Loan conditions remain the same – ADB

Conditions for the release of official development assistance (ODA) funding will not be altered by the assumption of Gloria Macapagal-Arroyo to the presidency, according to an official of the Asian Development Bank (ADB).

In a press briefing, ADB country director for the Philippines Dr. Gunter Hecker explained that the loans were released or were programmed for release without bias to a government administration but rather to the project itself.

However, the regional funding agency was open to possible amendments to the agreements to the release of the loans as conditions surrounding the project may have changed.

Hecker said that all conditions set were relevant at the time the contract was signed, and that in general the same conditions have remained unchanged.

"We are looking at all the conditions in the time frame of today, and we made conditions at that point which was relevant then. Whether this should be done now with the same vigilance we will always look at those things. But the basic principal is we keep the conditions."

He assured that the projects were undertaken within the merits of the study and not based on personality or type of government.

"This has nothing to do with which government is in place. We have placed certain conditions on which basis the loans were approved by our board, and which was approved, by the government in place. This was independent of whatever type of government," the ADB director continued.

Most of the loans approved or in the pipeline are heavy infrastructure such as the $440-million Leyte-Mindanao transmission line project. Total loans approved by the ADB for energy-related projects have amounted to over $500 million.

However, the ADB set the passage of the power reform bill as a condition for the release of the loans.

Meanwhile, the ADB explained that it was delaying loan packages already approved or in the pipeline. Cause of the delays were identified to be more of administrative systems.

Hecker explained that together with other major donors, they have created a group or committee to handle portfolio management meetings with the government borrower to thresh out the kinks in the efficient disbursement of funds.

"We have pointed out the things that have to be changed in the system and this has resulted in faster processing," he said.

He cited as a reason for the slow disbursement a system that has many layers or bureaucracy such as several agency or government agency approvals.

"There are some legal requirements before a loan can be declared effective. Earlier, it took nine months until a loan for the Philippines became effective. But the last three loans, we managed to do it within 90 days which is a tremendous improvement."