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By Darwin Amojelar, Reporter
A National Economic and
Development Authority (NEDA) study warned that the Philippines’
capacity to meet commitments based on the Paris Declaration on Aid
Effectiveness by 2010 is “disturbing.”
The Paris Declaration is an
international agreement endorsed by more than 100 ministers, heads
of agencies and other senior officials on March 2, 2005. It commits
the signatories to increasing efforts in harmonization, alignment
and management of foreign aid, including official development
assistance (ODA), using a set of actions and indicators that can be
monitored.
Twelve indicators have been
devised to call for greater transparency in the delivery and
management of foreign aid to make it effective and enable countries
achieve targets set in the United Nations Millennium Declaration and
the resulting Millennium Development Goals (MDGs).
The Paris Declaration indicators
include the development of operational development strategies that
link development assistance to the medium-term expenditure framework
as reflected in the annual budget; more efficient and transparent
public financial management and public procurement mechanisms; use
of arrangements common to both benefactor and recipient country; and
parallel monitoring and assessment structures.
“For the baseline year of 2005
and initial progress reported for 2006, the resulting ratios were
quite disturbing as there were noted declines in five of the nine
quantitative indicators despite quite a number of initiatives
undertaken by GOP [government of the Philippines], especially under
procurement,” according to the NEDA study.
The NEDA said the relatively low
usage of foreign donors could be blamed on the fact that
foreign-assisted projects do not use local procurement procedures,
but instead use International Competitive Bidding procedures as
their procurement method. “This is especially true for
loan-assisted projects in the Philippines,” NEDA explained.
NEDA said that of the total $1.82
billion official development assistance in 2006, 29 percent, or $528
million should be used in the national procurement systems. This is
lower compared to the 37 percent registered in 2005.
The Paris Declaration targets the
national procurement system to produce 58 percent of the total aid.
“The low percentage use of the
country’s procurement system was quite unexpected because of the
passage of Republic Act [R.A.] 9184, known as the Government
Procurement Reform Act [GPRA],” the study said.
NEDA also said the Philippines is
very slow in untying its official development assistance. It said
that out of the 25 foreign donors currently providing aid to the
country, only World Bank, Asian Development Bank, Japan Bank for
International Cooperation, International Fund for Agricultural
Development, Overseas Petroleum Exporting Countries, Germany, AusAID
and United Nations provide untied aid. These accounts for 62 percent
of total commitment in 2006. In 2005, untied loan was 46 percent.
“Though this is encouraging, it
is noteworthy to observe that most of this untied aid came from the
multilateral partners,” NEDA reported. “For bilateral partners,
the country is looking forward for its further progress on untying
its assistance, especially that the country is putting a lot of
effort/reform in development partnership to foster provision of
untied aid to the country, aside from the expected impact of aid
effectiveness.”
Besides procurement, NEDA said
there were noted declines in Paris Declaration indicators, such as
use of public financial management systems, strengthen capacity by
avoiding parallel implementation structures, joint missions to the
field and joint country analytic work.
On the other hand, improvements
were noted only in three indicators: aid as reported on budget; more
predictability of aid; and use of common arrangements or procedures.
Of the nine Paris Declaration
indicators measured, the Philippines has so far achieved the 2010
target for only one indicator, that of coordinated capacity
development.
In 2006, the indicator dropped
from the previous year’s level, but maintained its above-target
rating at 69 percent with $132 million coordinated out of $193
million total technical cooperation. The total technical cooperation
provided in 2005 was $224 million, of which 77 percent or $173
million was coordinated.
“Given the above target
performance of the Philippines in the past two years, continued
efforts should be made to ensure that performance does not
deteriorate, but instead continues to improve further,” the study
said.
In the past five years,
development-aid loans have steadily decreased, largely because of
the government’s conscious effort to adhere to better project
quality and greater fiscal discipline.
From a peak of $11.8 billion in
2002, cumulative development-aid loans decreased to $9.5 billion as
of 2006, some 7 percent lower than the 2005 figure and 20 percent
lower than the 2002 figure.
The NEDA said the survey aims to
monitor and encourage progress in implementing the Paris declaration
at country level.
The survey was sent and
distributed to 33 development partners in the Philippines in the
last quarter of the year. Together, these partners account for at
least 95 percent of official development assistance in the country.
Some of these partners have been
vocal about their disappointment with how the Philippine government
has disposed of its aid funds.
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