Welcome to the Frequently Asked Questions (FAQs) page of Republic Act (R.A.) No. 11966, also known as the Public-Private Partnership (PPP) Code of the Philippines. Understanding the PPP Code is crucial for all stakeholders involved in ongoing and future PPP projects. As such, this page is created to provide clarity and support as we navigate the new law.
This PPP Code FAQs page will be regularly updated to reflect the most common and recent public inquiries on the law.
Where can I submit my questions on the PPP Code?
Interested parties may submit their questions regarding the PPP Code of the Philippines through this link.
How to submit a question:
- Fill in all the required fields with accurate information.
- To facilitate efficient processing, please submit only one question at a time. Including multiple questions in a single submission may lead to delays. For additional questions, please use a separate form for each.
- After your submission, you will receive an email acknowledging the receipt of your question.
Disclaimer
This page provides a summary of the salient reforms under R.A. 11966 or the PPP Code of the Philippines. This document is non-binding and has no legal effect. Any portion of this document that conflicts with the said law, the law shall prevail.
Republic Act No. 11966 or the PPP Code of the Philippines was signed by President Ferdinand R. Marcos, Jr., on December 5, 2023. The law was published on December 8 in the Daily Tribune, and shall take effect fifteen (15) calendar days after its publication” following Section 38 of the PPP Code, or on December 23, 2023.
After publication and effectivity, the PPP Code Implementing Rules and Regulations (IRR) will be formulated by the IRR Committee. In accordance with Section 34 of the PPP Code, the IRR Committee shall be composed of the members of the PPP Governing Board, with the Secretary of NEDA as the Chairperson and PPP Center as the Secretariat.
The IRR Committee shall promulgate the IRR within ninety (90) calendar days from effectivity of the Code. The PPP Code IRR is expected to be issued within the first quarter of 2024.
Yes. Stakeholder consultations have started as of December 2023. To stay updated on announcements on stakeholder consultations, please visit the PPP Center website and follow our Facebook page for information.
The PPP Code shall cover the following:
- all contractual agreements between Implementing Agencies (IA) and Private Partner to finance, design, construct, operate, and maintain, or any combination or any combination or variation thereof, for infrastructure or development projects and services,
- joint ventures as defined in the Code,
- toll operation agreements,
- lease agreements providing for rehabilitation, operation, and/or maintenance, including the provision of working capital and/or improvements to, by the Private Partner of an existing land or facility owned by the government for a period of time covering more than 1 year,
- lease agreements when such lease is a component of a PPP project, and
- all other contractual arrangements which possess characteristics or elements of a PPP as defined under this Code, or as may be approved by the appropriate Approving Body.
The new law excludes projects:
- implemented under R.A. 9184 or the Government Procurement Reform Act, management contracts, service contracts, divestments or dispositions,
- corporatization,
- incorporation of subsidiaries with private sector equity,
- onerous donations,
- gratuitous donations, and
- joint venture agreements involving purely commercial arrangements that neither provide nor include public infrastructure or development services.
All Implementing Agencies are authorized to identify, develop, assess, evaluate, approve, negotiate, award, and undertake PPP Projects with the private sector. An IA refers to any of the following:
- Department, bureau, office, instrumentality, commission, authority of the national government,
- State universities and colleges (SUCs),
- Local universities and colleges (LUCs),
- Local government units (LGUs), or
- Government owned-or-controlled corporations (GOCCs).
Local PPP Projects are PPP projects undertaken by LGUs and local universities and colleges (LUCs), while those undertaken by the national government, state colleges and universities (SUCs), government owned-or-controlled corporations (GOCCs) including government instrumentalities with corporate powers (GICPs), government corporate entities (GCEs), and government financial institutions (GFIs), water districts, and economic zone authorities are called National PPP Projects.
Pursuant to Section 37 (Repealing Clause) of the PPP Code, local ordinances or any part thereof which are inconsistent with or contrary to the PPP Code are rendered inoperable: “All executive orders and administrative laws, decrees, orders, codes, issuances, rules and regulations, and ordinances or any part thereof inconsistent with or contrary to this Code are hereby repealed or modified accordingly.”
