More ODA funds were spent last year–Neda

The disbursement of Official Development Assistance (ODA), or low-cost bilateral funds for government projects and programs, tripled in the fourth quarter of last year compared to the same period the year before, National Economic and Development Authority (Neda) figures showed.

“Comparing the financial performance in the fourth quarter of 2014 from the same period in 2013, all absorptive capacity indicators registered favorable performance. This includes the disbursement level, disbursement rate, availment rate, and the disbursement ratio,” Neda Monitoring and Evaluation Staff (MES) Director Roderick M. Planta said.

Low absorption capacity or the inability of government to sufficiently draw from ODA financing for projects largely as a result of the lack of local counterpart funds has been identified as among the factors for the low level of infrastructure buildup in the country.

The disbursement level, which is the actual expenditure or draw-down of ODA-funded projects and programs, increased to $1.62 billion in the last quarter of 2014 from $546.36 million during the same period in 2013.

The improvement was attributed to higher actual loan drawdown (or disbursements) from 13 program loans amounting to $1.1 billion from $182.60 million in the fourth quarter of 2013, according to a report of the Neda-MES.

The disbursement rate, or the actual disbursement level as a percentage of target disbursement for the year, had an 18-percentage-point increase to 68.3 percent in 2014 from 50.3 percent in 2013.

Though this was below the acceptable 70-percent threshold, for a satisfactory financial performance for a given year, the disbursement rate was a significant improvement compared to 2013 figure.

The availment rate, or the percentage of loan amount’s actual utilization against loan schedule, likewise improved and still exceeded the threshold at 77.0 percent in the fourth quarter of 2014 from 73.0 percent of the previous year.

Furthermore, the disbursement ratio, which is the actual drawdown as against the available net loan amount, improved by 12.3 percentage points, from 9.3 percent during the last quarter of 2013 to 21.6 percent in fourth quarter same period. The increase was due to the entry of about $2.04 billion worth of new program loans, but almost half of which was disbursed within the year.

Meanwhile, the overall net commitment for ODA-assisted projects and programs registered an increase of $3.18 billion in fourth quarter of 2014. This was from $8.11 billion in last quarter of 2013 to $11.29 billion.

The said net commitment consists of 13 program loans amounting to $4.09 billion and 62 project loans amounting to $7.21 billion. The infrastructure sector had the largest share (40.2 percent).

The World Bank was the biggest source of loans, with a 39.5-percent share amounting to $4.46 billion.

The Japan International Cooperation Agency came second with $3.41 billion (30.2 percent), followed by the Asian Development Bank with $2.23 billion (19.8 percent).

The total assistance from the said three sources of loans amounting to $10.10 billion constitutes 89.0 percent of the total 2014 portfolio.