The Philippines may see an increase in official development assistance (ODA) inflow once the controversial Japan-Philippines Economic Partnership Agreement (JPEPA) is ratified, a ranking Finance official said.
Finance Undersecretary and acting National Treasurer Roberto Tan said Japan, the country’s top ODA source, is seen to relax its conditions for ODA once the agreement is sealed.
“There may be more ODA because the terms may be more relaxed,” Tan told The STAR during the weekend.
The government benefits from ODA loans as these are offered with better repayment terms compared to funds sourced from commercial sources.
The JPEPA is in Malacañang’s priority bills being pushed for approval in the 14th Congress. It is an economic agreement that opens up different sectors of both countries to enhance trade.
Latest data from the Department of Finance (DOF) showed that the government increased its ODA borrowings by seven percent to $1.466 billion this year from $854 million last year.
The government has so far borrowed as much as $900 million from lending agencies led by the World Bank, Asian Development Bank and Japan Bank for International Cooperation (JBIC).
This year’s program covers the $250-million development policy loan, the $200-million national program support for roads management and improvement with the Department of Public Works and Highways (DPWH) and the $83.75 million adaptable program loan for Mindanao.
It also covers the $50-million national program support for environmental management as well as the $11-million national program support for tax administration reform project of the Bureau of Internal Revenue (BIR).
Finance Secretary Margarito Teves has been pushing for the maximization of the use of cheaper ODA funds as part of efforts to fix the country’s fragile fiscal position.
The Philippines hopes to trim the budget deficit to P63 billion or 0.9 percent of gross domestic product (GDP) this year and wipe out the gap leading to a balanced budget by 2008.