Unsolicited proposals: Driving innovation and growth in public-private partnerships

In the past decades, Public-Private Partnerships (PPPs) have been considered a catalyst for driving and pushing the ends of traditional constraints long plaguing infrastructure development, especially in developing countries.1 In the Philippines, the government has acknowledged that PPPs are a crucial cornerstone for continuing the government’s infrastructure and development strategy. As enshrined in the national policy, the State recognizes the indispensable role of the private sector in bridging infrastructure gaps and accelerating inclusive growth. PPPs enable governments to tap into private sector resources, innovation, and technical expertise to finance, design, construct, operate, and maintain key infrastructure projects and public services, particularly where public funds are limited or unavailable.

In developing economies like the Philippines, insufficient and poorly maintained infrastructure remains a major constraint on economic growth and social equity. The development of infrastructure in the country is hampered by painfully long inefficient bureaucratic systems, lack of coordination, financing, and a relatively low involvement in private sector infrastructure provision.2 To combat these socio-economic difficulties, PPPs serve as a strategic mechanism to address these systemic challenges by enabling efficient, transparent and cost-effective project delivery. They now extend beyond traditional infrastructure to include essential social services like schools and hospitals, contributing directly to public welfare and national development goals.

Under Republic Act No. 11966, enacted on Dec. 5, 2023, otherwise known as the “Public-Private Partnership Code of the Philippines,” one of the most dynamic and potentially transformative mechanisms within the PPP framework is the Unsolicited Proposal (USP). USPs allow private proponents to propose PPP projects outside the formal government pipeline or the traditional request for a proposal from the government but align with national or local development objectives. This mechanism is especially critical and quite revolutionary for a rapidly evolving economic and technological landscape, where the private sector may be better positioned to identify opportunities or introduce innovative solutions directly to the government.

By allowing USPs, the government acknowledges that innovation and initiative often come from the private sector. These proposals can result in new infrastructure ideas that may not yet be captured by existing government plans, and they operate to assist the government in identifying economically valuable projects when it lacks the necessary financial resources to execute such projects through the solicited approach.3

The USP process, however, is not without controls. As public interest is paramount, the USP process is guided by stringent rules to prevent abuse and ensure government accountability. To guarantee that USPs would not become a medium for bypassing government procurement and anti-corruption measures, all USPs must first pass a completeness check by the PPP Center within 10 days from receipt thereof, followed by a detailed evaluation by the implementing agency.4 Guidelines are also in place to regulate the conduct of negotiations for PPP projects.5 The following government undertakings however are prohibited in a USP: Visibility Gap Funding (VGF) and other forms of subsidy; payment of right-of-way related costs; performance undertaking; additional exemptions from any tax other than those provided for by law; guarantee on demand; guarantee on loan repayment; guarantee on private sector return; government equity; and contribution of assets, properties, and rights.6

To promote competition and transparency, all accepted USPs are subject to a comparative challenge process, wherein third parties are invited to match or surpass the original proposal. The implementing agency shall carry out the comparative challenge, either through manual or electronic means, within a certain approved timeline. This period must consider the specific nature and complexity of the PPP project and shall not be shorter than 90 calendar days nor longer than one year. The original proponent retains the right to match any submitted proposal but only after other potential challengers are given a fair and open opportunity to submit competing offers.7 This is a safeguard against sweetheart deals while preserving the incentive for private firms to develop high-quality and well-structured proposals.

A key innovation to the USP process is its time-bound structure. Under the new framework, an Unsolicited Proposal first undergoes a 10-day review by the PPP Center to check for completeness and identify the appropriate approving body. Once endorsed, the implementing agency is given 90 calendar days to conduct a detailed evaluation of the proposal. If the agency fails to act within the 90-day period following the end of this evaluation period, the proposal is automatically deemed approved, subject to any liabilities of responsible officials. If the implementing agency decides to accept the proposal following its detailed evaluation, the head of the implementing agency must issue a Notice of Acceptance to the private proponent within three calendar days from the end of the evaluation period. The implementing agency must also issue a Notice to Commence Negotiations within the same three-day window. Thereafter, the negotiation period officially begins, lasting for 80 calendar days. This period may be extended by mutual agreement between the implementing agency and the private proponent, but in no case shall the total negotiation period exceed 150 calendar days.8

These guidelines address historical bottlenecks in the approval process and enhance investor confidence by providing a clear and enforceable timeline. In fact, failure of the agency to act on a proposal within the prescribed timeframes may result in the proposal being deemed approved, a provision meant to curb bureaucratic obstacles while still holding erring officials accountable under law.

In addition, USPs support the autonomy of local government units by enabling them to receive and process local USPs, helping foster community-level innovation and infrastructure delivery that is tailored to local needs. These projects must still comply with national policies on transparency, risk management, and sustainability, including climate resilience and gender integration, ensuring alignment with broader national objectives.9

Ultimately, for businesses, the USP mechanism represents a powerful avenue to directly propose projects that align with their strategic interests, technologies, and areas of expertise that the government has yet to consider. Unlike traditional procurement, where government agencies dictate the project structure and scope, USPs empower the private sector to take the initiative, identifying infrastructure gaps, and proposing economically feasible solutions to such infirmities. This opens new commercial opportunities while supporting national development priorities, creating a win-win scenario where business innovation can directly drive inclusive and sustainable growth. n

1 “Public-Private Partnerships in Developing Asian Countries: Practical Suggestions for Future Development Assistance,” ADBI Policy Brief No. 2021-5, September 2021

2 “Philippines: Meeting Infrastructure Challenges,” The International Bank for Reconstruction and Development/The World Bank, 2005)

3 “Unsolicited Proposals: An Exception to Public Initiation of Infrastructure PPPs,” Public-Private Infrastructure Advisory Facility, 2014

4 RA 11966, Sec. 10(a)

5 PPP Governing Board Resolution No. 2025-01-02

6 Ibid., Sec. 10(c)

7 Ibid., Sec. 10(e)

8 Ibid., Sec. 10(a)(b); PPP Governing Board Resolution No. 2025-01-02

9 RA 11966, Sec. 2

The views and opinions expressed in this article are those of the author. This article is for general informational and educational purposes only and not offered as and does not constitute legal advice or legal opinion.

Jackie L. Quiñones is an associate of the Angara Abello Concepcion Regala & Cruz Law Offices (ACCRALAW), Davao Branch.

(6382) 224-0996

jlquinones@accralaw.com