Republic of the Philippines

Public-Private Partnership Center

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PPP Program

Historical Background

Addressing the infrastructure gap is a continuing effort critical to the development agenda of the Philippine government. With an aging infrastructure, a growing population, and the need to be more competitive in the global market, different administrations sought alternatives to cope with the need to build more projects in sectors like transportation, power and roads.

However, the country’s infrastructure agenda is constrained by a limited fiscal space. In this context, the government looks to the private sector as a reliable partner in infrastructure development.

Over the years, public-private partnerships in the Philippines have progressed, with each administration implementing different strategies on how to engage the private sector in its development efforts. Its legal framework is replete with laws and regulations that track the evolution of PPPs and how it relates to the political and economic scenario at that time.

The Root of PPPs in the Philippines

In 1986, right after the martial law regime of the Marcos Administration, then President Corazon C. Aquino, government divested itself from non-essential business-related assets acquired during the Marcos era. It also enacted Presidential Proclamation No.  50 in December 1986, which created the Asset PrivatizationTrust (APT) and the Committeeon Privatization (COP) to handle this move.

The following year, Congress passed the 1987 Philippine Constitution. It defined the role of the private sector as a valuable partner in achieving the development goals of the country. Section 20, Article II specifically states that, “the State recognizes the indispensable role of the private sector as the main engine of national growth.”

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

In 1993, then President Fidel Valdez Ramos amended the BOT law to what is currently known as Republic Act 7718 or the Amended BOT Law and its Implementing Rules and Regulations.

President Ramos then issued Memorandum Order No166 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 as 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. This was 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.

On May 2013, Executive order No. 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.

PPPs today

The Public-Private Partnership Center of the Philippines is mandated to facilitate and coordinate the country’s PPP program. The Center manages a revolving fund called the Project Development and Monitoring Facility. It provides Implementing Agencies (IAs) technical advisory support in project development and management and monitors the implementation of PPP priority projects. It is also tasked to formulate policy guidelines for PPP transactions, and develop and manage a central database of all PPP programs and projects.

In June 2016, the Duterte administration presented its 10-point socio-economic agenda. Part of the agenda is to accelerate annual infrastructure spending to account for 5% of GDP, with Public-Private Partnerships playing a key role. The new government also envisions to implement more infrastructure projects around the country to generate more employment opportunities and boost economic activities to attain inclusive growth in every region.

In line with the government’s socio-economic agenda, the PPP Center together with its partners and stakeholders, will continue to strengthen the PPP program through pipeline development, policy reforms, and process improvement to help address the challenges in the country’s infrastructure development. It also aims to optimize PPP processes by learning about previous procurement bottlenecks, adopt established best practices and standardize lessons learned. It will continue working closely with implementing agencies and strengthen its collaboration with development and private partners and seek more support for PPPs in the Philippines from various local and international organizations.