Philippines' foreign aid disbursements decline in 2016

MANILA, Philippines – Disbursements of foreign aid declined by 49% in 2016, with the National Economic and Development Authority (NEDA) attributing this to the high base effect in 2015 and unmet targets.

NEDA's 2016 Portfolio Review report on official development assistance (ODA) showed that the overall disbursement level declined to $1.18 billion in 2016, from $2.31 billion in 2015.

"This is a base effect of the high disbursement level of active program loans in 2015 which reached $1.64 billion compared to only $677.43 million in 2016," NEDA said in the report.

In effect, the disbursement rate declined to 59% in 2016, from 83% in 2015. (READ: NEDA Board approves Metro Manila Subway, longest railway)

The disbursement rate is the actual disbursement level as a percentage of target disbursement for the period. It reflects the planning and implementation capacities of project management offices. 

The NEDA report attributed the lower disbursement rate in 2016 to "an increase in unmet disbursement targets" to $812.08 million in 2016, from $475.18 million in 2015.

"80% may be attributed to the poor performance of project loans," said NEDA.

Availment decreases

The NEDA report also showed that the availment rate decreased to 67% in 2016, from 85% in 2015, mainly because of poor historical performance of project loans with a cumulative $1.61-billion availment backlog in 2016.

The backlog in 2016 increased by $649.80 million compared to the $960.82 million availment backlog in 2015. 

The availment rate is the cumulative actual disbursements as a percentage of cumulative scheduled disbursement, both reckoned from the start of implementation up to the reporting period. 

The report further showed that the top 4 agencies that did not meet the disbursement targets for 2016 were the Department of Transportation (DOTr), the Department of Social Welfare and Development (DSWD), the Land Bank of the Philippines (Landbank), and the National Irrigation Administration (NIA).

These 4 agencies contributed 69% of the total shortfall of $571.85 million in 2016, NEDA said.

The total ODA portfolio as of December 2016 amounted to $15.6 billion, consisting of 66 loans ($12.21 billion) and 400 grants ($3.39 billion).

Japan was the biggest source of loans, with a 45% share of the overall loan portfolio, followed by the World Bank and the Asian Development Bank (ADB) with 25% and 24%, respectively.

For ODA grants, the United States Agency for International Development (USAID) and Millennium Challenge Corporation (MCC), Australia-Department of Foreign Affairs and Trade, and the United Nations System were the 3 leading providers with 40%, 25%, and 11% shares of the total grants portfolio, respectively. –