NGOs: RP foreign aid system in crisis due to 'wasteful' ODA projects

MANILA, Philippines - A number of anomalies that involved development aid projects such as the botched $329.4-million National Broadband Network deal has put the Philippines' foreign aid system in crisis. This was the conclusion of the "Citizens' Report on ODA" or the study on the state of the official development assistance (ODA) in the Philippines by about 100 nongovernment and civil society organizations under the Official Development Assistance Watch. The report was presented on Tuesday during the "People's Alternative to the Philippine Development Forum," at the University of the Philippines' Bahay ng Alumni in Diliman, Quezon City. "There is a consensus among independent Philippine ODA reviewers and investigators that development assistance has become an oxymoron. The volume of evidence, which includes reports by the Commission on Audit (COA), show the preponderance of irregularities and corrupt practices, as well as mis-directed, ill-conceived projects that were wasteful, useless, and burdensome for the people," the groups said in a statement. The groups were led by the Freedom from Debt Coalition, the Transparency and Accountability Network, Initiatives for Dialogue and Empowerment Through Alternative legal Services and the Philippine Human Rights Advocates. COA reports The groups cited a 2004 COA report on the country's public debt that "loan proceeds did not significantly contribute to our economic development as these were expended for loan repayments and not on projects." In 2005, the groups said another COA report on 55 ongoing foreign-funded projects found a number of anomalies and irregularities related to ODA implementation. The anomalies translated to losses of P4.7 billion, according to the groups. In 2006, another COA report showed that P107 billion worth of loans were canceled and P102 million were suspended for failure to comply with procurement rules. Included in these canceled loans were "unnecessary and overpriced" land acquisitions worth over P36 billion; double-recording, unrecorded or erroneous transactions that resulted into a net overstatement of P2.6 billion; unliquidated cash advances and fund transfers worth P1.56 billion; irregular, unnecessary, and uneconomical use of funds worth 475 million; and P13.6 million worth of excessive and defective school implements. Huge loans, illegitimate projects Aside from the NBN project, the groups said other foreign-assisted government projects that were "deemed to be illegitimate," should be canceled "because debts were incurred to finance (these) flawed, and anti-people" undertakings. These projects, mostly bankrolled through ODA, include the North Luzon Railways Project, the South Luzon Railways Project, the Secondary Social Expenditure Management Program - Secondary Education Development and Improvement Project or the "text book scam," and the Small Coconut Farms Development Project. The study likewise noted that the growth of the Philippine economy "continues to be slow and poverty remains a major challenge," despite decades of receiving huge sums of ODA. The groups said the country received a total of $37.9 billion in development assistance from 1986 to 2006. Also, there was a surge of new loan approvals in 2007 worth at least $1.26 billion. However, in that 20 years of assistance, loans (84 percent) dominated grants (16 percent), while ODA's share of the country's external debt stood at 41 percent as of June 2006, according to the groups. "The attendant loan obligations that have to be repaid, which includes interest rates ranging from 0.75 percent to 6.94 percent, and additional charges such as front end fees and commitment fees, adds to the burden shouldered by the Filipino people," the groups said. The groups pressed for the following to make ODA "accountable to the people:"

• Closely monitor and evaluate the effectiveness of foreign aids through the establishment of independent citizens' watch on ODA.
• Introduce mutually agreed, transparent, and binding contracts to govern aid relationships.
• Establish mechanisms for citizens, the Senate, and the House of Representatives to hold the Executives to account for aid decisions. - GMANews.TV