Japan still PHL’s top source of ODA

JAPAN remained the Philippines’ leading source of official development assistance (ODA) as of March, with just over 40% of the foreign-aid portfolio, according to the National Economic and Development Authority (NEDA).

Grants and loans from the Japanese government totaled $8.537 billion at the end of the first quarter, or 42.66% of all ODA.

The Philippines’ active ODA portfolio was worth $20.01 billion as of March, with $18.368 billion representing loans and $1.641 billion grants. The total was down 7.45% from the end of 2019, after outstanding loans declined 8%.

Japan was also the biggest source of ODA funding last year, accounting for 39.39% of the total.

Japan, through the Japan International Cooperation Agency, signed three loan agreements with the Philippines this year: the P57-billion loan for the construction of a fourth Cebu-Mactan bridge and coastal road project; the P18.5 billion in supplemental financing for the second phase of the Davao City Bypass Construction Project in June; and a P23.5-billion loan for the pandemic containment effort.

The Asian Development Bank (ADB) was the second-biggest source of foreign funding, accounting for 22.24% or $4.449 billion, followed by the World Bank with 19.75% or $3.952 billion.

Separately, NEDA tallied seven ODA loan agreements taking effect in the first quarter: four projects worth $923 million from the ADB and three projects worth $1.05 billion from the World Bank.

Other partners in the top ten were South Korea with ODA worth $631 million (3.15% of the total); China $590 million (2.95%); the US $578 million (2.89%); the United Nations $349 million (1.74%); Australia $290 million (1.45%); the Asian Infrastructure Investment Bank $208 million (1.04%); and France $147 million (0.73%).

Other partners include the European Union ($138 million); Germany ($43.05 million); Italy ($39.92 million); OPEC Fund for International Development ($30 million); Canada ($14 million); Spain ($9.8 million); and New Zealand ($3.89 million).

In its ODA Portfolio Review 2019 released early this week, NEDA said 32 projects of eight agencies will be “restructured” this year to either extend the loan validity or the implementation period, or make changes in scope, cost, implementation arrangements and loan reallocation.

Any changes will have to be reviewed and approved by the Investment Coordination Committee or the NEDA Board.

The report also laid out its recommendations to the agencies implementing projects this year, such as to strengthen the quality of proposals; ensure right-of-way issues are resolved before construction work starts; improving cooperation between multi-year contracting authorities and the Budget department to ensure prompt release of funds; as well as ensuring that beneficiaries can sustain the ODA-funded projects.

“(Agencies should) update and firm up the annual budgetary requirements in a post-COVID 19 scenario for all ongoing projects from 2020 and beyond taking into account the cumulative disbursement backlogs as of December 2019 and specific plans of action to address these backlogs within the project life cycle,” it added.

In 2019, NEDA said the release of loans increased by 21% to $2.71 billion due to higher project loan disbursements.

The use of active grants, however, declined to 50% utilization from 70% in 2018.

In 2019, 19% or 62 projects out of the 329 active ODA-funded projects were completed, one ahead of schedule; 66% or 217 were “on schedule” while 12% or 40 others were considered behind schedule. It said eight projects have not yet started while one was closed while incomplete. — Beatrice M. Laforga