Japan remained the Philippines' largest bilateral source of official development assistance over a 20-year period covering the presidencies of Gloria Macapagal Arroyo, Benigno Aquino III and Rodrigo Roa Duterte, the Department of Finance said Tuesday.
The DOF said in a statement about $14.139 billion in loans were contracted and committed during these three administrations.
The DOF’s International Finance Group said in a report to Finance Secretary Carlos Dominguez III that Japan’s ODA from 2001 to 2020 accounted for 72 percent of the Philippines’ total bilateral loan portfolio of $19.656 billion during the period.
Financial support from the European Union and China amounted to $3.049 billion and $1.185 billion, respectively, making up for 16 percent and 6 percent of the total ODA loan portfolio from 2001 to the present.
Loans from South Korea amounted to $1.101 billion and accounted for 5.6 percent while the rest came from the United States ($160 million) and the Middle East ($20 million).
Finance 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 $6.067 billion worth of bilateral ODA loans, of which $3.2 billion or 52.7 percent came from Japan.
Bilateral ODA loans of the administration of the late President Benigno Simeon Aquino III reached $5.641 billion, of which Japan provided 85 percent of the total or $4.817 billion.
About $7.947 billion of the loans were contracted under the Duterte administration, mostly to help bankroll the government’s massive infrastructure investments under the “Build, Build, Build” 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 for infrastructure to spur economic growth, and in safeguarding development gains during the pandemic,” Joven said in the report.
Japan remained the top ODA partner of the Philippines under President Duterte, accounting for $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”.
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 $95.726 million while the largest amount of bilateral ODA loans was in 2020 totaling $2.774 billion.
The Duterte administration 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.
