Commission on Audit - The Official Website of the ......2.0 HIGHLIGHTS OF THE REPORT 6 3.0 STATUS OF ODA-FUNDED PROJECTS Commitments 11 Availments 16 Undrawn Commitments 20 Repayments

2014

Consolidated Audit Report

on

Official Development Assistance

Programs and Projects

TABLE OF CONTENTS Page

1.0 INTRODUCTION

Legal Basis 1

Scope and Content 3

Methodology 4

2.0 HIGHLIGHTS OF THE REPORT 6

3.0 STATUS OF ODA-FUNDED PROJECTS

Commitments 11

Availments 16

Undrawn Commitments 20

Repayments 22

Debt Service Expenditures 25

Outstanding Balances 29

4.0 AUDIT OBSERVATIONS AND RECOMMENDATIONS 34

4.1 Agency- specific and Common Audit Observations and Recommendations

4.1.1 Department of the Interior and Local Government (DILG) 35

4.1.2 Department of Social Welfare and Development (DSWD) 38

4.1.3 Department of Energy (DOE) 43

4.1.4 National Irrigation Administration (NIA) 46

4.1.5 Department of Public Works and Highways (DPWH) 51

4.1.6 Department of Environment and Natural Resources (DENR) 56

4.1.7 Department of Agriculture (DA) 60

4.1.8 Department of Transportation and Communications (DOTC) 63

4.1.9 Department of Agrarian Reform (DAR) 66

4.2 Common Audit Observations 69

4.3 General Audit Recommendations 72

4.3 Status of Implementation of Prior Years’ Audit Recommendations 73

5.0 CHART

I Number of Loans Contracted, Sources and Cumulative Net Commitment

3

II Programs and Projects Status 6

III Loan Cumulative Net Commitments, Availments and Undrawn Balances by Type of Creditor

8

IV Loan Availments, Repayment and Balances by Type of Creditor 9

V Cumulative Commitments, Cancellation and Ne Commitment 11

VI Outstanding Balance by Creditor Type 29

VII Number of Loans and Outstanding Balance by Sector 30

VIII Status of Implementation of Prior Years’ Audit Recommendations 73

6.0 TABLES

I Status and Breakdown of Loans 3

II Sources of Loans 6

III Sources of Loans Availed and Distribution by Project and Government Sectors

7

IV Undrawn Balances by Creditor 7

V Loan Repayments and Outstanding Balances 8

VI Debt Service Expenditures by Creditor Type 9

VII VIII

Debt Service Expenditures by Sector Commitment Fees Paid per Creditor Type and Type of Loans

9 10

IX List of New ODA Loans 11

X Cancelled Commitments for 2014 12

XI Cumulative Commitments, Cancellation and Net Loan Commitment by Creditor

12

XII Cumulative Commitments, Cancellation and Net Loan Commitment by Sector

14

XIII Cumulative Commitments, Cancellation and Net Commitments by Implementing Agency

14

XIV Cumulative and Current Year Availments by Creditor 16

XV Cumulative and Current Year Availments by Project Sector 17

XVI Cumulative and Current Year Availments by Implementing Agency 18

XVII Programs and Projects Implemented by Agencies with Significant Share in CY Availments

19

XVIII Net Commitments and Cumulative Availments of 87 Loans with Undrawn Balance by Creditor

20

XIX Net Commitments and Cumulative Availments of 87 Loans with Undrawn Balance by Project Sector

21

XX Net Commitments and Cumulative Availments of 87 Loans with Undrawn Balance by Implementing Agencies

