REPUBLIC OF THE PHILIPPINES
DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT
DILG-NAPOLCOM Center
EDSA corner Quezon Avenue, Quezon City
MEMORANDUM CIRCULAR
No. 2016-_____________
FOR
SUBJECT
1.0
:
:
ALL PROVINCIAL GOVERNORS, CITY/ MUNICIPAL MAYORS,
PUNONG BARANGAYS, DILG
REGIONAL
DIRECTORS,
PROVINCIAL DIRECTORS, DILG FIELD OFFICERS, AND ALL
OTHERS CONCERNED
GUIDELINES FOR THE IMPLEMENTATION OF PUBLIC-PRIVATE
PARTNERSHIP FOR THE PEOPLE (P4) INITIATIVE FOR LOCAL
GOVERNMENTS
Background
1.1 President Rodrigo Roa Duterte has identified core projects during his first State of the Nation
Address (SONA) such as roads, bridges, airports, tourism, harvest facilities, public health,
irrigation, rail, ferry system and public Wi-Fi, and welcomes unsolicited proposals for
infrastructure projects, while ensuring counter offers were made to ensure fairness to
maintain the country’s robust economic growth, improve traffic management and investment
frameworks.
1.2 The President also declared his commitment to promote economic and social development
not only in metropolitan areas, without losing sight of the “truth north” of Public-Private
Partnership (PPP) - to promote the general welfare and provide for better quality of life of
the people – ensuring that PPPs are undertaken primarily for the benefit of the people (“P’).
1.3 The PPP Program has been the vehicle for private sector participation in the provision of
infrastructure and social services. The private sector has always played a significant role in
the country’s by bridging the gaps in the economy and social development.
2.0 Purpose
2.1 To promote local economic development that eventually contribute to the increase on the
growth of national economy and create more jobs.
2.2 To help local government units (LGUs) in providing basic services to the community and its
people especially the marginalized men and women.
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2.3 To develop, create and strengthen the partnership between the local and private sectors in
promoting the general welfare and providing better quality of life of the people.
3.0 Legal Bases
3.1 Section 20, Article II of the 1987 Constitution provides that the State recognizes the
indispensable role of the private sector as the main engine of national development;
3.2 Republic Act No. 7160, known as the Local Government Code of 1991, encourages the
participation of the private sector in local governance, particularly in the delivery of basic
services, to ensure the viability of local autonomy as an alternative strategy for sustainable
development;
3.3 Republic Act No. 6957 as amended by Republic Act 7718, An Act Authorizing the Financing,
Construction and Operation and Maintenance of Infrastructure Project by the Private Sector;
3.4 Republic Act No. 9184, the Government Procurement Reform Act; and
3.5 The Civil Code of the Philippines and Corporation Code of the Philippines
4.0 Scope/Coverage
This Memorandum Circular shall apply to all provinces, cities, municipalities and barangays.
5.0 The Public-Private Partnership for the People (P4)
5.1 Definition
Public-Private Partnership for the People (P4) shall be defined in two levels, i.e., policy
and project. At the policy level, a P4 is a developmental, innovative, change and partnership
strategy aimed at promoting the general welfare, inclusive growth and better quality of life of
Filipinos.
At the project level, a P4 is a contractual arrangement between the government and the
private sector to deliver public infrastructure and/or public services where each party assumes
specified functions, bears certain risks, provides contribution, performs particular obligations,
and earns benefits and revenues.
5.2 10-Point Guiding Principles. The following are the 10-point guiding principles in the
implementation of LGU P4 projects:
a. Pro-People, as the welfare and the improvement of the quality of life of Filipinos is of
primordial importance;
b. Pro-Accountability, whereby the government and the private sector must be accountable
and responsible to the people;
c. Pro-Change, since transformation that is sustainable, impactful, inclusive and personbased is key;
d. Pro-Value, where partnering with the private sector through various mechanisms,
modalities and financing schemes shall yield the best results for government and the
people;
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e. Pro-Learning, in order that all stakeholders and the general public will be informed of this
strategy and will actively and meaningfully participate in the process;
f. Pro-Innovation, to encourage, for possible replication, out-of-the-box thinking and trailblazing initiatives on partnerships;
g. Pro-Rule of Law, as laws and relevant regulations must be followed in the prioritization,
choice of modalities and schemes, selection of the private proponent and contract
management, and the evils of government contracts – corruption, clientism, capture,
complacency, conflict of interest and concealment – must be curbed and effectively
addressed;
h. Pro-Justice, as this program must advance human rights, promote climate and gender
justice and prioritize the needs of the marginalized;
i.
Pro-Participation, whereby social accountability and constructive engagement by the
citizenry, civil society, non-governmental and people’s organization in governance will
be promoted and respected; and
j.
