STAKEHOLDER CONSULTATION

Implementing Rules and Regulations (IRR) of

Republic Act No. 11966 (PPP Code of the Philippines)
Proposed policies

FOR PUBLIC CONSULTATION

Materials as of January 22, 2024 uploaded via PPP Center website
Timeline of the PPP Code and its IRR

Milestones Timeline
Signing of the PPP Code December 5

Publication of the PPP Code December 8

Effectivity of the PPP Code

December 23
(15 calendar days after publication)

Start of 90-day period for the IRR December 24

End of 90 Days and publication of the IRR in the Official Gazette March 23

Effectivity of the IRR

April 7
(15 calendar days after publication)

2
Outline of discussion
1 Scope and coverage 14 PPP Risk Management Fund
2 Repealing clause 15 Monitoring of PPP Projects
3 Transitory provisions 16 Divestment or Takeover
4 Reasonable Rate of Return 17 Award and Execution of PPP Projects
5 PPP Institutions (PPPGB, PPPC, PDMF, PPP Unit) 18 Implementation of PPP Projects
6 General provisions
7 Consolidated list of investment and infrastructure
plans (“The Consolidated Plans”) and list of PPP 19 Regulation of tariff
projects (“The List”) 20 Government Undertakings
8 Evaluation and approval of PPP projects 21 Investment incentives
9 Variation, Expansion, or Extension 22 Valuation of government assets
10 Unsolicited proposals 23 Contract termination
11 Procurement of PPP projects
12 Review and approval of PPP contracts
13 Protest mechanism

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Outline of discussion – Part 1

1 Scope and coverage

2 Repealing clause
3 Transitory provisions
4 Reasonable Rate of Return
5 PPP Institutions (PPPGB, PPPC, PDMF, PPP Unit)
6 General provisions

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(1) Scope and coverage – Section 4 of the PPP Code
PPP Code SHALL COVER the following:
a. ALL contractual arrangements between IA and Private
Partner to finance, design, construct, operate, and
maintain, or any combination or variation thereof,
infrastructure or development projects and services, which
are typically provided for by the public sector, where each
party shares in the associated risks
b. Joint Ventures (JVs) as defined in the Code
c. Toll operation agreements (TOAs)
PPP Code EXCLUDES the following:
a. infrastructure projects undertaken through RA 9184
b. joint venture and lease agreements involving purely
commercial arrangements that neither provide nor
include public infrastructure or development services
c. management contracts
d. service contracts

d. Lease agreements with provision of working capital and/or e. divestments or dispositions

improvements to an existing land or facility owned by the
government for a period of time covering more than 1 year f. Corporatization

e. Lease agreements when such lease is a component of a g. incorporation of subsidiaries with private sector equity
PPP project
f. all other contractual arrangements which possess h. onerous donations
characteristics or elements of a PPP as defined under the
Code i. gratuitous donations

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(1) Scope and coverage – Proposed IRR provision

“For avoidance of doubt, Eligible Types of PPP Projects

any infrastructure project Land Transport and
Airports, air
traffic Port
where the government is a Highways transportation management
navigation, and
infrastructure related facilities
contracting party and which systems projects
has a component that
delivers public service shall Power Energy Information Irrigation and
Telecommunications
generation and efficiency and infrastructure technology (IT) related
be considered as a PPP, and distribution conservation networks facilities
shall therefore follow the
rules of the Code and this Land
Water supply,
IRR. Educational Health reclamation Industrial and
sewerage, and
infrastructure infrastructure and flood tourism estates
drainage
control
For purposes of this IRR,
Urban Heritage
infrastructure projects that Government preservation and Markets and
Warehouses and
fall under Section (x) of this redevelopment adaptive reuse slaughterhouses
post-harvest
buildings facilities
and housing projects
IRR (Eligible Types of PPP
Projects) are to be Climate change
Public fish Environmental Other
considered projects that Agri-fishery adaptation and
ports and and solid waste disaster risk
infrastructure
deliver public service.” industrial hubs
fishponds management reduction projects

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(1) Scope and coverage – Proposed IRR provision

No separate approval for the contractual arrangement shall be required

“All PPP contractual arrangements under the Code and this IRR shall be part of the
proposed parameters, terms, and conditions (PTCs) to be approved by the appropriate
Approving Body.
The Code and this IRR shall also cover the following contractual arrangements:
a. Joint Ventures as defined in the Code and this IRR;
b. Toll operation agreements or supplemental toll operation agreements, or any contractual arrangements involving
the construction, operation, and maintenance, or a combination or variation thereof, of toll facilities in accordance
with Presidential Decree (PD) No. 1112 series of 1977, PD No. 1113, series of 1977, and PD No. 1894, series of 1983;
c. Lease agreements providing for the rehabilitation, operation, and/or maintenance, including the provision of
working capital and/or improvements to, by the Private Partner of an existing land or facility owned by the
government for a fixed period of time covering more than one (1) year;
d. Lease agreements, when such lease is a component of a PPP Project, as defined under the Code and this IRR; and
e. All other contractual arrangements which possess characteristics or elements of a PPP as defined under the Code.”

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(1) Scope and coverage – Proposed IRR provision

Project Cost definition - Section 3(bb) of the PPP Code

(bb) Project Cost refers to the total cost to be expended to plan, develop, and construct the project to completion stage,
including cost of feasibility studies, engineering and design, construction, equipment, land/right-of-way (ROW), taxes
imposed on said cost, and development cost. For avoidance of
doubt, interests and other financing
costs incurred during construction shall be considered as part of the Project Cost.
For Operations and Maintenance (0 & M) PPP Projects without initial capital expenditures, the present value of costs
incurred in delivering the contracted service, including any reinvestment requirements, shall be considered as the
Project Cost;

For O&M PPP Projects without initial capital expenditures, the government borrowing
rate shall be the discount rate used in determining the present value of costs incurred in
delivering the contracted service, including any reinvestment requirements.

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(2) Repealing clause – Section 37 of the PPP Code
• Refer to Section 37 for a complete list of specific laws and
decrees repealed or modified.
• Provisions on identification, evaluation, approval, procurement,
and/or implementation of PPP Projects including leases and
Joint Ventures in UP Charter, PD No. 1113, s. 1977 and PD No.
1894, s. 1983 are amended.
• All executive orders and laws, decrees, orders, codes, issuances,
rules and regulations, and ordinances or any part thereof
inconsistent with or contrary to the Code, are repealed or
modified accordingly.
• References to BOT Law are amended to now refer to the PPP
Code.
Upon effectivity of this Code, no other JV guidelines, PPP guidelines,
codes, or ordinances, whatsoever may be enacted, issued and/or used
by any government entity to enter into PPPs, except those that are
enacted, issued, and/or used in accordance with this Code and its IRR.

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(2) Repealing clause – Proposed IRR provision

Local PPP and JV codes or ordinances, or any part thereof which are inconsistent
with or contrary to the PPP Code are rendered inoperable. Following the principle
that every law must be interpreted and brought in accordance with other laws as to
form a uniform system of jurisprudence, and that the PPP Code comprehensively
covers all rules and procedures covered in all stages of PPP project development,
approval, procurement, and implementation, the language used in the PPP Code
renders it irreconcilable with the rules and procedures found in existing local PPP
codes and other local issuances.

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(3) Transitory provisions – Proposed IRR provision

GENERAL The enactment of the PPP Code shall not affect or alter the PTCs of PPP projects that
RULE have already been approved by the appropriate Approving Body prior to the effectivity
of the PPP Code. The same principle of recognizing approved project terms shall be
applicable to (a) Local PPP Projects processed and/or approved under local PPP or JV
codes and ordinances, and (b) PPP projects of GOCCs processed and/or approved
under their respective charters or NEDA JV Guidelines.

1 Existing PPP projects with executed contracts prior to the effectivity of the PPP Code

All existing contracts shall be governed by the agreements entered into by the
concerned parties. The provisions of the PPP Code shall be applied suppletorily to the
extent that such application does not infringe upon established rights and obligations
of the parties under the existing contracts.

