EDITORIAL - Another lost project

Faced with a massive fiscal deficit, the government can use all the funding assistance it can get. But what does the government do when such aid becomes available? Everything gets bogged down in red tape.

This was seen once again in a P9.2-billion project to modernize six airports in the cities of Butuan, Cotabato, Dipolog, Pagadian, Puerto Princesa, and Sanga-Sanga in Tawi-Tawi. Five years ago, the Asian Development Bank and the European Investment Bank gave the go-signal for the project, with the ADB committing a concessional loan of $92 million and the EIB 25 million euros. The rest of the amount was supposed to have been put up as counterpart fund by the Philippine government.

Over the years, however, the country has become notorious for its failure to come up with the required counterpart funds for projects and its slow availment of official development assistance or ODA. The so-called Third Airports Development Project, launched in November 1998, fared no better. Reports said that to date, the project is less than 20 percent complete.

Efforts to expropriate lands for the airport runways are locked in litigation. Reports said losing bidders complained of corruption in the awarding of contracts. The EIB loan expired on Nov. 30 last year while the commitment of ADB was deemed cancelled as of last May 31, with only 12.85 percent of the funds having been disbursed. The ADB and EIB are reportedly set to fine the Philippine government P138 million. Can this project be saved?

Complaints about the country’s slow utilization of ODA are not new. Since the collapse of the Marcos regime, all multilateral lending agencies have been reminding the government of the country’s dismal availment rate and lack of counterpart funds. Awareness of the problem, however, is different from doing something about it. The government should stop complaining about its sorry fiscal position when it can’t even fully utilize foreign funding assistance.