AGRA Philippine PPP 101 ( Private Public Partnership )
Summary
TLDRThe video script 'Philippine PPP 101' outlines the importance of Public-Private Partnerships (PPP) in the Philippines' development, highlighting their role across government levels and in various sectors like infrastructure and social services. It explains PPP as a collaborative venture between the government and private sector, sharing risks and benefits, and compares it to a marriage contract or a boat ride. The script details the selection process for private partners, emphasizing the principles of public advantage, competition, and transparency. Ultimately, PPP is portrayed as a strategic approach for inclusive growth and improved quality of life for Filipinos, embodying the spirit of Bayanihan.
Takeaways
- đïž Public-Private Partnerships (PPP) in the Philippines are a priority program aimed at key development studies and are undertaken by implementing agencies at various government levels.
- đ€ PPPs involve collaboration between implementing agencies and a Private Sector Proponent (PSP), where both parties exchange resources, share obligations, and apportion risks for a project.
- đ ïž PPP projects can be either 'hard' infrastructure projects like airports and bridges, or 'soft' social service projects like hospitals and classrooms.
- đ The bundling approach in PPP allows for the combination of projects to increase viability and service provision, such as building an evacuation center with an intermodal transport terminal.
- đž PPP is likened to a marriage contract or a credit card scheme, where the government receives services now and pays later, sharing functions and risks with the PSP.
- đ”đ In the Philippines, PPP can have multiple meanings due to the absence of a single governing law, with at least 24 PPP modalities and nine stated in the Build-Operate-Transfer (BOT) Law.
- đïž Under the BOT Law, the PSP assumes responsibility for financing, designing, constructing, and operating the project, with the government regulating and setting policies.
- đ Other laws and regulations may apply to different types of PPPs, such as the Electric Power Industry Reform Act for power and transmission projects.
- đ€ The selection of a PSP must follow parameters of public advantage, accountability, competition, and transparency, ensuring the PSP is capable and qualified.
- đ The selection process for a PSP can involve competitive selection through open bidding, or the competitive challenge method involving unsolicited proposals from the PSP.
- đ PPP is not just about a single project but is a developmental strategy for innovative change and partnership, promoting inclusive growth and improving the quality of life for Filipinos.
Q & A
What is the main focus of the video script 'Philippine PPP 101'?
-The video script focuses on explaining the concept of Public-Private Partnerships (PPPs) in the Philippines, their importance, how they function, and the various modalities involved.
At what levels of government can PPPs be undertaken in the Philippines?
-PPPs in the Philippines can be undertaken at three levels of government: national government agencies, government corporations and instrumentalities, and local government units.
What is the role of a Private Sector Proponent (PSP) in a PPP project?
-A Private Sector Proponent (PSP) collaborates with implementing agencies for a particular project, exchanging resources, sharing obligations, apportioning risks, and meeting the benefits of the project.
What are the examples of hard infrastructure projects in PPPs?
-Examples of hard infrastructure projects in PPPs include reclamation, airports, seaports, roads, bridges, monorail, water supply, power, and market redevelopment.
What are the examples of soft social service projects in PPPs?
-Examples of soft social service projects in PPPs include hospitals, classrooms, and agriculture development-related projects.
What is the bundling approach in PPP projects?
-The bundling approach in PPP projects involves combining different projects together to ensure viability and provision for more services. For instance, an evacuation center may be built with an intermodal transport terminal, a gas station, and a mall.
How is a PPP similar to a marriage contract or a credit card scheme?
-A PPP is similar to a marriage contract or a credit card scheme in that the government gets the service today and pays for it later, sharing the functions and corresponding risks with the PSP.
What are the different PPP modalities mentioned in the script?
-The script mentions at least 24 PPP modalities, with nine being stated in the Build-Operate-Transfer (BOT) Law, also known as Republic Act No. 6957, as amended by RA 7718.
What is the role of the government in the VLT (Build-Lease-Transfer) modality?
-In the VLT modality, the PSP designs, finances, builds, and operates the road, and at the end of the long-term period, transfers the asset to the government.
How does the government select the PSP for a PPP project?
