House pushes PPP reforms

MANILA, Philippines — Reforms in the country’s public-private partnership (PPP) projects are being pushed especially as infrastructure remains a key component in the government’s planned economic recovery from the pandemic.

In a Congress hearing yesterday, the House committee on public works and highways approved, subject to amendments, the PPP Rationalization Act primarily authored by Albay Rep. and former presidential economic adviser Joey Salceda.

The proposed law aims to optimize the government’s value for money in the projects and provide efficient approvals and incentives, among others.

“Because of the economic scarring impact of the pandemic, which may last two to three years, the PPP enterprise is a vital partner of the state in the promotion of economic progress,” Salceda said.

Among the major provisions of the bill are rules on the approval of PPP projects, which aim to foster competitiveness, efficiency and ease of doing business.

National PPP projects worth up to P5 billion shall be approved by the PPP Center, unless overturned by the Investment Coordination Committee of the National Economic and Development Authority (NEDA-ICC) within 30 days from the approval date.

Projects worth more than P5 billion shall be approved by the NEDA board upon recommendation of the ICC.

Salceda said P5 billion “is a reasonable level at which we can allow our implementing agencies the leeway without going through the more rigorous and longer process of going through the NEDA board.”

PPPs at the local level shall be approved by local sanggunian or councils regardless of project cost, provided that the project involving government undertaking using national government funds shall require PPP Center approval.

Salceda also said such a move promotes local autonomy by allowing local governments to undertake PPPs regardless of size, as long as they use their own resources.

Further, the lawmaker is also pushing for deadline-based mandates that are consistent with the government’s direction toward ease of doing business.

This means that the government shall act on a PPP project within 30 working days upon satisfactory compliance, where failure to act on it within the specified period shall be deemed an approval and the implementing agency may proceed with the procurement.

“PPPs already go through a long process, there’s feasibility studies, etc. At first glance, you might think 30 days is too short but we’ve gone through this too many times, they have the tools there whether it will be approved or not,” Salceda said.

Based on the bill, PPP projects shall also be entitled to various incentives under applicable laws and existing policies of the government, allowing PPPs to avail of fiscal and non-fiscal incentives, without breaking the single-menu principle under the Corporate Recovery and Tax Incentives for Enterprises Act.

The rationalization of PPP targets to support the private sector without endangering fiscal strength, provide public services, ensure that all projects yield sufficient value for money to optimize the use of resources to achieve better quality of projects at lower costs, and integrate environmental sustainability and value.