The Public-Private Partnership (PPP) Center has outlined the key criteria for structuring agriculture projects as PPPs, with user affordability being a top priority. According to the PPP Center, its partnership with the Department of Agriculture must align with the PPP Code of the Philippines and its implementing rules and regulations, which standardizes PPPs as a strategic approach to delivering quality, accessible, efficient, and affordable infrastructure and development projects.
The PPP Center emphasizes that the core principle of public-private partnerships is that the public interest always comes first. It notes that while the private sector is encouraged to invest, innovate, and operate efficiently, every PPP project must ultimately deliver better public services. The PPP Code requires PPP projects to undergo rigorous evaluation before approval, which includes assessments on affordability, value for money, fiscal sustainability, environmental and social impacts, and risk allocation.
The PPP Center cited safety nets put in place to mitigate the risks faced by the private sector, such as predetermined payments by the implementing agency to the private partner in exchange for asset or service delivery in accordance with the PPP contract. It also highlighted the Viability Gap Funding feature of PPP contracts, a government subsidy granted in the case of projects that are deemed economically beneficial, but require assistance for commercial viability.
The PPP Center ensures that private partners deliver service levels that are agreed upon throughout the partnership through performance standards and contractual obligations. Private entities are required to follow specific KPIs (key performance indicators) to ensure projects are implemented in accordance with requirements and standards.
The PPP Center is working with other government agencies in drafting the guidelines for the use of its Risk Management Fund, a dedicated financial mechanism provided for by the PPP Code to pay for contingent liabilities and financial obligations arising from PPP projects. The government’s regulatory oversight and monitoring mechanisms remain in place throughout the implementation of agricultural infrastructure PPP projects, ensuring that the private sector earns returns by delivering efficient, high-quality services.
As of July 9, there are 13 agricultural PPP projects in the implementation stage, all of which are local infrastructure projects worth a combined P3.6 billion. These include the improvement, construction, and operation of slaughterhouses and public markets. Seven agricultural PPP projects are in the pipeline, three of which are national projects and four local, involving farm centers, food hubs, and irrigation systems, with estimated costs of P33.3 billion.
