The government is preparing the Executive Order to review the existing Build-Operate-Transfer Law to attract more private sector interest in the administration’s priority infrastructure projects, National Economic and Development Authority Secretary Arsenio Balisacan said.
“We know that he’s (President Ferdinand Marcos Jr.) okay for us to review. I think they are preparing the EO or something like that because we need to publish it. We have to have the presidential authority to review it,” Balisacan said during the 2022 Economic Journalists Association of the Philippines-San Miguel Corp. Economic Forum.
In the face of mounting criticisms of alleged onerous provisions in the BOT, former President Rodrigo Duterte formed the BOT IRR (implementing rules and regulations) committee, then chaired by former NEDA chief Karl Kendrick Chua late last year, to amend the IRR of the BOT Law. The revised rules came out in April of this year.
“We discussed it several times already with him (President Marcos), and he’s aware of the issues. We need to look at the issues and see what can be — we have to strike a balance between the need to get the investors and at the same time aware of the risks that government faces,” Balisacan added.
The secretary is hopeful the EO will be approved by September.
“Yeah, hopefully by next month, we already get the EO — but in the meantime, we are already doing our consultation with the private sector, and the NEDA and the PPP Center have been talking with stakeholders. So we’re ready,” Balisacan added.
The amended BOT law’s IRR zeroed in on minimizing contingent liabilities, defined as “liabilities that may be incurred from events specified in a contract, the occurrence, timing, or amount of which are uncertain.”
The cabinet will have to agree and vet appropriately so that we share common perspectives and views of the issues. Like sharing of risk, he said.
The Maga issue, the arbitration issue. The IRR defined Maga as “any act of the executive branch, which the project proponent had no knowledge of, or could not reasonably be expected to have known of, before the effectivity of the contract; and that occurs after the effectivity of the contract, that: Specifically discriminates against the project proponent; and has a material adverse effect on the ability of the project proponent to comply with any of its obligations under the contract.”
Moreover, the secretary said that all the private sector requests are not accommodated.
“We have to look at the economics, all the angles to make sure that in the end, it is socially beneficial, it is economically beneficial, it’s financially viable… in the end, it’s all about the viability, and it’s the government’s objective. In the end, we don’t want projects that (are) quite risky for government,” Balisacan said.