Member Article

The implementing rules and regulations of Republic Act No. 6957 as amended, or the BOT Law, have been revised to increase incentives, minimize government regulations, allow reasonable returns on investments, share risks between the government and the project proponent, and assure transparency and competitiveness in the bidding and award of projects. Provisions of the new issuance underscore the intent to seek greater participation of investors from the international community in local projects. Under the revised rules, the invitation to pre-qualify and bid is required to be posted in the website of the Agency/Local Government Unit concerned and, for projects costing at least US$10 million, the invitation may be published in at least one international publication. For purposes of pre-qualification, a foreign contractor is given the option of obtaining a license and accreditation from the Philippine Contractors Accreditation Board or from an equivalent accreditation institution in the contractor’s country of origin. Equally significant is the provision allowing a project proponent to enter into a management contract with another entity, which may be 100% foreign-owned, for the day-to-day operation of the project facility. The revised rules also permit the Philippine government to provide additional forms of direct and indirect support or contribution, such as direct government subsidy, direct government equity, performance undertaking, legal assistance and security assistance. Any one, or a combination, of these Government undertakings may be offered, depending on the type, scope and other circumstances of a project.