ODA disbursements on track, says NEDA

The official development assistance (ODA) disbursements for the first quarter of 2004 is on track, despite decreasing ODA loans commitments, the National Economic and Development Authority (NEDA) reported yesterday.

"If the current disbursement rate of 91 percent is maintained for the rest of the year, then the target disbursement ratio of 20 percent by end of 2004 will most likely be achieved," Rolando G. Tungpalan, NEDA assistant director general said.

Tungpalan noted that the availment rate, or the cumulative actual disbursements against cumulative scheduled disbursements, went up by three percentage points to 57 percent from 54 percent.

"This means that implementing agencies were able to reduce cumulative backlog. This becomes possible also when government is able to close or restructure some of the poor-performing loans," Tungpalan said, citing a report by its project monitoring staff.

However, total ODA loan commitments went down after it peaked to $13.3 billion in 2000. As of March this year, ODA loan commitments reached only $10.8 billion, which is six percent lower than the 2003 figure and 19 percent lower than the 2000 figure.

"This reduction in ODA commitments resulted from the National Government’s deliberate moves to limit ODA borrowing to high priority projects to ensure cost-efficiency in decision and adhere to fiscal discipline," said Tungapalan.

The disbursement level of ODA loans decreased by 10 percent. The government disbursed only $388.3 million compared to $432.3 million for the same period last year. This is due to a significant drop in disbursements by World Bank-assisted projects.

"The biggest drop in disbursement level was noted among World Bank-assisted projects, which disbursed only $26.7 million, 53 percent lower than the previous year’s disbursement," said Tungpalan.

Implementing agencies reported that the factors that caused the decline in disbursement levels include insufficient budget cover, lack of counterpart funds, delays in procurement and in the approval of the 2004 budget.

To ensure improvement of the ODA portfolio performance, the NEDA will continue to conduct a continuing review of the portfolio with a view to cancel portions of the loans that will no longer be utilized due to certain constraints.

"These constraints include insufficient budget support in the medium term, projects with outstanding issues on ROW (right-of-way) and resettlement, and excess financing identified as a result of currency budget support to fast-moving priority projects of National Government agencies," Tungpalan said.