Thursday, 3 December 2009

ODA partners express support for reconstruction efforts worth $3B

Cai U. Ordinario and Jun Vallecera
Business Mirror

IN A bid to help the Philippine government undertake reconstruction and recovery efforts, the donor community represented by the country’s official development assistance (ODA) partners have indicated they will extend financial support worth $3 billion.

Philippine Disaster Recovery Foundation (PDRF) chairman and Finance Secretary Margarito Teves told reporters that the amount cannot still be termed as a formal commitment since the donors as well as the public- and private-sector representatives will still have to meet and discuss the details of the financial support.

Teves said the amount will not be final until donors and the national government have already signed an agreement indicating the exact amounts donors will be contributing.

Apart from the financial support from ODA partners, Teves also said the government, particularly government financial institutions (GFIs), government-owned and -controlled corporations (GOCCs) and local government units (LGUs), will extend some $2 billion to share part of the reconstruction- and recovery-effort burden.

“We are pleased with the broad indication of support by our development partners that reached $3 billion. Together with available funding from the public sector, or about $2 billion, plus private-sector, efforts through the PDRF, we are confident that we can have enough funds to meet the requirements for the country’s recovery and reconstruction,” Teves said.

Teves explained that the GFIs, GOCCs and the LGUs will be able to provide funds since most of these government entities are in surplus. The GFIs and GOCCs which will likely be tapped include the GFIs, Land Bank of the Philippines and Development Bank of the Philippines.

GOCCs that will likely be tapped include the Home Mutual Development Fund or Pag-IBIG Fund and the National Development Corp.

Vice President Noli de Castro indicated that the Housing and Urban Development Coordinating Council already extended P12 billion worth of home calamity loans and relocated families displaced by the storms.

De Castro said most of the families displaced by the storms were relocated in safer areas in the nearest cities or towns from their original locations.

Teves said the funds from the ODA partners will be available in three to six months’ time. The finance secretary also assured that apart from the ODA, which will be composed of concessional loans and grants, and the government’s share, support from the private sector may also be expected within the next few months.

“The support from the GFIs and GOCCs is a welcome boost to our recovery and reconstruction efforts as we recognize that the fiscal space of the national government is getting tighter due to the revenue-eroding measures and the impact of the global financial crisis and the economic slowdown on our revenue collection,” Teves said.

National Economic and Development Authority (Neda) Acting Director General Augusto Santos said the majority of the projects that will be financed by these funds will be geared toward flood-control projects.

The Post-Disaster Needs Assessment (PDNA) report stated that the total cost of recovery and reconstruction may be onerous, but doing nothing could be more expensive for the government.

“Because of the rapid increase in economic activity and concentration of people in Metro Manila, the costs of disasters such as Ondoy warrant investments in much higher protection against floods and other disasters than currently in place,” the PDNA stated.

Teves said public, as well as private- sector entities committed on Tuesday far more resources than the economic ruin left in the wake of typhoons Ondoy and Pepeng.

While damage done to the economy totaled more or less $4.4 billion or P208 billion, the country’s development partners vowed to spend around $5 billion or P234 billion for three years to compensate for the losses.

The economic toll has been huge, the damage having been estimated to equal 2.7 percent of local output or the gross domestic product this year, Teves said.

More than 90 percent of the economic ruin was sustained by private- sector entities, and its impact was magnified by the fact that it struck a sector, the Metro Manila area, which accounts for 60 percent of GDP.

“We are pleased with the broad indication of support by our development partners which reached more than $3 billion. Together with available funding from the public sector of about $2 billion, plus private-sector efforts through the PDRF, we have more than enough funds to meet the requirement for the country’s recovery and reconstruction,” Teves said.

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