I.

PPP HISTORY
 
 In 1986, under President Corazon Aquino, the government issued Presidential
Proclamation No. 50 which created the Asset Privatization Trust and the
Committee on Privatization, which divested itself from non-essential business-
related assets acquired during the Marcos Era.

 The 1987 Constitution defined the role of the private sector. Section 20,
Article II of the 1987 Constitution provides that “The State recognizes the
indispensable role of the private sector, encourages private enterprise, and
provides incentives to needed investments.”

 In 1990, Republic Act 6957 entitled “An Act Authorizing the Financing,
Construction, Operation and Maintenance of Infrastructure Projects by the
Private Sector and for other purposes” was enacted. This law was also known
as the Build-Operate-Transfer (BOT) Law. It brought the participation of the
private sector into the frontline of development efforts.

 In 1993, under Fidel Ramos’s administration, the BOT Law was amended to
what is currently known as RA 7718. Consequently, Ramos issued
Memorandum Order No. 166 directing the Coordinating Council of the
Philippine Assistance Center (CCPAP) of the Office of the President to
establish a BOT Center with the CCPAP Chairman as BOT Action Officer.

 During the administration of President Joseph E. Estrada, the CCPAP‐ BOTC

enter was reorganized into the Coordinating Council for Private Sector
Participation (CCPSP) by virtue of Administrative Order 67. This expanded
the coverage of the BOT Program into other forms of private sector
participation. It was also during the Estrada administration that the CCPSP
formalized its provision of technical assistance support through technical
assistance agreements (TAAs) with IAs/LGUs.

 During her presidency, President Gloria Macapagal-Arroyo signed Executive

Order 144 in 2002. It converted the CCPSP into the BOT Center and lodged it
under the Department of Trade and Industry’s (DTI) Industry and Investment
Group (IIG). Its task was to promote and market not just BOT projects, but
transform Public‐ Private Partnerships (PPP) as the cornerstone of the
national infrastructure development plan.

 On September 9, 2010, President Aquino signed Executive Order No. 8

entitled “Reorganizing and Renaming the Build-Operate-and-Transfer (BOT)
Center to the Public-Private Partnership (PPP) Center of the Philippines and
Transferring its Attachment from the Department of Trade and Industry to the
National Economic and Development Authority and for Other Purposes.”
Under the Presidency of Benigno Simeon C. Aquino III, public-private
partnership was tagged as a powerful machinery to help push forward the
country’s development. Under his administration, private sector participation
in the country’s economic agenda is clearly defined in his “social contract”
with the Filipino people.

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  In May 2013, EO 136 was issued mandating the creation of the PPP
Governing Board chaired by the Socioeconomic Planning Secretary, with the
Finance Secretary as co-Chair. Included as members of the Board are the
Secretaries of Budget and Management, Justice, Trade and Industry, the
Executive Secretary and the Private Sector co-chair of the National
Competitiveness Council. The PPP Governing is the overall policy-making
body for all PPP-related matters, including the Project Development and
Monitoring Facility. It shall be responsible for setting the strategic direction of
the Philippine PPP Program while creating an enabling policy and institutional
environment for PPPs in the Philippines.
 

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Administration Laws/Programs Offices Created

Cory Aquino Engaged with private sectors  

through divestment

  Presidential Proclamation 50 Asset Privatization Trust

  Committee on Privatization 

  1990 (original)) BOT Law (R.A.  

6957)

Fidel Ramos Power Sector Crisis Coordinating Council for Phil.

Assistance Program (CCPAP)
(BOT Center) 

  Private Sector Power CCPAP-BOT Creation under

Generation through IPPs OP
(Power Purchase Agreement) 

  Amended BOT Law (RA 7718)  

  Power BOTs (San Roque,  

etc.)

Joseph Estrada BOTs expanded to Private Coordinating Council for

Sector Participation (PSP Private Sector Participation
Program) (CCPSP) under OP (flagship
program)

Gloria Arroyo  BOT Program + JV Guidelines BOT Center (DTI)

Benigno PPP Program (BOT Law/JVs) PPP Center (NEDA)

Aquino III

Rodrigo Infrastructure Spending (Build PPP Center

Duterte Build Build) 

  ODA/GAA/PPP (Hybrid)  
II. CURRENT PPP PROJECT CYCLE

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1
https://ppp.gov.ph/ppp-program/ppp-processes/

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 III. International practice of PPP in other countries.

In Australia, adherence to PPP is debatable. In the UK, the think that PPP
is a scam. In Indonesia, PPP is favored.

