ODA utilization improves in 2019

MANILA, Philippines — The government’s capability to implement foreign-assisted projects improved in 2019, as shown by progress in all indicators.

The 2019 ODA Portfolio Review Report of the National Economic and Development Authority (NEDA) showed that all indicators of the government’s absorptive capacity for official development assistance (ODA) loans – disbursement level, disbursement rate, availment rate and disbursement ratio – registered improvements in 2018 from 2019.

The overall disbursement level, the amount of actual drawdowns from loan proceeds, increased by 21 percent from $2.23 billion in 2018 to $2.71 billion in 2019.

Disbursement rate, the actual disbursement level as a percentage of target disbursement for the period, increased to 64 percent in 2019 from 58 percent in 2018.

The availment rate, the total actual spending as a percentage of the scheduled spending from the start of project implementation up to reporting period, rose to 73 percent in 2019 from 67 percent in 2018.

The disbursement ratio – the ratio of actual disbursements for the year to the loan balance available at the beginning of the year, inclusive of newly effective loans – rose minimally from 19.29 percent in 2018 to 20.9 percent in 2019.

“The recent loans portfolio performance showed improvements for the past two years. For 2019, all indicators of absorptive capacity improved. We are grateful to our development partners for supporting us in our efforts to pursue much-needed reforms towards a higher growth trajectory and improving the quality of life of all Filipino people,” said Acting Socioeconomic Planning Secretary Karl Chua.

He noted that the government needed to borrow more in 2020 to help fund emergency response, social protection programs, and other related expenditures to provide immediate relief to Filipinos affected by the COVID-19 pandemic.

As of December 2019, the country’s ODA portfolio stood at $21.62 billion, while additional ODA funding of around $10.94 billion was obtained for the pandemic response as of August.

This consisted of 84 loans worth $19.98 billion (92 percent of the total portfolio) and 268 grants worth $1.64 billion (eight percent of the total portfolio).

Japan remained the top provider of ODA to the Philippines in 2019, with its loans and grants amounting to $8.51 billion. This accounted for 39 percent of the active ODA portfolio.

The infrastructure development sector accounted for the largest share of the active ODA portfolio with 58 percent ($12.54 billion), followed by the social reform and community development sector with 18 percent ($3.81 billion).

Other sectors, such as governance and institutions development, agriculture, agrarian reform, and natural resources, and industry, trade, and tourism sectors account for the remaining with 24 percent ($5.26 billion).

As of Aug. 5 19 ODA loans and grants (16 loans and three grants) amounting to $10.94 billion have been added to the country’s total ODA portfolio in support of the government’s efforts to address the COVID-19 pandemic and to mitigate its economic impact.

“These will enable us to provide more support to the people and will also help cover budget priorities in 2020 and 2021 to help address the health crisis,” said Chua.

NEDA conducts the annual ODA portfolio review pursuant to the ODA Act of 1996.