Philippines
Philippines
Infrastructure procurement: Public Private Partnerships (PPPs) play a crucial role to accelerate infrastructure development (Executive Order No. 8, 2010) and are an important element of the Philippines Development Plan (2011–2016).
PPP projects: Benefiting from strong government support, PPPs were widely used in the mid-1990s and private infrastructure investment commitments peaked at 15.5% of GDP in 1997. In the wake of the Asian financial crisis, however, the pace of PPP investment sharply slowed down and the power sector emerged as the only sector recording successful PPI projects. Following the crisis, most infrastructure projects were financed by Official Development Assistance (ODA) and the number of projects started to increase in the mid-2000s.
| Subsidies & Guarantees | |
|---|---|
| General Incentives | There is no formal framework for grants and subsidies targeting PPP projects, however the general frameworks do cover PPPs:
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| Infrastructure Tax Incentives | PPP projects are entitled to fiscal incentives under the Investments Priorities Plan (IPP). Enterprises registered at the Board of Investment (BOI) can receive: • Income tax holidays exempting enterprises from income tax payments for four to six years, which could be extended to eight years. • Income tax could be further reduced in the first five years by reducing the taxable income by 50% of the paid wages. • Deduction for projects in less developed areas. • Import tax and duties on machinery, equipment and accessories for new or expanding enterprises. • Exemption from local taxes for up to four years for 'non-pioneer' enterprises and six years for 'pioneer' enterprises. • Additional tax incentives are offered in Special Economic Zones, including: reduction of income taxes, import duties, exemption from VAT on sales and export taxes etc. |
| Revenue Guarantees | Take-or-Pay and availability based contracts. |
| Guarantees covering Political Risks | The legal investment framework guarantees foreign investors the ability to repatriate investments and profits, freedom from expropriation, protection of patents and other property rights. |
| Grants/Soft Loans/Equity Investment | |
|---|---|
| Viability Gap Funding (VGF) | Ongoing efforts to establish VGF. |
| Grants and Equity Investment | • The government can provide grants to certain projects with the objective of reducing investment costs for the PPP sponsors. • The government conducts equity investments in PPP projects. |
| Other Public Support | |
|---|---|
| Land acquisition support | Land is normally provided by government through ROWA (Right-of-Way Acquisition) and is provided to all projects. Land ownership limited for foreign investors (1987 Constitution). |
| PPP Strategic Support Fund | The PPP Strategic Support Fund (PPPSSF) was established to support the implementation of PPP projects through:
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| Project Development and Monitoring Facility | The Project Development and Monitoring Facility (PDMF) is a revolving pool of funds made available to enhance the investment environment for PPP and to develop a robust pipeline of viable and well-prepared PPP infrastructure projects. To that end it supports implementing agencies in the conduct of pre-investment studies, which includes preparing pre-feasibility studies, tender documents, draft contracts, and supporting the bidding process, contract negotiations and project monitoring. The PPP Centre manages the PDMF.
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