MANILA, Philippines – Foreign and Philippine business groups are pushing for the swift enactment of amendments to Republic Act 7718 or the Build Operate Transfer (BOT) Law in order to sustain investor confidence and ensure critical infrastructure projects are implemented here.
In a letter to Benguet Representative Ronald Cosalan, chair of the Committee on Public Works and Highways at the House of Representatives dated Feb. 18, the Joint Foreign Chambers (JFC) and Philippine business groups said they back the passage of the amendments to the BOT Law.
The letter was signed by the heads of groups making up the JFC as well as Philippine business groups Management Association of the Philippines and the Makati Business Club.
The JFC is composed of the American, Australian- New Zealand, Canadian, European, Japanese and Korean Chambers in the Philippines and the Philippine Association of Multinational Companies Headquarters, Inc.
The coalition represents over 3,000 member companies engaged in over $230 billion worth of trade and some $30 billion worth of investments in the Philippines.
â€śWe call on government to swiftly enact the amendments to the BOT Law that will institutionalize the PPP (Public Private Partnership) Center and its processes, which we believe will further strengthen our PPP framework and prevent hindrances to the implementation of critical public projects,â€ť the groups said.
The groups are pushing for the passage of the amendments to the BOT Law given the need for massive investments in infrastructure to support the countryâ€™s economic growth.
Given the need for more investments in infrastructure, the groups said the governmentâ€™s PPP program is seen to provide a framework to accelerate infrastructure development and allow for projects to be properly tendered.
â€śWhile the PPP program encountered some difficulties in its initial stages, it has since begun to catch up, with high impact projects being steadily rolled out, catching the attention of domestic and international investors,â€ť the group said.
Earlier, PPP Center executive director Cosette Canilao said amendments to the BOT Law through the PPP Act are being pushed to ensure that the PPP program would continue even after the term of President Aquino.
The PPP, a flagship program under the Aquino administration, seeks to accelerate infrastructure development to allow the country to attain inclusive growth.
The government has so far, awarded the following projects under the PPP program: Daang Hari â€“ South Luzon Expressway Link Road, PPP for School Infrastructure Project (Phase 1), Ninoy Aquino International Airport Expressway Project (Phase 2), Modernization of the Philippine Orthopedic Center, Automatic Fare Collection System, Mactan-Cebu International Airport Passenger Terminal Building, Light Rail Transit Line 1 Cavite Extension and Operation and Maintenance, as well as the Integrated Transport System-Southwest Terminal Project.
The Philippine Star, 25 February 2015
By Louella D. Desiderio
The Public-Private Partnership (PPP) Center, the office that oversees and reviews projects under the Aquino administration’s flagship program, expects Congress to pass the PPP Act this year, a move that could raise the number of projects to be awarded by the government.
“We expect the PPP Act will be passed within the year, hopefully bago mag-recess sila,” PPP Center deputy executive director Eleazar Ricote told reporters on the sidelines of Philippines Infrastructure Seminar in Makati City on Monday.
The passage of the Build-Operate-Transfer (BOT) Law Amendments or the PPP Act is sponsored by Marikina Representative Romero Quimbo in the House of Representatives and by Senator Franklin Drilon in the Senate.
Concerns over the sustainability of the PPP program would significantly be addressed by the enactment of the PPP Act, Ricote said.
“It will strengthen the current framework, provide some more stability and predictability in terms of process, institutionalize the PDMF, PPP Center,” he said.
Project Development and Monitoring Facility (PDMF) is a revolving pool of funds from the Philippine government and Australia under a capacity building technical assistance project from the Asian Development Bank (ADB) and Canada to enhance the investment environment for the PPP initiative while developing a robust pipeline of viable and well-prepared infrastructure projects.
With the amended law, the Aquino administration could have over 15 projects awarded under the program, Ricote noted.
“That’s the expectation. With the institutionalization of PDMF, we will have more resources to help agencies put up more projects and therefore will have more in the pipeline,” he said.
