The absorptive capacity indicators of official development assistance (ODA) to the Philippines improved in 2019, according to a report released by the National Economic and Development Authority (NEDA).
In its ODA portfolio review report for 2019 posted on its website, NEDA said the disbursement level, disbursement rate and availment rate of the portfolio showed notable increases, while the disbursement ratio had a slight increase in comparison to the 2018 performance.
“Historically, loan performance is at a decreasing trend in the past 10 years,” the report said.
“However, the portfolio performance showed improvements over the past three years,” it added.
NEDA said in its report the 2019 performance was also generally better compared to the past three-year performance.
The total ODA portfolio as of 2019 amounted to $21.62 billion, consisting of 84 loans worth $19.98 billion and 268 grants worth $1.64 billion.
Japan provided the bulk of ODA assistance to the country accounting for 39 percent share of the active ODA portfolio, followed by the Asian Development Bank with 26 percent, and World Bank with 20 percent.
The report said the overall disbursement level increased by 21 percent from $2.23 billion in 2018 to $2.71 billion in 2019, mainly due to the increase in disbursements of project loans.
NEDA said the following project loans were the highest contributors to the high disbursement: North-South Commuter Railway Project ($235.5 million), Metro Manila Subway Project Phase 1 ($214.08 million), Metro Rail Transit Line 3 Rehabilitation Project ($133.86 million), Capacity Enhancement of Mass Transit Systems in Metro Manila ($55.62 million) and Philippine Rural Development Project ($58.01 million).
“However, a slight decrease in the disbursement levels was observed for continuing program loans which already registered high disbursement levels in 2018,” the report said.
The disbursement ratio, or the ratio of actual disbursements for a given year to the loan balance available at the beginning of that year inclusive of newly effective loans, barely increased by 0.8 percentage point from 19.29 percent in 2018 to 20.09 percent in 2019.
The report said six out of the 15 program loans contributed to the 17.76 percentage point increase in program disbursement ratio.
“More than half ($1.5 billion) of the available program loan balance ($2.14 billion) from the beginning of 2019 was disbursed by year-end,” the report said.
“Notwithstanding the increase in loan balance due to the entry of new project loans amounting to $3.31 billion in 2019 from $2.48 billion in 2018, disbursement ratio of project loans registered a two percentage point increase from 8.29 percent in 2018 to 10.71 percent in 2019,” it added.
Meanwhile, the disbursement rate of the project loans portfolio exhibited a 6 percentage point increase from 58 percent in 2018 to 64 percent in 2019.
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.
“However, despite the improved performance, the portfolio still registered a disbursement shortfall,” the report said.
“The top five agencies that contributed the most to the disbursement shortfall for 2019 were the Department of Transportation (DOTr), Department of Public Works and Highways (DPWH), Department of Agriculture (DA), National Irrigation Administration (NIA) and the Department of Agrarian Reform, which constituted 96 percent of the total shortfall amounting to $675.21 million,” it added.
Lastly, the availment rate of the project loans portfolio also performed better with a 6 percentage point increase from 67 percent in 2018 to 73 percent in 2019.
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.
“However, despite the improved performance, the project loans portfolio registered a 1.46 billion net availment backlog,” the report said.
“Top contributors to the backlog were the DOTr, DPWH, DA, Department of Environment and Natural Resources, and NIA, which constituted 97 percent of the total backlog,” it added.
The financial performance of grants was measured in terms of utilization level, or the cumulative disbursements of grants reckoned from grant agreement effectivity dates.
The utilization level of the active grants reached $0.83 billion, posting a utilization rate of 51 percent against the total grant amount of $1.64 billion.
The utilization rate is computed as the utilization level over the total grant amount.
“This reflects a 19 percentage point decrease in utilization rate compared to the same period last year,” the report said.
Out of the 329 active ODA-assisted projects, 62 were physically completed, one was ahead of schedule, 217 were on schedule, 40 were behind schedule, eight have not yet started and one project loan closed with incomplete outputs.