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REPUBLIC OF THE PHILIPPINES |
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HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
First Regular Session REGISTR \TION UNIT

BILLS Ai

House Bill No, 2727

Introduced by MAGDALO Party-List Representative
HON. GARY C. ALEJANO

XPLANATORY NOTE

Republic Act 6957 declares that it is the policy of the State to recognize the indispensable role of
the private sector as the main engine for national growth and development and provide the most
appropriate favourable incentives to mobilize private resources for the purpose. It is seen as a
pioneering law in the region enticing participation of the private sector in major government
infrastructure projects.

Recently, the Philippines moved seven (7) notches higher in the World Economic Forum’s
(WEF) Global Competitiveness Index 2014-2015. The Philippines ranked 52nd out of 144
economies this year, up from its 59th spot among 148 countries in 2013. Notably, the country's
gain of 33 places since 2010 is the largest over the period among all countries studied. However,
despite our gains, the country still lags in infrastructure, which remains “poor” at 91* place. The

country is ranked 108" in airport infrastructure and 101° in seaport infrastructure’.

In view of this, this proposed measure aims to improve the BOT law by expanding its coverage
and providing more incentives to the private sector who become partners of the government in
infrastructure projects.

The measure introduces the “Projects of National Significance” as a classification of
infrastructure projects which, when classified as such, will enjoy incentives such as exemption
from real property tax, restrictions on imposable local taxes and automatic grant of business
permits, among others. The bill also protects these projects from being the subject of judicial
reliefs such as temporary restraining orders (TROs), preliminary injunctions and preliminary
mandatory injunctions.

In view of the foregoing, and to further sustain the high competitive ranking of our country,
immediate approval of this bill is earnestly requested.

* Data retrieved from http://www.philstar.com/headlines/2014/09/03/1364967/philippines-7-notches-global-

competitiveness-index on 02/17/2015.

OF R [PRESENTATIVES

1D INDE X SPRVICE



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REPUBLIC OF THE PHILIPPINES
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
First Regular Session

House Bill No. 2727 _

Introduced by MAGDALO Party-List Representative
HON. GARY C. ALEJANO

AN ACT
ENCOURAGING MORE PUBLIC-PRIVATE PARTNERSHIP (PPP) PROJECTS,
CREATING THE PUBLIC-PRIVATE PARTNERSHIP (PPP) GUARANTY FUND, AND
FOR OTHER PURPOSES, THEREBY AMENDING REPUBLIC ACT NO. 6957, AS
AMENDED BY REPUBLIC ACT NO. 7718, OTHERWISE KNOWN AS THE "BUILD-
OPERATE-TRANSFER" (BOT) LAW
Be it enacted by the Senate and House of Representatives of the Philippines in Congress

assembled:

SECTION 1. Section 4-A of Republic Act (R.A.) No. 6957, as amended by Republic
Act (R.A.) No. 7718, is hereby further amended to read as follows:

"SEC, 4-A. Unsolicited proposals. - Unsolicited proposals for projects may be
accepted by any government agency or local government unit on a negotiated
basis: Provided, That, all the following conditions are met: (1) such projects
involve a new concept or technology and/or are not part of the list of priority
projects, (2) no direct government guarantee, subsidy or equity is required, and
(3) the government agency or local government unit has invited by publication,
for three (3) consecutive weeks, in a newspaper of general circulation,
comparative or competitive proposals and no other proposal is received for a
period of sixty (60) working days: Provided, further, That in the event another
proponent submits a lower price proposal, the original proponent shall have the
right to match that price within thirty (30) working days] SUBMITTED. THE
GOVERNMENT AGENCY, | GOVERNMENT-OWNED — AND
CONTROLLED CORPORATION (GOCC), OR LOCAL GOVERNMENT
UNIT (LGU) CONCERNED MAY EITHER:
(1) USE THE UNSOLICITED PROPOSAL AS THE BASIS
FOR PUBLIC BIDDING AS PROVIDED IN SECTION 5 OF THIS
ACT. IF A FINAL AWARD TO A WINNING BIDDER IS MADE ON
THE BASIS OF THE UNSOLICITED PROPOSAL WITHIN ONE (1)
YEAR FROM THE SUBMISSION THEREOF, AS DETERMINED BY


1 THE NATIONAL ECONOMIC AND DEVELOPMENT AUTHORITY
2 (NEDA), THE ORIGINAL PROPONENT OF THE UNSOLICITED
3 PROPOSAL MAY BE REIMBURSED FOR COSTS INCURRED IN ITS
4 PREPARATION, INCLUDING, BUT NOT LIMITED TO,
5 THE COST OF ANY FEASIBILITY STUDIES UNDERTAKEN:
6 PROVIDED, THAT SUCH REIMBURSEMENT: (A) SHALL BE IN
7 THE AMOUNT TO BE DETERMINED BY NEDA, BUT NOT
8 EXCEEDING THREE PERCENT (3%) OF THE TOTAL PROJECT
9 COST, EXCLUDING ANY PROJECT COSTS WHICH WILL BE
10 BORNE BY THE GOVERNMENT SUCH AS, BUT NOT LIMITED TO,
1 THE COST OF RIGHT-OF-WAY ACQUISITIONS; AND (B) SHALL
2 BE PAID IN FULL BY THE WINNING BIDDER AS A
1B REQUIREMENT FOR THE AWARD OF THE PROJECT;