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(3) Transitory provisions – Proposed IRR provision
2 PPP Projects with a Winning Bidder but no
executed contracts
All PPP Projects issued with a Notice of Award (NOA) but
without any executed contracts before the effectivity of
the Code shall be governed by the rules under the PPP
Code and this IRR, except for the rules provided under the
instructions to bidders and the conditions stated in the
NOA that was issued prior to the effectivity of the law.
The composition of the Special Bids and Awards
Committees (SBAC), Pre-qualification Bids and Awards
Committee (PBAC), Joint Venture Selection Committees
(JVSC), and all other applicable bidding committees of the
projects covered under this section, created before the
effectivity of the Code, shall remain the same and effective.
3 Solicited PPP Projects which have published an
Invitation to Bid prior to the effectivity of the Code
Solicited PPP Projects which have commenced bidding
before the effectivity of the Code shall be governed by
the rules under the PPP Code and this IRR, except for the
bidding rules or any amendments thereto issued by SBAC,
PBAC, JVSC, or the applicable bidding committee. In case
of gaps in the rules of the bidding process, the respective
bidding committee may use the provisions of the PPP
Code as reference.
The composition of the SBAC, PBAC, JVSC, and all other
applicable bidding committees of the projects covered
under this section, created before the effectivity of the
Code, shall remain the same and effective.
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(3) Transitory provisions – Proposed IRR provision

4 Unsolicited PPP Projects which have commenced
comparative challenge prior to the effectivity of the
PPP Code
Unsolicited PPP Projects which have commenced comparative
challenge before the effectivity of the Code shall be governed by
the rules under the PPP Code and this IRR, except for the
comparative challenge rules or any amendments thereto issued by
SBAC, PBAC, JVSC, or the applicable bidding committee. In case of
gaps in the rules of the comparative challenge process, the
respective bidding committee may use the provisions of the PPP
Code as reference.
For avoidance of doubt, the prequalification rules and requirements,
which were used to pre-qualify the Original Proponent before the
effectivity of the Code and this IRR, shall apply to all challengers.
5 Solicited and Unsolicited Projects pursuant to the BOT
Law which are already approved for bidding or
comparative challenge but pending publication of
applicable invitation prior to the effectivity of the PPP
Code
Projects which have secured the approvals necessary to
publish an Invitation to Bid or invitation for comparative
challenge but have not yet published the applicable
invitation shall proceed with its publication.
The rules under the PPP Code and this IRR shall be applied
for the bidding process or the comparative challenge
process, and all succeeding stages.

The Original Proponent Status conferred to the Original Proponent

and the issued Certificate of Successful Negotiation shall remain
effective.

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(3) Transitory provisions – Proposed IRR provision

6 Solicited Projects pursuant to the BOT Law pending approval of the appropriate Approving Body prior to
the effectivity of the PPP Code

Solicited Projects pursuant to the BOT Law, pending
approval of the appropriate Approving Body, shall mean
those PPP Projects that have been submitted to the
appropriate Approving Body prior to the effectivity of the
PPP Code. This does not include PPP Projects pursuant to
the BOT Law that have been returned by the appropriate
Approving Body, and have not yet been resubmitted to the
appropriate Approving Body.
Such projects shall be continuously and expeditiously
processed in accordance with the approval rules in effect
at the time the project was submitted to the appropriate
Approving Body.
Upon securing the approval of the appropriate Approving
Body, the PPP Code and its IRR shall be applied to the
bidding process and the succeeding stages, based on the
approved parameters, terms, and conditions.
Such solicited projects which fail to secure the approval of
the appropriate approving body may be resubmitted in
accordance with the approval rules under the PPP Code
and this IRR.

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(3) Transitory provisions – Proposed IRR provision

7 Unsolicited Projects pursuant to the BOT Law pending approval of the appropriate Approving
Body prior to the effectivity of the PPP Code (1/2)

Unsolicited Projects pursuant to the BOT Law, and

pending approval of the appropriate Approving Body,
shall mean those PPP Projects that have been granted an
OPS and submitted to the appropriate Approving Body
prior to the effectivity of the PPP Code. This does not
include PPP Projects pursuant to the BOT Law that have
been returned by the appropriate Approving Body and
have not yet been resubmitted to the appropriate
Approving Body.
Original Proponents shall notify the Implementing
Agency in writing within thirty (30) calendar days
after the effectivity of this IRR of its decision on
whether to proceed with the approval process
pursuant to BOT Law or resubmit the Project under
the PPP Code.

For such projects, the Original Proponent shall have the

option to proceed with the approval process pursuant to
BOT Law or resubmit the Project under the PPP Code.

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(3) Transitory provisions – Proposed IRR provision
7 Unsolicited Projects pursuant to the BOT Law pending approval of the appropriate Approving Body
prior to the effectivity of the PPP Code (2/2)
A. Approval Process Pursuant to BOT Law
Should the Original Proponent decide to proceed with the
approval process pursuant to the BOT law, such projects shall be
continuously and expeditiously processed in accordance with
the approval rules in effect at the time the project was
submitted to the appropriate Approving Body. For avoidance of
doubt, the approval process shall refer to the approval of the
PTCs for negotiation, the negotiation process under the BOT Law
and its Revised 2022 IRR, and the approval of the negotiated
PTCs by the appropriate Approving Body.
Unsolicited proposals which are in the negotiation process upon
the effectivity of the Code and this IRR, or fail to reach successful
negotiation after having secured the approval of the PTCs for
negotiation, shall proceed in accordance with PPPGB Resolution
No. 2023-06-02 or the Guidelines on the Negotiation Process for
Unsolicited Proposals under the Revised 2022 IRR of the BOT
Law.
Upon securing the approval of negotiated PTCs by the appropriate
Approving Body, the PPP Code and its IRR shall apply in the
comparative challenge process and the succeeding stages based on
the approved negotiated PTCs.
Such projects which fail to secure the approval of the appropriate
approving body shall be returned to the IA concerned and may be
resubmitted in accordance with the approval rules under the PPP
Code and this IRR.
B. Approval Process Pursuant to PPP Code and its IRR
Should the Original Proponent decide to resubmit under the Code,
its submission shall be processed in accordance with the rules
stated in the PPP Code and this IRR, starting from the
completeness check by the PPP Center. The OPS that was
previously conferred to the Original Proponent shall remain
effective.
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(3) Transitory provisions – Proposed IRR provision

8 Non-BOT Law PPP Projects pending approval of the relevant approving authorities
prior to the effectivity of the PPP Code

For non-BOT Law PPP projects (e.g., JVs of GOCCs, JVs of LGUs, Toll Operation Agreements
or STOA), pending approval of the relevant approving authorities, the rules and
procedures under the PPP Code shall apply.

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(4) Reasonable Rate of Return
Section 3(dd) of the PPP Code:
Reasonable Rate of Return refers to
the net gain of an investment over a
specified time period, expressed as
an annualized per centage as
prescribed by the appropriate
Approving Body and reflected in the
PPP contract: Provided, That where
the realized rate of return exceeds
the prescribed Reasonable Rate of
Return, the excess shall be remitted
to the National Treasury
Pursuant to Section 9(d) of the PPP Code, RROR will only
apply to single complying solicited bids.
The IA may consider, on a negotiated basis, a single complying
and responsive bid, if:
1. After advertisement, more than one bidder applied for pre-
qualification but only one met the pre-qualification
requirements;
2. After advertisement, only one bidder applied for and met the
pre-qualification requirements, provided such was allowed by
the Head of the IA, upon recommendation of the PBAC;
3. After pre-qualification of more than one bidder, only one
submitted a bid; or
4. After pre-qualification, more than one bidder submitted bids
but only one is found by the IA to be complying.
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(4) Reasonable Rate of Return – Proposed IRR provision
a. General rules, if RROR is required
i. shall consider prevailing market conditions,
risks to be assumed by the private partner,
and duration of the project, as decided upon
by the appropriate Approving Body
ii. The RROR, as prescribed by the appropriate
Approving Body, shall be provided in the PPP
contract.
c. Data sets for the RROR variables shall be derived
from reputable sources of financial data. Should
the RROR be set at more than the determined
RROR using the formula above, the justification for
such increment shall be assessed.
b. Operationalization
i. Cost of debt, which is the sum of the following:
• Risk-free rate based on loan tenor
• Credit spread
ii. Cost of equity, which is the sum of the following:
• Risk-free rate based on the project duration
• Relevered beta based on the project’s debt-
to-equity ratio, multiplied by the equity risk
premium
iii. RROR shall be composed of the weighted average
of the post-tax cost of debt and cost of equity
following the debt-to-equity ratio of the project
d. The ICC may update the basis of setting the RROR
through the issuance of guidelines.
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(4) Reasonable Rate of Return – Proposed IRR provision

e. Remittance of excess. Where the realized rate of return

exceeds the prescribed RROR, the following may be
considered in remitting the excess to the National
Treasury:
i. Creation of a trust account where the excess will
accrue per agreed monitoring period until the end
of the contract period
ii. Withdrawal of the private partner from the trust
account for reinvestment in the project if the
realized rate of return for the agreed monitoring
period falls below the prescribed RROR
f. Monitoring of excess. IA shall monitor
the RROR and determine the excess, if
any. For an IA to do so, the Private
Partner shall submit financial models
and AFS annually.
g. Application. Pursuant to Section 9 of the
PPP Code, the RROR shall apply ONLY to
solicited proposals with a single
complying and responsive bidder.

iii. Remittance to the National Treasury of the

remaining excess at the end of the contract period

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(5) PPP Institutions; The PPP Center
PPP Code institutionalizes the PPP Center, with additional
functions: (Section 24 of the PPP Code) Proposed IRR provision:
i. Act as procurement agent upon the request of the IA The PPP Center may act as a
ii. Review PPP contracts of national PPP projects prior to procurement agent upon request by
execution to ensure compliance with required PTCs the IA, and under the following
iii. Require the submission of PPP project documents in all stages circumstances:
of the PPP process, notwithstanding the confidentiality
clauses stipulated 1. If the PPP Project is complex and
iv. Issue non-policy matter opinions relating to PPPs the IA lacks capacity to procure
v. Manage and administer the RMF such project; and
vi. Advise and assist IAs and oversight agencies in developing and
periodically updating an organizational development plan 2. If the PPP Project is considered
that will enable them to competently perform their functions pioneering.
under this Code; and recommend to the DBM the standards
of training, qualification, and compensation for necessary The PPPGB may issue supplemental
personnel under these organizational development plans guidelines to operationalize such
function of the PPP Center.
21
(5) PPP Institutions – Sections 25 and 26 of the PPP Code

The PPP Code strengthens enabling institutions for PPPs.

