Lungsod NG Pasay, Kalakhang Maynila: Republic of The Philippines Tanggapan NG Sangguniang Panlungsod

Republic of the Philippines
LUNGSOD NG PASAY, KALAKHANG MAYNILA

Tanggapan ng Sangguniang Panlungsod
ORDINANCE NO. 5611 SERIES OF 2014
AN ORDINANCE ADOPTING AND PURSUING A PUBLIC-PRIVATE PARTNERSHIP

(PPP) APPROACH TOWARDS DEVELOPMENT, CREATING A PPP SELECTION
COMMITTEE, AND PROVIDING GUIDELINES AND INCENTIVES THEREFOR AND
FOR OTHER PURPOSES
SPONSORED BY ALL MEMBERS OF THE SANGGUNIANG PANLUNGSOD

WHEREAS, in line with the thrust of the national/local government to maximize the involvement and
participation of private sector in local affairs, Pasay City also recognizes the importance of private sectors
participation’s that great things can be done with the support of each and every member of economic sector.
WHEREAS, the City of Pasay intend to improve living conditions of constituents of Pasay by providing
infrastructure services in energy and power, communication, transport and water thru the involvement of private
sectors in local planning and decision making.
WHEREAS, the City Government of Pasay selected the best practice on Public-Private Partnership (PPP)
in improving local infrastructure and it is basically refers to long-term, contractual partnerships between the public
and private sector agencies, specifically targeted towards financing, designing, implementing, and operating
infrastructure facilities and services that were traditionally provided by the public sector.
WHEREAS, the concept is viewed as a wide spectrum of models has emerged to enable private sector
participation in providing infrastructure facilities and services. The models vary from short-term simple
management contracts to long-term and very complex BOT form, to divestiture.
NOW THEREFORE, BE IT ORDAINED, by the Sangguniang Panlungsod Pasay City, in a regular

session assembled, that:
Chapter 1.Basic Principles and Definitions
Sec 1. Short Title. – This Ordinance shall be known and cited as the “2014 CITY OF PASAY PPP CODE.”
Sec. 2. Declaration of Policy. – It is hereby declared as a policy that the CITY OF PASAY shall advance the general
welfare and promote the interest of the community and the CITY within the framework of sustainable and integrated
development; and shall ensure the participation of the private sector in local governance through effective and viable
Public-Private Partnerships.
Sec. 3. Operative Principles. – The accomplishment of the stated policy shall be guided by the following principles:
(a) The CITY, pursuant to Sections 1, 2 and 5, Article X of the 1987 Constitution is a territorial and political
subdivision which enjoys local autonomy and fiscal autonomy. Under Section 3, Article X of the 1987 Constitution,
local autonomy means a more responsive and accountable local government structure instituted through a system of
decentralization. Fiscal autonomy means that local governments have the power to create their own sources of
revenue in addition to their equitable share in the national taxes released by the national government, as well as the
power to allocate their resources in accordance with their own priorities.
(b) The CITY exists and operates in its governmental and proprietary capacities thereby making the CITY an
agent of and is therefore accountable to the State and its community.
(c) The CITY must develop into a self-reliant community and as such, is in a better position to address and resolve
matters that are local in scope.
AN ORDINANCE ADOPTING AND PURSUING A
PUBLIC-PRIVATE PARTNERSHIP (PPP) APPROACH
TOWARDS DEVELOPMENT, CREATING A PPP
SELECTION COMMITTEE, AND PROVIDING
GUIDELINES AND INCENTIVES THEREFOR AND
FOR OTHER PURPOSES
(d) Under Section 18 of the 1991 LGC, the CITY may to acquire, develop, lease, encumber, alienate, or otherwise
dispose of real or personal property held by them in their proprietary capacity and to apply their resources and assets
for productive, developmental, or welfare purposes.
(e) Under Section 22 (d) of the 1991 LGC, the CITY enjoys full autonomy in the exercise of its proprietary
functions and shall exercise the powers expressly granted, those necessarily implied therefrom, as well as powers
necessary, appropriate, or incidental for its efficient and effective governance, those not otherwise prohibited by law
and those which are essential to the promotion of the general welfare.
(f) Under Section 25 (b) of the 1991 LGC, the CITY may collaborate or cooperate with other local governments,
national government agencies, government-owned and controlled corporations, government instrumentalities and
government corporate entities for the implementation of local projects.
(g) Under the charter of the CITY, Sections 16, 17, 19 and 129 of Republic Act No. 7160 or the Local
Government Code of 1991 (1991 LGC) and other statutes, the CITY has been given the responsibility and mandate
to exercise devolved and delegated powers.
(h) The CITY, under Section 106 of 1991 LGC, is mandated to draw up and implement a comprehensive multi-
sectoral development plan.
(i) The CITY under Section 3 (l) of the 1991 LGC is duty-bound to ensure the active participation of the private
sector in local governance.
(j) The role of the CITY both as a regulator or business and as implementer of a proprietary undertaking must be
delineated.
(k) The CITY, as a partner in a PPP arrangement, may provide equity, subsidy or guarantee and use local funds
and that the usage thereof for a PPP project shall be considered for public use and purpose.
(l) Under Sections 34, 35 and 36 of the 1991 LGC and in the exercise of its powers, the CITY may enter into joint
ventures and such other cooperative arrangements with people’s and non-governmental organizations to engage in
the delivery of certain basic services, capability-building and livelihood projects, and to develop local enterprises
designed to improve productivity and income, diversity agriculture, spur rural industrialization, promote ecological
balance, and enhance the economic and social well-being of the people; provide assistance, financial or otherwise, to
such people’s and non-governmental organizations for economic, socially-oriented, environmental, or cultural
projects to be implemented within its territorial jurisdiction; provide funding for local projects, provide incentives
and tax exemptions to private companies.
Sec. 4. Rationale for PPP. – PPPs shall be promoted to provide more, better, affordable and timely services to the
community. In pursuing PPPs, the CITY shall be guided by the following reasons and drivers:
(a) PPPs should be adopted to address a pressing and urgent or critical public need. Under the principle of
“Additionality”, the increased economic benefits to consumer welfare of having needed public services/
infrastructure accessible now because of the PPP, rather than having to wait until the CITY could provide the public
services much later. PPP would also encourage the accelerated implementation of local projects.
(b) PPPs can be adopted to avoid costs and public borrowing. By contracting with the private sector to undertake a
new infrastructure project, scarce Government capital budgets can be directed to other priority sectors such as social
services, education, and health care.
(c) PPPs allow for technology transfer, and improved efficiency and quality of service. These could be valuable
contribution of the private sector in local governance.
(d) PPPs should be feasible and affordable. From the onset, the project should be feasible, demonstrating the need
for the project, broad level project costs estimation, and indicative commercial viability. The assessment of
affordability will need to be the cornerstone for all PPP projects, both to the CITY and the general public.
(e) PPP Projects should be bankable. PPPs should be bankable as financiers will be reluctant to commit funding
when a project entails high participation costs, unreasonable risk transfer or lengthy and complex contract
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negotiations. PPPs project will remain attractive to the private sector through cost recovery pricing policy. This is
critical to ensure that the project developer/ investor are assured of steady and predictable tariffs over the life of the
project in order to guarantee service delivery.
(f) PPP Projects should provide Value for Money as far as practicable. PPPs should provide value for money to the
CITY and good economic value and includes allocating risks to the party best able to control and manage them, and
maximizing the benefits of private sector efficiency, expertise, flexibility and innovation.
(g) Risk allocation should be based on the party most capable to manage the risk. PPPs always comprise a higher
level of risk due to the magnitude of the financial stakes involved, uncertainties over construction and operating
costs, and revenue related uncertainties. PPPs rely on balancing the allocation of risk, and enables transfer of the
same to the private party when the said party is better able to mitigate/ manage the risk than the public authority. In
return, the public party significantly reduces its risk exposure while overseeing project optimization efforts. The
private party expects a return that is in line with the risks it shall undertake.
(h) PPP Projects should provide economic and social benefits. PPP projects should always be evaluated for
economic and social benefits rather than focus on the financial considerations. PPPs underlying principle stems from
the fact that the public authority remains responsible for services provided to the public, without necessarily being
responsible for corresponding investment.
(i) PPP Projects should have due consideration for empowerment of Filipino citizens. The implementation of PPP
projects should have due consideration for the empowerment of the citizens as a strategy for economic growth and
sustainability. As such, PPPs undertakings need to provide for the participation of local investors.
(j) Procurement of PPP Projects should be competitive. PPP Projects should be procured through open competitive
bidding. However, where competitive bidding is not applied, arrangements shall be made to introduce competition
into the process in order to ensure both transparency and economically efficient outcome.
(k) PPP is an essential part of the overall infrastructure reform policy of the CITY. By encouraging performance-
based management of the delivery of public services applying commercial principles and incentives whenever
possible, by introducing competition in and for the market, and by involving users and stakeholders in the decision-
making process, infrastructure and regulatory reform shall be achieved.
(l) The regulation of the PPP shall be pursuant to the PPP contract and exercised by the appropriate regulatory
authority.
Sec. 5. Definition of Terms. – As used in this Code, the following terms shall mean:
(a) Build-Operate-Transfer Law Schemes – Under Republic Act No. 6957 as amended by RA No. 7718, the
following are the BOT variants:
(i) Build-and-Transfer (BT)- A contractual arrangement whereby the Project Sector Proponent (PSP)
undertakes the financing and construction of a given infrastructure or development facility, and after its
completion, turns it over to the CITY, which shall pay the PSP, on an agreed schedule, its total investment
expended on the project, plus a Reasonable Rate of Return thereon.
(ii) Build-Lease-and-Transfer (BLT)- A contractual arrangement whereby a PSP is authorized to finance

