Development Down The Drain: The Crisis of Official Development Assistance to the Philippines By: Eduardo C. Tadem, Ph.D.
I. WHAT IS ODA?
“Flows of official financing administered with the promotion of the economic development and welfare of developing countries as the main objective…” - Organization for Economic Cooperation and Development (OECD) II. QUALIFICATIONS:
1. undertaken by the official sector
2. main objective: promotion of economic development and welfare of recipient countries 3. aid is granted at concessional financial terms
III. BENEFITS OF ODA:
1. Lower interest loan rates
2. Longer repayment period with extended grace periods
3. Funds are geared towards projects that would normally not attract private capital 4. Availability of grant assistance
IV. Japan’s ODA to the Philippines:
91.19% = loans / 8.81% grants and technical assistance (1986 – 2006) Issues with Japan’s tied aid in the Philippines:
* Preferential treatment given to foreign counterparts/competitors * Influx of highly paid foreign consultants
* Consultancy services component of untied loans remains tied to the donor country. V. Sectoral Allocation of ODA
* No significant reform gains (as of the date the report was published) * Significant decrease in ODA commitments for “human development” (7.85% = 2000-2006 versus 10.95% = 1987 – 2000) VI. Geographical Distribution of ODA
* Most developed regions/provinces had the largest shares of ODA while less developed regions with higher poverty levels got smaller allotments VII. ODA as Share of External Debt
* Commitment fees
* Conflicts between the Executive branch and the Legislature have resulted in the non-passage of the govt. budget bill. As a result, ODA projects were jeopardized causing delays in scheduled loan disbursements. VIII. ODA Loan Disbursements and Availments
Availment rates are “the cumulative actual...