Declaration of Policy
- Recognizes the vital role of the private sector in infrastructure development.
- Encourages private enterprise and investment through incentives.
- Ensures protection of public interest by delivering affordable, accessible, and efficient public services.
- Promotes equitable risk allocation and ensures PPP projects deliver Value for Money (VFM).
- Financing may come from appropriations, Official Development Assistance (ODA), PPPs, or combinations thereof.
- Local Government Units (LGUs) have autonomy to enter into and implement local PPP projects.
- Integrates climate resilience, sustainability, and gender and development policies in PPP projects.
- Emphasizes open, fair, transparent, and competitive selection processes.
- Mandates full public disclosure of transactions involving public interest.
Definition of Terms
- Defines key terms such as Approving Body, Availability Payments, Construction, Contractor, Facility Operator, Financial Close, and other essential PPP terminology.
- Clarifies government-related definitions including Government-Owned or Controlled Corporations (GOCCs), Government Financial Institutions (GFIs), and Government Instrumentalities with Corporate Powers (GICPs).
- Outlines concepts like Material Adverse Government Action (MAGA), Value for Money (VFM), Reasonable Rate of Return, and Unsolicited Proposal.
Coverage
- Applies to all contractual arrangements between implementing agencies and private partners for financing, designing, constructing, operating, and maintaining public infrastructure or development projects.
- Covers Joint Ventures (JVs), toll operation agreements, lease agreements linked to PPP projects, and other arrangements with PPP characteristics.
- Excludes projects under the Government Procurement Reform Act (RA 9184), management/service contracts, divestments, corporatization, and purely commercial joint ventures.
Authority to Undertake PPP Projects
- All implementing agencies are authorized to identify, develop, assess, evaluate, approve, negotiate, award, and undertake PPP projects per this Code.
Identification and Development of PPP Projects
- PPP projects must align with government objectives, procurement appropriateness, VFM, transparency, affordability, safety, and accessibility.
- Projects must comply with national, local, and sectoral development plans.
- Require stakeholder consultation and assessment of legal, technical, economic, financial, and environmental factors.
- Lists of PPP projects must be submitted to oversight agencies and the PPP Center.
Approval of PPP Projects
- National PPP projects costing ₱15 billion or more require approval by the NEDA Board.
- Projects below ₱15 billion may be approved by heads of implementing agencies or governing boards.
- Local PPP projects require approval by local sanggunians or boards, with certain projects requiring endorsement from regional councils and the NEDA Board for government undertakings using national funds.
- Projects overlapping or affecting existing government projects require higher-level approval.
- Approving Bodies assess feasibility, VFM, risk allocation, benefits, and public interest.
- Decisions must be rendered within 120 days; failure to act is deemed approval.
- Splitting projects to evade approval thresholds is prohibited.
PPP Pre-qualification, Bids and Awards Committee (PBAC)
- Implementing agencies must form PBACs responsible for bidding processes.
- Final PPP contracts must be reviewed and cleared by the PPP Center, statutory counsel, and Department of Finance as applicable.
- Contracts with provisions contrary to approved project terms and conditions are null and void.
Solicited Proposals and Public Bidding
- Solicited proposals arise from a public bidding initiated by the Implementing Agency.
- Bidding may be single-stage or two-stage, manual or electronic.
- Award goes to the most responsive bid meeting all requirements.
- Procedures address failure of bidding and handling a single complying bid.
- Financial Close timelines and penalties for failure are mandatory.
Unsolicited Proposals
- Submitted to the PPP Center for completeness determination and endorsement.
- Implementing Agency may accept or reject based on alignment with development plans.
- Detailed evaluation within 90 days; decision is final and non-appealable.
- Negotiations must conclude within 150 days.
- Unsolicited proposals subject to a comparative challenge period of 90 days to 1 year with right-to-match mechanism.
- Restrictions on Government Undertakings in unsolicited proposals.
Joint Ventures (JVs)
- May be contractual or through JV companies.
- Government equity contributions capped at 50% of project cost or JV company stock.
- Profit, loss, and assets shared proportionately; government may negotiate higher returns.
- JV formation shall not alter the government agency's mandate or compliance obligations.
- Properties revert to government at contract end unless divestment occurs.
Protest Mechanism
- Protests resolved within 45 days.
