House OKs bill allowing foreign private firms to fund ODA

The House of Representatives on Wednesday approved on second reading a measure allowing foreign privately-owned firms and commercial institutions to lend money to the Philippines through Official Development Assistance (ODA).

House Bill 7311 also provides that the donor government should issue a guarantee covering at least 75 percent of the commercial component of the loan.

Likewise, the measure requires that the lending government, bilateral or multilateral agency, or international or multilateral institution shall guarantee the timely release of funds committed by their partner private or commercial institutions.

In addition, the measure reduces the ODA grant component from 25% to 15% to attract more ODA, as well as removes the 40% requirement for the weighted average grant element of  all ODA loans.

The bill allows local government units to access ODA loans and tax reliefs; authorizes the Department of Finance to determine the rate and terms that are concessional; retains the terms and conditions for ODA contracted prior to these amendments but permits unutilized balances to be used for other loan agreements; among others.

“This is to expand the country's ODA portfolio, which is critical to fiscal stability and funding of long-term priorities,” the committee report on the measure read.

France’s Ambassador to the Philippines Michèle Boccoz earlier said that Philippine limitations on ODA financing has prevented the country from securing big-ticket development projects such as the €25 million shipyard project backed by a French company. —LDF, GMA Integrated News