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Manila Bulletin devider Business devider The Economy devider PPP projects' contingent liabilities further rise to ₱424 billion

PPP projects' contingent liabilities further rise to ₱424 billion

Published Dec 12, 2025 02:08 pm
Amid the Marcos Jr. administration’s push for public-private partnerships (PPPs) in infrastructure development, contingent liabilities arising from projects funded by tycoons’ deep pockets further rose to ₱424.22 billion as of end-2024, according to the Cabinet-level, interagency Development Budget Coordination Committee (DBCC).
The DBCC’s Fiscal Risks Statement for fiscal year (FY) 2026 showed that the latest contingent liabilities amount represented the total foreseeable and definite financial liabilities of implementing agencies (IAs) to their private partners in 40 out of 52 PPP contracts with a combined project cost of ₱2.06 trillion, based on data from the Public-Private Partnership Center of the Philippines (PPP Center).
In the DBCC’s FY 2025 Fiscal Risks Statement last year, end-2023 contingent liabilities from PPP projects amounted to ₱406.3 billion for 37 out of the then 47 contracts worth a total of ₱1.84 trillion.
“The ₱17.92-billion increase from the previous report is due to updates in the total amount of some liabilities under one contract such as payment for right-of-way (ROW) acquisition, light rail vehicle procurement, and depot works, among others,” the DBCC explained.
“Of the total amount of foreseeable and definite liabilities, at least ₱188.36 billion has been confirmed paid,” the DBCC added.
Since its FY 2026 Fiscal Risks Statement was based on PPP Center documents as of Dec. 31, 2024, the DBCC conceded that “the actual liabilities could be higher.”
Contingent liabilities arise from PPP risks such as liquidated damages as well as force majeure-related and termination payments.
The DBCC noted that as of end-2024, the government had 275 awarded PPP projects, with 218 ongoing and 57 completed or terminated at that time.
The PPP Center’s financial liability analysis covered 52 of 134 national projects, with work underway to include remaining water district and local PPP contracts.
According to the DBCC, the government’s unpaid contingent liabilities under five PPP contracts reached ₱16.64 billion as of Dec. 31, 2024, up by ₱2.85 billion due to newly filed claims.
No new material adverse government action (MAGA) or force majeure claims were filed, but the increase came from five compensation claims tied to unmet government obligations and two variation-related claims totaling ₱420 million now lodged with the Construction Industry Arbitration Commission (CIAC) after the Commission on Audit (COA) rejected earlier filings, the DBCC said.
“As of Dec. 31, 2024, no notice of default has been filed by any of the private partners of the 52 PPP contracts. The PPP Center does not foresee any of these contracts being terminated in 2025,” it added.
To recall, the current administration renewed focus on PPP projects, given the national government’s (NG) narrower fiscal space wrought by the Covid-19 pandemic.
The previous Duterte administration had shunned PPPs, especially unsolicited projects, as it did not want disadvantageous provisions like government guarantees, subsidies, and MAGAs.
As for PPP projects’ private-sector proponents, whose liabilities are also monitored by the PPP Center, the DBCC said that private partners have at least ₱138.03 billion in foreseeable and definite liabilities to IAs across 40 PPP contracts, with ₱57.8 billion already paid.
Also, IAs have filed ₱556.43 million in compensation claims—excluding about ₱971.97 million in key performance indicators (KPIs)-related penalties—with ₱32.1 million already settled by private partners.
Private partners’ financial liabilities include concession fees, lease payments, IA loan repayments, and reimbursement of IA expenses.
Amid concerns on contingent liabilities, the DBCC pointed to reforms under Republic Act (RA) No. 11966 or the PPP Code of the Philippines, enacted in 2023, with its implementing rules and regulations (IRR) issued in 2024.
Empowered by RA 11966, the government is rolling out several policies to strengthen the management of fiscal risks in PPPs, including guidelines on contingent liability management and the Risk Management Fund (RMF), the operationalization of the Risk Management Program (RMP), a unified PPP monitoring framework, and tariff-regulation mechanisms to reduce regulatory risks, the DBCC said.
These measures, which aim to streamline monitoring, ensure fiscal sustainability, and improve financial terms for PPP projects, are targeted for issuance between 2025 and 2026, according to the DBCC.
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