1. The Philippine Public-Private-Partnership (PPP) Program
International Infrastructure Investment & Cooperation Forum
China International Contractors Association (CHINCA)
25-29 May , Beijing, China
The Philippine Public-Private-Partnership (PPP) Program
COSETTE V. CANILAO
Deputy Executive Director, Philippine PPP Center

2. Outline of Presentation
The Aquino Administration’s PPP Program
Private Sector Role in Phil Socio-Economic Development
The Expanding Scope of Private Sector Role
Legal Framework
Institutional and Regulatory Set-Up
The PPP Center and its Services
PPP Process
PPP Developments
Priority Projects for 2011
Prospects for Chinese Partners
Summary

3. The Aquino Administration’s PPP Agenda
A Social Contract with the Filipino People
Commitment that all transactions are transparent & above board
Consultative view on private sector areas of concern, i.e. policy issues, market sounding, etc.
Protection of interest of the public as facility users and payers
“We are working to develop profitable partnerships with private companies both domestic and international. We have the resources. We have the human capital. Filipino citizens, invigorated by a shared sense of professionalism, integrity, and quality, are working with their leaders to build policy formulations for growth…”
Pres. Benigno S. Aquino, III
President Benigno S. Aquino III’s Social Contract with the Filipino People envisions a country that has achieved inclusive growth and is characterized by rapid, sustained, and broad-based economic growth that is focused on creating more jobs and new opportunities to achieve full employment, and on significantly reducing poverty.
In order to attain this vision, the development strategies will be directed towards attaining a high and sustained economic growth, providing equal access to development opportunities while formulating effective social safety nets.
To help achieve the high and sustained economic growth needed to generate productive employment opportunities, the Government commits to provide an enabling environment for private sector investment through a stable macroeconomic environment and sound and consistent public policies.

4. Private Sector Role in Economic Development
Indispensable role of the private sector recognized by the Philippine constitution – “private sector as partner in development”
Private sector participation most prominent in infrastructure and development projects traditionally provided by government
Policy environment supports private sector’s critical role
structural adjustments policies - privatization, deregulation and liberalization
market-based tariff setting; broad range of government support; various mechanisms for public-private partnerships
economic agenda to harness private sector financing and efficiency
The Philippine Government recognizes the essential role of the private sector as the main engine for national growth and development. Private sector investors will be selected through open competition under fair and transparent terms. All interested investors will be given a level playing field with reasonable returns and appropriate sharing of risks without compromising the protection of public interests. Through this program, end-users will be provided with adequate, safe, efficient, reliable, and reasonably-priced infrastructure services.

5. Expanding Private Sector Role
“Three Waves” of Private Sector Participation
Disposition/Sale of Assets through the Asset Privatization Trust (APT) and the Committee on Privatization
Late 80s to Early 90s – Energy Act (Power Purchase Agreements); Philippine BOT Law (RA 6957); 1994 Amended BOT Law (RA 7718)
Present and Onwards – The Public-Private-Partnership (PPP) Phase
The PPP Phase
Expanded range of private sector engagements – Management Contracts, Lease, BOTs, JVs, Concessions, other variants
PPPs in traditional (transportation, water, etc) and non-traditional infrastructure (ICT, health, education, etc) sectors
Mixed financing structure; project bundling/unbundling, etc.
The Philippines boasts of a long experience of public-private partnership (PPP) initiatives, which serves as a rich basis for future investments. With its aggressive PPP promotion, the government was and is able to attract private partners to invest not only in traditional infrastructure projects, such as power, transportation, and water sectors, but also in non-traditional infrastructure and development sectors, such as information and communications technology, health, and property development.
Through the partnerships with private sector, the power crisis in the early 1990s was addressed. The partnership likewise helped improve road network quality, transport linkages and social services. To date, approximately US$ 19.5 billion in investment has already been generated since its inception.
Today, PPP can be credited in helping realize various development projects both at the national and local levels across various infrastructure sectors.

6. LEGAL FRAMEWORK The Amended Build-Operate-Transfer (BOT) Law (RA 7718)
BOT Law’s Implementing Rules and Regulations (IRR)
Charters of Government Owned and Controlled Corporations (Republic Acts and Executive Issuances)
Legal Mandates of Implementing Agencies (Republic Acts)
Sectoral Regulatory Agencies (Republic Acts and Executive Issuances)
The Local Government Code (RA 7160)
Procurement Reform Act (RA 9184)
The government’s PPP Program is governed by the amended Build-Operate-Transfer (BOT) Law and its IRR. The BOT law and its IRR recognizes other republic acts and executive issuances of Implementing/Line Agencies including local governments, Government Owned and Controlled Corporations, sectoral regulatory agencies and other related laws such as the Procurement Reform Act.

