2018 Consolidated Audit Report on Official Development Assistance-Funded Programs and ... · 2019-07-04 · Debt amounted to P7,780,086 million, comprised of domestic and external

REPUBLIC OF THE PHILIPPINES

COMMISSION ON AUDIT

Commonwealth Avenue, Quezon City

Consolidated Audit Report on

Official Development Assistance -

Funded Programs and Projects

2018

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EXECUTIVE SUMMARY

A. Introduction

The Official Development Assistance (ODA) as defined in Republic Act (RA) No. 8182, or the Official Development Assistance Act of 1996, is a loan or a grant administered with the objective of promoting sustainable social and economic development and welfare of the Philippines. It must be contracted with government 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.

Under Section 3 of RA No. 8182, the ODA is excluded from the total amount of loans, credits, and indebtedness, excluding interests, which the President is authorized to incur, which shall not exceed 10 billion US Dollars or its equivalent in other foreign currencies at the exchange rate prevailing at the time the loans, credits, or indebtedness are incurred and terms of payment of not less than 10 years except those contracted in the interest of national security and rehabilitation resulting from natural calamities.

Under Executive Order (EO) No. 292 and other existing laws on borrowings, the Debt Management functions are lodged mainly on two government offices– the Department of Finance (DOF) and the Bureau of the Treasury (BTr). The DOF is responsible for the review, negotiation, approval, and management, including servicing and restructuring, if necessary, of all public sector debt. On the other hand, the BTr manages the cash resources, issues domestic securities and secondary market transactions, and services all domestic and external borrowings.

Moreover, RA No. 8182, as amended by RA No. 8555, mandated the National Economic and Development Authority (NEDA) to conduct an annual review of the status of all projects financed by ODA and identify causes of implementation and completion delays or reasons for bottlenecks, cost overruns (actual and prospective), and continued project or program viability.

On the other hand, the Commission on Audit (COA) shall conduct an audit on each ongoing and completed project and report to Congress not later than June 30 each year, with the auditors of implementing agencies performing the audit of projects and programs funded by ODA.

As of December 31, 2018, the total National Government (NG) Outstanding Debt amounted to P7,780,086 million, comprised of domestic and external debt, which were (a) directly incurred by the NG for programs and projects to be implemented by national government agencies (NGAs) and for

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relending to local government units (LGUs), (b) loans assumed by the NG, (c) NG debt securities, and (d) contracted by the government financial institutions (GFIs)/government-owned and controlled corporations (GOCCs) and guaranteed by the NG, as summarized in Table 1.

Table 1. National Government Debt Stock as of December 31, 2018

NG Debt Stock External Domestic Total

Amounts in million PHP

Actual Debt 2,515,641 4,776,859 7,292,500

NG Agencies 922,820 156 922,976

Relent 24,441 - 24,441

Assumed - 792 792

Debt Securities 1,568,380 4,775,911 6,344,291

Guaranteed Debt 290,049 197,537 487,586

Total 2,805,690 4,974,396 7,780,086

Source: BTr – Debt Monitoring and Analysis Division (DMAD), National Government Outstanding Debt Stock

In Calendar Year (CY) 2018, the external debt increased by P304,471 million or an equivalent of US$3,598.961 million or 13.77 per cent from the CY 2017 level. Contributing largely to the increase in external debt were loans amounting to P100,151 million with an equivalent of US$1,064.998 million contracted by the NG for programs and projects for implementation of NGAs and the issuances of US Dollar Bonds of P115,907 million with an equivalent of US$1,024.718 million, Japanese Yen Bonds of P77,247 million with an equivalent of US$1,425.460 million, and Chinese Yuan Bonds totaling P11,166 million with an equivalent of US$212.431 million. Guaranteed external debt, on the other hand, increased by P9,453 million despite a decrease in the USD level by US$98.517 million, due to the increase in the PhP equivalent of the USD from 49.958 in CY 2017 to 52.563 in CY 2018. Guaranteed external debt consists of loans contracted by GFIs/GOCCs with direct NG guarantee. At the CY 2018 year-end level of external debt, Gross Domestic Product (GDP) ratio was 23.90 or an increase of 0.06 per cent from the previous year.

Of the P2,805,690 million external debt as of CY 2018, ODA loans account for P1,026,529.284 million, of which P884,342.770 million or 85.15 per cent were contracted directly by the NG for programs/projects to be implemented by the NGAs, and to be relent to LGUs, and those contracted directly by the GFIs/GOCCs which were guaranteed by the NG totaling P121,012.954 million or 11.79 per cent and those relent to GFIs/GOCCs of P21,173.560 million or 2.06 per cent.

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The Government of the Philippines (GoP) contracted 13 ODA loans totaling P170,757.642 million in CY 2018 which were sourced mainly from five development partners (DPs) (multilateral and bilateral), namely, the Asian Development Bank (ADB), International Bank for Reconstruction and Development (IBRD), Japanese International Cooperation Agency (JICA), China Export and Import Bank (CExim), and the Korea Export and Import Bank (KExim). The common and distinct features of loans incurred from these DPs are shown in Table 2.

Table 2. Loan Terms and Conditions

Terms and Conditions

Multilateral Bilateral

ADB IBRD JICA CExim KExim

Common Features

Original Currency of Loan

USD USD JPY USD KRW

Maturity Date (in yrs)

15 23 28 - 40 20 40

Grace Period (in yrs)

None None 10 - 12 7 10

Nominal Interest Rate

Sum of: LIBOR, 0.60% less credit of 0.10% (plus

maturity premium of

0.10% - 0.20% for LIBOR-

based Loans)

Reference rate plus variable

spread as defined by the

bank

Principal is divided into I

and II for repayment

(0.1% to 0.3% per annum on

Principal I and 0.01% per

annum on Principal II)

2% of the principal amount

drawn per annum

0.15% per annum on

the principal amount of the loan

disbursed and

outstanding

₱4,974,396; 63.94%

0; 0.00%

₱1,026,304; 13.19%

₱1,779,386; 22.87%

₱2,805,690; 36.06%

Total National Government Outstanding Debtas of 31 December 2018

(in million PhP)

DomesticDebt

External Debt

ODA Loans

Non-ODA Loans

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Terms and Conditions

Multilateral Bilateral

ADB IBRD JICA CExim KExim

Arbitration

Arbitral Tribunal

composed of Arbitrators chosen by

ADB, borrower/ guarantor, and agreed upon

by parties

With an arbitration

proceeding, the Umpire to

be agreed upon by the

parties

Determined by agreement between

parties, or by the Umpire.

Arbitration Venue:

Beijing/Hong Kong

Arbitration Venue:

Determined by the Umpire

Distinct Features

Front - End Fee Rate

None

0.25% of the Loan Amount

0.2% on the maximum

amount of loan None None

Commitment Fee Rate

0.15% per annum on the

Unavailed Balance

0.25% per annum on the

unavailed balance

None

0.3% based on undrawn

and uncanceled

balance payable semi-

annually

None

Service Charge Rate

None None None None

0.1% of the amount of

each disburseme

nt

Management Fee

None None None

0.3% of the loan amount,

payable within 30 days after

the effective date not later than the 1st Disburseme

nt date

None

Source: Various ODA loan agreements

B. Scope of Audit

In compliance with Section 8(b) of RA No. 8182, as amended, mandating COA to submit ODA report to Congress, the Auditors of of the NGAs, GFIs/GOCCs, and LGUs implementing and had implemented ongoing and completed ODA-funded programs and projects conducted an audit of the operations, and financial and physical performance of 46 on-going and completed programs/projects as of year-end of CY 2018. The audit observations and recommendations were consolidated and grouped into audit issues for emphasis, based on the audit reports transmitted by the concerned auditors.

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C. ODA Loans Highlights

From CYs 1995 to 2018, the NG contracted 472 ODA loans (inclusive of 9 cancelled loans) with an outstanding loan balance of P1,026,529.284 million as of December 31, 2018 as summarized in Table 3.

Table 3. Outstanding ODA Loan Balance as of December 31 2018

Creditor Type

Amounts in million PhP as of December 31, 2018

CGLC CLC CNLC Cumulative Availments

Cumulative Repayments

Outstanding Loan Balance

Multilateral 1,198,887.776 107,975.771 1,090,912.005 916,345.275 297,080.156 619,265.118

Bilateral 1,185,562.048 119,004.349 1,066,557.699 715,478.444 308,419.293 407,059.151

Commercial 41,230.853 3,855.429 37,375.423 37,375.395 37,170.381 205.014

Total 2,425,680.677 230,835.550 2,194,845.127 1,669,199.115 642,669.830 1,026,529.284

Source: BTr – Debt Monitoring and Analysis Division (DMAD) Status Report of NG-Direct and Guaranteed Foreign Loans

D. ODA-Funded Programs and Projects’ Implementation Highlights

As of December 31, 2018, a total of 398 ODA-funded programs and projects were consolidated based on the project implementation status report of Implementing Agencies and NEDA as presented in Table 4.

