The PPP Code (RA 11966)

Atty. Alberto C. Agra

Law Professor, PPP Law, Administrative Law and Local Government Law
Advocate and Author, PPP Law-for-All
Certified PPP and Regulation SpecialistTM
Former Acting Secretary of Justice, Acting Solicitor General, Government
Corporate Counsel and Chairman of the Philippine Reclamation Authority
19 February 2024
 Presentation Flow: 7 Ps

4 5 7
1 2 3 6
Partnership Permissions Pact/
Policies Parties Projects Procedures
Schemes (Approvals) Provisions
(1) Policy
PPP Policy Journey

Today (since
Before
12.23.23)
o BOT Law o PPP Code
o NEDA JV Guidelines o Repeal of laws, guidelines
o PPP Ordinances & ordinances
The PPP Code
Key Dates Milestones/Activities
December 5, 2023 Republic Act No. 11966 (Public-Private Partnership
Code) signed into law.
December 23, 2023 o PPP Code takes effect (15 days from publication in
Official Gazette or newspaper)
o PPP Code Interim Guidelines published
March 23, 2024 Deadline to promulgate the Implementing Rules and
Regulations (90 days from effectivity of Code)
October 4, 2024 Deadline to issue guidelines, frameworks or
mechanisms for consultation, review, and approval
of initial tolls, fares, fees, rentals, and other charges
and adjustments thereof (180 days from effectivity
of IRR)
Under the PPP Code, what happens
to PPP Policies, Contracts and
Ongoing Activities?
BOT Law and IRR Repealed or modified accordingly (inconsistent provisions)
NEDA JV Guidelines Repealed or modified accordingly (inconsistent provisions)
PPP LGU Ordinances Repealed or modified accordingly (inconsistent provisions)
Existing Contracts Governed by the agreements (PPP Code suppletory application)
Bidding or Challenge not yet PPP Code applicable except those that govern project approval
commenced
BOT Law: Granted Original 2 Options: (1) Proceed with approval process under prevailing
Proponent Status policy or (2) Resubmit proposal under the PPP Code
Notice of Award - No Contract PPP Code applicable (if rights are infringed, policy in effect applies)
Solicited: Bidding commenced PPP Code applicable (if rights are infringed, policy in effect applies)
Unsolicited: Competitive PPP Code applicable (if rights are infringed, policy in effect applies)
challenge commenced (PPPC: e.g. of rights – bidding rules published)
What special laws are
repealed by the PPP Code?
Laws Administrative Agencies Repealed Provisions
RA 7227 Bases Conversion Development Turnkey or Build-Operate-Transfer of Major Conversion
Authority Projects
RA 8292 State Universities and Colleges Joint Ventures of Economic Assets
RA 9500 University of the Philippines Leases of Land and Joint Ventures
RA 10844 Department of Information and Issuance of Public-Private Partnership (PPP) Guidelines for
Communications Technology ICT Projects of Government Agencies
PD 857 Philippine Ports Authority Prescribe Rules for Construction, Operation and
Maintenance of Ports; Lease of Land, Port, Wharf or Quay
PD 1112 Toll Regulatory Board Construction, Operation and Maintenance of Toll Facilities
PD 1113 Construction and Development Construction, Operation and Maintenance of Toll Facilities
Corporation of the Philippines
PD 1894 Philippine National Construction Construction, Operation and Maintenance of Extensions,
Corporation Linkages, Stretches and Toll Facilities
Various GOCCs, GIs and SUCs Issuance of PPP Guidelines (financing, designing,
constructing, operating, and maintaining)
Under the PPP Code, can LGUs
still enact PPP ordinances?
Yes, provided …
“Upon effectivity of this o Under the Principle of Subordinate Legislation
and Hierarchy of Policies, local ordinances
Code, no other JV must not be inconsistent with statutes such as
guidelines, PPP guidelines, the PPP Code. (PPPC: If inconsistent, “inoperable”)
codes, or ordinances, o This is an implied restriction in local legislation
whatsoever may be and rule-making.
enacted, issued and/or o However, the restriction under the PPP Code
cannot prohibit LGUs from enacting PPP
used by any government ordinances provided these will not be in conflict
entity to enter into PPPs, with the PPP Code. (PPPC: no need to enact
except those that are ordinances)
enacted, issued, and/or o The LGUs’ power to legislate is founded on the
Constitution.
used in accordance with
o For example, LGUs can enact ordinances on
this Code and its IRR.” management and service contracts,
(Last paragraph, Section 35, corporatization and LGU subsidiaries since
PPP Code) these PPP schemes are not covered the PPP Code.
PPP Code and PPPP Ordinance
Comparing and Contrasting
Aspects PPP Code PPPP Local Ordinance
Definition of PPP Not expressly defined (PPP Project defined) Defined in terms of policy and project

PPP Project Infrastructure or development project typically Developmental projects (Ordinance contains
provided by government (PPP Code contains no a list which is inclusive; projects need not be
list) typically provided by LGUs)
Arrangements/ o Finance, Design, Construct, and O&M 26+ arrangements (JV, leases, service or
Modalities o Joint Ventures and Leases management contracts, corporatization, local
o Lists 9 arrangements excluded from Code subsidiary)
Procedures Solicited and Unsolicited Solicited and Unsolicited

