Guidelines for the Release and Utilization of the Public-Private Partnership Strategic Support Fund (PPPSSF) of CY 2012 for the Modernization of DOH Hospitals, Pursuant to Special Provision No. 1 of the DOH Appropriations under the FY 2012 General Appropriations Act, R.A. No. 10155

September 16, 2013 DOH-DOF-DBM-NEDA JOINT CIRCULAR NO. 2013-0001 TO : All Concerned Government Agencies SUBJECT : Guidelines for the Release and Utilization of the Public-Private Partnership Strategic Support Fund (PPPSSF) of CY 2012 for the Modernization of DOH Hospitals, Pursuant to Special Provision No. 1 of the DOH Appropriations under the FY 2012 General Appropriations Act, R.A. No. 10155 1.0 Purpose 1.1 To prescribe the guidelines relative to the implementation of Special Provision No. 1 of the appropriations of the Department of Health (DOH), page 548 of the FY 2012 General Appropriations Act (GAA), Republic Act (R.A.) No. 10155, quoted as follows: "Public-Private Partnership Strategic Support Fund. The amount of Three Billion Pesos (P3,000,000,000.00) appropriated under B.1.a for the Public-Private Partnership Strategic Support Fund shall be used exclusively for the modernization of the below-enumerated regional hospitals including the conduct of feasibility studies, and engagement of legal, financial, and such other advisers needed to develop said projects under RA No. 6957, as amended by RA No. 7718. However, no amount from this Fund shall be used to pay private partner's financial obligations whose payment government has guaranteed." 1.2 To clarify the roles and responsibilities of all national government agencies involved in the implementation of this Circular. 1.3 To prescribe the required reports for the release and utilization of the fund for the modernization of the DOH Hospitals. 2.0 Objectives The Public-Private Partnership Strategic Support Fund (PPPSSF) is envisioned to achieve the following objectives: 2.1 To improve the level of quality hospital care services thru the upgrading and/or expansion of the DOH Hospitals' infrastructure and hospital equipment 2.2 To ensure availability and accessibility of hospital care services through the DOH Hospitals, in support of the Universal Health Care or Kalusugan Pangkalahatan (KP) 2.3 To promote performance efficiency and fiscal discipline in the operations of the DOH hospitals. ADSTCa 3.0 Coverage This Joint Circular shall cover all DOH Hospitals authorized to avail from the PPSSF for the modernization and upgrading of their respective facilities in support of the major thrust of Universal Health Care or Kalusugan Pangkalahatan (KP). 4.0 Definition of Terms For the purpose of this circular, the following terms shall be construed to mean as follows: 4.1 Implementing Agency (IA) refers to any department, bureau, office, commission, authority or agency of the national government including GOCCs, GFIs and SUCs, authorized by law or their respective charters to contract for and undertake infrastructure or development projects. 4.2 Kalusugan Pangkalahatan (KP) a focused approach to health reform implementation, ensuring that all Filipinos especially the poor receive the benefits of health reform; intended to ensure that the poor are given financial risk protection through enrolment in PhilHealth and that they are able to access affordable and quality health care and services in times of need. 4.3 Pre-feasibility/Feasibility/Pre-Investment Study refers to a study undertaken to determine and document, among others, a project's technical, financial and economic viabilities. 4.4 PPP a range of possible contractual arrangements between the public and private entities to provide and/or deliver infrastructure and/or development projects or services, with the roles and responsibilities of the parties/partners defined and the allocation of revenues/costs/risks sharing among public and private partners are clearly provided. 4.5 PPPSSF a lump-sum which shall be used exclusively for the modernization of the 25 priority hospitals including the conduct of feasibility studies, and engagement of legal, financial, and such other advisers needed to develop the projects to be implemented under RA 6957. No amount from PPPSSF shall be used to pay private partner's financial obligations whose payment government has guaranteed. 4.6 DOH Macro Plan is also known as National objectives for Health (NOH). This is the country's strategic plan for the health sector within a medium-term. It contains what the health sector seeks to achieve ( i.e. , goals and objectives) and how can these be accomplished ( i.e. , measurable indicators, targets and strategies). 4.7 Business Case refers to the preliminary assessment of a project to justify the need to pursue the project and is argued in terms of cost/benefit analysis, which may include both financial, economic and societal benefit. 4.8 Center for Excellence on Public-Private Partnership in Health (CEP3H) refers to the office established under DOH Administrative Order No. 2012-0004 primarily concerned with the PPPs related initiatives and activities of the DOH, it is specifically mandated to initiate; facilitate PPPs in Health projects, undertake policy formulation and advocacy, and monitoring and coordination of PPPs in Health. 4.9 Project Cost refers to the total cost to be expended to plan, develop and construct the project to completion stage including but not limited to cost of feasibility studies engineering and design, construction, equipment, land and right-of-way, taxes imposed on said cost and development cost. TCADEc 4.10 Project Evaluation Report (PER) report prepared by the National Economic and Development Authority (NEDA) that contains technical, economic, financial and environmental appraisal of a PPP project. 