provided by the national
government to a Local PPP Project: (i) Guarantees on Demand, (ii) Guarantees on Private Sector
Return, (iii) Guarantees on Loan Repayment; (iv) Viability Gap Funding and other forms of
Subsidy; (v) payment of Contingent Liability, including Termination Payments.
Provided, further, That permits, clearances, licenses, or endorsements from national
government agencies required for Local PPP Projects under laws, rules, and regulations, shall not
be considered as Government Undertakings by the national government for Local PPP Projects.
The Approving Body shall assess all PPP Projects based on its overall feasibility analysis and
accord paramount importance on the affordability of user fees and efficiency in public service.
To ensure that all risks associated with PPP Projects are managed and mitigated accordingly, all
PPP contracts to be entered into by the Implementing Agency shall adhere to the principles
stipulated under the Generic Preferred Risk Allocation Matrix (GPRAM) issued by the
ICC-NEDA.


The Implementing Agency shall set the financial bid parameters to determine the most
advantageous bid based on the following guidelines which shall be included in the bidding
documents:
1. For Revenue-based PPP Project which does not require any form of Subsidy, the
bidding parameter shall be the lowest starting tariff or user charge below a
prescribed ceiling, or highest revenue share above a prescribed floor, as may be
appropriate;
2. For solicited Revenue-based PPP Project which requires Viability Gap Funding,
the bidding parameter shall be the lowest VGF or starting tariff or user charge
below the prescribed ceiling;
3. For
Availability-based
PPP,
the
bidding
parameter
shall
be
the
lowest
amortization payment or other equivalent forms;
4. For Operations and Maintenance PPP Project, the bidding parameter shall be the
lowest Operations and Maintenance fee.
(c) The Implementing Agency may consider other financial bid parameters
appropriate for a PPP Project, subject to the approval of the Approving Body.
(d) The appropriate Approving Body shall act on the project within thirty (30)
working days upon satisfactory compliance by the concerned Implementing Agency
with the requirements of the appropriate Approving Body. Failure of the appropriate
Approving Body to act on the project within the specified period shall be deemed an
approval thereof and the concerned Implementing Agency may proceed with the
procurement of the PPP Project.


SEC. 8. Solicited Proposals. – Solicited Proposals refer to submissions by the Private
Proponent to bid for priority PPP Projects through open, fair, transparent, and competitive public
bidding initiated by the Implementing Agency. Government Undertakings are allowed, subject to
the approval of the Approving Body.
The public bidding may be conducted in a single-stage or two-stage bidding process. The
prequalification documents, technical, and financial proposals shall be submitted in at least three
(3) separate envelopes. Electronic bid submission may also be allowed.
The contract shall be awarded to the bidder who has passed the prequalification stage
after having satisfied the prescribed minimum financial, organizational, and legal standards, has
passed the technical proposal evaluation, and has submitted the most favorable financial bid
based on the parameters defined in the bid documents. Affordable user fees and efficient public
services shall be of paramount importance in awarding a PPP contract.
The Implementing Agency shall declare failure of bidding in case of any of the
following:
a.
If no bids are received;
b. If there are no complying bids;
c.
If, after advertisement, only one bidder applied for and met the pre-qualification,
unless otherwise allowed by the ICC-NEDA.
The Implementing Agency may consider, on a negotiated basis, a single complying and
responsive bid in case of any of the following:
a.
If, after advertisement, more than one bidder applied for pre-qualification but only
one met the pre-qualification requirements;
b. If, after pre-qualification of more than one bidder, only one submitted a bid; or


c.
If, after pre-qualification, more than one bidder submitted bids but only one is found
by the Implementing Agency to be complying.
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 consider the next
technically and financially qualified bidder. In case the contract is awarded to the next
technically and financially qualified bidder, it shall be without prejudice to legal remedies
available to the Implementing Agency like forfeiture of bid security, withdrawal of award, and
such other remedies allowed under existing laws and the PPP contract.
The head of the Implementing Agency shall create a Bids and Awards Committee (BAC),
which shall be responsible for all aspects of pre-bidding and bidding process in solicited
proposals, or the comparative bidding process in unsolicited proposals. The composition of the
BAC shall be specified in the IRR of this Act which may include other relevant government
agencies.
Any change in control of the Private Proponent or composition of the consortium after
the submission of a solicited proposal shall be subject to the approval of the Implementing
Agency.
SEC. 9. Unsolicited Proposals. – Unsolicited Proposals refer to project proposals
submitted by a Private Proponent not in response to a formal solicitation or request issued by the
Implementing Agency.
In accordance with the provisions of this Section, the Implementing Agency may accept,
reject, or convert an unsolicited proposal into a solicited proposal, subject to the evaluation of
eligibility and merits of the project, and the qualifications of the Private Proponent who
submitted the unsolicited proposal.


