"There was a concern before that line agencies would not be able to deliver because of their [limited] absorptive capacity... Funds are now being used that are available," NEDA Deputy Director-General for Investment Programming Rolando G. Tungpalan said in a telephone interview yesterday.
The NEDA report tracked the improvement in absorptive capacity through three criteria: disbursement rate, availment rate, and disbursement ratio.
"There was a general increase in all major financial indicators of ODA absorptive capacity. The disbursement rate, which is the percentage of actual disbursements over target disbursements, increased to 86% in the first six months of 2009 from 80% during the same period last year," NEDA said yesterday in a statement accompanying the First Semester 2009 ODA Loan Performance Report.
"On the other hand, the percentage of cumulative actual disbursements over scheduled disbursements, or the availment rate, rose to 81% in the first half of 2009 from 74% in the same period in 2008.
"The disbursement ratio also rose to 17% as of the first semester of 2009 from 13% in the same period last year. The disbursement ratio is the share of actual disbursement to the net loan amount available during the year," the statement read further.
The 17% disbursement ratio, Mr. Tungpalan noted, is an "acceptable" ratio since the benchmark set for ODA loans is 20%. He also said the disbursement ratio would have been higher if not for the entry of new loans in the ODA portfolio.
Mr. Tungpalan also assured that "[the increase in absorptive capacity] in the first semester would be sustained" for the rest of the year. He said NEDA has been coordinating with aid organizations to arrange for "program loans that are ready-to-go and responsive" to the financing needs of line agencies.
But despite the strides made in ODA loan use, the NEDA report said: "31 program and project loans had disbursement rates below 50% due to procurement-related and financial processing issues and other issues such as right-of-way."
Acknowledging the delays, Mr. Tungpalan said his agency will craft measures aimed at "harmonizing procurement guidelines" to add to the revised implementing rules and regulations (IRR) of Republic Act No. 9184, or the Government Procurement Reform Act. "The revised IRR is seen a crucial step in making public biddings for both local and foreign-funded state projects simpler, faster, and more transparent," the World Bank had said in an earlier statement announcing the new IRR.
Aside from an increase in absorptive capacity, the NEDA report also showed a 96% year-on-year rise in ODA disbursements to $826.59 million in the first half of 2009.
"The significant increase in disbursements was largely attributed to the single tranche release of two program loans of $150 million for the Governance in Justice Sector Reform Program, Subprogram II (GJSRP) and $200 million for the Global Food Crisis Response Program Development Policy Operations (GFRP-DO)" NEDA said in a statement.
GJSRP aims to enhance the rule of law in the Philippines, as well as improve governance and access to justice. It is funded by the Asian Development Bank (ADB).
Meanwhile, GFRP-DO aims to reduce the negative impact of high, volatile food prices. It is funded by the World Bank (WB).
As of the first semester of 2009, total cumulative ODA loans amounted to $8.07 billion, financing 91 loan programs.
The biggest donor of ODA was the Japan International Cooperation Agency, accounting for 38% of total ODA commitments. It is followed by WB (18%), the Asian Development Bank (15%), and China (12%). — M. P. T. Jamias .
