THE PHILIPPINE PUBLIC-PRIVATE PARTNERSHIPS PROGRAM

The Anatomy of PPP in the City Government of Batangas

Term Paper
Presented to:
DR. HERMOGENES PANGANIBAN

By:
MARY ANN E. ANTENOR
Doctor of Public Administration

INTRODUCTION

It was during the administration of President Corazon Aquino on

1986 to 1992 that lead the way to major structural reforms such as
privatization and decentralization that geared towards the overall
efficiency of the economy specifically the public sector and its
responsiveness to the needs of its citizenry. After strengthening the powers
of the central government during the past Martial Law, the real
democratic characteristics of the country can be mirrored in such a way
that due power and functions were given equally to both private and
public sectors.

It was on the middle part of Aquino administration whereby

privatization includes the participation of private sector in the provision of
infrastructure and services. The legal basis of that participatory approach
was provided by the passage of Republic Act No. 6957 or the Build-
Operate-Transfer (BOT) Law in 1990. The BOT scheme was defined to be a
contractual arrangement whereby a contractor undertakes the
construction, including financing, of a given infrastructure facility as well
as its operation and maintenance (ADB, 2016). The contractor operates
the facility over a fixed term during which it is allowed to charge users the
appropriate tolls, fees, and charges sufficient to enable it to recover its
initial investment, operating and maintenance expenses, and a
reasonable rate of return. The contractor transfers the facility to the
national government agency (NGA) or the LGU concerned at the end of
the fixed term, which shall not exceed 50 years.
 The PPP program has been declared a cornerstone strategy of the
administration of President Benigno Aquino III in which he vowed to
transform the government from one that negates private initiative into
something that creates conditions conducive to the growth and
competitiveness of private businesses whether big and small. The PPP
program was identified as the main mechanism through which
infrastructure development can be accelerated and inclusive economic
growth can be attained, all within a framework of transparent and
accountable governance.

II. Goals of the Program

As the component of the Philippine Development Plan (PDP), the

development plan at the regional and local levels adopts the same
development framework of the so-called Ambisyon Natin 2040 in which
the goal is to lay down a solid foundation for more inclusive growth, a
high-trust society and a globally competitive knowledge economy
through the Public-Private Partnership Program. The PPP Program is one of
the goals that focus on the acceleration of infrastructure projects.

It was truly argued that the Philippine infrastructure gap is prominent

at the local government level and this is true in the case of previous
experiences of PPP projects in the City Government of Batangas. This
paper reviews such PPP programs and then suggests ways forward to help
the local government units (LGUs) to prepare acceptable PPPs, ensure
efficient project procurement, enhance financial viability of PPPs, and
strengthen LGUs’ PPP legal and institutional frameworks to enable
leveraging more private investment in local economic and social
infrastructure.

In Batangas City, responsible government remains committed in

valuing the principles of performance, accountability, transparency and
inclusivity. It shares the responsibility with the national government the
advancement of economic prosperity, social well-being and
environmental integrity.

The Local Government of Batangas City envisions itself as “A well-

diversified agro-industrial center and international gateway with a tourist-
friendly and safe environment and quality infrastructure, powered by a
globally-competitive citizenry. Inspired by transparent, firm and fair
leadership”, this vision is guided by the political leaders in shaping what
Batangas City is today.

The City is presently classified as a Regional Growth Center and

identified as one of the sites for the Regional Agro-Industrial Center and
Special Economic Zone as mandated by the Medium Term Philippine
Development Plan and the Ecozone Act of 1995. This capital city is one of
the nation’s top revenue earning cities and the site of one of the biggest
refineries in the Philippines. It is also known as the “Industrial Port City of
CALABARZON”. Recognizing its role as a leading contributor to the
national economic growth, political actors and the civil society work hand
in hand in achieving sustainable development programs that embodied
its vision.

Making this term paper helps present Batangas City in a

perspective that is geared towards development and progress. The
success of Batangas City in the area of good governance may still be
very young but having achieved such status in the whole Province,
Region or even in the World is something every Batangueño should be
aware and be proud of.

III. Description of the Program Components

-- Rationale

In 2015, the Batangas City Government forged a Public-Private

Partnership (PPP) with Batangas Ventures Properties and Management
Corporation (BVPMC) regarding the construction and operation of the
Batangas City Grand Terminal located at Barangay Diversion Road,
Alangilan Batangas City. It was then part of the vision of former City Mayor
Eduardo B. Dimacuha to have this terminal project to make Batangas City
more competitive and for providing job opportunities to its constituents.
And all of these were moved successfully through the leadership of her
father’s daughter in the name of our Honorable City Mayor Beverley Rose
A. Dimacuha. She vowed to continue what her father started stating her
own formula for progress. She calls for the continuous gateway of private
investors and big companies to the City so that our youths will no longer
have to take their chances in other place to look for jobs. She also
strengthens various infrastructure projects and supports for a growing and
developing City.
 The Batangas City Grand Terminal is dubbed as the first PPP in the
Province of Batangas and also in the entire CALABARZON Region. This
terminal commands pride of place of six (6) hectares of land or 23, 511
square meter lot owned by the City Government of Batangas. This was
came about after the Sangguniang Panlungsod City Councils approved
the Contract of Lease between the Batangas City Government and
Batangas Ventures Properties and Management Corporation (BVPMC) on
August 23, 2015. Shortly after, the Batangas City Government issued a
Notice to Proceed to the BVPMC. Under the terms of this PPP, this terminal
shall be developed by the BVPMC at no cost to the Batangas City
Government.
--Intended Beneficiaries

Prior to approval of the PPP-Lease, the Batangas City Government

operated a temporary public transportation terminal. Through the help of
this terminal, the city government will no longer have to shoulder
operations expenses, repair and salaries of personnel. The BVPMC will
lease the 23,511 government-owned lot for twenty five (25) years in the
amount of Two hundred twenty five thousand (P 225,000.00 per month)
plus a 5% cumulative increase every three (3) years. This does not include
taxes, other fees, and real property taxes (RPT) stipulated in the Batangas
City Revenue Code, whereby BVPMC will also shoulder.

--How Beneficiaries May Benefit from the Program

Once the term of lease expires, all establishments put up inside and
around the Grand Terminal lot that is owned by the government will
automatically be owned by the Batangas City Government. In part of the
BVPMC, its project cost recovery will be sourced from service fees from
bus lines and jeepney operators, commercial spaces and stall rentals, and
also parking space rentals.

All bus and jeepney lines playing in and out of the City, now use the
Batangas City Grand Terminal as their central terminal. The move is in
keeping with the demands of the City’s riding public for an improved
terminal facility
--Implementation Aspects

IV Administrative Implications (inject your analysis here)

--- Organizational Framework: Human, Financial, Technological,
Coordinative mechanisms; centralization/decentralization (issues
concerning Human resources, financial resources, technological
resources).
--- Policy Issues
--- Program Administration/Implementation issues
--- Legal issues

V Conclusion and Recommendation