France grants $150-M aid for PH LGUs

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To continue the government’s decentralization program, France has issued a $150-million official development assistance (ODA) loan to the Philippines to be used to improve efficiency of public expenditure, enhance accountability of local government units, and create a fiscal framework conducive to job creation.

The reform program aims to improve service delivery in the Philippines by assisting the development of efficient and transparent local government units within an adequate and equitable fiscal framework.

In a statement, the Department of Finance (DOF) said that the ODA loan agreement was signed between the governments of the Philippines and France through the public development finance institution Agence Française de Développement (AFD French Development Agency).

The Finance department said the loan will partially finance the 2014 general budget requirements of the national government under the framework of the Local Government Finance and Fiscal Decentralization Reform Program, also being co-financed by the Manila-based lender Asian Development Bank.


The highly concessional loan by the French government, through AFD, is in recognition of the Philippine government’s accomplishments on its decentralization reforms, the DoF said.

“Thanks to this important step for France-Philippines cooperation, AFD is expecting to further enhance its strategic partnership with the government of the Philippines on the occasion of forthcoming bilateral consultations and on the prospects for the most expected official visit of President [Benigno] Aquino [3rd] to France,” it said.

Besides France, the European Union (EU) is also expected to provide a 4.8-million euro or about P300 million grant to strengthen the national Disaster Preparedness Audit (DPA) framework to be implemented by Department of Interior and Local Government.

The DPA framework aims to improve local government performance in institutionalizing disaster preparedness policies and monitoring disaster preparedness response, and strengthen the public finance management at the local level.

Finance Secretary Cesar Purisima thanked the French government and the European Union for their support to the Philippines, particularly in the achievement of the inclusive growth agenda of the government and in the relief and reconstruction efforts in the Super Typhoon Yolanda-affected areas.

The European Union, through Ambassador Guy Ledoux, said that the provisions of the technical assistance reflect the timely and coordinated assistance that the EU and AFD can jointly provide to the Philippines to implement disaster risk reduction and management policies.

French Ambassador Gilles Garachon said that the loan agreement recognizes four years of AFD’s full dedication and commitment to assist the Philippines in achieving its inclusive growth strategy.

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