Table 4. Status of ODA-Funded Projects

Project Implementation Status

Project Sector Total

AARNR GID INFRA ITT SRCD

Not yet implemented - - 3 - - 3

Ongoing 13 2 40 - 5 60

Completed 64 21 156 21 60 322

Cancelled 5 - 6 2 - 13

Total 82 23 205 23 65 398 Source: NEDA List of ODA Loans for CY 2018 and reports submitted by IAs

E. Summary of Significant Audit Observations and Recommendations

For CY 2018, audit reports on 27 ongoing and 19 completed projects, three of which were completed during the year, showed observations and recommendations on the following areas as summarized:

1. On Project Implementation, Management and Sustainability

a. Delays in the implementation of the project/sub-project activities due

to, among others: (a) inefficient procurement process; (b) contractor's inability to undertake the project; (c) lack of management readiness to implement the project; (d) delayed approval of the loan agreement for additional financing; (e) late releases of funds (loan proceeds and GOP counterparts); (f) poor project planning, supervision, and

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monitoring; (g) suspended works, unreasonable work plan and the inability of Management to effectively carry out the detailed engineering investigation and survey contributed to the incurrence of commitment fees and management fees of P355.874 million and resulted in, among others, low physical accomplishments and loan availments, loan cancellation of P22.420 million, reversion of project funds to the BTr of P134.13 million, and accumulation of unutilized funds of P4,225.547 million.

We recommended that IAs:

Undertake the procurement process/procedures as prescribed to ensure that contractors/suppliers awarded the contracts have the technical and financial capacity to undertake projects/sub-projects and that contract terms are the most advantageous/reasonable for the project, and in accordance with the procurement timelines;

Consider readiness and capacity to implement a project prior to submission of project feasibility/design for review and approval by the NEDA;

Determine and evaluate the causes of project/component/sub-project implementation delays and take immediate appropriate action/s to specifically address such causes to put the projects on track;

Improve overall project implementation by ensuring that the project components/sub-projects/activities are properly planned and monitored, and implemented in accordance with the approved project budget, milestones, and project objectives; and

Develop strategies and undertake pre-implementation activities prior to loan effectiveness, as feasible, and exert best efforts to comply with loan conditions within the prescribed period to facilitate project start-up activities.

We also recommended that the NEDA:

Review project designs/feasibility studies thoroughly.

Ensure that IAs are institutionally and technically capable to undertake project design/planning, as feasible, and the implementation of the project; and that the project cost is

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reasonable and all necessary resources, such as right of way (ROW), Project Management Office (PMO) personnel, and clearances/documents are available to the IAs for the implementation of the project when the loan becomes effective;

Continue to monitor ODA-funded projects, particularly those with delays in implementation and coordinate with other concerned agencies for immediate resolution; and

Recommend to IAs the immediate request to the DOF for the cancellation of undrawn loan commitments for project components/sub-projects which could no longer be implemented or are no longer feasible to implement or, as necessary, based on its review of the project’s progress and consultation with IAs to minimize commitment fees.

We further recommended that: (i) the DBM ensure adequate and timely release of project funds, both loan proceeds and GOP counterpart funds; and, (ii) the DOF facilitate the immediate request for loan cancellation with the DPs to minimize commitment fees.

b. Construction contracts with a total cost of P342.914 million with

negative slippages were not rescinded and liquidated damages not imposed.

We recommended that the IA closely monitor contract implementation and take immediate appropriate action/s on contractor’s/supplier’s defaults/deviations from contract stipulations.

2. On Financial Management

a. Lapses in the processing, recording, reporting, and monitoring of financial transactions, such as: (a) late recording and recognition of financial transactions; (b) disparities in financial information affecting accountability reports; (c) inadequate monitoring of transactions and account balances; and (d) failure to require the submission of complete documents in the processing of transactions and claims resulted in, among others, delays in payments and inappropriate charging of expenses, utilization of funds for other purposes, and additional costs.

We recommended that IAs observe strict compliance with accounting and auditing rules and regulations, particularly on

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the grant, utilization, and liquidation of cash advances and fund transfers, and reporting on project funds and implementation.

3. On Reliability of Financial Statements

a. Accounting errors and omissions, such as (a) non-reclassification / misclassification of various accounts totaling P19,818.376 million; and (b) unrecorded and erroneous recording of transactions totaling P3,852.143 million and P267.159 million, respectively, resulted in the overstatement/ understatement of affected account balances.

b. Long outstanding and accumulated balances of fund transfers of P18,299.510 million were due to, among others, the: (a) inadequate monitoring of project funds; (b) delayed completion of projects; and (c) non-liquidation of fund transfers to NGAs, LGUs, and NGOs/POs.

We recommended that IAs prioritize the recognition of unrecorded project transactions, the analyses of accounting deficiencies, and reconciliation of project accounts with accounting/property/supply and other government entities’ records, and the adjustments of accounting errors in the balances of affected accounts, as necessary.

We also recommended that the DBM ensure the early and complete release of the non-cash availment authority (NCAA) to facilitate recording by IAs of goods delivered and services rendered.

4. On Compliance with Existing Laws, Rules, and Regulations and

Provisions of the LA/MOA

a. Non-compliance with procurement laws, rules, and regulations were on (a) the expiration of performance bond for ongoing and suspended contracts totaling P310.768 million; (b) final payment of P6.391 million on delayed project without documents on extension of contract duration; (c) non-imposition of warranty for payments of procured goods of P5.323 million; and (d) splitting of purchase orders of P3.809 million, among others.

We recommended that IAs’ Management observe strict compliance with the related provisions of the Government Procurement Reform Act, otherwise known as RA No. 9184 and its Implementing Rules and Regulations in order to ensure procurement is implemented in a manner that is most advantageous to the government.

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b. Non-compliance with accounting and auditing rules and regulations were on (a) physical count, accounting, management, and reporting of inventories and property, plant, and equipment (PPE); (b) the grant, utilization and liquidation of cash advances; and (c) delayed/incomplete/ non-submission of contracts, purchase orders (POs), Job Orders (JOs), Inspection and Acceptance Reports (IARs), financial statements (FSs), and other supporting documents, among others.

We recommended that IAs observe strict compliance with accounting and auditing rules and regulations, particularly on the reporting of inventories and PPE; the grant, utilization, and liquidation of cash advances; and reporting on project funds and implementation.

F. Status of Implementation of Prior Year’s Audit Recommendations

Of the 851 prior years’ audit recommendations embodied in the CY 2017 Consolidated Audit Report on ODA-Funded Programs and Projects, 259 were fully implemented, 268 were partially implemented and 324 are yet to be implemented as summarized in the Table 5. The details are discussed in Part 5 of this report.

Table 5. Status of Implementation of PY Audit Recommendations

Gov’t Sector No. of

Agencies

Number of Audit Recommendations % Share per

Sector Fully

Implemented Partially

Implemented Not

Implemented Total

NGAs 11 207 197 250 654 76.85

GOCCs 8 23 62 62 147 17.27

LGUs 6 29 9 12 50 5.88

TOTAL 25 259 268 324 851 100.00

Percentage 30.43 31.49 38.07

We enjoin Management to ensure the full implementation of all audit recommendations to improve the financial and operational efficiency of the projects.

2018 Consolidated Audit Report on ODA–Funded Programs and Projects

TABLE OF CONTENTS

Page 1.0 STATUS OF ODA LOANS 1.1 Loan Commitments 1 1.2 Availments 5 1.3 Undrawn Commitments 7 1.4 Debt Service Expenditures 9 1.5 Outstanding Balances 13

2.0 STATUS OF ODA-FUNDED PROGRAMS AND PROJECTS 16

3.0 AUDIT OBSERVATIONS 19

4.0 GENERAL AUDIT RECOMMENDATIONS 28

5.0 STATUS OF IMPLEMENTATION OF PRIOR YEAR’S AUDIT RECOMMENDATIONS

31

6.0 TABLES Cancelled Loans in CY 2018 1 Status and Breakdown of Loans 1 CY 2018 New Agreements 2 Partial Loan Cancellations in CY 2018 4 IAs with the Highest Cumulative Net Loans Commitments 5 Current and Cumulative Loan Availments by Creditor Type 5 Percentage of Availments over CNLC (by Project Sector) 6 Comparison of Availments in CYs 2017 and 2018 6 Loan Status of Undrawn Commitment 8 Undrawn Commitments of Active and Newly Signed Loans 8 Debt Service Expenditures by Development Partners 9

Comparative Debt Service Expenditures made by BTr and GFIs/GOCCs

10

Commitment Fees Paid according to Project Sectors and year loans were contracted

12

Changes in the ODA Outstanding Balance 13 Status of Programs/Projects as of December 31, 2018 16 Status of Implementation of Ongoing Projects 17

7.0 CHARTS Debt Service Expenditures for CY 2018 9 Debt Service Expenditures 10 Commitment Fees Paid to DPs in CY 2018 13 Outstanding Balances by Creditor as of December 31, 2018 14

1.0 STATUS OF ODA LOANS

1 2018 Consolidated Audit Report on ODA–Funded Programs and Projects

1. STATUS OF ODA LOANS

1.1 LOAN COMMITMENTS

As of December 31, 2018, the National Government (NG) entered into a

total of 472 ODA loan agreements, comprising of 395 project loans and 77 program loans with cumulative gross loan commitments (CGLC) of P2,425,680.677 million (US$46,148.064 million). Out of the CGLC, cumulative loan cancellations (CLC) totaled P230,835.550 million (US$4,391.598 million) resulting to cumulative net loan commitments (CNLC) of P2,194,845.127 million (US$41,756.466 million).

Of the 395 project loans, 10 are new loans signed in calendar year (CY)

2018, of which seven became effective during the year, while 46 are active, 330 were already closed, and nine are cancelled loans. Of the nine cancelled loans, two were cancelled during the year for reasons cited in Table 1:

Table 1. Cancelled Loans in CY 2018

Project Title Loan Amount

(in million PhP) Reasons for Cancellation

Inclusive Partnerships for Agricultural Competitiveness Project (IPAC)

5,220.184 World Bank (WB) did not receive any documentary evidence in fulfilment of the conditions precedent to effectiveness of the loan by May 31, 2018. Accordingly, the loan agreement was terminated and the loan was cancelled.

