ODA disbursement down to only $781 million in 2008

MANILA, Philippines - The government’s disbursement of official development assistance (ODA) loans slowed down last year compared to 2007 due to procurement problems and financial issues, the National Economic and Development Authority (NEDA) reported yesterday.

In a report to NEDA director general Ralph Recto, NEDA director of Project Monitoring Roderick Planta said the government disbursed only $781 million in ODA loans last year compared to the $1.949 billion disbursed in 2007.

Planta attributed the low disbursement level to procurement and financial issues.

In the area of procurement, he said, the government encountered delayed procurement and processing of contracts as well as delays in sealing contracts with consultants.

On the financial side, the government implementing agencies also encountered problems such as delayed release of the budget for the local financing component, increase in costs and delays in the settlement of contractors’ bills, Planta said.

Other problems encountered included slow gestation activities, changes in key officials in management, poor performance of the contractor, limited technical capabilities of local government units, security issues, right of way challenges and failure of bidding.

Planta said to improve the disbursement level of ODA loans, the government needs to address specific problems of the implementing agencies.

As of end-2008, total cumulative ODA loans extended by various lending agencies to the Philippines reached $9.7 billion, consisting of $7.9 billion or 82 percent in project loans and $1.8 billion or 18 percent in program loans.

Lenders include the governments of Germany, Begium, Kuwait, Saudi Arabia, Netherlands, Korea, Spain and the United Kingdom.

Of the 115 program and project loans, 80 loans worth $6.3 billion are still ongoing, 25 have closed, one was cancelled and one was signed in 2007 but is yet to be made effective. The remaining eight loans were newly signed loans.

Some of the projects include the New Iloilo Airport Development Project, the Batangas Port Development Project, Light Rail Transit Expansion Project, the Mindanao Second Roads Improvement Projects and other infrastructure projects.

Implementing agencies include the Department of Public Works and Highways, Department of Agriculture, the Philippine National Oil Co. and the Bangko Sentral ng Pilipinas (BSP).