RP needs key reforms to make foreign aid effective – Officials

Foreign aid will only help revive the Philippines economy if the government implements key reforms, government and aid officials said yesterday.

Political problems, failure to identify priorities, and lack of follow-through action stand in the way of the effective use of nearly $1 billion in annual foreign aid, they told an international aid conference here.

Manila suffers from a reputation of not putting assistance to the best use, sometimes leading to the postponement or even cancellation of projects.

The Philippines received $9.55 billion in foreign aid committments from 1992 to 2002, said Jonathan Uy, a public investment officer at the Socio-Economic Planning Department.

But many aid programs have to be extended beyond their original schedule.

This could indicate that the gains of the projects were not sustained or that there was a failure in management and targeting of programs, he said.

This could also be a sign of the Philippines’ weakness in identifying its needs, he said.

Donors and consultants could be driving the preparation and implementation of the projects rather than the recipients.

Budget Secretary Emilia Boncodin conceded that such issues had become more pressing, particularly in cases where foreign consultants "appear to call the shots in key areas, putting program sustainability in question".

UNDP policy director Steven Brown said the Philippines should consider undergoing an audit to measure its capacity to absorb foreign aid.

"The Philippines is realizing it can do more for itself," he said, adding that the country had a highly skilled and educated population.

Among the country’s problems are absence of stability and continuity in certain policies, high social inequalities and the need for a more hospitable environment for small and medium enterprises.

To address this would require many difficult political decisions, Brown said. It would also need a clearly defined and transparent development strategy.

Strong central management of aid was also necessary to avoid duplication and ensure it was channeled to the right places.

The Philippines "should be ready to say no" to inappropriate aid programs, Brown said. – AFP