The IRR Committee established the following objectives for amending the 2012 IRR:

  1. Facilitate the development of well-structured PPPs that deliver high quality services to the public
    1. Implement a transparent and expeditious process for evaluating PPP proposals in order to arrive at the real cost of PPPs to the Government, the consumers, and taxpayers
    2. Avoid conflicts of interest situations and promoting the engagement of practices that promote competition
    3. Ensure that the parties of PPP contracts are capable to implement and fulfill their respective contractual obligations
  2. Protect the public from excessive payments, undue guarantees, unnecessary fiscal risks, and onerous contractual obligations from PPP projects
    1. Enable an environment where all government agencies, including regulators, are able to perform their functions in accordance with their respective mandates
    2. Clearly define the scope, parameters, terms, and conditions in every approval by the Approving Body
    3. Mitigate the risk of exposure by the National Government arising from PPPs
    4. Prohibit the incorporation of onerous and one-sided provisions in PPP contracts
  3. Promote the interests of Filipinos who ultimately pay for the costs and returns of PPP projects

On March 4, 2022, the BOT Law IRR Committee approved a draft of the amended IRR for purposes of initial publication and stakeholder consultation. The following are the major highlights of the draft amendments.

  1. The draft amendments provided the following, which were not clarified in the 2012 IRR:
    1. guidelines specifying criteria for approval of projects
    2. the minimum set of parameters, terms, and conditions (PTCs) that will be the basis for the drafting of a contract
    3. for unsolicited projects, a mechanism to determine the existence of a new concept or a new technology
    4. guidelines for what could be included among payments to be made by government to the proponent in case the contract is terminated and how to calculate such payments
    5. methodology for determining financial capability of proponents
    6. rules for the disclosure of the terms of loan agreements signed between the proponent and its lenders that have an impact on the fiscal exposure of the government
  2. The draft amendments required that “key performance indicators” (how the performance of the proponent shall be measured) be specified in the contract
  3. The draft amendments added rules for government liabilities in contracts:
    1. Disclosure of liabilities that are to be assumed by government
    2. Submission of a risk mitigation plan for the so-called “contingent liabilities” (liabilities that arise from uncertain events)
    3. Approval of the nature and the amount of the liabilities
    4. Monitoring and reporting of liabilities
  4. For performance securities, the draft amendments:
    1. Required a performance security for the pre-construction phase
    2. Required a performance security for any works or services that are outside the approved scope
    3. Required that the form of the performance security is subject to approval by the Approving Body
    4. Required that the value of the amount guaranteed by performance securities be maintained throughout the life of the contract
    5. Required the strict monitoring of compliance by the proponent with the requirements for the performance securities
  5. For unsolicited projects, the draft amendments provided the following rules:
    1. the granting of OPS by Agencies/LGUs shall be conditional and shall be subject to confirmation by the approving body. If the Approving Body finds that the proponent fails to meet the qualification requirements, the Approving Body may cause the revocation of the OPS
    2. An adjusted rate of return shall be set by the Approving Body. This is in addition to the reasonable rate of return required by the 2012 IRR.
  6. The draft amendments expanded the role of COA in auditing PPP projects
  7. The draft amendments required agencies to publish the signed PPP contracts in their websites
  8. The draft amendments restricted the kinds of variations that can be allowed

The full draft of the amended IRR is available on this link.

The stakeholder consultation is scheduled on March 11, 2022.