7. INSTITUTIONAL SET-UP
Contracting Parties (enters into PPP/BOT Agreement)
Implementing Agencies (national agencies)
Government Corporations
Local Government Units (Province, City, Municipality)
Other National Agencies Concerned
Line Agencies/Departments (policymaking)
National Regulatory Bodies (Finance, Economic Planning, Environment, Securities and Exchange, Central Bank, etc.)
Sectoral Regulators (e.g. toll regulatory board)
Review and Approving Bodies
Inter-Agency Investment Coordination Committee
Local Government Councils
Coordinating and Monitoring Agency
The PPP Center

8. The PPP Center
Pres. Aquino signed Executive Order No. 8 (09 September 2010)
BOT Center renamed PPP Center and transferred attachment from DTI to NEDA
Expanded mandate
covers all arrangements under the BOT Law, Joint Venture arrangements, and other PPP arrangements
Promote the PPP Program
Facilitate development of PPP Projects
Advocate policy reforms
Monitor PPP implementation
By virtue of Executive Order No. 8, the Build-Operate-Transfer (BOT) Center was renamed into the Public-Private Partnership Center (PPPC) of the Philippines and its attachment was transferred from the Department of Trade and Industry (DTI) to the National Economic and Development Authority (NEDA).
This move is consistent with the government's economic agenda that has PPP as a major strategy in the pursuit of critical infrastructure development. The PPP Center's transfer to NEDA gives the Center a strategic link to key infrastructure program and policy, regulatory bodies and approving agencies, and most importantly, implementing agencies and local government units (LGUs) which are ultimately the entities forging partnerships with private sector.
Basically, the functions of the PPP Center include the following:
Provide advisory services and technical assistance to agencies/LGUs in project preparation and development
Recommend plans and policies related to PPP in consultation with appropriate agencies/LGUs
Manage and administer the Project Development and Monitoring Facility (PDMF Fund)
Monitor and facilitate implementation of priority PPP projects of agencies/LGUs
To meet the mandate given to the PPP Center, it has been reorganized and the new structure’s focus on project development, capacity building and monitoring of contract compliance is consistent with the President’s vision for the PPP Center to be the lead coordinator and monitoring agent of the country’s PPP Program.
Further, under EO 8, approximately USD 6 million (300 million pesos) was allocated to the PPP Center to fund the preparation of business cases, pre-feasibility and feasibility studies for potential PPP projects.

9. PPP Process Start Process Responsible Party PPP Center Intervention
Project Preparation
IAs/LGUs
Fund pre-investment activities through the PDMF
Provide Training & Capacity Development
Provide technical assistance in the review of the Project’s financial and economic viabilities
Provide legal advice during formulation of the contract
Project Submission to
NEDA-ICC
(Complete and qualified documentation)
The Government is committed to facilitating the approval and implementation process for PPP projects. In accordance with this, solicited proposals will be processed within six (6) months upon submission of all required documents to the NEDA-ICC. Qualified PPP proposals must complete all necessary documents to facilitate the approval process.
While the BOT Law allows for the government to process unsolicited proposals, solicited proposals will be actively promoted.
IAs/LGUs
Project Review & Evaluation
NEDA Secretariat/LGUs
Assist IAs/LGUs in complying with requirements during the Project & Contract evaluation

10. PPP Process Process Responsible Party PPP Center Intervention
LGU/ICC Approval
ICC Technical Board
ICC Cabinet Committee
NEDA Board
Investment Coordination Committee (ICC)
NEDA Board
Preparation of Request for Proposals (RFP)
Assist in the preparation of bid Documents
Invitation & Pre-qualification
IAs / LGUs
Per BOT Law IRR, non-voting observer of PBAC for national projects
Provide advice during procurement process
Preparation and
Submission of Bids
Private Sector
Evaluation of Bids
IAs / LGUs
Assist in the evaluation of bids
Award & commencement of Implementation
IAs / LGUs
Monitor implementation