Approvals o Sanggunian and Local Development Council o Sanggunian

o NEDA-ICC if with Government Undertakings o DOF/ DBM if Nat’l Gov’t involved
Unsolicited 1. PPP Center determines completeness of UP 1. PPP Center no such stated role
Proposal (UP) (PPPC: UP submitted to PPPC) 2. Becomes OP after Acceptance of UP
2. Becomes Original Proponent (OP) after (Stage 1)
Successful Negotiations (Stage 2) 3. Right to Match by OP
3. Right to Match by OP 4. If multiple proposals, accept best
4. If multiple proposals, accept best 5. Reasonable period set by LGU
5. 90 to 365 days for challenge 6. LGU Government Undertakings allowed
6. Government Undertakings not allowed
(1.1) PPP Defined
PPP Code: What is a Public-
Private Partnership (PPP)?
1. What is a PPP? The term is not expressly defined under
the PPP Code. (The IRR will most likely define this.)
2. What is a PPP Project? Any public infrastructure or
development projects and services implemented under the
PPP Code.
3. Is there a list of PPP Projects under the PPP Code?
None. (PPPC: Proposed list)
4. What is the nature of PPP Projects?
oInfrastructure or development projects and services which
are typically provided by the public sector.
oConsistent and responsive to national, local, and sectoral
development and investment plans.
Nature of PPPs
Private Aspects:
Proponent o Project
Implementing
o Design
Agency
o Finance
o Construction
o Operations
o Governance
o Risk-Allocation
o Period
PPP o Performance
Project o Payments
o Liabilities
o Procedures
Rationale of PPP
o Indispensable role of the private sector, encourage private enterprise, and
provide incentives to needed investments
o Enabling environment for the private sector to mobilize its resources to finance,
design, construct, operate, and maintain infrastructure or development projects
and services
o Public interest by providing affordable, accessible, and efficient public services
o Financing infrastructure and other development projects and services through all
means available to effectively meet the objectives of the government
o LGU local autonomy, as self-reliant communities, more effective partners in the
attainment of national goals
o Integration of climate resilience, sustainability, and gender and development
policies and programs
o Open, fair, transparent, and competitive selection as the central tenet for securing
private investment in PPP projects
(2) Parties
3 Levels of PPPs

