Partnership with the Private Sector

1987 CONSTITUTION
ARTICLE II
Declaration of Principles and State
Policies

Section 20. The State recognizes the indispensable role of the private sector, encourages private enterprise, and
provides incentives to ne ded investments.cralaw
Section 23. The State shal encourage non-governmental, community-based, or sectoral organizations that
promote the welfare of the nation.cralaw
1987 Constitution (ARTICLE XIII)
ADMINISTRATIVE ORDER NO. 270 - PRESCRIBING THE IMPLEMENTING RULES AND REGULATIONS OF
THE LOCAL GOVERNMENT CODE OF 1991

Approved: Feb. 21, 1992 by Pres.

Corazon C. Aquino
RULE I. Policy and Application
Article III. Declaration of Policy

(c) It is likewise the policy of the State to

require all national government
agencies and offices (NGOs) to conduct
periodic consultations with appropriate
LGUs, nongovernmental organizations
(NGOs) and people's organizations, and
other concerned sectors of the
community before any project or
program is implemented in their
respective jurisdictions.
RULE XIII - Local Government Relations
With People's Organizations,
Nongovernmental Organizations, and
the Private Sector

ARTICLE 62. Role of People's

Organizations, Nongovernmental
Organizations and the Private Sector.
LGUs shall promote the
establishment and operation of
people's organizations, NGOs, and
the private sector, to make them
active partners in the pursuit of local
autonomy. For this purpose, people's
organizations, NGOs, and the private
sector shall be directly involved in
the following plans, programs,
projects, or activities of LGUs:
 ARTICLE 63. Local Special Bodies.
(a) Local Development Councils The duly designated
representatives of accredited people's organizations,
NGOs, and the private sector operating in the
provinces, cities, municipalities, or barangays shall sit
as members in the provincial, city, municipal, or
barangay development councils, as the case may be.
The number of NGO representatives in each LDC shall
not be less than one-fourth (1/4) of the total
membership of the fully organized council. The local
chief executive shall undertake the necessary
information campaign to ensure participation of all

(a)Local NGOs operating within his territorial jurisdiction.

(b) Local Prequalification, Bids and Awards Committees
Two (2) representatives of people's organizations or

special NGOs that are represented in the LDC concerned, to be

chosen by the organizations themselves, and a
practicing certified public accountant from the private