The Aquino administration aims to cap its term with 15 PPP contracts awarded, of which five infrastructure projects are to be completed by 2016. â€“ VS, GMA News
GMA News, 23 February 2015
By Danessa O. Rivera
A HOUSE committee reworking the decades-old Build-Operate-Transfer (BOT) law heard testimony last week on the need to better address the needs of Public-Private Partnership (PPP) investors, including mechanisms to bypass delays in the bid process and proposals from business groups to institutionalize the PPP Center.
The House Committee on Public Works and Highways is considering a substitute bill drafted following a series of at least five meetings to consolidate proposed amendments to the current BOT law, which was enacted in 1990 and last amended in 1994.
The new bill, if passed, may allow joint venture contracts as part of possible PPP project agreements, and will exempt PPP participants from paying real property tax and transfer taxes, such as capital gains tax and documentary stamp tax, and all local taxes in the case of projects of national significance.
Investment incentives will also be offered on all infrastructure projects worth P1 billion or more, in order to attract more potential private sector partners.
The government relies on PPP projects to hasten and improve the construction of public infrastructure and services for sustainable development.
â€śWe are banking on the PPP not only because we need the financing from the private sector but also on the efficiency and innovation of the private sector,â€ť PPP Center Deputy Executive Director Sherry Ann N. Austria told lawmakers during the hearing.
To preclude delays in the PPP process, the bill also provides for the automatic grant of licenses and permits for winning bidders, as bureaucratic concerns have long been cited by business groups. It also includes prohibitions against the issuance of temporary restraining orders in the bidding, awarding, and construction of PPP projects.
â€śI was hoping to approve it now but there seem to be some questions with regard to the sharing of government funds or responsibilities with respect to the PPP projects,â€ť committee chairman and Benguet Rep. Ronald M. Cosalan said in an interview on the sidelines of last weekâ€™s meeting.
â€śIt may be disadvantageous now but in the long run, it will be good for the economy and for the entire country,â€ť Mr. Cosalan added when asked how such a delay would affect the passage of the bill. He said he remained confident that the measure will see approval before June 2016, or when the present Congress closes.
Both the government and business groups have tagged BOT reform as a priority amid the various procedural delays and conflicts that have stood in the way of PPP projects since the programâ€™s inception in 2010.
In a position paper submitted to Mr. Cosalanâ€™s committee last week, the seven-member Joint Foreign Chambers in the Philippines pressed for urgent action on the BOT law amendments.
â€śThe private sector is cognizant of the great need for massive infrastructure investments to support and boost the growth of the Philippine economy. We recognize that the governmentâ€™s Public-Private Partnership Program provides the framework by which infrastructure development can be accelerated and properly tendered to interested and capable parties,â€ť the groups said in a two-page letter.
â€śWe call on government to swiftly enact the amendments to the BOT Law that will institutionalize the PPP Center and its processes, which we believe will further strengthen our PPP framework and prevent hindrances to the implementation of critical public projects.â€ť
The coalition is composed of the American, Australia-New Zealand, Canadian, European, Japanese and South Korean chambers and the Philippine Association of Multinational Companies Regional Headquarters, Inc., which altogether have invested some $30 billion in the Philippines.
Pressed for details on particular changes that are needed, Peter L. Wallace of the Management Association of the Philippines said: â€śThe one change Iâ€™d like to see is that after acceptance of all bids and their technical submissions these submissions are given to all participants who may raise objections. Once these are resolved no further complaints can be raised or accepted including to the courts (which the BOT law would state). Then the cost bids can be opened and the project proceed,â€ť Mr. Wallace said in a text message.
â€śThe other is that owners of land the project needs are offered twice fair market value which they may not refuse.â€ť
Peter Angelo V. Perfecto, Executive Director of the Makati Business Club, added that institutionalizing the PPP Center would increase the attractiveness of projects it offers to the business sector, which would be reassured by the agencyâ€™s permanence and the consistency of its procedures.
â€śThe key is to institutionalize a more effective PPP model that can further accelerate the countryâ€™s growth by tapping the combined strengths of government and the private sector. There is much our lawmakers can adopt and build on from the experience of the existing PPP Center,â€ť Mr. Perfecto said in a text message.
