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ODA projects should be targeted for procurement streamlining – think tank

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NATIONAL government agencies need to ensure that the preparatory stages for projects funded with official development assistance (ODA) are streamlined to avoid delays, according to a think tank attached to the House of Representatives.

“To address delays inherent in procurement processes, a comprehensive approach encompassing legal resolutions, administrative streamlining, and sound financial planning and management, among others, may be necessary,” the Congressional Policy and Budget Research Department (CPBRD) said in a report.

Delayed implementation of ODA-financed projects  increases the financial burden on the government, which depends on ODA for low-cost financing, the CPBRD said.

“In addition to the opportunity cost, the government may also incur additional commitment fees, extra interest, higher foreign exchange differentials, and even penalties due to significant project implementation delays,” it added.

According to the National Economic and Development Authority’s (NEDA) 2022 ODA portfolio report, combined disbursements for project and program loans fell to $4.82 billion from $5.52 billion in 2021.

Citing NEDA reports, the CPBRD said that procurement is one of the major concerns in implementing ODA projects. Other issues include budget flow, site conditions and availability, institutional support, and force majeure.

The active ODA portfolio at the end of 2022 consisted of 106 loans worth $30.2 billion and 320 grants amounting to $2.2 billion.

“In 2022, ODA projects executed by the Bureau of Customs (BoC), Department of Agriculture (DA), Department of Agrarian Reform (DAR), Department of Education (DepEd), Department of Energy (DoE), Department of Health (DoH), and Department of Transportation (DoTr) encountered procurement difficulties in acquiring project consultants, contractors for civil works, and suppliers of goods, which eventually resulted in implementation delays,” it said.

“While recognizing that procurement is just one facet influencing project implementation, it significantly contributes to the overall success and timeliness of government projects,” the think tank added.

The Asian Development Bank, the Philippines’ largest ODA provider, accounted for 33% of th portfolio, followed by Japan, the World Bank, China, and South Korea. — Beatriz Marie D. Cruz

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