PPPs and COVID-19: The Case of the Philippines

4th Meeting of the Infrastructure Financing and PPP Network of Asia and the Pacific

October 15, 2020

Eleazar E. RicoteAssistant Secretary and

Deputy Executive DirectorPPP Center of the Philippines

Ensure ecological

integrity, clean and healthy environment

Ensure safety and build resilience

Accelerate strategic

infrastructure development

Ensure peace and security

By 2022, to lay down the foundation for inclusive growth, a high-trust and resilient society, and

globally competitive knowledge economy

Philippine Development Plan 2017-2022

Achieve upper middle-income status by 2022

Government’s Response to COVID-19

On March 23, 2020, the Philippine Congress enacted the BayanihanAct (Republic Act 11469), which

allowed the President to "reallocate, realign, and reprogram" a budget of almost ₱275 billion (or

around $5.68 billion USD) in response to the pandemic.

On September 11, 2020, following Republic Act 11469, Bayanihan 2 (Republic Act 11949) was passed

into law which allocated ₱165.5 billion (or around $3.42 billion USD) for recovery interventions in response

to the pandemic and to bolster resiliency.

Government’s Response to COVID-19

• On March 27, 2020, IATF-EID issued Resolution No. 16 creating the

Technical Working Group for Anticipatory and Forward Planning (TWG-

AFP) to assess the impact of the pandemic and draft appropriate policy

recommendations that will help stimulate the economy and adapt to the “new

normal”.

• The Inter-Agency Task Force on

Emerging Infectious Diseases (IATF-EID)

was organized to respond to emerging

infectious diseases in the Philippines.

• On March 25, 2020, the IATF-EID laid

down a National Action Plan (NAP) to

implement and decentralize the system of

managing the COVID-19 situation.

TWG for Anticipatory and Forward Planning

The TWG, chaired by the National Economic and Development Authority (NEDA), is expected to provide recommendations on rebuilding confidence and adjusting to the “new normal”.

Its main objectives include:

1. To reduce uncertainty by making information available;

2. To recommend programs and strategies to mitigate the losses experienced by consumers and businesses; and

3. To recommend policies and programs to adapt to a “new normal” state of economic activities.

Priorities in the New Normal

Healthcare and Food Value Chain Solicited PPPs

Build, Build, Build (BBB) Infrastructure Plan

Key Implementing Agencies

• Department of Transportation (DOTr)

• Department of Public Works and

Highways (DPWH)

• Bases Conversion and Development

Authority (BCDA)

http://www.build.gov.ph/

• As of August 2020, there are 30 projects

(out of 104; 29%) in the BBB list that will be

financed thru PPPs.

• Sectors include:

urban redevelopment (including

disaster risk mitigation)

transport and mobility

water resources

power/energy

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Transition to the New Normal and Ways Forward(for the Infrastructure Sector)

1. Realign expenditure priorities in 2021, provide more space for relevant

health-related expenditures, and improve the digital infrastructure.

2. Ensure unhampered movement of agricultural goods and services

through efficient transport and logistics systems.• This would involve the construction of better road and transport infrastructure and

other facilities for agriculture

3. Conduct comprehensive vulnerability and risk assessment of critical

infrastructure, particularly in areas considered as COVID-19 hot spots.• This would include public buildings that may be used as isolation or treatment

facilities

4. Construct and/or rehabilitate hospitals or designated quarantine

holding facilities in LGUs, airports, and major sea ports.

5. Under the Universal Health Care Law, strengthen the health system

through the establishment of facilities and laboratories and

acquisition of necessary hospital equipment to address COVID-19 and

possible recurrence of virus contagion, among others

Main Reference: We Recover As One Report prepared by the Inter-Agency Task Force for the Management of Emerging Infectious Diseases – Technical Working Group for Anticipatory and Forward Planning

9

Towards a Healthy and More Resilient Philippines

1. Intensify the implementation of the Prevent, Detect,

Isolate Treat and Reintegration (PDITR) strategy

2. Develop the PPE ecosystem

3. Support the agriculture sector, including urban

agriculture

4. Minimize disruptions in value chain and the

logistics sector

5. Extend financial assistance, retooling and

upskilling programs, alternative livelihood

programs and job matching services

6. Provide support for flexible learning opportunities

7. Financial and technical support to MSMEs

especially for digital transformation

8. Improve in the digital infrastructure

9. Continue implementation of projects on ecological

integrity

10. Reopen safely and sufficiently the public transport

system

Main Reference: Transcript of NEDA Acting Secretary’s Statement during the DBCC Budget Briefing on the FY 2021 Proposed Budget dated September 04, 2020

COVID19-Responsive PPP Center Services

Project Management and Development

• Extends technical assistance online for implementing agencies in the preparation, packaging, structuring, approval, and bidding of their PPP projects

• Considers the risks and impacts of COVID-19 in PPP project preparation and structuring

• Continued rollout of the Project Development and Monitoring Facility especially for fiscally-constrained local implementing agencies

Capacity Building

• Online delivery of activities to continue empowering implementing agencies with the competencies to craft well-structured PPP projects, and to adjust with the new normal

Policy Formulation and Advocacy

• Recommends policies in response to COVID-19 and to address PPP policy gaps mainly thru the amendment of the Philippine BOT Law

• Online assistance in the formulation of PPP Codes for local implementing agencies

Project Monitoring

• Virtual monitoring and facilitation in the implementation of PPP projects

• Assessment of impacts brought by COVID-19 in PPP contracts especially in terms of contingent liabilities

The PPP Center of the Philippines facilitates the implementation of the country’s PPP Program. It serves as a central coordinating and monitoring agency for all PPP projects in the country.