-The government selects the PSP through competitive procedures that follow four parameters: public advantage, accountability, competition, and transparency. The PSP must be legally, technically, and financially capable and meet the nationality requirements.
What is the significance of the term 'Bayanihan' in the context of PPPs in the Philippines?
-The term 'Bayanihan' signifies the Filipino tradition of community spirit where stakeholders help carry a shanty from one place to another, symbolizing trust and working together towards a common goal. In the context of PPPs, it represents the partnership strategy aimed at promoting inclusive growth and a better quality of life for Filipinos.
Outlines
đïž Philippine PPP 101: Introduction and Basics
This paragraph introduces the concept of Public-Private Partnerships (PPP) in the Philippines, emphasizing its significance as a key development strategy. It explains that PPPs can be implemented by various government levels and agencies, which collaborate with Private Sector Proponents (PSPs) to undertake projects. The projects can range from infrastructure (hard projects) such as airports and roads to social services (soft projects) like hospitals and education. The paragraph also illustrates the bundling approach in PPPs, where multiple projects are combined for viability and service provision. It likens PPP to a marriage contract or a credit card scheme, highlighting the government's role in regulation and the PSP's role in project execution. The paragraph concludes by discussing the legal framework of PPPs in the Philippines, mentioning the Build-Operate-Transfer (BOT) law and other modalities, and the importance of trust and collaboration among stakeholders.
đ€ Government and PSP Collaboration in PPPs
The second paragraph delves into the specifics of how government and PSPs engage in PPPs, particularly focusing on the selection process and the types of contributions each party can make. It outlines the roles of government agencies and PSPs in joint ventures (JVs), where both parties contribute resources and share in profits, revenues, and risks. The paragraph also discusses various forms of government contributions, such as cash, property use, tax incentives, and concessions. It further explores the PSP's role in managing government-owned enterprises or providing services to the government, and the different ways the government can remunerate the PSP or generate revenue from the PSP's business. The selection of the PSP is guided by principles of public advantage, accountability, competition, and transparency, with the PSP required to demonstrate legal, technical, and financial capability. The paragraph concludes with a discussion on the selection procedures, including competitive bidding and the evaluation of bids based on financial parameters.
đ PPP Process and the Role of Competitive Procedures
This paragraph outlines the process of PPP project implementation, starting from the selection of the PSP through competitive procedures. It describes the stages of negotiation and the publication process inviting challengers to submit comparative proposals. The paragraph explains the rights of the original proponent (OP) to match or improve upon the financial offers made by challengers and the conditions under which the contract is awarded. It also touches on the current guidelines that do not allow the right to match a second financial offer from the OP. The paragraph emphasizes the importance of PPP as a developmental, innovative change and partnership strategy aimed at promoting general welfare, inclusive growth, and a better quality of life for Filipinos. It concludes by framing PPP as a collective effort, or 'bayanihan,' involving the participation and responsibility of all stakeholders, and encourages the audience to be part of the PPP learning ecology.
Mindmap
Keywords
đĄPPP
đĄImplementing Agencies
đĄPrivate Sector Proponent (PSP)
đĄInfrastructure Projects
đĄSocial Service Projects
đĄBundling Approach
đĄModalities
đĄBO(T) Law
đĄJV (Joint Venture)
đĄSelection Procedure
đĄBayanihan
Highlights
Public-Private Partnerships (PPP) in the Philippines are a priority program and key development strategy.
PPPs can be undertaken by implementing agencies at three levels of government: national, government corporations, and local government units.
Implementing agencies collaborate with a Private Sector Proponent (PSP) for project development, sharing resources, obligations, and benefits.
PPP projects can be categorized as 'hard' infrastructure projects or 'soft' social service projects.
Examples of hard projects include reclamation, airports, seaports, roads, and power supply, while soft projects may involve hospitals and education.
The bundling approach can make projects more viable by combining them, such as an evacuation center with an intermodal transport terminal.
PPP is likened to a marriage contract or a credit card scheme, where the government receives services now and pays later.
In the Philippines, PPP reflects the tradition of bayanihan, symbolizing community spirit and cooperation.
The government cannot solely bear the burden of development; it partners with the private sector to introduce innovation and improve services.