Integrated Marine Environment Monitoring System- Phase 2 (PHILO Phase 2) Project

1,713.168 The Investment Coordination Committee – Cabinet Committee (ICC-CC) approved Department of Agriculture-Bureau of Fisheries and Aquatic Resources (DA-BFAR) request to cancel the French Treasury Loan to enable DA-BFAR to proceed with the procurement using local funds and initiate project implementation. The French Embassy informed that the declared winning bidder is not an eligible supplier under the terms of the French Financial Protocol.

Total 6,993.352 Source: Department of Finance-International Finance Group (DOF-IFG)

On the other hand, of the 77 program loans, three are new loans with two already effective and only five loans contracted prior to CY 2018 are active. The remaining 69 loans were already closed. Details are shown in Table 2:

Table 2. Status and Breakdown of Loans

Status Breakdown CNLC (in million)

Project Program Total USD PHP

Active* 46 5 51 9,820.467 516,193.218


Status Breakdown CNLC (in million)


New: 10 3 13 3,284.628 170,757.642

Not yet effective 3 1 4 898.265 47,215.507

Effective 7 2 9 2,350.363 123,542.135

Closed 330 69 399 28,526.415 1,499,433.973

Cancelled** 9 0 9 160.955 8,460.294

Total 395 77 472 41,756.466 2,194,845.127

Source: National Economic and Development Authority (NEDA) List of ODA Loans for CY 2018 and 2017 Consolidated Audit Report on Official Development Assistance (ODA) Programs and Projects *Inclusive of one loan contracted in the previous year revived in 2018 **Inclusive of seven loans cancelled in the previous years

The Government secured a total of 13 new ODA loans in CY 2018 from

the Asian Development Bank (ADB), and the International Bank for Reconstruction and Development (IBRD), Japan International Cooperation Agency (JICA), Export-Import Bank of Korea (KExim) and Export-Import Bank of China (CExim) totaling P170,757.642 million (US$3,248.628 million) equivalent to 7.78 per cent of the CNLC. The Metro Manila Subway Project, Phase I and the New Bohol Airport Construction and Sustainable Environment Protection Project, Phase II with project cost of P50,065.067 million (US$952.477 million) and P2,095.903 million (US$39.874 million), both funded by the JICA, are the projects funded by two new ODA loans to support the current Administration’s “Build, Build, Build” Program.

Projects for implementation in the infrastructure (INFRA) sector account

for 74.39 per cent of the CNLC, 18.47 per cent for Governance and Institutional Development (GID) sector, and the remaining 7.14 per cent for Agriculture, Agrarian Reform and Natural Resources (AARNR) sector, as shown in Table 3.

Table 3. CY 2018 New Agreements

Development Partners

(DPs)

Loan Accoun

t No. Name of Project

Closing Date

Commitments (in million) % to

Total USD PHP

INFRA 2,416.54 127,020.66 74.39

JICA PH-

P267

Metro Manila Subway Project

Phase I 6/25/2025 952.477 50,065.07 29.32

ADB 3631-PHI

Improving Growth Corridors in

Mindanao Road Sector Project

6/30/2024 380 19,973.94 11.7

JICA PH-

P269

Metro Rail Transit Line 3 Rehabilitation

Project - 347.176 18,248.63 10.69

ADB 3768-PHI

Emergency Assistance Loan for Reconstruction and

6/30/2021 300 15,768.90 9.23


Development Partners

(DPs)

Loan Accoun

t No. Name of Project

Closing Date

Commitments (in million) % to

Total USD PHP

Recovery of Marawi (ERRM) -

Component 1: Quick Disbursing Loan

CExim CHI-9 New Centennial Water Source-

Kaliwa Dam Project - 211.215 11,102.08 6.5

ADB 3769-PHI

Emergency Assistance Loan for Reconstruction and Recovery of Marawi

(ERRM) - Component 2: Project Loan

6/30/2021 100 5,256.30 3.08

JICA PH-

P266

Arterial Road Bypass Project

Phase III (ARBP III) 6/21/2025 85.644 4,501.69 2.64

JICA PH-

P268

New Bohol Airport Construction and

Sustainable Environment

Protection Project, Phase II

- 39.874 2,095.90 1.23

KExim KEXIM PHL-19

New Cebu International

Container Port Project

8/21/2023 0.155 8.158 0.01

GID 600 31,537.80 18.47

ADB 3691-PHI

Expanding Private Participation in Infrastructure

Program Subprogram 2

10/31/2019

300 15,768.90 9.23

ADB 3707-PHI

Inclusive Finance Development

Program, Subprogram 1

(IFDP1)

2/20/2019 300 15,768.90 9.23

AARNR 232.087 12,199.18 7.14

IBRD 8816-

PH

Philippine Rural Development Project

- Additional Financing

5/31/2021 170 8,935.71 5.23

CExim CHI-8 Chico River Pump Irrigation Project

6/5/2023 62.087 3,263.47 1.91

Total 3,248.63 170,757.64 100

Source: Various Loan Agreements

On the other hand, there were decreases in loan commitments or partial

loan cancellations totaling P2,364.663 million (US$44.987 million) for two loans due to reasons as stated in Table 4.


Table 4. Partial Loan Cancellations in CY 2018

IA Loan

Account No.

Name of Project

Amount (in million)

Reasons for Commitment Decrease / Partial Loan

Cancellation USD PHP

DENR 2957-PHI

Integrated Natural Resources and Environmental Management Project

42.950 2,257.557 Department of Environment and Natural Resources (DENR) requested the partial cancellation of US$42.950 million from the US$100 million ADB loan due to delays in the implementation of major activities under the project brought about by, among others, DENR’s difficulty in i) engaging Project Management and Implementation Consultants, ii) establishing implementation arrangements for river basin areas, iii) obtaining necessary clearances from the National Commission on Indigenous Peoples, and iv) monitoring overall project implementation. The ICC-CC approved DENR’s request for loan cancellation on April 25, 2018 and the same was approved by ADB effective July 13, 2018. The revised loan amount is now US$57.050 million.

DA 767-PH

Rapid Food Production Enhancement Programme

2.038 107.106 Out of the original amount of SDR 10.685 million, a total of SDR 9.220 million was disbursed. The undisbursed amount of SDR 1.465 million after project completion was cancelled by International Fund for Agricultural Development (IFAD) in accordance with Section 12.02 (b) of the General Conditions for Agriculture Development Financing applicable to

IFAD loans.

Total 44.987 2,364.663

Source: DOF-IFG

Among the foreign funding sources for programs/projects, the bilateral

DPs financed most of the projects at 244 loans with a total CNLC of P1,066,557.699 million (US$ 20,291.035 million). A total of 187 loans with a CNLC of P1,090,912.005 million (US$20,754.371 million) were sourced from multilateral DPs while only 41 loans totaling P37,375.423 million (US$ 711.060 million) were obtained from commercial DPs.

The JICA, ADB, and IBRD were the three leading sources of ODA loans

with 36.59 per cent or P803,123.552 million (US$15,279.256 million), 27.98 per cent or P614,126.228 million (US$11,683.622 million), and 20.90 per cent or P458,825.217 million (US$8,729.053 million), of the CNLC, respectively.


Of the various agencies that availed ODA loans, 81.27 per cent are national government agencies (NGAs), 18.21 per cent are government financial institutions (GFIs)/government-owned and controlled corporations (GOCCs), and 0.52 per cent are either availed by the Municipality Development Fund Office (MDFO) for relending to local government units (LGUs) or directly by the LGUs. As of December 31, 2018, the top five implementing agencies (IAs) with the highest CNLC are presented in Table 5.

Table 5. IAs with the Highest Cumulative Net Loan Commitments

Implementing Agency No. of Loans

CNLC (in million) % to Total CNLC

USD PHP

Department of Public Works and Highway (DPWH)

90 6,327.753 332,605.705 15.15

Department of Transportation (DOTr) 43 6,042.161 317,594.121 14.47

Department of Social Welfare and Development (DSWD)

9 2,760.822 145,117.098 6.61

Development Bank of the Philippines (DBP)

24 1,437.685 75,569.052 3.44

Department of Agrarian Reform (DAR) 25 1,268.745 66,689.030 3.04

Total 191 17,837.166 937,575.006 42.71

Source: Bureau of the Treasury – Debt Monitoring and Analysis Division (BTr-DMAD) Status Report of NG- Direct and Guaranteed Foreign Loans

1.2 AVAILMENTS

Cumulative availments of ODA loans as of December 31, 2018 totaled

P1,669,199.115 million (US$31,756.161 million), of which P116,233.085 million (US$ 2,211.310 million) were availed during the year. Also, for the 13 new loans, a total of P880.600 million (US$16.753 million) were already availed. Current year availments included capitalized commitment fees charged by ADB and JICA of P30.405 million (US$0.576 million) and P8.032 million (US$0.152 million), respectively, or a total of P38.437.66 million (US$0.728 million) which were drawn from the loan accounts and directly paid by the DPs to themselves.

As of December 31, 2018, approximately 54.90 per cent, 42.86 per cent,

and 2.24 per cent of the cumulative availments were drawn from multilateral, bilateral, and commercial DPs, respectively. However, for CY 2018, approximately 76.70 per cent was drawn from multilateral DPs and the remaining 23.30 per cent from bilateral DPs. There was no drawdown from the commercial creditors. Details are shown in Table 6.