Project terms, including rights and privileges of proponents, under PPP contracts that were executed prior to the effectivity of the Code are protected. Pending PPP Projects are not expected to be delayed given the transitory provisions provided in the Act.
| Scenarios | Rules to be applied | |
| 1 | All signed PPP contracts prior to effectivity of the Code – Section 35(a) | Signed contract + PPP Code to the extent that such application does not infringe upon established rights |
| 2 | PPP Projects with notices of award (NOA), but no signed contract yet – Section 35(b) | PPP Code to the extent that such application does not infringe upon established rights; otherwise, rule in effect at the time the NOA was issued shall apply |
| 3 | Solicited PPP Projects which have commenced bidding – Section 35(c) | PPP Code to the extent that such application does not infringe upon established rights; otherwise, rule in effect at the commencement of bidding or comparative challenge shall apply |
| 4 | Solicited PPP Projects proposed under the Build-Operate-Transfer (BOT) Law pending approval – Section 35(d) | PPP Code, except for project approval |
| 5 | Solicited PPP Projects undertaken through the BOT Law which have been approved but the bidding has not yet commenced – Section 35(d) | |
| 6 | Solicited PPP projects NOT under the BOT Law pending approval – Section 35(e) | Approval process under Section 7 of the PPP Code, to the extent that such application does not infringe upon established rights |
| 7 | Unsolicited PPP Projects which have commenced comparative challenge – Section 35(c) | PPP Code to the extent that such application does not infringe upon established rights; otherwise, rule in effect at the commencement of bidding or comparative challenge shall apply |
| 8 | Unsolicited PPP Projects undertaken through the BOT Law which have been approved but the comparative challenge process has not yet commenced – Section 35(d) | PPP Code, except for project approval |
| 9 | Unsolicited proposals undertaken through the BOT Law which have been granted original proponent status (OPS) but pending approval – Section 35(d) | Private Proponent shall have the option to: (i) continue with approval under old process; or (ii) resubmit under the Code |
| 10 | Unsolicited PPP Projects NOT under the BOT Law pending approval – Section 35(e) | Approval process under Section 7 of the PPP Code, to the extent that such application does not infringe upon established rights |
The new law repeals all guidelines and related issuances, including specific provisions in the special charters of GOCCs on partnerships between government and private sector for the financing, designing, constructing, operating and maintaining, or any combination thereof, of infrastructure or development projects outside of Republic Act No. 9184.
Project terms, including rights and privileges of proponents, under PPP or JV contracts that were executed prior to the effectivity of the Act shall not be disturbed. Pending PPP Projects are not expected to be delayed given the transitory provisions provided in the Act.
| Scenarios | Rules to be applied | |
| 1 | All signed PPP contracts prior to effectivity of the Code – Section 35(a) | Signed contract + PPP Code to the extent that such application does not infringe upon established rights |
| 2 | PPP Projects with notices of award (NOA), but no signed contract yet – Section 35(b) | PPP Code to the extent that such application does not infringe upon established rights; otherwise, rule in effect at the time the NOA was issued shall apply |
| 3 | Solicited PPP Projects which have commenced bidding – Section 35(c) | PPP Code to the extent that such application does not infringe upon established rights; otherwise, rule in effect at the commencement of bidding or comparative challenge shall apply |
| 4 | Solicited PPP Projects proposed under the Build-Operate-Transfer (BOT) Law pending approval – Section 35(d) | PPP Code, except for project approval |
| 5 | Solicited PPP Projects undertaken through the BOT Law which have been approved but the bidding has not yet commenced – Section 35(d) | |
| 6 | Solicited PPP projects NOT under the BOT Law pending approval – Section 35(e) | Approval process under Section 7 of the PPP Code, to the extent that such application does not infringe upon established rights |
| 7 | Unsolicited PPP Projects which have commenced comparative challenge – Section 35(c) | PPP Code to the extent that such application does not infringe upon established rights; otherwise, rule in effect at the commencement of bidding or comparative challenge shall apply |
| 8 | Unsolicited PPP Projects undertaken through the BOT Law which have been approved but the comparative challenge process has not yet commenced – Section 35(d) | PPP Code, except for project approval |
| 9 | Unsolicited proposals undertaken through the BOT Law which have been granted original proponent status (OPS) but pending approval – Section 35(d) | Private Proponent shall have the option to: (i) continue with approval under old process; or (ii) resubmit under the Code |
| 10 | Unsolicited PPP Projects NOT under the BOT Law pending approval – Section 35(e) | Approval process under Section 7 of the PPP Code, to the extent that such application does not infringe upon established rights |
The new approval process for national PPP Projects shall be governed by Section 7 of the PPP Code. Under the new law, approving bodies shall render their decisions within 120 calendar days from receipt of complete requirements. Failure to render a decision within the required period shall be deemed an approval of the PPP project.
