PH to pay penalties to foreign lenders for delayed, canceled 2017 projects

By Ben Rosario

The Philippines will pay P230.17 million in commitment penalties to foreign lenders for the delayed and canceled projects in 2017, the Commission on Audit has revealed.

MB FILE—Commission on Audit. Commission on Audit

IN the Consolidated Audit Report on Official Development Assistance (ODA) Programs and Projects for 2017, COA disclosed that government only availed of P299.75 million, or a low 0.004 percent, of the P74.85-billion net commitments it contracted in 2017 under 10 ODA loans.

The low or non-implementation of projects already assured of funding from foreign lending agencies have resulted in the balooning of yearly budget for debt service payments of the government.

COA revealed that in 2017, total debt service payment amounted to P66.97 billion, higher by P5.85 billion or 9.57 percent compared to the debt service expenditures of 2017.

Commitment fees, together with interests, guarantee fees and other charges account for 27.61 percent of the total annual debt payments. Included are interest cost of P16.20 million, commitment fee of P230.17 million, guarantee fee of P644.21 million and other charges of P1.41 billion.

Auditors said commitment fees are normally charged by lenders in case the borrower could not immediately use available credit lines.

Of the 409 programs and projects financed out of these loans 336 were completed, 63 are ongoing and 8 yet to be started while 212 were cancelled

According to COA various government agencies did not avail of the loans after completion of 17 projects turned out to be “unlikely.”

Included among the delayed projects are those supposedly implemented by the Department of Agriculture and the Department of Transportation.

Seven DOTr projects that were delayed are the following:

• Puerto Princesa Airport Development Project (PPADP);
• New Bohol Airport Construction and Sustainable Environment Protection Project (NBAC-SEPP);
• New Communications, Navigation, Surveillance/Air Traffic Management (CNS/ATM) Systems Development Project;
• Capacity Enhancement of Mass Transit Systems in Metro Manila Project (CEMTSMMP);
• Maritime Safety Capability Improvement Project (MSCIP) Phases I and II;
• Cebu Bus Rapid Transit System, and;
• Philippine Coast Guard Capability Development Project (PCGCDP).
Specifically, the implementation of the projects to extend the Light Rail Transit Lines 1 and 2 to Cavite and Rizal under CEMTSMMP was delayed by “slow procurement process.”

The low utilization of the ¥43.25-billion loan facility financed by Japan meant commitment fees had kept piling up since 2013.

The DA was blamed for delays in four projects that included
agribusiness, irrigation and farm-to-market road subprojects under the Philippine Rural Development Project (PRDP) and he Second Cordillera Highland Agricultural Resource Management Project (SCHARMP).

The ODA audit revealed that procurement lapses were found in the National Roads Improvement and Management Project, and low fund utilization was flagged for the reconstruction of the National Agricultural and Fishery Council and the Livestock Development Council building.

Also given notice by auditors were two projects of the Department of Social Welfare and Development under its Kapit-Bisig Laban sa Kahirapan Comprehensive and Integrated Delivery of Social Services (KALAHI-CIDSS) program.

Auditors said physical accomplishment for the National Community-Driven Development Project (KC-NCDDP) was below target, while the asset management for the KALAHI-CIDSS Subprojects was found ineffective. (Ben R. Rosario)