Why? If the government has the financial capacity to sustain its own
projects and programs, such as that of Australia and the UK, private
entities are no longer needed to be partnered with.

For developing countries like Indonesia and ours, PPP is needed as we do

not have the financial capacity or technical-know-how to engage in big
government projects.

IV. (CONCLUSION) THE NEED FOR PPP REFORM IN THE PHILIPPINES

Recognizing the role of PPP in accelerating the country’s infrastructure

development and sustained economic growth, the current implementation of PPP
faces challenges attributed to overlapping laws governing the same. With this, there
is a need to provide a coherent law that will input all improved and systematic
mechanisms for PPP implementation.

V. PROPOSED REFORMS FOR PPP IN THE PHILIPPINES

A. Guide Questions for PPP Reformation Based on the Proposed Bills in

the Senate. Based on the previous discussions conducted by the Committee
with concerned government agencies, the following issues should be resolved
in lieu with the reformation of PPP in the Philippines:

(a) Is there a need to establish by law and/or strengthen the PPP Center
that was previously organized only by an Executive Order?

(b) What powers and functions should be given to the PPP Center, if it shall
be established by law and/or strengthened?

(c) Should the PPP Center be authorized to receive unsolicited PPP project
proposals?

(d) Which body should determine the Implementing Agency and Approving
Authority for unsolicited PPP project proposals?

(e) Should the threshold for dichotomizing the referral to the NEDA-ICC and
NEDA Board be adjusted, or be made subject to adjustment according to
economic indexes to be determined in the IRR?

(f) Should local (LGU) PPP Projects be made to undergo prior review and
approval by the NEDA?

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 (g) Is a regular review of national PPP projects by an oversight Committee
of the Congress sufficient, or should it be supplemented by an regular
operational audit by another body, such as the PPP Center?

(h) Is a regular review of local (LGU) PPP projects by an oversight

Committee of the Congress sufficient, or should it be supplemented by
an regular operational audit by another body, such as the PPP Center?

(i) Is the authorization of a post-audit necessary for PPP projects,

especially for PPP projects that do not involve public funding?

(j) Should modalities and procedures be referred to IRR specification and

clarification after major guidelines are set in the law, in order to obtain
flexibility in view of the dynamic progression in technology and
development?

B. Status of the Proposed Bills in the Senate Committee on Public Works

The Committee on Public Works conducted three public hearings held

on September 4, 2019, October 2, 2019, and January 29, 2020, respectively.
On the last hearing, Senator Franklin Drilon suggested that we await for the
proposed draft of the bill to be submitted by the Executive Branch.
That procedure will allow the Committee to appreciate the suggestions
from the Government’s implementing arm. The Executive Branch’s proposal is
expected to image its needs based on the understanding of the present
situation. The consideration of its ideas will also enhance the approval of the
bill.
Presently, the Committee Chair Senator Emmanuel Pacquiao, has
been apprised that the proposal from the Executive Branch is still in the
process of consideration and discussion prior to approval by the Infrastructure
Committee (Infracom) of National Economic and Development Authority
(NEDA).
Nonetheless, the Chair tasked the Secretariat support group and his
staff to assist in the preparation of a discussion draft based on the bills
submitted by our colleagues Senator Ralph Recto, Senator Franklin Drilon,
Senator Juan Edgardo Angara, Senator Imee Marcos, and the one from the
Committee Chair.
In the same light that will facilitate approval of the bill, the version from
our counterparts in the House of Representatives was also reviewed.
Moreover, the working group invited some experts and representatives
from concerned agencies of the Government for consultation to reflect a
better understanding of the PPP, and have a preview of implementation
concerns.

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 Professor-Lawyer Alberto C. Agra, who is a certified PPP specialist and
formerly of the Institute for Public-Private Partnerships in Virginia, USA, sat
down with the Chair and the working staff on August 13, 2019 and March 9,
2020.
Mr. Alvin Sia and Ms. Sarah Amor Conche of the Department of
Finance (DOF) and Director Francis Bryan Coballes, Mr. Quintin de Luna and
Ms. Leyden Sta. Isabel of the NEDA, came to discuss with the Chair and the
working staff and shared their views on various dates in February 2020.
Director Jeffrey Manalo, Atty. Phebean Ramos, Mr. Eleazar Ricote,
Ricardo Benjamin Osorio, John Dexter Lunk and Maria Beatriz Quintos of the
PPP Center gave insights to the Chair and the working staff at a meeting on
February 4, 2020, and via Zoom meetings on May 18, June 8, 10, 11, 15, 16,
19, and 22, all in 2020.