Private Public Public

Private Public Private

Implementing Agencies (IAs)
Public Partners
National Local
1. National Government 1. Local Government Unit
2. State University and College 2. Local University and
3. Government-Owned and - College
Controlled Corporation
4. (Government No IA/ Regulatory Body shall
Instrumentality with implement a PPP Project that it
Corporate Powers) regulates unless it adopts a conflict
5. PPPC: Water Districts mitigation and management plan.
Private Party
o Private Partner - private sector entity determined to be financially, legally, and
technically capable to undertake obligations under an awarded PPP contract
o Private Proponent - private sector entity which has submitted bid in relation to a
Solicited Project, or a private sector entity which has submitted an Unsolicited
Proposal; may be Filipino or foreign-owned, and may engage the services of a
foreign Contractor or foreign Facility Operator, subject to requirements and
limitations provided under the Constitution, existing laws, rules, and regulations
o Facility Operator - any entity allowed and duly registered and licensed under
Philippine laws, which may or may not be the Private Partner, that shall be
responsible for operating and/or maintaining a facility
o Contractor - any entity allowed and duly registered and licensed under Philippine
laws, which may or may not be the Private Partner, that shall be responsible for
the construction and/or supply of equipment or services for PPP Projects
o PPPC: IA may require formation of Special Purpose Vehicle or Joint Venture
Corporation
(2.1) Public Governance
PPP Governing Board
oOverall policy-making body for all Composition
PPP-related matters, including the 1. NEDA - Chairperson
Project Development and 2. DOF - Vice-Chairperson
Monitoring Facility (PDMF) 3. DBM
oResponsible for setting the 4. DOJ
strategic direction of the PPP 5. DTI
Program and PPP Projects 6. DILG
oResponsible for creating an 7. DENR
enabling policy and institutional 8. CHED
environment for PPP 9. ES
oMembers form part of IRR 10. PPP Center ED
Committee 11. Private Sector Representative
from Infrastructure Sector
National Economic and Development
Authority (NEDA)
Board
oApprove National Projects (≥ P15B Project Cost)
ICC
oRecommend to Board (≥ P15B )
oApprove National Projects (< P15B) subject to conditions
oApprove Local Projects with Government Undertakings using national
government funds
oApprove Availability Payments
oFormulate guidelines, forms, and templates that shall be used by IAs
and Approving Bodies in reviewing and approving the PPP Project
oReview, evaluate and update P15B Threshold
oIssue Generic Preferred Risk Allocation Matrix (GPRAM)
PPP Center
1. Assist IAs in identifying, prioritizing, 9. Manage and administer the PPP Risk
developing, and maintaining a pipeline Management Fund
of PPP Projects 10. Coordinate with NEDA-ICC in formulation
2. Provide project advisory services and of guidelines, forms, and templates that
technical assistance to IAs, Approving shall be used by IAs and Approving Bodies
Bodies in reviewing and approving the PPP
3. Facilitate the appraisal and approval Project
of PPP Projects by NEDA 11. Coordinate with Regulatory Agencies in
4. Review contracts for National PPPs the drafting of guidelines, frameworks, or
mechanisms for consultation, review, and
5. Require the submission of PPP Project approval of initial tolls, fares, fees,
documents from IAs rentals, and other charges
6. Provide regular monitoring and status 12. Determine completeness of unsolicited
reports on the implementation of all proposals and appropriate Approving
PPP Projects Body
7. Manage and administer the PDMF 13. Assist IA during negotiations of
unsolicited proposals
8. Serve as Secretariat for IRR
Committee 14. PPPC: Act as procuring entity
IA Pre-qualification, Bids and Awards
Committee (PBAC)
oResponsible for all aspects of pre-bidding and bidding process in
solicited proposals, or the comparative bidding process in
Unsolicited Proposals
oDeclare failure of bidding
oIn no case shall a motion for reconsideration or an appeal from
any decision by the PBAC stay or delay the bidding process.
oNo award shall however be made until a decision on any
pending appeal is rendered
oPPPC: Composition - same as BOT Law IRR, voting and non-voting,
minimum
IA PPP Units (PPPC)
oIA may create PPP Units
oMinimum Composition
1. Senior Official
2. Technical – Project Development
3. Technical – Contract Management
4. Finance
5. Legal
oPPP Center to assist
Regulatory Agencies
Mandate (defined by Charters) Considerations
o Issue and publish guidelines, frameworks, or oWhen no appropriate
mechanisms for consultation, review, and regulatory body – regulation by
approval of initial tolls, fares, fees, rentals, and
other charges and adjustments thereof
contract; LGUs may create a
local rate-setting body
o Approve and uphold the initial tolls, fares, fees,
rentals, and other charges and adjustments oRegulatory approvals must be
thereof made prior to the approval of a
o Approve any decrease in IA revenues or profit PPP Project
o Adopt a conflict mitigation and management oRegulatory action is considered
plan if will implement a PPP Project that it a contingent liability event
regulates
oMAGA includes unanticipated
o Approve Alternative Sources of Funding like
bonds
regulatory risks
Courts
oCourts (except the SC) cannot issue temporary restraining order,
preliminary injunction, preliminary mandatory injunction, temporary
environmental protection order, or similar temporary or provisional reliefs
or remedies
oAgainst any IA or the PPP Center, its officials or employees, or any
person or entity, whether public or private acting under the government
direction
