Republic of the Philippines HOUSE OF REPRESENTATIVES
HOUSE OF REPRESENTATIVES RECEIVED
Quezon City

SEVENTEENTH CONGRESS
First Regular Session

HOUSE BILL No. 163

Introduced by REP. FELICIANO BELMONTE, JR.

EXPLANATORY NOTE

In 1990, the Philippine Congress enacted Republic Act No. 6957, the first BOT law in
Asia. The BOT law significantly increased private investment in infrastructure in the
Philippines by promoting private sector participation.

The BOT law was further amended by Republic No. Act 7718 in 1994 in order to
provide for an increased number of variants of BOT contractual arrangements. ‘lwo decades
later, there is a need to further amend the law to create an enhanced policy framework that is
responsive to the current economic environment.

In identifying the needed reforms, this bill seeks to build from the experiences of the
government in areas involving BOT projects. The proposed amendments aim to encourage
private sector participation in public infrastructure projects. It also aims to further strengthen
the basic legal framework in undertaking Public-Private Partnership (PPP) projects in the
Philippines to aid the government in addressing and implementing necessary infrastructure
development.

In view of the foregoing, the immediate passage of this bill is earnestly sought.

Ge. G2

FELICIANO BELMONTE, JR.


10
ul
2

3
4
1s

16
7
18
19

20

Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
First Regular Session

HOUSE BILLNO. _1€

Introduced by Representative Feliciano Belmonte, Jr.

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

Be it enacted by the Senate and House of Representatives 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 res
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.

surces for the purpose of

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:


12
3
4

1s
16
"7

19
20
21
22
23

24
23
26

2
28

29
30

32
33

(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;

(c) 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;

(d) 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;

(c) Contingent liability refers to obligations of the government arising from a valid
PPP contract whose occurrence, timing, and amount depend on some uncertain future
event or circumstance;

(f) 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;

(g) Cooperation period refers to the period of operation of an infrastructure facility;

(h) Facility operator refers to a person registered with the Securities and Exchange
Commission (SEC) or the Department of Trade and Industry (DTI), 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;

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

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

(k) 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 the “GOCC Governance Act of 2011”, state universities and
colleges (SUCs), or a local government or a distinct unit therein;


7
18

19
20

21
22

23
24
25
26
27

28
29
30

31
32

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

(1) Infrastructure facility - includes power plants, highways, ports, airports, canals,
dams, hydropower projects, water supply, irrigation, telecommunications facilities,
railroads and railways, transport systems, reclaimed land, industrial estates or townships,
housing, government buildings, tourism projects, markets, slaughterhouses, warehouses,
information technology systems and infrastructure, education and health facilities,
sewerage, and drainage; and

(2) Infrastructure-related service - includes dredging, climate change mitigation and
adaptation measures and other related services;

(m) Public-Private Partnership (PPP) 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;

(n) Person refers to an individual, sole proprietorship, partners
any other form of organization, whether domestic or foreign;

ip, corporation or

(0) 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;

(p) Project proponent refers to the private person who shall have contractual
responsibility to undertake a PPP project;

(q) 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;

(t) 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 of a PPP project;

(s) Solicited PPP project refers to priority projects identified by the implementing
agency;


9

10
"
12
13
14
15
16

7
18
19
20
2u

22
23
24
25

27
28
29

30
31
32
33
34

(t) Unsolicited PPP project refers to a project proposal submitted by a private person,
which is not in response to a formal solicitation or request issued by the implementing
agency; and

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

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 on the project, plus a rate of return thereon. This arrangement may be
employed in the construction of any infrastructure facility, including critical facilities
which, for security or strategic reasons, must be operated directly by the government;

(b) Build-Lease-and-Transfer refers to a contractual arrangement whereby a project
proponent undertakes to finance and construct an infrastructure facility and, upon its
completion, turns it over to the implementing agency concerned on a lease arrangement
for a cooperation period, after which ownership thereof is automatically transferred to the
implementing agency concerned;

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

(d) Build-Operate-and-Transfer refers to a contractual arrangement whereby the project
proponent undertakes a PPP project and transfers ownership of the infrastructure facility
to the implementing agency at the end of the cooperation period;

(©) 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;


ul
12
13
14

Is
16
0
18
19
20
ai

22
23
24
25

26
7
28
29

30
31

32
33
34

(f) Contract-Add-and-Operate refers to a contractual arrangement whereby the project
proponent adds to an existing infrastructure facility which it is renting from the
government. It operates the expanded infrastructure facility over an agreed cooperation
period. There may, or may not be, a transfer arrangement in regard to said facility;

(g) Develop-Operate-and-Transfer refers to a contractual arrangement whereby
favorable conditions external to a new PPP project which is to be built by a project
proponent are integrated into the arrangement by giving that entity the right to develop
adjoining property and, thus, enjoy some of the benefits the investment creates such as
higher property or rent values;

(h) Joint Venture refers to a contractual arrangement whereby a private person or a
group of private persons and an implementing agency contribute money, services, assets,
or a combination of any or all of the foregoing, to undertake a PPP project, with the
intention to share profits, risks and losses. Assets may include equipment, land,
intellectual property or anything of value;

(i) 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;

(i) Rehabititate-Operate-and-Transfer refers to a contractual arrangement whereby an
existing infrastructure facility is turned over to the project proponent to refurbish,
improve, operate and maintain for a cooperation period, at the expiry of which the
ownership of the facility is transferred to the implementing agency; and

(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 which 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.


