SECOND EDITION Table of Contents 3 PPP in the Philippines 4 What is PPP? 5 Public-Private Partnership Center of the Philippines 6 Overview of the PPP Process and Nationality Requirements 7 Fiscal Incentives 8 Pipeline of PPP Projects 10 Investment Opportunities 45 Awarded Projects 56 Doing Business in the Philippines 57 The PDMF & Panel of Consulting Firms 58 Policy Initiatives 61 Awards & Citations 62 Directory 63 Acknowledgements 2 Public-Private Partnership in the Philippines The 1987 Philippine Constitution explicitly acknowledges the critical role that the private sector plays in the development agenda of the country. In this context, the Philippine Public- Private Partnership (PPP) Program was forged as a fl agship program for development under the Aquino Administration. Its vision is to accelerate the country’s infrastructure development agenda that will contribute to the country’s goals of attaining inclusive growth for all Filipinos. Guided by the principles of transparency, accountability, and good governance, the Program will engage the private sector as vital partners who can bankroll critical infrastructure projects that will deliver much needed services for its growing populace. Under the hallmark of good governance, the Philippine government guarantees that the private sector will be able to do business in an environment that nurtures fair and transparent transactions. Government ensures that the interests of both the private sector and its citizens are balanced, where policies and procedures are continually enhanced. The robust pipeline of PPP projects is a product of the government’s continuing efforts to deliver viable and well-structured proposals that will attract investors to bring their business to the Philippines. 3 What is Public-Private Partnership? Public-Private Partnership (PPP) can be broadly defined as a contractual agreement between the Government and a private firm targeted towards financing, designing, constructing and operating infrastructure facilities and services that were traditionally provided by the public sector. It embodies optimal risk allocation between the parties – minimizing cost while realizing project developmental objectives. Thus, the project is to be structured in such a way that the private sector gets a reasonable rate of return on its investment. PPP efficiency gains in delivering services to the public. Most importantly, PPP emphasizes Value for Money – focusing on reduced costs, better risk allocation, innovation, faster implementation and improved services. 4 The Public-Private Partnership Center of the Philippines By virtue of Executive Order No. 8, series of 2010, and as amended by Executive Order No. 136, series of 2013, signed last May 28, 2013, the Public- Private Partnership (PPP) Center functions as the central coordinating and monitoring agency for all PPP projects in the Philippines. Together with the various implementing agencies (IAs), the Center champions the Program and enables them to undertake well-structured PPP projects by capacitating them in the vital areas of project preparation, implementation, and monitoring. The Center provides technical advisory services to these IAs as they go through the entire project cycle to ensure that projects and processes are bankable, transparent, and advances public interest. The Center also manages a funding mechanism known as the Project Development and Monitoring Facility (PDMF) that allows IAs access to world- class consulting fi rms who will be tasked to provide its expertise in pre- investment and investment requirements. It also advocates policy reforms to improve the legal and regulatory frameworks governing the PPP Program in order to maximize the great potentials of these infrastructure and development projects in the country and to level the playing fi eld among interested investors. 5 Overview of the PPP Process Nationality Requirements Who can participate in the Philippine PPP Program? • Regardless of nationality, anyone is encouraged to invest and participate in the Philippine PPP Program. • For PPP, 100% foreign equity may be allowed in all areas of investment EXCEPT in case of infrastructure facility whose OPERATION requires public utility franchise. In the construction stage of the infrastructure projects, the project proponent can obtain fi nancing from foreign and/or domestic sources and/or engage the services of a foreign and/or Filipino contractor: provided, that, in case an infrastructure or a development facility’s operation requires a public utility franchise, the facility operator must be Filipino or if a corporation, it must be duly registered with the Securities and Exchange Commission and owned up to at least sixty percent (60%) by Filipinos. 