oApplies in all cases, disputes, or controversies instituted by any person,
including cases filed by bidders or those claiming to have rights through
such bidders
oNot apply when the matter is of extreme urgency involving a constitutional
issue, such that unless a temporary restraining order is issued, grave
injustice and irreparable injury will arise
Courts: Covered PPP-related Acts
1.Evaluation, acceptance, and rejection of UPs
2.Bidding, rebidding, or declaration of failure of bidding
3.Awarding of any PPP contract
4.Acquisition, clearance, and development of the ROW, site, or location
of any PPP Project
5.Construction, operation, and maintenance of any PPP Project
6.Commencement, execution, implementation, termination, or
rescission of any PPP contract
7.Undertaking or authorization of any other lawful activity necessary for
such PPP Project
(3) Projects
PPP Projects
No list in PPP Code
Nature Characteristics
oInfrastructure or development o Legal, technical, economic, financial,
projects and services which are and commercial feasibility of the
typically provided by the public sector project
oConsistent and responsive to national, o VfM of the proposed project
local, and sectoral development and o Optimal risk allocation
investment plans
o Affordability of fees or tariffs
oPart of list submitted to appropriate
oversight agencies, NEDA, RDC, o Climate resilience and sustainability
Sanggunian and the PPP Center o Social and environmental safeguards
oPPPC: Consolidated plan (all plans o Product of stakeholder consultation
submit to NEDA within 30 days from o PPPC: Included in Strategic
IRR effectivity; project not in list Investment Priority Plan for
cannot be pursued) incentives (mandatory incentives –
included in rates/ tariffs)
Eligible Types of Projects (PPPC)
o Highways o Land reclamation and flood control
o Land transportation systems o Industrial and tourism estates
o Transport and traffic management o Government buildings
projects o Urban redevelopment and housing
o Port infrastructure o Heritage preservation and adaptive reuse
o Airports, air navigation, and related projects
facilities o Markets and slaughterhouses
o Power generation and distribution o Warehouses and post-harvest facilities
o Energy efficiency and conservation o Public fish ports and fishponds
o Telecommunications infrastructure o Agri-fishery industrial hubs
o Information technology networks o Environmental and solid waste management
o Irrigation and related facilities o Climate change adaptation and disaster risk
o Water supply, sewerage, and drainage reduction
o Educational infrastructure o Other infrastructure projects
o Health infrastructure
Value for Money (VfM)
oEffective, efficient, and oAll PPP Projects must yield
economic use of resources, sufficient VfM
which requires the evaluation
of relevant costs and oIAs shall identify, develop,
benefits, along with an and prepare their respective
assessment of risks, and of lists of PPP Projects guided
non-price attributes and/or by VfM
life cycle costs, as
appropriate. oApproving Body shall assess
PPP Project based on VfM
oPrice alone may not
necessarily represent VfM
Minimum Parameters, Terms and
Conditions (PTCs) (PPPC)
oScope oContingent liabilities
oContractual arrangement oBid parameter
oContract term oCeiling for debt-to-equity ratio
oRights and obligations of the IA oRevenue share for the government, if
and the Private Proponent, and any
penalties to be imposed for oProposed public bidding process
failure to deliver (single stage or two-stage) (for
oRisk allocation solicited)
oPerformance standards and oProposed period for comparative
targets challenge process (for unsolicited)
oGovernment undertakings Divergence between approved PTCs
oRepayment scheme and PPP contract = void contract
(4) Partnership Schemes
Universe of PPP Arrangements
1. Build-Transfer 14. Joint Venture
2. Build-Lease-Transfer 15. Lease or Affermage
3. Build-Operate-Transfer 16. Lease-to-Own
4. Build-Own-Operate 17. Real Property Swap
5. Build-Transfer-Operate 18. Management Contract
6. Contract-Add-Operate 19. Management Contract (No Public Funds)
7. Develop-Operate-Transfer 20. Service Contract
8. Rehabilitate-Operate-Transfer 21. Service Contract (No Public Funds)
9. Rehabilitate-Own-Operate 22. Divestment or Disposition
10. Rehabilitate-Lease-Transfer 23. Corporatization
11. Rehabilitate-Transfer 24. Subsidiary with Private Equity
12. Rehabilitate-Transfer-Operate 25. Onerous Donation
13. Concession Arrangement 26. Gratuitous Donation
PPP Code-Listed Arrangements
1. Finance, Design, Construct, Operate and Maintain (any
combination or variation thereof)
2. Joint Ventures
3. Construct, Operate and Maintain (combination or variation
thereof) Toll Facilities
4. Lease
5. Arrangement which possesses characteristics or elements
of a PPP
6. Arrangement approved by appropriate Approving Body
9 Exclusions
1. Procurement of Infrastructure 7. Onerous Donations
Projects (GPRA) 8. Gratuitous Donations
2. Management Contracts 9. Joint Venture Agreements
3. Service Contracts involving purely commercial
4. Divestments or Dispositions arrangements that neither
provide nor include public
5. Corporatization infrastructure or
6. Incorporation of Subsidiaries development services
with Private Sector Equity (PPPC: e.g. malls without
public service)
Joint Venture
Definition
oIA (proprietary function) and the PP
oParties pool resources comprising of capital, services, or
assets, including equipment, land, or intellectual property
oJoint undertaking
oSpecific investment activity
oInfrastructure or Development Project (typically provided by
Public Sector)
oWithin a specific period of cooperation
Joint Venture
Requirements
oConsistency with IA mandate/ charter
