Active ODA loans, grants hit $30.7B in 2020

The amount of outstanding loans and grants in the Philippines’ official development assistance (ODA) portfolio climbed by nearly half to $30.7 billion in 2020 as the government borrowed more to finance the fight against the COVID-19 pandemic.

But the state planning agency National Economic and Development Authority’s (Neda) ODA portfolio review 2020 report on Monday showed that disbursement and implementation of these concessional loans and grants extended by multilateral lenders and bilateral development partners, especially project-specific financing, were delayed by last year’s prolonged lockdowns.

The Neda data showed that the Philippines’ active ODA last year jumped 46.6 percent from $20.9 billion in 2019.

The additional ODA in 2020 included 20 quick-disbursing program loans totaling $8.2 billion, which were injected into the budget, 14 project loans amounting to $2.9 billion, as well as 25 grants worth $140 million.

These ODA signed last year expanded the active portfolio to a total of 30 program loans, 76 project loans and 251 grants as of end-2020.

The Neda said spending of ODA project financing lagged behind, no thanks to the stringent lockdown restrictions, which stopped many economic activities last year.

Financial performance

“There was a decline in the financial performance of project loans in terms of disbursement level, disbursement ratio, and availment rate (except for disbursement rate), largely due to delays in implementation of project activities resulting from the imposition of community quarantines in the country and related issues on travel restrictions, manpower reduction and materials supply,” Neda said.

In the case of loans intended for specific projects, the disbursement level declined to $1.1 billion last year from $1.2 billion in 2019 alongside lower disbursement ratio (8.1 percent last year against 2019’s 10.7 percent) as well as availment rate (64.9 percent in 2020 vs 70.5 percent in 2019).

Project loans

The government spent these project loans lower than targeted, resulting in backlogs last year. “The project loans portfolio registered a disbursement shortfall (target disbursements less actual disbursements) of $569.6 million in 2020. Availment backlog (cumulative target disbursements less cumulative actual disbursements) also remained high at $2.8 billion,” Neda said.

In terms of actual implementation of the 311 ongoing ODA-financed projects, Neda said 224 were on schedule; 53 were behind schedule; while 29 were already finished.

“In terms of the physical status of the 60 loan-assisted projects, five projects were physically completed, 24 projects were on schedule, 28 projects were behind schedule, and three projects closed with incomplete outputs. Of the five completed loan-assisted projects in 2020, four projects were completed on time while one project was completed past due its target completion date,” Neda said.

“Of the 24 projects that were on schedule, three projects are expected to be completed in 2021, four projects to be completed in 2022, and 17 projects to be completed in 2023 onwards. Meanwhile, the implementation of 28 projects were behind schedule due to COVID-19 restrictions, issues on site condition/availability, delays in procurement and government/funding institution approvals, inadequate budget or delayed fund releases, issues on the design/scope/technical specifications of projects, as well as issues on the performance of contractors/consultants, institutional support, inputs and costs, among others,” it added.

The Neda said that “the unprecedented challenges brought by the pandemic prompted a shift in sourcing and utilizing ODA financing in the new normal, from project-specific to quick-disbursing program loans.” INQ