(The Official Development Assistance Act of 1996)
AN ACT EXCLUDING OFFICIAL DEVELOPMENT ASSISTANCE (ODA) FROM THE
FOREIGN DEBT LIMIT IN ORDER TO FACILITATE THE ABSORPTION AND OPTIMIZE
THE UTILIZATION OF ODA RESOURCES, AMENDING FOR THE PURPOSE PARAGRAPH
1, SECTION 2 OF REPUBLIC ACT NO. 4860,
AS AMENDED.
SECTION 1. Title. — This Act shall be known as the "Official
Development Assistance Act of 1996."
Sec. 2. Official Development Assistance (ODA). — For purposes
of this Act, ODA is a loan or loan and grant which means all of
the following criteria:
(a) It must be administered with the objective of promoting sustainable
social and economic development and welfare of the Philippines;
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(b) It must be contracted with governments of foreign countries
with whom the Philippines has diplomatic, trade relations or bilateral
agreements or which are members of the United Nations, their agencies
and international or multilateral lending institutions;
(c) There are no available comparable financial instruments in
the capital market; and
(d) It must contain a grant element of at least twenty-five percent
(25%). Grant element under this Act is the reduction enjoyed by
the borrower whenever the debt service payments which shall include
both principal and interest and expressed at their present values
discounted at ten percent (10%) are less than the face value of
the loan or loan and grant. The grant element of a loan or loan
and grant is computed at the ratio of (i) the difference between
the face value of the loan or loan and grant and the debt service
payments to (ii) the face value of the loan or loan and grant.
Sec. 3. Amendatory Clause. — Official Development Assistance,
as defined in this Act, is hereby excluded from the application
of Paragraph 1, Section 2 of Republic
Act No. 4860, as amended: Provided, That the weighted average
grant element of all ODA at anytime shall not be less than forty
percent (40%): Provided, further, That in no case shall the interest
rate on the loan or loan component exceed seven percent (7%).
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Sec. 4. Use of ODA for Equitable Development. — The proceeds
of ODA shall be used to achieve equitable growth and development
in all provinces through priority development projects for the
improvement of economic and social service facilities taking into
account such factors as land area, population, scarcity of resources,
low literacy rate, infant mortality and poverty incidence in the
area: Provided, That rural infrastructure, countryside development
and economic zones established under the PEZA law shall be given
preference in the utilization of ODA funds. Towards this end,
the National Economic and Development Authority (NEDA) shall endeavor
to obtain ODA funds from donor countries, which shall approximately
be five percent (5%) of the total ODA loan from the immediately
preceding year. Said funds shall be administered by the NEDA for
project identification, feasibility studies, master planning at
local and regional levels, and monitoring and evaluation: Provided,
further, That ODA shall not be availed of or utilized directly
or indirectly for the following:
(a) Telephone programs contracted as of 1 January 1996 except
basic telephone programs and projects for rural areas not adequately
serviced and/or currently developed by private enterprises shall
be entitled to ODA loan availments;
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(b) Projects mandated primarily by law to be served by the private
sector; and
(c) Financing for private corporations with access to commercial
credit.
The NEDA shall ensure that the ODA obtained shall be for previously
identified national priority projects which are urgent or necessary.
ODA shall not be accepted or utilized solely because of its availability,
convenience, or accessibility.
Provided, finally, That the expressed approval of Congress shall
be obtained by the Executive Department prior to the negotiation
and implementation of projects funded from ODA on or after 1 January
1995 as well as those that have not been finalized.
Sec. 5. Counterpart Funds. — The counterpart funds necessary
to implement each ODA project must be included in the Annual Expenditure
Program submitted by the President to Congress within thirty (30)
days from the opening of every regular session. Any request for
funds to cover cost overruns must be submitted to Congress for
appropriation.
