This is an overview of the public-private partnership in the Philippines - its history, accomplishments, problems and prospects.

1. Public Private Partnership in
the Philippines
Some Q and A

2. What is Public-Private
Partnership (PPP)

3. PPP can be broadly defined as
contractual agreement between the
Government and a private firm to:
• Finance
• Design
• Implement and
• Operate
Infrastructure facilities and services
that were traditionally provided by
the public sector.

4. Public + Private
= Infrastructure facilities
and services

6. What is unique with PPP
• Balancing act: Embodies optimal risk
allocation between the parties –
minimizing cost while realizing project
developmental objectives.
• Needs to structure a project in such a way
that the private sector gets a reasonable
rate of return on its investment

8. Elements of PPP
• A contractual agreement between the
public sector and the private sector
• Strategic mode of procurement
• Shared risks and resources
• Value for Money
• Outcome orientation
• Acceleration of infrastructure provision
and faster implementation

10. The Philippines is
one of the first
Asian country to
implement PPP

11. July 1990 – Republic Act No. 6957, also called the
BOT Law. It presented two project schemes:
build-operate-and-transfer (BOT) and build-and-
transfer (BT).

13. 1994 – Amends Republic Act. No. 6957
to allow more contractual agreements

14. 9 Contractual agreements under
the BOT Law as amended
• Build-operate-and-transfer (BOT)
• Build-and-transfer (BT)
• Build-lease-and-transfer (BLT)
• Build-own-and-operate (BOO)
• Build-transfer-and-operate (BTO)
• Contract-add-and-operate (CAO)
• Develop-operate-and-transfer (DOT)
• Rehabilitate-operate-and-transfer (ROT)
• Rehabilitate-own-and-operate (ROO)

15. 2010 – President Aquino reorganizes the BOT
Center and renames it as the Public-Private
Partnership of the Philippines and transfers it from
the Department of Trade and Industry to the
National Economic Development Authority

16. What has been
accomplished?

17. The story so far
• 34 completed PPP projects with a
total cost of P3.9B
• 38 operational projects with a total
cost of P16.6B
• 28 just awarded projects for around
P10B.

18. What about issues and
problems?

19. • Complicated process, delay in
government review and approval,
• Bidding failure, no bidders
• Issue on direct guarantees and
sharing of risks
• How to strike a balance between
commercial viability and public
interest
• Improving the quality
of project pipelines with sufficient
project preparation,
including economic, financial,
technical and environmental
feasibility studies, is critical to
clearing the way for private sector
participation. Limited flow of
bankable projects because of
underinvestment in project
preparation represents a major
obstacle to public-private
partnerships for infrastructure.

20. Innovative approach to bridge
the viability gap

21. What is blended finance?

22. • Blended finance is combining the
public sector’s social return
objectives and private sector’s
financial return objectives through
risk mitigation by the public sector
in a manner that induces the
private sector to participate.

23. • Notes on blended finance
• Blended finance is defined as the complementary use of
grants (or grant-equivalent instruments) and non-grant
financing from private and/or public sources to provide
financing on terms that would make projects financially
viable and/or financially sustainable.
• Given that certain infrastructure investments may not be
commercially viable, innovative instruments have been
sought to close this ‘viability gap’ and make a larger
number of projects bankable.
• By blending grants with loans, this innovative approach
to development finance aims to achieve a number of
objectives – from increasing the volume of development
finance in a context of constrained resources, to
increasing the viability of investments, to enhancing the
overall effectiveness of aid.

24. Hope in blended finance