Date:
May 2003
Government Prunes its Expectations
According
to reports, the government is planning to
terminate or scale back a number of ODA funded
projects in order to reduce the requirement
for matching government funds and thereby
reduce the strain on overstretched government
coffers. According to the National Economic
Development Authority (NEDA) some 109 projects
which have already been approved for ODA financing
between 2003 to 2009 are likely to be affected.
Scrapping these projects would result in savings
of US$524 million out of the $7.24 billion
already secured in funding commitments from
major lending agencies including the World
Bank, the Asian Development Bank and the Japan
Bank for International Reconstruction.
Those projects affected by the cutback include
the Sixth Road Public Works Project, the Bohol
Second Irrigation Project, Maritime Safety
Project, RP-Spain Acquisition of Vessels Project,
Pasig River Rehabilitation project, and the
Metro Manila Urban Transportation Project.
The government is also planning to cut back
on its programmed foreign borrowings for the
remainder of the year in order to ease the
strain on its foreign reserves. It will concentrate
on raising funds from the local market. Earlier
it had been planned to raise some $2.4 billion
in foreign borrowings this year, mostly to
finance its expected P202 billion deficit.
By April the government had already raised
$1.5 billion of this total. However, improved
revenue collection in April enabled the government
to rethink its requirement and led to the
plan to scale back dollar debts. According
to preliminary figures, the BIER collected
P140 billion in the first four months of the
year while the Bureau of Customs collected
P35.9 billion. Both figures were ahead of
targets.
It may be no coincidence that these positive
numbers came ahead of a review by Fitch Ratings
due this week and the bi-annual meeting with
the IMF starting May 8.
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