Table 6. Current and Cumulative Loan Availments by Creditor Type

Creditor Type CY 2018 Availments (in million)

% to Total USD PHP

Multilateral 1,696.107 89,152.490 76.70


Source: BTr –DMAD Status Report of NG-Direct and Guaranteed Foreign Loans

Of the CNLC, P1,669,199.115 million (US$ 31,756.161 million) or 76.05

per cent were availed as of December 31, 2018, with the Industry, Trade, and Tourism (ITT) sector’s availments at 99.98 per cent, details of which are shown in Table 7.

Table 7. Percentage of Availments over CNLC (by Project Sector)

Project Sector

CNLC (in million)

Cumulative Availments (in million) % of

Availment/ CNLC USD PHP USD PHP

INFRA 20,076.582 1,055,285.394 12,167.505 639,560.565 60.61

SRCD 10,711.315 563,018.845 10,110.133 531,418.912 94.39

GID 5,019.034 263,815.466 4,417.863 232,216.112 88.02

AARNR 4,511.588 237,142.604 3,622.933 190,432.206 80.30

ITT 1,437.947 75,582.817 1,437.728 75,571.320 99.98

Total 41,756.466 2,194,845.127 31,756.161 1,669,199.115 76.05


Comparison of the availments in CYs 2017 and 2018 showed an

increase of 65.56 per cent over the previous year’s level. The increase was mainly attributable to the Second Disaster Risk Management Development Policy Loan project, which is a program loan under the GID sector with availments of P26,150.093 million (US$ 497.500 million) in CY 2018 or a significant increase of P25,162.143 million (US$ 477.724 million) or 2,547.90 per cent from the CY 2017 availment, as presented in Table 8.

Table 8. Comparison of Availments in CYs 2017 and 2018

Project Sector

CY 2017 Availments (in million)


Increase/(Decrease)

USD PHP USD PHP USD PHP %

GID 19.775 987.950 497.500 26,150.093 477.724 25,162.143 2,547.90

SRCD 939.441 46,932.573 1,079.372 56,735.017 139.931 9,802.444 20.89

Infra 305.629 15,268.629 461.474 24,256.451 155.845 8,987.822 58.86

AARNR 140.454 7,016.797 172.964 9,091.525 32.510 2,074.727 29.57

Bilateral 515.203 27,080.595 23.30

Commercial - - -

Total 2,212.310 116, 233.085 100

Cumulative Availments (in million)

Multilateral 17,433.276 916,345.275 54. 90

Bilateral 13,611.827 715,478.444 42.86

Commercial 711.059 37,375.395 2.24

Total 31,756.161 1,669,199.115 100


Project Sector



Increase/(Decrease)

USD PHP USD PHP USD PHP %

ITT - - - - - - -

Total 1,405.299 70,205.950 2,211.310 116,233.085 806.011 46,027.135 65.56


Based on the preceding table, although the increase in availments for

the SRCD sector increased by P9,802.444 million (US$ 139.931 million) only, it is notable that this sector had the highest level of availments for CY 2018 totaling P56,735.017 million (US$ 1,079.372 million). This was comprised of availments of P30,363.017 million (US$ 577.650 million) for projects which started availment in CY 2018, such as the Facilitating Youth-School-to-Work Transition Program - Subprogram implemented by the Technical Education and Skills Development Authority (TESDA), the Department of Trade and Industry (DTI), and the Department of Overseas Labor and Employment (DOLE), the Encouraging Investment through Capital Market Reforms Program - Subprogram 2 implemented by the BTr and the Securities and Exchange Commission (SEC), and the Senior High Support Program - Results Based Lending, implemented by the Department of Education (DepEd), and availments of P26,372.000 million (US$501.722 million) for projects which already started availment during the previous years.

Moreover, the NGAs availed P1,300,710.838 million (US$24,745.750

million) as of December 31, 2018, representing 77.92 per cent of the cumulative availments. The GFIs/GOCCs came next with P357,137.428 million (US$6,794.464 million) or 21.40 per cent, while only P11,350.848 million (US$ 215.947 million) was availed by the LGUs and/or availed by the MDFO for relending to LGUs.

In CY 2018, P111,521.192 million (US$2,121.667 million) or 95.95 per

cent was availed for the implementation of various programs and projects of the NGAs. The remaining 4.05 per cent or P4,711.893 million (US$ 89.643 million) was availed by GFIs/GOCCs.

1.3 UNDRAWN COMMITMENTS

As of December 31, 2018, the cumulative undrawn commitments totaled

P525,646.012 million (US$10,000.305 million) for 96 loans, which accounts for 23.95 per cent of the CNLC. As compared to CY 2017, undrawn commitments increased by P76,800.327 million or 17.11 per cent with the net increase due to the newly signed loans in CY 2018.


Cumulative undrawn commitments were for 88 project loans and eight program loans. Of the 88 project loans, 46 are active, 29 were already closed, 3 were cancelled, and 10 are newly signed. For the program loans, four are active, one was already closed, and three are newly signed. Undrawn commitments for cancelled and closed loans are no longer available for drawdown. Details are shown in Table 9.

TabIe 9. Loan Status of Undrawn Commitment

Loan Status Type of Loan

Cumulative Undrawn Commitment (in million) % to Total


Active 46 4 50 6,087.175 319,960.158 60.87

Newly Signed 10 3 13 3,231.875 169,877.042 32.32

Closed 29 1 30 526.494 27,674.079 5.26

Cancelled 3 - 3 154.762 8,134.732 1.55

Total 88 8 96 10,000.305 525,646.012 100.00


For the active and newly signed loans with undrawn commitments as of

December 31, 2018, the details are presented in Table 10.

Table 10. Undrawn Commitments of Active and Newly Signed loans

Year of Loan Agreement

Loan Closing Years

Project/Program Status Cumulative Undrawn

Commitment (in million)

Ongoing Completed Not Yet

Implemented

2014 to 2018* 2019 to 2028 33 1 3 415,334.688

2009 to 2013 2012 to 2023 21 1 - 70,732.740

2002 2019 - 1 - 3,769.773**

Total 54 3 3 P489,837.201

Source: BTr –DMAD Status Report of NG-Direct and Guaranteed Foreign Loans *Undrawn commitments of the 2018 newly acquired loans totaled P169,877.04 million **Pertain to one project loan from JICA with closing date of November 21, 2019

Of the total P489,837.201 million undrawn commitments, 89.01 per cent

or P435,983.033 million can be drawn to finance 54 ongoing projects while P22,407.560 million pertain to programs/projects which were completed during the year. The remaining P31,446.607 million is available to finance projects/programs to be implemented in the following years.

At an average, loans can be availed for a period of five to seven years,

unless otherwise granted an extension. No further withdrawal on the loan can be made after the closing period, or once the loans were fully cancelled.


1.4 DEBT SERVICE EXPENDITURES

During the year, the debt

service expenditures (DSE) for 288 NG direct and relent loans as reported by the NG Debt Accounting Division (NGDAD) of the BTr and for 49 NG guaranteed loans as reported by the GFIs/GOCCs totaled P81,769.207 million. The DSE comprised of repayment of principal, and payments for interest, commitment fees, and other charges.

Repayments of principal totaling P57,447.946 million comprise 70.26 per

cent of the total DSE. Payments for interest totaling P21,149.855 million accounted for 25.87 per cent, while commitment fees totaling P278.250 million, and other expenditures totaling P2,893.155 million collectively comprised 3.54 per cent of the DSE. Other expenditures consists of exposure fees, service fees, cable costs, and other charges.

Majority of the total DSE for the year were attributed to payments to

multilateral DPs which comprised 53.38 per cent of the total. Payments to ADB and IBRD were the main contributors to this percentage, collectively accounting for 52.58 per cent for 122 loans. On the other hand, payments to bilateral DPs accounted for 46.58 per cent of the total DSE, majority of which pertains to payments to JICA for 115 loans or 34.65 per cent of the total DSE.

Table 11. Debt Service Expenditures by Development Partners

Particulars

Amount (in million PHP)

TOTAL % to Total Principal Interest Commitment Fee Other

Charges

Multilateral 43,650.685 53.38 27,430.128 14,588.060 167.048 1,465.449

ADB 25,707.692 31.44 17,750.833 6,908.747 86.095 962.017

IBRD 17,283.063 21.14 9,189.049 7,558.192 62.705 473.117

OPEC 313.487 0.38 232.680 71.196 - 9.611

IFAD 308.085 0.38 243.424 46.915 - 17.745

NDF 19.482 0.02 14.142 2.382 - 2.958

AIIB 18.876 0.02 - 0.627 18.248 0.001

Bilateral 38,091.472 46.58 29,990.769 6,561.795 111.202 1,427.707

JICA 28,334.177 34.65 22,320.951 4,835.611 77.351 1,100.264

BNP PARIBAS 2,361.924 2.89 1,892.406 275.464 22.908 171.147

CExim 1,747.492 2.14 1,314.040 404.735 0.443 28.274

70.26%

25.87%

0.34%

0.00%

0.25%

3.29%

3.54%

Chart 1. Debt Service Expenditures for CY 2018

Principal

Interest

CommitmentFeesOthers

Service Fees

Gain or Loss onrevaluation


Particulars

Amount (in million PHP)

TOTAL % to Total Principal Interest Commitment Fee Other

Charges

AFD 925.536 1.13 602.593 314.014 5.109 3.820

BAC 886.669 1.08 703.405 153.736 0.163 29.365

Others 3,835.674 4.69 3,157.373 578.235 5.228 94.838

Commercial 27.434 0.03 27.052 - - 0.382

BNP PARIBAS 27.434 0.03 27.052 - - 0.382

Grand Total 81,769.591 100 57,447.948 21,149.855 278.250 2,893.537

Source: BTr - NGDAD Summary of Debt Service Expenditure CY 2018 and Debt Service for ODA Loans of GFIs/GOCCs for the year 2018

Differences between totals and sum of components are due to rounding off.

