Public-Private Partnerships in the Philippines: The Legal Framework Explained
Understand the legal framework for public-private partnerships in the Philippines under the PPP Code, its IRR, and the New Government Procurement Act.
The legal framework for public-private partnerships (PPPs) in the Philippines is primarily governed by Republic Act No. 11966, the PPP Code of the Philippines, and its Implementing Rules and Regulations (IRR). The PPP Code covers contractual arrangements where a government Implementing Agency and a Private Partner finance, design, construct, operate, and maintain infrastructure or development projects and services, sharing associated risks, with the Private Partner's investment recovery linked to performance. Projects procured under the Government Procurement Reform Act or covered by the New Government Procurement Act are generally excluded, except for portions financed by the government.
What is a PPP under Philippine law?
Under Section 4(rr) of the IRR of RA No. 11966, a PPP is a contractual arrangement between an Implementing Agency and a Private Partner to finance, design, construct, operate, and maintain, or any combination or variation thereof, Infrastructure or Development Projects and Services typically provided by the public sector. Each party shares in the associated risks, and the Private Partner's investment recovery is linked to performance.
The PPP Code and its IRR cover any Infrastructure or Development Project or Service that satisfies these elements. This includes joint ventures, toll operation agreements, lease agreements for rehabilitation or operation of government facilities, and Build-Operate-Transfer arrangements and their variants such as Build-and-Transfer, Build-Lease-and-Transfer, and Rehabilitate-Operate-and-Transfer.
Which projects are covered?
Section 5 of the IRR lists the Infrastructure or Development Projects and Services that may be undertaken as PPPs. These include highways, land transportation systems, ports, airports, power generation and distribution, telecommunications, water supply and sewerage, health and educational infrastructure, solid waste management, climate change adaptation projects, and other projects authorized by the Implementing Agency.
The government may finance PPP Projects through appropriations, official development assistance, or the Private Partner's resources. Blended Finance arrangements are also permitted, where a partner government or multilateral agency mobilizes financing from private or commercial institutions for one or more components of a PPP Project.
What is the relationship with the New Government Procurement Act?
The IRR of RA No. 12009, the New Government Procurement Act, clarifies the boundary between the two regimes. Under Section 4.3(c) of that IRR, public-private sector infrastructure or development projects and other procurement covered by RA No. 11966 are excluded from the New Government Procurement Act. However, for the portions financed by the Government of the Philippines, the provisions of the New Government Procurement Act and its IRR shall apply.
This means that if a PPP Project has a component funded by government appropriations, any procurement activities for that component are governed by the procurement law, while the PPP itself remains under the PPP Code.
Who are the key government players?
An Implementing Agency is a department, bureau, office, instrumentality, commission, authority of the national government, state university or college, local university or college, local government unit, or government-owned or controlled corporation. All Implementing Agencies are authorized to identify, develop, assess, evaluate, approve, negotiate, award, and undertake PPP Projects under Section 8 of the IRR.
The PPP Governing Board serves as the overall policy-making body for PPPs. The PPP Center is the institution referred to in Section 24 of the PPP Code. For National PPP Projects, the Investment Coordination Committee of the National Economic and Development Authority issues guidelines, while the PPP Governing Board issues guidelines for Local PPP Projects.
What are the types of PPP arrangements?
PPP Projects may be solicited or unsolicited. A Solicited Project is identified by an Implementing Agency as part of its List of PPP Projects and is subjected to public bidding. An Unsolicited Proposal is a project proposal made by a Private Proponent to undertake a PPP Project under Section 10 of the Code.
The State affirms open, fair, transparent, and competitive selection as the central tenet for securing private investment in PPP Projects. All PPP Projects must yield sufficient Value for Money, promote sustainability, and advance public welfare, with equitable risk allocation between the parties.
Frequently asked questions
What law governs public-private partnerships in the Philippines? Republic Act No. 11966, the PPP Code of the Philippines, and its Implementing Rules and Regulations primarily govern PPPs. The New Government Procurement Act, RA No. 12009, applies to portions of PPP Projects financed by the government.
What is the difference between a solicited and an unsolicited PPP project? A solicited project is identified by an Implementing Agency in its List of PPP Projects and subjected to public bidding. An unsolicited proposal is submitted by a private proponent to undertake a PPP Project under Section 10 of the PPP Code.
Does the PPP Code apply to all government infrastructure projects? No. The PPP Code does not apply to projects procured under the Government Procurement Reform Act, infrastructure projects exclusively funded through foreign loans and grants covered by RA No. 8182, management contracts without PPP elements, certain service contracts, and purely commercial joint ventures or lease agreements that do not satisfy the elements of a PPP.
Practical takeaways
- The PPP Code of the Philippines, RA No. 11966, and its IRR provide the primary legal framework for PPPs, covering risk-sharing arrangements where the Private Partner's return is linked to performance.
- Implementing Agencies may undertake PPP Projects across a wide range of infrastructure and development sectors, from transport and energy to health, education, and climate resilience.
- Projects or portions financed by the government remain subject to the New Government Procurement Act, RA No. 12009, while the PPP itself is governed by the PPP Code.
- The State requires open, fair, transparent, and competitive selection, with Value for Money and equitable risk allocation as core principles.
- Unsolicited proposals are recognized under the PPP Code and are subject to the rules on Original Proponent status.
Primary sources
The rules discussed above are drawn from the following primary sources, as published in the Official Gazette and the national statute book.
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IRR of REPUBLIC ACT NO. 11966 - IMPLEMENTING RULES AND REGULATIONS OF REPUBLIC ACT NO. 11966, "AN ACT PROVIDING FOR THE PUBLIC-PRIVATE PARTNERSHIP (PPP) CODE OF THE PHILIPPINES"
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IRR of REPUBLIC ACT NO. 12009 - THE IMPLEMENTING RULES AND REGULATIONS OF REPUBLIC ACT NO. 12009 OR THE NEW GOVERNMENT PROCUREMENT ACT
This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.
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