Policy, purposes, and governing principles
- The State recognizes the private sector’s indispensable role, encourages private enterprise, and provides incentives to needed investments.
- The State shall provide an enabling environment for the private sector to mobilize resources to finance, design, construct, operate, and maintain infrastructure or development projects and services.
- The State shall protect the public interest by providing affordable, accessible, and efficient public services.
- The State shall ensure equitable risk allocation, ensure that PPP Projects yield sufficient Value for Money (VFM), promote sustainability, and advance public welfare.
- The State shall pursue financing of infrastructure and other development projects and services through all means available, including appropriations, ODA, PPPs, and combinations/variations, using considerations of budget availability, VFM, timelines, stakeholder commitments, and market capacity.
- The State recognizes the autonomy of Local Government Units (LGUs) in entering and implementing Local PPP Projects to make them self-reliant communities and effective partners in attaining national goals.
- PPP Projects must integrate climate resilience, sustainability, and gender and development policies and programs in planning, design, and implementation.
- The State shall affirm open, fair, transparent, and competitive selection as the central tenet for securing private investment in PPP Projects.
- The State shall implement full public disclosure of all transactions involving public interest, subject to applicable legal conditions.
Computation of periods; time rules
- When computing a period indicated in the Code and the IRR, the first day is excluded and the last day is included, pursuant to Article 13 of Republic Act No. 386 or the Civil Code of the Philippines and amendments.
- If the last day of a period for action by a government entity or for submission to a government entity falls on a non-working day (Saturday or Sunday), a legal holiday, a special non-working holiday, or other non-working days duly declared by the authorized official, the last day is the next working day.
Core definitions and meaning rules
- The IRR apply the following defined terms for purposes of the IRR, including:
- PPP is a contractual arrangement between an Implementing Agency and a Private Partner to finance, design, construct, operate, and maintain (or any combination/variation) Infrastructure or Development Projects and Services typically provided by the public sector, where each party shares associated risks and the Private Partner’s investment recovery is linked to performance.
- Implementing Agency means a department, bureau, office, instrumentality, commission, authority of the national government, SUC, LUC, LGU, and GOCC.
- Private Partner is the private sector entity determined to be financially, legally, and technically capable to undertake obligations under an awarded PPP Contract; it may create a special purpose company (SPC) or special purpose vehicle (SPV).
- PPP Contract refers to the contract as approved, executed, and implemented for the PPP Project.
- PPP Project refers to any public Infrastructure or Development Projects and Services satisfying the PPP elements.
- Infrastructure or Development Projects and Services covers construction, improvement, rehabilitation, repair, and/or maintenance of facilities or provision of services for public use that enable, sustain, and enhance economic and social development, including those listed in the IRR.
- Value for Money (VFM) means effective, efficient, and economic use of resources requiring evaluation of relevant costs and benefits and assessment of risks and non-price attributes and/or life-cycle costs; price alone may not represent VFM.
- VFM Model presents the quantitative VFM analysis showing PPP as more beneficial than traditional government procurement.
- Financial Model presents projected financial statements and cash flows for the full life cycle with assumptions having sufficient basis and justification, including calculations of financial viability.
- Economic Model presents economic benefits and costs with justified assumptions and calculations of economic viability.
- Feasibility Studies are project studies containing the information required by Section 19 of the IRR and may be further defined by ICC or PPP Governing Board guidelines for national or local PPP Projects, respectively.
- Financial Close is the milestone in a PPP Contract when the Private Partner secures all necessary project and financing agreements, confirming prior conditions were met and allowing financing drawdown as applicable.
- Availability Payments are predetermined payments by the Implementing Agency to the Private Partner in exchange for delivering an asset or service per the PPP Contract; Availability Payments are not Government Undertakings, Subsidy, or government contribution.
- Tariff refers to tolls, fares, fees, rentals, and other user charges for a PPP Project.
- Subsidy means arrangements where the Implementing Agency defrays, pays, shoulders, contributes property/assets, or waives charges/fees for items for PPP implementation, subject to specific statutory caps and exclusions and includes Viability Gap Funding (VGF) with defined limits and rules.