An unsolicited proposal involving a priority project may be considered if the
Implementing Agency has not awarded any contract to implement such project. In case the
Implementing Agency has already incurred any development cost for the priority project, such as
the conduct of feasibility study, business case, and surveys, among others, for the last five (5)
years, the Private Proponent must undertake to reimburse the Implementing Agency of such
documented development costs. Reimbursable development costs for a specific priority project
shall be determined by the Implementing Agency.
An unsolicited proposal for a priority project which requires a Government Undertaking
may be accepted by the Implementing Agency: Provided, That such proposal shall be
automatically converted to a solicited bid.
An unsolicited proposal may also be accepted for a project that is not in the list of priority
projects: Provided, That it does not require any of the following Government Undertakings:
a.
Viability Gap Funding and other forms of Subsidy;
b. Payment of Right-of-Way related costs;
c.
Performance undertaking;
d. Exemption from any taxes as required by laws, except local taxes imposed by local
government units;
e.
Guarantee on Demand;
f.
Guarantee on Loan Repayment;
g. Guarantee on Private Sector Return;
h. Government equity except in JV arrangements; and
i.
Contribution of assets, properties, and rights except in JV arrangements.


As an exception, item (i) above may be allowed provided the government owns the
Right-of-Way, asset, property or rights and receives compensation based on fair market value.
In cases where the Implementing Agency receives more than one unsolicited proposal
involving the same or similar project within one (1) year, the Implementing Agency may reject
all such proposals, and instead, bid out the project as a solicited proposal. Otherwise, the
Implementing Agency shall evaluate the proposals using a first in time approach. Under this
approach, the first complete proposal is evaluated and decided upon. The second complete
proposal shall only be processed if the first one is rejected or if there is a failure in the
negotiation of the first proposal within two (2) years from submission thereof.
If the Implementing Agency accepts, on a negotiated basis, an unsolicited proposal, it
shall grant the Private Proponent who submitted the unsolicited proposal an “Original
Proponent” status, which shall be valid for a period not exceeding one (1) year, and may be
extended by the head of the Implementing Agency, Provided, That such extension shall not
exceed a period of one (1) year.
The Implementing Agency shall publish an invitation for the submission of comparative
proposals.
The comparative challenge shall be conducted either manually or electronically, by the
Implementing Agency within the period proposed by it and approved by the appropriate
Approving Body, taking into consideration the nature and complexity of the PPP Project;
Provided, That the period shall start from the date of last publication of the invitation for the
submission of comparative proposals and shall be reasonable, fair, and upholds the competitive
nature of public budding. Comparative proposals shall be evaluated based on the best-and-final


offer method, the procedure of which shall be discussed in the IRR. If no other proposal is
received after the challenge period, the PPP contract shall be awarded to the Original Proponent.
If the Implementing Agency converts an unsolicited proposal and uses it as basis for
public bidding, the original proponent shall be reimbursed of the cost incurred in the preparation
of the proposal, such as the cost of any feasibility study undertaken: Provided, That such
reimbursement shall be in an amount as may be determined in the IRR of this Act, excluding
those which are borne by the Implementing Agency, such as the cost of right-of-way acquisition:
Provided, further, That such reimbursement shall be paid in full by the winning bidder as a
requirement for the award of the contract, or by the Implementing Agency in case of two
consecutive failures of bidding. The PPP Governing Board, as referred to in Section 22 of this
Act, may adjust the amount of reimbursement cost as the need arises. If the Implementing
Agency fails to act on an unsolicited proposal within sixty (60) working days from receipt
thereof, 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 shall furnish it with a copy of
the proposal. The PPP Center may assist the Implementing Agency in the evaluation of
unsolicited proposals.
Upon submission of the unsolicited proposal, the Private Proponent shall pay an
administrative fee to the Implementing Agency for processing of the same, subject to existing
laws, rules and regulations.


Any change in control of the Private Proponent or composition of the consortium after
the submission of an unsolicited proposal shall be subject to the approval of the Implementing
Agency.
SEC. 10. Protest Mechanism. – In all stages of the procurement process, the following
protest protocol shall be strictly followed:
(a) In case of National PPP Projects:
(i) Decisions of the BAC may be questioned by filing a motion for reconsideration within
fifteen (15) working days from receipt thereof. The BAC shall act on the motion and render a
decision within forty-five (45) calendar days, otherwise it shall be deemed denied.
(ii) The decision of the BAC on the motion for reconsideration in the immediately
preceding paragraph may be further questioned by filing an appeal to the head of the
Implementing Agency concerned, and paying a non-refundable appeal fee in an amount
equivalent to no less than ½ of 1% of the project cost within fifteen (15) working days from
receipt thereof. The head of the Implementing Agency shall act on the appeal and render a
decision within forty-five (45) calendar days, otherwise it shall be deemed denied.
If the head of the Implementing Agency in the immediately preceding paragraph is not
a Department Secretary, the decision of the head of the Implementing Agency may be further
questioned by filing an appeal to the Secretary of the Department to which the Implementing
Agency is attached within fifteen (15) working days from receipt thereof . The Department
Secretary shall act on the appeal and render a decision within forty-five (45) calendar days,
otherwise it shall be deemed denied.
(iii) The decision of the Department Secretary in the immediately preceding paragraph
may be questioned by filing an appeal to the Office of the President within fifteen (15) working