Project Development and

PPP Governing Board
Monitoring Facility (PDMF)
provision of additional members of the Board:
expansion on the use of PDMF for other
(1) PPP Center; (2) DILG; (3) DENR; (4) CHED
critical services

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(5) PPP units – Proposed IRR provision
1. IAs may form a dedicated PPP unit, responsible in planning, overseeing,
implementing, and monitoring the PPP projects to be implemented.

2. In lieu of a dedicated PPP unit, IAs shall, at the minimum, establish a committee or a
group to serve as focal persons for PPP projects.

3. The PPP unit shall, at the minimum, be composed of

a. a senior official
b. a technical personnel for project development
c. a technical personnel for contract management
d. a finance personnel
e. a legal personnel

4. The PPP Center shall provide technical assistance and capacity development for the
PPP units to effectively discharge their roles and responsibilities.

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(6) General Provisions – Proposed IRR provision

a. Unless expressly provided to the contrary, references to any statute, law, decree,
regulation, document, or agreement made in this IRR shall be deemed to include
references to such statute, law, decree, regulation, document, or agreement, as
amended, supplemented, novated, varied, or replaced from time to time: Provided,
That there is no impairment of the obligation of contract.

b. In computing a period indicated in the Code and this IRR, the first day shall be
excluded and the last day included, pursuant to Article 13 of the RA No. 386 or the Civil
Code of the Philippines.

c. In case the deadline for each activity falls on a non-working day (i.e. Saturday and
Sunday), legal holiday, or special non-working holiday, or other nonworking days duly
declared by the President, Governor, Mayor or other Government Official authorized to
make such declaration, the deadline shall be the next working day.
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Outline of discussion – Part 2

7 Consolidated list of investment and infrastructure

plans (“The Consolidated Plans”) and list of PPP
projects (“The List”)
8 Evaluation and approval of PPP projects
9 Variation, Expansion, or Extension

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(7) Consolidated investment and infrastructure plans – Proposed IRR provision

1. Government entities concerned shall submit

The following shall be considered as all official plans to NEDA, within 30 cds from
The Consolidated Plans to be considered by all IAs: effectivity of the IRR.

a. Public Investment Program (PIP) 2. The submitted official plans shall be

b. Three-Year Rolling Infrastructure Program (TRIP) continuously posted in the websites of
c. Local Development Investment Programs (LDIPs) NEDA and PPP Center.
d. Regional Development Investment Plans (RDIPs)
e. Official sector master plans 3. Updates to the plans shall be submitted to
NEDA within 7 cds from approval.

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(7) The List of PPP Projects – Proposed IRR provision
Preparation
1. Only projects that are included in the The
Consolidated Plans shall be included in the List of
PPP Projects.
2. IAs shall prepare The List which shall include the
following information:
a. name and brief description of the project, as
listed in The Consolidated Plans
b. Project Cost, as defined under the Code
c. project location (region, city/municipality)
d. status of the project (under implementation,
under procurement, for approval, ongoing
negotiation, etc.)
e. development costs such as the conduct of
feasibility study, business case, and surveys,
for the last three years
3. Unsolicited proposals shall only be included in
The List once the IA has granted the OPS for the
Private Proponent.
Submission and updating of The List
1. IA shall submit the List of PPP Projects to the NEDA, PPPC,
RDC, LDC, and local Sanggunian*, within 30 cds from
effectivity of the IRR.
2. IA may update The List at any time by submitting within 7 cds
from approval of the Head of IA.
3. PPP Center and IA shall post such lists in their websites or any
official digital platforms.
Rules on delisting of projects from The List
1. IA may delist projects from The List through a written notice
to the NEDA, PPPC, *RDC, LDC, and local Sanggunian which
shall include a justification.
2. Any of the following may be a ground for the automatic
delisting of projects in The List:
i. if the allowable period for procurement has lapsed
(solicited)
ii. if the OPS expired (unsolicited)
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*only applies to local PPP projects
(8) Evaluation and approval of PPP Projects – Proposed IRR provision
Guidelines, forms, and templates to be used by the IA and the appropriate Approving Body in reviewing and
approving PPP Projects
a. Guidelines for approval to be prepared by
a. ICC for national projects
b. PPP GB for local projects
b. The guidelines shall clearly define the:
i. Documentary requirements that will promote
ease of doing business
ii. Timelines that will ensure expeditious processing
of PPP projects
iii. Actions required from entities involved
c. Guidelines, forms, and templates may be reviewed and
updated as may be necessary.
d. Appropriate Approving Body may request capacity
development assistance from the PPP Center in their
review and approval of proposed Local PPP Projects
Approval guidelines shall cover the following:
1. Review and approval of PPP Projects submitted for
approval of the appropriate Approving Body
2. Review and approval of proposed changes to approved
PTCs prior to bid submission
3. Guidelines for cases where the appropriate Approving
Body requires PTCs outside of the negotiated PTCs
4. Determination of RROR in cases of single complying and
responsive bids in solicited projects
5. Review and approval of proposed contract variation,
expansion, or extension of an existing PPP Project
requiring the approval of the appropriate Approving Body
6. Guidelines for cases where the appropriate Approving
Body failed, within 120 calendar days from receipt of
complete requirements, to render its decision on a PPP
Project submitted for its approval
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(8) Evaluation and approval of PPP Projects – Proposed IRR provision

Minimum PTCs required to be submitted to the appropriate Approving Body

(both national and local PPP Projects)

Rights and obligations of

Contractual the IA and the Private
Scope Contract term Proponent, and penalties Risk allocation
arrangement to be imposed for failure
to deliver

Performance
Government Repayment Contingent
standards and Bid parameter
undertakings scheme liabilities
targets

Proposed public Proposed period for

Revenue share for comparative
Ceiling for debt- bidding process
the government, (single stage or two-stage) challenge process
to-equity ratio
if any (for solicited) (for unsolicited)

29
(8) Evaluation and approval of PPP Projects (National)
National PPP Projects
• Increased threshold which may be updated
by the ICC
• PPP Projects of water districts are
considered National PPP Projects
• Processing through green lane1 for PPP
Projects to be implemented by SUCs with
Project Cost of Php 15B and above but not
requiring any GU from the national
government
• PPP projects shall be approved within 120
cds from receipt of complete requirements.
Failure to render a decision within the
required period shall be deemed an approval
of the PPP project, without prejudice to the
provisions under Section 32 of the Code.
1pursuant
to the guidelines to be issued by the ICC.
Approving Body Amount threshold
NEDA Board (upon Projects costing Php 15 billion and above
recommendation of ICC)
Head of IA or Board, Projects costing below Php 15 billion
whichever is applicable
ICC Projects costing below Php 15 billion, but:
1. physically overlaps with another
government project
2. negatively affects the economic
benefits, demand, and/or financial
viability of another government project
3. requires financial government
undertakings to be funded under the
General Appropriations Act (GAA)
4. involves Availability Payments to be
sourced and funded under the GAA
5. The contribution of an IA in a proposed
JV exceeds 50% of its entire assets
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(8) Evaluation and approval of PPP Projects – Proposed IRR provision

General rules on approval of NATIONAL PPP projects

a. In no case shall the Approving Body delegate its
authority to render a decision on a project for
approval. However, the Approving Body shall not
be prohibited to establish, as needed, units to aid
in rendering such decision on the proposed project.
b. Approving Bodies shall evaluate and approve PPP
projects using a set of criteria.
c. For PPP Projects whose appropriate Approving
Body is neither the NEDA Board nor the ICC, the IA
shall notify the NEDA and the PPP Center in
writing of such information and submit the project
details for monitoring purposes.
d. To facilitate expedient processing of National PPP
Projects, meetings shall be held as follows:
i. NEDA Board – at least once a month;
ii. ICC Cabinet Committee – at least once a
month;
iii. ICC Technical Board – at least twice a month.
The above recommended frequency of meetings of
the Approving Body may not apply if there is no
project set for review or evaluation.