4 (2) ACCEPT THE UNSOLICITED PROPOSAL ON A
15 NEGOTIATED BASIS: PROVIDED, THAT, THE FOLLOWING
16 CONDITIONS ARE MET: (A) SUCH PROJECTS INVOLVE A NEW
v7 CONCEPT IN TECHNOLOGY AND/OR ARE NOT PART OF THE
18 LIST OF PRIORITY PROJECTS; (B) NO DIRECT GOVERNMENT
19 GUARANTEE, SUBSIDY OR EQUITY OR ANY FORM OF
20 PAYMENT OR SECURITY FROM THE GOVERNMENT IS
21 REQUIRED AS PROVIDED IN THE IMMEDIATELY SUCCEEDING
22 SECTION; AND (3) THE GOVERNMENT AGENCY OR LGU HAS
23 INVITED BY PUBLICATION FOR THREE (3) CONSECUTIVE
24 WEEKS, IN A NEWSPAPER OF GENERAL CIRCULATION,
25 COMPARATIVE OR COMPETITIVE PROPOSALS AND NO OTHER,
26 PROPOSAL IS RECEIVED FOR A PERIOD TO BE DETERMINED
27 BY NEDA, BUT NOT TO EXCEED ONE (I) YEAR: PROVIDED,
28 FURTHER, THAT IN THE EVENT ANOTHER PROPONENT
29 SUBMITS A PROPOSAL LOWER IN PRICE, THE ORIGINAL
30 PROPONENT SHALL HAVE THE RIGHT TO MATCH THAT PRICE
31 WITHIN THIRTY (30) WORKING DAYS; OR

32 (3) REJECT THE PROPOSAL."

33

34 SEC. 2. R.A. No. 6957, as amended by R.A. No. 7718, is hereby further amended by

35 _ inserting a new section after Section 4-A to read as follows:

36

37 "SEC. 4-B. PROHIBITION AGAINST GOVERNMENT GUARANTEES
38 OR PAYMENTS. - NOTWITHSTANDING ANY AGREEMENT TO THE


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CONTRARY, THE PROJECT PROPONENT OF AN UNSOLICITED
PROPOSAL ACCEPTED BY THE GOVERNMENT ON A NEGOTIATED
BASIS IN ACCORDANCE WITH SECTION 4-A (2) SHALL NOT, AT
ANYTIME, BE ENTITLED TO ANY FORM OF PAYMENT OR
SECURITY FROM THE GOVERNMENT, INCLUDING, BUT NOT
LIMITED TO, COST SHARING, CREDIT ENHANCEMENT, DIRECT
OR INDIRECT GOVERNMENT GUARANTEE, SUBSIDY OR EQUITY."

SEC. 3. R.A. No, 6957, as amended by R.A. No. 7718, is hereby further amended by

inserting a new section after Section 10 to read as follows:

"SEC. 10-A. PROJECTS OF NATIONAL SIGNIFICANCE. ~ UPON
CERTIFICATION AND RECOMMENDATION OF NEDA, THE
PRESIDENT MAY CLASSIFY CERTAIN PROJECTS UNDERTAKEN
UNDER THIS ACT AS PROJECTS OF NATIONAL SIGNIFICANCE,
WHICH SHALL BE ENTITLED TO THE FOLLOWING INCENTIVES:

A ALL REAL PROPERTIES WHICH ARE ACTUALLY

AND DIRECTLY USED FOR THE PROJECT SHALL BE

EXEMPT FROM ANY AND ALL REAL PROPERTY TAXES

LEVIED UNDER REPUBLIC ACT NO. 7160;

B. ALL LOCAL TAXES IMPOSED BY A PROVINCE,

CITY OR MUNICIPALITY IN METRO MANILA PURSUANT TO

REPUBLIC ACT NO. 7160 ON THE PROJECT PROPONENT

SHALL NOT EXCEED FIFTY PERCENT (50%) OF ONE

PERCENT (1%) OF GROSS SALES OR RECEIPTS OF THE

PRECEDING CALENDAR YEAR;

4 THE NECESSARY BUSINESS PERMITS,

INCLUDING ANY RENEWALS THEREOF, SHALL BE DEEMED

TO HAVE BEEN AUTOMATICALLY GRANTED OR ISSUED TO

THE WINNING PROJECT PROPONENT UPON TENDER OF

THE REQUIRED TAXES AND FEES TO THE APPROPRIATE

LGU.