oIA and Approving Body-approved Parameters, Terms and Conditions (PTCs)
oEquity contribution not exceed 50% of Project Cost/ Outstanding Capital Stock
oFair valuation of Equity Contribution
oFormation of JV not prevent the parties from entering into other JV PPP
contracts with other parties or from profitably entering into other business
ventures or markets, provided not compete with the first JV for the same
product and geographic market
oProfit share proportionate to contribution (Government may get higher
share/ favorable terms)
oReversion to Government or Divestment
Lease
oLease with:
oRehabilitate
oO&M, and
oProvision for Working Capital and/or Improvements
oPPPC: With public service component
oLease as component of PPP
(5) Permissions (Approvals)
Approval of National PPPs
≥ P15B* Project Cost**
oNEDA Board Approval (120 days) (PPPC: meets
at least 1x/ month)
oNEDA-ICC Favorable Recommendation
oIf SUC, Green Lane
*NEDA-ICC can review, evaluate and update
** 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/ROW, taxes imposed on said cost,
and development cost (PPPC: includes interest and financing cost; if O&M
with CAPEX, government borrowing rate and present value)
Approval of National PPPs
< P15B Project Cost
oGoverning Board or Department or Agency Head (if Attached
Agency has no Board) (120 days to decide, approval by inaction)
oNEDA-ICC if PPP Project:
o Physically overlaps with government-approved project or developed project per
national/ sectoral plans (PPPC: listed in Consolidated Plan)
o Negatively affects economic benefits, demand, and/or financial viability of
government-approved project or developed project per national/ sectoral plans
(PPPC: same alignment/ catchment/ market group)
o Requires financial government undertakings (under GAA) (PPPC: Subsidy, VGF)
o Involves Availability Payments (under GAA)
o With Government JV contribution which exceeds 50% of its entire assets (PPPC: of
IA) based on its latest audited financial statements (PPPC: last 3 years)
Approval of National PPPs
Regardless of Project Cost, Clearance from …
oPPP Center
oAssess compliance with the approved PTCs
oDetermination of completeness of unsolicited proposals
oStatutory Counsel - compliance with applicable laws, rules,
and regulations (PPPC: unfavorable opinion ≠ prima facie
evidence/ claim sufficient to sustain a judgment in favor of
the issue it supports)
oDOF - National Government Undertaking under the PPP
contract
Approval of Local PPPs
Regardless of Project Cost
oApproved by Sanggunian (if LGU) or Board (if LUC) (PPPC: 120 days)
oEndorsement by LDC (30 days, approval by inaction)
oApproved by NEDA-ICC (RDC endorsed) - Government Undertakings
using national government funds
oEndorsement by National Government (through RDC) - Local PPP
Projects affecting national or sectoral development plans and
national projects
oClearance from Statutory Counsel - compliance with approved PTCs
and applicable laws
oClearance from DOF - if there is national government undertaking
Approval of Inter-LGU PPPs
May be implemented by the: oApproved by the local
1. National government, Sanggunians of the LGUs
subject to the approval concerned
process for National PPP oRespective RDCs may assist
Project in the coordination of LGUs
2. Next higher level of LGU in the development,
approval, and
3. LGUs concerned, subject implementation of the
to the approval process Local PPP Project
for Local PPP Projects
Government Undertakings
Forms* Nat’l Gov’t to Local
Any form of contribution and/or support, which
the Government may extend to a PP for the
PPP Project**
implementation of PPP Projects o Guarantees on Demand
o VGF and other forms of subsidy o Guarantees on Private Sector Return
o Payment of ROW related costs o Guarantees on Loan Repayment
o Performance undertaking o VGF and other forms of Subsidy
o Additional exemptions from any tax other than
those provided for by law (PPPC: e.g. RPT) o Monetary Payment of Contingent
Liability through the PPP Risk
o Guarantee on Demand Management Fund
o Guarantee on Loan Repayment
o Guarantee on Private Sector Return All require DOF approval
o Government Equity * - Not allowed for Unsolicited Proposals
o Contribution of assets, properties, and rights ** - Requires NEDA-ICC approval
Not Government Undertakings
oAvailability Payments
oPermits, clearances, licenses, or endorsements from national
government agencies required for Local PPP Projects
o[Allowed for Solicited Projects and Unsolicited Proposals]
(6) Procedures
1. Open
2. Fair
3. Transparent
4.Competitive
Solicited Project
oPublic bidding initiated by IA
oStages: Single-Stage or Two-Stage (qualification requirements and/
then bid proposals)
oManner: Manual or Electronic
oPrivate Partner/ Awardee
oSatisfies all pre-qualification and eligibility requirements
oSubmitted the most responsive bid to the bid parameter proposed
by the IA (next most responsive)
oComplied with PTCs
oAllows substitution in composition of pre-qualified PP prior to bid
submission (substitute has equal or better qualified)
Solicited Project: Most Responsive Bid
Highest Lowest
oPayment to Government oGovernment Subsidy/ Support
(Revenue-based) oTariff by End-User
oShare in Revenues (JV) oRental Payment by
oRental Payment to Government (IA as Lessee)
Government (IA as Lessor)
Solicited Project
Failed Bidding Single Complying Bid
oNo bids are received oAfter advertisement
o >1 bidder applied for pre-qualification but only 1
oNo complying bids met the pre-qualification requirements
oWinner bidder o 1 bidder applied for and met the pre-
qualification requirements
refuses to accept
award oAfter pre-qualification
o >1 bidder, only 1 submitted a bid
o >1 bidder submitted bids but only 1 compliant