and construct an infrastructure or development facility and upon its completion, turns it over to the CITY
on a lease arrangement for a fixed period, after which ownership of the facility is automatically transferred
to the CITY.
(iii) Build-Operate-and-Transfer (BOT) – A contractual arrangement whereby the PSP undertakes the
construction, including financing, of a given infrastructure facility, and the operation and maintenance
thereof. The PSP operates the facility over a fixed term, during which it is allowed to charge facility users
appropriate tolls, fees, rentals, and charges not exceeding those proposed in its bid, or as negotiated and
incorporated in the contract, to enable the PSP to recover its investment, and its operating and maintenance
expenses in the project. The PSP transfers the facility to the CITY at the end of the fixed term which shall
not exceed fifty (50) years. This build, operate and transfer contractual arrangement shall include a supply-
and-operate scheme, which is a contractual arrangement whereby the supplier of equipment and machinery
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for a given infrastructure facility, if the interest of the CITY so requires, operates the facility, providing in
the process, technology transfer and training to Filipino nationals.
(iv) Build-Own-and-Operate (BOO)- A contractual arrangement whereby a PSP is authorized to finance,

construct, own, operate and maintain an infrastructure or development facility from which the PSP is
allowed to recover its total investment, operating and maintenance costs plus a reasonable return thereon by
collecting tolls, fees, rentals or other charges from facility users. Under this project, the proponent who
owns the assets of the facility may assign its operation and maintenance to a facility operator. The
divestiture or disposition of the asset or facility shall be subject to relevant rules of the Commission on
Audit.
(v) Build-Transfer-and-Operate (BTO)- A contractual arrangement whereby the CITY contracts out the
construction of an infrastructure facility to a PSP such that the contractor builds the facility on a turnkey
basis, assuming cost overruns, delays, and specified performance risks. Once the facility is commissioned
satisfactorily, title is transferred to the CITY. The PSP, however, operates the facility on behalf of the
CITY under an agreement.
(vi) Contract-Add-and-Operate (CAO) - A contractual arrangement whereby the PSP adds to an existing
infrastructure facility which it is renting from the CITY and operates the expanded project over an agreed
franchise period. There may or may not be a transfer arrangement with regard to the added facility provided
by the PSP.
(vii) Develop-Operate-and-Transfer (DOT)- A contractual arrangement whereby favorable conditions

external to a new infrastructure project to be built by a PSP are integrated into the arrangement by giving
that entity the right to develop adjoining property, and thus, enjoy some of the benefits the investment
creates, such as higher property or rent values.
(viii) Rehabilitate-Operate-and-Transfer (ROT) - A contractual arrangement whereby an existing facility

is turned over to the PSP to refurbish, operate and maintain for a franchise period, at the expiry of which
the legal title to the facility is turned over to the CITY.
(ix) Rehabilitate-Own-and-Operate (ROO) – A contractual arrangement whereby an existing facility is

