Every three years, at the beginning of each new administration the local development plans are prepared together with annual investment programs. These are requisite documents for budget preparation and appropriation process.
It is not clear how LGUs classify their long list of projects into PPP and non-PPP, or what criteria they employ to rank their projects. This is an area where the PPP process is weakened. Given this weakness, the next section introduces the possibility of using multivariate analysis (MVA) to segregate PPP from non-PPP projects. MVA methodology in this case would consist of carefully selected variables designed to screen out those projects that do not appear to be commercially sustainable. The MVA methodology may be combined with social cost benefit analysis (SCBA) to identify PPP projects considered to be strategic for long-term sustainable economic development.
Adopting the MVA methodology will not change the way projects are currently evaluated by approving authorities. Nonetheless, if they agree with this approach of prioritizing projects, the local sanggunians, in particular, can issue guidelines formalizing the use of MVA as a more rigorous system of PPP project selection as well as the application of SCBA in ranking projects according to their relative importance to the economy. It is important to note that MVA will not justify the viability of a PPP project; rather, it will only indicate which projects should be developed further. Nevertheless, with this technique, several criteria can be taken into account simultaneously where less than full information is available. Scoring rules, weighting and the methodology must be pre-determined and should not be changed during the process, so as to avoid manipulating the results, as will be apparent in the discussion below.