- Reasonable Rate of Return (RROR) is the net gain of an investment over a specified time period expressed as an annualized percentage as prescribed by the Approving Body and reflected in the PPP Contract; excess over the prescribed RROR must be remitted to the National Treasury, and RROR setting applies only to single complying and responsive bids for a Solicited Project.
- Guarantee on Demand and Guarantee on Loan Repayment are defined to allocate specific market demand and debt repayment risks to the Implementing Agency, with explicit exclusions for Availability-based schemes and repayment components embedded in Termination Payments.
- Material Adverse Government Action (MAGA) is defined to cover certain post-contract government acts that significantly and negatively affect the Private Partner’s ability to comply with obligations, excluding acts authorized or permitted under the PPP Contract and including unanticipated regulatory risks.
- Most Responsive Bid is the bid conforming to bid solicitation requirements and approved bid parameters in all material respects and being most advantageous to the government.
What PPPs and projects the IRR cover
- The IRR cover any Infrastructure or Development Project or Service that satisfies PPP elements, including specific contractual arrangements.
- The IRR expressly include PPP structures such as:
- Joint Ventures (JVs) as defined in the Code and the IRR.
- Toll operation agreements and supplemental toll operation agreements and related contractual arrangements involving Construction, O&M, or both for toll facilities under specified laws.
- Lease agreements providing for rehabilitation, operation, and/or maintenance of an existing government-owned land or facility for a fixed period of time covering more than one (1) year, including working capital and/or improvements by the Private Partner.
- Lease agreements as a component of a PPP Project.
- BOT and variants, including Build-and-Transfer (BT), Build-Lease-and-Transfer (BLT), Build-Own-and-Operate (BOO), Build-Transfer-and-Operate (BTO), Contract-Add-and-Operate (CAO), Add-Operate-and-Transfer (AOT), Develop-Operate-and-Transfer (DOT), Rehabilitate-Operate-and-Transfer (ROT), and Rehabilitate-Own-and-Operate (ROO).
- O&M.
- The PPP contractual arrangement proposed must be part of the PTCs under Title IV, which the Implementing Agency must submit to the appropriate Approving Body for approval.
- The IRR enumerate covered Infrastructure or Development Projects and Services, including (among others) highways, rail systems, transport and traffic management, ports, maritime infrastructure, airports, power generation/transmission/distribution, downstream oil and gas and energy-related facilities, telecommunications and IT networks, irrigation, water supply and sanitation systems, educational and health facilities, multi-purpose water resources, land reclamation and dredging, industrial and tourism estates, government buildings, urban redevelopment and housing, heritage preservation, markets and slaughterhouses, warehouses and post-harvest facilities, public fish ports and fishponds, agrilogistics and contract farming related facilities, cold chain centers, prisons and certain security-related government assets, environmental and solid waste facilities, climate resilience and disaster risk reduction projects, biodiversity conservation projects, and other authorized PPPs.
- The IRR permit related facilities to include commercial spaces within the project scope.
Key exclusions from PPP Code coverage
- The IRR state that the Code and IRR do not apply to:
- Infrastructure or development projects and services procured under Republic Act No. 9184 (Government Procurement Reform Act).
- Infrastructure projects exclusively funded through foreign loans and grants covered by Republic Act No. 8182, as amended by Republic Act No. 8555, unless the Government of the Philippines and the foreign grantor/financing institution agree otherwise.
- Management contracts lacking PPP elements; O&M PPP Projects are excluded from the meaning of “management contracts” for these IRR purposes.
- Service contracts including:
- Coal service contracts under PD No. 972, as amended.
- Petroleum service contracts under RA No. 387, as amended.
- Mining service contracts under RA No. 7942.
- Renewable energy service or operating contracts under RA No. 9513, with a rule that if bundled as a component of a PPP Project, it is treated as a PPP and covered by the Code and IRR.
- Service contracts contemplated by COA and DBM relevant circulars.
- Divestments or dispositions that involve taking away or withdrawing authority or title over government assets.
- Corporatization or transfer of government assets and