turned over to the PSP to refurbish and operate, with no time limitation imposed on ownership. As long as
the operator is not in violation of its franchise, it can continue to operate the facility in perpetuity.
(b) Competitive Challenge or Swiss Challenge – An alternative selection process wherein third parties or
challengers shall be invited to submit comparative proposals to an unsolicited proposal. Accordingly, the PSP who
submitted the unsolicited proposal, or the original proponent, is accorded the right to match any superior offers
given by a comparative PSP as provided in Chapter 6 hereof.
(c) Competitive Selection or Bidding or Open Competition – Refers to a method of selection or procurement
initiated or solicited by the CITY, based on transparent criteria, which is open to participation by any interested
party as provided in Chapter 4 hereof.
(d) Concession – A contractual arrangement whereby the financing and construction of a new facility and/ or
rehabilitation of an existing facility is undertaken by the PSP after its turnover thereof to the PSP, and includes the
operation, maintenance, management and improvement, if any, of the facility for a fixed term during which the PSP
generally provides service directly to facility users and is allowed to charge and collect the approved tolls, fees,
tariffs, rentals or charges from them. The CITY may receive a concession or franchise fee during the term of the
contract and/ or other consideration for the transfer, operation or use of any facility. There may be a transfer of
ownership of the asset or facility after the concession period has ended subject to rules of the Commission on Audit.
(e) Corporatization – Refers to transformation of a public entity or quasi-municipal corporation established by the
CITY into one that has the structure and attributes of a private corporation, such as a board of directors, officers, and
shareholders, and having it registered with the Securities and Exchange Commission as a stock corporation. The
process involves the establishment of a distinct legal identity for the company under which the CITY’s role is
clearly identified as owner; segregation of the company’s assets, finances, and operations from other CITY
operations; and development of a commercial orientation and managerial independence while remaining
accountable to the government or electorate.
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FOR OTHER PURPOSES
(f) Credit Enhancement - This shall refer to direct and indirect support to a development facility by the PSP and/or
CITY, the provision of which is contingent upon the occurrence of certain events and/or risks, as stipulated in the
PPP contract. Credit enhancements are allocated to the party that is best able to manage and assume the
consequences of the risk involved. Credit enhancements may include but are not limited to government guarantees
on the performance or the obligation of the CITY under its contract with the PSP, subject to existing laws on indirect
guarantees. Indirect Guarantees shall refer to an agreement whereby the City assumes full or partial responsibility
for or assists in maintaining the financial standing of the PSP or project company in order that the PSP/ project
company avoids defaulting on the project loans, subject to fulfillment of the PSP/ project company of its
undertakings and obligations under the PPP contract.
(g) Development Projects- Projects normally financed, and operated by the public sector, but which will now be
wholly or partly financed, constructed and operated by the PSP; projects that will advance and promote the general
welfare; and other infrastructure and development projects as may otherwise be authorized by the City.
(h) Direct City Government Equity – Refers to the subscription by the CITY of shares of stock or other securities
convertible to shares of stock of the special purpose vehicle or single-purpose project company, whether such
subscription will be paid by money or assets.
(i) Direct City Government Guarantee – Refers to an agreement whereby the City guarantees to assume
responsibility for the repayment of debt directly incurred by the PSP in implementing the project in case of a loan
default.
(j) Direct City Government Subsidy – Refers to an agreement whereby the City shall:
(i) defray, pay or shoulder a portion of the PPP project cost or the expenses and costs in operating and
maintaining the project;
(ii) condone or postpone any payments due from the PSP;
(iii) contribute any property or assets to the project;
(iv) waive or grant special rates on real property taxes on the project during the term of the contractual
arrangement; and/ or
(v) waive charges or fees relative to the business permits or licenses that are to be obtained for the
construction of the project, all without receiving payment or value from the PSP or operator for such
payment, contribution or support.
(k) Divestment or Disposition – Refers to the manner or scheme of taking away, depriving, withdrawing of title to
a property owned by a City and vesting ownership thereof to a PSP.
(l) Feasibility Study/Project Description – A study prepared by the City in a competitive selection or a PSP when
submitting an unsolicited proposal containing a needs analysis, affordability assessment, value for money
assessment, preliminary risk assessment, stakeholder assessment, human resource assessment, bankability
assessment, legal viability assessment, PPP mode selection, market testing if relevant, indicative transaction
implementation plan, and draft PPP contract. The study shall be supported by the results of the appropriate
“willingness-and-ability-to-pay” survey.
(m) Franchise – Refers to the right or privilege affected with public interest which is conferred upon a PSP, under
such terms and conditions as the City may impose, in the interest of public welfare, security and safety.
(n) Joint Venture (JV) – A contractual arrangement whereby a PSP or a group of private sector entities on one
hand, and the City on the other hand, contribute money/ capital, services, assets (including equipment, land,
intellectual property or anything of value), or a combination of any or all of the foregoing. The City shall be a
minority equity or shareholder while the PSP shall be majority equity or shareholder. Each party shall be entitled to
dividends, income and revenues and will bear the corresponding losses and obligation in proportion to its share.
Parties to a JV share risks to jointly undertake an investment activity in order to accomplish a specific, limited or
special goal or purpose with the end view of facilitating private sector initiative in a particular industry or sector, and
eventually transferring ownership of the investment activity to the PSP under competitive market conditions. It
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involves a community or pooling of interests in the performance of the service, function, business or activity, with
each party having a right to direct and govern the policy in connection therewith, and with a view of sharing both
profits and losses, subject to agreement by the parties.
(o) Lease or Affermage – A contractual arrangement providing for operation, maintenance, and management
services by the PSP, including working capital and/ or improvements to an existing infrastructure or development
facility leased by the PSP from the City for a fixed term. Under a lease, the PSP retains revenue collected from
customers and makes a specified lease payment to the City. Under an affermage, the parties share revenue from
customers wherein the PSP pays the contracting authority an affermage fee, which varies according to demand and
customer tariffs, and retains the remaining revenue. The City may provide a purchase option at the end of the lease
period subject to rules of the Commission on Audit.
(p) Management Contract – A contractual arrangement involving the management or provision by the PSP of
operation and maintenance or related services to an existing infrastructure or development facility owned or
operated by the City. The project proponent may collect tolls/ fees/ rentals and charges which shall be turned over to
the City and shall be compensated in the form of a fixed fee and/ or performance based management or service fee
during the contract term.
(q) Negotiated Projects – Refer to instances where the desired project is the result of an unsolicited proposal from
a PSP or, where the City has failed to identify an eligible private sector partner for a desired activity when there is
only one qualified bidder after subjecting the same to a competitive selection or bidding as provided under Chapter 5
hereof.
(r) New Technology – Refers to having at least one of the following attributes:
a. A recognized process, design, methodology or engineering concept which has demonstrated its ability to
significantly reduce implementation of construction costs, accelerate project execution, improve safety,
enhance project performance, extend economic life, reduce costs of facility maintenance and operations, or
reduce negative environmental impact or social/economic disturbances or disruptions during either the
project implementation/construction phase or the operation phase; or
b. A process for which the project proponent or any member of the proponent joint venture/consortium
possesses exclusive rights, either world-wide or regionally; or
c. A design, methodology or engineering concept for which the proponent or a member of the proponent
consortium or association possesses intellectual property rights.
(s) Private Sector Proponent (PSP) - Refers to the private sector entity which shall have contractual responsibility
for the project and which shall have an adequate track record in the concerned industry, as well as technical
capability and financial base consisting of equity and firm commitments from reputable financial institutions, to
provide, upon award, sufficient credit lines to cover the total estimated cost of the project to implement the said
project.
(t) Public-Private Partnerships (PPP) – PPP is a form of legally enforceable contract between the City and PSP,
which requires new investments from the PSP and which transfers key risks to the PSP in which payments are made
in exchange for performance, for the purpose of delivering a service traditionally provided by the public sector. PPP
shall also include disposition of an asset, facility, project owned or entity created by the City to a PSP; assumption
by a PSP of a proprietary function of the City; grant of a concession or franchise to a PSP by the City; or usage by
the PSP of public property owned or possessed by the City.
(u) Reasonable Rate of Return (RROR) – Refers to the rate of return that a PSP shall be entitled to, as determined
by the PPP Regulatory Authority taking into account, among others, the prevailing cost of capital (equity and
borrowings) in the domestic and international markets, risks being assumed by the PSP and the level of City
undertakings extended for the project.
(v) Service Contract – A contractual arrangement whereby the PSP shall provide a particular service to the City
involving the City’s proprietary authority or to entities or corporation created by the City. The PSP shall be entitled
to pay a fee per unit of work done during the term of the contract.
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(w) Unsolicited Proposal – Refers to project proposals submitted by a PSP to the City to undertake a Development
Projects without a formal solicitation issued by the City.
(x) Value for Money (VfM) – Refers to the concept that over the whole-life of a project finance-PPP project,
government’s total expenditures (i.e., its payments to the private sector), adjusted for the risks that have been
transferred to the private sector, will be less, on a Net Present Value (NPV) basis, than if the government will
perform the services itself. VfM considers monetary and non-monetary factors such as: (i) risk transfer; (ii) reduced
whole life costs; (iii) speed of implementation; and (iv) quality and reliability of service.
(y) Viability Gap Funding (VGF) – Refers to an explicit subsidy that is performance-driven (i.e., based on private
party achieving measurable outputs) and targeted to socio-economically disadvantaged users or groups of users.
Sec. 6. Rules of Interpretation. – This Code and the provisions hereof shall be liberally interpreted to accomplish the
policy and objectives set forth in Sections 2, 3 and 4 hereof.
Sec. 7. Authorities. –
(a) This Code is being adopted pursuant to the CITY’s constitutional and statutory authorities enumerated
under Section 3 hereof.
(b) In pursuing BOT Variants, the CITY shall comply with Republic Act No. 6957 as amended by RA No.
7718 and its Implementing Rules and Regulations.
(c) In entering into Management and Service Contracts, the CITY shall comply with Republic Act 9184
and its Implementing Rules and Regulations.
(d) For Dispositions, Commission on Audit Circular No. 89-296 (January 27, 1989) shall govern.
(e) For Competitive Selection, Competitive Challenge/Swiss Challenge, Limited Negotiations shall be
governed by Chapters 4, 5 and 6 respectively of this Ordinance.
(f) For all other PPP Modalities, by the provisions of this Ordinance.
Chapter 2. PPP Projects and PPP Modes
Sec. 8. PPP Projects. – The City, through the appropriate and viable PPP mode, may undertake Development
Projects including but not limited to, power plants, highways, ports, airports, canals, dams, hydropower projects,
water supply, sewerage, irrigation, telecommunications, railroad and railways, transport systems, land reclamation
projects, industrial estates or townships, housing, government buildings, tourism projects, public markets,
slaughterhouses, warehouses, solid waste management, information technology networks and database
infrastructure, education and health facilities, sewerage, drainage, dredging, prisons, and hospitals.
Sec. 9. List of Priority Projects. – The City shall identify specific priority projects that may undertaken under any of
the PPP Modalities defined under Sec. 10 hereof.
Sec. 10. PPP Modalities. – In undertaking specific PPP Projects, the City may adopt and pursue the following PPP
Modalities:
(a) Build-and-Transfer (BT);

(b) Build-Lease-and-Transfer (BLT);
(c) Build-Operate-and-Transfer (BOT);
(d) Build-Own-and-Operate (BOO);
(e) Build-Transfer-and-Operate (BTO);
(f) Contract-Add-and-Operate (CAO);
(g) Develop-Operate-and-Transfer (DOT);
(h) Rehabilitate-Operate-and-Transfer (ROT);
(i) Rehabilitate-Own-and-Operate (ROO);
(j) Concession Arrangement;
(k) Joint Venture (JV);
(l) Lease or Affermage;
(m) Management Contract;
(n) Service Contract;
(o) Divestment or Disposition; and
(p) Corporatization.
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Sec. 11. General Requirements. –
(a) Undertaking a PPP for a Development Project must be premised on any or all of the reasons and drivers
mentioned in Section 4 hereof.
(b) Unsolicited proposals may be accepted even if the project is included in the List of Priority Projects or
whether the same features a new concept or technology or not.
(c) The prohibition for unsolicited proposals under Republic Act No. 6957 as amended by RA No. 7718 on
providing Direct City Government Guarantee, Direct City Government Subsidy and Direct City
Government Equity only applies to BOT variants.
(d) For Concession Arrangements, Leases or Affermage, Management and Service Contracts, and Joint
Ventures, the City may provide Direct City Government Guarantee, Direct City Government Subsidy,
Direct City Government Equity, or Viability Gap Funding; provided, that the CITY may use a portion of its
general fund, its development fund comprising 20% of it annual share in the Internal Revenue Allotment,
or its equitable share in the proceeds of the utilization and development of the national wealth found within
its territory for this purpose; provided further, that any amount used for subsidy or equity for a PPP project
shall be deemed for development purposes and for the direct benefits of the inhabitants pursuant to Sections
287 and 289 of the 1991 LGC respectively.
(e) For all PPP Modalities, the City may provide Credit Enhancements.
(f) Official Development Assistance (ODA) as defined in R.A. 8182, otherwise known as the ODA Act of
1996, as amended by R.A. 8555 may be availed of for PPP projects where there is difficulty in sourcing
funds; provided, that ODA financing shall not exceed 50% of the project cost, the balance to be provided
by the PSP.
(g) Any subsidy that will be extended by the City must be targeted, transparent and efficiently
administered.
(h) Each PPP Modality adopted for a specific PPP project must specifically provide and adopt a tariff-
mechanism such as but not limited to cash-needs, price cap, revenue cap, rate of return, hybrid of the
foregoing, or any other appropriate scheme.
(i) The City shall have the option to form or allow the formation of a special purpose vehicle or single-
purpose project company to implement the PPP project as may be appropriate under the chosen PPP
Modality.
(j) In participating in PPPs, the City may, subject to Sections 16, 17, 18, 19 and 20 of the 1991 LGC,
exercise police power, perform devolved powers, apply and generate resources, expropriate and reclassify
and provide zoning regulations.
Sec. 12. Government-to-Government Joint PPP Undertakings. – The City by mutual agreement in a Government-to-
Government arrangement with other local governments, national government agencies, government-owned and -
controlled corporations, government instrumentalities and government corporate entities, may implement PPP
Projects for projects located within the City’s territory or those projects that will benefit the City and its community
even if the project site is outside the City’s territory; provided, that the collaborating or partner government entity
jointly undertakes with the City the selection of the PSP using the appropriate PPP Modality.
Chapter 3.PPP Procedures
Sec. 13. PPP Procedures. –
(a) For BOT variants, the City must comply with the procedure set forth in Republic Act No. 6957 as
amended by RA No. 7718 and its Implementing Rules and Regulations.
(b) For Management and Service Contracts, the City shall comply with Republic Act 9184 and its
Implementing Rules and Regulations.
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(c) For Concessions, Joint Ventures, and Leases or Affermage, the procedures specified herein shall
govern.
(d) For Divestment or Disposition of a property, Commission on Audit Circular No. 89-296 (January 27,
1989) shall be applicable.
(e) For the Divestiture of a subsidiary or corporation incorporated by the City under Corporatization, the
sale may be pursued via a public offering or through a public auction or other relevant schemes under
Commission on Audit Circular No. 89-296 (January 27, 1989).
(f) If the City opts to select a PSP using the Competitive Selection or Competitive Challenge approach, the
City in the first approach and the PSP in the second approach must prepare and submit a Feasibility Study
or Project Description.
(g) All recommendations of the PPP Selection Committee shall be submitted to the Mayor for consideration
and approval.
(h)All PPP contracts must be signed by the Mayor with prior authorization by the Sangguniang
Panlungsod.
(i) After the signing of the PPP Contract by the Mayor, the PPP-SC shall issue the Notice of Award to the
PSP.
(j) The Sangguniang Panlungsod has to ratify all PPP Contracts.
Sec. 14. PPP Selection Committee. –
(a) There is hereby created a Public Private Partnership Selection Committee or PPP-SC for purposes of
selecting a PSP for a specific PPP Project. The PPP-SC shall be composed of the following:
(i) Chairperson – City Administrator;