â€śAn institutionalized PPP Center will help ensure predictability in the rules and procedures that increases confidence of investors.â€ť
The PPP Center was established in 2010, by virtue of Executive Order No. 8 signed by President Benigno S. C. Aquino III, serving as the link between the government and private sector.
The bill likewise carries provisions on the acceptance of unsolicited proposals. The Palace version of the bill asks for an option for the outright rejection of a project proposal as submitted by a private contractor. The committee, however, will be drafting clear criteria for rejecting a proposal, Mr. Cosalan said, as a â€ścourtesyâ€ť to the proponent.
â€śWe are supposed to legislate for the benefit of the people, what would benefit [them] most. But we have to balance it with business interests and of the government in the totality of the benefits we want to receive from such projects,â€ť Mr. Cosalan said when asked how the Executiveâ€™s version of the proposed law was consideration.
Further talks will be held by the committee on the draft bill to address concerns raised during last weekâ€™s hearing, including a proposed rate of return cap for private sector partners.
Business World, 23 February 2015
By Melissa Luz T. Lopez
Among the amendments the Joint Foreign Chambers is pushing for is the extension of the Swiss challenge
MANILA, Philippines â€“ The Joint Foreign Chambers (JFC) pushed for the swift enactment of amendments to the build-operate-transfer (BOT) law to sustain investor confidence in the government’s infrastructure program.
In a letter to Representative Ronald Cosalan, chairperson of the House Committee on Public Works and Highways, JFC said the amendments to the law would institutionalize the processes that have improved the Public-Private Partnership (PPP) program over the past 4 years.
This will further strengthen the country’s PPP framework and prevent hindrances to the implementation of critical public projects, JFC added.
One of the amendments being pushed is a call to extend the maximum period of the Swiss challenge in an unsolicited bid to 6 months from the present two months.
“While the PPP Program encountered some difficulties in its initial stages, it has since begun to catch up, with high-impact projects being steadily rolled out, catching the attention of domestic and international investors,” JFC said.
President Benigno Aquino III highlighted these initial difficulties in his 2013 State of The Nation Address (SONA), saying, â€śThe studies on which the projects were based were outdated; and the bureaucracy lacked the sufficient knowledge to implement them.”
The program has been recently picking up steam with the government announcing 18 major infrastructure projects worth P602.2 billion ($13.6 billion). These were set to roll out before June of this year.
It was also highlighted during the first ASEAN-PPP Networking Forum held in December of 2014, where it was regarded as one of the most mature PPP programs in the region with established policy and process improvements and a developed pipeline of projects.
8 PPP projects have been awarded by the government so far amounting to P127 billion ($2.8 billion). â€“ Rappler.com
US$1 = P44.23
Rappler, 23 February 2015
MANILA – The Joint Foreign Chambers has asked Congress to accelerate amendments to the Build-Operate-Transfer (BOT) Law to improve the Philippinesâ€™ public-private partnership (PPP) program.
â€śWe call on government to swiftly enact the amendments to the BOT Law that will institutionalize the PPP Center and its processes, which we believe will further strengthen our PPP framework and prevent hindrances to the implementation of critical public projects,â€ť the group said in a February 18, 2015 letter to Rep. Ronald M. Cosalan, who chairs the Committee on Public Works and Highways.
â€śThe private sector is cognizant of the great need for massive infrastructure investments to support and boost the growth of the Philippine economy. We recognize that the governmentâ€™s PPP Program provides the framework by which infrastructure development can be accelerated and properly tendered to interested and capable parties,â€ť the group added.
It said the amendments to the BOT Law will sustain investor confidence, encouraging them to participate in the governmentâ€™s PPP projects.
â€śWhile the PPP Program encountered some difficulties in its initial stages, it has since begun to catch up, with high-impact projects being steadily rolled out, catching the attention of domestic and international investors,â€ť the letter read.
Amending the BOT Law is among the key legislation of the Aquino administration.
The Joint Foreign Chambers is composed of business groups of America, Australia, New Zealand, Canada, Europe, and South Korea as well as the Philippine Association of Multinational Companies Regional Headquarters Inc.
