Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

Eighteenth Congress
First Regular Session

HOUSE BILL No, _ 8575

Introduced by Representative Sharon S. Garin

EXPLANATORY NOTE

The role of public-private partnerships (PPP) is deemed crucial in driving growth and
increasing agricultural productivity in the country. As we enter the fourth agricultural
revolution, the call to modernize and adapt to rapid globalization is proving to be a
rising concern.

The Department of Agriculture's “new thinking” strategy underscored the role of the
private sector in the amelioration of the country's agricultural state. Fostering PPPs
can give way to the establishment of more agri-based industries and developing
markets for agriculture. In addition to this, small and marginalized farmers can have
better access to low-cost finance for inputs, modern technologies, and links to the
value chain and retail markets with the support of private sector investments.

In line with the aforementioned reasons, this bill seeks to strengthen and concretize
the role of the public-private partnerships in driving agricultural and economic growth
by establishing the following:

- Creation of the Public-Private Partnership Authority (PPPA)

- Removal of the one billion-peso (Php1,000,000,000) threshold for projects
entitled
to incentives; and

- Protection of PPP projects from restraining orders, preliminary injunctions, or
preliminary mandatory injunctions by any court, except the Supreme Court.

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



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

Eighteenth Congress
First Regular Session

7
HOUSE BILL NO. Baie

Introduced by Representative Sharon S. Garin

AN ACT
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. Short Title - This Act shall be known as the “Public-Private
Partnership (PPP) Rationalization Act of 2020.”

SEC. 2. Declaration of Policies and Principles. — Section 20, Article Il, 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 time-saving government regulations and
procedures and specific government undertakings in support of the private sector.

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.

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.

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) Brownfield Project - refers to a project with existing development programs
or projects;


(c) 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;

(d) 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;

(e) Cooperation Period - refers to the period during which the PPP contract is
in effect;

(f) 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;

(g) 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;

(h) Greenfield Project - refers to a pioneer development program or project;

(i) 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;

() 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

3


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;

(k) Local PPP Project - refers to a PPP Project that shall be undertaken by an
LGU;

(|) National PPP Project - refers to a PPP Project that shall be undertaken by
the national government, GOCC, GICP, GCE, GFI, or SUCs;

(m)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;

(n) 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;

(0) 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;

(p) 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

4


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 those 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 20 of this Act, for information. Each
proposed PPP Project shall be subject to the approval of the appropriate Approving
Body.

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 Investment Coordination
Committee of the National Economic and Development Authority (ICC-NEDA).
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 amounts
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;

(ili) 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
anggunians, except in cases where a Local PPP Project: (1) requires any

Government Undertaking from the national government for capital-intensive

projects; or (2) exposes the national government to significant fiscal and

monetary risks, as may be determined by the ICC-NEDA.

(b) 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.

(c) 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

6


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. Ifno 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

7


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;

. Government equity except in JV arrangements;
. Performance undertaking;
|. Exemption from real property taxes;

Loan guarantee;

@aog


f. Contribution of assets, properties, and rights; and

g. Right-of-Way and related costs

Asan exception, items (f) and (g) above shall not be considered as Government
Undertakings in the following instances:

a. The Implementing Agency owns the assets, properties, rights, including the

right-of-way; or

b. The government receives appropriate compensation pursuant to existing

laws, rules, regulations and guidelines.

In cases where the Implementing Agency receives more than one unsolicited
proposal involving the same or similar project, 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.

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, unless extended by the head of the Implementing Agency. The Implementing
Agency shall publish an invitation for the submission of comparative proposals.

If no other proposal is received for a period of not less than six (6) months from
the date of last publication, the PPP contract shall be awarded to the original
proponent.

If another qualified comparative proponent submits a superior counter-financial
proposal within the period referred to above, and it is accepted by the head of the
Implementing Agency, the original proponent shall have the right to match such
counter-financial proposal within a period not exceeding thirty (30) calendar days from
the receipt of notice.

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

9


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 21 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. —\n all stages of the procurement process, the
following protest protocol shall be strictly followed:

(a) 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 thirty (30) calendar days, otherwise it
shall be deemed denied.

(b) 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 % 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 thirty (30) calendar days, otherwise it shall be

10


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 thirty (30) calendar days, otherwise it shall be deemed denied.

(c) 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 sixty (60) calendar days, the
Office of the President does not act on the appeal, the same is deemed denied.

In no case shall an appeal taken from any decision rendered pursuant to this
Act stay or delay the bidding process.