10
ul

2
B
4
Is

16
”

18
19
20
21

22
23
24
25
26
27

28
29
30

31
32
33
34
35

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 implementing,
rules and regulations (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 and 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 concerned 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 concerned shall be
based on a review of the project documents submitted to it by the local government unit
(LGU) concerned, 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


16
7
18
19
20

21
2
23
24
25

26
27
28
29

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 LGU concerned and its responsible officials, or concerned
officers of the private project proponent, which results to or is aimed at downgrading the
category of the project 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 concerned officers shall
cause the rescission of its contract for the said project without compensation and shall be
perpetually disqualified from participating in any bidding, or other contractual
arrangement, for any government project.

SEC. 8, Project Development and Monitoring Facility (PDMEF). - 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 No. 8,
series of 2010, as amended by Executive Order 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.

(b) 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 PDME
support submitted by implementing agencies. It shall be composed of representatives
from the NEDA, Department of Finance (DOF), Department of Budget and Management
(DBM) and the PPP Center.

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

(c) Procedure - The procurement of consulting services for the PDMEF shall be
conducted through Republic Act No, 9184, otherwise known as the “Government
Procurement Reform Act,” and its associated 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


10
1
2
1B
4

1s
16

"
18
19

20
ai
22
23
24
25
26
27
28

29
30
31

to a finding of eligibility, and nonregistered consultants shall be allowed to bid. The
procedures for such procurement shall be prescribed in the IRR of this Act, consistent
with Republic Act 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
PDME 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:

(a) Accept the unsolicited proposal on a negotiated basis, subject to the following
conditions:

(1) 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

(2) 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 of 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;

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


10
ul
12
13

“4
15
16
W
18
19
20
21

22
23
24
25

26
21
28
29
30

31
32
33

(1) nan amount specified in the IRR of this Act, not to exceed three percent (3%) of
the project cost excluding those which are borne by the implementing agency, such as the
cost of right-of-way acquisitions; and

(2) Paid in full by the winning project proponent as a requirement for the award of
the contract; and

(c) Reject the proposal.

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

Within ten (10) working days from receipt of the unsolicited proposal, the
implementing agency shall inform the PPP Center in writing of such receipt and 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. - (a) Upon approval of PPP projects as mentioned
in Section 7 of this Act, the head of the implementing agency concerned shall immediately
cause the publication of a notice inviting all prospective project proponents to participate
ina 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
prequalification documents, technical and financial proposals shall be submitted in at
least three (3) separate envelopes. The procedures for public bidding shalll 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
prequalification stage after having satisfied the minimum financial, organizational, and
legal standards required under this Act; has passed the technical proposal evaluation; and
has submitted the most favorable financial bid based on the parameters defined in the bid
documents.

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.


ut
2

13

Is
16
7

18
19
20
2
22

23
24
25
26

21
28

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

(1) If, after advertisement, only one (1) 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;

(2) If, after advertisement, more than one (1) bidder applied for prequalification but
only one (1) meets the prequalification requirements, after which it submits a bid or
proposal which is found by the implementing agency to be complying;

(3) If, after prequalification of more than one (1) bidder, only one (1) submits a bid
which is found by the implementing agency to be complying; or

(4) If, after prequalification, more than one (1) bidder submits bids but only one (1) is
found by the implementing agency to be complying.

(6) In all stages of the procurement process, the following protest protocol shall be
strictly followed:

(1) 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;

(2) 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 concerned and paying a nonrefundable appeal fee in an
amount equivalent to no less than one-half (14) of one percent (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 preceding paragraph is
not a Department Secretary, the decision of the head of the implementing agency may be
further questioned by filing an appeal to the Secretary of the Department to which the
implementing agency is attached within a period prescribed in the IRR of this Act; and

(3) The decision of the Department Secretary in the immediately preceding
paragraph (2) may be questioned by the filing of an appeal to the Office of the President.

(d) 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:


19
20
21

22
23
24
25
26
27

28
29
30
31
32

3
34
35

Provided, That the PPP PBAC constituted for national PPP projects shall also include other
relevant government 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 or 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


10
Wl
12
13

22

23
24

25
26

7

28
29

30
31

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 concerned. The implementing agency shall transmit to the PPP
Center for records and monitoring purposes, a copy of the duly executed contract, within
thirty (30) working days from its complete execution,

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
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;
(©) 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;

(c) 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:


10
W
12
B

4
Is
16

18
19
20
21
22

2
24
25
26

27
28
29
30

31
32
33
34

Provided, That the temporary restraining order, preliminary injunction or preliminary
mandatory injunction issued by the Supreme Court shalll 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 injunction 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 concerned.

