Section 7Sec./Art. 7

Approval of PPP Projects. -

(a) The approval of PPP Projects under this Code shall be in accordance with the following:

(1) National PPP Projects. - National PPP Projects shall be approved as follows:

(i) Those with Project Cost of Fifteen billion pesos (P15,000,000,000.00) and above shall be approved by the NEDA Board, upon favorable recommendation of the NEDA Board - ICC: Provided, That PPP Projects to be implemented by SUCs with Project Cost of Fifteen billion pesos (P15,000,000,000.00) and above but not requiring any Government Undertaking from the National Government shall be processed through a green lane to be established pursuant to the guidelines to be issued by the NEDA Board - ICC.

(ii) Those with Project Cost of below Fifteen billion pesos (P15,000,000,000.00) shall be approved by the Head of Implementing Agency: Provided, That if the Implementing Agency is an attached agency without a governing board, the Head of the department or agency to which the Implementing Agency is attached shall approve the PPP Project: provided, further, That if the Implementing Agency has a governing board, whether or not it is an attached agency, the governing board shall approve the PPP Project.

The NEDA Board - ICC may, as it deems necessary and in strict adherence with the principles of prudence and reasonableness, review, evaluate, and update the above threshold amounts.

Notwithstanding the above threshold, a proposed PPP Project which costs below Fifteen billion pesos (P15,000,000,000.00) shall be approved by the NEDA Board - ICC, if:

1. It physically overlaps with a project approved by a government authority or with a project being developed by another government entity based on national or sectoral development plans;

2. It negatively affects the economic benefits, demand, and/or financial viability of a project approved by a government authority or a project being developed by another government entity based on national or sectoral development plans;

3. It requires financial Government Undertakings to be sourced and funded under the General Appropriations Act (GAA);

4. It involves Availability Payments to be sourced and funded under the GAA; or

5. The contribution of an Implementing Agency in a proposed JV exceeds fifty percent (50%) of its entire assets based on its latest audited financial statements and other pertinent documents, and subject to Section 3(gg) of this Code.

For PPP Projects that do not fall under any of the above, the Implementing Agency shall notify the NEDA and the PPP Center in writing of such information and submit the project details for monitoring purposes.

National PPP Projects that encompass or extend beyond jurisdictional boundaries, or where bundling of similar projects can benefit from economies of scale and can increase the viability of a proposed PPP Project, may be jointly implemented by all Implementing Agencies concerned under a single PPP contract. In such cases, all the Implementing Agencies concerned shall secure the required approvals of all Approving Bodies concerned pursuant to the provisions of this Code.

(2) Local PPP Projects. - Local PPP Projects shall be approved by the respective local Sanggunians in the case of LGUs, or by the boards in the case of LUCs. Prior to approval, Local PPP Projects implemented by LGUs shall be confirmed by the respective local development councils (LDCs).

Proposed Government Undertakings using national government funds for Local PPP Projects shall be submitted to the NEDA Board - ICC for approval, upon review and endorsement by the respective RDCs. Such Government Undertakings shall include, among others, the following items to be provided by the National Government to a Local PPP Project: (i) Guarantees on Demand; (ii) Guarantees on Private Sector Return; (iii) Guarantees on Loan Repayment; (iv) VGF and other forms of Subsidy; and/or (v) monetary payment of Contingent Liability through the PPP risk Management Fund of the National Government as defined under Section 27 of this Code.

Permits, clearances, licenses, or endorsements from national government agencies required for Local PPP Projects under laws, rules, and regulations shall not be considered as Government Undertakings by the National Government for Local PPP Projects.

The NEDA Board - ICC shall render its decision on such requested Government Undertakings within sixty (60) calendar days from receipt of complete requirements. The disapproval of the requested Government Undertakings within sixty (60) calendar days from receipt of complete requirements. The disapproval of the requested Government Undertakings shall not be considered as a disapproval of the Local PPP Project.

