INSIDER VIEW | Justifying a 99-year PPP contract

Can a Public-Private Partnership (PPP) project legally run for up to 99 years? This is a recurring question among government agencies and private proponents alike.

Historical context

Under Republic Act No. 7718 (amending R.A. 6957, the Build-Operate-Transfer Law), the maximum allowable term for PPP contracts was set at 50 years. Similarly, the 2013 Joint Venture Guidelines issued by the then-NEDA (now Department of Economy, Planning, and Development) also imposed a 50-year limit.

The PPP Code and its IRR

The newly enacted PPP Code (R.A. 11966) and its Implementing Rules and Regulations (IRR) are different. Neither the law nor its IRR prescribes a maximum contract duration.

Atty. Alberto  C. Agra

"While 99 years may sound extraordinary, it is permissible under Philippine law provided  it serves both the people’s welfare and the project’s viability."

Importantly, the IRR Committee cannot impose such a limit. Doing so would violate the principle of subordinate legislation, which holds that administrative rules cannot expand, restrict, or amend what the statute itself does not provide. Under the PPP Code framework, therefore, no statutory cap exists on contract life.

Contractual autonomy with safeguards

Because there is no fixed ceiling, the parties enjoy contractual autonomy in prescribing the term of a PPP agreement. However, this discretion is not absolute.

• Contract terms must be reasonable, project-specific, and performance-based
• A proposed 99-year contract must undergo scrutiny and approval by the relevant approving body under the PPP Code
• Most importantly, PPP contracts must uphold the public interest by ensuring affordability, accessibility, efficiency, sustainability, and Value for Money (VFM), while allowing the private partner a reasonable rate of return

Any provision contrary to these principles may be struck down as contrary to law or public policy.

Parallels in lease arrangements

The idea of a 99-year term is not unprecedented in Philippine law.

• Civil Code of the Philippines (1949): Leases exceeding 99 years are void, implicitly allowing leases up to that duration between private parties.
• Foreign Investment Lease Act (R.A. 12252, 2025): This law extended the cap for foreign leases over private lands from 50 to 99 continuous years. The rationale is to provide stability and attract long-term investments in industrial estates, agro-industrial ventures, tourism, ecological conservation, and other priority areas.

These examples reinforce the legitimacy of 99-year arrangements under certain policy and economic considerations.

Conclusion

Since the PPP Code does not impose a limit, a 99-year PPP or lease contract is legally permissible, provided that it is:

• Justified and reasonable in light of the project’s nature and objectives
• Approved by the appropriate approving body 
• Oriented toward the public good, consistent with the PPP Code’s guiding principles

In short, while 99 years may sound extraordinary, it is permissible under Philippine law provided  it serves both the people’s welfare and the project’s viability.