Two arrangements have become increasingly relevant: Commercialized PPPs and Asset Monetization PPPs.
These two overlap significantly—Asset Monetization PPPs being a sub-category of Commercialized PPPs—but they are not identical.
Distinguishing between them allows administrative agencies, local government units (LGUs), government-owned and -controlled corporations (GOCCs), government instrumentalities (GIs), and state and local universities and colleges (S/LUCs) to choose the most appropriate approach.
Commercial vs. Asset Monetization PPPs
Commercialized PPPs broadly refer to PPP projects where the primary source of revenue is market-based. These include user fees, rentals, advertising, commercial operations, sponsorships, and other non-government payments.
They differ from government-paid PPPs such as availability-payment schemes, where the government pays the private partner for making an asset or service available, or when the government provides subsidies, viability gap funding, or guarantees.
Commercialized PPPs work best when demand risk, pricing, and marketability can be absorbed by the private sector.
Asset Monetization PPPs fall within this commercial framework but focus specifically on existing public assets—land, buildings, facilities, easements, or air rights. The goal is to unlock value, generate revenue, reduce carrying costs, or catalyze redevelopment.
These often take the form of long-term leases, joint ventures, usufruct agreements, or real estate development arrangements where the private partner invests to improve, develop, or repurpose an idle or underutilized asset.
Common features
Both commercialized and asset monetization PPPs share common features:
Their key distinction lies in the asset base and objective.
Commercialized PPPs may involve constructing new facilities or systems—such as public markets, terminals, digital infrastructure, parking systems, or sports complexes—even without a significant pre-existing public assets. Asset Monetization PPPs, however, must involve pre-existing government property whose value can be converted into income or development potential.
Examples of Commercialized PPPs include modern bus terminals, commercial wings of sports facilities, digital advertising networks, and renewable-energy installations. Asset Monetization PPPs include long-term leases of government land for mixed-use development, JV development of idle GOCC, GI or S/LUC property.
Understanding two PPP pathways
For Build-Operate-Transfer, Rehabilitate-Operate-Transfer projects, JVs, or leases involving public projects, the PPP Code (RA 11966) applies.
For purely commercial or asset monetization arrangements, agencies and LGUs may rely on their charters, ordinances, or sector-specific guidelines.
In sum, Commercialized PPPs enable market-based service delivery, while Asset Monetization PPPs unlock value from existing assets. Choosing the right modality depends on goals, asset availability, and desired outcomes.
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