21

XXI Comparative Repayment in Relation to Availments 22

XXII Cumulative and Current Repayment by Creditor 22

XXIII Cumulative and Current Repayment by Project Sector 24

XXIV Cumulative and Current Repayment by Project Sector Implementing Agency

24

XXV Comparative Debt Service Expenditure in CY 2013 and 2014 25

XXVI Debt Service Expenditures by Creditor 26

XXVII Debt Service Expenditures by Implementing Agencies 27

XXVIII Debt Service Expenditures by Project Sector 28

XXIX Changes on Loan Outstanding Balance 29

XXX Outstanding Balance by Specific Creditor 29

XXXI Five Loans under each Project Sector with big Outstanding Balances 30

XXXII Outstanding Balances by Government Sector 32

XXXIII Agencies with Significant Loan Balances 32

XXXIV DILG - Project Status and Summary of Loans Profile 36

XXXV DILG - Project Loan with Audit Observations 36

XXXVI DSWD - Project Status and Summary of Loans Profile 39

XXXVII DSWD - Project Loan with Audit Observations 39

XXXVIII DOE - Project Status and Summary of Loans Profile 44

XXXIX DOE - Project Loan with Audit Observations 44

XXXX NIA - Project Status and Summary of Loans Profile 47

XXXXI NIA - Project Loan with Audit Observations 47

XXXXII DPWH - Project Status and Summary of Loans Profile 52

XXXXIII DPWH - Project Loan with Audit Observations 52

XXXXIV DENR - Project Status and Summary of Loans Profile 57

XXXXV DENR - Project Loan with Audit Observations 57

XXXXVI DA - Project Status and Summary of Loans Profile 61

XXXXVII DA - Project Loan with Audit Observations 61

XXXXVIII DOTC - Project Status and Summary of Loans Profile 64

XXXXIX DOTC - Project Loan with Audit Observations 64

XXXXX DAR - Project Status and Summary of Loans Profile 67

XXXXXI DAR - Project Loan with Audit Observations 67

XXXXXII Status of PYs Audit Recommendations 74

4 Ps Pantawid Pamilyang Pilipino ProgramAARNR Agriculture, Agrarian Reform and Natural ResourceABC Approved Budget for the ContractADB Asian Development BankAFD Agence Française de Développement ANF Air Navigation Facilities ANZ/EFIC Australia New Zealand/Export Finance & Insurance CorporationARBP PH II Arterial Road Bypass Project, Phase IIARBs Agrarian Reform BeneficiariesARCP II Agrarian Reform Communities Project IIARIIP Agno River Integrated Irrigation Project ARMM Autonomous Region of Muslim MindanaoARISP Agrarian Reform Infrastructure Support ProjectBAC Bids and Awards CommitteeBCDA Bases Conversion and Development AuthorityBCRP Bridge Construction and Replacement Project

BFAR Bureau of Fisheries and Aquatic ResourcesBFP Bureau of Fire ProtectionBIR Bureau of Internal RevenueBOC Bureau of CustomsBPIP Banaoang Pump Irrigation Project

BRS Bank Reconciliation Statement

BSP Banko Sentral ng PilipinasBTr Bureau of the TreasuryCARP Comprehensive Agrarian Reform ProgramCBFMMP Community-Based Forest and Mangrove Management Project

CCDF Climate Change Defence FundCDD Community-driven DevelopmentCEMRTMMP Capacity Enhancement of Mass Transit Systems in Metro Manila Project

CEXIM The Export-Import Bank of ChinaCFL Compact Fluorescent LampsCHI-I China National Construction and Agriculture Machinery ICIB-LCCA Cash in Bank – Local Currency, Current AccountCIP Construction In Progress

CIS Communal Irrigation Systems

CNS/ATM Communication, Navigation, Surveillance/Air Traffic Management

COA Commission on Audit

CSC Civil Service CommissionDA Department of AgricultureDAR Department of Agrarian ReformDBM Department of Budget and Management DBP Development Bank of the PhilippinesDENR Department of Environment and Natural ResourcesDepEd Department of EducationDIADP Davao International Airport Development ProjectDILG Department of Interior and Local GovernmentDMAD Debt Monitoring and Analysis Division DOE Department of EnergyDOF Department of FinanceDOH Department of HealthDOT Department of TourismDOTC Department of Transportation and CommunicationsDPWH Department of Public Works and HighwaysDSWD Department of Social Welfare and DevelopmentDTI Department of Trade and IndustryDVs Disbursement VouchersECGD Export Credit Guarantee Department - Deutsche BankEDC Export Development Corporation

LIST OF ACRONYMS

LIST OF ACRONYMS

EIB European Investment BankEISCP Environmental Infrastructure Support Credit ProgramEMB Environmental Management BureauENP Emergency Network ProjectE-Trike Project Energy Efficient Electric Vehicles Project FDS Family Development SessionsFMP Forest Management ProjectFP Family PlanningFRIMP Flood Risk Management ProjectFXRC Foreign Exchange Risk CoverGAA General Appropriations ActGAAM Government Accounting and Auditing Manual

GOCCs Government Owned and Controlled Corporations

GPPB Government Procurement Policy Board

GSFORP II Gapan-San Fernando-Olongapo Road Project, Phase II

GSIS Government Service Insurance System

HCAAP Help for Catubig Agricultural Advancement Project

HSRASP Health Sector Reform Agenda Support Programme

IARCDSP Italian Assistance to the Agrarian Reform Community Development Support

ProgramIBRD International Bank for Reconstruction and DevelopmentICRM Integrated Coastal Resources Management ICRMP Integrated Coastal Resources Management Project ICO Instituto de Credito OfficialIFAD International Fund for Agricultural DevelopmentInfra InfrastructureIIRUP Inventory and Inspection Report of Unserviceable PropertyIMOs Irrigation Management OfficesINREMP Integrated Natural Resources and Environmental Management Project

IT Information TechnologyITT Industry, Trade and TourismIWG Infrastructure Working GroupJBIC Japan Bank for International CooperationJEV Journal Entry Voucher

JEXIM Export-Import Bank of Japan

JFA Jordan Forearms Association

JICA Japan International Cooperation Agency

KALAHI-CIDSS Kapit-Bisig Laban sa Kahirapan-Comprehensive and Integrated Delivery of