FOR PURPOSES OF THIS SECTION, IN ORDER FOR A
PROJECT TO QUALIFY AS A _ PROJECT OF NATIONAL
SIGNIFICANCE, THE FOLLOWING CONDITIONS MUST BE
SATISFIED:


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1, THE TOTAL COST OF THE PROJECT IS AT LEAST FIVE
BILLION PESOS (PHPS5,000,000,000.00); AND

2. THE PROJECT IS LOCATED IN OR WILL DIRECTLY
BENEFIT AT LEAST TWO (2) PROVINCES."

SEC. 4. R.A. No. 6957, as amended by R.A. No. 7718, is hereby further amended by
inserting a new Section 11 to read as follows:

"SEC. 11. PROHIBITION ON THE ISSUANCE OF TEMPORARY
RESTRAINING ORDERS, PRELIMINARY INJUNCTIONS AND PRELIMINARY
MANDATORY INJUNCTIONS. - NO COURT, EXCEPT THE SUPREME COURT,
SHALL ISSUE ANY TEMPORARY RESTRAINING ORDER, PRELIMINARY
INJUNCTION Al PRELIMINARY MANDATORY INJUNCTION AGAINST
THE GOVERNMENT, OR ANY OF ITS SUBDIVISIONS, OFFICIALS OR ANY
PERSON OR ENTITY, WHETHER PUBLIC OR PRIVATE, ACTING UNDER
THE GOVERNMENT'S DIRECTION, TO RESTRAIN, PROHIBIT OR COMPEL
THE FOLLOWING ACTS WITH REGARD TO PROJECTS OF NATIONAL
SIGNIFICANCE UNDER THE IMMEDIATELY PRECEDING SECTION:

A. ACQUISITION, CLEARANCE AND DEVELOPMENT OF THE

RIGHT-OF-WAY AND/OR SITE OR LOCATION;

BIDDING OR AWARDING;

C. COMMENCEMENT, PROSECUTION,
EXECUTION, IMPLEMENTATION AND OPERATION;

D. TERMINATION OR RESCISSION OF THE CONTRACT; AND

E. THE UNDERTAKING OR AUTHORIZATION OF ANY OTHER
LAWFUL ACTIVITY NECESSARY OR IN CONNECTION WITH
THE EXECUTION OR IMPLEMENTATION OF THE PROJECT
THIS PROHIBITION SHALL APPLY IN ALL CASES, DISPUTES OR
CONTROVERSIES INSTITUTED BY A PRIVATE PARTY,
INCLUDING, BUT NOT LIMITED TO, CASES FILED BY BIDDERS
OR THOSE CLAIMING TO HAVE RIGHTS THROUGH SUC
BIDDERS INVOLVING PROJECTS OF NATIONAL SIGNIFICANCE.
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. THE APPLICANT SHALL FILE A BOND, IN
AN AMOUNT TO BE FIXED BY THE COURT, WHICH BOND
SHALL ACCRUE IN FAVOR OF THE GOVERNMENT IF THE



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COURT SHOULD FINALLY DECIDE THAT THE APPLICANT WAS
NOT ENTITLED TO THE RELIEF SOUGHT.

ANY TEMPORARY RESTRAINING ORDER, PRELIMINARY
INJUNCTION AND PRELIMINARY MANDATORY INJUNCTION
ISSUED IN VIOLATION OF THIS SECTION IS VOID AND OF NO
FORCE AND EFFECT."

SEC. 5. The succeeding sections of R.A. No. 6957, as amended by R.A. No. 7718, are

hereby renumbered accordingly

SEC. 6. Public-Private Partnership (PPP) Guaranty Fund. - A PPP Guaranty Fund is
hereby created to defray the cost of compensation to project proponents which enter into BOT
contracts, concession agreements or other contractual agreements with any national government
agency or GOCC pursuant to the provisions of Republic Act No. 6957, as amended, in the event
that the government agency or GOCC fails to comply, or is prevented from complying, with its
obligations under the aforementioned contracts or agreements as a result of any act of another
agency or branch of government: Provided, That no compensation shall be paid out of the PPP
Guaranty Fund if the contract or agreement has been determined to be unlawful or
unconstitutional by a final judgment of a court of competent jurisdiction.

The initial funding in the amount of Five Billion Pesos (PS,000,000,000.00) for the
creation of the Fund shall be charged against the overall savings of the National Government
‘Thereafter, the PPP Guaranty Fund may be replenished or increased by such amount as may be
deemed necessary in subsequent General Appropriations Act.

SEC. 7. Implementing Rules and Regulations. - The NEDA, Departments of Finance,
and the Department of Budget and Management shall promulgate the implementing rules and
regulations within sixty (60) days from the effectivity of this Act.

SEC. 8. 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. 9. Repealing Clause. - All laws, decrees, executive orders, proclamations, rules
and regulations and other issuances or parts thereof which are inconsistent with the provisions of
this Act are hereby repealed or modified accordingly.


1 SEC. 10. Effectivity Clause. - This act shall take effect after fifteen (15) days from its

2 publication in at least two (2) newspaper of general circulation

Approved,