In a bid to hasten infrastructure development in the country, Sen. Sonny Angara has filed a bill that seeks to relax the rules on public-private partnerships (PPPs) for the financing, construction, operation and maintenance of infrastructure facilities and services.
Angara hopes his Senate Bill 2672 or the PPP Act will better address the needs and bureaucratic concerns of PPP investors.
“For the country to build on its recent economic gains and to ensure the proper investment environment in our country, the private sector must be further encouraged to make investments through a modernized and enhanced PPP law,” said Angara, chairman of the Senate ways and means committee.
The lawmaker noted that the government has traditionally been responsible for providing and financing infrastructure in the country, but investment requirements have exceeded the capacities of the government, prompting the public sector to enable private participation in infrastructure development.
In the past two decades, a number of services in utilities, transportation, property development and information technology have been provided through contractual arrangements such as the build-operate-transfer (BOT) law.
“The BOT law has been in existence since the 90s. Gains have been made with the passage of this law and yet, the full potential for the synergy of the public and private sectors in improving and expanding the country’s infrastructure, such as our airports and rail systems and even in the building of schools and hospitals, has not been fully taken advantage of,” he added.
The proposed new measure provides for the automatic grant of administrative franchise, license or permit in favor of the winning bidder, subject to compliance with the requirements of the regulator and payment of appropriate taxes and fees.
SB 2672 likewise aims to protect public interest by ensuring fair and reasonable pricing, timely delivery of quality infrastructure, goods and services, and by requiring full public disclosure of all PPP transactions.
“We must be more transparent and competitive in the process of selecting our private sector partners. We must learn from successful and failed projects in the past, as well as global best practices in PPP,” the senator said.
In addition, upon certification and recommendation by the Investment Coordination Committee and prior consultation with the Department of Interior and Local Government, the President may classify certain projects, such as energy, toll road, mass transit, water, and sewerage, as “projects of national significance.”
All real properties which are directly used for such projects shall be exempt from any and all real property taxes under the new measure, while all local taxes, fees and charges imposed by a province, city or municipality on the project proponent shall not exceed 50 percent of one percent of gross sales or receipts of the preceding calendar year.
The bill also seeks to institutionalize the PPP Center that will serve as a link between the government and the private sector.
It will be tasked to assist implementing agencies in identifying, developing, promoting, facilitating, monitoring and evaluating PPP projects. It must report to the Office of the President and Congress on the implementation of the PPP programs and projects of the government at the end of each year.
“With the additional incentives provided under our measure, it is our hope that we could attract more potential private investors to help the government fast-track and improve the construction of public infrastructure and services to boost the growth of the Philippine economy,” Angara said.