Social Services KBC Bank Kredietbank ABB Insurance CERA Bank

KC-AF KALAHI CIDSS - Additional Financing

KEXIM Export-Import Bank of KoreaKFAED Kuwait Fund for Arab Economic DevelopmentKFW Kreditanstalt für WiederaufbauLAF Livelihood Assistance FundLAMP 2 Second Land Administration and Management ProjectLBP Landbank of the PhilippinesLCB Lowest Calculated BidLCCA Local Currency Current AccountLCCA-LGU CC Local Currency Current Account-Local Government Unit Counterpart

CommitmentLDU Liquid Display UnitsLED Light-emitting DiodeLGUs Local Government UnitsLIGs Livelihood Interest GroupsLLDA Laguna Lake Development AuthorityLRTA Light Rail Transit AuthorityLWUA Local Water Utilities Administration

http://en.wikipedia.org/w/index.php?title=Export-Import_Bank_of_Japan&action=edit&redlink=1#

LIST OF ACRONYMS

MBURD Mega Bridges for Urban and Rural Development

MDS Modified Disbursement System

MIDSAADP Mindanao Sustainable Agrarian and Agriculture Development Project

MOA Memorandum of Agreement

MWSS Manila Water and Sewerage System

NAMRIA National Mapping and Resource Information Authority

NBAC-SEPP New Bohol Airport Construction and Sustainable Environmet Protection Project

NCA Notice of Cash Allocation

NDF Nordic Development Fund

NEDA National Economic Development Authority

NFA National Food AuthorityNG National Government NGAs National Government AgenciesNGAS New Government Accounting SystemNGDAD National Government Debt Accounting Division NGOs/POs Non-Governmental Organizations/Peoples' OrganizationNIA National Irrigation Administration

NIS National Irrigation Systems

NISRIP National Irrigation Sector Rehabilitation and Improvement Project

NLRC North Luzon Railway Corporation

NPC National Power Corporation

NPSENRM National Program Support for Environment and Natural Resources

Management

NRIMP National Roads Improvement and Management Project

NTA Notice of Transfer of Allocation

OCM Overhead, Contingencies and MiscellaneousODA Official Development AssistanceOECF Overseas Economic Cooperation FundOP Office of the PresidentOPEC Organization of the Petroleum Exporting CountriesOTC Over the CounterPAS Philippine Accounting StandardsPD Presidential Decree

PEEP Philippine Energy Efficiency Project

PEZA Philippine Economic Zone Authority

PIA PHIVIDEC Industrial Authority

PIDP Participatory Irrigation Development Project

PMMA Philippine Merchant Marine Academy

PMO Project Monitoring Office

PMU Project Monitoring Unit

PNOC Philippine National Oil CorporationPNR Philippine National RailwaysPOPSTIRP Pepeng Short-Term Infrastructure Rehabilitation ProjectsPPA Philippine Ports AuthorityPPE Property, Plant and Equipment PPIADP Puerto Princesa Airport Development ProjectPRRC Pasig River Reconstruction Commission PSALM Power Sector Assets and Liabilities ManagementPSO Project Support OfficePTA Philippine Tourism AuthorityPWDs Persons with Disabilities

PWU Provincial Women's Union

RA Republic Act

RPCPPE Report on the Physical Count of Property, Plant and Equipment

RUPP Road Upgrading & Preservation Project

RZOA Raiffeissen Zentralbank Osterreich Aktiengeselschaft

LIST OF ACRONYMS

SADP PH I Selected Airports Development Project, Phase I

SARO Special Allotment Release Order

SBC Small Business Corporation

SBGFC Small Business Guarantee and Finance Corporation

SBMA Subic Bay Metropolitan Authority

SC Supreme Court

SCHARMP Second Cordillera Highland Agricultural Resource Management Project

SFD Saudi Fund for Development

SIDA INEC Swedish International Cooperation Agency - Ilocos Norte Electric Cooperative

SILCAB Social Infrastructure and Local Capability Building

SL Subsidiary Ledger

SPs Sub-Projects

SPSO State Programme Support Offices

SPSP Social Protection Support Project

SPISP Southern Philippines Irrigation Sector Project

SRCD Social Reform and Community Development

SWD Social Welfare and Development

SWDRP Social Welfare and Development Reform Project

TADP Third Airports Development Project

TELOF Telecommunications Office

TESDA Technical Education and Skills Development Authority

TRA Tax Remittance Advice

UBCPRD Urgent Bridges Construction Project-Rural Development

UP/PGA University of the Philippines/Participatory Governance Assessment

USPL U.S. Public Law

1.0 INTRODUCTION

1

CONSOLIDATED AUDIT REPORT ON OFFICIAL DEVELOPMENT ASSISTANCE

FOR THE CALENDAR YEAR 2014

1.0 INTRODUCTION

1.1 Legal Basis

Official Development Assistance is governed by Republic Act (RA) No. 8182, approved on June 11, 1996 as amended by RA No. 8555, approve on February 26, 1998, entitled:

The law was issued to facilitate the absorption and optimize the utilization of ODA

resources. It also excluded ODA loans from foreign debt limit of US$10 billion or its equivalent in other foreign currencies as set under Presidential Decree (PD) No. 1939, the law amending RA No. 4860. The ODA loan remained to be the preferred source of financing priority development projects of the country due to its lower interest rate and longer maturity periods compared to other foreign loans.