Local PPP Projects affecting national or sectoral development plans and national projects shall likewise secure the endorsement of the National Government through the respective RDCs, prior to endorsement of the LDC concerned and approval by the local Sangguniangs concerned in the case of LGUs, or by the boards in the case of LUCs. For this purpose, the NEDA shall provide the RDCs with copies of relevant national and sectoral development plans and updates thereof. For purposes of monitoring, the NEDA shall likewise provide the PPP Center copies of such plans.

Endorsements of the (i) LDCs for Local PPP Projects to be implemented by LGUs; and of the (ii) RDCs for PPP Project with proposed Government Undertakings using national government funds, and/or those that affect national and sectoral development plans, shall be processed within thirty (30) calendar days from submission of complete requirements. Failure of the LDC and/or the RDC to endorse the PPP Projects within the specified period shall be deemed an approval of the requested endorsement/s.

To improve case of doing business and ensure expeditious processing of such endorsement, the PPP governing Board shall prescribe guidelines and requirements to be followed by all RDCs and LDCs.

A PPP Project covering two (2) or more LGUs may be implemented by the National Government, subject to the approval process for National PPP Project; or by the next higher level of LGU or by the LGUs concerned, subject to the approval process for Local PPP Projects.

In case of a Local PPP Project implemented by two (2) or more LGUs, such project shall be approved by the local Sanggunians of the LGU concerned. in the development, approval, and implementation of the Local PPP Project covering two or more LGUs.

(b) The Approving Body shall assess all PPP Projects based on its overall feasibility and VFM, and in accordance with principle of protecting public interest through the provision of affordable, accessible, and efficient public services. All PPP Projects submitted to the Approving Body shall include proposed indicators to determine their benefits and outcomes, which shall be used in the monitoring and evaluation of PPP Projects during implementation. To ensure that all risks associated with PPP Projects are managed and mitigated accordingly, all PPP contracts to be entered into by the Implementing Agency shall adhere to the principles stipulated under the GPRAM, to the extent applicable. Any deviations to the preferred risk allocation shall be justified by the Implementing Agency and approved by the appropriate Approving Body,

(c) The appropriate Approving Body, except when the Head of the Implementing Agency is the appropriate Approving Body, shall notify and advise, in writing, the Implementing Agency of its receipt and assessment of the completeness, in form and in substance, of the PPP Project Proposal. Upon submission of complete requirements by the Implementing Agency, the appropriate Approving Body shall evaluate and render its decision on the project, and set forth the required parameters, terms, and conditions (TCs), considering the nature and complexity of the PPP Project.

The PTCs set forth by the Approving Body shall be the basis for the drafting and approval of tender documents and PPP contract, and shall include, among others, the project scope, required levels of service and key performance indicators, safeguards that will protect the interest of the government and the public, and penalties to be imposed for failure of any party to delivery obligations under the PPP contract.

(d) The decision of the appropriate Approving Body shall be rendered in writing within one hundred twenty (120) calendar days from receipt of complete requirements.

The failure of the appropriate Approving Body to render its decision on the PPP Project within the specified period shall be deemed an approval thereof, and the Implementing Agency concerned may proceed with the procurement of the PPP Project, without prejudice to any liability that the erring or negligent officials or employees may incur under this Code and other existing laws.

To facilitate the expedient processing of National and Local PPP Projects requiring NEDA Board and NEDA Board - ICC actions, meetings of such bodies shall be held monthly, unless no projects are set for review or evaluation.

(e) Guidelines, forms, and templates that shall be used by the Implementing Agency and the appropriate Approving Body in reviewing and approving the PPP Project shall be formulated by (1) NEDA Board - ICC, in coordination with the PPP Center, for National PPP Projects; and (2) the PPP governing Board for Local PPP Projects.

The NEDA Board - ICC shall also formulate guidelines on the approval of Government Undertakings using National Government funds for Local PPP Projects.

(f) The decision of the appropriate Approving Body to approve and implement the PPP Project under any of the contractual arrangements or variations thereof shall be final and executory unless the Implementing Agency can provide sufficient justifiable reason to convert the PPP Project to another project under a different procurement modality.

(g) The splitting of any PPP Project, for the purpose of circumventing the thresholds prescribed herein, is prohibited.