Sec. 6. Mechanism for the Distribution and Utilization of ODA
Funds. — The President of the Republic of the Philippines,
upon recommendation of the NEDA, shall develop and formulate the
mechanism for the equitable distribution and utilization of ODA
funds to all provinces consistent with the provinces consistent
with the provisions of this Act.
Sec. 7. Applicability. — This Act shall apply to ODA loans
and loans and grants contracted on or after 1 January 1995.
Notwithstanding the exclusion of ODA loans as prescribed in Section
3 hereof from the debt ceiling of Ten billion US dollars (US$10B)
prescribed in Section 2 of Republic
Act No. 4860, as amended by Presidential Decree No. 1939,
nothing contained in this Act shall be interpreted to mean that
whatever ODA loans that are within the debt ceiling of Ten billion
US dollars (US$20B) can be substituted or replaced by non-ODA
loans.
Sec. 8. Oversight. — Pursuant to its constitutional duties,
the Executive Department, particularly NEDA, the Commission on
Audit and Congress shall discharge Oversight functions, to wit:
(a) The NEDA shall conduct annual review of the status of all
projects financed by ODA, identify causes of delays, reasons for
bottlenecks, cost overruns, both actual and prospective, and continued
viability, and report to Congress not later than June 30 of each
year;
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(b) The Commission on Audit shall conduct an audit on each ongoing
and completed project and report to Congress not later than June
30 each year; and
(c) There shall be a Congressional Oversight Committee composed
of the Chairmen of the Committee on Ways and Means of both the
Senate and the House of Representatives, five (5) members each
from the Senate and the House representing the majority and two
(2) members each from the Senate and the House representing the
minority to be designated by the leaders of the majority and minority
in the respective chambers.
Sec. 9. Continuous Monitoring. — All concerned implementing
and oversight agencies shall submit to the NEDA all information
and reports as may be required by it to review draft contracts and
to assess the performance of individual ongoing projects as well
as the overall performance of all projects which are funded in whole
or in part by ODA.
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Sec. 10. Report. — It shall be the duty of the President of
the Republic of the Philippines to submit, within thirty (30) days
after the opening of every regular session, a separate report to
each member of Congress on the amount of ODA loans and grants incurred
under this Act.
Sec. 11. Implementation, Restrictions, Rules and Regulations. —
In the implementation of the projects: (a) Consultants for the feasibility
and design aspects of the project may not participate, directly
or indirectly, in any subsequent phase of project implementation;
(b) Project execution shall not be delegated by the implementing
agency except where the latter does not have the capacity to implement
such project; (c) In the hiring of consultants, contractors, architects,
engineers, and other professionals necessary for a project's implementation,
Filipinos shall be given preferences; (d) In the purchase of supplies
and materials, preference shall be given to Filipino suppliers and
manufacturers, so long as the same shall not adversely alter or
affect the project, and such supplies and materials are to the standards
specified by the consultants, contractors, architects, engineers,
and other professionals connected with the projects; and (e) ODA
projects shall not be exempt from the requirement of first obtaining
an Environmental Compliance Certificate (ECC), or other such certificates
and clearances necessary or required by law for the purpose of environmental
protection, from the Department of Environment and Natural Resources
(DENR) or proper government agency, as the case may be.
The NEDA shall promulgate the Implementing Rules and Regulations
(IRR) to implement this Act within thirty (30) days from its approval.
The Implementing Rules and Regulations shall take effect five
(5) days after publication in a newspaper of general circulation.
Sec. 12. Separability. — Provisions herein which may be
declared unconstitutional shall not revoke the effectivity and
enforcement of other provisions of this Act.
Sec. 13. Repealing Clause. — All laws, decrees, executive
orders, rules and regulations and other issuances inconsistent
with this Act are hereby repealed or amended accordingly.
Sec. 14. Effectivity. — This Act shall take effect after
five (5) days from its publication in the Official Gazette or
in at least two (2) national newspapers of general circulation
whichever date comes earlier.
Approved: June 11, 1996