Under Section 2 of RA 8182, ODA is defined as a loan, or a loan and grant, which

meets 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;

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 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 the loan and grant.

“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 RA No. 4860, as amended”.

2

Public debt is governed by RA No. 4860, issued on August 8, 1966. Under Section 1 of this Act, the President of the Philippines is authorized, in behalf of the Republic of the Philippines, to contract such loans, credits and indebtedness with foreign governments, agencies or instrumentalities of such foreign governments, foreign financial institutions, or other international organizations, with whom, or belonging to countries with which, the Philippines has diplomatic relations, as may be necessary and upon such terms and conditions as may be agreed upon, to enable the Government of the Republic of the Philippines (ROP) to finance, either directly or through any government office, agency or instrumentality or any government-owned or controlled corporations, industrial, agricultural or other economic development purposes or projects authorized by law. It is also provided in this section that the authority of the President of the Philippines shall include the power to issue, for the purposes herein before stated, bonds for sale in the international markets the income from which shall be fully tax-exempt in the Philippines.

The total amount of loans, credits and indebtedness, excluding interests, which the

President is authorized to incur, as provided under Section 2 thereof, shall not exceed US$1 billion or its equivalent in other foreign currencies at the exchange rate prevailing at the time the loans, credits and indebtedness are incurred, provided that the total loans, credit and indebtedness incurred shall not exceed US$250 million or its equivalent in other currencies in the fiscal year of the approval of the Act, and US$250 million or its equivalent in other currencies every fiscal year thereafter.

The foreign debt limit was, however, increased under PD No. 1939 issued on June

27, 1984 amending RA No. 4860 to an amount not exceeding US$10 billion or its equivalent in other foreign currencies at the exchange rate prevailing at the time the loans, credits or indebtedness are incurred at terms of payment of not less than 10 years except those contracted in the interest of national security and rehabilitation resulting from natural calamities. Section 2 of PD No. 1939 further amended the last paragraph of Section 3 of RA 4860 to read as follows:

The President, under Section 20, Article VII, of the 1987 Philippine Constitution,

may also contract or guarantee foreign loans on behalf of the Philippines with the prior concurrence of the Monetary Board, and subject to such limitations as may be provided by law. The Monetary Board shall, within thirty days from the end of every quarter of the calendar year, submit to Congress a complete report of its decision on applications for loans to be contracted or guaranteed by the Government or government-owned and controlled corporations which would have the effect of increasing the foreign debt, and containing other matters as may be provided by law.

“The total amount of loans, credits or indebtedness incurred, and the proceeds of bonds, securities or other evidences floated or issued, which may be guaranteed by the President under this Section shall not be more than US$7.5 billion or its equivalent in other foreign currencies at the exchange rate prevailing at the time the guarantee is made excluding interests and other normal banking charges imposed or charged by the International Bank for Reconstruction and Development (IBRD), the Asian Development Bank (ADB) and other similar international financial institutions”.

3

1.2 Scope and Sources

1.2.1 The report contains data on 425 ODA loans consisting of 62 program loans and 363 project loans contracted and guaranteed by the National Government (NG) from January 1, 1995 to December 31, 2014. RA No. 8182, as amended by RA No. 8555

applies only to loans contracted from January 1, 1995. Project loans are foreign loans obtained to finance specific projects. On the other hand, Program loans are multi-purpose foreign loans not intended to finance specific projects, but are conditioned on basic changes in economic, monetary or fiscal policies, among others.

The status and breakdown of 425 ODA loans with cumulative net commitment

amounting to P1.387 trillion (US$30.992 billion) is presented in Table I.

1.2.2 The loans were obtained from bilateral, multilateral and commercial creditors and utilized for Infrastructure (Infra); Social Reform and Community Development (SRCD); Industry, Trade and Tourism (ITT); Agriculture, Agrarian Reform and Natural Resource (AARNR); and Governance and Institutions Development (GID). The graphical presentation of the number of loans contracted, their sources and net commitments are shown in Chart 1.