4.11 Project Proponent private entity which has contractual responsibility for the implementation of a PPP project, with adequate financial base consisting of equity and firm commitments from reputable financial institutions to provide, upon award, sufficient credit lines to cover the total estimated cost of the project. 4.12 Unsolicited Project Proposals submissions by the private entities not in response to a formal solicitation or request made by IA to undertake infrastructure/development projects/services. 5.0 Roles and Responsibilities 5.1 Department of Health 5.1.1 Shall ensure that the DOH hospital concerned strictly implement the provisions of this Joint Circular, subject to sanctions provided for under applicable laws, for the upgrading and modernization of the hospital. 5.1.2 Shall monitor the implementation of projects funded under the PPPSSF pursuant to the provisions of this Joint Circular. 5.1.3 Shall submit reports on the utilization of the fund to DBM, and quarterly status reports on the implementation of PPP projects to the DOF and the PPP Center. 5.1.4 Shall include in the request the breakdown of each projects by category (Infrastructure, Equipment and Funding Strategy). 5.1.5 Shall issue Department Administrative Order to provide guidelines to operationalize this Joint Circular. 5.1.6 shall submit monthly physical and financial report of operations to DBM on the utilization and status of funds on the implementation of the PPP project pursuant to NBC 507. 5.2 Department of Finance shall monitor the implication/s of PPP projects on the fiscal position of the national government and provide measures to mitigate/minimize potential contingent liabilities. 5.3 Department of Budget and Management 5.3.1 Based on the request submitted by DOH-Central Office, shall release SARO/NCA through DOH-Central Office and shall be in accordance with Special Provision No. 1 of the DOH Budget under RA 10155. 5.3.2 Release funds subject to cash programming, budgeting, accounting and auditing and other applicable laws, rules and regulations. 5.4 National Economic and Development Authority-Public-Private Partnerships Center of the Philippines (PPP Center) shall monitor the implementation of PPP programs and projects. 6.0 General Guidelines The PPPSSF shall be utilized only for the following activities: 6.1 Right of Way (ROW) acquisition and related costs (including resettlement), government counterpart to be used for the construction and other related costs for potential and actual PPP projects identified by the IA, provided these do not exceed fifty percent (50%) of the project cost pursuant to Section 2a of RA 7718 (Philippine BOT Law); 6.2 Cost of designing, building, and otherwise delivering any part of a PPP project which government decides to retain responsibility for. This include public infrastructures such as rural and access roads, utilities, and other support facilities required for a PPP project to be viable. cHCIDE 6.3 Under exceptional circumstances, subject to the justification by the IA and approval by the DBM, the PPPSSF for FY 2012 may also be used for the following purposes: 6.3.1 Feasibility studies, business case development, pre-investment studies and other activities required to determine the feasibility and viability of potential PPP projects; 6.3.2 Preparation of various project documents as required for approval by the NEDA-ICC and other approving bodies; and 6.3.3 Hiring of consultants and advisors to assist the Department in various aspects of the project preparation, tendering, and execution process, including for the preparation of feasibility studies, transaction documents and marketing materials. 6.4 PPPSSF shall not be used for: 6.4.1 Any expenses related to unsolicited project proposals; 6.4.2 Credits and loans to the PPP private partners and guarantees provided by the government to the lenders of any private entity for any PPP project; and 6.4.3 Support to the regular programs of the Department. 6.5 PPPSSF shall include the following: 6.5.1 List of Hospitals to be funded broken down by Infrastructure, Equipment and Feasibility Study; 6.5.2 Conditions for the release per category: Infrastructure: should include the Work Program of the Project Equipment: should be classified as Movable and Needs Installation. For Movable Equipment, the list of equipment is required. For Needs Installation, this should be submitted together with the approved Feasibility Study. 6.6 The PPP process is independent on the release of funds. 6.7 PPPSSF shall be released by Tranche/Phase 7.0 Documentary and Reporting Requirements 7.1 The following documentary requirements shall be submitted to the DBM, copy furnished to the DOF and the PPP Center, together with the annual budget: THSaEC 7.1.1 NEDA-ICC TB endorsement and PER indicating cost sharing and financing scheme between national government and private entities; and 7.1.2 Project Implementation Plan (Form 1); 7.1.3 Physical and Financial Accomplishment Report; and 7.1.4 Updated Work and Financial Plan. 7.2 A status report on the utilization of PPPSSF and implementation of the PPP project/s. 8.0 Applicability Clause The provisions of this Joint Circular shall be applicable until such time that the Special Provision No. 1 of the FY 2012 appropriations of DOH as stated in Item No. A.III.B/1 above is superseded/deleted. 9.0 Governing Clause Cases not covered by the provisions of this Joint Circular shall be referred to the DBM, which shall resolve the matter in coordination with the DOH and in consultation with the DOF and the PPP Center. 