Effect: IA may negotiate on financial proposal

PPP Code Interim Guidelines:
Processing of Solicited Proposals
Scenarios Governing Policy and Activities
General Rule: If bidding rules Bidding Rules shall apply (not PPP Code, not Interim Guidelines)
already published prior to effectivity
of PPP Code (12.23.2023)
BOT Law: Project submitted to but Project Approval: BOT Law applicable (P300M/ P200M thresholds)
pending approval by Approving Other requirements: PPP Code applicable
Body (AB)
NEDA JV Guidelines and LGU National Projects: ≥P15B – NEDA Board per ICC rules that will be
Ordinance: Project submitted to but issued
pending approval by AB Local Projects: Sanggunian and Local Development Council
approvals
Project returned by AB and not National Projects: ≥P15B – NEDA Board per ICC rules that will be
resubmitted by the Implementing issued
Agency (IA) for approval Local Projects: Sanggunian and Local Development Council
approvals
Project submitted by the IA to the National Projects: ≥P15B – NEDA Board per ICC rules that will be
AB after 12.23.2023 issued
Local Projects: Sanggunian and Local Development Council
approvals
Unsolicited Proposal
Stage 1
oSubmission of UP by PP to IA (PPPC: UP submitted to PPPC)
oIA (PPPC: PPPC) can entertain similar proposals [within 10 days
from UP] (PPPC: after 10th day, other UPs not considered)
oSubmission to PPP Center (PPPC: simultaneous or subsequent)
oDetermination by PPP Center [10 days]
oUP completeness (PPPC: if incomplete, final and non-appealable)
oAppropriate Approving Body (then endorses to IA)
oDecision to process UP by IA (or to reject UP if project not aligned
with IA development plans or IA is developing a similar project) (PPPC:
Letter of Acceptance to state mechanics and commencement date
of negotiations)
Unsolicited Proposal
Stage 1
oDetailed Evaluation of UP and PP Qualifications by IA (90 days to
approve; approval by inaction) (PPPC: submitted PTCs are the items
which are deemed approved)
oAbsence of prohibited Government Undertakings
oConsider ROW
oAcceptance (or Rejection) of UP by IA
oIf multiple UPs (PPPC: submitted to PPPC), IA accepts (PPPC: 90
days) most advantageous UP (viability, project scope and terms,
investment recovery scheme, government risks, and PP
qualifications) (PPPC: If IA does not act, 1st UP deemed approved)
Unsolicited Proposal
Stage 2
oGood faith Negotiations between IA and PP with accepted UP
with assistance of PPP Center [≯150 days]
oPTCs
oSuccessful (or failed) Negotiations
oPP becomes Original Proponent (OPS valid for ≯1 year)
oSubmission of UP (and approved PTCs) to Approving Body for
approval (or rejection) (120 days to decide; approval by
inaction)
Unsolicited Proposal
Stage 3
oComparative Challenge by IA if Approving Body approves UP/ PTCs
[90 to 365 days]
oManual or electronic
oPublication of Invitation [within 7 days from approval]
oRight to Match by OP [30 days]
oAward to:
oOP:
oif no challenger (PPPC: wait for lapse of minimum of 90 days)
oif able to match proposal of challenger
oWinning Challenger - if OP not able to match
Unsolicited Proposal
Limitations/ Prohibitions
oAny change in the composition of the OP that will affect its
majority ownership
oInclusion of Government Undertakings
oIA advances payment for ROW acquisition and related costs
oValuation of usufruct of assets, properties and rights
oWinning PP: Reimbursement of Development Cost for past 3
years not exceed 6% of Project Cost
PPP Code Interim Guidelines:
Processing of Unsolicited Proposals
commenced under BOT Law
Scenarios Governing Policy and Activities
General Rule: If rules for challenge Rules for Challenge will apply (not PPP Code, not Interim Guidelines)
already published prior to effectivity of
PPP Code (December 23, 2023)
I. If Project submitted to Implementing PP has 60 days to complete submission
Agency (IA) by 12.23.23 and IA has o National Projects: Follow ICC rules that will be issued
not issued Letter of Acceptance to o Local Projects: PPP Center must determine completeness of UP, and Sanggunian
Private Proponent (PP) and Local Development Council approvals
II. If PP granted Original Proponent 1. Revoke OPS
Status (OPS) but UP not yet submitted 2. Commence Negotiations
for approval by Approving Body (AB) o National Projects: Follow ICC rules that will be issued
o Local Projects: Issue Notice - Set mechanics - Designate representatives –
(Hire consultants) - Negotiate; PPP Center must determine completeness of
UP, and Sanggunian and Local Development Council approvals
III. If PP granted OPS, Project returned o National Projects: ≥P15B – NEDA Board per ICC rules that will be issued
by AB to IA, and Project not yet o Local Projects: PPP Center must determine completeness of UP, and Sanggunian
resubmitted by IA to AB and Local Development Council approvals
IV. If PP granted OPS and UP pending PP has 2 options:
approval by AB 1. Proceed with approval process
2. Resubmit UP (notify IA within 30 days from IRR effectivity)
PPP Code Interim Guidelines:
Processing of Unsolicited Proposals commenced
under NEDA JV Guidelines/ Others
Scenarios Governing Policy and Activities
General Rule: If rules for challenge Rules for Challenge will apply
already published prior to effectivity (not PPP Code, not Interim Guidelines)
of PPP Code (December 23, 2023)
Project submitted to but pending Follow ICC rules that will be issued by
approval by Approving Body (AB) NEDA-ICC
If Private Proponent (PP) granted Implementing Agency (IA) shall either:
Original Proponent Status (OPS) but 1. Revoke OPS
UP not yet submitted for approval by 2. Commence Negotiations
AB Follow ICC rules that will be issued
If Project submitted to IA by PP has 60 days to complete submission
12.23.23 and IA has not issued Follow ICC rules that will be issued
Letter of Acceptance to PP
PPP Code Interim Guidelines:
Processing of LGU Unsolicited
Proposals (UPs) under P4 Ordinance
Scenarios Governing Policy and Activities
I. If rules for challenge already Such challenge rules will apply (not PPP Code, not
published prior to effectivity of Interim Guidelines)
PPP Code (December 23, 2023)
II. If UP pending approval by a. PPP Center must determine completeness of UP
Approving Body b. UP must be endorsed by Local Dev’t Council
c. Sanggunian to decide in writing
d. PPP Center to be furnished copy of decision
III. If Private Proponent granted LGU Options:
Original Proponent Status (OPS) 1. Revoke OPS
but UP not yet submitted for 2. Commence Negotiations
approval by Approving Body o Issue Notice - Set mechanics - Designate
representatives – (Hire consultants) - Negotiate
o Comply with II [a] to [d] above
o If successful, OPS reconfirmed
 (6.1) Unsolicited Proposal
Flowchart
PPP Center
https://ppp.gov.ph/processing-unsolicited-ppps-under-the-new-ppp-code/
Local UPs
(6.2) Completeness
Checklist
 Completeness Checklist (National UPs)
1. Company Profile 8. Complete Feasibility Study
o Problem Definition, Project Description, Sectoral Program/ Regional and Spatial
rd
2. 3 Party Valuation Report Context, Expected Outcomes and Key Success Indicators, Analysis of Technical
Solutions, Stakeholder Analysis, Project Costs, Legal Due Diligence, Demand
o Government Asset, Equity
Analysis, Proposed Tariff Structure, Financial Analysis, Economic Analysis, Project
Contribution of Parties, Reclaimed Safeguards, Risk Allocation, Contractual Options, Job Creation Information
Land
9. Economic Model (Traceable)
3. Gender Responsive o Assumptions, Economic Benefits and Costs, Conversion of Financial Costs to
Checklist Economic Costs, Calculation of Economic Viability

