THE government’s problems with foreign aid are rooted in the country’s flawed procurement laws, not the nature of official development assistance (ODA) itself, according to a former government official.

In a forum, former National Economic and Development Authority (Neda) director general Dante Canlas said that while the government receives a sizable amount of ODA, most foreign aid comes in the form of funds from donor-agencies that relate with the government on a project basis.

Canlas said an example would be loans coming from China, which, to this day, has no country program implemented in the country and deals with the government on a “projectized” basis.

“Some [foreign aid] are not in the nature of ODA. China has no country program in the country and all of its support are projectized, so there’s really a question of procurement,” Canlas said during the open forum of the briefing on ODA, sponsored by the Philippine Center for Investigative Journalism (PCIJ), in Quezon City on Monday.

“There are certain questionable procedures and [the government needs to implement] changes,” he added.

In the same forum, USAID-Philippines Mission economist Gil Dy-Liacco agreed with Canlas and said problems with ODA are only “symptomatic of a larger phenomena.”

As such, Dy-Liacco suggested that the Philippine press conducts efforts to “demystify” the process of appraising projects, particularly in arriving at the computation of the economic rates of return of projects that are submitted for approval by the Neda-Investment Coordination Committee (ICC).

In addition, Canlas said the government should also assert its authority by subjecting all government projects to international competitive bidding, particularly for projects that will be funded by loans.

He said that as a signatory of the Paris Declaration on Aid Effectiveness, the Philippines is mandated to achieve 12 aid-effectiveness indicators by 2010 and 2015. Some of these indicators are on untying aid, strengthening capacity, using public financial and using local procurement systems. 

This also means the country needs to impose competitive bidding for all government projects. Canlas said the first donor agency to comply with this is the Japan Bank for International Cooperation (JBIC).

Canlas also clarified that in the case of grants, international competitive bidding will no longer be necessary, only loans that will be paid by Filipinos taxes.

Previously, the Department of Budget and Management earlier said the government is in the process of drafting the implementing rules and regulations-B (IRR-B) to be used for all government projects funded by local and international funds.

Budget Secretary Rolando Andaya said that the IRR-B will be finished in a year’s time. In the meantime, the government will be imposing the procurement rules of the World Trade Organization (WTO), despite the fact that the Philippines is not a signatory to the WTO Agreement on Government Procurement.

The existing WTO agreement extends the coverage of government procurement to services (including construction services), procurement at the subcentral level (for example, states, provinces, departments and prefectures) and procurement by public utilities.

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THE government’s problems with foreign aid are rooted in the country’s flawed procurement laws, not the nature of official development assistance (ODA) itself, according to a former government official.

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