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The
Philippines will continue to seek official development
assistance (ODA) loans from China despite the recent
shakeup created by bribery allegations in the national
broadband network (NBN) project.
National
Economic and Development Authority acting director
general Augusto Santos said the country is in the
process of seeking new Chinese loans for some projects
including the construction of the Clark International
Airport and hybrid-rice production in Mindanao.
Santos
said concessional loans from China are more affordable
since the interest rate is pegged at a very low 1
percent. He added comparable interest rates from
multilateral agencies like the Asian Development Bank
and World Bank are “almost commercial” at around 5
percent to 7 percent.
Santos
also said the country would also not turn away from
Chinese tied loans because it is necessary to accept
this condition to obtain the Chinese ODA loans.
Another
Neda official had said Chinese loans are also easier to
obtain as against those from multilateral agencies that
impose more stringent requirements and takes a longer
time to secure.
The
official said, however, that with tied loans, the
financier had the right to choose the contractor. This
is usually stipulated in a memorandum of agreement or a
memorandum of understanding drafted prior to the loan
agreement itself.
Three
former Neda directors general previously urged the
government to push for international competitive bidding
for foreign-assisted projects.
Former
Socioeconomic Planning Secretary and University of the
Philippines economists Solita Monsod, Felipe Medalla and
Dante Canlas said the country should adhere to the
provisions set in the Paris Declaration on Aid
Effectiveness (the Paris Declaration).
The
Paris Declaration called for greater transparency in the
delivery and management of foreign aid to achieve the
United Nations Millennium Declaration and the Millennium
Development Goals (MDGs).
Monsod
said that since the Paris Declaration provides for
greater transparency, the government should strictly
follow its provisions; Medalla said that though the
country needs bilateral loans, these should only be used
for smaller projects such as roads or simple
infrastructure projects that do not call for big funding
requirements.
When it
comes to projects such as the NBN, Medalla said
international competitive bidding must be observed. |