National PPP Projects shall be approved by the following approving bodies:
| Approving Body | Class of PPP Project |
| National Economic and Development Authority (NEDA) Boardupon recommendation of the NEDA Investment Coordination Committee (ICC) | Projects costing Php 15 billion and above |
| Head of the Implementing Agency or Board, whichever is applicable | Projects costing below Php 15 billion |
| ICC | Projects costing below Php 15 billion, but:
|
Section 7 of the PPP Code also provides a special approval process for SUCs whereby their PPP Projects with project cost of PHP 15 billion and above, but not requiring any Government Undertaking from the National Government, shall be processed pursuant to guidelines to be issued by the NEDA Board-ICC.
Further details regarding rules and procedures on the approval of national PPP projects shall be threshed out in the PPP Code IRR and in guidelines to be issued by ICC/NEDA Board.
Local PPP Projects are those undertaken by LGUs and local universities and colleges (LUCs). In the new approval process for local solicited PPP projects, PPP Projects shall be approved within 120 calendar days from receipt of complete requirement.
| Approving Body | Implementing Agency |
| Local Sanggunians upon endorsement of local development council (LDC) concerned |
All LGU projects, regardless of Project cost |
| LUC Boards | All LUC projects, regardless of Project cost |
Special rules on local PPP projects:
- If the local PPP project has proposed Government Undertakings (GUs) using national government funds, the NEDA Board – ICC shall approve the requested GUs within 60 calendar days from receipt of complete requirements, and upon review and endorsement of respective regional development councils (RDCs). (Note: NEDA Board – ICC disapproval of requested GUs shall not be construed as a disapproval of the local PPP project.)
- If the local PPP project affects national or sectoral development plans, RDC endorsement is required, prior to: (i) in the case of LGUs, endorsement of the LDC concerned and approval by the Local Sanggunians; or (ii) in the case of LUCs, by the LUC Boards.
- If a local PPP project does not require GU from general appropriations, and does not affect national or sectoral development plans, then approval by the appropriate Approving Body suffices.
For projects which require LDC and RDC endorsement, the following are the rules on development council endorsements of local PPP projects:
- Upon receipt of complete requirements from the IA of a local PPP project, the respective LDCs and RDCs shall have 30 calendar days from receipt of the requirements to issue its endorsement on the same.
- Failure of the LDC and/or the RDC to endorse the PPP Project within the specified period shall be deemed an approval of the requested endorsement/s.
Further details regarding rules and procedures on the approval of local PPP projects shall be threshed out in the PPP Code IRR and guidelines to be issued by the PPP Governing Board.
The PPP Code IRR will discuss the specific rules on unsolicited proposals; however, Section 10 of the new law provides the following process and general rules, namely:
- Private proponents interested to submit unsolicited proposals should submit to the PPP Center.
- The PPP Center shall: (a) conduct a completeness check on the submitted proposal; and (b) determine the appropriate Approving Body for the same, within 10 calendar days of receipt of an unsolicited proposal. If the unsolicited proposal is determined to be complete, the PPP Center shall endorse the unsolicited proposal to the Implementing Agency (IA). If determined incomplete, the PPP Center to return the proposal to the private proponent.
- Upon receipt of the unsolicited proposal endorsed by the PPP Center, the IA may: (i) continue processing the unsolicited proposal in accordance with Subsection(d) of Section 10 of the PPP Code; or (ii) reject the proposal if such proposal is deemed not aligned with the development plans of the IA, or if the IA is already developing a project with similar scope and/or similar objective. The IA shall state in writing, with corresponding justification, the action it decides to take on the unsolicited proposal. If the IA fails to act on an unsolicited proposal ninety (90) calendar days after the end of the detailed evaluation period pursuant to Subsection (d)(2) of Section 10 of the PPP Code, the project proposal shall be deemed approved.