days from receipt thereof. If, within forty-five (45) calendar days, the Office of the President
does not act on the appeal, the same is deemed denied.
(b) In the case of Local PPP Projects:
(i) Decision of the BAC may be questioned by filing a motion for reconsideration within
seven (7) calendar days from receipt thereof. The BAC shall act on the motion and render a
decision within forty-five (45) calendar days, otherwise it shall be deemed denied.
(ii) The decision of the BAC on the motion for reconsideration in the immediately
preceding paragraph may be further questioned by filing an appeal to the local chief executive or
his authorized representative concerned within seven (7) calendar days from receipt thereof, and
paying a non-refundable appeal fee in an amount equivalent to no less than 1/2 of 1% of the
Project Cost. The local chief executive shall resolve the appeal within forty-five (45) calendar
days from receipt thereof, otherwise it shall be deemed denied. The selection process will be
suspended for a maximum period of forty-five (45) calendar days while the appeal is being
evaluated. The decision of the local chief executive or his authorized representative on the appeal
shall be final and immediately executory.
Unless otherwise provided in this Act, in no case shall a motion for reconsideration or an
appeal from any decision by the BAC, Head of Implementing Agency, or Department Secretary
stay or delay the bidding process. No award shall however be made until a decision on any
pending appeal is rendered, or deemed denied.
SEC. 11. Adoption of Contract Management and Risk Mitigation Plans in PPP
Projects and government contingent liabilities cap clauses. – In order to manage the fiscal risks
arising from PPP Projects, strengthen the credibility of the PPP program and projects among the
private sector, and to ensure the timely compliance with the contractual obligations of


Implementing Agencies, projects undertaken shall require the adoption of a contract management
and risk mitigation plan (CMRMP). The CMRMP shall contain the agreed project execution plan
and risk mitigation plans of the contractual parties, which shall ensure that value for money
derived from undertaking a PPP Project shall not be diminished and that all risks are mitigated,
to avoid contingent liabilities from being realized. All CMRMPs shall be submitted to the PPP
Center for monitoring. The procedures in creating, managing, and monitoring the CMRMP shall
be prescribed in the IRR.
Wherever acceptable to the Private Proponent or other contracting parties, the
Implementing Agency may also pursue the inclusion in the governing terms of a PPP project of a
ceiling to the contingent liabilities that the government shall be contractually obliged to bear or
realize in favor of the Private Proponent or other contracting parties.
SEC. 12. Project Supervision and Monitoring, Impact Evaluation, Value Engineering
Studies, and Building Information Modelling. – Every PPP Project shall be implemented in
accordance with the project terms as approved by the appropriate Approving Body, as well as the
signed PPP contract. The coverage of the project terms and the minimum required provisions in a
PPP contract shall be set forth in the IRR of this Act. The Implementing Agency shall be entitled
to exercise sufficient powers of supervision, monitoring, and control over the implementation of
each PPP contract it has entered into.
(a)
Supervision. The Implementing Agency shall be responsible for the overall
supervision of the PPP Project and for submission of periodic monitoring reports, executed under
oath, to the appropriate oversight agencies. The approval by any public officer of any certificate
of compliance or certificate of completion that is submitted by the Private Proponent shall also
be made under oath. The liability of the public officer or former public officer for any criminal


act under existing pertinent laws related to the actions made on such reports and such approvals
shall survive the retirement of the public officer, the termination of the project contract, and the
lapse of the applicable warranty period/s.
(b)
Monitoring. The PPP Governing Board shall set the framework for monitoring of
the compliance of the parties to PPP contracts.
The PPP Center shall be responsible for the coordination and monitoring of projects
implemented under this Act. For this purpose, the Implementing Agency shall submit to the PPP
Center all executed PPP contracts, information on the status of projects implemented by, as well
as copies of all unsolicited proposals and related documents received by, the former.
At the end of every calendar year, the PPP Center shall submit a report to the President of
the Philippines and to the Congress of the Philippines- particularly to the Senate President and
the Speaker of the House of Representatives, and the Chairpersons of the Committee on Public
Works - on the progress of all projects implemented under this Act.
(c)
Impact Evaluation. As the primary socio-economic policy think tank of the
national government, the Philippine Institute for Development Studies (PIDS) is hereby
mandated to conduct periodic impact evaluation studies of PPP Projects implemented under this
Act. The results of these studies shall be submitted to the PPP Governing Board, the PPP Center,
and other relevant oversight agencies.
(d)
Value Engineering Studies - In order to improve value and eliminate
unnecessary costs, value engineering, management, and analysis shall be applied in PPP projects
under this Act, as necessary. The submission of value engineering strategies, and periodic reports
on the status of such strategies, shall be imposed by the PPP Governing Board as a requirement
for PPP projects. The details of such application shall be provided in the IRR of this Act.