SEC. 11. Project Supervision and Monitoring. - Every PPP Project shall be
implemented in accordance with the designs, plans, specifications, and standards as
approved by the Implementing Agency, and costs as approved by the appropriate
Approving Body. The Implementing Agency shall supervise the project and provide
periodic monitoring reports to the appropriate oversight agencies.

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 on the progress of alll projects implemented under this Act.

SEC. 12. Investment Incentives. - The PPP Governing Board shall recommend
to the Board of Investments the variations or specific priority projects/activities and the


threshold amounts to qualify a PPP Project for incentives under applicable laws or
policies governing investments in the country.

SEC. 13. Investment Recovery Scheme. — In undertaking PPP Projects, the
Private Proponent shall be allowed to recover its investments and earn profit 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 14 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.

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.

SEC. 14. Regulation. — All PPP Projects shall be subject to regulation by the
appropriate regulatory body or by contract in the absence of the former.

SEC. 15. Variation, Expansion, or Extension of an Existing PPP Project. — A


contract variation, expansion, or extension may be allowed by the Implementing
Agency, subject to the rules and procedures as provided in the IRR of this Act:
Provided, That in case of project expansion or extension, it shall not exceed the cost
of the civil works of the original project, and shall be adjacent or contiguous to the
same, otherwise, the project shall be considered a new project and shall be tendered
accordingly.

For avoidance of doubt, application for variation, expansion, or extension shall
be governed by existing laws, decrees, orders, rules and regulations at the time of
application

SEC. 16. 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. 17. Contract Termination. - \f 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. 18. Wind-up and Transfer Measures. — All PPP contracts shall provide
for wind-up and transfer measures.


SEC. 19. 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. 20. 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;

. 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;

; Manage and administer the Project Development and Monitoring Facility

(PDMF) as provided in Section 22 of this Act;
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;

. Ensure the sustainability of the PPP program by monitoring, capturing, and

sharing lessons learned from PPP Projects;

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;

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

._ Issue advisory opinions relating to PPPs;

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;

Act as Secretariat to the PDMF Committee and the PPP Governing Board;
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. 21. 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:

. The Secretary of Finance as Chairperson;
. The Secretary of Socio-Economic Planning as Vice-Chairperson;
The Secretary of Budget and Management;
The Secretary of Justice;
The Secretary of Trade and Industry;
The Executive Secretary;
The Secretary of Interior and Local Government;

e-menagogcD


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. 22. 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

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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. 23. 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. 24. 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. 25. Contracts and Public Disclosure. - Copies of all PPP contracts
executed under this Act shall be considered as public documents. The procedure for
the disclosure of such documents shall be consistent with existing policies, laws,
decrees, orders, rules and regulations.

SEC. 26. Miscellaneous Provisions. - (a) 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.

(b) 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.

(c) 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.

(d) Standardization of Required Endorsements and Permits for PPP
Projects. The PPP Center, in consultation with relevant government agencies,

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bodies, and LGUs, shall ensure the adoption of standard timelines and requirements
for the issuance of relevant endorsements, approvals, and permits for PPP Projects.

(e) 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.

(f) 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 with regard to regulatory conflicts of interest, no regulatory body shall
be allowed to enter into any PPP contract that they regulate: Provided further, That 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.

(g) Capital Market Financing. In addition to equity and loans, capital markets
may also be accessed to finance PPP Projects under proper guidance by the
appropriate regulatory bodies.

SEC. 27. Implementing Rules and Regulations. — A committee called the IRR
Committee shall, within sixty (60) working days from the effectivity of this Act,
formulate and prescribe, after public hearing, the IRR for the proper implementation
of this Act. The IRR shall be published after the 60-day period and shall take effect
fifteen (15) days after its publication.

The IRR Committee shall be composed of the members of the PPP Governing
Board, and other agencies as may be identified by the PPP Governing Board.

From time to time, the Committee may formulate and prescribe, after due public
hearing, amendments or revisions to the IRR, consistent with the provisions of this

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Act. The amended or revised IRR shall take effect fifteen (15) days after its publication.

SEC. 28. 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; and

d. Any violation of Section 26 (F) under this Act.

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. 29. 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. 30. Transitory Clause. ~ The provisions of this Act shall apply to all PPP

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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. 31. 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. 32. 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. 33. Effectivity. This Act shall take effect fifteen (15) days after its
publication in the Official Gazette or in a newspaper of general circulation.

Approved,