0.00 - less than five thousand

The total DSE for the year consisted of payments made by the BTr for

NG direct and relent loans, and payments made by the GFIs/GOCCs for NG guaranteed loans totaling P65,818.65 million and P17,670.61 million, respectively. The DSE for the current year was relatively higher by P17,161.15 million or 26 per cent as compared to the DSE for CY 2017 as shown in Chart 2.

Table 12. Comparative Debt Service Expenditures made by BTr and GFIs/GOCCs

Total Debt Service Expenditures made by BTr to DPs (in million)

Year Principal Interest Commitment

Fees* Others Total

2018 44,746.008 17,954.444 243.013 2,875.180 65,818.645

2017 40,570.419 13,936.434 190.515 1,395.534 56,092.903

Increase/(Decrease) 4,175.589 4,018.010 52.498 1,479.646 9,725.743

Total Debt Service Expenditures made by GFIs/GOCCs to DPs (in million)

- 10,000.000 20,000.000 30,000.000 40,000.000 50,000.000 60,000.000 70,000.000 80,000.000 90,000.000

Principal Interest Commitment Fees

Others Total

2018 57,447.946 21,149.855 278.250 2,893.155 81,769.207

2017 48,482.758 16,203.504 230.166 1,411.685 66,328.113

Increase/ (Decrease) 8,965.188 4,946.351 48.084 1,481.470 15,441.094

Chart 2. Debt Service Expenditures (in million PhP)


Year Principal Interest Commitment

Fees* Others Total

2018 12,701.938 3,195.412 35.237 17.975 15,950.562

2017 7,912.338 2,267.070 39.651 16.151 10,235.211

Increase/(Decrease) 4,789.600 928.341 (4.414) 1.824 5,715.351

Source: BTr - NGDAD Summary of Debt Service Expenditure CY 2018 and Debt Service for ODA Loans of GFIs/GOCCs for the year 2018 and CY 2017 Consolidated Audit Report on ODA Programs and Projects

As shown in the foregoing table, principal repayments by the BTr and the

GFIs/GOCCs aggregated to P44,746.008 million and P12,701.938 million, respectively, which increased by P8,965.188 million as compared to CY 2017 figures. The increase was due primarily to payments for loans contracted from JICA from previous years which accounted for P7,001.098 million or 78.09 per cent of the increase, and supported programs and projects mainly implemented by the DOF, Department of Energy (DOE), and DBP.

Total interest payments made by the BTr to foreign DPs totaled

P21,149.855 million for the year, which was higher by P4,946.351 million as compared to the CY 2017 figures. Interest rates on IBRD and ADB loans are usually based on a 6-month London Inter-Bank Offered Rate (LIBOR) plus a maturity premium depending on the type of loan, the borrowing country’s income, and other factors. The Bangko Sentral ng Pilipinas (BSP) reported an increase in the average 6-month LIBOR from 1.4760 in CY 2017 to 2.4899 in CY 20181, which consequently resulted in an increase in the LIBOR-based interest payments.

In CY 2018, principal and interest repayments for loans contracted from

ADB and IFAD in CYs 2013 and 2015 started to be due to the DPs partly contributing to the increase in the DSE. Moreover, the depreciation of the Philippine Peso against the US Dollar by 4.29 per cent, from a weighted average2 of P50.404 in CY 2017 to P52.661 in CY 2018 as well as the foreign exchange fluctuations of other currencies against the US Dollar in which some loans are required to be paid also contributed to the increase in DSE.

In CY 2018, commitment fees totaling P278.250 million were paid for a

total of 35 loans, comprising of 32 NG direct loans and three NG-guaranteed loans. Delays in project implementation contributed to the total commitment fees for the year. Reasons for the delays are provided in Part 3 of this report.

Out of the total commitment fees paid during the year, 86.19 per cent or

P239.812 million were paid in cash, while 13.81 per cent or P38.438 million were constructively paid as capitalized commitment fees. Analysis of the total commitment fees paid during the year showed that a total of 88.12 per cent or

1http://www.bsp.gov.ph/statistics/spei_new/tab16_fir.htm 2 BSP Peso per US Dollar Rate, 1945 – 2018

http://www.bsp.gov.ph/statistics/spei_new/tab16_fir.htm


P245.183 million were paid for loans contracted during the previous years, while 11.88 per cent or P33.066 million of the total amount were for loans contracted in CY 2018. The breakdown of commitment fees according to project sector and the year the loans are incurred is shown in Table 13:

Table 13. Commitment Fees Paid according to Project Sectors and year loans

were contracted

Sector/Year loans

incurred

Active Closed Newly Effective Total % to Total No.

Amount (in million)

No. Amount

(in million) No.

Amount (in million)

No. Amount

(in million)

INFRA 16 118.179 2 5.227 1 20.394 19 143.801 51.68

2018 - - - - 1 20.394 1 20.394 7.33

Previous Years

16 118.179 2 5.227 - - 18 123.407 44.35

SRCD 4 73.505 3 2.562 - - 7 76.068 27.34

2018 - - - - - - - - 0.00

Previous Years

4 73.505 3 2.562 - - 7 76.068 27.34

AARNR 4 13.634 2 31.910 2 12.673 8 58.217 20.92

2018 - - - - 2 12.673 2 12.672 4.55

Previous Years

4 13.634 2 31.910 - - 6 45.544 16.37

GID - - 1 0.163 - - 1 0.163 0.06

2018 - - - - - - - - 0.00

Previous Years

- - 1 0.163 - - 1 0.163 0.06

Total 24 205.320 8 39.863 3 33.066 35.00 278.250 100

2018 - - 33.066 33.066 11.88

Previous years

205.320 39.863 - 245.183 88.12

Percentage 73.79 14.33 11.88 100.00

Source: BTr -NGDAD Summary of Debt Service Expenditure CY 2018 and Debt Service for ODA Loans of GFIs/GOCCs for the year 2018

The INFRA sector has the highest number of loans that incurred

commitment fees in CY 2018 at P143.801 million for 19 loans. Majority of these loans financed various projects which are implemented by the DPWH and the DOTr. For the SRCD sector, total commitment fees of P76.068 million was incurred for loans financed projects implemented by the DSWD and the program, Encouraging Investment through Capital Market Reforms Program – Subprogram 2 implemented by the SEC. Commitment fees for the GID sector of P0.163 million was for one loan that financed the Bureau of Fire Protection - Capability Building Program Phase 2, implemented by the Bureau of Fire Protection (BFP).

Of the total commitment fees, P226.151 million or 81.27 per cent were

paid to ADB, JICA, and IBRD, as summarized in Chart 3:


Creditor Creditor Type In million PHP Percentage

ADB Multilateral 86.095 30.94

JICA* Bilateral 77.351 27.80

IBRD Multilateral 62.705 22.54

BNP Paribas Bilateral 22.908 8.23

AIIB Bilateral 18.248 6.56

Other Creditors Various 10.943 3.93

Total 278.250 100.00

Source: BTr - NGDAD Summary of Debt Service Expenditure CY 2018 and Debt Service for ODA Loans of GFIs/GOCCs for the year 2018 *Starting CY 2014, loans contracted from JICA are no longer charged commitment fees.

Other charges incurred for the servicing of ODA loans amounted to P2,893.155 million. A significant portion of this amount pertains to losses incurred from the exposure of debt service payments to foreign currency risk of P2,692.029 million.

1.5 OUTSTANDING LOAN BALANCES

As of December 31, 2018, the Government of the Philippines (GoP)

owed DPs a total of P1,026,529.284 million equivalent to US$19,529.503 million, an increase by P108,831.032 million (US$1,160.108 million) compared to the CY 2017 balance of P917,698.252 million (US$18,369.395 million). The increase was due to, among others, the increase in availments over repayments and revaluation of outstanding loans in foreign currency at its Philippine Peso equivalent at rates higher than the CY 2017 level. The details are shown on Table 14.

Table 14. Changes in the ODA Outstanding Balance

Particulars Amounts (in million)

US$ PHP

Balance as of January1, 2018 18,369.395 917,698.252

31%

28%

22%

8%

7% 2%2%

0%

0%0%

Chart 3. Commitment Fees paid to DPs in CY 2018

Asian Development Bank

Japan International Cooperation Agency

International Bank for Reconstruction and Development

BNP Paribas

AIIB

AFD

FP

KFW

CEXIM

BAC


60.33%

39.65%

0.02%

Chart 4. Outstanding Balances by Creditor

As of December 31, 2018

Multilateral

Bilateral

Commercial

Particulars Amounts (in million)

US$ PHP

Add/(deduct):

Adjustment* (95.884) (5,039.964)

Forex Revaluation 94.474 52,818.125

CY Availments and Repayments 1,161.518 61,052.871

Balance as of December 31, 2018 19,529.503 1,026,529.284

Increase 1,160.108 108,831.032 Source: BTr –DMAD Status Report of NG-Direct and Guaranteed Foreign Loans *Difference between the ODA Audit Report for CY 2017 and BTr Status Report balances as of December 31, 2017 for transactions in CY 2017 which were reported only in CY 2018.

The outstanding balance pertains to 334 loans, consisting of 195, 136,

and 3 accounts from bilateral, multilateral, and commercial DPs, respectively.

Of the amount payable to bilateral DPs, 79.16 per cent or P322,233.043 million (US$ 6,130.416 million) or 31.39 per cent of the total outstanding balance is due to JICA. The balance of 20.84 per cent or P84,826.109 million (US$ 1,613.799 million) is due to various DPs, among others, Agence Francaise de Developpement (AFD), BNP Paribas, KExim, and CExim.