31
(8) Evaluation and approval of PPP Projects – Proposed IRR provision
Instances requiring ICC approval for national PPP Projects costing below Php15 billion
Criteria under the PPP Code
(Section 7)
(1) Proposed project
physically overlaps another
government project
(2) Proposed project
negatively affects the
economic benefits, demand,
and/or financial viability of
another government project
Proposed mechanism to determine whether the
proposed project falls under the criteria
a. The IA shall validate if the proposed project has a physical
overlap with a project that is in The Consolidated Plans and
The NEDA, in
The List posted in the PPP Center website.
coordination with
b. In case the information posted in the PPP Center website is not
the PPP Center
sufficient to determine existence of such physical overlap, the
may monitor the
IA shall have the responsibility to validate with agencies
existence of such
concerned.
physical overlap or
The PPP Project is considered to have a negative effect if the negative effect
proposed project falls under any of the following indicators: through the
information
i. Proposed project has the same alignment with any of the provided by the IA,
projects listed in The Consolidated list and The List posted in the The Consolidated
PPP Center website, Plans, and The List.
ii. Proposed project has the same catchment area as any of the
projects in The Consolidated Plans, or
iii. Same market/group being catered to, by any of the projects
32
listed in The Consolidated Plans
(8) Evaluation and approval of PPP Projects – Proposed IRR provision
Instances requiring ICC approval for national PPP Projects costing below Php15 billion

Criteria under the PPP Code
(Section 7)
(3) Proposed project requires financial
Government Undertakings to be
funded under the General
Appropriations Act (GAA)
(4) Proposed project involves
Availability Payments to be sourced
and funded under the GAA.
Proposed mechanism to determine whether the
proposed project falls under the criteria
a. For this purpose, financial government undertaking shall refer to Subsidy,
Viability Gap Funding, and any similar financial instrument.
b. Government undertaking in the form of ROW shall not be considered as a
financial government undertaking.
c. Financial government undertakings sourced from funds other than GAA
are not covered by this provision.
Availability Payments sourced from funds other than GAA are not covered by
this provision.

33
(8) Evaluation and approval of PPP Projects – Proposed IRR provision
Instances requiring ICC approval for national PPP Projects costing below Php15 billion

Criteria under the PPP Code
(Section 7)
(5) The contribution of an Implementing
Agency in a proposed JV exceeds fifty
percent (50%) of its entire assets based
on its latest audited financial
statements and other pertinent
documents, and subject to Section 3(gg)
of the PPP Code.
Proposed mechanism to determine whether the
proposed project falls under the criteria
a. The value of the entire assets of the Implementing Agency shall be the
average of the values for the last 3 years and as set forth in a valuation
report.
b. In addition to the ICC requirements, other pertinent documents may
include audited financial statements from the last 3 years, development
plans, financial performance reports, and management reports.

c. “Entire assets” shall refer to the assets of the GOCC, and not the assets of
the proposed project.

34
(8) Evaluation and approval of PPP Projects – Proposed IRR provision

Timelines for approval of NATIONAL PPP projects

1. Approving Body is NEDA Board (15 billion and above) 2. Approving body is ICC (below 15 billion but
falling under 5 criteria)
Milestone Maximum period Milestone Maximum period
Submission of complete Submission of complete
requirements by the IA to the ICC 60 cd from requirements by the IA to the ICC 60 cd from
Core Secretariat determination of Core Secretariat determination of
completeness completeness
ICC-TB deliberation and decision ICC-TB deliberation and decision

Recommendation of ICC-CC to the 30 cd from ICC-TB 30 cd from ICC-TB

Decision of ICC-CC
NEDA Board recommendation recommendation
30 cd from ICC-CC Total 90 cd
Decision of NEDA Board
recommendation
Total 120 cd

35
(8) Evaluation and approval of PPP Projects – Proposed IRR provision

3. Green lane projects (15 billion and above implemented by SUCs but not
requiring GUs from national government)

The NEDA Board-ICC shall issue guidelines to facilitate a faster approval process for
green lane projects. For this purpose, the NEDA Board-ICC may consider the
creation of a subcommittee or delegation to an executive committee the review and
evaluation of green lane projects for approval. The NEDA Board-ICC may also
prescribe a set of documentary requirements specifically for green lane projects.

36
(8) Evaluation and approval of PPP Projects – Proposed IRR provision
4. Approving body for projects below 15 billion, and not meeting the 5 criteria

Approving body is Head of Mother Agency or Approving body is Head of IA

Governing Board The IA shall issue guidelines outlining the process of its review
and approval of National PPP Projects pursuant to Section
7(a)(1)(ii), provided that such guidelines shall adhere to the
Milestone Maximum period following principles:

Completion of requirements
by the IA
Deliberation and
endorsement by the IA to the
Head of Mother Agency /
Governing Board
Decision of Head of Mother
Agency / Governing Board
Total
a. A focal person or a focal unit of the IA shall evaluate and
provide its recommendation on the project to the Head
60 cd from
determination of of IA by submitting the project documents.
completeness b. The decision of the Head of IA shall be rendered in
writing within 90 cds upon receipt of complete
requirements.
c. The processing and approval of each project shall be
30 cd from IA documented. The IA shall issue their own guidelines but
recommendation SHALL refer to the guidelines, forms, and templates
90 cd prescribed by the ICC.

All IAs shall submit a copy of their approval guidelines to the

37
PPP Center for monitoring purposes.
(8) Evaluation and approval of PPP Projects – Proposed IRR provision
Deemed approval of solicited PPP projects where the appropriate Approving Body failed
to render its decision on a PPP Project within the specified period
a. In cases where the appropriate Approving Body did not act on the PPP Project submitted for its approval:

i. After the specified period for approval, the PPP Center shall notify the appropriate Approving Body that
the period has lapsed and that the project is deemed approved.
ii. The proposed PTCs, as submitted, shall guide the procurement of the project deemed approved,
without prejudice to the penal sanctions under Section 32 of the Code.
b. In cases where the appropriate Approving Body who did not act on the PPP Project submitted for its
approval is the Head of IA, the PPP Center shall inform the IA of items (i) and (ii) above, and:
i. Require the IA to report to the PPP Center of its catch-up plan regarding the project not acted upon
within 15 cds from receipt of the PPP Center’s notification;
ii. That should the IA fail to comply with item (i) above, the PPP Center shall report to the COA and
the Joint Congressional Oversight Committee said failure to approve the project within the specified
period; and
iii. Of the penal sanctions for Section 7 under the PPP Code.
38
(8) Evaluation and approval of PPP Projects (Local)
Local PPP Projects
Implementing Approving Body Applicable
• Uphold local autonomy while ensuring harmonized
Agency (regardless of project cost) timeline
investment programming between LGUs and the
national government All LGUs Local Sanggunians 30 cds – LDCs
upon endorsement of local
• In cases where the appropriate Approving Body did development council (LDC) 120 cds – LS
not act on the PPP Project submitted for its approval, concerned
the proposed PTCs, as submitted, shall guide the
procurement of the project deemed approved All LUCs LUC Boards 120 cds – LUC
without prejudice to the penal sanctions under Boards
Section 32 of the Code

Projects requiring additional clearance Additional clearance required Applicable timeline

1. Local projects requiring government
undertakings (GU) using national
government funds
2. Local projects affecting (1) national
projects in The Consolidated Plans and
(2) national projects in The List
ICC approval of the required GU, upon 60 cds – ICC approval of the requested GU
endorsement of RDC
30 cds – RDC endorsement
Endorsement of by the respective RDC(s) 30 cds – RDC endorsement

39
(9) Variation, Expansion, or Extension – Proposed IRR provision

What the law provides: 1. All new variations, including those pending approval,
shall be governed by the Code and this IRR, unless
The provisions of this section (variation) there is an infringement on the established right.
shall apply prospectively to all existing
franchises and concessions granted for the 2. Guidelines in reviewing and approving endorsed
financing, construction, operation, and variations shall be formulated by:
maintenance of infrastructure facilities
under previous laws and decrees:
Provided, That such shall not impair the
a. the ICC, in coordination with the PPP Center, for
substantive rights National PPP Projects
of the Private Partner, and shall be b. the PPP Governing Board for Local PPP Projects
governed by existing laws, decrees, orders,
rules, and regulations at the time of
application.