bodies; sector, to be designated by the local chapter of the

Philippine Institute of Certified Public Accountant, if
any, shall sit as members of the provincial, city, and
municipal prequalification, bids and awards
committees (PBACs).
(c) Local Health Boards A representative from NGOs
or the private sector involved in health services in the
province, city, and municipality shall sit as member of
the provincial, city or municipal health boards,
respectively.
(d) Local School Boards The representatives of NGOs
or the private sector who shall sit as members of the
local school boards are as follows:
(1) Provincial school board the duly elected
president of the provincial federation of
parents/teachers associations, the duly elected
representative of teachers' organizations in the
province, and the duly elected representative
of the non-academic personnel of public
schools in the province;
(2) City school board the duly elected
president of the city federation of parents-
teachers associations, the duly elected
representative of teachers' organizations in the
city, and the duly elected representative of the
non-academic personnel of public schools in
the city;
(3) Municipal school board the duly elected
president of the municipal federation of
parents/teachers associations, the duly
elected representative of the teachers'
organizations in the municipality, and the duly
elected representative of the non-academic
personnel of the public schools in the
municipality;
(e) Local Peace and Order Councils The
representatives of people's organizations or NGOs in
the local peace and order councils shall be the same
as those provided under Presidential EO 309, series
of 1988, as amended, and the implementing rules
and regulations issued pursuant thereto (Annex B).
(f) People's Law Enforcement Boards The
representatives of people's organizations or NGOs
who sit as members of the boards shall be the same
as those provided under RA 6975, and the rules and
regulations issued pursuant thereto.
ARTICLE 64. Procedures and Guidelines for Selection of
Representatives of People's Organizations, Nongovernmental
Organizations, or the Private Sector in Local Special Bodies.
(a) Call for application Within thirty (30) days from the
approval of these Rules and thereafter, within thirty (30) days
from the organization of the newly elected sanggunian, each
sanggunian concerned shall call all community-based people's
organizations or NGOs, including business and professional
groups, and other similar aggrupations to apply with the LGU
concerned for accreditation for membership in the local
special bodies. The application shall include a duly approved
board resolution of the people's organizations, NGOs or the
private sector concerned, certificate of registration, list of
officers, accomplishments, and financial data of the
organization;
(b) Accreditation The sanggunian concerned shall accredit
the organizations based on the following criteria:
(1) Registration with either the Securities and Exchange
Commission, Cooperatives Development Authority,
Department of Labor and Employment, Department of Social
Welfare and Development, or any recognized NGA that
accredits people's organizations, NGOs, or the private sector.
If not formally registered, the said organizations may be
recognized by the sanggunian for purposes only of meeting
the minimum requirements for membership of such
organizations in local special bodies;
(2) Organizational purpose and objectives include
community organization and development, institution-
building, local enterprise development, livelihood
development, capability-building, and similar
developmental objectives and considerations;
(3) Community-based with project development and
implementation track record of at least one (1) year;
(4) Reliability as evidenced by the preparation of
annual reports and conduct of annual meetings duly
certified by the board secretary of the organization;
and
(5) In the case of PBACs, the organization or any of its
members shall have no conflict of interest in the
awarding of infrastructure or other projects.
(c) Completion of the accreditation process The
sanggunian shall complete the accreditation process
within sixty (60) days from the promulgation of these
Rules or within the same period from the organization
of the newly elected sanggunian.
(d) Meeting to choose representatives of people's
organizations, NGOs, or the private sector
Within fifteen (15) days after the accreditation
process, the DILG field officer assigned in the LGU
shall call all accredited people's organizations, NGOs,
or the private sector to a meeting where these
organizations shall choose from among themselves
which people's organizations, NGOs or private sector
will be represented in the local special bodies. The
selected people's organizations, NGOs or private
sector shall then designate their principal and
alternate representatives who are residents of the
LGU concerned. In no case shall an organization or a
representative thereof be a member of more than
one local special body within a province, city, or
municipality.
(e) Term of office of selected representatives The
term of office of a selected representative shall be
coterminous with that of the local chief executive
concerned. Should a vacancy arise, the selected
people's organizations, NGOs, or the private sector
shall designate a replacement for the unexpired
term.
ARTICLE 65. Delivery of Basic Services and Facilities.
LGUs may, by ordinance, sell, lease, encumber, or
otherwise dispose of public economic enterprises owned
by them in their proprietary capacity to the private sector
to ensure their active participation in local governance.
ARTICLE 66. Joint Ventures and Cooperative Programs or
Undertakings. LGUs may enter into joint ventures and
such other cooperative arrangements with people's
organizations, NGOs or the private sector, to engage in the
delivery of certain basic services; capability-building and
livelihood projects; develop local enterprises designed to
improve productivity and income; diversify agriculture;
spur rural industrialization; promote ecological balance;
and enhance the economic and social well-being of the
people.
ARTICLE 67. Financial and Other Forms of Assistance. An
LGU may, through its chief executive and with the
concurrence of the sanggunian concerned, provide
assistance, financial or otherwise, to people's
organizations, NGOs, or the private sector for economic,
socially-oriented, environmental, or cultural projects to be
implemented within its territorial jurisdiction. An LGU may
likewise grant tax exemptions, tax relief and other tax
incentives to the said organizations as provided in
these Rules.
ARTICLE 68. Preferential Treatment for Organizations
and Cooperatives of Marginal Fishermen.
(a) The duly registered organizations and
cooperatives of marginal fishermen shall have
preferential right in the grant by the sanggunian
to erect fish corrals, oyster, mussel or aquatic
beds or bangus fry areas, within a definite zone
of the municipal waters.
(b) The sanggunian may grant the privilege to
gather, take or catch bangus fry, prawn fry or
kawagkawag or fry of other species and fish
from the municipal waters by nets, traps or
other fishing gears to marginal fishermen free of
any rental, fee, charge, or any other imposition
whatsoever.
ARTICLE 69. Preferential Treatment for Cooperatives.
Upon approval by a majority vote of all its members, the
sangguniang panlungsod or sangguniang bayan may
grant a franchise to any person, partnership, corporation,
or cooperative to establish, construct, operate and
maintain ferries, wharves, markets or slaughterhouses,
or such other similar activities within the city or
municipality as may be allowed by applicable laws.
Cooperatives shall be given preference in the grant of
franchises as contemplated in this Article.
ARTICLE 70. Financing, Construction, Maintenance,
Operation, and Management of Infrastructure Projects
by the Private Sector. LGUs may enter into a contract
with any duly prequalified individual contractor for the
financing, construction, operation, and maintenance of
any financially viable infrastructure facilities, under the
build-operate-and-transfer (B-O-T) agreement, subject to
the applicable provisions of RA 6957 authorizing the
financing, construction, operation, and maintenance of
infrastructure projects by the private sector and the rules
and regulations issued thereunder and such other terms
and conditions as may be agreed upon by the
contracting parties.
 Parameters in the Privatization
Policies and Guidelines for the
privatization of Basic Services
Program:
and the Management of
Economic Enterprises: The service or enterprise to be privatized
should result in providing the most efficient
and effective delivery of services to the
One effective way in operation and people.
delivery of basic services with private Democratic consultations and participation
sector is the construction, operation and of all sectors affected should be encouraged
management of basic services. Transparency of all privatization transactions
and issues shall be observed as much as
possible.
The arrangement gives the NGO/private
sector and facilitate the privatization of A program of training and re-training of
some local services, while improving the workers is strongly suggested to the new
management.
efficiency and effectiveness in delivery of
basic services and maintenance of In all cases, public welfare should be the
facilities. guiding principle in the privatization issue.
The effect of privatization, a legal contract
must be processed between the LGU and the
This provides the guidance to promote private sector which should have the
and facilitate s the privatization of some credentials and capability to handle delivery
local services, while improving the of service/management of the enterprise.
efficiency and effectiveness in delivery of The contract must provide the role of each
basic services and maintenance of contracting party, financial arrangement,
facilities. condition and duration of the contract and
lease agreement.
The contractor must be licensed to manage
and operate the service.
 Difference between LEEs and PUs
LEEs are the Local Economic Enterprises PUs are the Public Utilities