For outstanding loans to

multilateral DPs, 49.72 per cent or P307,914.876 million (US$ 5,858.016 million) is due to ADB which is also 30 per cent of the total outstanding balance. To IBRD, 49.03 per cent or P303,601.718 million (US$ 5,775.959 million) is due which also represents 29.58 per cent of the total outstanding balance. The remaining 1.25 per cent or P7,748.524 million (US$ 147.414 million) is owed to the other multilateral DPs.

To commercial DPs, 0.02 per cent of the total outstanding balance is

due, which are mostly owed to BNP Paribas at P148.316 million (US$2.822 million).

Analysis of the outstanding balance by project sector showed that, as in

the previous year, the SRCD sector has the highest outstanding balance at 45.43 per cent or P466,318.961 million while the ITT sector remained to have the lowest outstanding balance at P33,419.234 million or 3.26 per cent of the total outstanding balance as of December 31, 2018.

Of the total outstanding balance, P862,463.583 million (US$ 16,408.188

million) were for loans directly contracted by the NG while P160,396.714


million (US$ 3,051.514 million) were for loans relent by NG to GFIs/GOCCs and those directly contracted by the latter and guaranteed by the NG. The remaining P3,668.987 million (US$ 69.802 million) were outstanding loans contracted by the NG for LGUs and/or relent to LGUs through the MDFO.

2.0 STATUS OF ODA–FUNDED PROGRAMS AND PROJECTS


2.0 STATUS OF ODA-FUNDED PROGRAMS AND PROJECTS

As of December 31, 2018, the 472 ODA loans with a total CNLC of

P2,198,844.598 million (US$41,756.456 million) financed the implementation of 398 programs and projects. Details of the status of the 398 programs/projects are shown in the Table 15 below:

Table 15. Status of Programs/Projects as of December 31, 2018

Sector

Project/Program Status (number of projects) Total

Completed Cancelled Ongoing Not Yet

Implemented No. of

Projects Percentage

INFRA 156 6 40 3 205 51.51

AARNR 64 5 13 - 82 20.60

SRCD 60 - 5 - 65 16.33

GID 21 - 2 - 23 5.78

ITT 21 2 - - 23 5.78

Total 322 13 60 3 398 100.00

% to Total 80.90 3.27 15.08 0.75 100.00 Source: NEDA List of ODA Loans for CY 2018 and reports submitted by IAs

Of the 322 completed programs/projects, six were completed during CY 2018. Of the six projects, two were projects under the INFRA sector, namely the Maritime Safety Capability Improvement Project for the Philippine Coast Guard, and the Puerto Princesa Airport Development Project were implemented by the DOTr. For the SRCD sector, one project, the Learning, Equity and Accountability Program Support Project was completed by the DepEd. Further, two programs, Facilitating Youth-Shool-to-Work Transition Program implemented by the DepEd, TESDA, DTI, DOLE, and the Sustainable Health Care Investment Program implemented by the DBP have been completed. For the GID sector, one program, the Inclusive Finance Development Program was implemented by the BSP, BTr, Philippine Statistics Authority, SEC, and the Insurance Commission.

Although the INFRA sector takes up the biggest share in the total

number of completed projects, it accounts for only 76.10 per cent of the total number of projects under that sector which is the lowest as compared to the percentages of completed projects of the other sectors. This was closely followed by the AARNR sector, with completed projects accounting for 78.05 per cent of the sector’s total projects. Almost all of the projects of the SRCD, GID, and ITT sectors were already completed accounting for 92.31 per cent for the SRCD sector’s total projects, and 91.30 per cent, for the GID and ITT sectors.

As to implementing agency, the DPWH, DOTr, and the Power Sector

Assets and Liabilities Management were the biggest contributors to the total


number of completed projects under the INFRA sector, comprising 101 or 64.74 per cent of the 156 completed INFRA projects. For the AARNR sector, 47 out of the 64 projects were completed by the DAR, DA, DENR, National Irrigation Administration (NIA), and BFAR, which accounts for 73.44 per cent of the total completed projects. For the SRCD, GID, and ITT sectors, more than half of the completed projects of the three sectors pertains to programs and projects executed by the DOF to support the operations of other NGAs, and the Land Bank of the Philippines and GFIs/GOCCs.

As of December 31, 2018, a total of 13 projects with a total CNLC of

P18,253.991 million (US$347.278 million) were already cancelled. One project under the AARNR sector, the IPAC, with an unavailed balance of P5,220.184 million (US$99.313 million) was cancelled during the year as the project was found to be inconsistent with the DAR’s actual functions. The proposed project, “Support for Parcelization of Land for Individual Titling” was set to replace the cancelled project and the corresponding loan is to be reprogramed by the IBRD.

Of the 60 ongoing projects, the INFRA sector took up 40 or 66.67 per

cent of the total, majority of which were projects implemented by the DPWH and the DOTr. This was followed by the AARNR, SRCD, and GID sectors, with a total of 13, 5, and 2 ongoing projects, respectively.

The NEDA monitors and evaluates the status of active ODA programs

and projects as to its financial and physical performance. As of December 31, 2018, the list of active ODA loans provided by the NEDA has identified 52 out of the 60 ongoing projects with the following status as presented in Table 16.

Table 16. Status of Implementation of Ongoing Projects

Project Sector

Project Status of Ongoing Projects

Total Ahead of Schedule

Behind Schedule

On Schedule With Completed

Components

INFRA 1 11 21 1 34

AARNR - 9 3 - 12

SRCD - - 4 - 4

GID - - 2 - 2

ITT - - - - -

Total 1 20 30 1 52

% to Total 1.92 38.46 57.69 1.92 100.00

Source: NEDA Complete List of all ODA Loan Supported Programs and Projects in CY 2018

One project financed by the ADB under the Infrastructure sector, the Angat Water Transmission Project of the Manila Water Sewerage System (MWSS), was ahead of schedule. On the other hand, 20 projects or 38.46 per cent of the 52 ongoing projects are behind schedule which are mainly projects under the Infrastructure and the AARNR sectors. Some of these projects are


with audit observations discussed in Part 3 of this report. Projects representing 57.69 per cent of the 52 ongoing projects are on schedule, and one project, the Arterial Road Bypass Project Phase II, has completed project components as of June 2018 and is still ongoing. As of December 31, 2018, there are no ongoing projects for the ITT sector.

Three projects under the Infrastructure sector with a total loan

commitment of P31,446.607 million (US$598.265) as of December 31, 2018 have not yet started implementation. These were financed by bilateral loans from JICA and CExim.

3.0 AUDIT OBSERVATIONS


3.0 AUDIT OBSERVATIONS

This report covers completed and ongoing projects funded by ODA loans contracted by the GoP and GFIs/GOCCs on or after January 1, 1995 as defined under RA No. 8182, otherwise known as the ODA Act of 1996.

In compliance with Section 8(b) of the said Act, the respective Auditors of

the agencies implementing the said projects conducted audits of the operations, financial and physical performances of 46 projects for CY 2018. Audit observations from the audit reports on the projects implemented by various NGAs, GFIs/GOCCs, and LGUs were consolidated and grouped into four areas, namely (a) Project Implementation, Management and Sustainability; (b) Financial Management; (c) Reliability of Financial Statements, and (d) Compliance with existing Laws, Rules, Regulations and Provisions of the LA/MOA and summarized in the following matrix:

Observations

Implementing Agencies and Projects*

DS

WD

DA

R

BF

AR

NIA

DE

NR

DP

WH

DO

E

MW

SS

Dep

Ed

DO

Tr

DA

I. Project Implementation, Management and Sustainability

1 Delays in the implementation of the project/sub-project activities due to, among others: (a) inefficient procurement process; (b) contractor's inability to undertake the project; (c) lack of management readiness to implement the project; (d) delayed approval of the loan agreement for additional financing; (e) late releases of funds (loan proceeds and GoP counterparts); (f) poor project planning, supervision, and monitoring; (g) suspended works, unreasonable work plan and the inability of Management to effectively carry out the detailed engineering investigation and survey contributed to the incurrence of commitment fees and management fees of P355.874 million and resulted in, among others, low physical accomplishments and loan availments, loan cancellation of P22.420 million, reversion of project funds to the BTr of P134.13 million and accumulation of unutilized funds of P4,225.547 million.

38 4 56 7

1 43 45

8 9

32 37 30 28 34 31 29 33

12 11 13 14 28

2

2 Overlapping of project fund source in six Farm to Market Roads (FMRs) costing P54 million included in the list of DA FMR Development Program implemented projects in CY 2018 sourced from DA Regular Agency (RA) Fund also included in the PRDP I-Build subproject portfolio funded by the WB were also identical with three FMRs costing P27 million.

2

3 Inadequate evaluation procedures in the bidding process resulted in the award of five contracts totaling P58.699 million to ineligible bidders.

45

4 Improper handling of project resources, weak inventory control on the handling and utilization of project supplies and materials resulted in the incurrence of storage fees of P166.739 million

16 2


Observations


DS

WD

DA

R

BF

AR

NIA

DE

NR

DP

WH

DO

E

MW

SS

Dep

Ed

DO

Tr

DA

and unnecessary wastage due to deterioration and obsolescence.

5 Low percentage of requests of Division Offices for textbooks and teacher’s manuals resulted in the accumulation of stocks, totaling P56.745 million.

11

6 Non-consideration of the required easement in the construction of a Day Care Center costing P0.93 million resulted in the demolition of the Center, thus, depriving the children-beneficiaries of the benefits due them.

