Public–Private Partnership Monitor: Philippines

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• Publisher: Asian Development Bank
• Year: 2020
• Print ISBN: 9789292626488
• eBook ISBN: 9789292626495
• Topic: Business
• Subtopic: Government & Business
• Index: Business

This publication presents a detailed overview of the current state of the public–private partnership (PPP) environment in the Philippines. In over three decades, the country developed a robust public–private partnership (PPP) enabling framework through the Build-Operate-Transfer Law of 2012 and the PPP Center. Among developing member countries of the Asian Development Bank, the Philippines has a relatively mature market that has witnessed 116 financially closed PPPs. Under the government's 2017–2022 Development Plan that has an infrastructure investment target of $180 billion, PPPs are expected to play a pivotal role in financing national and subnational infrastructure investments. With a pipeline of 37 PPPs, the government is taking various steps to further improve the environment for PPPs.

III.Sector-Specific Public–Private Partnership Landscape

ROADS

Parameter	Value	Unit
Length of the total road network	200,037	kilometers
Quality of road infrastructure	3.70	1(low) – 7(high)

✓ = Yes, × = No, NA = Not Applicable, UA = Unavailable

Sources: Trading Economics. Philippines-Road Total Network. https://tradingeconomics.com/philippines/roads-total-network-km-wb-data.html; The Global Economy. Compare Countries. https://www.theglobaleconomy.com/compare-countries/.

1. Contracting Agencies in the Road Sector

The Department of Public Works and Highways (DPWH) implements road projects and offers concessions for PPP projects. For the Metro Manila Skyway Stage 3 project, however, the Toll Regulatory Board (TRB) acted as the implementing agency.

The DPWH functions as the engineering and construction arm of the government and is tasked to continuously develop technology to ensure the safety of all infrastructure facilities and the highest efficiency and quality of construction for all public works and highways. It is currently responsible for the planning, design, construction, and maintenance of infrastructure, especially the national highways, flood control and water resources development system, and other public works in accordance with national development objectives.³²

2. Road Sector Laws and Regulations

The TRB, created by the Toll Operation Decree (Presidential Decree 1112), acts as the main regulatory body for road sector PPP projects. It regulates the toll and publishes the toll rates on its website. As per the Limited Access Highway Act (Republic Act 2000), the Department of Public Works and Communications (now the DPWH) is authorized to design any limited access facility and to regulate, restrict, or prohibit access to best serve the traffic. The following are the key regulations that govern the road sector:

• Revised Philippine Highway Act (Presidential Decree 17, series of 1972),

• Limited Access Highway Act (Republic Act 2000),

• Right-of-Way Act (Republic Act 10752), and

• Prohibited Uses within the Right-of-Way of National Roads (Department Order 73, 2014, DPWH).

2.1 Foreign Investment Restrictions in the Road Sector

The maximum equity investment allowed for foreign investors in greenfield projects is 40%.³³

2.2 Standard Contracts in the Road Sector

There are no standard contacts for PPPs in the road sector.

Type of contract	Availability
PPP/concession agreement	×
Performance-based operation and maintenance contract	×
Engineering procurement and construction contract	×

✓ = Yes, × = No, NA = Not Applicable, UA = Unavailable

3. Road Sector Master Plan

In 2010, the DPWH and the Japan International Cooperation Agency (JICA) developed the Masterplan on High Standard Highway Network Development. The masterplan covered areas within 200-kilometer radius from Metro Manila, Metro Cebu, and Tagum–Davao–General Santos Corridor, totaling 3,460 kilometers of highways. In 2019, the DPWH partnered with JICA to prepare a new master plan for high standard highway network.³⁴ Table 13 shows the priority projects identified in the road sector for the PPP mode of implementation based on NEDA’s Revised List of Infrastructure Flagship Projects (published on 17 February 2020).

Table 13: Public–Private Partnership Priority Projects, 2020

1 = $ 0.01974

DPWH = Department of Public Works and Highways, NLEX = North Luzon Expressway, SLEX = South Luzon Expressway

Source: NEDA. 2020. Revised List of Infrastructure Flagship Projects. Manila. https://www.neda.gov.ph/infrastructure-flagship-projects/.

3.1 Projects under Preparation and Procurement in the Road Sector

Figure 16 shows the number of PPP projects which are under preparation and procurement in the Philippines’ road sector.

Figure 16: Public–Private Partnership Roads under Preparation and Procurement

Source: Public–Private Partnership Center. List of Projects. https://ppp.gov.ph/list-of-projects/ (accessed 28 August 2020); Public–Private Partnership Center. 2019. Investment Opportunities. Manila. https://ppp.gov.ph/investors-corner/investment-opportunities-2/.

The PPP Center tracks the progress of a pipeline of PPP projects in the Philippines, which is updated regularly and published on the PPP Center website (Table 14).³⁵

Table 14: Public–Private Partnership Pipeline Projects in the Road Sector

1 = $0.01974, TBD = To be decided

Sources: NEDA. 2020. Revised List of Infrastructure Flagship Projects. Manila; https://ppp.gov.ph/list-of-projects/; DPWH. List of Public–Private Partnership (PPP) Priority Projects. http://www.dpwh.gov.ph/dpwh/ppp/priority (accessed 28 August 2020); Public–Private Partnership Center. 2019. Investment Opportunities. Manila. https://ppp.gov.ph/investors-corner/investment-opportunities-2/.

4. Features of Past Public–Private Partnership Projects in the Road Sector

Figure 17 presents the number of PPP projects procured through various modes including direct appointment, unsolicited bids, and competitive bids in the Philippines’ road sector.

Figure 17: Modes of Procurement for Public–Private Partnership Roads

Note: Only active projects are considered in the above graph.

Source: ADB, World Bank. Infrastructure Finance, PPPs and Guarantees. Country Snapshots. Philippines. https://ppi.worldbank.org/en/snapshots/country/philippines (accessed 28 August 2020).

Figure 18 shows the number of PPP projects which have reached financial closure and the total value of those projects in the Philippines’ road sector.

Figure 18: Public–Private Partnership Projects Reaching Financial Closure

Note: Only active projects are considered in the above ...

Table of contents

• Front Cover
• Title Page
• Copyright Page
• Contents
• Tables and Figures
• Foreword
• Acknowledgments
• Definition of Terms
• Abbreviations
• Guide to Understanding the Public–Private Partnership Monitor
• Currency Equivalents
• I. Overview
• II. National Public–Private Partnership Landscape
• III. Sector-Specific Public–Private Partnership Landscape
• IV. Local Government Public–Private Partnership Landscape
• Appendixes
• References
• Footnotes
• Back Cover