(e)
Building Information Modeling (BIM) or similar automated management tool-
For all PPP projects under this Act, Implementing Agency shall use the BIM or similar
automated management tool that will provide a digital representation of the physical and
functional characteristics of a facility, including time and cost elements, during its entire
life-cycle. The Implementing Agency shall require the use, by all project proponents and
concessionaires, of BIM or similar tool, as part of the prescribed minimum performance
standards and specifications. The Implementing Agency shall also use the BIM in monitoring
and evaluating the project performance in all phases of the project life-cycle.
SEC. 13. Investment Incentives. – PPP Projects undertaken through this Act shall be
entitled to various incentives under applicable laws and existing policies of the government.
SEC. 14. Principles of Compensation for Private Proponent. – In determining the
method and terms of compensating the Private Proponent for the functions it will undertake
within the PPP, the following principles shall be observed in the terms of the PPP:
(a) The private firm shall be given adequate opportunity to recover the costs of
undertaking the functions assigned to it, including the cost of bearing the risk of undertaking
these functions, subject to the conditions set under Section 15 of this Act;
(b) Notwithstanding overriding social equity considerations, and except where clear
policy objectives justify a subsidy towards operations, fees and tariffs paid by end-users shall be
set at or as close as possible to the full long-run marginal cost of providing the services they
receive;
(c) A strong system of incentivizing firms to meet service or asset maintenance standards
shall be in place; and


(d) The identified method of compensating the Private Proponent shall be consistent with
the risk allocation and mitigation mechanism set in place pursuant to Section 11 of this Act.
SEC. 15. Investment Recovery Scheme. – In undertaking PPP Projects, the Private
Proponent shall be allowed to recover its investments and earn profit within an allowed Rate of
Return (ROR) set in the terms of the PPP through any of the following schemes or a combination
thereof:
a.
Revenue-based - refers to a scheme where the Private Proponent is
authorized to charge and collect, in whole or in part, from the public reasonable user
fees or tariffs not exceeding those agreed in the contract subject to appropriate
regulation in accordance with Section 15 of this Act. Where applicable, the Private
Proponent may likewise be repaid in the form of a share in the revenue of the project;
and
b. Availability-based - refers to a scheme where the Implementing Agency
commits to make predetermined payments, which do not take the form of charges
paid by the users of the works or of the service, but of regular payments by the
Implementing Agency based on contractually-defined performance delivery.
Other non-monetary payments, such as commercial development rights, or the grant of a
portion or percentage of the reclaimed land, subject to the constitutional requirements on land
ownership, may also be allowed to supplement the foregoing schemes, Provided, that where
non-monetary payments are the option taken by the Implementing Agency, it is required to
justify the option through value management and engineering analysis, cost-benefit analysis, and
other quantitative and qualitative studies to ensure that the State is not unduly disadvantaged, and
that the financial valuation of the non-monetary payment justifies the option and approximates


the value of the monetary payment if the same were taken as the option instead: Provided
further, that such justification shall be included in the reports to Congress required under this
Act.
In determining the Rate of Return (ROR), the maximum ROR shall be equal to the
post-tax weighted average cost of capital for the same or comparable businesses computed using
established methodologies such as the capital asset pricing model. Income tax shall be allowed as
a cash outflow for rate-determination purposes. This provision shall not bar the application of
performance based-rate regulation or any other rate methodologies, should the administrative
agency regulating such public service deem it efficient and in the public interest.
Where the revenue-based option is taken such that fees or tariffs are charged the end user,
the fees or tariffs shall be set at the lowest level that end users are willing to pay or that recovers
the full cost of service; Provided that where the tariff is lower than the full cost of service, the
government may set a subsidy whose mechanism maximizes the policy objective of the subsidy,
reaches its intended beneficiaries in a cost-efficient manner as justified by a cost-benefit analysis,
and is acknowledged by the Secretary of Finance to be fiscally sustainable; Provided further, that
the disbursement of the subsidy shall be linked to the private partner or private proponent
meeting service provision or asset maintenance standards.
SEC. 16. Regulation. – All PPP Projects shall be subject to regulation by the appropriate
regulatory body or by contract in the absence of the former.
SEC. 17. Variation, Expansion, or Extension of an Existing PPP Project. – A contract
variation, which includes expansion, extension, augmentation of capacity, among others, that is
not within the approved scope of an existing PPP Project may be allowed by the Implementing
Agency, subject to the rules and procedures as provided in the IRR of this Act: Provided, That