38

7 Non-preparation of a revised program of work due to changes in the design or variations in the original plan resulted in excess construction materials that could no longer be utilized.

38

8 Construction contracts with a total cost of P342.914 million with negative slippages were not rescinded and liquidated damages not imposed.

45

9 Sustainability of projects/sub-projects was affected by: (1) damaged rural access roads, defective solar street lights and unimplemented road concreting for completed sub-projects costing P264.375 million, due to, among others: (a) lapses in procurement; (b) lack of technical guidance and supervision; and (c) inadequate coordination with the local government community/local government unit (LGU); (2) absence of funding support for continuous operation and maintenance of the project due to improper turn-over and/or non-recognition of asset accounts in the books for completed project components; (3) unenforceability of indispensable work items necessary to the continuance and maintenance of subprojects due to lack of a Memorandum of Agreement (MOA)/written agreement; and (4) absence of an updated policy on the member-beneficiaries payback scheme of the marketing fee and cost of supplies and materials used for greenhouses.

38 44 2

II. Financial Management

10 Lapses in the processing, recording, reporting, and monitoring of financial transactions such as: (a) late recording and recognition of financial transactions; (b) disparities in financial information affecting accountability reports; (c) inadequate monitoring of transactions and account balances; and (d) failure to require the submission of complete documents in the processing of transactions and claims resulted in, among others, delays in payments and inappropriate charging of expenses, utilization of funds for other purposes, and additional costs.

38 39

1 45 89

2


Observations


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11 Excess payment to the supplier by P339.173 million was due to the non-deduction of the remaining balance of unrecouped 15 per cent advance payment on the project.

12 Audit suspension of P1.087 million and disallowances totaling P106.165 million were unsettled.

4567

1 8 2

13 Payments of seed fund of P2.700 million to 27 People’s Organizations and of honoraria to project officials and personnel of P0.277 million were not supported by a MOA and of not included in the project's financial plan, respectively.

8

14 Actual costs incurred in the implementation of the sub-project components such as trainings and workshop exceeded the budget amounts by 65 to 957 per cent.

2

III. Reliability of Financial Statements (FSs)

15 Accounting errors and omissions such as (a) non-reclassification /misclassification of various accounts totaling P19,818.376 million; and (b) unrecorded and erroneous recording of transactions totaling P3,852.143 million and P267.159 million, respectively, resulted in the overstatement/ understatement of affected account balances.

38 457

1 44 45

89

29 30 31 33 35 36

11 131420 212425

2

16 Long outstanding and accumulated balances of fund transfers of P18,299.510 million were due to, among others, the: (a) inadequate monitoring of project funds; (b) delayed completion of projects; and (c) non-liquidation of fund transfers to NGAs, LGUs, and Non-Government Organizations/POs.

38 39

45 6 7

1 44 9 20 2

17 Completeness and accuracy of the reported balances of Property, Plant and Equipment (PPE) accounts cannot be ascertained due to: (a) unreconciled variances between the accounting records and physical count of PPE totaling P1,584.384 million; (b) non-maintenance of PPE ledger cards and Property Cards; (c) non-derecognition of PPE of completed projects transferred to end-users of P5,582.005 million; and (d) absence of a report on physical count.

7 44 45

89

15 17 18 19 26 27

2

18 The balance of the Construction Materials Inventory of P2,901.678 million relative to the steel/construction materials and other related services purchased/delivered in 2011-2012 is doubtful due to: (a) net difference of P116.623 million between the records of the Supplier/Lenders and BTr of P3,018.300 million and per Accounting Division of P2,901.677 million; (b) SARO requested by the DOTr and Non-Cash Availment Authority (NCAA) issued by the Department of Budget and Management pertained only to the 15 per cent advance payment of P1,563.327 million to the supplier; (c) non-inspection/count of the delivered steel

16


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materials aggregating P624.636 million and; (d) incomplete supporting documents recognizing the delivered steel materials.

19 The fairness of presentation of accounts in the FSs was affected by the: (a) non-inclusion of subsidy received and disbursed of P8.478 million; (b) inconsistencies in the cash flow items totaling P47.013 million between those reported in the Statement of Cash Flows (SCF) of the Central Office (CO) and those consolidated with the SCF of the Regional Offices; (c) errors in the cash outflow items of P281.936 million in the SCF of CO; (d) inclusion of non-cash item of P1.741 million and unreconciled variances in the cash inflow items aggregating P4.447 million in the consolidated SCF; and (e) personnel benefits not included in the Statement of Financial Performance.

45

20 Non-provision of allowance for depreciation for various PPE totaling P256.842 million was due to, among others, late recording of completed projects from Construction in Progress (CIP) accounts to its appropriate PPE accounts.

44 45

89

21 Correctness of Cash in Bank (CIB) accounts’ balances was uncertain due to: (a) unreconciled differences between balances per books and per bank totaling P3.207 million; (b) non/ delayed preparation of bank reconciliation statements; (c) existence of long outstanding reconciling items of P33.750 million; and (d) non-remittance to the BTr of the CIB – Local Currency Current Account dormant account balances of completed projects aggregating P32.948 million and interest income from various cash accounts totaling P4.014 million.

44 45

35 14 17 20 22 25

22 All expenditures, whether direct or indirect cost, were recorded under the CIP) account and are to be adjusted only when all components of the NISRIP are completed, thus, misstating the CIP account and other affected accounts at interim date.

44

23 The reliability of the reported balances of some assets, liabilities and equity accounts was affected by the (a) inclusion of projects funded by terminated foreign loans that are for transfer to the Regular Agency (RA) Fund; (b) unreconciled variances and abnormal balances; and (c) dormant accounts/outstanding balances for more than 2 to 33 years.

45 8 28 29 30 31 33 35 36

40 41 42

13 14 17 18 20 21 25 28

2 3

24 Inadequacy/absence of required accounting records/reports/documents for issuances of inventories made during the year and subsidiary ledgers or supporting schedules for Accumulated Surplus/(Deficit) account balance.

44 45

8 14 16


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25 Disclosure in the notes to financial statements were incomplete due to the absence of the details/breakdown of Accumulated Surplus/ (Deficit) account balance and sub-classification of subsidy income received of P458.449 million.

45 2

IV. Compliance with Existing Laws, Rules and Regulations and Provisions of the LA/MOA

26 Non-compliance with Procurement Laws

a. Expired performance bond for ongoing and suspended contracts totaling P310.768 million

2

b. Final payment of P6.391 million on delayed project without documents on extension of contract duration

2

c. Non-imposition of warranty for payments of procured goods of P5.323 million

1 2

d. Splitting of purchase orders of P3.809 million

43

e. Liquidated damages of P3.300 million not imposed on supplier/contractor

1 45 2

f. Procurement of plane tickets used for traveling expenses amounting to P0.578 million exclusively from a single supplier or travel agency incurred additional charges totaling P0.011 million

2

g. Consideration by the BAC of a bid/quotation with proposed alternative specifications did not allow for a competitive bidding.

2

h. Delivery of goods made prior to the approval of contract

8 9

i. Non-termination of contract when the contractor defaulted in the delivery of a sub-project

1 2

27 Non-compliance with accounting and auditing rules and regulations

a. Report on the Physical Count of Property, Plant and Equipment, Stock Cards and Supplies Ledger Cards not maintained/in conformity with prescribed templates/ format and not completely filled out

8 2

b. Non-conduct of physical count of inventories and non-maintenance of Stock Cards

8

c. Non-presentation by the Accountable Officers of various equipment amounting to P0.410 million for inspection and validation

7

d. Non-renewal of Property Acknowledgement Receipt (PAR) as necessary

8

e. Non-invitation of COA representative to witness physical inventory-taking

8 9


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f. Improper custody, utilization and disposition of semi-expendable properties and PPE

2

g. Non-disposal of unserviceable and damaged properties of P0.893 million

45 8 9

h. Uninsured property, plant and equipment of P84.150 million

56 7

1 43 44 45

89

2

i. Non-preparation/ non-submission of reports, such as report on government PPAs, Inventory and Inspection Report of Unserviceable Property, PAR, and other supporting documents

4 5 6 7

8 9

2

j. Non-posting of relevant information on blackboards, whiteboards, or similar materials within the agency premises for implemented subprojects

1 2

k. Non-compliance with the guidelines on the grant, utilization and liquidation of cash advances (CAs) resulting in a) delayed settlement thereof; b) grant of additional CAs of P0.521 million in spite of unsettled CAs; and c) improper charging of accounts; and

2

l. Delayed/ incomplete/ non-submission of contracts, purchase orders, Job Orders, Inspection and Acceptance Reports, FSs, and other supporting documents

4 5 67

1 44 45 46

89

2

28 Non-compliance with Tax Laws:

a. Under/non-withholding of taxes

1

2

b. Delayed/under/non-remittance of taxes of P4.623 million

4 5 67

1 43 44

89

2

c. Use of inappropriate tax rates /erroneous computation of withholding taxes

1 30 35

2

29 Late/non-submission of Gender and Development (GAD) Plan and Budget, GAD Accomplishment Reports and other supporting documents

4 5 6 7

43 8 9

2

30 Non-allocation of 5 to 30 per cent of ODA for the implementation of gender-responsive programs and projects

5 6

1 9

2

31 Non-deduction of Government Service Insurance System loan amortizations from the salary of project personnel

45

32 Late renewal of registration of motor vehicles with LTO with penalties of P0.033 million

43

33 Non-compliance with the Implementation Management Agreement, Enterprise Agreement and Section 4 of PD No. 1445


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a. Initial release of project fund totaling P3.196 with incomplete supporting documents, and in excess of the scheduled amount; and

2

b. Delayed release of funds and procurement of goods totaling P2.374 million.

