By Manuel T. Cayon

DAVAO CITY—A softening on the stringent policy of the National Economic and Development Authority (Neda) on accessing foreign assistance has emboldened more local governments to apply for more assistance for their important rural infrastructure and livelihood projects.

At a cost-sharing arrangement raised to 50 percent for foreign-assisted projects, several projects and indications of interest to apply for loans have been filed by almost all the 425 municipalities in 27 provinces of Mindanao.

The Neda has allowed first- and second-class municipalities to access only 30 percent of the entire loan amount and to put up a 70-percent counterpart. Third- and fourth-class municipalities would only get 40 percent, with 60 percent as counterpart.

Only the fifth- and sixth-class municipalities were allowed 50 percent of the fund, and to put up the 50-percent counterpart.

This policy on cost-sharing arrangement has delayed the implementation of many rural infrastructure under the World Bank-funded Mindanao Rural Development Program (MRDP), already in its second phase, said Arnel de Mesa, deputy program director.

Launched in May last year, no projects were implemented so far, with local governments petitioning the Neda to increase their access to 50 percent to the World Bank fund assistance. “There’s a lull, actually, for one year,” he said.

He said the MRDP 2 has already received P550 million worth of proposals to fund several rural infrastructures, from farm-to market roads and communal irrigation, to potable water system and other infrastructure-related projects.

The proposals were filed immediately as soon as the MRDP 2 was launched here, “but these were placed on hold because of the Neda 2003 policy that placed this access restriction on all foreign-assistance funds.

The Neda relaxed its rules last month but only on MRDP 2 funded projects. “We are proud to say that we are the only one which was given that privilege, and we credit that to the work of the mayors, the governors, even the Medco [Mindanao Economic Development Council] for their repeated petition and representation with the Neda,” de Mesa said.

Shortly after the Neda approval, the local chief executives also indicated their interest to revive their proposals submitted last yet that were also placed on hold, he said.

These indications of interest were expressed in the five regional gatherings that MRDP 2 held in the regions in Mindanao. It held its fifth leg at the Grand Men Seng Hotel here Wednesday, where 27 mayors signed a memorandum of agreement with MRDP 2 executives that formalized the mayors’ agreement with the new guidelines, including the 50-percent-50-percent cost-sharing arrangement.

The MRDP 2 has a fund outlay of $83.752 million spread in five years, up from $27 million of the first phase of the MRDP.

The projects are divided into two categories, the rural infrastructure and the community fund for agricultural development, which includes livelihood as its major component.

“Projects should benefit the poorest of the poor,” he said.

De Mesa said local governments would be the ones to ascertain and certify that the local organizations were indeed the association of the poor, “with preference also for the women headed households and the indigenous population.”

Of the P550 million worth of proposals filed, the MRDP has approved P350 million of these. “These are now into the process of bidding them out to contractors,” de Mesa said.

He said that 80 percent of the project proposals were into constructing farm-to-market roads, “which must link agricultural production areas to the market.” Projects under this would range  from P5 million to P20 million.

Communal irrigation also got a sizable share, averaging P25 million per project, and which could go higher at P30 million.

About P50 million has been approved for the category of community fund for agricultural development.

The MRDP 2 has also required local governments to form their own municipal program management-implementation agency to craft out the projects for MRDP 2 funding. “In many instances in Mindanao, local governments in rural areas have submitted their infrastructure plans for possible funding of MRDP 2.”

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