(ii) Vice Chairperson/Secretariat – City Legal Officer;
(iii) The City Budget Officer;
(iv) The City Planning and Development Officer;
(v) The City Engineer
(vi) One (1) representative from and selected by the Sangguniang Panglungsod.
A quorum of the PPP-SC shall be composed of a simple majority of all voting members. The Chairperson shall vote
only in case of a tie.
The PPP-SC may invite non-voting observers from the national government agencies, regulatory agencies, Public
Private Partnership Center, National Economic Development Authority, Department of Interior and Local
Governments, private sector, non-governmental and people’s organization to observe in the proceedings of the PPP-
SC; and form a support staff composed of employees and staff of the City.
(b) The PPP-SC shall be responsible for all aspects of the pre-selection and selection process, including, among
others, the preparation of the Feasibility Study, selection/ tender documents; determine the minimum designs,
performance standards/ specifications, economic parameters and reasonable rate of return or tariff-setting
mechanism appropriate to the PPP Modality; drafting or evaluation of the PPP contract; publication of the invitation
to apply for eligibility and submit proposals or comparative proposals; define the eligibility requirements,
appropriate form and amount of proposal securities, and schedules of the selection and challenge processes; pre-
qualification of prospective PSPs, bidders or challengers; conduct of pre-selection conferences and issuance of
supplemental notices; interpretation of the rules regarding the selection process; the conduct of the selection or
challenge process; evaluation of the legal, financial and technical aspects of the proposals; resolution of disputes
between PSPs and challengers; defining the appeals mechanisms; and recommendation for the acceptance of the
proposal and/ or for the award of the contract.
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Sec. 15. Schedules and Timelines. – The PPPSC shall have the authority to adopt and prescribe the appropriate
schedules and timelines for each PSP selection process: provided that the periods are reasonable and will not
undermine free competition, transparency and accountability.
Chapter 4. Competitive Selection
Sec. 15. Competitive Selection. –
(a) The Competitive Selection procedure shall consists of the following steps: advertisement, issuance of
instructions and tender documents, pre-bid conference, eligibility screening of prospective bidders, receipt and
opening of bids, posting of proposal securities, evaluation of bids, post-qualification, and award of contract as
detailed in this Chapter.
(b) The Mayor shall approve the tender documents and the draft Contract before they are issued to the prospective
PSPs/ bidders. Tender documents shall be released upon payment of the non-refundable bid document fee which
shall not be less than 5% of the Project Cost or as determined by the PPP-SC. Notwithstanding, the PPP-SC at its
discretion may adjust said non-refundable bid document fee as may be appropriate for the nature, scope, size, and
complexity of the proposed JV activity. Provided, that the principles of transparency, competition and accountability
are observed.
Sec. 16. Selection/Tender Documents. The PPP-SC shall prepare the selection/tender documents, which shall
include but not limited to the following:
(a) Instructions to Private Sector Participants;

(b) Minimum Design, Performance Standards/Specifications, and other Financial and Economic
Parameters, where applicable, among others;
(c) Feasibility Study or a Business Case/Pre-feasibility Study/ Project Description of the Proposed
Project;
(d) Draft Contract reflecting the terms and conditions in undertaking the JV activity, including, among
others, the contractual obligations of the contracting parties;
(e) Selection Form reflecting the required information to properly evaluate the technical and financial
proposal;
(f) Forms of technical and financial proposals and performance securities;
(g) Other documents as may be required by the PPP-SC suitable for a particular contract/project
Sec. 17. Instructions to Private Sector Participants. The instructions to private sector participants, which establish the
rules of the selection process, shall be clear, comprehensive and fair to all private sector participants and shall, as far
as necessary and practicable, include the following information:
(a) General description and objectives of the JV activity;

(b) Proposal submission procedures and requirements, which shall include information on the manner of
proposal submission, the number of copies of the technical and financial proposal to be submitted, where
the proposals are to be submitted, the deadline for the submission of proposals, permissible mode of
transmission of technical and financial proposals, etc.;
(c) Amount and form of proposal security and proposal security validity period;
(d) Milestones;
(e) Method, parameters and criteria for the evaluation of the proposals;
(f) Minimum amount of equity of the prospective JV partner;
(g) Requirements of concerned regulatory bodies;
(h) Revenue sharing arrangement, if any;
(i) Nationality and ownership requirements as, required by law; and
(j) Other information as may be included by the PPP-SC suitable for a particular contract/project.
Sec.18. Minimum Designs, Performance Standards/Specifications and Economic Parameters. Minimum design and
performance standards/specifications, including appropriate environmental standards by the regulatory agencies
shall be clearly defined and shall refer more to the desired quantity and quality of the outputs of the JV activity and
should state that non-conformity with any of these minimum requirements shall render the proposals as non-
responsive. Likewise, for the purpose of evaluating proposals, the following economic parameters, among others
and where applicable, shall be prescribed:
(a) discount rate, foreign exchange rate and inflation factor;

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(b) maximum period of project construction;

(c) fixed term and price indices to be used in the adjustments of tolls/fees/rentals/charges, if applicable;
and
(d) minimum period of repayment, if applicable.
Sec. 19. Draft Contract. The draft contract should clearly define the basic and legal relationship between the parties
and their rights and responsibilities including specific Government Undertakings to be provided by the City relative
to the JV activity, if any. Specifically, the draft contract shall also contain provisions on the following matters, as far
as practicable:
(a) the date on which the agreement is established, executed, and considered effective;
(b) the names, addresses and identification of the parties, including the type of business of each members
of the JV;
(c) the name under which the JV will do business;
(d) the principal place of business of the JV;
(e) purpose, term and scope of the JV;
(f) project specifications and features;
(g) a statement that the parties are actually co-venturers for the project, whether or not the contract is in
the name of all members;
(h) the establishment of a fund by the parties to finance the work, together with the amounts to be
contributed by each party, with the fund being deposited in a special bank account under dual control, and
all progress payments and other revenues being deposited in such account;
(i) procedure for additional capital infusions, if required;
(j) a declaration of the participation of the parties and percentage in which profits and losses are shared,
in proportion to the contributions of the party to the working fund. The amount of contribution of funds by
parties can be increased or decreased, depending on the contributions of equipment or expertise;
(k) if equity other than cash is to be contributed, a statement as to how the property will be valuated, and
the ownership of the property during and after the effectivity of the JV Agreement;
(l) designation of one of the parties as general manager of the project, with authority to bind the JV
Company/Partnership/Parties; or, in the alternative, the constitution of a management committee, with a
provision for remuneration. Management duties, other duties of the co-venturers and procedures to be
followed in dealing with unusual situations or problems that may develop, should be specified;
(m) implementation milestones, regular meeting schedules, financial and periodic JV and progress
reporting procedure;
(n) establishment of a JV bank account, and the appointment of a chartered accountant and lawyer;
(o) provide for the acquisition of licenses in the name of the JV or each coventurer, as required;
(p) type of insurance carried by the JV and clearly defined liabilities to be insured against by each
participant;
(q) definition of items which are to be considered as costs to the JV for the purpose of determining profit
or loss, and a description of items which are not reimbursable to members of the JV;
(r) confidentiality of trade information passed between the co-venturers;
(s) ownership or retention of patents, technology, and consultant reports;
(t) performance security requirements of the project and the bonding obligations of the co-venturers;
(u) undivided pro-rata interests held by the co-venturers on all assets of the JV;
(v) restriction regarding assignment of private sector participant’s undivided prorate interests in assets of
the JV;
(w) cost recovery scheme;
(x) indemnification and liquidated damages;
(y) performance and warranty bonds;
(z) minimum insurance coverage;
(aa) acceptance tests and procedures;
(bb) warranty period and procedures;
(cc) grounds for and effects of contract termination including modes for settling disputes and procedure
for handling guarantees, defects, and insurance after termination;
(dd) the manner and procedures for the resolution of warranty against corruption;
(ee) compliance with all other laws, rules and regulations;
(ff) procedure for exit of the City and Substitution or addition of parties;
(gg) payout of funds;
(hh) disputes arbitration clause and
(ii) Other information as may be included by the PPP-SC suitable for a particular contract/project
Sec. 20. Publication of Invitation to Apply for Eligibility and to Submit a Proposal (IAESP).
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a. The IAESPs shall be advertised once in a newspaper of general nationwide circulation, and posted
continuously for a period of seven (7) calendar days, starting on date of advertisement, at the
Website of the City and any conspicuous place within the City.
b. Private sector participants shall be given at least thirty (30) calendar days from the date of
publication of the IAESP to apply for eligibility and to submit a proposal. Notwithstanding, the
PPP-SC at its discretion may adjust said period as may be appropriate for the nature, scope, size,
and complexity of the proposed JV activity. Provided, that the principles of transparency,
competition and accountability are observed.
Sec. 21. Eligibility Requirements
(i) Legal Requirements. If the JV activity requires a public utility franchise, the private sector
participant must be duly registered with the SEC and be at least 60% Filipino-owned. For projects
other than these, prospective private sector participant shall comply with nationality and
ownership requirements under the Constitution and other applicable laws and issuances.
For JV activities to be operated by the prospective JV Partner or a facility operator where

