AGRA Philippine PPP 101 ( Private Public Partnership )

Summary

The 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

• 🏛️ 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.
• 🤝 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.
• 🛠️ PPP projects can be either 'hard' infrastructure projects like airports and bridges, or 'soft' social service projects like hospitals and classrooms.
• 🔄 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.
• 💸 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.
• 🇵🇭 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.
• 🏗️ Under the BOT Law, the PSP assumes responsibility for financing, designing, constructing, and operating the project, with the government regulating and setting policies.
• 📚 Other laws and regulations may apply to different types of PPPs, such as the Electric Power Industry Reform Act for power and transmission projects.
• 🤔 The selection of a PSP must follow parameters of public advantage, accountability, competition, and transparency, ensuring the PSP is capable and qualified.
• 🏆 The selection process for a PSP can involve competitive selection through open bidding, or the competitive challenge method involving unsolicited proposals from the PSP.
• 🌐 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

00:00

🏛️ 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.

05:02

🤝 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.

10:03

📜 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.

Keywords

💡PPP

PPP stands for Public-Private Partnerships, which is a collaborative approach where the government and private sector work together to finance, design, implement, and operate services and facilities traditionally provided by the public sector. In the video, PPP is highlighted as a key development strategy in the Philippines, aimed at promoting inclusive growth and improving the quality of life for its citizens. Examples of PPP projects include infrastructure development like airports and roads, as well as social service projects like hospitals and classrooms.

💡Implementing Agencies

Implementing agencies are government entities responsible for carrying out PPP projects. They operate at various levels of government, including national government agencies, government corporations, and local government units. The script mentions that these agencies collaborate with private sector proponents to exchange resources, share obligations, and manage risks associated with PPP projects.

💡Private Sector Proponent (PSP)

A Private Sector Proponent (PSP) is a private entity that partners with government implementing agencies in PPP projects. The PSP is responsible for financing, designing, constructing, and sometimes operating the project. The script emphasizes the importance of the PSP's role in introducing innovation, accelerating service delivery, and providing better value for money.

💡Infrastructure Projects

Infrastructure projects are physical structures or systems that are developed as part of a PPP. These projects are often referred to as 'hard' projects and include airports, seaports, roads, bridges, and power supply systems. The video script uses examples of infrastructure projects to illustrate the tangible outcomes of PPPs.

💡Social Service Projects

Social service projects are those that focus on providing services to the community, such as healthcare and education. In the script, these are referred to as 'soft' projects and include hospitals, classrooms, and agriculture development. The video highlights the potential for combining social service projects with other initiatives to enhance viability and service provision.

💡Bundling Approach

The bundling approach is a strategy mentioned in the script where multiple projects are combined to enhance overall viability and service provision. For instance, an evacuation center might not be viable on its own, but when bundled with an intermodal transport terminal, gas station, and a mall, it becomes a more feasible project.

💡Modalities

Modalities in the context of PPP refer to the different methods or structures through which a PPP project can be implemented. The script mentions at least 24 PPP modalities, with nine being detailed under Republic Act No. 6957, as amended by RA 7718, commonly known as the BOT Law.

💡BO(T) Law

The BOT (Build-Operate-Transfer) Law is a specific legal framework in the Philippines that governs certain PPP projects. Under this law, the PSP is responsible for financing, designing, constructing, and operating the project, with the government regulating and setting policies without participating in operations. The asset is eventually transferred to the government after the operational period.

💡JV (Joint Venture)

A Joint Venture (JV) is a business arrangement where both the government and the PSP contribute resources, implement the project together, and share profits, revenues, and risks. The script explains that the JV is governed by different laws, such as the guidelines issued by the National Economic and Development Authority (Neda) and the template ordinance by the Department of Interior and Local Government (DILG).

💡Selection Procedure

The selection procedure refers to the process by which the government chooses the PSP for a PPP project. The script outlines several parameters for this selection, including public advantage, accountability, competition, and transparency. It also describes different methods such as competitive selection, competitive challenge, and unsolicited proposals, each with its own set of criteria and processes.

💡Bayanihan

Bayanihan is a Filipino term that refers to a spirit of community and cooperation, where people work together to help each other. In the context of the video, Bayanihan is used metaphorically to describe the collaborative nature of PPPs in the Philippines, emphasizing the collective effort of stakeholders to carry the burden of development.

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 perón 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]