• Robust pipeline of local PPP projects in expanded priority sectors

• Institutionalization of reforms in the PDMF

• Develop sector-specific PPP guidebooks

• Enhancement of network of collaborative alliances

Short Term

(by 2020)

Medium Term

(by 2022)

Long Term

(within 6-8 years)

Inclusive and sustainable economic development

PPP Center’s Local PPP Strategy

• Successful showcase of projects for replication

• Development of an updated capacity-building PPP curriculum

• Acquisition of expertise for continuous project development

• Development of PPP network

• Nationwide operationalization of the PPP Project Information Management System

Local PPP ProjectsOnline Capacity Building Activities

Conduct of online trainings and seminars depending

on the development needs and requirements of the implementing agency

Introduction to PPP concepts or PPP 101

Concept note formulation

Project prioritization Management of

unsolicited proposals Financial and

economic analysis of PPP projects

The Proposed PPP Act (Amendments to the BOT Law)

Address the concerns of Local Government Units (LGUs) in undertaking PPP

Projects, especially amid the pandemic and related future events

Autonomy in project approval

Capacity to establish local PPP codes

Capacity to develop local projects that are pandemic-responsive

Provide adequate measures to protect public interest

Avoiding onerous provisions in PPP contracts

Increased competition in the procurement process

Regulation of PPP contracts

Avoidance of conflict of interest

Management of project risks, including pandemic-related risks

Post-project impact evaluation

Enable efficient, timely, and pandemic-responsive delivery of public services

More streamlined and online/virtual processes

Strengthened resources to develop projects

Allowing unsolicited proposals even for priority projects, subject to a clear set

of rules and processes

SALIENT FEATURES

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Public-Private Infrastructure Advisory Facility (PPIAF) COVID-19 PPP Rapid Response Program

• The PPIAF, as supported by the World Bank Group,

helps developing-country governments strengthen

policies, regulations, and institutions that enable

sustainable infrastructure with private-sector

participation.

• Through the Rapid Response Program, the Philippines

can request short interventions of remote, targeted

technical advice to undertake a fast assessment of the

impact of COVID-19 on the Philippine PPP Program.

• Option 1: Focus on the study of high- and portfolio-level fiscal

implications of COVID-19 on selected PPP projects• Lead: Department of Finance

• Option 2: Focus on bringing global best practices on adjusting

requirements for infrastructure contracts as a result of the

pandemic• Lead: National Economic and Development Authority

• The PPP Center is one of the co-implementing agencies for both options.

PPP Project Database Updates (as of August 31, 2020)

PPP Projects by

STATUS

PPP Projects by

SECTOR

52%

10%

8%

3%

6%

21%

17Under

Construction

92 Operational

15Pre-

Construction

10 Terminated

37 Concluded

6 For

Verification

SECTOR

No. of

Projects

Transportation 32

Airport 6

Ports 4

Rail 4

Terminal 3

Roads 15

Water and Sanitation 55

Power 40

Property Development 15

Information Technology (IT) 13

Agriculture/Food Security 13

Solid Waste Management 4

Education 2

Health 2

Tourism 1

TOTAL 177

PPP Project Database Updates

Region No. of Projects

Nationwide 14

NCR 31

Luzon 87

Visayas 25

Mindanao 20

TOTAL 177

PPP Projects by

GEOGRAPHIC

LOCATION

177 Projects in the Database

• 86 Projects (2010-present)

• 82 Projects (1990-2009)

• 8 (For verification)

PPP Projects by

TYPE OF IMPLEMENTING

AGENCY

53%

27%

19%

25 PROJECTS

USD 0.32 Billion**

*Does not include Joint Ventures and PPP Projects prior to 2010. **Total cost does not include projects with no estimated costs or those with costs yet to be finalized

as of August 31, 2020Procurement Stage

USD 0.02 Billion 5

Approval StageUSD 0.24 Billion 1

19Development Stage

SOLICITED

Status of PPP Projects in the Pipeline*

30 PROJECTS

USD 38.59 Billion**

UNSOLICITED

Competitive Challenge StageUSD 0.46 Billion2

Approval StageUSD 37.74 Billion25

2Evaluation Stage

USD 0.31 Billion

No. USD (bn)

National 13 0.08**

Local 12 0.25**

No. USD (bn)

National 26 38.13**

Local 4 0.46**

Negotiation Stage1 USD 0.08 Billion

USD 0.07 Billion

As of August 31, 2020, the PPP Center is assisting local implementing agencies in the development and evaluation of 16 local PPP projects

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Priority Sectors Regions

4

2

2

Luzon - 4

M. Manila - 5

Visayas - 5

Mindanao - 2

Water Supply & Sanitation

Solid Waste Management

Vertical Infrastructure / Government Property Development(e.g. town centers, city halls, public markets)

Tourism

3Others(e.g. IT, transport)

Local PPP ProjectsLocal PPP Projects

Local PPP ProjectsEmerging Sectors for PPP Projects in the New Normal

CLIMATE CHANGE

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