operation of the facility does not require a public utility franchise, the JV partner or facility
operator or concessionaire may be Filipino or foreign-owned, as maybe allowed under applicable
laws, rules, and regulations.
(ii) Technical Requirements. The prospective JV Partner must have completed a similar or related
project costing at least 50% of the JV activity subject of the selection process within the relevant
period as determined by the Government Entity. The prospective JV Partner shall submit a
statement of all its ongoing and completed government and private contracts similar or related to
the JV activity subject of the selection process, including contracts awarded but not yet started, if
any. Notwithstanding, the PPP-SC at its discretion may adjust said technical requirements as may
be appropriate for the nature, scope, size, and complexity of the proposed JV activity. Provided,
that the principles of transparency, competition and accountability are observed.
(iii) Financial Capability. The PPP-SC shall determine before evaluation of eligibility, the minimum
amount of equity needed for the JV activity. The following documents shall be submitted by the
prospective JV Partner: (a) Audited financial statements for the past three calendar years. If the
prospective JV Partner is Filipino, the audited financial statements to be submitted must be
stamped “received” by the BIR or its duly accredited and authorized institutions; and (b) Latest tax
returns, if the JV Partner is Filipino.
(iv) In case of consortia, all member entities of the prospective JV Partner shall also submit the above
legal, technical and financial eligibility requirements to determine the overall capability of the
consortia for the JV undertaking.
(v) Acceptance of Criteria and Waiver of Rights to Enjoin JV Activity. In addition to the above, all
prospective private sector participants shall be required to submit, as part of their qualification
documents, a statement stipulating that the private sector participant (i) has accepted the
qualification criteria established by the JV-SC of the Government Entity concerned; and (ii)
waives any right it may have to seek and obtain a writ of injunction or prohibition or restraining
order against the City or its PPP-SC to prevent or restrain the qualification proceedings related
thereto, the award of the contract to a successful private sector participant, and the carrying out of
the awarded contract. Such waiver shall, participant to question the lawfulness of its
disqualification or the rejection of its proposal by appropriate administrative or judicial processes
not involving the issuance of a writ of injunction or prohibition or restraining order. Financial
capability shall be measured in terms of: (a) proof of ability of the prospective JV Partner to
provide a minimum amount of equity to the JV activity, measured in terms of the net worth of the
company, or a deposit equivalent to the minimum equity required set aside or ear-marked for the
proposed JV Activity; and (b) a letter from a domestic universal/commercial bank, or an
international bank with a subsidiary/branch in the Philippines, or any international bank
recognized by the BSP, attesting that the prospective JV Partner is one of its current clients, and is
in good financial standing.
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Sec. 22. Eligible and Ineligible. The PPP-SC shall within a period of fifteen (15) calendar days after the deadline set
for the submission of the eligibility documents, complete the evaluation of the eligibility documents of the
prospective JV Partners, and determine which among them are “eligible” and “ineligible”. Accordingly, the PPP-SC
shall duly inform the eligible JV Partners within seven (7) calendar days after approval thereof. Ineligible private
sector participants shall be similarly given notice of such ineligibility, stating therein the grounds for ineligibility
within the same period.
Those ineligible may appeal their ineligibility to the City Mayor, within seven (7) calendar days from receipt of the
notice of ineligibility. The selection process will be suspended for a maximum period of thirty (30) calendar days
while the appeal is being evaluated. The City Mayor or his authorized representative shall act on the appeal within
thirty (30) calendar day period of suspension of the selection process. The decision of the City Mayor or his
authorized representative, on the appeal shall be final and immediately executory. If the appeal is not resolved
within said period, the appeal is deemed denied, and the selection process will proceed.
Sec. 23. Issuance of Tender Documents. The PPP-SC concerned shall make available the related competitive
selection documents to all eligible private sector participants as soon as practicable to provide respective private
sector participants ample time to examine the same and to prepare their respective proposals prior to the date of
opening of the proposals. Tender documents shall be released to prospective challengers upon payment of the non-
refundable bid document fee which shall not be less than 5% of the Project Cost or as determined by the Public
Private Partnership Selection Committee. Notwithstanding, the Public Private Partnership Selection Committee at its
discretion may adjust said non-refundable bid document fee as may be appropriate for the nature, scope, size, and
complexity of the proposed JV activity. Provided, that the principles of transparency, competition and accountability
are observed.
Sec. 24. Responsibility of the Private Sector Participant. The prospective private sector participant shall be solely
responsible for having taken all the necessary steps to carefully examine and acquaint himself with the requirements
and terms and conditions of the selection documents with respect to the cost, duration, and execution/operation of
the project as it affects the preparation and submission of its proposal. The PPP-SC concerned shall not assume any
responsibility regarding erroneous interpretations or conclusions by the prospective private sector participant out of
data furnished or indicated in the competitive selection documents.
Sec. 25. Supplemental Notices. A prospective private sector participant may submit a written request to the PPP-SC
on or before the Pre-Selection Conference as to the meaning of any data or requirements or any part of the selection
documents. Any substantive interpretation given by the PPP-SC shall be issued in the form of a Supplemental
Notice, and furnished to all prospective private sector participants. The PPP-SC may also issue Supplemental
Notices to all prospective private sector participants at any time for purposes of clarifying any provisions of the
selection documents, provided that the same is issued within a reasonable period to allow all private sector
participants to consider the same in the preparation of their proposals. Receipt of all Supplemental Notices shall be
duly acknowledged by each private sector participants prior to the submission of his proposal and shall be so
indicated in the proposal.
Sec. 26. Pre-Selection Conference. Pre-selection conference shall be conducted by the Government Entity at least
fifteen (15) calendar days before the deadline for the submission of proposals.
Sec. 27. Submission and Receipt of Proposals
a. Requirements for Submission of Proposals. Private sector participants shall be required to submit their proposals
on or before the deadline stipulated in the “Instructions to Participants”. For eligible participants, proposals shall be
submitted in two (2) separate sealed envelopes, the first being the technical proposal and the second the financial
proposal. The technical proposal shall contain the following, as applicable:
(i) compliance statements with regard to the technical parameters as stated in the tender documents;
(ii) operational feasibility;
(i) technical soundness, including proposed project timeline;
(ii) preliminary environmental assessment;
(iii) cost and financing plan of the JV activity; and
(iv) proposal security in accordance with the following schedule
Cost of JV activity Required Proposal Security

as estimated by the government
entity
Less than PhP 5.0 billion 2.0% of the cost of the JV activity
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less than PhP 5.0 billion to less than 1.5% of the cost of the JV activity
PhP 10.0 billion or PhP 100 million, whichever is
higher
PhP 10.0 billion and more 1.0% of the cost of the JV activity
or PhP 150 million, whichever is
higher
(v) other documents to support the private sector participant’s technical proposal, as may be required by the
PPP-SC.
b. The financial proposal shall contain the following, as the case may be:
(i) compliance statements with regard to the financial parameters stated in the tender documents
(ii) proposed cost of the JV activity, operation and maintenance cost, the amount of equity to be infused and
debt to be obtained for the project, sources of financing, and all other related costs
(iii) financial proposal corresponding to the parameters set by the PPP-SC
Fifty percent (50%) of the equity to be provided by the private sector entity should as much as possible come from
its own resources and not borrowed. The PPP-SC is not precluded from specifying other requirements for the
technical and financial proposals that are best suited for the specific JV activity.
Sec. 28. Submission of late proposals. Proposals submitted after the deadline for submission prescribed in the
“Instructions to Private Sector Participants” shall be considered late and shall be returned unopened.
Sec. 29. Opening and Evaluation of Proposals

