ALL’S well that ends well, as the old cliché goes. Where Official Development Assistance (ODA) is concerned, the Philippines chose to rely on time-tested friendships and strong relationships.
In late February, Executive Secretary Salvador C. Medialdea issued a memorandum lifting the suspension of negotiations for and signing of all loan and grant agreements with governments of countries that co-sponsored and/or voted in favor of the United Nations Human Rights Council Resolution in July last year.
This can only cement the bond between the Philippines and its development partners, especially as the Duterte administration is in the thick of undertaking its massive infrastructure push to address a primary development constraint that prevents the economy from reaching greater heights.
Many of the administration’s Build, Build, Build (BBB) projects and the 100 Flagship projects are being funded by ODA from various countries. Based on the latest list of the flagship projects, around 49 of the projects worth P2.32 trillion will be funded through ODA.
Based on the 2018 Portfolio Review of the National Economic and Development Authority (Neda), the country’s total ODA portfolio amounted to $16.86 billion. This is composed of 76 loans worth $14.46 billion or 86 percent of the total and 338 grants worth $2.4 billion or 14 percent of the total.
Of this amount, the bulk of ODA commitments or 51 percent or $8.62 billion was allocated for infrastructure development. This includes 41 loans and 19 grants.
This was followed by 7 loans and 105 grants under the Social Reform and Community Development (SRCD). This amounted to $3.43 billion which represented 20.36 percent of the total ODA as of December 2018.
“Year-on-year (2017-2018) comparison shows that aside from having the highest share for both years, the INFRA sector also significantly increased by $1.99 billion in 2018,” the report stated.
“This is mainly due to the entry of seven (7) new infrastructure loans amounting to $2.15 billion, three (3) of which are part of the Build, Build, Build Program with net commitment amounting to a total of $1.31 billion,” it added.
The country’s reliance on ODA has not been a secret. The Philippines has been a recipient of concessional financing from its development partners, to not only move the economy forward but to also free millions of Filipinos from the shackles of poverty.
From the Neda report of the years between 1970 and 1979, we see that the country’s total ODA — then a whopping $4.57 billion — had posted an impressive average annual growth of 34.8 percent. The Neda attributed this rapid rate of increase in ODA to higher absorptive capacity “made possible by increased project preparation, implementation capacity and improved government revenue performance.”
Of the total amount, more than 90 percent or $4.127 billion were concessional loans; the remaining $446.5 million were grants.
As of June 1989, or a decade later, the country’s total ODA amounted to $9.29 billion, the jump in aggregate data apparently a result of the Philippines being the darling of the democratic world after the 1986 Edsa People Popwer revolt. The amount covered 498 loans and grants used to finance ongoing or new programs and projects. Total ODA loans reached $7.404 billion while grants amounted to $1.886 billion.
By the June 1991 review, one sees there were 156 active ODA loans, albeit a continuing struggle with availment rate. As of 30 June 1991, the country posted overall availment rate of 77 percent, or a decline of 6 percentage points from the 30 June 1990 report.
The total loan amount as of 30 June 1991 was $8.113 billion covering the 156 active ODA projects. This is composed of 144 project loans worth $6.592 billion and 12 program loans worth $1.52 billion.
As of the First Quarter 1999, total ODA commitments reached $11.171 billion, covering 180 loans, with the OECF of Japan as the largest source of ODA loans — or $5.127 billion or 46 percent of the total; followed by ADB with loans worth $3.048 billion or 27 percent of the total; then World Bank with $2.681 billion or 24 percent of the total.
Infrastructure received the highest loan amounts, with $7.549 billion covering 114 projects. The largest subsector was transportation with 36 projects worth $2.85 billion followed by energy, power, and electrification, $2.757 billion for 34 projects and water resources, $1.671 billion for 34 projects.
It is worth noting that many of the development partners of the country in the 1970s have remained the Philippines’ allies in its fight against underdevelopment and poverty.
“The little I know about development aid is that it is a great deal of money, though nothing that a country cannot provide for itself; and there is quite a lot of talk concerning matters that no country could know on its own,” Secretary of Foreign Affairs Teodoro L. Locsin Jr. said in his Keynote Speech at the Awarding Ceremonies of Mission: PHL, The BusinessMirror Envoys & Expats Awards last year.
“Behind it is a philosophy of development that is behind the most recent success story today: China’s. Don’t reinvent the wheel or struggle at great cost and much loss of precious time to learn to the way to do things better that is already known elsewhere and has only to be accessed, adapted and adopted,” he added.
Through the years, the Philippines has improved the way that it has undertaken its partnerships for development, as reflected in Neda’s ODA Portfolio Reviews not only to document the changes but also to institutionalize them.
Some of the reforms in the past decade included dedicating a portion of the ODA Portfolio Review to the country’s efforts to adhere to the Paris Declaration on Aid Effectiveness, a global compact that seeks to improve the extension and use of ODA in 2009 and discussing International Commitments on Aid and Development Effectiveness such as the MDGs, the Financing for Development (FfD), the High Level Forum (HLF) on Aid Effectiveness (which created the Paris Declaration), and the Managing for Development Results conducted in Morocco in 2004 and Hanoi in 2007 which appeared in 2010.
Meanwhile, the 2015 report highlighted efforts to transition to the Sustainable Development Goals (SDGs) from the MDGs, and included a portion of projects to be restructured in 2015.
A key reporting change in the 2015 report was the inclusion of the Alert Mechanism, introduced in 2010 but excluded from the ODA Portfolio Review.
The 2017 report also bore a summary of where the ODA loans and srants are located, so we see what regions benefit from development cooperation. The 2017 report also included the Flagship projects included in the Build, Build, Build program.
In the 2018 report, the Neda documented its development effectiveness initiatives, including its efforts to update and localize regional development plans as well as its participation in the 3rd Monitoring Round of the Global Partnership for Effective Development Cooperation.
Efforts to emphasize monitoring and evaluation of ODA projects is one of the major changes in past few years. These activities are being undertaken to improve efforts to implement ODA.
All these efforts and the long history of ODA partnerships between the Philippines and multilateral and bilateral institutions has improved the lives of many Filipinos. And it is the country’s hope that soon, it will be able to repay its debt of gratitude to its partners by becoming a donor and help other nations achieve their development objectives.
“The story of development cooperation is many decades old. And it is a continuing and evolving story — one made up as it goes along,” Locsin said. “Ending Part I and starting the first chapter of a second part which I think will be a thin volume; because the story of development should soon be coming to its end here as we cross over into a developed nation. And then another story will begin of the Philippines as a major donor nation. For there is no return on investment, no recompense for good deeds done, that is so satisfying as that which comes of giving with no thought of return.”