Simpler ODA processing system sought

The Department of Finance has asked international lenders to simplify the processing of official development assistance (ODA) to help move projects from concept to implementation faster.

Finance Secretary Cesar V. Purisima said he had conveyed this message to the government’s multilateral and bilateral partners in side talks in Tokyo where officials gathered for the yearly meetings of the World Bank and International Monetary Fund.

In particular, during a meeting of middle-income countries with World Bank President Jim Yong Kim, Purisima said he had stressed that the Philippine President had only a single six-year term.

“We need projects moving as fast as we can, and we hope our development partners can join us in ensuring that projects move from the drawing table to groundbreaking at a much faster pace,” he said.

One such reform that the DOF is pushing is the separation of evaluation of the project itself and of the loan or financing package.

In the present system, project proposals go through the National Economic Development Authority—Investment Coordinating Committee (Neda-ICC) and eventually to the Neda board with a specific financing source already identified.

“The current process where projects are evaluated not only on their merits but also on the financing commitments that agencies have already secured, present multiple problems,” Purisima said.

The finance chief said one major drawback was that priority projects approved by the Neda board that were already committed to specific financing entities tie the priority projects to the rules of these entities that might sometimes result in delays.

Another problem is that implementing agencies are forced to split their limited time in preparing projects and in looking around for financing.

Also, supplier-driven loans can easily gain an advantage in the current setup as they already provide financing in their proposals, Purisima said.

The DOF proposes that implementing agencies should submit their projects to the Neda-ICC without any financing commitments, and that the Neda-ICC will evaluate the projects based on their economic benefits. If a project is deemed beneficial, the decision on whether to finance the project through locally sourced funds or through ODAs will be left with the DOF, in coordination with the inter-agency Development Budget Coordinating Committee.

“We have sounded this off with the Neda, DBM, the various implementing agencies and our development partners, and the feedback has been generally positive,” Purisima said.

“We are working together on the specifics that are required to operationalize this shift and we plan on presenting the revised process during the next Philippine Development Forum tentatively scheduled in January,” he added.