a. Opening of the envelope for the technical proposal. At the date and time of the proposal opening
stipulated in the “Instructions to Private Sector Participants”, the PPP-SC shall open only the first envelope
containing technical proposal and ascertain (a) whether the same is complete in terms of the
data/information required above; and (b) whether the same is accompanied by the required proposal
security in the prescribed form, amount, and period of validity. All private sector participants, or their
representatives, present at the opening of the envelopes containing the technical proposal shall sign a
register of the proposal opening.
b. Evaluation of the technical proposal. The evaluation of the first envelope containing the technical
proposal shall involve the assessment of the technical, operational, environmental, and financing viability
of the proposal, vis-à-vis the prescribed requirements and criteria/minimum standards, and basic parameters
prescribed in the competitive selection documents. The PPP-SC shall complete the evaluation of the
technical proposal within fifteen (15) calendar days from the date the proposals are opened. Only those
proposals that have been determined to have positively passed the evaluation of the technical proposal shall
be qualified and considered for the evaluation of the financial proposal.
c. Opening of the envelope for the financial/technical proposal. Only the financial proposals of private
sector participants who passed the evaluation shall be opened for further evaluation. The financial
proposals tendered by private sector participants who failed the technical proposal evaluation shall not be
considered further, and shall be returned, unopened, together with a notice stating the reasons for
disqualification from further consideration.
The PPP-SC shall notify the private sector participants qualifying for the second stage of evaluation of the
date, time and place of the opening of the envelopes for the financial proposal. The opening thereof shall
follow the same procedure prescribed for the opening of the envelopes containing technical proposals.
d. Evaluation of the financial proposal. The evaluation of the financial proposal shall involve the
assessment and comparison of the financial proposals against the financial parameters stated in the tender
documents and proposal parameters set by the PPP-SC. The proposed financing plan must show that the
same adequately meets the costs relative to the JV activity. The second stage evaluation of financial
proposals shall be completed by the PPP-SC within fifteen (15) calendar days.
e. Simultaneous evaluation of the technical and financial proposals. Subject to the determination of the
PPP-SC wherein the nature of the JV activity shall warrant the appreciation of both the technical and
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financial proposals as a whole in order to determine the best proposal, simultaneous evaluation of the
technical and financial proposals may be resorted to. Provided, that, said evaluation procedure shall be
explicitly stated in the proposal documents. Simultaneous evaluation of the technical and financial
proposals shall be completed within thirty (30) calendar days from the date the proposals are opened.
f. Prescriptive periods. The periods stated for the evaluation of the technical and financial proposals are
prescriptive. The PPP-SC may adjust said periods as may be appropriate for the nature, scope, size, and
complexity of the proposed JV activity. Provided, that the principles of transparency, competition and
accountability are observed.
g. Rejection of proposals. Non-compliance to the information required on either the first or second
envelope shall be grounds for rejection of proposals.
h. Withdrawal and/or modification of proposals. Withdrawal and/or modification of proposals may be

allowed upon written notice by the private sector participant concerned, to the PPP-SC prior to the time and
date set for the opening of the envelope containing the technical proposal as specified in the “Instructions to
Private Sector Participants”. No proposals shall thereafter be modified or withdrawn.
Proposal modifications received after said period shall be considered late and will be returned unopened.
Withdrawal of proposals after the proposal opening date shall cause the forfeiture of the private sector
participant’s proposal security.
i. Right to Reject All Proposals. The PPP-SC concerned reserves the right to reject any or all proposals,
waive any minor defects therein and accept the offer it deems most advantageous to the government.
Sec. 30. Award and Approval of Contract
a. Recommendation to Award. Within seven (7) calendar days from the date the evaluation procedure
adopted is completed, the PPP-SC shall submit the recommendation of award to the City Mayor. The PPP-
SC shall include as part of its recommendation, a detailed evaluation/assessment report on its decision
regarding the evaluation of the proposals, and explain in clear terms the basis of its recommendations
b. Decision to Award. Within seven (7) calendar days from the submission by PPP-SC of the
recommendation to award, the City Mayor shall approve or reject the same. The approval shall be
manifested by signing and issuing the “Notice of Award” to the winning private sector participant within
seven (7) calendar days from approval thereof.
All participating private sector participants shall be informed of the award in writing. Such decision shall
be made available to the public upon request.
c. Notice of Award. The “Notice of Award” to be issued by the City Mayor, shall contain among others, an
instruction to the winning private sector participant to comply with conditions precedent for the execution
of the JV Agreement and to submit compliance statements with regard thereto, within fifteen (15) calendar
days from receipt of the “Notice of Award”.
d. Failure to comply with the conditions precedent for the execution of the contract within the prescribed
fifteen (15)-calendar day period will result in confiscation of the proposal security. Within seven (7)-
calendar days from receipt of the compliance statements from the winning private sector participant, the
City Mayor shall determine the sufficiency of the same, and notify the winning private sector participant
accordingly.
e. Validity of Proposals/Return of Proposal Security. The execution of the JV Agreement shall be made
within the period of the validity of the proposal security. The required proposal security shall be valid for a
reasonable period, but in no case beyond one hundred eighty (180) calendar days following the opening of
the proposals. Proposal securities shall be returned to the unsuccessful private sector participants upon
signing of the JV Agreement by the winning private sector participant.
f. Extension of Validity of Proposals. When an extension of validity of proposals is considered necessary,