4. Location Map 10. Financial Model (Traceable)

o Assumptions, Balance Sheet, Income Statement, Cash Flows, Calculations on
5. Right of Way Acquisition/ Financial Viability and Bankability

Resettlement Plan 11. Parameters, Terms and Conditions

o Project Scope, Contractual Arrangement, Term, Bid Parameter, General
6. Draft Contract Performance Standards and Targets, Obligations (Construction, Supply of Assets
and Operations), Revenues (to Private Proponent and IA), Transfer at end of
7. Unsolicited Proposal Contract, Performance Security, Contingent Liabilities, Regional Development
Council Endorsement, EIS/ ECC
Assessment Forms
 Completeness Checklist (Local UPs)
1. Letter of Private Proponent 9. Complete Feasibility Study
to PPP Center o Problem Definition, Project Description, Sectoral Program/ Regional and
Spatial Context, Expected Outcomes and Key Success Indicators, Analysis of
2. Company Profile Technical Solutions, Stakeholder Analysis, Project Costs, Legal Due Diligence,
3. 3rd Party Valuation Report Demand Analysis, Proposed Tariff Structure, Financial Analysis, Economic
Analysis, Project Safeguards, Risk Allocation, Contractual Options, Job
o Government Asset, Equity Creation Information
Contribution of Parties,
Reclaimed Land 10. Economic Model (Traceable)
4. Gender Responsive o Assumptions, Economic Benefits and Costs, Conversion of Financial Costs to
Economic Costs, Calculation of Economic Viability
Checklist
11. Financial Model (Traceable)
5. Location Map
o Assumptions, Balance Sheet, Income Statement, Cash Flows, Calculations on
6. Right of Way Acquisition/ Financial Viability and Bankability
Resettlement Plan 12. Parameters, Terms and Conditions
7. Draft Contract o Project Scope, Contractual Arrangement, Term, Bid Parameter, General Performance
Standards and Targets, Obligations (Construction, Supply of Assets and Operations),
8. Unsolicited Proposal Revenues (to Private Proponent and LGU), Transfer at end of Contract, Performance
Assessment Forms Security, Contingent Liabilities
(7) Pact and Provisions
20 Important PPP Code Provisions
1. Risk Allocation 11. Guarantees
2. Sources of Financing 12. Subsidy
3. Financial Close 13. Government Undertakings
4. Investment Recovery Schemes 14. Divestment
5. Tolls, Fares, Fees, Rentals and 15. Wind-Up and Transfer Measures
Other Charges 16. Alternative Dispute Resolution
6. Availability Payments 17. Material Adverse Government
7. Reasonable Rate of Return Action
8. Land Value Capture Strategies 18. Variation, Expansion or Extension
9. Contingent Liability 19. Termination
10. Viability Gap Funding 20. Accountability/ Liability
Risk Allocation
oEquitable and optimal risk allocation between/ among the PPP Parties
oEach party shares in the associated risks
oNEDA-ICC shall publish the Generic Preferred Risk Allocation Matrix (GPRAM)
oAll PPP contracts to be entered into by the IA shall adhere to the principles
stipulated under the GPRAM, to the extent applicable
oAny deviations to the preferred risk allocation shall be justified by the IA and
approved by the appropriate Approving Body
oAdoption of contract management and risk mitigation plans (execution plan,
all risks assumed by the government under the PPP contract, risks assumed by
the IA, risk mitigating measures, estimated costs to be incurred, target timeline
to have each measure in place, and the appropriate action plan by the IA to
manage each type of risk)
Sources of Financing
Private Alternative
oDebt and Equity oGreen Financing
oProject Finance oCorporate or Project Bonds
and Securities
Government oOther forms of capital
market financing
oDirect government
appropriations
oOfficial Development
Assistance
Financial Close
oSpecific milestone in a PPP contract where the PP
successfully secures all necessary project and financing
agreements
oThe achievement of such milestone confirms that all prior
conditions have been met, allowing the PP to draw down
the financing to commence work on the PPP Project
oPeriod stated in PPP contracts
oFailure to achieve Financial Close within such period,
without the fault of the government, shall subject the PP
to penalties under the signed PPP contract
Investment Recovery Schemes
Private Partner shall be allowed to recover its investments and earn reasonable profit
1. Revenue-based - refers to a scheme where the PP is authorized to charge and
collect, in whole or in part, from the users reasonable tolls, fares, fees, rentals,
and other charges subject to appropriate regulation; Where applicable, the PP
may likewise be repaid in the form of a share in the revenue of the PPP Project
2. Availability-based - refers to a scheme where the IA commits to make
predetermined payments, which do not take the form of charges paid by the
users of the works or of the service, but of regular payments by the IA in exchange
of delivering an asset or service in accordance with the PPP contract.
3. Supplementary/ Other investment recovery schemes:
a) Commercial development rights
b) Grant of a portion or percentage of a reclaimed land, subject to the
constitutional requirements on land ownership and fair valuation
Tolls, Fares, Fees, Rentals and
Other Charges
o Initial tolls, fares, fees, rentals, and other charges and adjustments thereof shall be as
stipulated in the PPP contract (for revenue-based investment recovery scheme)
o Regulatory Agencies to issue guidelines, frameworks, or mechanisms for consultation,
review, and approval of said initial tolls, fares, fees, rentals, and other charges and
adjustments thereof
o Approve the initial tolls, fares, fees, rentals, and other charges and adjustments thereof, on the
basis of service quality, key performance indicators, 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
o Uphold the approved initial tolls, fares, fees, rentals, and other charges and adjustments thereof
during the implementation of the PPP Project
o Where the IA fails to implement the initial tolls, fares, fees, rentals, and other charges and
adjustments thereof as stipulated in the PPP contract, the Private Partner shall be allowed to
recover the difference through measures consistent with the PPP contract and applicable laws,
rules, and regulations
o In the case of Local PPP Projects, the IA may also opt to create and establish a local rate
setting body
o Changes in tolls, etc. must be approved by Approving Body
Availability Payments
oPredetermined payments by the IA to the PP in
exchange of delivering an asset or service in
accordance with the PPP contract.
oNot construed as a Government Undertaking,
Guarantee on Demand, Subsidy, or government
contribution
oApproval by NEDA-ICC needed (even if < P15B)
Reasonable Rate of Return (RRoR)
oNet gain of an investment over a specified time period, expressed
as an annualized percentage as prescribed by the appropriate
Approving Body and reflected in the PPP contract
oWhere the realized rate of return exceeds the prescribed RRoR,
the excess shall be remitted to the National Treasury
(“Clawback”)
oPrescribed by Approving Body (PPPC: what is required under the
law as defined vs. negotiated/ proposed)
oConsidered by Regulatory Agency in assessment of public interest
o(PPP Code Interim Guidelines: not apply until IRR issued)
Reasonable Rate of Return (RRoR)
(PPPC)
Applicability Remittance
oApplicable only for oTrust account during
solicited with 1 complying monitoring period
bid oWithdrawal from Trust
oNot applicable for: Account for Reinvestment if
oSolicited with multiple < RRoR
complying bids oRemittance at end of
oUnsolicited proposals contract
oIA monitoring on an annual
basis
Land Value Capture Strategies
A set of mechanisms used to recover and re-invest land-
based value increases that arise in the catchment area of
public infrastructure investments
Contingent Liability
oAn obligation that may arise from events specified in a PPP
contract, the occurrence, timing, and amount of which are
uncertain
oRegulatory action
oForce majeure
oBreach of government warranties
oMaterial Adverse Government Action (MAGA)
oOthers
oPayment of CL from PPP Risk Management Fund
Viability Gap Funding (VGF)
oExtended by the government to make an economically
viable revenue-based PPP Project financially viable
oROW and resettlement shall not be considered as VGF
Guarantees
oOn Demand - an agreement where the IA undertakes to
assume the market demand risks associated with the PPP
Project
oOn Loan Repayment - an agreement where the IA
guarantees to assume responsibility for the repayment of
debt directly incurred by the PP in implementing the PPP
Project in case of a loan default
oOn Private Sector Return - an agreement where the IA
guarantees to provide a predetermined rate of return on
the investment of the PP
Subsidy
An agreement where the IA will:
1. Defray, pay for, or shoulder a portion of the Project Cost or the expenses and costs in
operating or maintaining the project
o ≯ 50% of Project Cost
o Not a subsidy if Gov’t receives payment or renumerated by PP
2. Bear a portion of capital expenditures associated with the establishment of an
infrastructure or development project and services
o ≯ 50% of Project Cost
3. Contribute any property or assets to the project
o Allowed for JVs
4. Waive charges or fees relative to business permits or licenses that are to be obtained for
the Construction of the project
o Not a subsidy if Gov’t receives payment
Includes VGF which may be extended by the government to make an economically viable
revenue-based PPP Project financially viable
Divestment

