EDITORIAL — The steep cost of delays

As of July this year, the government has been billed up to P1.76 billion in commitment fees by its lenders for delays in the implementation of big-ticket projects, Department of Transportation data showed.

That P1.76 billion is in the rail transport sector alone, where delays in implementation have been caused by factors particularly right-of-way issues.

Commitment fees are slapped by foreign lenders when unused portions of a loan remain untapped. This is to encourage the completion of projects on time. The longer the delay in project completion and the longer the loan sits unused, the bigger the fees.

And yet public officials seem unmindful of the cost of withdrawing counterpart funding for foreign-assisted big-ticket projects and delaying their implementation.

In previous General Appropriations Acts, foreign-assisted projects were placed in unprogrammed appropriations – meaning the FAPs are on hold unless new or excess sources of funding are found for the UA in the course of the budget year. During budget deliberations, UA amounts proposed by the executive have also been slashed by Congress.

For 2027, the House of Representatives has done it again, slashing P130 billion for FAPs in the P7.2-trillion national budget proposed by the executive.

Senators and budget watchdogs count a total of  up to P206 billion realigned by the House across its version of the budget bill. Congressmen realigned the critical funding to their pet local infrastructure projects such as farm-to-market roads and dole-out programs such as the health pork barrel, the Medical Assistance to Indigent and Financially Incapacitated Patients or MAIFIP and the all-purpose ayuda AICS or the Assistance to Individuals in Crisis Situations.

Senators and budget watchdogs have warned that apart from incurring stiff commitment fees, cutting counterpart funding and delaying FAPs could harm the country’s credit standing and ability to secure future official development assistance.

Department of Transportation officials noted that commitment fees for stalled railway projects have been piling up yearly. Rail officials have been ordered to wrap up pre-construction works.

Among the delayed projects is the Metro Manila Subway Project, which is affected by the P130 billion slashed from the 2027 funding for FAPs.

Congressmen, most of whom tool around in convoys of luxury vehicles, probably see no urgency in finishing the country’s first subway system, as they focus on creative budgeting that will make taxpayers bankroll their campaigns for 2028.

Senators – with the help of public transparency initiatives of civil society watchdogs – should put an end to skewed congressional priorities and systematic mismanagement of public funds.