COVID-19 to further slow processing of China ODA

MANILA, Philippines — The coronavirus disease-2019 (COVID-19) outbreak may further slow down the processing of official development assistance (ODA) from China as there will be fewer meetings due to travel restrictions, the National Economic and Development Authority (NEDA) said.

Socioeconomic Planning Secretary and NEDA chief Ernesto Pernia said there is recognition on both sides that more meetings must be held about projects proposed for financing, but current travel limitations in relation to the spread of  the virus may prevent these from pushing through.

“We admitted that we need to meet, to have regular meetings, but it would be difficult right now because we cannot go to China,” he told reporters in a recent interview.

He also noted that China’s dollar shortage may contribute to the lag in the processing of ODA for infrastructure projects in the Philippines.

Last month, Pernia commented on the slowness of the provision of ODA from China compared with Japan, which is currently the country’s top ODA provider.

Pernia attributed this to the lack of regular meetings with their Chinese counterparts as well as the languid pace in the screening process for Chinese companies on the Philippine side. 

So far, only two projects under the government’s Build Build Build program have obtained funding from China: the Chico River Dam irrigation project and the Kaliwa Dam project. 

The Philippines is stepping up negotiations for ODA to fund its ambitious infrastructure program within the grace period allotted for countries graduating to upper middle income status.

The country is currently classified as a lower middle income economy having a gross national income (GNI) per capita of $3,830 as of 2018. This year, it is expected to become an upper middle income country with a GNI per capita income range of $3,996 to $12,375.

A three-year grace period will be in effect before the country becomes ineligible for concessional loans or borrowings with interest rates that fall below market rates.

Alongside this are efforts to attain an “A” credit rating so commercial funding sources can be tapped in the absence of concessional financing.