- Motions for reconsideration or appeals do not stay the bidding, but awards await resolution of pending appeals.
Regulation of Tolls, Fares, Fees, Rentals, and Charges
- Regulatory bodies required to issue guidelines and approve initial rates within 180 days of IRR effectivity.
- Approvals based on service quality, transparency, fairness, and reasonable rate of return.
- Adjustments upheld during contract implementation.
- Private partners may recover differences if government fails to implement approved rates.
- Local rate-setting bodies may be established subject to local legislation.
Dispute Avoidance and Alternative Dispute Resolution
- PPP contracts must include ADR mechanisms under RA 9283.
- Parties have freedom to select the ADR process.
Contract Management and Risk Mitigation Plans
- Mandatory adoption of plans to manage financial risks, outline responsibilities, risk mitigation measures, timelines, and costs.
- Plans submitted to PPP Center for monitoring and updating.
Project Supervision and Monitoring
- Implementing Agency exercises supervision and monitoring powers.
- Periodic reports under oath submitted to oversight agencies.
- PPP Governing Board sets monitoring frameworks; PPP Center coordinates monitoring.
- Annual reports submitted to Congress and oversight committees.
Investment Incentives
- PPP projects entitled to applicable government incentives.
- Any tax exemptions or special rates must be reported to the PPP Center.
Investment Recovery Schemes
- Revenue-based schemes where private partner collects user fees.
- Availability-based schemes involving predetermined government payments.
- Other schemes like commercial development rights or related land grants allowed with fair valuation.
Variation, Expansion, or Extension of PPP Projects
- Subject to due diligence and approval of appropriate body for major changes.
- Minor variations approved by Head of Implementing Agency and reported.
- Unauthorized variations are void.
- Prohibited to split changes to evade limits.
- Applies prospectively to existing franchise and concession agreements.
Divestment
- Private partners may divest after lock-in period with approval and qualifications verified.
- Government divestment of assets requires appropriate approvals.
Contract Termination
- PPP contracts must define termination events, remedies, cure periods, and processes.
- Termination not allowed without exhausting remedies.
- Guidelines on termination payments to be issued.
Wind-up and Transfer Measures
- Include asset transfer, technology transfer, personnel training, warranties, and compensation for buy-outs.
Prohibition on Provisional Court Remedies
- Courts, except Supreme Court, prohibited from issuing TROs or similar provisional remedies against implementing agencies or PPP Center related to PPP activities.
- Exception for extreme urgency involving constitutional issues with bond filing.
- Violating judges face penalties and invalidation of orders.
PPP Center
- Authorized to adopt structure, absorb employees, upgrade resources.
- Powers include assistance to agencies, project appraisal facilitation, contract review, document management, monitoring, capacity building, policy recommendations, fund management, and secretariat functions.
- Reports to PPP Governing Board; attached to NEDA.
- Executive Director appointed and responsible for day-to-day management and policy recommendations.
PPP Governing Board
- Overall policy-making and strategic direction body for PPPs.
- Composed of key government department heads, PPP Center Executive Director, and private sector representative.
- Quorum and voting procedures established.
Project Development and Monitoring Facility (PDMF)
- Revolving fund for services related to PPP project preparation, structuring, evaluation, procurement, and monitoring.
- Funded through GAA, ODA, or other sources.
- Managed by PPP Center; governed by PDMF Committee.
Risk Management Fund
- Created to cover contingent liabilities from PPPs.
- Funded by appropriations, existing project income, and other sources.
- Managed by PPP Center.
- Includes inter-agency technical working group for guidelines.
- LGUs may establish local similar funds and access national fund with contributions.
Establishment of PPP Units
- Implementing agencies may establish dedicated units for PPP planning, oversight, and monitoring.
- Units staffed with knowledgeable personnel and assisted by PPP Center.
Safekeeping and Public Disclosure
- Tender documents and PPP contracts are public documents.
- Must be published on agency and PPP Center websites.
- Disclosure respects proprietary and security concerns aligned with law.
Miscellaneous Provisions
- Independent consultants procured to provide unbiased advice; costs shared equally.
- Conflict of interest provisions apply; mitigation required if agency is regulator and implementer.
- Confidential business information protected unless disclosure mandated by law.
- Alternative financing like Green Financing allowed subject to regulations.
- Required MOAs for PPP projects with interconnection or interface ri