those who submitted proposals shall be requested in writing, to extend the validity of their proposals before
the expiration date of the same. However, private sector participants shall not be allowed to modify or
revise the price or other substantial aspect of their proposals.
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Private sector participants shall have the right to refuse such an extension without forfeiting their proposal
security. As a condition of the extension of the validity of their proposals, participating private sector
participants must correspondingly extend the validity of their proposal security.
Sec. 31. Failure of Competitive Selection. There shall be a failure of competitive selection in any of the following
instances:
a) If there is only a single party who submits eligibility documents within the deadline stipulated in
Invitation to Apply for Eligibility and to Submit a Proposal;
b) If at any time prior to the issuance of the notice of eligibility, should interested parties withdraw from the
competitive selection process with the effect that there is only a single interested party remaining;
c) If there is only a single interested party who is determined to be eligible to submit a proposal;
d) If at any time after the issuance of the notice of eligibility until deadline for submission of proposals,
should eligible private sector participants withdraw from the competitive selection process with the effect
that there is only a single eligible private sector participant remaining and eligible to submit a proposal;
e) If there is only a single eligible private sector participant that submits a proposal;
f) Should no Technical Proposal be rated “passed”;
g) If there is be only a single eligible private sector participant whose Technical Proposal is rated “passed,”
but whose Financial Proposal does not meet the financial parameters set for in the Tender Documents: and
h) Should no Financial Proposal of any eligible private sector participant whose Technical Proposal is rated
“passed”, meets the financial parameters set forth in the Tender Documents.
i) No proposals were received or no private sector entity is found qualified for the JV undertaking.
In the event of a failed competitive selection brought about by instances stipulated under items a., b., c., d., e, g. and
h. above, the JV Activity, at the sole decision of the City Mayor upon recommendation by PPP-SC, may be
subjected to a competitive selection once more, or, may be the subject of limited negotiations in accordance with
Chapter 5 hereof. In the event of a failed competitive selection brought about by an instance stipulated under item f.
above, a competitive selection shall be conducted again by the PPP-SC. In the event of a failed competition brought
about by item (i) above, the PPP-SC may seek private sector entities for the JV undertaking subject to Chapter 6
hereof.
Sec. 32. Execution/Approval of the JV Agreement. The authorized signatory(ies) of the winning private sector
participant and the City Mayor shall execute and sign the JV Agreement, within seven (7) calendar days from receipt
by the winning private sector participant of the notice of award. Consistent with Article 1159 of the New Civil Code,
said JV Agreement is considered the law between the parties, and the parties shall perform their respective
prestations, obligations, and undertakings thereunder with utmost good faith, with a view to attaining the objective
thereof. An original signed copy of the contract shall be submitted for ratification to the Sangguniang Panlungsod.
In the event of refusal, inability or failure of the winning private sector participant to enter into contract with the
City, within the time provided therefore, the City shall forfeit its proposal security. In such event, the City shall
consider the private sector participant with the next ranked complying proposal as the winning private sector
participant, and notify said private sector participant accordingly. If the next ranked complying private sector
participant shall likewise refuse or fail to enter into contract with the City, its proposal security shall likewise be
forfeited and the City shall consider the next ranked complying proposal, and so on, until a contract shall have been
entered into. In the event that the City is unable to execute the contract with any of the complying private sector
participants, a failure of competitive selection will be declared and the JV may be subjected to a competitive
selection again.
Sec. 33. Other Approvals for Contract. The entity tasked under the JV Agreement shall, as may be required under
existing laws, rules and regulations, secure any and all other approvals for the contract, or the implementation
thereof, from government agencies or bodies. The City may provide the necessary assistance to its JV partner in
securing all the required clearances. The contract shall provide milestones in securing such other approvals required
for the implementation of the contract.
Sec. 34. Appeals Mechanism. Decisions of the PPP-SC with respect to conduct of the competitive selection process
may be appealed in writing to the City Mayor. Provided, however, that a prior motion for reconsideration should
have been filed by the party concerned, and the same has been resolved by the PPP-SC. The appeal must be filed
within seven (7) calendar days from receipt by the party concerned of the resolution of the PPP-SC denying its
motion for reconsideration. An appeal may be made by filing a verified position paper with the City Mayor,
accompanied by the payment of a non-refundable appeal fee. The non-refundable appeal fee shall be in an amount
equivalent to no less than one-half (1/2) of one percent (1%) of the project cost or as determined by the PPP-SC.
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Notwithstanding, the PPP-SC at its discretion may adjust said non-refundable appeal fee as may be appropriate for
the nature, scope, size, and complexity of the proposed JV activity. Provided, that the principles of transparency,
Sec. 35. Contract Effectivity. The contract shall be effective upon ratification thereof by the Sangguniang
Panlungsod.
Chapter 5. Limited Negotiations
Sec. 36. Limited Negotiations. – Where the City has failed to identify an eligible PSP for a desired PPP activity
when there is only one qualified bidder after subjecting the same to a competitive selection or bidding or where the
desired PPP project is the subject of an unsolicited proposal from a PSP, Limited Negotiations may take place. The
negotiations will cover all the technical and financial aspects of the PPP project or activity; provided, that the
minimum designs, performance standards/ specifications and economic parameters stated in the Feasibility
Study/Project Description and Terms of Reference for the Competitive Selection are complied with. The Mayor
shall approve the terms of the Limited Negotiations prior to the award of the contract to the PSP.
The PPP-SC shall set the timetable of the various activities for the limited negotiations. The PPP-SC may terminate
the limited negotiations should the party it is negotiating with fail to observe the said timetable. The negotiations
shall be in accordance with the procedures below.
Sec. 37. Should there be a failure of competitive selection brought about by instances stipulated under Section 31(a)
and Section 31 (b) as outlined in Chapter 4 hereof with the effect that there is only one (1) interested party
remaining, the following procedure shall be observed:
(a) The PPP-SC concerned shall proceed with the determination of the eligibility of the sole
private sector entity;
(b) The sole private sector entity’s eligibility documents shall be evaluated in accordance with the
rules set forth in Chapter 4 hereof;
(c) If the eligibility documents are found to be insufficient and rated “failed”, the PPP-SC
concerned shall terminate the negotiations. In the event the negotiations are terminated, the
City Mayor, at its sole option, may conduct again a competitive selection or decide to pursue
the proposed activity through alternative routes other than JV;
(d) If the eligibility documents are found sufficient and rated “passed”, the PPP-SC shall give the
sole private sector entity the draft tender documents in accordance with Chapter 4 hereof;
(e) The sole private sector entity shall submit a proposal in accordance and compliance with
Chapter 4 hereof;
(f) The PPP-SC concerned shall simultaneously evaluate the technical and financial proposals of
the sole private sector entity in accordance with Chapter 4 hereof;
(g) If the proposal of the sole private sector entity is rated “failed”, the PPP-SC shall terminate
the negotiations and, the City Mayor, at its sole option, may conduct again a competitive
selection or decide to pursue the proposed activity through alternative routes other than JV.
(h) Should the proposal of the sole private sector entity meet the parameters set forth in the tender
documents, the City shall enter into the JV Agreement with the sole private sector entity
concerned. In the event that an agreement is not reached, negotiations shall be terminated.
Sec. 38. Should there be a failure of competitive selection brought about by instances stipulated under Section 31 (c)
and Section 31 (d) as outlined in Chapter 4 hereof with the effect that there is only one (1) interested party
remaining and eligible to submit a proposal the following procedure shall be observed:
(a) The sole eligible party shall be instructed to submit a proposal.