upon prior approval by the Approving Body, the Private Proponent of an existing PPP Project
may be allowed to expand or extend the same even without further bidding: Provided, further,
That the cost thereof shall not exceed fifty percent (50%) of the price-adjusted original approved
Project Cost: Provided, finally, That any subsequent expansion or extension shall no longer be
allowed, and such shall be considered a new project and shall be tendered accordingly.
Any pending application for contract variation, expansion or extension of an existing PPP
project, that has not yet been approved prior to the effectivity of this Act shall be governed by
this Act retroactively.
SEC. 18. Divestiture/Divestment. – Subject to the approval of the head of the
Implementing Agency, a Private Proponent may divest its ownership, rights, or interest in a PPP
Project: Provided, That the divestiture shall be after a holding or lock-in period as indicated in
the PPP contract: Provided, further, That the new Private Proponent has equal or better
qualifications as with the previous Private Proponent.
The Implementing Agency may divest its ownership, rights, or interest in a project:
Provided, That projects which involve full or partial divestment or transfer of ownership of
government assets or properties shall be subject to approval of the appropriate Approving Body
and applicable laws, decrees, orders, rules and regulations.
SEC. 19. Contract Termination. – If a PPP contract is revoked, cancelled or terminated
prior to its completion, either contracting party shall compensate the other party pursuant to
terms as defined in the PPP contract. Depending on the contractual stipulations, the grounds for
contract termination which would warrant the right of compensation may include, but are not
limited to, default, insolvency, unlawful divestment or divestiture, or other unlawful acts, by the
Private Proponent or by the government.


SEC. 20. Decommissioning, Wind-up, and Transfer Measures. – All PPP contracts shall
provide for decommissioning, wind-up, and transfer measures. Such provision shall include,
among others, the following:
(a)
Mechanisms and procedures for the transfer of assets to the Implementing
Agency;
(b)
The transfer of technology required for the operation of the PPP Project, subject
to limitations under existing laws, rules and regulations;
(c)
The training of the personnel of the Implementing Agency or of a successor in the
operation and maintenance of the PPP Project;
(d)
The provision, by the Private Proponent, of a warranty that the PPP Project 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 PPP
Project to the Implementing Agency or to a successor; and
(e)
In case of JV Projects, the compensation to which the Private Proponent may be
entitled in case of buy-out and transfer of assets to the Implementing Agency, or to a successor.
SEC. 21. Prohibition on the issuance of Temporary Restraining Orders, Preliminary
Injunctions and Preliminary Mandatory 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 or the PPP Center, 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;
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 concerned under Section 9 of this Act;
e.
Acquisition, clearance, development of the right-of-way, site or location of any PPP
Project;
f.
Construction, operation and maintenance of any PPP Project;
g. Commencement, execution, 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.
This prohibition shall apply in all cases, disputes or controversies instituted by any
person, including, cases filed by bidders or those claiming to have rights through such bidders.
This prohibition shall not apply 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.
In addition to any civil and criminal liabilities a judge may incur under existing laws, any
judge who shall issue a temporary restraining order, preliminary injunction or preliminary
mandatory injunction in violation of this Section, shall suffer the penalty of suspension of at least
sixty (60) days without pay.
Any temporary restraining order, preliminary injunction, or preliminary mandatory
injunction issued in violation of this section is void and of no force and effect.
SEC. 22. 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
to Implementing Agencies in all PPP-related matters, and act as a procurement agent
upon the request of the Implementing Agency;
c.
Manage and administer the Project Development and Monitoring Facility (PDMF) as
provided in Section 23 of this Act;
d. 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;
e.
Ensure the sustainability of the PPP program by monitoring, capturing, and sharing
lessons learned from PPP Projects;
f.
Submit reports to the Office of the President and the Congress of the Philippines on
the implementation of PPP program and projects of the government at the end of each
year;
g. Promote and market PPP programs and projects, in collaboration with other
government investment promotion agencies;
h. Issue advisory opinions relating to PPPs;


