Understand the constitutional and statutory foundations behind sovereign guarantees in the Philippines
Explore the cautious yet strategic approach to public-private partnerships, and how guarantees are structured to protect public finances.
Learn how sovereign guarantees apply to GOCCs, LGUs, and foreign-assisted projects, for direct lending without guarantees.
Discover how international lenders and private partners can structure deals, and adapt to evolving risk-sharing models in Philippine infrastructure finance.
Secure smarter infrastructure deals in the Philippines
Download The Guide to Philippine Sovereign Guarantee and gain expert insights on government-backed financing, and legal safeguards for PPPs, GOCCs, and ODA-funded projects. For tailored legal advice, connect with our team today.
This section addresses common concerns raised by businesses, legal teams, and finance professionals looking for clarity on complex issues. If you’re seeking practical answers or a better understanding of key concepts, you’ll find helpful insights here.
What is a sovereign guarantee and why is it important in infrastructure projects?
A sovereign guarantee is a legal commitment by the Philippine government to cover specific financial obligations if a borrower — such as a GOCC or private partner in a PPP — defaults. It helps attract investors and lenders by reducing risk, especially in large-scale infrastructure or ODA-backed projects.
Does the Philippine government still offer sovereign guarantees for PPPs?
Yes, but selectively. The government avoids blanket guarantees and now focuses on targeted support mechanisms. These are subject to strict review and approval under the PPP Code of 2023.
Can LGUs or GOCCs secure foreign loans without a sovereign guarantee?
In most cases, a sovereign guarantee is still required. However, there are emerging opportunities for financially sound LGUs to directly access foreign financing without national government backing — especially under pilot programs with multilaterals like the ADB or World Bank.
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