6 Fiscal Incentives PPP projects are entitled to incentives under the Omnibus Investments Code of 1987 (E.O. No. 226) and other existing laws. The Board of Investments (BOI) is the government agency mandated to be responsible for the regulation and promotion of investments in the Philippines, as well as the granting of such incentives. The BOI is also tasked to prepare the country’s Investment Priorities Plan (IPP) in consultation with other government agencies, the private sector, and other stakeholders. The IPP is a list of various areas of economic activities for investment eligible for government incentives. The list includes infrastructure, agriculture/agribusiness and fishery, creative industries/knowledge-based services; shipbuilding; mass housing; energy; research and development; green projects; motor vehicles; tourism; strategic projects; and disaster prevention, mitigation and recovery projects. Incentives for Board of Investments (BOI)-registered Enterprises Entitlement and availment of incentives shall be subject to the terms and conditions set forth under the relevant law and the project’s Certificate of Registration as well as the rules and regulations of the implementing/administering agency. The Omnibus Investments Code of 1987 (E.O. No. 226) provides the following incentives: 1. Income Tax Holiday (ITH) a. Six (6) years for projects with pioneer status and for projects located in a Less Developed Area (LDA); b. Four (4) years for new projects with non-pioneer status; c. Three (3) years for expansion/modernization projects. 2. Duty exemption on imported capital equipment, spare parts and accessories; 3. Exemption from wharfage dues and any export tax, duty, impost and fees; 4. Tax exemption on breeding stocks and genetic materials; 5. Tax credits on imported raw materials; 6. Tax and duty-free importation of consigned equipment; 7. Additional deduction for labor expense; 8. Employment of foreign nationals; 9. Simplification of customs procedures; and 10. Access to bonded manufacturing warehouse. 7 Pipeline of Public-Private Partnership Projects Various projects can be financed and A. 12 Awarded Projects implemented via PPPs - from traditional infrastructure projects such as toll • Muntinlupa-Cavite Expressway (Daang roads, airports, and transport systems Hari - SLEx Link Road) Project to non-traditional infrastructure such as • PPP for School Infrastructure Project ICT systems and facilities, and social (PSIP) Phase I infrastructure like education and health. • NAIA Expressway (Phase II) Project • PPP for School Infrastructure Project ___________________________________ (PSIP) Phase II • Modernization of the Philippine For more information on PPP Orthopedic Center (MPOC) Project • Automatic Fare Collection System projects status, Project Please visit www.ppp.gov.ph • Mactan-Cebu International Airport Passenger Terminal Building Project (As of February 16, 2016) • LRT Line 1 Cavite Extension and O&M ____________________________________ Project • Southwest Integrated Transport System (ITS) Project • Cavite-Laguna Expressway (CALAx) Project • South Integrated Transport System Project • Bulacan Bulk Water Supply Project 8 B. Projects Under Procurement E. Projects with On-Going • Operation & Maintenance of LRT Line 2 Project Studies • Regional Prison Facilities through PPP Project • Motor Vehicle Inspection System (MVIS) • Davao Sasa Port Modernization Project Project • Development, Operations & • Integrated Transport System - North Maintenance of the New Bohol Terminal Project (Panglao) Airport • Development, Operations & F. For Procurement of Maintenance of the Laguindingan Airport Consultants to conduct • Development, Operations & Pre-Investment Studies Maintenance of the Davao Airport • Development, Operations & • Manila Heritage and Urban Renewal Maintenance of the Bacolod Airport Project • Development, Operations & • Clark Green City Food Processing Maintenance of the Iloilo Airport Terminal Project • Laguna Lakeshore Expressway Dike • Central Spine Roll-on/Roll-off (RORO) Project Project • New Centennial Water Source - Kaliwa • Manila-East Rail Transit System Dam Project Project • Road Transport IT Infrastructure • R1-R10 Link Mass Transport System Project (Phase II) Development Project • Civil Registry System Information Technology Project (Phase II) • North-South Railway Project (South G. Projects Under Line) Conceptualization/ • LRT Line 6 Project Development C. Projects for Roll-Out • Central Luzon Link Expressway (Phase II) Project • LRT Line 4 Project • Operation, Maintenance & • NLEx-SLEx Connector Road Project Improvement of Kennon Road and Marcos Highway Project • Rehabilitation of the National Center D. For Approval of Relevant for Mental Health Project • NLEX East Expressway Project Government Bodies • Camarines Sur