The group represents over 3,000 member companies with over US$230 billion worth of trade and US$30 billion worth of investments in the country.
InterAksyon, 20 February 2015
By Philippine News Agency
Experts and finance officials will meet in Tagaytay City on March 4 to 6 to discuss the Public-Private Partnership (PPP) program as well as infrastructure, as part of this yearâ€™s Asia-Pacific Economic Cooperation (APEC) forum, which is being hosted by the Philippines.
When the 4th APEC PPP Experts Advisory Panel Meeting opens on March 4, participants will get a report from the APEC Secretariat and Indonesia regarding the discussions made and decisions taken during the panelâ€™s third meeting, as well as updates on the works undertaken by Indonesia or the panel.
Indonesia will also give an update on its PPP unit and its various PPP projects, as well as the challenges the country faces.
The Philippines will also give inputs during the discussion, presenting its own PPP programs and the work of the Philippine PPP Center and PPP projects that are in the pipeline.
After the discussions on PPPs, officials will gather for the APEC Finance and Central Bank Deputiesâ€™ Meeting (FCBDM) to tackle the current economic outlook and financial condition in the region, and the Cebu Action Plan, as well as how to promote financial integration, advance fiscal transparency, enhance financial resiliency, and support infrastructure development and financing.
The Tagaytay meeting is a build-up to the APEC Leadersâ€™ Meeting in November.
Since its formation in November 1989, the APEC has become the premier forum for facilitating economic growth, cooperation, trade and investment in the Asia-Pacific region.
The APEC groups 21 member economies: Australia; Brunei Darussalam; Canada; Chile; Peopleâ€™s Republic of China; Hong Kong, China; Indonesia; Japan; Republic of Korea; Malaysia; Mexico; New Zealand; Papua New Guinea; Peru; The Philippines; The Russian Federation; Singapore; Chinese Taipei; Thailand; The United States of America; and Viet Nam.
This yearâ€™s meetings carry the theme, â€śBuilding Inclusive Economies, Building a Better World.â€ť
U.S. News Agency, 19 February 2015
By PNA and U.S. News Agency / Asian
MANILA, Philippines – The Philippines has become a more attractive location for investments for British firms amid improving economic conditions here, but the government needs to address bottlenecks to growth such as lack of infrastructure, predictability in business environment and skills gap to get more investors.
London Mayor Alan Yarrow told reporters yesterday the Philippinesâ€™ economic gains in the last four years has made it a more attractive place for business and investments.
â€śYouâ€™ve been particularly successful in the last four years. Youâ€™ve been the choice of a number of companies to outsource back office, very good level of education, good command of English. Consequently, the world is coming to the Philippines. You can see it in GDP (gross domestic product) numbers and that is important,â€ť he said.
Despite the improvements made, Yarrow said there are bottlenecks which need to be addressed for the country to continue to grow and attract more investments.
Among the bottlenecks to growth is the lack of necessary infrastructure.
In that area, Yarrow said the United Kingdom (UK) could provide assistance to the Philippines in terms of financing and technical assistance.
â€śWe can support the Philippines either through financing, project management or with design of projects or with Public Private Partnerships (PPPs),â€ť he said noting that the country has experience in undertaking PPPs.
Aside from the lack of infrastructure, he said predictability of taxes is another important concern for investors.
â€śIf you invest money, you want tax rates to be predictableâ€¦Getting certainty of tax rates, of tax instance is important,â€ť he said.
Another area of concern is the skills gap as the economy is growing.
â€śEqually, having said that, there are issues to do with opening up the economy to more international qualifications and professions because as you grow, and you are growing very rapid at the moment, you need to have skill gaps filled. That is looking at things like accountancy, lawyers, all of whom would want to employ Filipino people which is making Filipino people more globally transportable,â€ť he said.
The mayor of London arrived in the country for a two-day visit yesterday to strengthen the UK and Philippinesâ€™ partnerships, as well as promote British capabilities in the areas of PPPs and financial and professional services and encourage inward investments to the UK.
