By Rea Cu, August 19 2018; Business Mirror
Image Credit to Department of Finance
THE Department of Finance (DOF) has reported that it is already crafting a memorandum of understanding (MOU) with the Spanish government in line with its offer to the country of around $300 million in official development assistance (ODA).
DOF Assistant Secretary Maria Edita Z. Tan told financial reporters that the Philippine government was offered an ODA by the Spanish government for funding of the Duterte administration’s various projects.
“We have received another offer from an ODA partner, it’s from the Spanish government, for $300 million worth of ODA over the next three years. [For] this one we are still crafting the MOU, but the terms are very good.” Tan said.
Tan explained that the Philippines was offered to either tap the Spanish government’s euro- or dollar-denominated facilities, which offer a 0.25-percent interest rate over a 35 year period and a 1.15- percent rate over a 20-year period, respectively.
“We can either tap the euro facility or the US [United States] dollar facility. For the euro, it’s 0.25 percent over a 35-year period inclusive of a 10-year grace period, while the dollar facility is 1.15 percent over a 20-year period inclusive of a 10-year grace period. That could cover either project or program loans,” she added.
Spain is known to prefer funding projects in line with infrastructure, energy and telecommunications, among others. Tan pointed out that specific projects for funding by Spain have yet to be finalized.
Discussions to tap the Spanish government’s ODA facilities started late last year, according to the DOF. But the MOU is being eyed for completion within the next two months.
“I think within the next two months [to firm up the MOU],” she said.
In July this year, the National Economic and Development Authority (Neda) reported that efforts to fast-track the government’s infrastructure spending have apparently borne fruit as the country’s ODA disbursement rate improved in 2017.
The Neda said the country’s ODA disbursement rate grew 11.5 percent to $1.4 billion in 2017. As a percentage of target, the disbursement rate was at 67.21 percent in 2017. The Philippines’s total outstanding ODA portfolio for the full year of 2017 reached $14.72 billion.
Based on the ODA Portfolio Review, this amount is composed of 70 loans worth $12.30 billion and 352 grants worth $2.42 billion.
In the 2014-2017 Country Partnership Framework for Development Cooperation, the Spanish government extended 50 million euros in aid to the Philippines, with the cooperation focusing on financing projects such as social inclusion and the fight against poverty; gender development; promotion of human rights and democratic governance; environmental sustainability; and respect for cultural diversity.
Based on Neda data, the Philippines has not received any loans from the Spanish government for 2017, with most of Spain’s projects in the country being financed by grants.
As of December 2017, grant projects from Spain amounted to $10.99 million, while total ODA received by the country from Spain was $14.34 billion.
The Spanish government has seven ongoing grant projects in the Philippines amounting to $9.18 million, with four of the projects being in the Governance and Institutions Development and three in Social Reform and Community Development.