NEDA reports lower cost overruns in ODA loans

MANILA, Philippines -  Cost overrun stock in the Official Development Assistance (ODA) loans portfolio amounted to P21.13 billion as of March 2011, according to the National Economic and Development Authority (NEDA).

The amount is lower by 23.1 percent from the P27.47 billion cost overrun stock as of March 2010, and by 24.2 percent from the P27.88 billion as of the previous quarter

Cost overrun is defined as additional costs over and above the budget of the loan program as approved by the NEDA-Investment Coordination Committee (ICC).

The decline in cost overrun was attributed to two loan programs that were closed in the first quarter of 2011. These are the Subic-Clark-Tarlac Expressway, funded by the Asian Development Bank, and the Southern Philippines Irrigation Project, funded by the Japan International Cooperation Agency.

As of March 2011, there were 18 requests for cost overrun worth P21.13 billion, all of which were requested in the previous years. Fifteen already secured the approval of the NEDA-ICC Cabinet Committee (CabComm); two were already endorsed by the ICC-Technical Board for the CabComm’s action; and one from the Pinatubo Hazard Urgent Mitigation Project is still being review by the secretariat.

The NEDA-ICC, which is one of NEDA Board’s seven interagency committees, evaluates the fiscal, monetary and balance-of-payments implications of major national projects. The powers and functions of the NEDA-ICC reside in the CabComm, which is headed by the Secretary of Finance. The Committee is supported by an interagency Technical Board, with NEDA as ICC Secretariat.

From January to December of 2010, six requests for cost overrun were received by the ICC secretariat. During the same period, four loans were also closed, one request was withdrawn and one request underwent cost adjustment. The cost overrun stock by the end of 2010 included 20 requests worth P27.88 billion.