40
Outline of discussion – Part 3

10 Unsolicited proposals
11 Procurement of PPP projects
12 Review and approval of PPP contracts
13 Protest mechanism

41
(10) Unsolicited Proposals – Proposed IRR provision
Processing unsolicited proposals prior to approval
What the law provides: STEP 1: Private Proponent shall submit the unsolicited proposal
to the PPP Center.
a. PPP Center to determine completeness
of the proposal and the appropriate Unsolicited Proposals submitted to the IA shall not be
approving body within 10 calendar days considered as valid unless simultaneously or subsequently
from receipt submitted to the PPP Center.

i. If complete, PPP Center to endorse
the proposal to the IA
ii. If incomplete, PPP Center to return
the proposal to the Private
Proponent
STEP 2: PPP Center shall issue acknowledgement on the day of
receipt.
Proposals submitted outside of business hours shall be
acknowledged the following day.

STEP 3: PPP Center shall determine completeness and

appropriate approving body within 10 calendar days from
receipt.

A 42
(10) Unsolicited Proposals – Proposed IRR provision
Processing unsolicited proposals prior to approval
What the law provides:
a. IA shall be given 90 calendar
days to conduct detailed
evaluation, and decide
whether to accept or reject
the proposal
b. If the IA fails to act on the
proposal 90 calendar days
after the end of the detailed
evaluation, proposal shall be
deemed approved, without
prejudice to the provisions
under Section 32 of the Code
A
If complete, PPP Center shall endorse the If incomplete, PPP Center
proposal to the appropriate IA, copy furnished shall return the proposal to
the Private Proponent. the Private Proponent.
IA to conduct detailed evaluation within 90 The decision of the PPP
calendar days from endorsement by the PPP Center to return the proposal
Center. shall be final and non-
appealable.
If IA decides to accept the proposal, proceed to
Negotiation. If IA decides to reject the proposal,
such shall be returned to the Private Proponent
with corresponding justification.
The letter of acceptance by the IA shall include the
mechanics and commencement date of the
Negotiation.
43
(10) Unsolicited Proposals – Proposed IRR provision
What the law provides:
a. Negotiation
o Conducted after acceptance
of unsolicited proposal within a
period not more than 150
calendar days; successful
negotiation results to grant of
OPS
b. Validity of OPS
o Period not exceeding one (1)
year from conferment
Negotiation
a. Negotiation shall be conducted within a period of 80 cds,
but not less than 30 cds. It may be extended by the IA up
to a maximum of 150 cds.
b. The IA shall invite the following as part of the Negotiation
Committee
i. One team lead officially designated by the Head of IA
ii. One legal officer
iii. One officer knowledgeable in finance
iv. One officer knowledgeable in the technical aspects
and/or management and operations of the project
c. The PPPGB shall issue specific guidelines on the conduct
of negotiations.
44
(10) Unsolicited Proposals – Proposed IRR provision
Negotiation
IN CASE OF SUCCESSFUL NEGOTIATION
1. The IA shall grant the Private Proponent an Original
Proponent Status (OPS) which shall be valid for 1 year
from conferment.
2. The IA and the Private Proponent shall submit the
complete set of requirements for approval, including the
negotiated PTCs, to the appropriate Approving Body,
within 30 cds from end of negotiation.
3. For projects whose approving body is the Head of IA:
After successful negotiation, the Head of IA shall confirm
the completeness of the requirements and approve the
negotiated PTCs. Once approved, the Head of IA shall
grant the OPS for the Private Proponent. The IA shall
provide the PPP Center with the complete set of
requirements, for monitoring purposes.
IN CASE OF FAILURE OF NEGOTIATION
1. The IA shall reject the proposal in writing, within 7 cds
from the lapse of the negotiation period or declaration
of the failure of negotiation.
2. The IA shall inform the PPP Center of such failure of
negotiation, for monitoring purposes. The IA shall then
have the option to accept a new unsolicited proposal,
or bid out the project through the solicited track.
ORIGINAL PROPONENT STATUS
1. OPS shall automatically expire/become invalid after 1
year from grant of IA
2. Once expired, the IA shall write a letter to the Private
Proponent regarding the expiration of the OPS. The
letter is in no way a pre-requisite before OPS shall be
deemed invalid or expired.
3. Counting of the 1-year period for OPS shall stop once 45
the comparative challenge process has commenced.
(10) Unsolicited Proposals – Proposed IRR provision
The IA shall, within 7 cds upon approval by the appropriate Approving Body,
publish an invitation for the submission of comparative proposals. Such
publication shall be the start of the period for comparative challenge.
What the law provides:

a. Not less than 90 days and Publication of

not exceeding 1 year, as Submission
Invitation for Posting of bid
proposed by the IA and START and receipt of
Comparative bond
approved by the appropriate the proposal
Proposals
Approving Body

b. Right-to-match mechanism
(30 calendar days) Opening and Right-to-
evaluation of match (30 cds) Award and
END
comparative This is on top of the 90 Execution
days for the challenge.
proposals

46
(10) Unsolicited Proposals – Proposed IRR provision
Other rules in processing unsolicited proposals (USPs) prior to approval

a. PPP Center shall issue a complete list of b. In cases of similar proposals:

i. Similar USPs shall be submitted to the PPP Center for
requirements and descriptions of each, which
determination of completeness
shall include, but are not limited to, the following: ii. Similar USPs may be received up to the 10th day from
the receipt of the first USP
i. Complete feasibility study; iii. IA shall conduct detailed evaluation of all complete
ii. Traceable economic model; USPs until the 90th day of the last USP endorsed by the
iii. Traceable financial model; PPPC.
iv. Minimum PTCs that will provide sufficient
c. If the IA fails to act on the proposal 90 cds after the end of
information for the IA to decide; and the detailed evaluation period, proposal shall be deemed
v. Project site plan. approved, without prejudice to the provisions under Section
32 of the Code, and to proceed to negotiation stage. If the IA
PPP Center shall also issue detailed guidelines on fails to act during the negotiation period, such shall be
the specific procedures in the submission of USPs, considered a failure of negotiation.
including the use of a digital platform to facilitate
d. In case the IA fails to act on multiple similar proposals, the
efficient processing. first submitted proposal shall be deemed approved, without
prejudice to the provisions under Section 32 of the Code, to
47
proceed to negotiation stage.
(10) Unsolicited Proposals – Proposed IRR provision

Government share in the upside of the Unsolicited Project

a. IA may negotiate the inclusion of the following as part of the project’s PTCs:

i. Setting a pre-determined rate of return based on prevailing market conditions, risks to be

assumed by the private partner, and duration of the project
ii. Sharing by the private partner with the government of revenues, net revenues, earnings before
interest and taxes, net income, or the like if there is an upside
iii. Implementing a graduated share in cases where government already has a share in the project
revenues, net revenues, earnings before interest and taxes, net income, or the like even
without upside
iv. Setting a period for monitoring the returns
v. Setting a period for remitting the share of the government in the upside

b. The Approving Body may also require the above as part of the PTCs it shall approve.

