Japan remains PH’s top source of ODA

Japan remains the Philippines’ top source of official development assistance (ODA) and major infrastructure development partner, as the bulk of its financial support went mainly to the Duterte administration’s “Build, Build, Build” program.

As of the third quarter of 2020, Japan’s total official development Assistance (ODA)—low-interest loans and grants—to the Philippines hit $11.2 billion, of which $9.9 billion or 89.1 percent went to infrastructure projects, the government’s Investor Relations Office (IRO) said.

The country’s other major sources of ODAs or concessional financing during the period were the Asian Development Bank, the World Bank and South Korea.

Despite claims of a closer Manila-Beijing ties, China ranked only fifth with an ODA to the Philippines of $600 million.

The IRO report was based on the latest data from state planning agency National Economic and Development Authority, the Public-Private Partnership (PPP) Center, the Department of Public Works and Highways and the Department of Transportation.

The Manila-based ADB had extended $8.5 billion in ODA, of which 25.8 percent or $2.2 billion was used to finance big-ticket infrastructure projects. The Washington-based World Bank had extended $5.3 billion in concessional financing to the Philippines, of which about $700 million or 13.1 percent went to infrastructure projects.

South Korea provided about $700 million in ODA to the Philippines, of which 61.9 percent or $400 million financed infrastructure projects.

Despite moves in recent years to intensify economic relations and infrastructure cooperation under President Duterte’s watch, Beijing’s ODA to Manila amounted to about $600 million as of the third quarter last year.

China’s loans and grants were mostly spent on infrastructure, as about $500-million worth or 88.9 percent of the total had been set aside to build a dam, flood control and “iconic” bridges along Pasig River.

While ODA remained a leading funding source for “Build, Build, Build” besides the national budget, the IRO said private-sector participation in infrastructure development had turned “broader” lately.

As of end-February, a total of 240 PPP projects worth P8.5 trillion were either under implementation or in the pipeline.

Among those being implemented were 79 solicited PPP projects amounting to P268 billion, plus 93 unsolicited projects worth P936 billion. Another seven PPPs totaling P85 billion are currently being verified, the IRO said.

In the PPP pipeline were P53 billion worth of 24 upcoming solicited projects, on top of 37 unsolicited PPPs amounting to a larger P7.1 trillion.

The Duterte administration had planned to spend a total of P6.7 trillion across 5,586 infrastructure programs in 2017 to 2022, including 104 of the big-ticket infrastructure flagship projects (IFPs) worth P4.1 trillion.

Socioeconomic Planning Secretary Karl Kendrick Chua earlier said 75 percent of these IFPs were already under implementation, while the remaining projects were under various stages of processing for approvals so they could be started before President Duterte steps down in the middle of next year.

By 2022, “more than half of the IFPs are either completed or ongoing,” the IRO said.

The government had set aside P1.17 trillion, equivalent to 5.9 percent of gross domestic product (GDP), for public infrastructure spending this year, ramping up expenditures after budgets of implementing agencies were slashed last year when more funds were injected into response to the health and socioeconomic crises inflicted by COVID-19.

In 2020, the government spent P824.9 billion on infrastructure or 4.5 percent of GDP, below the P1.05 trillion or 5.4 percent of GDP spent in 2019, partly as some projects had been delayed due to the restrictions imposed on movement of people and nonessential goods to contain the deadly coronavirus at the height of the longest and most stringent COVID-19 lockdown in the region.

The IRO nevertheless said the “Build, Build, Build” program generated 6.6 million jobs between 2016 and 2020.