During the visit, the London mayor is scheduled to meet with key government officials including the heads of Congress, the Department of Finance, Bangko Sentral ng Pilipinas and the PPP Center, as well as top UK and Philippine companies.
He is also visiting the Philippine Stock Exchange and meeting with the trading community.
The Philippine Star, 13 February 2015
By Louella D. Desiderio
THE PUBLIC-Private Partnership (PPP) Center said it made a presentation to a Singapore business forum to drum up interest in key local infrastructure projects.
PPP Center Executive Director Cosette V. Canilao said in a statement that the business forum was intended at identifying and developing areas of cooperation between the Singapore and Philippine private sectors.
â€śThere are 11 PPP projects that are under procurement with an indicative total cost of P279.92 billion,â€ť Ms. Canilao said, without mentioning which projects attracted interest in Singapore. She did, however, highlight in the statement the importance of airport projects for ASEAN integration.
In December 2014, the Department of Transportation and Communications rolled out P116.23 billion worth of contracts to develop, operate and maintain six regional airports under its PPP program.
The six projects under the bundled contracts are: the P4.57-billion New Bohol (Panglao) Airport; the P5.81-billion Puerto Princesa Airport; P14.62-billion Laguindingan Airport; P20.26-billion Bacolod-Silay International Airport; P30.40-billion Iloilo Airport; and P40.57-billion Davao International Airport.
â€śThese airport projects are identified by the World Bankâ€™s Singapore Infrastructure Hub as essential infrastructures to realize the Master Plan for ASEAN Connectivity,â€ť Ms. Canilao said.
About 29 PPP projects, according to the PPP Center, are to be pursued by the Transportation department while the Department of Public Works and Highways have 12 projects.
PPP Center said that the Department of Health, Department of Education, Metropolitan Waterworks and Sewerage System and other government agencies will implement the rest of the projects in the current pipeline.
As of January, there were 61 PPP projects in the pipeline.
Business World, 05 February 2015
By Chrisee Jalyssa V. Dela Paz
The Philippines encouraged Singaporean companies to invest in the countryâ€™s public-private partnership (PPP) projects during the Philippines-Singapore Business Council Forum held on Thursday.
â€śThere are 11 PPP projects that are under procurement with an indicative total cost of P279.92 billion [$6.3 billion],â€ť PPP Center executive director Cosette Canilao said.
Canilao showcased the PPP investment opportunities that the country is currently offering to international and local investors.
In December 2014, the Department of Transportation and Communications (DOTC) published the invitation to pre-qualify and bid for the development, operation and maintenance of six airport PPP projects, namely the Laguindingan, Davao, Bohol, Iloilo, Bacolod and Puerto Princesa airports.
These airport projects were identified by World Bankâ€™s Singapore Infrastructure Hub as essential infrastructures to realize the Master Plan for ASEAN Connectivity (MPAC).
Twenty-nine PPP projects are to be pursued by the DOTC while the Department of Public Works and Highways (DPWH) haas twelve (12) projects.
The Department of Health (DoH), Department of Education (DepEd), Metropolitan Waterworks and Sewerage System (MWSS) and other government agencies will implement the rest of the projects in the current pipeline.
As of January, there are 61 PPP projects in the pipeline.
The government issued its 9th notice of award (NOA) on January 23 for the Integrated Transport System (ITS)-Southwest Terminal PPP project to MWM Terminals, a consortium of Megawide Construction Corp. and WM Property Management Inc. A pre-bid conference on February 9 is set for the South Terminal of the ITS PPP project.
DPWH Secretary Rogelio Singson, DOTC Secretary Joseph Emilio Abaya, and other government officials also attended the forum. Filipino business groups included SyCip Gorres Velayo & Co. (SGV) chairman Cirilo Noel while the Councilâ€™s vice chairman Fernando Zobel de Ayala closed the two-day event.
The Philippines-Singapore Business Council Forum aims to identify and develop areas of cooperation between both countriesâ€™ private sectors.
The Manila Times, 05 February 2015
By Rosalie C. Periabras