ODA loans decline to $8.31 B in first half

MANILA, Philippines - Official development assistance (ODA) loans extended by donors to the Philippines dropped to $8.31 billion as of end-June compared to the $8.84 billion recorded in the same period last year, according to the latest report from the National Economic and Development Authority (NEDA).

However, this is slightly higher than the $8.03 billion recorded in the first quarter of the year.

The $8.31 billion financed 68 project loans worth $7.27 billion and seven program loans worth $1.04 billion. Of these loans, five were closed during the period, while 66 are ongoing and four are yet to be made effective, the NEDA said.

The NEDA attributed the drop in ODA loans to a lower level of absorptive capacity for the period, with lower disbursement and availment rates compared to the first semester of last year.

According to NEDA, the disbursement rate is the level of disbursement against the annual target while the availment rate is the loan amount’s cumulative utilization according to a multi-year schedule.

The NEDA-Project Monitoring Staff (PMS) attributed the low disbursement rates to procurement, financial and other issues such as the suspension of contract and sharing schemes between the national and local governments.

“The substantial decrease in the disbursement performance may be attributed to the low financial performance of some China loans and other sources-assisted projects,” the NEDA-PMS report said.

These projects include the first phase of the Northrail Project, amounting to $400 million; the Second Cordillera Highland

Agricultural Resource Management (CHARM) Project, with $26.6 million and the Local Government Unit (LGU) Investment Programme II with $9.72 million.

“The North Rail Project only disbursed $16.69 million out of its $180.59 million target for the year due to contract suspension issues while the last two cited projects did not make any disbursements yet in 2011,” said the NEDA-PMS report.

In terms of sources, the government of Japan through the Japan International Cooperation Agency (GOJ-JICA) remained the top source with a share of 31.69 percent of the total ODA commitments.

The World Bank followed with a 23.75 percent share. China came in third with a share of 13.73 percent and fourth was the Asian Development Bank with a share of 8.77 percent.

Other sources such as Austria, Belgium, France, Germany, and International Fund for Agricultural Development (IFAD), Korea, Netherlands, the Organization of Petroleum Exporting Countries, Saudi Arabia, Spain, the Swedish International Development Cooperation Agency (SIDA) and the United Kingdom have a combined share of 22.06 percent.