THE HOUSE OF REPRESENTATIVES on Monday approved a third reading bill that would reform the process for receiving official development assistance (ODA), improving transparency in the implementation of ODA-supported projects.
By a 166 to 0 vote with no abstentions, lawmakers approved House Bill 10322 or the ODA Effectiveness Bill, which seeks to amend Republic Law 8182 or Law on official development assistance from 1996.
The bill allows the yield of newly issued government bonds to be used as a benchmark for the discount rate when estimating the present value of debt service on grants, if those yields are lower than the fixed rate. 10% set by the National Authority for the Economy and Development (NEDA).
The bill will continue to require that the subsidy portion of ODA be at least 25% of aid.
It will also require that ODA be administered with the specific objective of achieving sustainable reduction of poverty and inequalities.
The measure will also require studies on the social and economic impact of the project and consultation of target groups.
A congressional oversight committee will also be created to oversee and ensure the proper implementation of the proposed law and review ODA grants and loan agreements entered into by the national government. It will have the power to initiate independent impact studies on projects financed by ODA.
ODA is concessional financing provided by multilateral banks or foreign governments to the poorest countries to promote economic development.
The NEDA said the active ODA portfolio increased 42% to $ 30.39 billion in 2020 as the government stepped up foreign borrowing to fund its response to the pandemic.
Meanwhile, the government’s use of ODA – or actual spending against target – was 66.69% in 2020, up from 64.28% in 2019. Russell Louis C. Ku