i.
Serve as the central repository of all PPP Project documents, including all executed
PPP contracts and any subsequent amendment or supplement thereto, including
settlement agreements, entered into by Implementing Agencies;
j.
Act as Secretariat to the PDMF Committee and the PPP Governing Board;
k. 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 attached to
the Department of Finance (DOF) for purposes of policy and program coordination.
The PPP Center shall be headed by an Executive Director with the rank equivalent to an
Undersecretary, who shall be appointed by and co-terminus with the President of the Philippines.
The Executive Director shall perform the following functions:
a. 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 are
deemed necessary for the effective exercise and discharge of the powers and functions
of the PPP Center;
c. Sit as a non-voting member of the PPP Governing Board, and as a member of the
INFRACOM, ICC-NEDA, and other inter-agency bodies in cases where PPPs are
concerned; and
d. Perform such other functions as may be assigned by the PPP Governing Board.
SEC. 23. PPP Governing Board. – The PPP Governing Board, created under Executive
Order No. 136, series of 2013, and hereinafter referred to as the Board, is hereby
institutionalized. It shall be the overall policy-making body for all PPP-related matters, including


the PDMF. It shall be responsible for setting the strategic direction of PPP programs and projects
and in creating an enabling policy and institutional environment for PPP.
The Board shall be composed of the following:
a.
The Secretary of Finance as Chairperson;
b.
The Secretary of Socio-Economic Planning as Vice-Chairperson;
c.
The Secretary of Budget and Management;
d.
The Secretary of Justice;
e.
The Secretary of Trade and Industry;
f.
The Executive Secretary;
g.
The Secretary of Interior and Local Government;
h.
The Executive Director of the PPP Center, as non-voting member; and
i.
A private sector representative, appointed by and co-terminus with the President of
the Philippines.
The principal members of the Board may designate their respective alternates, who shall be
the official next-in-rank to them, and whose acts shall be considered the acts of their principals.
The presence of the Chairperson and four (4) other members of the Board shall constitute a
quorum and a majority vote of the 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) working
days from the date of submission thereof.


SEC. 24. Project Development and Monitoring Facility. – (a) 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, project evaluation,
and monitoring of implementation of PPP Projects.
(b) The PDMF referred to under EO No. 8, series of 2010, as amended by EO
No. 136, series of 2013, shall be transferred to the PDMF under this Act. The PDMF
may be funded through and such amount as may be needed and included in the
general appropriations act, official development assistance, or other sources.
(c) 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 the Implementing Agencies.
The PDMF Committee shall be composed of: (1) the Secretary of Socio-Economic
Planning as chairperson; (2) the Secretary of Finance, (3) the Secretary of Budget and
Management, and (4) the Executive Director of the PPP Center, as members. The PPP Center
shall serve as the Secretariat for the PDMF Committee.
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. 25. Creation of a Risk Management Fund. – Under an optimal allocation of risks
between the Implementing Agency and the Private Proponent, each risk in a PPP Project shall be
assigned to the party that is best able to control the likelihood of its occurrence, manage its
impact on the project, and absorb the risk at the lowest cost.
To ensure fiscal sustainability, enhance the ability of the Implementing Agency to
discharge its obligations under risks allocated to it, and improve terms of financing of PPP
Projects, there is hereby created a trust fund named Risk Management Fund, herein referred to as
the Fund, which shall be financed through dedicated budgetary appropriations and contributions
from the budgets of the Implementing Agencies.
The Risk Management Fund shall provide a reliable pool from which disbursements on
government obligations on liabilities that have materialized can be drawn. Any appropriation and
contribution to the Fund, including accrued interests thereon, are permanently appropriated and
shall not revert to the general fund if not disbursed during the fiscal year. The Fund shall be
administered by the DOF following fiduciary standards for fund management. The operations of
the Fund can be enhanced through official development assistance.
The initial seed fund of Three Billion Pesos (P3,000,000,000.00) shall be constituted to
the Fund from the effectivity of this Act.
Notwithstanding the establishment of this fund, the government may still provide an
un-programmed appropriation for unforeseen risks that the government may incur from PPP
Projects.
To monitor such government obligations on liabilities that have materialized and other
unforeseen risks that may arise from PPP Projects; and to develop the guidelines to access the


Fund, the inter-agency technical working group created under Development Budget Coordination
Committee (DBCC) Resolution No. 2015-2, is hereby institutionalized.
As part of the budget submission, the DOF shall submit an annual report on the status of
the fund to Congress of the Philippines. Proceeds of the fund shall be invested in risk-free highly
liquid assets.
SEC. 26. Establishment of a PPP Unit. – Each concerned Implementing Agency shall
organize a PPP unit headed by a senior official, who shall be responsible for planning,
overseeing, and monitoring PPP Projects of the Implementing Agency. The PPP unit may also
include as members, among others, technical and legal personnel who are knowledgeable on the
technical and legal aspects, respectively, of the PPP Projects.
SEC. 27. Contracts and Public Disclosure. – Copies of all PPP contracts executed under
this Act shall be considered as public documents, and appropriately kept safe and preserved as
such. Except those provisions in the contract which are deemed proprietary, or may pose threats
to national security or safety under relevant laws, rules, and regulations, the procedures for the
disclosure of such documents shall be consistent with existing policies, laws, decrees, orders,
rules and regulations, including the IRR of this Act. The Implementing Agency and the PPP
Center shall publicly make available copies of PPP contracts through their respective websites,
unless otherwise prohibited by existing laws, rules, and regulations, including national security
and public safety concerns.
SEC. 28. Miscellaneous Provisions. – (a) Mitigation of Interconnectivity and Interface
Risks. All PPP Projects which will interconnect or interface with a local or national facility shall
be
required
to
submit
a
Memorandum
of
Agreement
(MOA)
containing
an
interconnection/interface plan agreed upon by all relevant parties. For National PPP Projects,