There is no single governing law for PPPs in the Philippines, with at least 24 PPP laws and regulations corresponding to different modalities.
Nine PPP modalities are outlined in the Build-Operate-Transfer (BOT) Law, with the PSP assuming various project functions.
Under the BOT modality, the PSP is responsible for financing, designing, constructing, and operating the project, with government regulation and policy setting.
Local governments can undertake PPP projects following national or local guidelines, such as the Electric Power Industry Reform Act for power projects.
In a Joint Venture (JV), both the government and the PSP contribute resources, implement projects, and share profits, revenues, and risks.
Government contributions can be in cash or non-cash forms, such as property use or tax incentives.
The government may also form subsidiaries, sell assets, or allow PSPs to have minority equity in government-owned corporations.
Selection of the PSP follows four parameters: public advantage, accountability, competition, and transparency.
The PSP must be legally, technically, and financially capable, following nationality requirements and demonstrating a track record and financial capacity.
Three selection methods are highlighted: competitive selection, competitive challenge, and the unsolicited proposal process.
The competitive challenge and unsolicited proposal processes involve the PSP submitting a proposal for consideration by a selection committee.
PPP is not just about individual projects but represents a developmental, innovative change and partnership strategy for inclusive growth and better quality of life.
PPP is described as bayanihan for the country, pursued by the people, emphasizing the collective responsibility and ownership in government projects.
Transcripts
[Music]
as part of his contribution to the PPP
learning ecology Alberto C Agra a
certified PPP and regulation specialist
and the PPP and political law professor
and bar reviewer presents Philippine PPP
101
public-private partnerships or PPP's in
the Philippines is a priority program
and is a key development study ppps may
be undertaken by implementing agencies
at three levels of the government
bureaucracy national government agencies
government corporations and
instrumentalities and local government
units
[Music]
these implementing agencies collaborate
with a private sector proponent or PSP
for a particular project the parties
exchange resources share obligations
apportion risks and meet the benefits
the project may be a hard or
infrastructure project or a soft or
social service project examples of hard
projects are reclamation airports
seaports roads bridges monorail water
supply power and even market
redevelopment so of projects of the
other hand our hospitals classrooms and
agriculture development
related projects maybe synergize
together under one Kanta is within sure
viability and provision for more
services while an evacuation center may
not be viable on its own other
components may be added on a piece of
land owned by a CD an evacuation center
may be built with an intermodal
transport terminal even a gas station
and a mall this is the bundling approach
waste of energy and hydropower projects
are other examples PPP is like a
marriage contract or a credit card
scheme where the government gets the
service today and pays for it later a
PPP and also be compared to a boat ride
where the government stairs or regulates
well the PSP rows more appropriate in
the Philippines which shows the Filipino
tradition is the symbolism of pioneer or
community spirit where four sets of
stakeholders help carry a shanty from
one place to another
they must trusting each other work
together towards one direction
government cannot carry the burden and
responsibility of development by itself
government partners with the BSP since
it was to cope remote development and to
Co improve the quality of life of the
people government believes that the BSP
can introduce innovation accelerate the
delivery of services and provide better
value for money government can share the
functions and corresponding risks with a
PSP government can also pursue pvp's
because it lacks the resources pp peace
in the Philippines can have several
meanings because there is no single
governing law there are at least a PPP
laws and regulations corresponding to 24
PPP modalities nine modalities are
stated on the Republic after number six
nine five seven as amended by are a
seven seven one eight or more popularly
known as the Bo
law under this law the PSP assumes the
financing designing constructing and
operating functions the government does
not participate in the operations it
merely regulates sets policies and in
certain locations contributes resources
under the VLT modality the PSP designs
finances builds bonds operates the road
and at the end of the long term period
transfer the asset to government under
the build transferred operate modality
the government owns the asset after turn
over immediately after construction the
PSP operates the asset in this case not
as owner the president may add three
similar modalities to the list of nine
local governments today can undertake
this where the PSP rehabilitates
finances and operates an existing
facility special knows where their
national or local must be followed for
example for power and transmission
projects the electric power industry
Reform Act of 2001 not the Bo T law is
the flickable
law for joint ventures or JB's by
government corporations and local
governments the guidelines issued by the
