PPP Center says commitments ‘intact’ despite cost pressures

By Justine Irish D. Tabile, Senior Reporter

THE Public-Private Partnership (PPP) Center said infrastructure commitments under existing PPP projects remain intact despite rising global cost pressures linked to the conflict in the Middle East.

“Based on available information to date, there is no significant evidence of direct impact on the implementation of awarded PPP projects,” the PPP Center said in an e-mailed reply to questions on May 4.

“Contractual commitments remain intact, and both government and private partners continue to honor their obligations under existing PPP contracts,” it added.

The latest PPP Center data showed 287 PPP projects worth P3.57 trillion are currently under implementation. Of the total, 202 are unsolicited projects, while 71 are solicited projects.

However, the center said the conflict in the Middle East could exert upward pressure on key input costs, including fuel, construction materials and logistics.

“These cost pressures can pose challenges for infrastructure projects, including those implemented through PPPs,” it said.

Inflation accelerated to 7.2% in April, exceeding the Bangko Sentral ng Pilipinas’ 5.6%-6.4% forecast for the month, amid higher fuel, electricity and food prices.

Despite these risks, the PPP Center said PPP arrangements are structured “to manage risks through clear allocation mechanisms and contractual provisions,” which help support project resilience amid external uncertainties.

“The PPP Center is committed to assisting implementing agencies and their private partners in navigating the intricacies of their PPP contracts and facilitating the continuous resolution of project issues,” it said.

“In this regard, the PPP Center plays an active advisory role to ensure that contractual mechanisms and collaborative solutions are appropriately applied and calibrated to emerging risks, including resource scarcity, so that service delivery to the public remains uninterrupted,” it added.

The PPP Center also identified bottlenecks affecting both solicited and unsolicited projects.

“For solicited projects, the most common bottleneck arises during the FS (feasibility study) phase,” it said. “Rushing the conduct and finalization of FSs leads to various issues that delay procurement, such as requiring extensive revisions and re-approvals.”

It added that rushed feasibility studies tend to prolong procurement and increase the likelihood of poor-quality bid submissions.

For unsolicited proposals, delays typically arise from prolonged negotiations when parties fail to agree on key commercial or risk-allocation terms.

“Protracted or unsuccessful negotiations can significantly slow down a project’s movement toward approval. The PPP Code remedies this by providing a maximum, non-extendable period of 150 calendar days for negotiation,” the center said.

The PPP Center said PPP Governing Board Resolution No. 2025-01-02, or the Guidelines on the Conduct of Negotiations for PPP Projects Pursuant to the Provisions of the PPP Code of the Philippines, is expected to help address such delays.

“These guidelines aim to promote more structured, transparent, and time-bound negotiations, thereby reducing avoidable delays,” it said.

The center also said that projects included in the PPP pipeline are not “locked in,” as implementing agencies retain flexibility to add, remove or reprioritize projects depending on policy priorities, fiscal space, technical readiness and market conditions.

“It is also important to note that inclusion in the pipeline does not necessarily mean that a project has already undergone extensive or detailed study,” it said.

Still, the PPP pipeline serves strategic functions for both the government and the private sector, the center said.

“For the private sector, the pipeline provides market signaling and early visibility into government priorities, allowing investors and project developers to prepare, mobilize expertise, and assess opportunities,” it said.

“For the government, the pipeline informs the private sector of projects/areas where government interest exists, potentially encouraging the submission of unsolicited proposals and helping reduce public expenditure on project development,” it added.

As of May 4, there were 252 projects worth P3.13 trillion in the PPP pipeline, consisting of 195 solicited projects and 57 unsolicited proposals.