Section 20, Article II of the 1987 Philippine Constitution provides that “The State recognizes the indispensable role of the private sector, encourages private enterprise, and provides incentives to needed investments.”
In recognition of this role in sustainable development, Congress enacted two primary laws to implement the same: Republic Act No. 9184 or the Government Procurement Reform Act (RA 9184) for the procurement of goods, supplies and services, and Republic Act No. 6957 as amended by Republic Act No. 7718 or the Philippine Build-Operate-and-Transfer (BOT) law which provided a more focused framework in PPP infrastructure development.
The enactment of RA 6957 allowed Local Government Units (LGUs) to enter into contractual arrangements with the private sector to implement infrastructure projects through two variants – Build-Operate-and-Transfer (BOT) and Build-Transfer-and-Operate (BTO).
RA 7718 enhances the provision of RA 6957 by broadening the list of PPP government implementing agencies such as government owned and controlled corporations (GOCCs), government financing institutions (GFIs) and state universities and colleges (SUCs); putting in place incentives for attracting private sector investments to venture into PPP projects; and allowing negotiated unsolicited proposals provided that these comply with conditions outlined in the law. More importantly, RA 7718 provided for the inclusion of other contractual arrangements or schemes to implement PPP projects.
As provided in the amended BOT law and its Implementing Rules and Regulations (IRR), collaborative partnerships between the government and the private sector can be made possible through a broad spectrum of modalities. The BOT law identifies a number of variants and includes a catch all provision for other variants that may be identified later. However project implemented using new variants are subject to the approval of the President of the Philippines.