Official development assistance reaches $8.31 billion

The Philippine  official development assistance (ODA) loan commitment  totalled US$8.31 billion as of June 2011, lower than the same period  last year at $8.84 billion.
The National Economic and Development Authority (NEDA) said the US  8.31 billion was used to fund 68 project loans worth US$7.27 billion and 7 program loans worth US$1.04 billion.
Of these loans, five were closed during the period, while 66 are ongoing and four are yet to be made effective.

The NEDA noted lower levels of absorptive capacity for the period, with lower disbursement and availment rates compared to the first semester of 2010.

Disbursement rate is the loan amount’s level of disbursement against the annual target, while the availment rate is the loan amount’s cumulative utilization according to a multi-year schedule.

From January to June, the disbursement rate in 2011 was 66 percent, compared to 87 percent last year, while the availment rate was 71 percent, compared to 82 percent last year.

The NEDA-Project Monitoring Staff (PMS) said  the low disbursement performance was due to procurement, financial, and other issues like suspension of contract and the national government-local government sharing scheme.

“The substantial decrease in the disbursement performance may be attributed to the low financial erformance of some China loans and other sources-assisted projects,”said NEDA.

These projects include the Northrail Project Phase I Section I, with US$400 million net commitment and implemented by the Philippine National Railways; the Second Cordillera Highland Agricultural Resource
Management (CHARM) Project, with US$26.6 million net commitment and implemented by the Department of Agriculture; and the Local Government Unit (LGU) Investment Programme II, with US$9.72 million and implemented by the Department of Interior and Local Government.

The three loans are extended by China, the International Fund for Agricultural Development and Germany, respectively.

“The North Rail Project only disbursed US$ 16.69 million out of its US$ 180.59 million target for the year due to contract suspension issues, while the last two cited projects did not make any disbursements yet in
2011,” said the NEDA-PMS report.

Thirteen ongoing loans have disbursement rates below 50 percent as of June 2011. However, the number
is lower compared to the figure as of March 2011, which had 15 loans.

“The decrease in the number of projects with low disbursements maybe attributed to the fact that those in the said category in the first quarter have disbursed more in the second quarter of 2011,” the report

Three ongoing project loans, excluding newly effective and those in the start-up stage, did not disburse due to low demand of subproject and prolonged processing of withdrawal application.

These projects are the LGU Investment Programme II, the Second CHARM Project and the Health Sector Reform Project.

Meanwhile, the NEDA-PMS report said that the biggest ODA donor as of June 2011 is the Government of Japan-Japan International Cooperation Agency (GOJ-JICA), with a share of 31.69 percent of the total ODA commitments, followed by the World Bank with a 23.75% share. China came third with a share of 13.73 percent and fourth was the Asian Development Bank with a share of 8.77 percent.