Japan is top PHL bilateral ODA partner in 3 administrations

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The Philippines’ largest bilateral source of official development assistance (ODA) is Japan over a 20-year period covering the presidencies of Gloria Macapagal Arroyo, Benigno Aquino III and Rodrigo Roa Duterte, with a total of US$14.139 billion in loans contracted and committed during these three administrations, according to data from the Department of Finance (DOF).

In its report to Finance Secretary Carlos Dominguez III, the DOF’s International Finance Group (IFG) said Japan’s ODA from 2001 to 2020 accounted for 72 percent of the Philippines’ total bilateral loan portfolio of US$19.656 billion during this period.

Financial support from the European Union (EU) and China amounted to US$3.049 billion and US$1.185 billion, respectively, making up 16 percent and 6 percent of the total ODA loan portfolio from 2001 to the present.

Loans from South Korea of US$1.101 billion accounted for 5.6 percent while the rest came from the United States (US$160 million) and the Middle East (US$20 million).

DOF Undersecretary Mark Dennis Joven, who heads the IFG, said that in its nine-year term from January 2001 to June 2010, the Arroyo administration contracted a total of US$6.067 billion worth of bilateral ODA loans, of which US$3.2 billion or 52.7 percent came from Japan.

Bilateral ODA loans of the administration of the late President Aquino III reached US$5.641 billion, of which Japan provided 85 percent of the total or US$4.817 billion.

About US$7.947 billion of the loans were contracted in the current Duterte administration, mostly to help bankroll the government’s massive infrastructure investments under the President’s signature “Build, Build, Build” (BBB) program, along with scaling up state funds for the huge financial requirements of COVID-19 response and subsidies for families and sectors hit hard by the pandemic.

“The extensive bilateral borrowing during the (Duterte) administration has been instrumental in allowing the (government) to spend around 5 percent of gross domestic product (GDP) for infrastructure to spur economic growth, and in safeguarding development gains during the pandemic,” Joven said in his report.

Japan remains the top ODA partner of the Philippines under President Duterte, accounting for US$6.122 billion or 77 percent of the total ODA commitments under his administration, “on the back of strengthened bilateral cooperation anchored on the Philippines’ BBB program,” he said.

Joven said that on a year-by-year comparison, during the 20-year period covering the administrations of Arroyo, Aquino III and Duterte, the Philippines contracted the least amount of bilateral ODA loans in 2003 totaling US$95.726 million while the greatest amount of bilateral ODA loans was in 2020 totaling US$2.774 billion.

The Duterte administration has dramatically raised spending on “Build, Build, Build” to close the decades-old infrastructure gap that has blunted the Philippines’ competitiveness as an investment hub in the region.