Chart 1 – Number of Loans Contracted, Sources and Cumulative Net Commitment

Program Project Total USD PHP

6 46 52 6.416 287.041

4 6 10 2.890 129.333

2 3 5 1.074 48.078

1 3 4 1.566 70.070

1 1 0.250 11.185

52 305 357 21.679 969.915

0 6 6 0.006 0.277

62 363 425

USD 11.828 19.164

PHP 529.169 857.398

Cancelled

TotalCumulative Net

Commitment

(in billion)

30.992

1,386.57

New:

Newly Signed/ Effective

New/Active

New/Closed

Closed

Table I – Status and Breakdown of Loans

StatusBreakdown

Cumulative Net

Commitment (in billion)

Active

4

(Chart I, continued)

1.2.3 The data are sourced from the following:

a) Status Report on NG Direct and Guaranteed Loans prepared by the Debt Monitoring and Analysis Division (DMAD), Bureau of the Treasury (BTr) - this shows the details of foreign loans by loan account number, creditor and implementing agency with summary on the type of loans and creditors.

b) List of ODA loans signed during the year – sourced from the reports forwarded

to the Commission on Audit (COA) by the Department of Finance (DOF) and National Economic Development Authority (NEDA).

c) Summary of Debt Service Expenditures - Foreign prepared by the National

Government Debt Accounting Division (NGDAD), BTr – payments by the NG on Principal, Interests, Commitment Fees and Other Charges for the Direct and Relent Loans.

d) Actual Debt Service, ODA - Funded Projects prepared by concerned GOCCs –

payments by the GOCCs direct to their creditors for the NG Guaranteed loans.

1.2.4 The Consolidated Audit Observations and Recommendations as of December 31, 2014 are based on the audited reports submitted by the auditors of the implementing agencies concerned.

This report does not include Foreign-Assisted Projects (FAPs) funded from ODA

grants.

1.3 Methodology

COA maintains database on ODA loans which is updated annually based on the Status Report on NG Direct and Guaranteed Loans submitted by the DMAD BTr. The status of projects and loans were gathered from the implementing agencies and respective auditors and verified from the NEDA Report.

Based on updated data file, COA prepared schedules of ODA loans by creditor,

sector and implementing agency with data on commitments, availments, repayments, and undrawn and outstanding balances per loan account and project. COA adapted the sectoral classifications of loans/projects being used by NEDA. The data are presented in tables and charts with narrative discussion.

All balances were translated to local currency equivalent using the BSP weighted

average rate at reporting date which was published on the first working day of the ensuing year. Third currency balances are first converted to US Dollars (USD) before translating to Philippine Peso (PhP) using the exchange rate at reporting date.

5

In compliance with Section 8 (b) of RA No. 8182, as amended, which mandated COA to conduct an audit of ongoing and completed projects and submit report to Congress, the concerned Auditors of National Government Agencies (NGAs), GOCCs and Local Government Units (LGUs), prepared and submitted to the National Government Sector (NGS), their audit observations and recommendations for consolidation. The consolidated audit observations and recommendations were grouped into audit issues for emphasis.

2.0 HIGHLIGHTS OF THE REPORT

6

2.0 HIGHLIGHTS OF THE REPORT

The NG contracted 425 ODA loans (including cancelled loans), from 1995 to 2014, for financing 354 programs and projects of the Government. NGs net loan commitments amounted to P1.39 trillion (US$30.99 billion), of which P1.08 trillion (US$24.13 billion) were availed as of December 31, 2014, leaving undrawn amount of P307.03 billion (US$6.86 billion) equivalent to 22.14 percent of the net commitments. For undrawn amount, NG paid a total of P201.53 million commitment fees for CY 2014 alone.

On the other hand,

cumulative repayment as of December 31, 2014 amounted to P372.56 billion (US$8.33 billion) leaving outstanding balance of P706.97 billion (US$15.80 billion). Of the 354 programs and projects financed out of these loans, 280 were completed, 57 are on-going, 9 are yet to be started while 8 were cancelled.

Chart II – Programs and Projects Status

Ten of the 425 ODA loans were contracted in 2014 with net loan commitments of

P129.33 billion (US$2.89 billion). Of the commitments, only P32.56 billion (US$0.73 billion) were availed leaving undrawn amount of P96.78 billion (US$2.16 billion) representing 74.82 percent of the total commitments for the year for which the NG paid P18.31 million commitment fees during the year.

2.1 Commitments – P1.54 trillion (US$34.31 billion)

The cumulative loan commitments from 425 ODA loans as of December 31, 2014 amounted to P1.54 trillion or US$34.31 billion, of which P148.62 billion (US$3.32 billion) or 9.68 percent were cancelled leaving net loan commitments of P1.39 trillion (US$30.99 billion). Of the amount, P129.33 billion (US$2.89) were intended for the 10 new loans contracted in 2014 from 4 individual creditors, of which P812.38 million or US$18.16 million were cancelled. These were sourced from the following creditors:

US$ PHP

1 Bilateral 13.76 615.52 44.39

2 Multilateral 15.66 700.56 50.53

3 Commercial 1.58 70.48 5.08

31.00 1,386.56 100.00

Table II - Sources of Loans (in billion)

Creditor Type Net Loan Commitments

% to Total

Total

7

2.2 Availments – P1.08 trillion (US$24.13 billion)

ODA loans were availed by the Government to implement programs and projects of the different sectors. Total cumulative availments from 419 loan accounts as of December 31, 2014 amounted to P1.08 trillion (US$24.13 billion) with availments in CY 2014 amounting to P75.97 billion (US$1.698 million). Sources by creditor type, and distribution by project and government sectors of current year and cumulative loan availments are presented in Table III.