48
(10) Unsolicited Proposals – Proposed IRR provision
Reimbursement of development costs
What the law provides:
In case the Implementing Agency
has already incurred any
development cost for projects
subject of an Unsolicited Proposal,
the Private Proponent shall
reimburse the Implementing
Agency of such documented
development costs: Provided, That
such reimbursement shall be in an
amount not exceeding 6% of the
Project Cost, excluding the cost of
ROW acquisition.
• The development cost to be reimbursed by the Private Proponent
submitting an unsolicited proposal included in The List shall be
documented by the following:
a. COA-certified copies of invoices and proofs of payment for services
provided to the project;
b. Contract of Consulting Services or similar contractual agreement/s
covering the services paid;
c. Copies of outputs (e.g., FS, business case, survey) for the services
paid;
d. COA-certified copies of official receipt for other expenses incurred
for the project; and
e. COA-certified certificate of taxes withheld and proof of tax
remittances to the BIR.
• The reimbursement amount shall be included in the bidding documents for
the comparative challenge, to be reimbursed by the winning bidder as a
condition for award.
49
(11) Procurement of PPP Projects – Proposed IRR provision
Composition of PBAC for NATIONAL IAs, applicable for both solicited and unsolicited
To be created by the Head of IA:
MINIMUM members
a. Chairperson – At least a third ranking official of
the IA
b. Secretary – A legal officer of the IA
c. An officer of the IA knowledgeable in finance
d. An officer of the IA knowledgeable in
management/operation of the PPP Project
e. An officer of the IA knowledgeable with the
technical aspects or requirements of the PPP
Project, designated on a project-to-project basis
Non-voting members
a. A technical officer from the regulatory body concerned,
to be invited on a project-to-project basis
b. A representative from the statutory counsel concerned
c. A representative from the PPP Center, if PPP Center is
not the procuring entity
d. A representative from PCC
Observers
a. A representative from COA
b. A representative from an association related to the
project
c. A representative from the facility users, or accounting
association
50
(11) Procurement of PPP Projects – Proposed IRR provision
Composition of PBAC for LOCAL IAs, applicable for both solicited and unsolicited
To be created by the Head of IA:
MINIMUM members Non-voting members
a. Chairperson – the Administrator or at least a third ranking a. A technical officer from the regulatory body
permanent official concerned
b. Treasurer or accountant of the local IA
b. A representative from the PPP Center, if PPP
c. Planning and Development Coordinator or Engineer of the
Center is not the procuring entity
local IA
d. Legal officer*
e. A representative from the local Sanggunian Observers
f. 2 representatives from the local development councils a. A representative from COA
b. A representative from DILG Regional Office or
The Chairperson shall appoint any of the other voting members Field Unit
as the Secretary of the PBAC.
c. A representative from NEDA Regional Office
*In case the local IA does not have a legal officer, the IA shall d. A representative from an association related to
seek legal advice from either an external legal advisor or the the project
legal officer of the next higher level of LGU to assist the PBAC. e. A representative from the facility users or an
accounting association
51
(11) Procurement of PPP Projects – Proposed IRR provision
Roles and responsibilities of the PBAC
The PBAC shall be responsible for all aspects of pre-bidding
and bidding process including, among others:
a. preparation of the tender documents
b. publication of the Invitation to Pre-qualify and Bid
c. pre-qualification of prospective bidders
d. conduct of pre-bid conferences and issuance of
supplemental notices
e. interpretation of the rules regarding the bidding
f. conduct of bidding
g. evaluation of bids
h. resolution of disputes between bidders
i. recommendation for the acceptance of the bid
and for the award of the PPP contract
General rules:
• A quorum of the PBAC shall be composed of a
simple majority of all voting members, including the
Chairperson.
• The IA may constitute more than one PBAC, as
determined by the Head of IA.
• The Head of IA may include other members to the
PBAC, through an issuance of a formal office order.
• For solicited proposals, the bidding shall commence
within 20 cds from the issuance of Notice of
Approval.
52
(11) Procurement of PPP Projects – Proposed IRR provision
Rules for non-voting members and observers
a. Non-voting members may be consulted or be allowed to
give advice or opinions to the voting members of the PBAC.
b. Observers cannot influence or attempt to influence the
votes/actions of the voting members of the PBAC.
c. Observers shall not be placed in a conflicted situation and,
if placed in such a situation, shall immediately inhibit and
notify the IA in writing.
d. Non-voting members and observers shall be notified at
least 7 cds before the following stages: pre-bid conference,
opening of bids, evaluation of bids, contract award, and
special meetings of the PBAC. Failure of the PBAC to do so
shall be subject to the penal provisions of the Code.
d. The absence of non-voting members and
observers shall not nullify the PBAC proceedings:
Provided, That they have been duly invited in
writing.
e. Non-voting members shall be allowed to submit
their written advice / opinions to the PBAC.
f. Non-voting members shall be allowed to access to
or be provided with all pertinent documents free
of charge upon their request.
g. Non-voting members other than the statutory
counsel of the IA shall be required to enter into a
confidentiality agreement with the IA.
53
(11) Procurement of PPP Projects – Proposed IRR provision
Tender documents
Contents, among others:
a. Instruction to Bidders/Comparative Proponents
b. draft PPP contract
c. Bid Form
d. forms of bid and performance securities
Invitation to Pre-qualify and Bid (ITPB)/Invitation for
Comparative Proposals shall be published in 2
newspapers of general circulation and in a local
newspaper in which the PPP project shall be
implemented.
Disclosure of tender documents - Without prejudice to rules
on publication of tender documents to commence bidding,
the IA may disclose the tender documents to the public for
the entirety of the bidding process. However, such
documents shall be considered as public documents after
contract signing.
Participation fees for pre-qualification and bid submission shall be
indicated in the ITPB; shall be a percentage of the Project Cost.
Such percentage may be updated by the PPPGB.
Pre-qualification
• Requirements to pre-qualify shall include legal requirements,
experience or track record, and financial capability
• PBAC shall give prospective bidders sufficient time to prepare
their pre-qualification documents, provided that it shall be
atleast 15 cds
Qualification of bidders
• any individual, partnership, corporation, or firm, whether local
or foreign, including consortia of local, foreign, or both local
and foreign firms, or cooperatives may participate or apply for
pre- or simultaneous qualification
For unsolicited proposals:
Bid Bond by the Original Proponent – to be submitted on the first
day of the publication of the Invitation for Comparative Proposals
in an amount indicated in such invitation
54
(11) Procurement of PPP Projects – Proposed IRR provision
Procurement process for solicited projects, applicable for national and local
START
Validity of bids and bid
Opening of the Envelope Evaluation of Qualification securities – 180 cds
Publication of Invitation
for Qualifications of Bidders Requirements from the opening of
to Pre-qualify and Bid
bids

Preparation of Pre-
qualification Documents by Opening of the Envelope
Bid submission
the prospective bidders for the Technical Proposal END
(atleast 20 cds from publication)

Pre-qualification Pre-bid Conference

Evaluation of the Envelope
by the PBAC (15 or 30 cds depending on Award and Execution
for the Technical Proposal
(20 cds from last day of submission) the Project Cost)

Notifications to pre-
Issuance of tender Opening of the Envelope Evaluation of the Envelope
qualified and disqualified
documents for the Financial Proposal for the Financial Proposal
bidders (7 cds)

55
For single-stage bidding process – simultaneous evaluation of technical and financial proposals within 45 cds from bid opening
(12) Review and approval of PPP contracts
Required clearances prior to approval of the final draft contract by the Head of IA:

National PPP Projects: Local PPP Projects:

a. PPP Center – for compliance with the
approved PTCs
b. Statutory counsel – for compliance
with applicable laws, rules, and
regulations
a. Statutory counsel – for compliance
with applicable laws, rules, and
regulations
b. DOF – if there is a national
government undertaking

c. DOF – for national government

undertakings

"If the executed PPP contract contains provision/s which are contrary with the approved PTCs and are
grossly disadvantageous to the government, the contract shall be null and void, without prejudice to the
provisions under Section 32 of this Code."

56
(12) Review and approval of PPP contracts – Proposed IRR provision
Applicable for all projects
• The PBAC shall not proceed with
The draft contract to be released to bidders shall also be sent to reviewing bodies the bid submission date unless the
for comments within 7 cds from issuance to bidders PPP contract is approved by the
Head of the IA.

Reviewing bodies shall have 20 cds to review and provide comments. • Any government undertaking not
approved by the appropriate
Approving Body and not cleared by
IA shall submit the final draft contract to concerned oversight agencies for review, the DOF shall not be binding.
30 cds before bid submission. Oversight agencies are given 20 cds to review.
• In no case shall the Head of the
Final letter of the concerned oversight agencies shall be considered as their Implementing Agency sign the
clearance of the contract, for consideration of the Head of IA. The unfavorable contract if it contains provisions
comments/clearance made by the appropriate statutory counsel shall not be that are inconsistent or in conflict
deemed a prima facie evidence/claim, sufficient to sustain a judgment in favor of with the final PTCs approved by the
Approving Body.
the issue it supports.
• Contracts of PPP Projects with
Head of IA shall review and approve the final draft PPP contract to be released to Availability Payments sourced
bidders. Such release shall be 5 cds before bid submission from GAA shall also be reviewed
by the DOF.
57
(13) Protest Mechanism – Proposed IRR provision
For national PPP projects

What the law provides: Appeal to

• Mechanism for protest shall be
resolved in the most expeditious
(filed within 3 cds from
manner which shall not exceed
receipt of notice; 7 cds
45 cds
• In no case shall a motion for
reconsideration or an appeal
from any decision by the PBAC,
Head of IA, or Department
Secretary stay or delay the
bidding process.
• No award shall however be
made until a decision on any
pending appeal is rendered.
Motion for
Appeal to Head of IA Department Secretary,
Reconsideration
(within 3 cds from if applicable
to PBAC
receipt of decision on (within 3 cds from
MR; 20 cds for IA to receipt of decision on
decide) appeal; 20 cds for
for PBAC to decide)
Secretary to decide)
a. Amount of appeal fees for appeals to Head of IA or Department Secretary –
to be set by the PBAC, provided that it shall be within 0.75% to 0.1% of the
Project Cost
b. PPPGB may update the amount of appeal fees, if it deemed necessary
c. No party shall be allowed a second motion for reconsideration for the
decision of the PBAC
d. Any motion for reconsideration or appeals shall not stay or delay the bidding
process
e. No award shall be made until a decision on any pending appeal is rendered

