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Foreign funds worth hundreds of million dollars were canceled last
year by the Philippine government, primarily due to unutilized
balance at the close of the loan and foreign exchange movement, the
National Economic and Development Authority (NEDA) reported.
In NEDA’s 16th official development assistance
portfolio review, the agency said partial loan cancellations made
last year for 17 loans amounted to $125 million, lower than the
$222-million worth of unused loan portfolio in 2006.
The bulk of last year’s cancelled ODAs came
from unutilized balance at the close of the loan amounting to $98.75
million; followed by change in financing mode, $11.78 million;
excess financing as a result of foreign exchange rate movement,
$8.23 million; and reduction in scope of projects, $4.12 million.
As of last year, the country’s ODA loans
portfolio amounted to $9.75 billion covering 130 loans composed of
119 projects, broken down into $7.58-billion project funding for 19
projects and $2.17-billion program loans for 11 programs.
The Japan Bank for International Cooperation
continues to be the biggest source of loans with $3.46 billion,
comprising 37 percent of total ODA; followed by other sources
(China, Germany, Belgium, South Korea, Austria, United Kingdom, the
Netherlands, Kuwait and the OECD, among others, with 24 percent or
$2.28 billion; the Asian Development Bank with $1.98 billion; and
the World Bank with $1.84 billion.
The Organization for Economic Cooperation and
Development (OECD) defines ODA as flows of official financing with
the promotion of the economic development and welfare of developing
countries as the main objective. The loans are concessional in
character with a grant element of at least 25 percent using a fixed
10-percent rate of discount.
Projects funded by ODA, which generally deal
with infrastructure upgrading or improvement, require counterpart
funds from beneficiary governments. Reduction of these funds can
lead to a delay in implementation or outright cancellation.
NEDA said the infrastructure sector remains the
biggest recipient of ODA loans with $5.53 billion for 61 projects.
The agriculture sector came second with $1.67 billion or 17 percent;
social reform and development sector, 12 percent; and industry,
trade and tourism sector, 7 percent.
In terms of disbursement, the Philippines
utilized only $1.95 billion for 130 projects last year, down by 1
percent compared to $1.97 billion for 141 projects in 2006.
The NEDA said ADB recorded the highest
disbursement ratio at 62 percent; followed by other sources, 39
percent; JBIC, 36 percent; and World Bank at 32 percent.
The disbursement ratio is the ration of actual
disbursements to the net loan amount available during January to
December.
-- Darwin G. Amojelar
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