10.0 Effectivity This Joint Circular shall take effect immediately. (SGD.) ENRIQUE T. ONA Secretary Department of Health (SGD.) CESAR V. PURISIMA Secretary Department of Finance (SGD.) FLORENCIO B. ABAD Secretary Department of Budget and Management (SGD.) ARSENIO M. BALISACAN Secretary National Economic and Development Authority ANNEX A FY 2012 List of Hospitals for Funding Assistance under PPP Strategic Support Fund Hospital PPP Project Particulars Amount * 1. Vicente Sotto Modernization Plan: DOH Equity for part of 100,000,000 Medical Center increase capacity to infrastructure and ROW 1200 beds and transfer of acquisition; major hospital site to Eversley equipment requirements Sanitarium; Establishment under PPP arrangements, of a cancer center including project feasibility complete w/ equipment study preparation 2. Western Visayas Modernization Plan: DOH Equity for part of 125,000,000 Medical Center increase capacity to infrastructure and the 1,000 beds hospital & major equipment requirements under PPP arrangements, including project feasibility study preparation 3. Cagayan Valley Modernization Plan: DOH Equity for 150,000,000 Medical Center increase capacity to infrastructure; Hospital 800 beds equipment under PPP arrangements 4. Northern Modernization Plan DOH Equity for part of 100,000,000 Mindanao infrastructure and major Medical Center hospital equipment under PPP arrangements 5. Quirino Memorial Modernization Plan: DOH Equity for part of 100,000,000 Medical Center increase in bed capacity infrastructure; balance on to 1000 beds infrastructure and all major hospital equipment under PPP arrangements 6. Bicol Medical Modernization Plan DOH Equity for part of 100,000,000 Center including establishment infrastructure and major of a Cancer Center with hospital equipment under complete radiotherapy PPP arrangements equipment 7. Bicol Regional Modernization Plan DOH Equity for part of 25,000,000 Training & infrastructure and the Teaching hospital & office furniture Hospital & fixtures including training equipment requirements; infrastructure and major hospital equipment under PPP arrangements 8. Eastern Visayas Modernization Plan DOH Equity for part of 80,000,000 Medical Center infrastructure; infrastructure and major hospital equipment under PPP arrangements 9. Zamboanga City Modernization Plan: DOH Equity for part of 80,000,000 Medical Center increase of bed capacity infrastructure; infrastructure to 800 beds including and major hospital equipment establishment of a under PPP arrangements Cancer Center with complete radiotherapy equipment 10. Cotabato Regional Modernization Plan DOH Equity for part of 300,000,000 Hospital infrastructure and major hospital equipment under PPP arrangements 11. Ilocos Training Modernization Plan DOH Equity for part of 80,000,000 and Regional infrastructure; infrastructure Medical Center and major hospital equipment under PPP arrangements 12. Baguio General Modernization Plan DOH Equity for part of 100,000,000 Hospital infrastructure; infrastructure and major hospital equipment under PPP arrangements 13. Batangas Regional Modernization Plan DOH Equity for part of 360,000,000 Hospital infrastructure and; infrastructure and major hospital equipment under PPP arrangements 14. Corazon Locsin Modernization Plan DOH Equity for part of 25,000,000 Montelibano infrastructure; infrastructure Memorial and major hospital equipment Hospital under PPP arrangements 15. Veterans Regional Modernization Plan DOH Equity for part of 50,000,000 Hospital infrastructure; infrastructure and major hospital equipment under PPP arrangements 16. Rizal Medical Modernization Plan DOH Equity for part of 200,000,000 Center infrastructure; infrastructure and major hospital equipment under PPP arrangements 17. Southern Philippines Modernization Plan DOH Equity for part of 50,000,000 Medical Center includes establishment infrastructure; infrastructure of a medical arts building and major hospital equipment under PPP arrangements 18. Amang Rodriguez Modernization Plan DOH Equity for part of 25,000,000 Medical Center infrastructure; infrastructure and major hospital equipment under PPP arrangements 19. Samar Provincial Modernization Plan DOH assistance to the 50,000,000 Hospital Modernization Plan of the LGU hospital 20- Jose Reyes Development of a medical DOH Equity for part of 260,000,000 21 Medical Center, complex linking the 3 infrastructure; infrastructure Jose Fabella hospitals and sharing a and major hospital Memorial common diagnostic equipment under PPP Hospital and center and national arrangements San Lazaro center for geriatric health Hospital 22. JB Lingad Cancer Center with DOH Equity for the 100,000,000 Medical Center complete radiotherapy renovation work on the (San Fernando equipment proposed site; major City, Pampanga) equipment under PPP arrangements 23. Paulino J. Garcia Establishment of a DOH Equity for the 50,000,000 Memorial Research Cancer Center with renovation work on the and Medical Center complete radiotherapy proposed site; major (Cabanatuan City) equipment equipment under PPP arrangements 24. Region I Upgrading Plan DOH Equity for part of 50,000,000 Medical Center infrastructure including site (Dagupan City) development; infrastructure and major hospital equipment under PPP arrangements 25. CARAGA Regional Upgrading/Plan DOH Equity for part of 50,000,000 Hospital infrastructure; infrastructure and major hospital equipment under PPP arrangements 10 Priority Conduct of FS and 390,000,000 Hospitals Hiring of Transaction advisers Grand Total 3,000,000,000 ============ Note: * The estimated amounts are proposed to be used for Right-of-Way acquisition for hospitals to be relocated, equity support for infrastructure construction and conduct of feasibility studies as may be necessary. SIcEHD