ODA law put 25-M-euro investment on hold – French envoy
At least 25 million euros (about P1.45 billion) worth of French investment was put on hold due to restrictions in the Official Development Assistance (ODA) Act of 1996, which does not allow private sector financing.
This was raised yesterday by French Ambassador Michéle Boccoz during a briefing of the House committee on ways and means, chaired by Albay Rep. Joey Salceda, on issues concerning the ODA.
“We had prepared a short memo on what are the issues we have some difficulty with,” she said. “The problem lies around the unavailability of certain sovereign loans to finance the cooperation projects of the Philippines.”
Boccoz noted that “sovereign blended loans” are among the “number of tools for ODA” that are being used by France in funding projects around the world.
She pointed out that “according to the Department of Finance (DOF) at the moment, this type of financing is currently unavailable in the Philippines, due to the interpretation of the case law from the Supreme Court (SC).”
“I understand that limits the definition of ODA to project fully financed with sovereign loans, which restricts significantly the list of potential partners for the Philippines and which is more restrictive,” said Boccoz.
The ambassdor explained that for large development projects, “financial facilities from European partners, in particular, are often composed of sovereign soft loan backed by buyer credit, which is a sort of sovereign, blended loans.”
Asked by Salceda if the Philippines already lost investment opportunies because of the ODA law, Boccoz cited a French company that is developing a shipyard in the Philippines for 25 million euros.
The project was “ready to be made and that has been blocked for the moment” due to ODA policies, she said.
The French diplomat said it “would (be) creating jobs and would be also an opportunity to have or to strengthen competencies or to translate competencies and to create a closer relation” between the Philippines and France.
“For my own country, this situation is a significant obstacle to many projects that are in the pipeline at the moment,” she underscored.
Olivier Ginepro, economic counselor at the French embassy, said they have been discussing with the Philippine government for more than two years a government-to-government agreement that “would allow ODA but also blended financing facilities.”
However, Ginepro also cited the notice from the DOF that “a case law of the Supreme Court has brought them to the interpretation that foreign sovereign concessional fundings are restricted to ODA only.”