US$ PHP US$ PHP US$ PHP

1 Infra. 0.231 10.343 13.61

2 GID - - -

3 AARNR 0.087 3.882 5.11

4 SRCD 1.370 61.274 80.66

5 ITT 0.010 0.470 0.62

Total 1.699 75.970 100.00 Total 1.697 75.970 100.00 Total 1.698 75.969 100.00

1 Infra. 10.32 461.76 42.77

2 GID 4.05 181.30 16.80

3 AARNR 3.03 135.37 12.54

4 SRCD 5.34 238.73 22.11

5 ITT 1.39 62.37 5.78

Total 24.13 1,079.53 100.00 Total 24.13 1,079.53 100.00 Total 24.13 1,079.53 100.00

Distribution

3 LGUs 0.21 9.11 0.84 3 Commercial 1.57 70.41 6.52

2 GOCCs 6.13 274.37 25.42 2

Multilateral 11.83 529.25 49.03

Cumulative Availments

1Bilateral 10.73 479.87 44.45 1 NGAs 17.79 796.05 73.74

3 Commercial 0.014 0.604 0.80 3 LGUs 0.0003 0.013 0.02

93.42 1

Bilateral 0.538 24.067 31.68

2Multilateral 1.147 51.299 67.52 2 GOCCs 0.111 4.987 6.56

Project

Sector

Amount

2014 Availments

% to

Total Creditor Type

Amount % to

Total

Go vern-

ment

Secto r

Amount

1 NGAs 1.586 70.970

Table III- Sources of Loans Availed and Distribution by Project and Government Sectors (in billion)Sources

% to

Total

2.3 Undrawn Commitments – P307.03 billion (US$6.86 billion)

The undrawn commitments of P307.03 billion (US$6.86 billion) as of December

31, 2014 represent 22.14 percent of the net loan commitments from the following creditors:

US$ PHP US$ PHP

1 Bilateral 13.760 615.520 3.032 135.655 22.04

2 Multilateral 15.660 700.560 3.829 171.305 24.45

3 Commercial 1.580 70.480 0.002 0.074 0.10

31.000 1,386.560 6.863 307.034 22.14 Total

Net Loan Commitments % to Net

Commitments

Table IV - Undrawn Balance by Creditor (in billion)

Creditor Type Undrawn Commitments

Shown in Chart III is the graphical presentation of loan cumulative net

Commitments, Availments and Undrawn balances as of December 31, 2014, summarized by type of creditor.

8

Chart III- Loan Cumulative Net Commitments, Availments and Undrawn Balances by Type of Creditor

(in billion peso)

2.4 Repayments – P372.56 billion (US$8.33 billion) and Outstanding Balances– P706.97 billion (US$15.80 billion)

Out of the cumulative availments of P1.08 trillion (US$24.13), P372.56 billion (US$8.33 billion) were already repaid with outstanding balance of P706.97 billion (US$15.80 billion). This represent balances from 336 loan accounts out of 419 total loans (net of cancelled loans).


1 Bilateral 10.73 479.87 3.72 166.31 34.66 7.01 313.55 65.34

2 Multilateral 11.83 529.25 3.62 161.92 30.59 8.21 367.34 69.41

3 Commercial 1.57 70.41 0.99 44.33 62.96 0.58 26.08 37.04

24.13 1,079.53 8.33 372.56 34.51 15.80 706.97 65.49 Total

Outstanding

Balances

Table V - Loan Repayments and Outstanding Balances (in billion)

Creditor Type

Cumulative

Availments Repayments % to

A vailments

% to

A vailments

Shown in Chart IV are the loan cumulative Availments, Repayments and

outstading balances as of December 31, 2014, summarized by type of creditor.

9

Chart IV - Loan Availments, Repayment & Balances by Type of Creditor (in billion peso)

2.5 Debt Service Expenditures for the year – P56.11 billion

During the year, the total debt service payments to creditors amounted to P56.11 billion inclusive of interest, commitment fees and other charges as presented in Table VI.

Principal Interest C o mmit-

ment F ees

Guaranty

Fee

Other

Charges Total

% to

Total

1 Bilateral 21,860.13 5,593.60 114.79 1,329.01 24.66 28,922.18 51.54

2 Multilateral 18,955.37 4,692.35 84.71 329.37 185.48 24,247.28 43.21

3 Commercial 2,033.56 876.79 2.03 20.26 10.12 2,942.76 5.24

42,849.05 11,162.74 201.53 1,678.64 220.26 56,112.21 100.00

76.36 19.89 0.36 2.99 0.39 100.00

Table VI- Debt Service Expenditures by Creditor Type (in million peso)

Creditor Type

Total

% to total

By Project Sector, 47.92 percent of debt service expenditures represent

repayment to loans falling under infrastructure sector as shown in Table VII.