By IA By PP
oDivest ownership, rights or oDivest ownership, rights or
interest in a PPP Project interests in a PPP Project
(full or partial) oApproval of IA
oApproval of Approving oAfter a holding or lock-in
Body period as indicated in the PPP
contract
oNew PP must have equal or
better qualifications as
previous PP
Wind-Up and Transfer Measures
oMechanisms and procedures for the transfer of assets to the IA
oTransfer of technology required for the operation of the PPP Project
oTraining of the personnel of the IA or of a successor in the O&M of
the PPP Project
oThe provision, by the PP, of a warranty that the PPP Project meets the
project technical specifications, agreed system features, and
performance standards and services for a certain period after the
transfer of the PPP Project to the IA
oIn case of JVs, the compensation to which the PP may be entitled in
case of buy-out and transfer of assets to the IA
Alternative Dispute Resolution
oInclude provisions on the use of dispute avoidance and
ADR mechanisms (Republic Act No. 9285 otherwise known
as the “Alternative Dispute Resolution Act of 2004)
oContracting parties shall be given complete freedom to
choose which ADR mechanisms
Material Adverse Government Action
(MAGA)
oAny act of the government which the PP had no knowledge of, or
could not be reasonably expected to have had knowledge of, prior
to the effectivity of the PPP contract, and that occurs after the
effectivity of the PPP contract, other than an act which is
authorized or permitted under the PPP contract, which:
ospecifically discriminates against the sector, industry, or project, and
ohas a significant negative effect on the ability of the PP to comply with
any of its obligations under the approved PPP contract
oMAGA may include unanticipated regulatory risks
oCL covered by National/ LGU Risk Management Fund
Termination
PPP contract shall: Restrictions
oDefine all events that may lead to its oNo termination without
termination, including but not limited to, exhausting the
either party event of default, force majeure corresponding remedy or
and other no-fault termination events, and curing period
other termination events, as may be agreed oTermination shall take
upon by the parties to the PPP contract. place only upon failure to
oProvide for remedies, curing periods, lender remedy or cure the
step-in rights, remittance procedures, default in accordance with
default interest rates, and written notice the PPP contract
requirements agreed upon by both parties
oIndicate the Termination Payment (amount
payable by the government or the PP on
the occurrence of an event or series of
events)
“Amendments”
PPP Contract Variation, Expansion or Extension
1.Changes in the agreed schedule or parametric formula to calculate tolls,
fares, fees, rentals, and other charges and adjustments thereof, as
stipulated in the PPP contract
2.Decrease in the IA’s revenue or profit share derived from the project,
except as may be allowed under a formula approved by the relevant
regulatory or Approving Body
3.Change in the approved scope of works, decrease in the performance
standards, deferment of committed service levels or change in the
contractual arrangement
4.Extension in the contract term
5.Increase in the financial liabilities of the government under the PPP Project
“Amendments”

Approving Body Requirements

oMust approve the “amendments” oNo Approval = Void Amendment
oMay impose limitations on oApproval before implementation
amendments during approval of amendment
process of project oSplitting of Amendments not
allowed
IA Head
oApprove other forms of
“amendments”
Accountability
oAll PPP contracts - clearly define the scope of each party’s
accountability under the PPP contract
oIA Head shall at all times be accountable to PPP Projects
oPP shall likewise be held accountable for the works it has
delivered and services it has rendered for a PPP Project
oPPP Projects shall be subject to the Government Auditing
Code of the Philippines and the 2009 COA Revised Rules of
Procedures
Liability
oImprisonment (3 – 6 years) and fine (P1M – P5M)
oDowngrading the category of the Project Cost for purposes of
evading the required approvals
oSubmitting of any false information or falsified documents
oNeglecting or refusing to act upon an UP within the prescribed period
oPerforming any act which restricts transparency or tend to restrain
the natural rivalry of parties or operates to stifle or suppress
competition in the PPP process
oWithdrawing a bid, after it shall have been declared the winner, or
refusing award, without just cause for the purpose of forcing the IA to
award the PPP contract to another bidder
oViolating provisions on Approval of Projects, Solicited and Unsolicited
Proposals, JVs, Amendments, Divestment, Conflict of Interest,
Confidentiality of Information
oAnti-Graft and Corrupt Practices Act
Next Steps
IRR Guidelines
o 90 days from PPP Code effectivity 1. Guidelines, forms, and templates that shall be used
o Public Consultations by IAs and the appropriate Approving Bodies
o Possible Contents 2. Guidelines, frameworks, or mechanisms for
consultation, review and approval of said initial tolls,
o More definitions fares, fees, rentals, and other charges and
o Procedures for approval of PPP adjustments thereof
Projects 3. Approval of Government Undertakings
o Requirements for Unsolicited
Proposals 4. Negotiation of PTCs for Unsolicited Proposals
o Evaluation of bid proposals and 5. Processing of LDC endorsements
protests 6. Determination of Termination Payments
o Framework for supervision and
monitoring of PPP Projects 7. Use of PDMF
o Mechanism for setting the 8. Management of Contingent Liabilities
RRoR
o List of Government 9. Set-up of Local PPP Risk Management Fund
Undertakings 10. PPP Audit Guide (COA)
PPP Code: Rules in Rule-Making
Suggested Guide for IRR Committee
IRR Committee can: IRR Committee cannot:
o Supply details and add definitions o Change, amend or issue rules which are
(Supplementary or Implementing in conflict with the PPP Code and other
Rule) statutes (Subordinate Legislation)
o Spell out how the PPP Code will be o Issue a rule which is not germane/
implemented (Supplementary or related to the PPP Code
Implementing Rule) o Issue a rule which is unreasonable
o Set out procedures for solicited and o Issue Penal Rules (whereby a violation
unsolicited projects (Procedural Rule) of the IRR will be considered an offense
o Issue a Contingency Rule (e.g. since this is not authorized under the
increasing the P15B threshold for PPP Code)
National Projects requiring NEDA o Promulgate the IRR without public
Board approval) since the PPP Code consultation (since this is required
provides the contingency under the PPP Code)
 www.albertocagra.com
09175353823
alberto agra
[email protected]
Together, let us learn-unlearn-relearn.
Thank you.