18 2

*see legend on the next page.


Legend:

No. Project Name Project Sector

BFAR

1 Fisheries, Coastal Resources and Livelihood Project (FishCORAL) AARNR

DA

2 Philippine Rural Development Project (PRDP) AARNR

3 Second Cordillera Highland Agricultural Resource Mgnt. Project (CHARMP2) AARNR

DAR

4 Agrarian Reform Communities Project (ARCP) II AARNR

5 Convergence on Value Chain Enhancement for Rural Growth and Empowerment (CONVERGE) AARNR

6 Italian Assistance to the Agrarian Reform Community Development Support Program (IARCDSP) AARNR

7 Mindanao Sustainable Agrarian & Agriculture Development (MinSAAD) AARNR

DENR

8 Forestland Management Project (FMP) AARNR

9 Integrated Natural Resources and Environmental Management Project (INREMP) AARNR

DepEd

10 Learning, Equity and Accountability Program Support (LEAPS) Project SRCD

11 Senior High Support Program - Results Based Lending (SHSSP) SRCD

DOE

12 Market Transformation through the Introduction of Energy Efficient Electric Vehicles (E-Trikes) Project

INFRA

DOTr

13 Capacity Enhancement of Mass Transit Systems in Metro Manila Project (CEMTSMMP) INFRA

14 Cebu Bus Rapid Transit Project (CBRTP) INFRA

15 Davao International Airport Development Project (DIADP) INFRA

16 Greater Maritime Access (GMA) Ports Project INFRA

17 Laguindingan Airport Development Project (LADP) INFRA

18 Maritime Safety Capability Improvement Project for the Philippine Coast Guard (MSCIP) INFRA

19 Maritime Safety Improvement Project (MISP) INFRA

20 New Bohol Airport Construction and Sustainable Environmet Protection Project (NBACSEPP) INFRA

21 New Communications, Navigations Surveillance/Air Traffic Mgmt. (CNS/ATM) System Development Project INFRA

22 New Iloilo Airport Development Project (NIADP) INFRA

23 North-South Commuter Railway Project, Phase I (NSCRP) INFRA


No. Project Name Project Sector

24 Philippine Ports and Coast Guard Capability Development Project (PPCGCDP) INFRA

25 Puerto Princesa Airport Development Project (PPADP) INFRA

26 Social Reform Related Feeder Ports Development Projects (SRRFPP) INFRA

27 Third Airports Development Project (TADP) INFRA

DOTr/DPWH

28 Infrastructure Preparation and Innovation Facility (IPIF) INFRA

DPWH

29 Arterial Road Bypass Project, Phase II INFRA

30 Central luzon Link Expressway Project (CLLEx) INFRA

31 Flood Risk Management Project for Cagayan River, Tagolaon River and Imus River INFRA

32 Improving Growth Corridors in Mindanao Road Sector Project INFRA

33 Pasig-Marikina River Channel Improvement Project II INFRA

34 Road Improvement and Institutional Development INFRA

35 Road Upgrading Preservation Project (RUPP) INFRA

36 Samar Pacific Coastal Road (SPCR) Project INFRA

37 Metro Manila Flood Management Project (MMFMP - Phase 1) INFRA

DSWD

38 KALAHI-CIDSS National Community-Driven Development Project SRCD

39 Social Welfare Development Reform Project II SRCD

MWSS

40 Manila Second Sewerage Project INFRA

41 New Water Source Development Project INFRA

42 Umiray-Angat Transbasin Project (UATP) INFRA

NIA

43 Jalaur River Multi Purpose Project, Stage II (JRMPP II) INFRA

44 National Irrigation Sector Rehabilitation and Improvement Project (NISRIP) AARNR

45 Participatory Irrigation Development Project (PIDP) AARNR

46 Southern Philippines Irrigation Sector Project (SPISP) AARNR

4.0 GENERAL AUDIT RECOMMENDATIONS


4.0 GENERAL AUDIT RECOMMENDATIONS

For the Implementing Agencies Determine and evaluate the causes of project/component/sub-project implementation delays and take immediate appropriate action/s to specifically address such causes to put the projects on track. Improve overall project implementation by ensuring that the project components/sub-projects/activities are properly planned and monitored, and implemented in accordance with the approved project budget, milestones, and project objectives. Develop strategies and undertake pre-implementation activities prior to loan effectiveness, as feasible, and exert best efforts to comply with loan conditions within the prescribed period to facilitate project start-up activities. Consider readiness and capacity to implement a project prior to submission of project feasibility/design for review and approval by the NEDA. Undertake the procurement process/procedures as prescribed to ensure that contractors/supplies awarded the contracts have the technical and financial capacity to undertake projects/sub-projects and that contract terms are the most advantageous/reasonable for the project, and in accordance with the procurement timelines. Monitor closely contract implementation and take immediate appropriate action/s on contractor’s/supplier’s defaults/deviations from contract stipulations. Evaluate attainment of project objectives of completed projects, undertake benefit and impact assessment, where feasible, and communicate results to oversight agencies, and ensure that the required manpower and financing for project sustainability are incorporated in the agency budget. Provide technical guidance to project beneficiaries and strengthen coordination with LGUs as necessary to ensure project sustainability. Document lessons learned and best practices in project implementation as reference/guide in project feasibility preparation and project implementation for future projects.


Prioritize the recognition of unrecorded project transactions, the analyses of accounting deficiencies and reconciliation of project accounts with accounting/property/supply and other government entities’ records, and the adjustments of accounting errors in the balances of affected accounts as necessary.

Remit immediately to the BTr the unutilized balances of project funds from loans contracted by the NG for projects implemented by the NGAs as well as all interest earned thereon.

Observe strict compliance with the related provisions of Government Procurement Reform Act, otherwise known as RA No. 9184 and its Implementing Rules and Regulations in order to ensure procurement is implemented in a manner that is most advantageous to the government as well as with contracts or agreements, laws, rules, regulations, guidelines and issuances applicable to project operation. Observe strict compliance with accounting and auditing rules and regulations, particularly on the reporting of inventories and PPE; the grant, utilization and liquidation of cash advances, and reporting on project funds and implementation.

For the National Economic and Development Authority

Review project designs/feasibility studies thoroughly. Ensure that IAs are institutionally and technically capable to undertake project design/planning, as feasible, and the implementation of the project; and that the project cost is reasonable, and that all necessary resources such as right of way (ROW), Project Management Office personnel and clearances/documents are available to the IAs for the implementation of the project when the loan becomes effective. Consider in the review of project feasibility studies the lessons learned from similar projects as an aid in determining project design deficiencies and the viability of projects under review. Continue to monitor ODA-funded projects, particularly those with delays in implementation and coordinate with other concerned agencies for immediate resolution. Recommend to IAs the immediate request to the DOF for the cancellation of undrawn loan commitments for project components/sub-projects which could no longer be implemented or are no longer feasible


to implement or as necessary, based on its review of the project’s progress and consultation with IAs. Require IAs to document lessons learned and best practices in project implementation for submission to the NEDA and for compilation and posting in the NEDA website.

Keep up-to-date in the NEDA website the information on ODA projects to facilitate validation and comparison of data with that of the IAs, the BTr and the DOF.

For the Department of Finance

Ensure that loans are contracted in the amounts necessary and can be absorbed by the IAs. Facilitate the immediate request for loan cancellation with the DPs to minimize commitment fees. Facilitate the review/evaluation of ODA data among the oversight bodies to ensure consistency of data reported in their respective websites and agency reports.

For the Department of Budget and Management

Ensure adequate and timely release of project funds, both loan proceeds and GoP counterpart funds.

Ensure the early and complete release of the NCAA to facilitate recording by IAs of goods delivered and services rendered.

5.0 STATUS OF

IMPLEMENTATION OF PRIOR YEAR’S AUDIT RECOMMENDATIONS


5.0 Status of Implementation of Prior Year’s Audit Recommendations Out of the 851 prior years’ audit recommendations included in prior years’ Consolidated Audit Reports on Official Development Assistance Programs and Projects of 25 NGAs, GOCCs, and LGUs, 259 or 30.43 per cent were implemented, 268 or 31.49 per cent were partially implemented and 324 or 38.07 per cent are yet to be implemented, as presented below.

Gov’t Sector

No. of Agencies

No. of Projects

Number of Recommendations % Share per

Sector Implemented

Partially Implemented

Not Implemented

Totals

NGAs 11 64 207 197 250 654 76.85

GOCCs 8 17 23 62 62 147 17.27

LGUs 6 27 29 9 12 50 5.88

Total 25 108 259 268 324 851 100.00

Percentage 30.43 31.49 38.07

Among the reasons cited for the partial or non-implementation of the audit recommendations are as follows:

Budgetary/Fund allocation issues;

Non-reconciliation of records/accounts or reconciliation in process;

Non-/Delayed/Incomplete submission of various documents and reports;

Deficiencies in the documents submitted by bidders/contractors;

Non-coordination between and among concerned parties;

Non-adherence to rules and regulations on settlement of accounts/procurement laws;

Non-refund/non-settlement of incentives/allowances without legal bases;

Non-forfeiture of performance bond after termination of contracts;

Non-imposition of liquidated damages for delayed contracts;

Non-/partial liquidation of CAs/granting of additional CAs in spite of non-liquidation of previous CAs;

Lack or shortage of manpower;

Incurrence of project's negative slippage;

Problems on ROW; and

Unworkable project site condition.

Documents

2018 Consolidated Audit Report on Official Development Assistance-Funded Programs and ... · 2019-07-04 · Debt amounted to P7,780,086 million, comprised of domestic and external