SEC. 19. Investment Incentives. - Among other incentives, PPP projects in excess of one
billion pesos (P1,000,000,000.00) 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 the 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


10
nN

2
B
14
15
16
7

18
9
20
21

22
23
24
25
26
20
28

29
30

31
32
33

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 of 1991”;

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

() 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:

(1) The total project cost falls within the threshold set by the ICC;

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

(3) The project will have direct and indirect economic impact beyond the LGU where
it is located; and

(4) 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 the 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 an implementing agency;


12
3

4
15

16
7

18
19
20

21
2

23
24

28
26

21
28

29
30

(©) Manage and administer the PDMF as provided in Section 8 of this Act;

(d) Work with implementing agencies in setting procurement and implementation
timelines for approved PPP projects;

(e) 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;

(f) Facilitate, monitor, and evaluate the implementation of PPP programs and
projects developed by implementing agencies;

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

(h) Serve as a link between the government and the private sector;

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

() Sit as member of the NEDA-Infrastructure Committee (INFRACOM), ICC, and
other interagency bodies where a PPP project is a major concern;

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

(D) 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;

(m) Review PPP contracts prior to execution, and provide and transmit copies of
duly executed PPP contracts to Congres

(n) Act as Secretariat to the PDMF Committee, PPP Governing Board, and ICC
insofar as PPP projects are concerned;

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

(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
attached to the NEDA for purposes of policy and program coordination.


15
16

7
18
19

20
21
2
23
24

25
26

a7
28
29
30
31

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:

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

(b) The Secretary of the Department of Finance as Vice Chairperson;
(c) The Secretary of the Department of Budget and Management;
(d) The Secretary of the Department of Justice;

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

() The Executive Secretary;

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

(h) The Executive Director of the PPP Center; and

(i) The Private Sector as Co-Chairperson of the National Competitiveness Council
(NCC), as members.

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

The presence of the Chairperson and four (4) other members of the Board shall
constitute a quorum and a majority vote of the members present shall be necessary for the
adoption of any issuance, order, resolution, decision or other act of the Board in the
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.

exer

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

SEC. 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 (6) years, upon recommendation of the PPP
Governing Board: Provided, That the term of the first Executive Director appointed under
this Act shall expire at noon of June 30, 2019 and the term of the next Executive Director


B
“4
1
16
7

18
19
20
21

22
23
24
25

26

27
28
29
30
31
32
33

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:

(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 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 interagency bodies where a PPP project is a major concern; and

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

SEC. 25. Mandatory Inclusion of Aliernative 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 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 DOF shall regularly monitor and review the viability of the PPP Contingent Liability


22
23
24

25
26
27

28

29
30
31
32
33
34

Fund in relation to the magnitude of PPP projects undertaken by the government and, if
necessary, recommend the increase in the target amount of the PPP Contingent Liability
Fund and the reason therefor. All National Government contributions to the PPP
Contingent Liability Fund shall be included in the proposed budget of the DOF.

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; and

(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,
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


18
19

20
24
2
23

24
25
26
21

28
29
30
31

32
33

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
(60%) of the outstanding capital stock of the corporation: Provided, finally, That the return
on investment of either party shall be in proportion to their respective contribution.

(©) 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:

(1) Mechanisms and procedures for the transfer of assets to the implementing
agency;

(2) The compensation to which the project proponent may be entitled in respect of
s tral

sferred to the implementing agency, or to a successor, or purchased by the
implementing agency;

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

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

(5) The provision, by the project proponent, of a warranty that the infrastructure
facility meets the project technical specifications, agreed system features, and performance
standards and services for a certain period as may be defined in the IRR of this Act after
the transfer of the infrastructure facility to the implementing agency or to a successor.

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

( 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:


10

2
13

4
15
16
”
18
9

20
a1
22
23

24
25
26
27
28

29
30

31
32

33
34

35

(1) PPP. contracts entered into, and selection procedures undertaken, by
implementing agencies prior to the effectivity of this Act in accordance with relevant laws,
regulations, guidelines, and ordinances; and

(2) 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 the 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 the PPP Center as 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.

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, Section
3(a) of Presidential Decree No. 1112, Section 2 of Presidential Decree No. 1894, and
Executive Order No. 8, series of 2010, as amended by Executive Order No. 136, series of


2013, Executive Order No. 78, series of 2012, Section 8 of Executive Order No. 423, series
of 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.

fectivity. - This Act shall take effect fifteen (15) days after its publication
in the Official Gazette or in at least one (1) newspaper of general circulation

Approved,