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Sunday, March 3, 2024

Tweaking the ODA Law

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How can we modernize the Philippine military if we do not have enough money to do it?

For a leading member of the House of Representatives where bills involving funding originate, we can raise enough money for the armed forces by the simple expedient of tweaking the existing ODA law.

Here’s how we can do it, according to Albay Rep. Joey Salceda, chairman of the House Ways and Means committee.

Under the existing ODA Law, the country is restricted by provisions that put a cap of 40 percent on the grant component of total ODA loans, and at least 25 percent on each loan.

There are other limitations.

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The lack of provision for private sector participation in financing is one.

Another is the public bidding requirement, which can prevent us from getting loans for defense equipment which are usually provided by a single eligible supplier.

These restrictions, the lawmaker pointed out, keep the country from acquiring state-of-the-art aircraft and naval vessels.

The French have already offered to provide loans for us to acquire submarines so that we can adequately defend our coasts.

The country also needs to acquire sophisticated air assets like the F-16 fighter jets to augment the AFP’s capability in defending the West Philippine Sea.

Salceda maintains we need to strengthen our military so we can deter other countries with similar territorial claims from thinking that “they can push us around so easily.”

“Countries like us shouldn’t declare that our only option is diplomacy. No one wants war, but defenders don’t decide that. Aggressors decide whether they want war. And defenders have to be ready,” he said.

We agree completely

A big advantage of tweaking the ODA Law is that the loans for upgrading our defense capabilities are concessional.

The lawmaker believes ODAs are the cheapest way to borrow as the interest rates are lower and feature longer payment terms than in the capital markets, which do not give a grant component.

And ODAs also come with technical assistance and knowledge sharing.

We need to move fast because the ODA Law was written in the 1970s when the county had to cope with political and economic crises.

As we are now on the verge of being an upper-middle income country, the Organization for Economic Cooperation and Development (OECD) might decide we’re no longer eligible for any ODA.

The bottom line here is that even as the 1987 Constitution makes it very clear that the Philippines renounces war as an instrument of national policy, we should be ready at all times to defend our territory.

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