Section 27Sec./Art. 27

Creation of a Risk Management Fund. - To ensure fiscal sustainability and negotiate better financing terms of PPP Projects, there is hereby created a PPP Risk Management Fund to be used for the payment of Contingent Liabilities arising from PPPs in accordance with its contract terms. The PPP Risk Management Fund shall be funded by: (a) general appropriations; (b) income from existing PPP Projects; and (c) other sources as may be determined by the Development Budget Coordination Committee (DBCC): Provided, That the PPP Risk Management Fund shall be managed by the PPP Center.

The Inter-Agency Technical Working Group on Contingent Liabilities created under the DBCC Resolution No. 2015-2 is hereby institutionalized.

The PPP Center, in coordination with the aforementioned Inter-Agency Technical Working Group, shall formulate the guidelines on the management of Contingent Liabilities arising from PPP Projects and the use of the PPP Risk Management Fund, for approval by the DBCC.

The target amount in the PPP Risk Management Fund is to be determined by the DBCC using risk-adjusted methods or such other means that estimate the exposure of the Government of the Philippines to PPP Contingent Liabilities.

In the case of Local PPP Projects, a similar PPP Risk Management Fund may be established by the LGU subject to the guidelines to be issued by the PPP Governing Board. Sources of the fund may include the budget of the LGU and the income of the LGU from PPP Projects. The LGUs may also access the PPP Risk Management Fund of the National Government, subject to the payment by LGUs of contributions in accordance with the guidelines to be issued by the DBCC.