Principal Interest Commit-

ment Fees

Guaranty

Fee

Other

Charges Total

% to

Total

1 Infra. 21,100.76 4,469.57 127.33 1,135.14 55.25 26,888.05 47.92

2 GID 6,690.07 2,079.62 0.05 - 1.07 8,770.81 15.63

3 AARNR 5,971.02 1,744.12 27.20 144.21 (25.61) 7,860.95 14.01

4 SRCD 5,186.86 2,366.79 42.79 47.36 187.74 7,831.54 13.96

5 ITT 3,900.33 502.63 4.16 351.92 1.81 4,760.85 8.48

42,849.05 11,162.74 201.53 1,678.64 220.26 56,112.21 100.00

76.36 19.89 0.36 2.99 0.39 100.00

Table VII- Debt Service Expenditures by Sector (in million peso)

Sector

Total

% to total

10

Commitment fees paid during the year alone for the undrawn balance

amounted to P201.53 million or 0.07 percent of the total undrawn balance of P307.03 billion as presented in Table VIII.

Undrawn

Balance NG Direct

NG

Relent

NG-

Guaranteed Total

% to Undrawn

balance

1 Bilateral 135,655.35 89.11 - 25.68 114.79 0.08

2 Multilateral 171,305.22 80.54 - 4.16 84.71 0.05

3 Commercial 74.41 1.28 - 0.75 2.03 2.73

307,034.98 170.93 - 30.60 201.53 0.07

84.82 0.00 15.18 100.00

Table VIII- Commitment Fees Paid per Creditor Type and Type of Loans (in million pesos)

Creditor Type

Total

Percentage to total

2.6 Audit Observations and Recommendations

The audit observations and recommendations were summarized and presented

either separately as agency-specific or grouped together into audit issues by nature of deficiencies.

3.0 STATUS OF ODA–FUNDED

PROGRAMS AND PROJECTS

11

3.0 STATUS OF ODA-FUNDED PROJECTS

3.1 Commitments – P1.54 trillion (US$34.31 billion)

As of December 31, 2014, there were 425 loans contracted by the NG with total commitments amounting to P1.54 trillion (US$34.13 billion), 10 of which amounting to P129.33 billion (US$2.89 billion) or 8.42 percent were secured and signed during the year. Of the total cumulative commitments, P148.62 billion (US$33.32 billion) or 9.68 percent were cancelled resulting in cumulative net commitments of P1.39 trillion (US$30.99 billion). The graphical presentation of commitments is shown in Chart V.

Chart V – Cumulative Commitments, Cancellation and Net Commitment (in billion )

The 10 new loans were secured by NGAs with 37.96 percent going to the DOF. The projects to be financed from the new loans are tabulated in Table IX.


TOTAL 2.890 129.332 100.00 0.727 32.555 100.00 2.163 96.777 100.00

1.097 49.098 37.96 0.590 26.391 81.07 0.507 22.707 23.46

1 3111-PHI ADB 0.250 11.185 22.78 0.250 11.185 42.38 - - 0.00

2CPH 1013-

01 LAFD 0.132 5.922 12.06 0.13 5.92 22.44 - - 0.00

3 PH-SB1Post Disaster Stand- by

LoanJBIC/JICA 0.415 18.569 37.82 0.208 9.284 35.18 0.207 9.285 40.89

4 8435-PH

Third Development Policy

Loan to Foster More

Inclusive Grow th

IBRD 0.300 13.422 27.34 - - 0.00 0.300 13.422 59.11

0.501 22.426 17.34 0.001 0.056 0.17 0.500 22.370 23.11

5 8421-PHPhi. Rural Development

PrjectAARNR IBRD 0.501 22.426 100.00 0.001 0.056 100.00 0.500 22.370 100.00

Table IX - List of New ODA Loans (in billion)Loan Account

NumberName of Project Sector

Cre-

ditor

Commitments % to

Total

Availments % to

Total

Undrawn Balance % to

Total

Local Govt. Finance and

Fiscal Decentralization

Reform Program

SRCD

DOF

DA

12

During the year, commitments amounting to P812.38 million (US$18.16 million)

were cancelled covering seven loan accounts as presented in Table X.

3.1.1 By Creditor

The net cumulative loan commitments on account of cancellations as of December

31, 2014 for each creditor is presented in Table XI.


0.300 13.422 10.38 0.001 0.034 0.10 0.299 13.388 13.83

6

8344-PH Learning, Equity and

Accountability Program

Support Project

SRCD IBRD 0.300 13.422 100.00 0.001 0.034 100.00 0.299 13.388 100.00

DSWD 0.851 38.078 29.44 0.135 6.061 18.62 0.716 32.017 33.08

7 3100-PHI ADB 0.372 16.648 43.72 0.037 1.677 27.67 0.335 14.971 46.76

8 8335-PH IBRD 0.479 21.430 56.28 0.098 4.384 72.33 0.381 17.046 53.24

0.141 6.308 4.88 0.000 0.013 0.04 0.141 6.295 6.50

9 8444-PH 0.116 5.190 82.28 0.000 0.013 100.00 0.116 5.177 82.24

10TF017646-

PH0.025 1.118 17.72 - - 0.00 0.025 1.118 17.76

Loan Account

NumberName of Project Sector

Cre-

ditor

Commitments % to

Total

Availments % to

Total

Undrawn Balance % to

Total

SRCD

Infra.