Pro-Decentralization, recognizing the mandate and role of LGUs in promoting the general
welfare and responding to the needs and interests of local communities in partnership with
the private sector.
5.2 Adoption of LGU P4 Code. LGUs are encouraged to adopt an LGU P4 Code to establish an
open, transparent, efficient and equitable process for the identification, screening, prioritization,
development, procurement, implementation and monitoring of P4 projects (marked as Annex
1 of this MC).
(a) Each LGU P4 Code shall:
(i)
promote general welfare and the public good;
(ii)
ensure that the P4 process is applied consistently to promote efficient use of LGU
resources, and improved asset and service quality, public sector management and
public sector procurement;
(iii)
integrate accountability and social accountability mechanisms and approaches in all
stages of the P4 process;
(iv)
support the evaluation of P4 projects on the basis of economic and social benefits
rather than on purely financial considerations;
(v)
reiterate that the LGU remains responsible for services provided to the public,
notwithstanding the use of any of the P4 modalities in providing such service;
(vi)
employ a competitive procurement process, undertaken through open, fair and
legitimate competitive bidding upon a common standard and basis, and upon the
same thing, subject matter and undertaking, and, where competitive bidding cannot
be applied, a competitive process ensuring both transparency and economically
efficient outcome must be employed;
(vii)
include arrangements to deal with unsolicited projects and contracts negotiated with
only one counterparty;
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(viii) require the establishment of a system for contract management for each P4 contract,
and provide guidelines for the formulation of contract management standards that
will result in value for money, on-time delivery of quality services to the public, and
achievement of government policy goals, all within sustainable and integrated
development;
(ix)
provide for joint P4 undertakings between or among LGUs, GOCCs, and
government agencies, when such collaboration will be beneficial to the people; and
(x)
provide for the training and capacity building of LGUs.
(b) An LGU P4 Code provides all the above-mentioned components, and may be adopted,
through an ordinance, by provinces, cities, municipalities and barangays, or be revised or
modified as the LGU deems necessary to adapt to the needs of their respective LGUs,
provided that any such revision or modification shall not be inconsistent with law.
(c) LGUs may likewise provide for their P4 framework or adopt the following as their PPP/
P4 frameworks:
(i)
The Build-Operate-and-Transfer Law as amended;
(ii)
The 2008 or 2013 Joint Venture (“JV”) Guidelines issued by the National Economic
and Development Authority (“NEDA”);
(iii) PPP and JV Ordinances enacted by LGUs; or
(iv) The Government Procurement Reform Act.
5.3 Partners for P4 Undertakings. LGUs are encouraged to enter into Government-to-Government
arrangements with other LGUs, national government agencies, GOCCs, government
instrumentalities or government corporate entities for:
(a) the joint implementation of P4 projects that extends outside the territory of an LGU; or
(b) the joint implementation of P4 projects that will benefit the LGU and its community even
if the project site is outside of that LGU’s territory,
provided, that collaborating or partner LGUs, national government agencies, GOCCs,
government instrumentalities or government corporate entities shall jointly undertake with the
LGU the selection of the private sector partner using the appropriate P4 modality.
6.0 Developmental Plans and Investment Programs as Source of Identified Priority PPAs for P4
projects
Provinces are mandated to prepare their Provincial Development and Physical Framework
Plan (PDPFP) while Cities and Municipalities are required to prepare their Comprehensive Land
Use Plan (CLUP) and Comprehensive Development Plan (CDP). These plans contain the priority
developmental programs, projects and activities (PPAs) as well as policies and capacity
development programs. PPAs responding to economic, social development and services as
identified in these plans may be the basis for engaging P4 project.
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Budget allocation for these PPAs should be provided by ensuring that these are programmed
through the Local Development Investment Program and Annual Investment Program, wherein
public and private credit financing and partnerships, such as a P4 project, are considered as one of
the financing options (marked as Annex 2, LDIP Preparation Flow Chart and Annex 3, LGU
Financing Options Framework).
7.0 Documentary Requirements for a P4 Project
The following documents and instruments that shall be prepared by the LGUs in engaging in
LGU P4:
1)
2)
3)
4)
5)
LGU P4 Code;
Provincial Development and Physical Framework Plan (PDPFP), for the province;
Comprehensive Land Used Plan, for cities and municipalities;
Comprehensive Development Plan, for cities and municipalities; and
Appropriate contracts.
8.0 Effectivity
This policy shall take effect immediately.
9.0 Monitoring and Reporting of the Implementation
DILG Regional Offices shall submit progress and period report in the implementation of the
P4 Initiate for LGUs program to SILG and Undersecretary for Local Government thru the Bureau
of Local Government and Development (BLGD).
For the information and guidance.
ISMAEL D. SUENO
Secretary
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