- If the IA proceeds to accept an unsolicited proposal, relevant parties shall conduct negotiation within a period not exceeding 150 calendar days. If the IA and the private proponent reach a successful negotiation, the IA shall grant an Original Proponent Status (OPS) to the private proponent.
- The IA shall submit the unsolicited proposal, including negotiated parameters, terms, and conditions, for approval by the appropriate Approving Body pursuant to Section 7 of the PPP Code. For PPP Projects wherein the Approving Body is the Head of the IA, conferment of the OPS shall be deemed an approval of the unsolicited proposal, subject to compliance with the conditions in Section 7 of the Code.
- Comparative Challenge – Once an unsolicited proposal is approved by the appropriate Approving Body, the unsolicited proposal shall be subjected to comparative challenge. The IA shall, within seven (7) calendar days upon approval by the appropriate Approving Body, publish an invitation for the submission of comparative proposals. The IA shall propose the length of the challenge period to the appropriate Approving Body; the period of which shall not be less than ninety (90) days and not exceed a period of one (1) year.
- A right-to-match mechanism is provided; the period of which shall be thirty (30) calendar days. The Original Proponent shall have the right to match the proposal submitted by a challenger during the comparative challenge process. If the Original Proponent is able to match the proposal of the challenger, the IA shall award the PPP Project to the Original Proponent. Otherwise, the PPP Project shall be awarded to the winning challenger.
To download the flowchart of the unsolicited proposals process under the PPP Code, please click here.
Special rules on unsolicited proposals are as follows:
- The IA shall have the right to reject the unsolicited proposal upon receipt if: such proposal is deemed not aligned with the development plans of the IA, or if the IA is already developing a project with similar scope and/or similar objective.
- Unsolicited proposals are allowed for projects in the List of PPP Projects, subject to Private Proponent’s reimbursement of the government’s documented development costs for the last three (3) years from submission of unsolicited proposal; not exceeding six percent (6%) of the Project Cost excluding the cost of right-of-way (ROW) acquisition.
- Any change in the composition of the Original Proponent that will affect its majority ownership shall be strictly prohibited.
- Validity of OPS shall be a period not exceeding one (1) year from conferment.
- The following are Government Undertakings (GUs) which are prohibited for unsolicited proposals:
| Prohibited GUs for Unsolicited Proposals | Definition under the PPP Code |
| i. VGF and other forms of Subsidy | Subsidy refers to 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; (2) bear a portion of capital expenditures associated with the establishment of an infrastructure or development project and services; (3) contribute any property or assets to the project; and/or (4) waive charges or fees relative to business permits or licenses that are to be obtained for the Construction of the project: Provided, That items (1) to (4) shall not be considered as Subsidy if the government receives payment or remuneration from the Private Partner for such: Provided, further, That subsidy falling under items (1) and (2) shall not exceed fifty percent (50%) of the Project Cost: Provided, finally, That in the case of solicited proposals, the expenses for existing ROW or ROW to be acquired shall not be included in the said cap. Subsidy shall also include Viability Gap Funding (VGF) which may be extended by the government to make an economically viable revenue-based PPP Project financially viable: Provided, That government payments for ROW, and resettlement shall not be considered as VGF; |
| ii. Payment of ROW-related costs | (Note: Details to be provided in the PPP Code IRR) |
| iii. Performance undertaking | |
| iv. Additional exemptions from any tax other than those provided for by law | |
| v. Guarantee on Demand | Guarantee on Demand refers to an agreement wherethe IA undertakes to assume the market demand risks associated with the PPP Project: Provided, That the adoption of availability-based schemes and Availability Payments shall not be considered as Guarantee on Demand; |
| vi. Guarantee on Loan Repayment | Guarantee on Loan Repayment refers to an agreement where the IA guarantees to assume responsibility for the repayment of debt directly incurred by the Private Partner in implementing the PPP Project in case of a loan default. As an exception, government repayment of debt as part of Termination Payments shall not be considered as Guarantee on Loan Repayment; |
