Due to project implementation delays, the Philippines is seeking the extension of two loans obtained by the previous Duterte administration from the Asian Development Bank (ADB) and the World Bank.
Documents showed that the Department of Finance (DOF), on behalf of the Philippine government, asked the Manila-based ADB to extend up to Dec. 31, 2027, instead of the original loan closing date of June 30, 2024, the $408-million Emergency Assistance for Reconstruction and Recovery of Marawi, which was approved in 2018 and took effect in 2019.
This means rehabilitation and reconstruction works for Marawi City in the southern Mindanao island—flattened by five-month fighting between government forces and Islamic State supporters back in 2017—are still unfinished.
The project itself was scheduled to finish last Dec. 20, 2023, but the Philippines proposed to extend implementation until June 30, 2027.
With these requests, the ADB document noted that "total project implementation period will be about 8.5 years (including the proposed extension), which exceeds the five-year limit for an emergency assistance loan (EAL) in post-conflict areas."
While three out of the four intended project outputs were already completed last year, the ADB said the second output to rebuild key public infrastructure and restore connectivity in the city, being executed by the Department of Public Works and Highways (DPWH), has been facing "delays due to the Covid-19 pandemic interruptions and heightened security challenges."
For instance, the ADB lamented that persistent presence of armed conflict and violence had necessitated strict and continuous security measures, which impacted on both accessibility and the safety of on-site consultants and contractors throughout the originally planned five-year project implementation period.
Security threats and incidents had led to even stricter security measures, which made it harder to keep the project on schedule and increased logistical challenges, including safely transporting materials and getting workers to the site, the ADB added.
"However, due to travel bans imposed during COVID-19, these measures could not be effectively implemented, which resulted in the project being more severely affected by security challenges than initially anticipated. An estimated total of eight months was lost due to the deteriorating security environment. Overall, delay factors have resulted in a loss of 3.5 years in implementation schedule," the ADB noted, as the pandemic itself also delayed this project by about 30 months.
Also, "the complexity of project readiness assessments required more time than initially anticipated, as did the evolving approach needed to align Bangon Marawi Comprehensive Rehabilitation and Recovery Program (BMCRRP) implementation with available government capacities," the ADB said.
As such, out of the $100 million set aside under the ADB loan for the project's output two, just $17.96-million worth of contracts were awarded and only $8.91 million were disbursed as of early November this year.
"Despite earlier delays, the remaining contract packages are now in a state of high readiness for implementation. With the reinforced strategies and enhanced measures in place, the DPWH is committed to completing the project within the government's requested extension period," according to the ADB.
A separate World Bank project restructuring paper disclosed on Dec. 18 also showed that of the $370-million loan for the Support to Parcelization of Lands for Individual Titling (SPLIT) project, the Department of Agrarian Reform (DAR) had spent merely $149.62 million or over two-fifths of proceeds before this investment project financing closes on Dec. 31 of this year.
This loan was approved by the Washington-based multilateral lender back in 2020, aimed at not only improving agrarian reform beneficiaries' (ARBs) land tenure security but also stabilizing their property rights.
"The project is currently rated moderately unsatisfactory on the overall progress towards the achievement of the project development objective (PDO) and implementation progress, mainly because the PDO indicators will not be achieved by the current closing date. The project currently has an implementation delay of over 18 months," the World Bank lamented.
The World Bank blamed delayed implementation to five major challenges, namely: this project requiring significant additional investigation to validate decades-old land-allocation information; lockdowns during the COVID-19 pandemic; delayed and inadequate budget releases of the government's counterpart financing, amounting to $103.6 million, from 2020 to 2022; multiple procurement setbacks; as well as longer-than-expected establishment of key institutional agreements and arrangements, no thanks to leadership changes at the DAR and its partner-implementing agencies.
For instance, the World Bank noted that out of the P1.2-billion budgetary counterpart requested to implement this DAR project in 2020, just P114 million were received; in 2021, its budget was released "six months late and was only nine percent of what was requested (P1 billion out of P12 billion)."
"The delayed and insufficient fund releases led to significant delays in the procurement of field personnel, consultants, and goods. These had a ripple effect since the completion of field validation activities is a prerequisite for the main project activities of survey and titling. The situation improved in 2023 when the DAR received its full budget request," it added.
"Nevertheless, significant progress on key project activities has been made. As of November 2024, a total of 124,556 collective certificates of land ownership awards (CLOA/titles) with validated lists of ARBs have been covered. This is 125 percent of the target of 100,000," the World Bank said.
Also, the World Bank cited that the DAR had registered 113,474 electronic land titles (eTitles) with the Land Registration Authority (LRA) plus issued 109,047, representing 15-16 percent of their targeted 750,000 ARBs.
The World Bank added that over 80 percent of titles issued to date have female names, either as primary beneficiary or co-owner, surpassing the 45-percent goal. "These figures represent a significant improvement over the previous year and is an upward trajectory for the titling process which requires nine to 12 months to complete."
As such, following the Philippines' request last August to restructure this loan, the World Bank is considering a 36-month closing date extension, or until Dec. 31, 2027.
Earlier World Bank documents had shown that the SPLIT project wanted to subdivide or parcelize 1,368,900 hectares (ha) of land in 78 provinces in 15 of the country's regions.
Citing DAR figures, the World Bank had said more than 4.9 million hectares of land were distributed to more than three million small farmers from 1988 to 2018, of which about 45 percent of the titles were CLOAs.
In the past, the DAR had difficulty breaking down CLOAs into individual titles because the process had been cumbersome. Issuing individual titles would give farmers clarity as well as legal proof of the land they own or occupy, according to the World Bank.