Philippines proposes new PPP bill

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Philippines proposes new PPP bill

Philippines has proposed a new public private partnership (PPP) bill, which will improve the Build-Operate-Transfer (BOT) contract model.

The BOT law is expected to be improved by expanding its coverage and providing more incentives to the private sector who become partners of the government in infrastructure projects as proposed in HB 5517.

A press release of the House of Representatives of Philippines said:

"An Act Encouraging more Public-Private Partnership (PPP) projects, creating the Public-Private Partnership (PPP) Guaranty Fund, and for other purposes, thereby amending Republic Act No.6957, as amended by Republic Act No. 7718, otherwise known as the 'Build-Operate-Transfer (BOT) Law.'"

The proposed PPP Guaranty Fund is created to defray the cost of compensation to project proponents which enter into BOT contracts, concession agreements or other contractual agreements with any national government agency, in the event that the government agency fails to comply with its obligations.

HB 5517 also introduces the "Project of National Significance" as a classification of infrastructure projects which, when classified as such, will enjoy incentives such as exemption from real property tax, restrictions on imposable local taxes and automatic grant of business permits, among others. The proposed amendatory law protects these projects from being the subject of judicial reliefs such as temporary restraining orders (TROs), preliminary injunctions and preliminary mandatory injunctions.

The bill is now pending with the Committee on Public Works and Highways chaired by Rep. Ronald M. Cosalan.

Among other salient amendments, Section 3 of R.A. 6957, as amended by R.A. 7718, has been also amended by inserting a new Section 10 to read as follows:

"SEC. 10-A. Projects of National Significance. - Upon certification and recommendation of NEDA, the President may classify certain projects undertaken under this Act as Projects of National Significance, which shall be entitled to the following incentives:""A. All real properties which are actually and directly used for the project shall be exempt from any and all real property taxes levied under R.A. No. 7160;""B. All local taxes imposed by a province, city or municipality in Metro Manila pursuant to R.A. 7160 on the project proponent shall not exceed fifty percent (50%) of one percent (1%) of gross sales or receipts of the preceding calendar year;""C. The necessary business permit, including any renewals thereof, shall be deemed to have been automatically granted or issued to the winning project proponent upon tender of the required taxes and fees to the appropriate LGU."

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