said MOA shall be submitted to the ICC-NEDA; while for Local PPP Projects, said MOA shall
be submitted to the Local Sanggunian
(b) Issuance of Legislative or Administrative Franchise, License or Permit.
All PPP Projects requiring legislative franchise under existing laws shall secure the
same prior to project implementation. Upon compliance by the Private Proponent of
the requirements set by the appropriate regulatory body, the Private Proponent shall
be automatically granted or issued by the appropriate regulatory body the franchise,
permits, license, certificates, or other similar authorizations necessary for the conduct
of its business.
(c) Standardization of Real Property Tax Valuation. The DOF shall issue the
guidelines on real property tax valuation of PPP Projects to ensure uniform and
consistent implementation among all LGUs. All real properties which are actually,
directly, and exclusively used for a Greenfield PPP Project shall be exempted from
the payment of real property taxes during the period of construction and until such
time the facility is used or operational, whether partial or full. The details of the
exemption shall be prescribed in the IRR of this Act.
(d) Exemption from Payment of Transfer Taxes. For all PPP Projects, the
transfer of ownership of the PPP Project to the Implementing Agency shall be exempt
from capital gains tax, documentary stamp tax, donor’s tax, and all taxes and fees,
whether from national or local, related to the transfer thereof.
(e) Standardization of Required Endorsements and Permits for PPP
Projects. The PPP Center, in consultation with relevant government agencies, bodies,


and LGUs, shall ensure the adoption of standard timelines and requirements for the
issuance of relevant endorsements, approvals, and permits for PPP Projects.
(f) Mandatory Inclusion of Dispute Avoidance and Alternative Dispute
Resolution Mechanisms in PPP Contracts. All PPP contracts shall include
provisions on the use of dispute avoidance and Alternative Dispute Resolution (ADR)
mechanisms. The contracting parties shall be given complete freedom to choose
which ADR mechanisms and venue shall govern their dispute, as well as the rules or
procedures to be followed in involving the same.
(g) Conflict of Interest. Conflict of interest shall be prohibited at all times in
the interpretation and implementation of this Act. Conflict of interest, which refers to
any act or omission tending to oppose or disrupt the faithful performance of one’s
duty or mandate, shall include personal, pecuniary, and regulatory conflicts of
interests: Provided, That no national Implementing Agency shall implement a PPP
Project that it regulates: Provided, further, That any regulatory agency or body which
implements a PPP Project shall adopt a conflict mitigation and management plan.
(h) Alternative Sources of Financing. In addition to Private Proponent equity
and debt, alternative financial instruments such as Green Financing, corporate or
project bonds and securities, and other forms of capital market financing may be
allowed for PPP Projects, subject to the approval of relevant regulatory bodies for
such instruments under existing laws, rules, and regulations.
(i) Private Legal and Medical Assistance. All the BAC members and other
public officials providing services to the BAC 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 BAC members shall also be entitled to medical assistance for
injuries incurred in the performance of their functions.
(j) 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.
(k) Safeguard Mechanisms to Protect Public Interest. In order to improve
transparency and to promote bankability and social acceptability of PPP Projects, the
following mechanisms shall be observed: (1) Whenever applicable, the Implementing
Agency shall assess the affordability of fee or tariff, and conduct a willingness-to-pay
survey among the users of the infrastructure facility; (2) The Implementing Agency
shall conduct public consultation with notice and hearing with all potential
stakeholders, the details of which shall be threshed out in the IRR; and (3) The
Implementing Agency and the PPP Center shall post in their respective websites the
approved starting fare or user fee in a PPP Project as well as the approved parametric
formula on fare increases or adjustments, if applicable.
(l) Land value capture strategies. In order to ensure that the government
shall be able to maximize the land value gains consequent to the implementation of
the PPP project, the PPP Center shall propose to the Implementing Agency land value
capture strategies that will maximize the returns to the government of the PPP Project