National Economic and Development
Authority or Neda and template ordinance
issued by the Department of Interior and
Local Government for the DILG
respectively would be the governing laws
in a JV both the government and the PSP
pull the resources Co contribute Co
implement a project and po share in the
profits revenues even in the losses and
risks in proportion to their
contributions on the part of government
the contribution may be cash or non-cash
non-cash participation can come in the
form of allowing its property to be used
giving a tax incentive or awarding a
concession
government may also leases property for
a fee
the PSP can also manage a business
enterprise of or provide a service for
government government may either pay the
PSP or draw revenues from the PSP
business the first scenario is
governmental government procurement
reform app under a management or a
service country government may also sell
its asset this is the reverse of
procurement a Commission on audit
circular must be followed public action
is the procedure for divestment
government may also form a subsidiary in
corporate the same before the Securities
Exchange Commission and attach an asset
to that new corporation later on it may
sell the corporation together with the
asset in the initial public offering or
stock exchange this is corporate
decision government may also set up a
new company and allow a PSP to have a
minority equity this is government
subsidiary with private equity BSP can
also donate to government if there is no
condition for burden attached this is a
gratuitous donation if material
obligations are required to be performed
by government it becomes an onerous
donation the Civil Code is the relevant
law for these arrangements how does
government select the PSP any selection
procedure must follow four parameters
the pact public advantage accountability
competition and transparency the PSP
must be legally technically and
financially capable it must follow the
nationality requirements show track
record and have the resources to finance
the project
there are three ways of guarantee impact
most agencies are familiar with a
competitive selection or open bidding
approach the implementing agency issues
the tender documents publishes the
invitation and pre-qualified the bidders
those pre-qualified are called to a
conference and then those interested
shall submit the respective technical
and financial offers where the best
offer from a bidder gets the award
[Music]
who is the best then the winner in the
bidding is determined depending on the
parameter set and the applicable
governing law there are seven financial
parameters highest payment to government
what is in it for government lowest
government subsidy what is the cost to
government Lovis tariff by end-user how
much will the users pay higher share in
revenues how much is the government's
share highest purchase price how much is
the government willing to sell
highest-rated bid who can provide the
best service and lowest calculated bid
or price what is the cheapest price
becoming more popular is the competitive
challenge or the unsolicited proposal
rather than originating from government
the study comes from and is funded by
the PSP this is submitted together with
the cover letter proposal draft contract
and eligibility documents the head of
agency endorses the documents to a
selection committee which in turn evil
weights and endorses it back either for
acceptance or rejection under the BOC
law and DILG circular no other proposal
can be entertained by the agency if the
head of agency accepts the proposal the
PSP now becomes the original proponent
this ends stage one negotiation follows
if the government and the original
proponent or Gopi come to terms a
certificate of successful negotiations
is executive this is stage two stage
three commences with the publication
inviting challengers to submit
comparative proposals the
be posts a proposal security and if
there are no challengers the Hopi gets
the contract based on the agreed terms
and if there are qualified challengers
then the OB has the right to match the
best or superior offer if it fails to
match the financial offer the Challenger
wins however under the current there the
guidelines there is no right to match
the second financial offer of the home B
is open at the same time the envelopes
of the challengers are open whoever
offers the highest revenue percentage
gets the BPP contract for that
particular project PPP can thus be
summarized in then peace PPP first and
foremost is about partnership for the
people who act as payers the government
in the PSP are the parties to a pact to
implement projects and allocate perĂłn or
risk between themselves the PSP is
selected through competitive procedures
where the contracts have performance
targets which should be achieved in a
given period just to be clear PPP is not
just about a project in a particular
transaction PPP is a developmental
innovative change and partnership
strategy aimed at promoting the general
welfare inclusive growth and better
quality of life of Filipinos PPP is
bayanihan
for our country and is pursued by the
people or the heroes as the Bayani
PPP is thus for and by the people
this is before now being a spouse by the
DILG we all have a stake in all
government projects PPP included we are
all responsible
we are co-owners and we are coach am
pians
or PPP projects that respond to our
needs you are now part of the PPP
learning ecology thank you
[Music]
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