11. PPP Program Updates
2011 PPP Projects in the Roll-Out launched in November 2010 and February 2011
First five (5) projects to be bid in the first half of the year
Next five (5) projects to be bid in the second half of the year
Projects in the roll-out are mostly transportation projects
Amendment of the BOT Law and its IRR under way
Public hearing ongoing
Collaborative efforts with government PPP stakeholders initiated

12. PPP Program Updates
Capacity development for government PPP stakeholders
To ensure reliable Pre-FS/FS output
To equip efficient evaluation and approval of projects
Project Development and Monitoring Facility beefed up
To help finance Pre-FS/FS
To ensure high success rate

13. 2011 PPP Projects DaangHari – SLEX Link Project
Implementing Agency: DPWH
Estimated Project Cost: US$ 35.5M
Proposed Scheme: Solicited BTO
Expected Bidding Bid Date: First half of the year
NAIA Expressway Phase 2 Project
Estimated Project Cost: US$
Expected Bid Date: First half of the year
The projects under the PPP Program were selected based on the following criteria:
1. Project Readiness/Preparation
a. For 2011 Rollout
i. Feasibility Study to be completed within 2010 to 2011,
ii. Completed Feasibility Study being reconfigured for PPP, and
iii. Ready to tender in 2011.
b. For Medium-Term Rollout and other PPP Projects
i. Included in the PPP pipeline projects of the Implementing Agencies, and
ii. Initial preparation on-going, i.e., concept stage, hiring of consultants for Feasibility Study preparation.
2. Responsiveness to the sector’s needs (e.g., part of the transport network system,water supply/sewerage, electric power capacity, etc); and
3. High Implementability (bankable, no major issues).

14. 2011 PPP Projects NLEX-SLEX Connector Project
Implementing Agency: DPWH
Estimated Project Cost: US$ M
Proposed Scheme: Unsolicited PPP
Expected Bidding Bid Date: First half of the year
CALA-Manila Side Expressway Project
Estimated Project Cost: US$ M
Proposed Scheme: Solicited PPP
Expected Bid Date: Second half of the year

15. 2011 PPP Projects Puerto Princesa Airport Development Project
Implementing Agency: DOTC
Estimated Project Cost: US$ 97.78M
Proposed Scheme: Solicited PPP
Expected Bidding Bid Date: Second half of the year
New Legaspi Airport Development Project
Estimated Project Cost: US$ 71.11M
Expected Bid Date: Second half of the year

16. 2011 PPP Projects New Bohol Airport Development Project
Implementing Agency: DOTC
Estimated Project Cost: US$ M
Proposed Scheme: Solicited PPP
Expected Bidding Bid Date: Second half of the year
O&M Privatization of Laguindingan Airport Project
Estimated Project Cost: US$ 33.33M
Expected Bid Date: Second half of the year

17. 2011 PPP Projects LRT Line 2 East Extension Project
Implementing Agency: DOTC
Estimated Project Cost: US$ M
Proposed Scheme: Solicited PPP
Expected Bidding Bid Date: Second half of the year
LRT Line 1 South Extension Project
Estimated Project Cost: US$ 1,555.55M
Expected Bid Date: Second half of the year

18. Prospects for Chinese Investors
Participation as project partners of Philippine PPP Projects in the following areas
Engineering, Design and Construction
Financing (equity shareholder, lender, insurer, etc)
Operation and Maintenance

19. Features of the Philippine PPP Program
There is an established national policy on PPPs (BOT Law)
PPPs are allowed in practically all development sectors
PPP legal framework allows creativity in PPP financing and contractual arrangements (several PPP variants)
PPP legal framework allows procurement options (solicited and unsolicited modes)
Institutions (Implementing Agencies and Local Government Units) have distinct legal mandates to enter into PPPs
Government support is allowed in critical projects not viable through full private sector financing
There is a dedicated PPP Program coordinating agency (PPP Center) formally integrated into the government machinery

20. Information on Philippine PPPs
Overview of the PPP Program
Legal Framework
PPP Projects for 2011 Rollout
Other PPP Projects
PPP Process Flow
PPP Brochure
PPP Sample Contracts
PPP Presentations and Speeches
Frequently Asked Questions

21. THANK YOU! Public-Private Partnership (PPP) Center
National Economic and Development Authority
4/F GA Yupangco Bldg.
339 Sen.Gil J. Puyat Ave.
1200 Makati City, Philippines
Tel. No: (+63 2)
Fax No: (+63 2)