and its consequent economic benefits. Details on these strategies shall be included in
the reports to Congress required herein. Such strategies may include:
a.
The rationalization of land valuation for taxation purposes in areas surrounding
the PPP project or serviced by it, and the extension of technical assistance to local
governments and other relevant valuation agencies in performing the same;
b. Land-banking strategies, which may be accompanied by transit-oriented and
sustainably planned urban development;
c.
Special fees and levies as may be allowed by law and by the terms of the PPP
project;
d. Auction of development rights as may be allowed by law and by the terms of the
PPP project; and
e.
Such other strategies that may supplement the direct economic and financial
returns of the PPP project itself.
SEC. 29. Implementing Rules and Regulations. – The IRR Committee shall be
composed of representatives from the NEDA, DOF, DBM, DPWH, DOTr, DILG, DOJ, DTI,
DENR, Office of the President, PPP Center, and Private Sector Representatives and other
agencies, as may be identified by the PPP Governing Board. Within forty (40) working 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. 30. Administrative, Civil, and Penal Sanction. – Any person, whether private
individual or public officer or employee, who commits any of the prohibited 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.
Downgrading the category of the project cost for purposes of evading the required
approvals under this Act;
b.
Representation that the Private Proponent has the necessary capitalization to
commence, complete, and implement the PPP Project when the same is false in
material respects;
c.
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;
d. Any violation of Section 27 (G) under this Act; and
e.
A public officer or employee, whether in connivance with others or acting alone,
negligently or by fraud commits a failure to ensure compliance with the project
terms as approved by the Approving Body, and the signed PPP contract, by
approving,
issuing,
or
confirming any certification, required documents, or
deliverables of the Private Proponent, which are non-compliant with existing rules,
erroneous, not authentic, or fraudulent.


In addition, such act committed by the Private Proponent and its concerned officers shall
cause the rescission of its contract for the said PPP Project without compensation and shall be
perpetually disqualified from participating in any bidding or other contractual arrangement for
any government project. This is without prejudice to any other civil or administrative liability
that erring officials or Private Proponents may incur.
SEC. 31. Accountability in PPP Projects. – The head of the concerned Implementing
Agency shall at all times be accountable to PPP Projects undertaken through this Act. The
Private Proponent shall likewise be held accountable for the works and services it has committed
and delivered for a PPP Project. All PPP contracts are hereby required to clearly define the scope
of each party's accountability under the PPP contract. To further promote accountability in PPP
Projects, the Commission on Audit (COA) shall have jurisdiction over the activities and
transactions of the PPP Project, which shall be limited to the exercise of its visitorial power as
defined in the 2009 Revised Rules of Procedure of the COA, and any amendments thereto. Such
power shall be further limited to determining whether the contribution or share of the
Implementing Agency in the PPP Project is being allocated and utilized according to its intended
purpose, and if the Implementing Agency is getting its rightful share from the revenues
generated, as may be applicable.
SEC. 32. Joint Congressional Oversight Committee on Public Private Partnerships
(PPP). - A Joint Congressional Oversight Committee on Public-Private Partnerships (PPP) 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. 33. Transitory Clause. – The provisions of this Act shall apply to all PPP Projects
except: (a) all projects wherein a PPP contract between the winning Private Proponent and the
Implementing Agency concerned has been executed prior to effectivity of this Act; and (b) all
projects undertaken through competitive selection wherein the bid/s have already been opened
prior to the effectivity of this Act. For PPP Projects not covered under items (a) and (b) above,
this Act shall govern, provided that this Act shall not, in any manner, operate to impair vested
rights already accruing to a party.
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 the PPP Center provided in this Act shall be determined by the PPP Governing
Board. Appropriations for succeeding years shall be incorporated in its budget proposals for
congressional action.
All officials and employees of the PPP Center shall be retained and shall not suffer any
loss of seniority or rank or decrease in emoluments.
SEC. 34. Separability Clause. – If any provision of this Act is declared unconstitutional
or invalid, other parts or provisions hereof not affected thereby shall continue to be in full force
and effect.
SEC. 35. Repealing Clause. – The following are hereby repealed:
a.
Republic Act No. 6957;
b. Republic Act No. 7718;
c.
Executive Order No. 8 (s. 2010) as amended by Executive Order No. 136 (s. 2013);


d. Executive Order No. 78 (s. 2012);
e.
Section 8 of Executive Order No. 423 (s. 2005);
f.
2013 Revised Guidelines and Procedures for Entering Into Joint Venture Agreements
Between Government and Private Entities; and
g. Joint Venture Guidelines issued by LGUs.
All other laws, decrees, orders, rules and regulations, and all other related national and
local issuances or parts thereof inconsistent with this Act are hereby repealed or amended
accordingly.
SEC. 36. Effectivity. – This Act shall take effect fifteen (15) days after its publication in
the Official Gazette or in a newspaper of general circulation.
Approved,