PUBLIC – PRIVATE

PARTNERSHIP
(PPP)

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 PPP
Public-private partnerships involve
collaboration between a government
agency and a private-sector company
that can be used to
finance, build, and operate projects,
such as public transportation networks,
parks, and convention centers.
Investopedia
https://www.investopedia.com/terms/p/public-private-partnerships.asp

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 PPP
In the Philippines, PPP is similarly defined as
a contractual agreement between the
Government and a private firm targeted
towards financing, designing, implementing
and operating infrastructure facilities and
services that were traditionally provided by
the public sector.(Public-Private Partnership
Center, 2015b).

https://nro13.neda.gov.ph/ppp-knowledge-corner/

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 PPP
Public-private partnerships are
typically found in transport
and municipal or
environmental infrastructure
and public service
accommodations.
Investopedia
https://www.investopedia.com/terms/p/public-private-
partnerships.asp 4
 HOW PUBLIC-PRIVATE PARTNERSHIPS WORK

A city government, for example,

might be heavily indebted and
unable to undertake a capital-
intensive building project, but a
private enterprise might be interested
in funding its construction in
exchange for receiving the operating
profits once the project is complete.
Investopedia
https://www.investopedia.com/terms/p/public-private-partnerships.asp
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 GENERAL FORMS OF PPP
The two forms could be distinguished from each
other based on what the public or private parties
assume within the partnership, e.g. rights, obligations,
and risks.
• Availability PPP
A form of PPP wherein the public authority contracts
with a private sector entity to provide a public good,
service or product at a constant capacity to the
implementing agency (IA) for a given fee (capacity
fee) and a separate charge for usage of the public
good, product or service (usage fee). Fees or tariffs
are regulated by contract to provide for recovery of
debt service, fixed costs of operation and a return on
equity.
https://ppp.gov.ph/ppp-program/what-is-ppp/ 6
 GENERAL FORMS OF PPP

• Concession PPP
A form of PPP wherein the government
grants the private sector the right to build,
operate and charge public users of the
public good, infrastructure or service, a fee
or tariff which is regulated by public
regulators and the concession contract.
Tariffs are structured to provide for
recovery of debt service, fixed costs of
operation, and return on equity.

https://ppp.gov.ph/ppp-program/what-is-ppp/ 7
 ADVANTAGES OF PPP
• Encourage private sector capital
• Makes projects affordable
• Providing better value for money
• Risks sharing
• Government’s focus on outputs and benefits
• Quality assurance
• Encourage sector reform
• Promote innovation
• Sharing of responsibilities

https://nro13.neda.gov.ph/ppp-knowledge-corner/
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 POTENTIAL RISKS OF PPP
• Development, bidding and ongoing costs in PPP projects
are likely to be greater than for traditional government
procurement processes
• There is a cost attached to debt
• Some projects may be easier to finance than others
• Some projects may be more politically or socially
challenging to introduce and implement than others
• There is no unlimited risk-bearing
• Government responsibility continues
• A clear legal and regulatory framework is crucial to
achieving a sustainable solution
https://nro13.neda.gov.ph/ppp-knowledge-corner/
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PPP PROJECT CYCLE IN THE
PHILIPPINES

https://nro13.neda.gov.ph/ppp-knowledge-corner/ 10
 PPP PROJECT CYCLE IN THE
PHILIPPINES

DEVELOPMENT STAGE
• Project Preparation includes Feasibility Study and Market
Sounding Activitiy
• Finalization of Project Structure

https://nro13.neda.gov.ph/ppp-knowledge-corner/ 11
 PPP PROJECT CYCLE IN THE
PHILIPPINES

APPROVAL STAGE
• Project Proposal
• Project Assessment
• Project Appraisal
• Project Approval/Recommendation (ICC-Cabinet Committee)
• NEDA Board Approval
https://nro13.neda.gov.ph/ppp-knowledge-corner/ 12
PPP PROJECT
COMPETITION CYCLE STAGEIN THE
• Preparation for Bidding
PHILIPPINES • Bidding
• Issuance of NOA

https://nro13.neda.gov.ph/ppp-knowledge-corner/ 13
 PPP PROJECT
COOPERATION CYCLE
STAGE IN THE
• Submission of NOA
PHILIPPINES
• Contract Signing
• Financial Close
• Designing
• Issuance of Notice to Proceed
• Construction
• Commissioning
• Concession Agreement

Turnover of
Facility/
Infrastructur
e to the
Government
https://nro13.neda.gov.ph/ppp-knowledge-corner/ 14
 The case study conducted by Susumo Ito in the
Philippines in 2022 presents the current status of
infrastructure development in the Philippines
which lags behind ASEAN peers, and the
achievements for PPP, which is relatively positive.
In order to further discuss the achievements in
PPP in the Philippines and advantages and
disadvantages of PPP modality in general, two
PPP projects are reviewed, one in the water work
and another in the railway sector. In regard to
these two case studies, the Water Concession
project in Metro Manila has been regarded as one
of the successful PPP projects not only in the
Philippines but globally as one of the model PPP
Sample Footer Text
projects inhttps://link.springer.com/chapter/10.1007/978-981-19-1088-3_5
the water sector. 15
 Although the project has delivered benefits
to residents of Metro Manila over the years,
there are still some issues including the
issue of water source development. Metro
Rail Transit Line 3 project, on the other
hand, is regarded as failed PPP project that
requires continued government subsidies
and defects of the railway system. These
cases well illustrate both the advantages and
disadvantages, complexities, and
challenging nature of PPP. The case of MRT
3 also explains that PPP does not bring “free
money”.
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https://link.springer.com/chapter/10.1007/978-981-19-1088-3_5
 NOTE:
PPPs may not be able to resolve all issues or they may
even make them worse. These limitations mean that PPPs
are not a panacea or a remedy for all infrastructure
performance problems. Sound public decision-making
based on comprehensive analysis and a governance
framework fostering transparency and accountability are
prerequisites for successful public investment projects.
Evidence suggests that improved management can reduce
infrastructure shortfalls by making better use of existing
infrastructure facilities and more efficient use of public
resources on greenfield projects.

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 Who owns the PPP
projects?
FREQUENTL In a PPP scheme, the
government owns the PPP
Y ASKED projects. Even as the
QUESTIONS private partners build,
operate and maintain the
project, ownership
https://ppp.gov.ph/ppp-program/what-is-ppp/
remains with the
government.
 Who can enter into PPP?
Government implementing
agencies (IAs) can enter into PPP.
BOT Law and its IRR defines an
FREQUENTL “Agency” referring to any
department, bureau, office
Y ASKED commission, authority or agency of
the national government, including
QUESTIONS Government-Owned and/or –
Controlled Corporations
(GOCCs), Government Financial
institutions (GFIs), and State
https://ppp.gov.ph/ppp-program/what-is-ppp/ Universities and Colleges (SUCs)
authorized by law or their
respective charters to contract for
or undertake Infrastructure or
Development Projects.
 Who may qualify as bidders of
these PPP projects?
According to Section 5.1 of the
FREQUENTL BOT Law IRR , any individual,
partnership, corporation, firm,
Y ASKED whether local or foreign, including
consortia of foreign or local and
QUESTIONS foreign firms can participate or
apply for pre-qualification or
simultaneous qualification for ppp
projects. However, if the project
https://ppp.gov.ph/ppp-program/what-is-ppp/ involves the operation of a public
utility, the operator must be at
least 60% Filipino owned.
 THANK YOU!

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