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Japan still Philippines’ top ODA partner

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Japanese Ambassador Koji Haneda signed four grant contracts in Cotabato City with the representatives of the recipient organizations for various social development projects in conflict-affected areas in Mindanao. Courtesy of Embassy of Japan

JAPAN remains the biggest source of foreign funding for the Philippines, the National Economic and Development Authority (NEDA) said on Friday, accounting for nearly half the loan portfolio.

Loans and grants from the Japanese government reached $5.977 billion as of end-September to account for 41.2% of the country’s official development assistance (ODA), the NEDA said.

Commitments for the Philippines’ active ODA portfolio hit $14.507 billion as of September, broken down into loans worth $12.283 billion and grants at $2.225 billion.

ODAs refer to credit lines extended by foreign governments and international development and aid agencies for local projects, which come with cheaper borrowing rates compared to those imposed by banks.




Japan took the lion’s share after it extended financing for the government’s Metro Manila subway project, which involved a 105.43-billion yen (or P50.12 billion) loan line back in March. The railway plan forms part of the “Build, Build, Build” program of the Duterte administration, and is set to break ground in January 2019.

The project, which is expected to cost a total of P356.96 billion to build a 25-kilometer railway from Mindanao Avenue in Quezon City to the Ninoy Aquino International Airport in Pasay, is eyed to start partial operations in May 2022. A full run is targeted by 2025.

Japan also granted funding for the North-South Commuter Railway Extension project, the New Bohol Airport Construction and Sustainable Environmental Protection Project and the Metro Rail Transit Line 3 (MRT3) Rehabilitation Project, to name a few.

Tokyo was the top source of ODA in 2017, according to government data.

Multilateral lenders were the next-biggest sources of foreign funding, the NEDA said. The World Bank came second with $3.128-billion loans, more than a fifth of the total ODA. The regional lender Asian Development Bank followed with $2.24 billion.

Other major sources of ODA are the United States ($806.76 million worth of active project loans) worth 5.56% of the sum, and South Korea ($659.73 million) at 4.55%.

Also extending loans and grants to the Philippines are Australia, United Nations System, the China-led Asian Infrastructure Investment Bank, France, the European Union, China, Germany, OPEC Fund for International Development, Italy, Canada, Spain and New Zealand, NEDA added.

The Duterte government has said that it will rely more on public funding and foreign loans and grants via ODA to avoid delays and higher project costs, versus the old model of tapping public-private partnership (PPP) deals to put up big-ticket infrastructure. — Melissa Luz T. Lopez