2018News

Delayed projects cost government P230 million in penalty fees in 2017

By Lian Buan, September 19 2018; Rappler

https://www.rappler.com/nation/212319-commitment-fees-government-agencies-loans-official-development-assistance-audit-report-2017

Image Credit to Rappler

MANILA, Philippines – Seven national agencies which obtained millions worth of loans for 2017 were not able to follow the schedule of projects, therefore costing the government P230.17 million worth of commitment fees.

Commitment fees are charged by the creditor for loans that were not used.

“Based on the Bureau of Treasury Report, out of the total debt service for calendar year 2017 alone, P230.17 million represents payment of commitment fees for delayed withdrawal/availment of loans,” state auditors said in its 2017 report of the Official Development Assistance or ODA.

ODA, which is under the National Economic and Development Authority (NEDA), provides the mechanism for which government can obtain loans for socio-economic projects. (READ: Build, Build, Build: P73 billion worth of DPWH projects delayed)

These are the 7 national agencies which undertook 17 projects severely delayed, resulting in the loans being delayed or withdrawal and incurring commitment fees: 

  1. Department of Transportation (DOTr) – 7 projects
  2. Department of Agriculture (DA) – 3 projects
  3. National Irrigation Administration (NIA) – 2 projects
  4. Department of Social Welfare and Development (DSWD) – 2 projects
  5. Department of Environment and Resources (DENR)
  6. Department of Health (DOH)
  7. Bureau of Fisheries and Aquatic Resources (BFAR)

Because of this, the Commission on Audit (COA) recommended ODA to review its processes and even install a budget performance tracking system to avoid the problem next time.

Reasons for delay

The DOTr had the most number of delayed projects. The COA said that despite available P43.25 billion worth of loans from Japan, the construction of the LRT Lines 1 and 2 were still delayed “due to slow procurement process.”

The DA had 3 delayed projects that incurred commitment fees, mostly covered by the department’s Philippine Rural Development Project or PRDP.

These are rural projects like roads and livelihood projects for those in the fringes of society.

For the DSWD, the delayed projects are under its poverty alleviation program Kapit-Bisig Laban sa Kahirapan-Comprehensive and Integrated Delivery of Social Services or Kalahi-CIDSS.

According to COA, some of the DSWD’s problems are unaccredited and unregistered associations to implement its income-generating projects.

“Considering the status of implementation of 17 projects as reported by the concerned Auditor Teams, the timely completion of these projects is unlikely,” said the auditors. – Rappler.com

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