| vii. Guarantee on Private Sector Return | Guarantee on Private Sector Return refers to anagreement where the IA guarantees to provide a predetermined rate of return on the investment of the Private Partner. This shall not cover Termination Payments arising from government events of default; |
| viii. Government equity | (Note: Details to be provided in the PPP Code IRR) |
| ix. Contributions of assets, properties, and rights | |
| Note: ii and ix may be allowed if the government receives compensation; viii and ix may be allowed for JV arrangements. | |
An Unsolicited Proposal shall not contain any of the following GUs:
| Prohibited GUs for Unsolicited Proposals | Definition under the PPP Code |
| i. VGF and other forms of Subsidy | Subsidy refers to 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; (2) bear a portion of capital expenditures associated with the establishment of an infrastructure or development project and services; (3) contribute any property or assets to the project; and/or (4) waive charges or fees relative to business permits or licenses that are to be obtained for the Construction of the project: Provided, That items (1) to (4) shall not be considered as Subsidy if the government receives payment or remuneration from the Private Partner for such: Provided, further, That subsidy falling under items (1) and (2) shall not exceed fifty percent (50%) of the Project Cost: Provided, finally, That in the case of solicited proposals, the expenses for existing ROW or ROW to be acquired shall not be included in the said cap. Subsidy shall also include Viability Gap Funding (VGF) which may be extended by the government to make an economically viable revenue-based PPP Project financially viable: Provided, That government payments for ROW, and resettlement shall not be considered as VGF; |
| ii. Payment of ROW-related costs | (Note: Details to be provided in the PPP Code IRR) |
| iii. Performance undertaking | |
| iv. Additional exemptions from any tax other than those provided for by law | |
| v. Guarantee on Demand | Guarantee on Demand refers to an agreement wherethe IA undertakes to assume the market demand risks associated with the PPP Project: Provided, That the adoption of availability-based schemes and Availability Payments shall not be considered as Guarantee on Demand; |
| vi. Guarantee on Loan Repayment | Guarantee on Loan Repayment refers to an agreement where the IA guarantees to assume responsibility for the repayment of debt directly incurred by the Private Partner in implementing the PPP Project in case of a loan default. As an exception, government repayment of debt as part of Termination Payments shall not be considered as Guarantee on Loan Repayment; |
| vii. Guarantee on Private Sector Return | Guarantee on Private Sector Return refers to anagreement where the IA guarantees to provide a predetermined rate of return on the investment of the Private Partner. This shall not cover Termination Payments arising from government events of default; |
| viii. Government equity | (Note: Details to be provided in the PPP Code IRR) |
| ix. Contributions of assets, properties, and rights | |
| Note: ii and ix may be allowed if the government receives compensation; viii and ix may be allowed for JV arrangements. | |
No, the new law does not require a new concept or technology for unsolicited proposals
At the outset, we limit our responses in general terms considering that the query does not present a complete factual situation from which we may draw our premises and conclusions. All capitalized terms in this response shall take the meanings provided in Section 3 of the PPP Code.
For new Unsolicited Proposals that are being submitted in accordance with Republic Act No. 11966 or the PPP Code of the Philippines: Section 10 (a) provides that “Unsolicited Proposals shall be submitted to the PPP Center for determination of completeness and determination of the appropriate Approving Body xxx”. With the effectivity of the PPP Code on December 23, 2023, unsolicited proposals may already be submitted to the PPP Center for completeness check and determination of appropriate Approving body. Pending the promulgation of the implementing rules and regulations (IRR) of the PPP Code (as well as the ICC-issued and PPP Governing Board-issued guidelines to be followed in processing National PPP Projects and Local PPP Projects for approval, respectively), the PPP Center, in processing all unsolicited proposal for the determination of completeness by the PPP Center pursuant to the PPP Code, shall be guided, as may be applicable, by the List of Documentary Requirements for Unsolicited Proposals (Annex 2 of the Guidelines and Procedures on Processing PPP Proposals for NEDA Board/ICC Evaluation and Approval, which was approved by the NEDA Board on November 23, 2022). Documentary requirements may be accessed in the links below:
