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To DOF, NEDA: Extend greater transparency on infra loans

MANILA, Philippines – A Philippine National Railways (PNR) train stops at the Sta Mesa Station in Manila, 24 June 2017 file. The facility is part of the proposed South Line of the PNR North-South Railway Project (NSRP), which will run from Tutuban in Manila up to Los Baños in Laguna to be financed by the Japanese government. Photo by Mark Cayabyab/OS WIN GATCHALIAN

Senator Win Gatchalian has urged government agencies involved in the planning and implementation of the Duterte administration’s Build, Build, Build (BBB) program to extend greater transparency on foreign loan agreements the government entered into to bankroll the various infrastructure projects.

The Gatchalian-led Senate Committee on Economic Affairs opened an inquiry into the status, sustainability, and risk of the multi-billion projects under the BBB program by scrutinizing the complete terms and conditions of loans entered into by the government.

During the hearing, Gatchalian called the attention of the Department of Finance (DOF), National Economic and Development Authority (NEDA), and the Bangko Sentral ng Pilipinas (BSP) to exercise greater transparency on infrastructure loans after he failed to find even copies of summaries of different loan documents on their respective websites.

“I went through the websites of DOF and NEDA and I couldn’t find any specifics on the loan agreement. I wanted to personally analyze the loan agreements, to look at the loan agreements but nowhere in the DOF and NEDA website that I can find any trace or any summary, at least summary man lang, of the loan agreements,” the Senate Committee on Economic Affairs chairman recalled.

“I’m putting myself on the shoes of a common person who wanted to understand not only about the projects, but also how the projects came about, how the loans were evaluated, and what are the thought processes that went through the loans,” he said.

The lawmaker stressed that greater transparency is proper, especially at a time when “there are lots of allegations flying here and there” on the supposed preferential treatment and one-sided provisions for a certain group or country.

“We hope to see that the principle of responsible lending and borrowing have been observed, not just to correct public perception but to further strengthen our economic partnership with our development partners,” he said.

The DOF, for its part, assured Senator Gatchalian that the loans agreements that the government signed went through rigorous vetting process. Contrary to reports, Finance Assistance Secretary Maria Edita Tan informed the Senate Committee on Economic Affairs that the government has secured more loans from Japan than in China.

Data from the DOF shows that at least five ongoing, big-ticket infrastructure projects are being financed through loans secured from Japan. On the other hand, China and South Korea are each financing two on-going infrastructure projects under the BBB program of the Duterte administration.

Meanwhile, the NEDA reported that it had identified and approved at least 75 Infrastructure Flagship Projects (IFPs) out of the thousands of projects listed in the Public Investment Program (PIP). Out of the 75 projects, the NEDA said 59 IFPs are funded by the Official Development Assistance.

In terms of project cost, the largest allocation goes to Japan/Asian Development Bank with P628 billion, equivalent to 30 percent. China meanwhile constitutes 25 percent of the total project cost or equivalent to P515 billion.

Before the hearing ended, Gatchalian requested both the DOF and NEDA to submit several documents, including complete copies of the loan agreements and simulation of the debt to GDP ratio, among others.

“That’s why I want to urge NEDA and DOF to really practice greater transparency. I know that there is an FOI directive, but it doesn’t bar us from practicing greater transparency beyond what the FOI requires. This is to really make the public appreciate that everything that is being done here is for the greater interest of our constituents,” he said.