83 Percent Part 2

83 Percent Part 2

 

This average grade of the Philippine public-private partnership (PPP) regulatory framework per the recently published report of the World Bank titled Procuring Infrastructure PPP 2018 (2018 PPP Report), hit it on the mark. Having a clear policy and framework ensures stability, consistency, transparency, integrity, accountability, reliability and enforceability.

This columnist would even give our PPP framework a higher mark, anywhere from 85 percent to 90 percent. He particularly commends the maturity of our unsolicited proposal approach. Our laws and regulations, including jurisprudence, categorically permit this. Other countries, as shown in the 2018 PPP Report, either do not have this or are not as developed.

He notes with agreement that the country should make available online tender documents and publish PPP contracts. These two identified gaps are actually transparency gaps. By the way, (the World Bank may not be aware of this) the template PPP ordinance annexed to Memorandum Circular 120-2016 (Section 37) of the Department of the Interior and Local Government requires the posting of the PPP contract, feasibility or project studies, bidding documents, terms of reference and results of the PSP selection process.

The country has promoted PPP, privatization and private sector participation (PSP) for the past five to six decades. We have the oldest, if not among the oldest, design-finance-build-operate-Transfer laws in the world. While other countries do not consider joint ventures (JVs) as a PPP, JV is a popular modality in the country, particularly with local government units (LGUs) and state corporations.

While we do not have a single PPP law, the Philippines actually has a broad array of modalities to choose from, each governed by a law or regulation. There are actually at least 24 PPP arrangements in the PPP Menu.

Innovative LGUs advance this expansive view of PPP. To date, some 100 LGUs have their respective PPP or JV ordinances. This is a testament to local autonomy, PPP vertical decentralization and the dictum that LGUs know local concerns best. So, if this PPP advocate is asked to give a rating for the PPP Regulatory Framework for LGUs, he would pencil in 90 percent.

While 83 percent good, we should not sit on our laurels. Having a regulatory framework, while indispensable under a rule of law, accountability, transparency and competition, is not the be-all of PPPs. There are other standards for PPP readiness.

Are our government agencies organizationally prepared to implement PPP arrangements? Is the general public sufficiently informed about PPP laws and regulations? Do stakeholders have meaningful access to participation in the various stages of the PPP lifecycle?

Are our PPP projects environmentally compliant and safe? Are the projects socially sustainable? Are they technically feasible and economically viable? Do the hard and soft projects actually serve the people and enhance the public good? Do we have adequate mechanisms against unilateral rescissions of PPP contracts and against successor risks?

Maybe the World Bank can do another study on this—measuring success and failures of PPPs. The question now is—will our grade here be as high, higher or lower? What do you think?

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