58
(13) Protest Mechanism – Proposed IRR provision

For local PPP projects

Appeal to Local Chief

Motion for Reconsideration
Executive
to PBAC
(within 3 cds from receipt of
(filed within 3 cds from receipt of
decision on MR;
notice; 7 cds for PBAC to decide)
30 cds for LCE to decide)

a. Amount of appeal fees for appeals to LCE – to be set by the PBAC, provided that it shall be within
0.75% to 0.1% of the Project Cost
b. PPPGB may update the amount of appeal fees, if it deemed necessary
c. No party shall be allowed a second motion for reconsideration for the decision of the PBAC
d. Any motion for reconsideration or appeals shall not stay or delay the bidding process
e. No award shall be made until a decision on any pending appeal is rendered

59
Outline of discussion – Part 4

14 PPP Risk Management Fund

15 Monitoring of PPP Projects
16 Divestment or Takeover
17 Award and Execution of PPP Projects
18 Implementation of PPP Projects

60
(14) PPP Risk Management Fund (RMF)

Section 27 of the PPP Code:

1. facility for the payment of contingent liabilities arising from PPPs

2. to be funded from (1) general appropriations, (2) income from existing PPP projects, and (3)
other sources as may be determined by the Development Budget Coordination Committee
(DBCC)

3. institutionalization of the Inter-Agency Technical Working Group on Continent Liabilities under

the DBCC

For local PPP projects: (1) LGUs may access the PPP RMF of the national government subject to
payment of contributions, or (2) LGUs may establish a similar fund subject to PPP Governing Board
guidelines.

61
(14) PPP Risk Management Fund (RMF) – Proposed IRR provision
Coverage
• Coverage of the RMF shall start 20 cds
upon the confirmation of the IA’s first
payment of contribution.
• CLs from events specified in a PPP contract
that occurred prior to the coverage date
shall not be covered by the fund, except
for exceptional and urgent circumstances
as identified by the DBCC in the guidelines
it shall issue.
Rules and procedures
The PPP Center, in coordination with NEDA, DOF, and DBM, shall issue
guidelines on the RMF, for approval of the DBCC, which shall include:
1. Opening of the fund;
2. Procedures for the application, evaluation, and approval of the
use of the fund; and
3. Payment of contribution and release of funds.
a. RMF shall be required for all IAs, but they shall not be precluded
from utilizing other source of payment for CLs, subject to approval
by the Approving Body as part of the PTCs.
b. For existing contracts where the IA wishes to tap the RMF, the IA
shall inform the DBCC in writing that it intends to pay contribution
for the project to be eligible for the fund.
62
(15) Monitoring of PPP Projects – Proposed IRR provision

Project Monitoring and Framework and Protocols

• As provided in Section 16 of the PPP Code, the PPP Governing Board shall set the
framework for monitoring the compliance of the parties with PPP contracts, for
reporting of the progress of PPP Projects and their expected benefits and outcomes,
and for the appropriate penalties for the non-compliance of parties to such
requirements.

• The framework shall be applicable to both national and local PPP projects.

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(16) Divestment or Takeover – Proposed IRR Provision
What the law provides:
A Private Partner may divest its
ownership, rights, or interests in a PPP Project,
provided that:
• such is approved by Head of IA
• such shall be after a holding or lock-in
period as indicated in the PPP contract
• the new Private Partner has equal or better
qualifications as with the previous Private
Partner
The IA may also divest its ownership, rights, or
interests in a PPP Project, subject to approval
of the appropriate Approving Body and
applicable laws, decrees, orders, rules, and
regulations.
Divestment
1. A divestment made in violation of the Code and this IRR shall be a
ground for disqualification of the Private Partner or cancellation of the
PPP contract, as the case may be, and forfeiture of the Private
Partner’s bid or performance security
2. The IA shall, within 5 cds from the approval of any change in
ownership, inform in writing the PPP Center of such change for
monitoring purposes.
Takeover
In cases of emergency or when public interest so requires, as determined
by the President, the IA may, by written notice to the Private Partner
immediately takeover the PPP Project or any part thereof.
a. Temporary – tariff to be held in trust for the Private Partner;
concession period shall be suspended until the project is returned
to the Private Partner
b. Permanent – Private Partner shall be entitled to claim Termination
Payment; IA may issue guidelines to facilitate the takeover, if
necessary
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(17) Award and Execution of PPP Projects – Proposed IRR Provision
• The PBAC of the IA shall submit a recommendation
to award, including a detailed evaluation or
assessment report, within 7 cds from date of
completion of the financial evaluation.
• The Head of the IA shall decide on the award within
7 cds from the submission of the PBAC of the
recommendation to award
• PBAC shall post the NOA and/or bidding results
within 7 cds from the issuance, in the website or
digital platforms of the PPP Center and the IA.
• The winning bidder shall submit documentary
requirements within 20 cds from official receipt of
the NOA.
Documentary requirements to be submitted:
1. Prescribed performance security
2. Proof of commitment of the required equity
contribution
3. Proof of firm commitments from reputable financial
institution
4. If the Private Partner is already an SPC or JVC, proof
of registration in accordance with Philippine laws.
Otherwise, an undertaking to be incorporated shall
be a condition precedent to execution of PPP
contract.
5. Other conditions imposed by the IA
Failure to comply with the conditions precedent for the
execution of the PPP contract within the prescribed
period, or as specified or extended by the appropriate
Approving Authority, will result in forfeiture of the
proposal security and revocation of NOA.
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(17) Award and Execution of PPP Projects – Proposed IRR Provision
Formation of a Special Purpose Company (SPC) or a
JV Company (JVC)
• IA may require the winning bidder to incorporate
with SEC, subject to existing laws and regulations.
• The SPC or JVC that will be created shall assume all
the rights and obligations of the winning Private
Proponent.
• The winning Private Proponent shall subscribe to and
pay for a significant/principal shareholding or
controlling interest in the SPC or JVC.
• In the case of a consortium, all members shall
present proof of contractual or other legally binding
ties to or relationships with the SPC or JVC for the
development and implementation of the project in
accordance with their submitted business plan
Withdrawal or substitution of a member
• In case of withdrawals, the remaining
members or shareholders shall still be
legally, technically, and financially capable
• A withdrawal made in violation of the IRR
shall be a ground for disqualification or
cancellation of the contract, as the case
may be, and forfeiture of the winning
Private Proponent’s bid or performance
security.
• The IA shall inform in writing the PPP Center
of such changes within 5 cds for monitoring
purposes.
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(17) Award and Execution of PPP Projects – Proposed IRR Provision
Validity of Bids
• 180 cds from opening of the bid
• Bid securities shall be returned to the
winning bidder and unsuccessful bidders
as soon as the PPP contract is signed by
the winning bidder.
• Extension of validity of bids may be
allowed, provided that bidders shall not
be allowed to modify or revise the price
or any other substantial aspects of their
bids.
Execution of the PPP contract
• IA and winning bidder shall execute and sign the
contract within 5 cds from receipt of the notice by
the winning bidder.
• An original signed copy of the PPP contract shall
be submitted to the Approving Body and the PPP
Center within 5 cds after signing thereof by the IA.
Failure to enter into contract
• If IA is unable to execute the PPP contract with a
failure of bidding, consider next most responsive
bidder.
• If Private Proponent refuses to enter into a
contract, its bid security shall be forfeited in favor
of the IA.
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(18) Implementation of PPP Projects – Proposed IRR Provision
Rules on Contingent Liabilities (CLs)
a. CLs shall be set only for risks that the national or local
government, whichever is applicable, is best able to
control.
b. IA shall submit a risk mitigation plan for approval by
the Approving Body, and shall include a list of all risks
assumed by the government under the contract, risks
assumed by the IA, risk mitigating measures,
estimated costs to be incurred, target dates to have
each measure in place, and the appropriate action
plan by the IA to manage each type of risk.
c. Approving Body shall validate that the proposed risk
allocation is consistent with the GPRAM.
d. Both the draft and the final PPP contract shall be
consistent with the approved PTCs related to CLs.
e. All CLs to be assumed by the government shall be
transparent in terms of:
1. specific risk events that would trigger such
liabilities
2. the probability or likelihood that such risks
will occur
3. the manner of compensation for the
economic impact on the Private Partner, if
compensation is financial
4. the method or principle of calculation of
financial compensation
5. the materiality threshold
6. the cap on compensation
f. For force majeure risks, CLs above the insurance
proceeds shall be shared between parties to the
PPP contract: Provided, That the share of the IA
does not exceed 50% of the cost.
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(18) Implementation of PPP Projects – Proposed IRR Provision
g. The IA and the PPP Center shall conduct
monitoring of CLs.
h. Should risks materialize leading to CLs, the
parties shall exhaust all cures provided in the
PPP contract. Provided, that if such cures are
insufficient to address the government’s CLs in
the PPP project, the IA may tap the PPP RMF,
subject to the guidelines to be issued by the
DBCC.
i. The identification and reporting of CLs shall be
based on the applicable accounting rules and
regulations adopted or issued by COA.
Monitoring and Reporting Liabilities
• The PPPGB shall establish a system, consisting of
processes, procedures, and forms, to be used by
the IA for monitoring and reporting CLs in PPP
contracts. The system shall be consistent with the
applicable accounting rules and regulations
adopted or issued by COA.
• The IA shall submit to the PPP Center information
on the CLs in their PPP contracts following the
monitoring and reporting processes, procedures,
and forms established by the PPPGB. The Private
Partner shall cooperate and provide the IA with all
necessary documents within a reasonable time for
the latter to comply with their obligations.
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Outline of discussion – Part 5

