The complaint of President Ferdinand “Bongbong” Marcos, Jr. or BBM over the lack of funding for Foreign-Assisted Projects (FAPs) is really embarrassing for the country. It also besmirches our reputation as a creditor in the international financial community.
Since the 1960s, the Philippines has relied on “foreign aid,” also formally known as Official Development Assistance (ODA), to support its big-ticket infrastructure projects.
The funds come from over 30 donor countries which have diplomatic and trade relations or bilateral agreements with the Philippines, or which are part of the United Nations, its allied agencies and institutions.
Presently, the Department of Economy, Planning and Development (DEPDev) oversees ODA matters through the Investment Coordination Committee (ICC) headed by the President.
Unfortunately, after a recent DEPDev-ICC meeting, BBM has said that the Philippines’ standing on ODA-funded projects is upsetting because many of its FAPs have become defunded after budget “insertions” in the 2025 budget deliberations by Congress.
It would be a mortal sin if BBM is referring to the budget for regular amortizations on the ODA loans, as these are covered by international agreements which have the force and effect of a law of the land. On the other hand, the so-called Government of the Philippines (GOP) counterpart fund in the national budget is another equally grave concern.
The long-term loans for the FAPs are approved by the DEPDev and ICC. To assure donor countries that proposed projects will really be implemented by the Philippines, the latter has to shoulder a counterpart cost amounting to a certain percentage of the construction cost. This is called the GOP counterpart fund.
In the 1990s, the Metro Cebu Development Project Office chaired by then Cebu City mayor Tomas Osmeña implemented road projects under ODA funding from Japan, with payments for road right-of-way acquisition consisting of 10 percent of the construction cost paid for by the GOP counterpart fund.
This enabled Cebu to open new roads like the Maximo Patalinjug Ave. in Lapu-Lapu City, Ouano Ave. at the Mandaue City Reclamation Area, F. Cabahug and Imus Streets as well as widen V. Rama Ave., B. Rodriguez and Katipunan Streets in Cebu City, among others.
The GOP counterpart funding scheme was also observed in the construction of the Mactan Circumferential Road and Marcelo Fernan Bridge.
While Japan’s ODA funded these FAPs, the National Government through the Department of Public Works and Highways took charge of acquiring affected private properties either through negotiation or expropriation.
Luckily for Cebu, the GOP counterpart funds for the right-of-way acquisition of these FAPs were not elbowed out in the national budget for several years. Thanks to the ODA, Cebu beamed with pride as a beacon of infrastructure development and economic progress at the time.
But chances for other FAPs may not be as promising now. For one, the national budgeting process is being riddled with all sorts of accusations such as lack of transparency that has led to allegations of insertions.
If allocations like regular amortizations and GOP counterpart funds for ODA projects are not assured in the national budget, the DEPDev and ICC fear that our country’s applications for infrastructure initiatives for foreign funding will not be taken seriously by international donors this time.
And without adequate Congressional support, BBM’s Build Better, More may just end up as another slogan.