ASIAN DEVPT BANK TO LEND UP TO $300 MILLION ODA TO RP
MANILA, AUGUST 23, 2007 (STAR) By Iris C. Gonzales - The Asian Development Bank (ADB) is extending some $200 to $300 million worth of official development assistance (ODA) to the Philippines to be used for financial reforms of local government units, a ranking official said yesterday.
Finance Undersecretary and Acting National Treasurer Roberto Tan said the loan, to be drawn in the fourth quarter of the year, would be used to support the financial reform program of local government units (LGUs).
“This would be used to help LGUs enhance procurement practices, improve their revenue generating capability and to improve their efficiency,” Tan told reporters.
He said the government would use the funds for budgetary support for its LGU reform program.
Multilateral agencies have been pushing for the improvement in the governance and management of LGUs given rampant corruption in some LGUs especially those in remote areas.
Tan said the loan is outside the programmed $1.466 billion ODA borrowings for this year.
“Hopefully, we can also get financing from other partners,” Tan added.
As of June, the government has so far borrowed between $800 million and $900 million from lending agencies such as the ADB, World Bank, and the Japan Bank for International Cooperation (JBIC).
The Department of Finance (DOF) increased its ODA borrowings by seven percent to $1.466 billion this year from $854 million last year as multilateral lending agencies offer interest and better repayment terms compared to funds sourced from commercial sources.
In fact, because of the attractive rates offered for ODA loans, Tan said the government is unlikely to prepay most of its external borrowings this year.
The ODA loans, he said, already have attractive rates. Thus, the country can afford not to prepay these types of loans.
Finance Secretary Margarito Teves has been pushing for the maximization of the use of cheaper ODA funds as multilateral lending agencies committed more funds after the Philippines was able to put its fiscal house in order.
Data from the Bureau of the Treasury (BTr) showed that the government’s total borrowings fell by 15 percent from January to July to P289.973 billion or lower than the P341.494 billion borrowed in the same period last year.
Of the amount, external borrowings stood at P103.706 billion while domestic borrowings amounted to P186.267 billion.
Chief News Editor: Sol Jose Vanzi
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