(b) The process outlined in I(d) to (h) above shall then be observed and followed.
Sec. 39. Should there be a failure of competitive selection brought about by Section 31 (e) as outlined in Chapter 4
hereof such that only one (1) proposal is received by the City, the process outlined in Section 37 (a)(vii) to Section
37 (a)(viii) above shall then be observed and followed.
Sec. 40. Should there be a failure of competitive selection brought about by Section 31 (g) and Section 31 (h) as
outlined in Chapter 4 hereof the following procedure shall be observed:
(a) The negotiation shall be on a “Financial Proposal” only basis. The Technical Proposal shall
remain valid and binding.
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FOR OTHER PURPOSES
(b) The eligible private sector participant/s whose Technical Proposal/s was/were rated “passed” but
whose Financial Proposal/s is/are non-compliant with the Financial Parameters outlined in the
Tender Documents, shall be asked to submit a revised Financial Proposal.
(c) Should there be more than one revised Financial Proposal, the revised Financial Proposal/s shall
be evaluated in accordance with Chapter 4 hereof.
(d) Should the revised Financial Proposal meet the Financial Parameters outlined in the Tender
Documents, the City shall enter into the JV Agreement with the eligible Private sector participant
(if there is only one remaining) or with the eligible private sector participant submitting the most
advantageous Financial Proposal, in accordance with Chapter 4 hereof. Should the eligible private
sector participant still fail to meet the Financial Parameters outlined in the Tender Documents, the
PPP-SC concerned shall terminate the negotiations with the said eligible private sector
participant/s, and, the City Mayor, at its sole option, may conduct another round of competitive
selection, or decide to pursue the proposed activity through alternative routes other.
Chapter 6. Competitive Challenge or Swiss Challenge
Sec. 41. Competitive Challenge Procedure. In all cases where the City directly negotiates with a private sector
participant for a proposed JV undertaking, the negotiated terms shall be subjected to a competitive challenge
wherein other private sector entities shall be invited to submit comparative proposals, to ensure that JV Agreements
are entered into under a transparent and competitive process that promotes accountability in government
transactions. Negotiated JV Agreements shall be subjected to a three-stage process, summarized hereunder.
Sec. 42. Stage One – A private sector entity submits an unsolicited proposal to the City, or the City seeks out a JV
partner after failed competition for a JV activity deemed manifestly advantageous to Government. The private sector
entity submits a proposal to the City for a projected JV activity/undertaking. The PPP-SC is tasked with the initial
evaluation of the proposal. Upon completion of the initial evaluation, the City Mayor, upon recommendation of the
PPP-SC, shall either issue an acceptance or non-acceptance of the proposal. The City concerned shall act on the
proposal within ten (10) working days upon submission of complete documents by the private sector entity. An
acceptance shall not bind the City to enter into the JV activity, but, shall mean that authorization is given to proceed
with detailed negotiations on the terms and conditions of the JV activity. In case of non-acceptance, the private
sector entity shall be informed of the reasons/grounds for non-acceptance.
Sec. 43. Stage Two – The parties negotiate and agree on the terms and conditions of the JV activity. The following
rules shall be adhered to in the conduct of detailed negotiations and the preparation of the proposal documents in
case of a successful negotiations:
(a) Both parties shall negotiate on, among others, the purpose, terms and conditions, scope, as well as all
legal, technical, and financial aspects of the JV activity;
(b) The PPP-SC shall determine the eligibility of the private sector entity to enter into the JV activity in
accordance with Sec. 21 (Eligibility Requirements) under Chapter 4 hereof.
(c) Negotiations shall comply with the process, requirements and conditions as stipulated under this
Ordinance.
(d) Once negotiations are successful, the City Mayor and the authorized representative of the private
sector entity shall issue a signed certification that an agreement has been reached by both parties. Said
certification shall also state that the City has found the private sector participant eligible to enter into the
proposed JV activity and shall commence the activities for the solicitation for comparative proposals.
(e) However, should negotiations not result to an agreement acceptable to both parties, the City shall have
the option to reject the proposal by informing the private sector participant in writing stating the grounds
for rejection and thereafter may accept a new proposal from private sector participants, or decide to pursue
the proposed activity through alternative routes other than JV. The parties shall complete the Stage Two
process within thirty (30) calendar days upon acceptance of the proposal under Stage One above
(f) After an agreement is reached, the contract documents, including the selection documents for the
competitive challenge are prepared.
Sec. 44. Stage Three – Once the negotiations have been successfully completed, the JV activity shall be subjected to
a competitive challenge, as follows:
(a) The PPP-SC shall prepare the tender documents pursuant to Section 16, 17, 18 and 19 of Chapter 4
hereof. The eligibility criteria used in determining the eligibility of the private sector entity shall be
the same as those stated in the tender documents. Proprietary information shall, however, be respected
and protected, and treated with confidentiality. As such, it shall not form part of the tender and related
18
FOR OTHER PURPOSES
documents. The City Mayor shall approve all tender documents including the draft contract before the
publication of the invitation for comparative proposals.
(b) Within seven (7) calendar days from the issuance of the Certification of a successful negotiation
referred to in Stage Two above, the PPP-SC shall publish the notice of unsolicited proposal and
invitation for comparative proposals (NUPICP) once in a newspaper of general nationwide circulation,
and posted continuously for a period of seven (7) calendar days, starting on date of advertisement, at
the Website of the City and any conspicuous place within the City.
(c) Tender documents shall be released upon payment of the non-refundable bid document fee which shall
not be less than 5% of the Project Cost or as determined by the PPP-SC. Notwithstanding, the PPP-SC
at its discretion may adjust said non-refundable bid document fee as may be appropriate for the nature,
scope, size, and complexity of the proposed JV activity. Provided, that the principles of transparency,
(d) Private sector participants shall be given at least thirty (30) calendar days from the date of publication
of the NUPCIP to apply for eligibility and to submit a proposal. Notwithstanding, the PPP-SC at its
discretion may adjust said period as may be appropriate for the nature, scope, size, and complexity of
the proposed JV activity. Provided, that the principles of transparency, competition and accountability
are observed.
(e) The private sector entity shall post the proposal security or bank guarantee at the date of the first day of
the publication of the invitation for comparative proposals in the amount and form stated in the tender
documents.
(f) The procedure for the determination of eligibility of comparative proponents/private sector
participants, issuance of supplemental competitive selection bulletins and pre-selection conferences,
submission and receipt of proposals, opening and evaluation of proposals shall follow the procedure
stipulated under Chapter 4 hereof. In the evaluation of proposals, the best offer shall be determined to
include the original proposal of the private sector entity.
(g) If the PPP-SC determines that an offer made by a comparative private sector participant other than the
original proponent is superior or more advantageous to the government than the original proposal, the
private sector entity who submitted the original proposal shall be given the right to match such superior
or more advantageous offer within thirty (30) calendar days from receipt of notification from the PPP-
SC of the results of the competitive selection. Notwithstanding, the PPP-SC at its discretion may adjust
said period as may be appropriate for the nature, scope, size, and complexity of the proposed JV
activity. Provided, that the principles of transparency, competition and accountability are observed.
(h) Should no matching offer be received within the stated period, the JV activity shall be awarded to the
comparative private sector participant submitting the most advantageous proposal. If a matching offer
is received within the prescribed period, the JV activity shall be awarded to the original proponent. If
no comparative proposal is received by the Government Entity, the JV activity shall be immediately
awarded to the original private sector proponent.
(i) Within seven (7) calendar days from the date of completion of the Competitive Challenge, the JV-SC
shall submit the recommendation of award to the City Mayor. Succeeding activities shall be in
accordance with Sections 30, 32, 33, 34 and 35 of Chapter 4 hereof.
Chapter 7.Final Provisions
Sec. 45. Application of Other PPP Laws and Regulations. – Whenever relevant and appropriate as determined by the
City Mayor, upon recommendation of the PPP-SC, the provisions of Republic Act No. 6957 as amended by R.A.
No. 7718 or the BOT Law, R.A. 9184 or the Government Procurement Reform Act, Executive Order No. 301 (26
July 1987), Commission on Audit Circular No. 89-296 (January 27, 1989), and their applicable rules and
regulations, and the 2008 Joint Venture Guidelines adopted by the National Economic Development Authority shall
apply in a suppletory manner.
Sec. 46. Application to Pending PPP Projects. - This Code shall be applicable to all pending PPP projects being
deliberated and/or considered by the Public Private Partnership Selection Committee (PPP-SC) created under
Executive Order No. 15 Series of 2103 regardless of the nature, scope, size and complexity of the proposed PPP
Project.
Sec. 47. Separability Clause. – If, for any reason, any section or provision of this Code or any part thereof, or the
application of such section, provision or portion is declared invalid or unconstitutional, the remainder thereof shall
not be affected by such declaration.
Sec. 48. Repealing Clause. – All ordinances and resolutions or parts thereof inconsistent with the provisions of this
Code are hereby repealed or modified accordingly.
19
FOR OTHER PURPOSES
Sec. 49. Effectivity. – This Code shall take effect after passage by the Sangguniang Panlungsod, approval by the
Honorable City Mayor and one (1) day after posting in conspicuous places in Pasay City.
ORDAINED in the City of Pasay, Metro Manila, Philippines, this 13TH day of January in the Year of our Lord, Two
Thousand Fourteen.
CERTIFIED APPROVED BY THE SANGGUNIANG PANLUNGSOD.
Hon. MARY GRACE B. SANTOS Hon. ALLAN T. PANALIGAN
HON. JENNIFER A. ROXAS HON. AILLEN PADUA LOPEZ
Hon. RICHARD M. ADVINCULA Hon. IAN P. VENDIVEL
Hon. ALBERTO C. ALVINA Hon. ARNEL REGINO T. ARCEO
Hon. EDUARDO I. ADVINCULA Hon. ARVIN G. TOLENTINO
Hon. LEXTER N. IBAY Hon. REYNALDO O. PADUA
Ex-Officio Member
Hon. MA. ANTONIA C. CUNETA

Liga Ng Mga Barangay
Certified True Copy
ATTY. ROBERTO B. YAM

City Secretary
ATTESTED BY:
HON. MARLON A. PESEBRE

City Vice Mayor & Presiding Officer
APPROVED BY:
Hon. ANTONINO G. CALIXTO

City Mayor
20

Lungsod NG Pasay, Kalakhang Maynila: Republic of The Philippines Tanggapan NG Sangguniang Panlungsod

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Lungsod NG Pasay, Kalakhang Maynila: Republic of The Philippines Tanggapan NG Sangguniang Panlungsod

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Republic of the Philippines

LUNGSOD NG PASAY, KALAKHANG MAYNILA

ORDINANCE NO. 5611 SERIES OF 2014

AN ORDINANCE ADOPTING AND PURSUING A PUBLIC-PRIVATE PARTNERSHIP

SPONSORED BY ALL MEMBERS OF THE SANGGUNIANG PANLUNGSOD

NOW THEREFORE, BE IT ORDAINED, by the Sangguniang Panlungsod Pasay City, in a regular

Chapter 1.Basic Principles and Definitions

(ii) Build-Lease-and-Transfer (BLT)- A contractual arrangement whereby a PSP is authorized to finance

(iv) Build-Own-and-Operate (BOO)- A contractual arrangement whereby a PSP is authorized to finance,

(vii) Develop-Operate-and-Transfer (DOT)- A contractual arrangement whereby favorable conditions

(viii) Rehabilitate-Operate-and-Transfer (ROT) - A contractual arrangement whereby an existing facility

(ix) Rehabilitate-Own-and-Operate (ROO) – A contractual arrangement whereby an existing facility is

(ii) condone or postpone any payments due from the PSP;

(iii) contribute any property or assets to the project;

Chapter 2. PPP Projects and PPP Modes

(a) Build-and-Transfer (BT);

Sec. 11. General Requirements. –

Chapter 3.PPP Procedures

Sec. 13. PPP Procedures. –

(j) The Sangguniang Panlungsod has to ratify all PPP Contracts.

Sec. 14. PPP Selection Committee. –

(i) Chairperson – City Administrator;

Chapter 4. Competitive Selection

Sec. 15. Competitive Selection. –

(a) Instructions to Private Sector Participants;

(a) General description and objectives of the JV activity;

(a) discount rate, foreign exchange rate and inflation factor;

(b) maximum period of project construction;

Sec. 21. Eligibility Requirements

For JV activities to be operated by the prospective JV Partner or a facility operator where

Sec. 27. Submission and Receipt of Proposals

Cost of JV activity Required Proposal Security

Sec. 29. Opening and Evaluation of Proposals

h. Withdrawal and/or modification of proposals. Withdrawal and/or modification of proposals may be

Sec. 30. Award and Approval of Contract

f. Extension of Validity of Proposals. When an extension of validity of proposals is considered necessary,

Chapter 5. Limited Negotiations

(a) The sole eligible party shall be instructed to submit a proposal.

Chapter 6. Competitive Challenge or Swiss Challenge

Chapter 7.Final Provisions

CERTIFIED APPROVED BY THE SANGGUNIANG PANLUNGSOD.

Hon. MARY GRACE B. SANTOS Hon. ALLAN T. PANALIGAN

HON. JENNIFER A. ROXAS HON. AILLEN PADUA LOPEZ

Hon. RICHARD M. ADVINCULA Hon. IAN P. VENDIVEL

Hon. ALBERTO C. ALVINA Hon. ARNEL REGINO T. ARCEO

Hon. EDUARDO I. ADVINCULA Hon. ARVIN G. TOLENTINO

Hon. LEXTER N. IBAY Hon. REYNALDO O. PADUA

Hon. MA. ANTONIA C. CUNETA

Certified True Copy

ATTY. ROBERTO B. YAM

HON. MARLON A. PESEBRE

Hon. ANTONINO G. CALIXTO

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