NPM 155-2012

Requesting Entity: PHIVIDEC Industrial Authority (PIA)

Issues Concern: Applicability of the Provisions of Republic Act (RA) No. 9184 and its Revised Implementing Rules and Regulations (IRR)



Whether RA 9184 and its IRR is applicable in PHIVIDEC's proposed port expansion considering the following aspects:

(1) There is an existing contractual relationship between PIA and MICTSI, which was established through competitive bidding; and
(2) Government funds will not be used for the implementation of the project. However, the private entity will be allowed reimbursement of construction costs charged against the concession fees in the existing contract.

RA 9184 provides the rules that should be followed in acquisition of goods, infrastructure projects, and consulting services in relation to an identified appropriation of public funds. Conversely, if the government transaction or activity does not involve use of public funds, such transaction or activity will not be covered by RA 9184 and its IRR.

[A]t the end of the transaction, the funds that would have been purportedly advanced by the private entity for the undertaking are the very funds that PIA should have regularly received from MICTSI in the form of fees and charges under the original concession Contract, which are, in reality PIA's own money expected from the latter's accounts receivables from MICTI, and therefore considered collectible public funds due to PIA.

[S]ince the above-described transaction between PIA and MICTSI will be ultimately funded using public funds, such transaction should be entered into in accordance with the provisions of RA 9184 and its IRR. However, assuming that public funds will not be involved in the transaction, and instead will be fully financed by MICTSI, the rules and regulations under RA 6957, as amended by RA 7718, otherwise known as the Build Operate and Transfer Law, and its revised IRR should be considered.