19 Regulation of tariff
20 Government Undertakings
21 Investment incentives
22 Valuation of government assets
23 Contract termination

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(19) Regulation of tariff
The PPP Code establishes a predictable tariff regime that safeguards public interest

All regulatory bodies charged with approval of initial tolls, fares, fees, rentals, and other charges and adjustments
thereof shall:
1. Publish guidelines and frameworks for tariff rate consultations, review, and approval within 180 calendar days
after the effectivity of the IRR, with provisions mandating that regulatory approvals be made prior to the
approval of a PPP Project

2. Approve the initial tolls, fares, fees, rentals, and other charges and adjustments thereof, on the basis of service
quality, KPIs, the principles of fairness, transparency, predictability, and protection of public interest while
providing for a Reasonable Rate of Return on capital or investment by the Private Partner, and other stipulations
in the PPP contract

3. Uphold the approved tariff rates and adjustments thereof during project implementation

4. In the absence of an appropriate regulatory body, initial tariff rates shall be as stipulated in the contract

5. IAs of local PPP projects may opt to establish a local rate setting body, subject to approval by the local Sanggunian

71
(19) Regulation of tariff – Proposed IRR provision
a. The PPP Center shall identify regulatory bodies charged with approval of initial tolls, fares, fees,
rentals, and other charges and adjustments thereof, and within a reasonable time after the effectivity of
this IRR, shall conduct consultations with these regulatory bodies on the issuance of franchise, and
regulation of tolls, fares, fees, rentals, and other charges.

b. All regulatory bodies shall include the following minimum provisions in the formulation of their policy
documents:

i. Regulatory approvals shall be made prior to the approval of the PPP Project;
ii. During the implementation period of the PPP Project, the Private Partner shall have the right to file
the application for tolls, fares, fees, rentals, and other charges and adjustments thereof;
iii. Procedure of approval of initial, adjusted, or periodic increase of rates;
iv. Publication and Hearing of initial, adjusted, or periodic increase of such rates;
v. Framework, rules, and/or parametric formula that shall be followed in setting the initial tariff rates
and adjustments thereof;
vi. Decision and Order; and
vii. Appeal Process.
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(20) Government Undertakings – Proposed IRR Provision
Other government undertakings to be defined
CREDIT ENHANCEMENTS
This shall refer to support to an infrastructure or
development project by the Private Partner and/or IA
concerned, the provision of which is contingent upon
the occurrence of certain events and/or risks, as
stipulated in the contract.
Credit enhancements are allocated to the party that is
best able to manage and assume the consequences of
the risk involved. Credit enhancements may include,
but are not limited to, government guarantees on the
performance, or the obligation of the IA under its
contract with the Private Partner.
GOVERNMENT EQUITY
This shall refer to the subscription by the IA of
shares of stock or other securities convertible to
shares of stock of the project company, whether
such subscription will be paid by the money or
assets.
PERFORMANCE UNDERTAKING
This shall refer to an undertaking of a department,
bureau, office, commission, authority, agency, GOCC,
or LGU in assuming responsibility for the
performance of the IA’s obligations under the
contractual arrangement including the payment of
monetary obligations, in case of default. These
undertakings may be subject to payment of risk
premium to the Government or LGU, or any other
authorized agency. 73
(20) Government Undertakings – Proposed IRR Provision
Other government undertakings to be defined
LEGAL ASSISTANCE
This shall refer to the extension of representation by
government lawyers to a Private Partner but only in cases,
hearings, or inquiries where the IA and Private Partner are
party-defendants/respondents therein including the adoption
by such government lawyers of positions and strategies
consistent with upholding the validity of the approved
contractual arrangement.
SECURITY ASSISTANCE
This shall refer to the deployment of government security
forces, either from the PNP or AFP in the vicinity of the
project site to provide security during the implementation of
the project up to completion, subject to the request of the IA
or Private Party.
1. IA may offer any one or more Government
Undertakings relative to a PPP Project, which
shall be pre-cleared in principle, in writing, by
the department, bureau, office, commission,
authority, agency, GOCC, or LGU, or any other
government entity that will grant the same as
mandated by law.
2. Government contribution to JV undertakings
shall not exceed 50% of the project cost for
Contractual JVs or 50% of the outstanding
capital stock of the JV Company.
3. The Government Undertakings shall be based
on the approved risk allocation matrix which
shall be issued by the Approving Body.
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(21) Investment Incentives – Proposed IRR Provision
The grant of incentives shall be governed by the following rules:
1. PPP projects shall be listed in the Strategic
Investment Priority Plan (SIPP) and shall be entitled
to applicable incentives.
2. The registration and grant of incentives to PPP
projects shall be pursuant to existing laws, rules and
regulations; provided that only income generated
from the operation of the registered PPP project
through the delivery of public service shall be
entitled to fiscal incentives.
3. The application for incentives shall be disclosed and
included in the financial and economic models
submitted to the appropriate Approving Body during
project approval stage.
4. The incentives shall be considered in the
rates or tariffs approved by the
regulatory agency concerned.
5. Registered Business Enterprises whose
PPP projects are granted with any
exemption or special rates on taxes shall
report to the PPP Center in writing the
details of incentives availed for every
taxable year.
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(22) Valuation of government assets – Proposed IRR provision

What the law requires to be subject to

valuation: a. The report shall not be older than 1 year from the date
of submission to the appropriate Approving Body.
• Section 10 on Unsolicited Proposal –
usufruct of assets, properties, and b. The valuation shall be as determined by a GFI or by an
rights contributed independent property appraiser included in the list of
Accredited Asset Valuers of the SEC.
• Section 11 on JVs – Equity contribution
of the government and the Private
Partner in JVs

• Section 18 on Investment Recovery

Schemes – portion or percentage of a
reclaimed land involved in investment
recovery schemes

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(23) Contract Termination – Proposed IRR provision

a. An independent appraiser shall be required under the contract and chosen by

mutual consent of the parties. The cost of hiring the independent appraiser shall
be borne by the party at fault, except in cases of termination that is neither the
fault of the government nor the Project Proponent, in which case, the cost shall be
divided equally.

b. The amount determined by the independent appraiser shall be binding to both the
Project Proponent and the Agency/LGU.

c. For the continuity of public services, the government is authorized to take

possession of the assets or facilities prior to the payment of termination payment,
pursuant to the approved contract.

77
Call for inputs to the PPP Code IRR

For inputs, comments, and

suggestions to the IRR of the PPP Code,
kindly scan the QR code or
follow the link

http://bit.ly/PPPCodeinquiry
78
For further information, please visit:
www.ppp.gov.ph
For inquiries, kindly e-mail:
PPP Code IRR Committee Secretariat
PPPCode@ppp.gov.ph

Public-private-partnership-
Center-of-the-Philippines

79
Annex A – Criteria for Assessing PPPs - Proposed IRR provision
a. project context and objectives are clearly specified;
b. the scope, outputs, and performance indicators of the project are clearly specified;
c. the proposed project is technically feasible;
d. Environment, climate change, and social safeguards framework including identified
risks and mitigating measures;
e. the Project Cost is sufficient to achieve the technical requirements of the project,
including the general performance standards and targets set for the project, and
those components needed to meet gender, social and environmental standards;
f. the operating costs are sufficient to achieve the operational requirements;
g. the project is economically viable, and the information used are reasonable and
robust to determine viability;
h. value-for-money analysis shows that PPP modality is a viable procurement option;
i. the project is financially viable for investors at the project level, and the information
used are reasonable and robust to determine viability;
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Annex A – Criteria for Assessing PPPs - Proposed IRR provision
j. the project’s cash flows are healthy and sufficient to service debt obligations;
k. the risk allocation complies with the Generic Preferred Risk Allocation Matrix. Any
deviation must be justified by the implementing agency and shall be up for approval
of the appropriate Approving Body;
l. the government undertakings and investment recovery schemes are justified by the
implementing agency;
m. the proposed bid parameter is the most advantageous to the government and
fosters competition, fairness, and transparency; and
n. the implementing agency has the capability to deliver its assumed obligations for
the project, including contingent liabilities.

81
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