(Table IX, continued)

DepEd

KALAHI-CIDSS National

Community-Driven

Development Project

Cebu Bus Rapid Transit

(BRT) ProjectIBRD

DOTC

USD PHP

18.16 812.38

SOCIAL REFORM AND COMMUNITY DEVELOPMENT 10.81 483.60

1 IBRD 7959-PH KALAHI-CIDSS (Additional Financing) DSWD 1.83 81.91

2 IBRD 7290 PH Second Women's Health & Safe Motherhood Project DOH 5.28 236.40

3 IBRD 7912-PH Additional Financing for ARMM Social Fund Project ARMM 0.67 29.85

4 8035-PH Laguna Lake Development Authority LLDA 3.03 135.44

AGRICULTURE, NATURAL RESOURCES AND AGRARIAN REFORM 3.05 136.55

5 IBRD 7298 PH Second Land Administration & Management Project DENR IBRD 0.05 2.33

6 ADB2465 PHI Agrarian Reform Communities Project II DAR ADB 3.00 134.22

GOVERNANCE AND INSTITUTION DEVELOPMENT 4.30 192.23

7 IBRD 7431 PH National Program Support for Tax Administration

Reform Project

BIR IBRD 4.30 192.23

IBRD

Total

Table X - Cancelled Commitments for 2014 (in million)

AmountLoan Account Number CreditorName of Project IA

USD PHP USD PHP USD PHP

Total Commitments 34,313.43 1,535,183.00 3,321.78 148,616.52 30,991.65 1,386,566.48 100.00

Bilateral 15,295.82 684,334.81 1,538.12 68,815.31 13,757.70 615,519.50 44.39

1 JBIC 11,661.16 521,720.16 1,168.96 52,299.13 10,492.20 469,421.02 33.85

2 ECGD 718.80 32,159.01 - - 718.80 32,159.01 2.32

3 BNP Paribas 992.85 44,419.89 321.08 14,365.20 671.76 30,054.70 2.17

4 KEXIM 540.69 24,190.43 6.03 270.00 534.65 23,920.44 1.73

5 KFW 349.09 15,618.27 34.62 1,548.89 314.47 14,069.38 1.01

6 AFD 312.43 13,978.02 - - 312.43 13,978.02 1.01

% to

Total

Table XI- Cumulative Commitments, Cancellation and Net Loan Commitment by Creditor

(in million pesos)

Net Cumulative

CommitmentsCreditor

Cumulative

Commitments

Cumulative

Cancellation

13


7 USPL 235.00 10,513.90 0.87 39.04 234.13 10,474.86 0.76

8 ICO 117.27 5,246.70 0.02 0.90 117.25 5,245.80 0.38

9 ANZ/EFIC 94.81 4,241.72 2.25 100.56 92.56 4,141.16 0.30

10 EFIC 89.48 4,003.55 0.22 9.73 89.27 3,993.82 0.29

11 FP 46.34 2,073.21 2.44 109.10 43.90 1,964.11 0.14

12 Artigiancassa 31.44 1,406.56 - - 31.44 1,406.56 0.10

13 SFD 19.98 893.85 - - 19.98 893.85 0.06

14 KFAED 21.29 952.71 1.54 68.78 19.76 883.93 0.06

15 SOCIETE GEN 15.02 671.97 - - 15.02 671.97 0.05

16 KBC BANK 13.63 609.64 0.00 0.00 13.63 609.64 0.04

17 FORTIS BANK 10.18 455.50 - - 10.18 455.50 0.03

18 ITALY II 9.74 435.83 0.04 1.93 9.70 433.90 0.03

19 Belgian 7.58 339.06 - - 7.58 339.06 0.02

20 JFA 4.53 202.55 0.03 1.50 4.49 201.05 0.01

21 SIDA INEC 2.31 103.42 0.01 0.54 2.30 102.88 0.01

22 LEONIA BANK 2.21 98.85 0.00 0.00 2.21 98.85 0.01

Multilateral 17,152.85 767,418.66 1,494.38 66,858.57 15,658.47 700,560.09 50.52

1 ADB 8,741.87 391,111.09 792.65 35,463.21 7,949.22 355,647.88 25.65

2 IBRD 8,105.77 362,652.16 683.45 30,577.44 7,422.32 332,074.72 23.95

3 IFAD 132.33 5,920.31 8.63 385.89 123.70 5,534.42 0.40

4 OPEC 97.00 4,339.78 7.97 356.76 89.03 3,983.02 0.29

5 EIB 60.68 2,714.70 - - 60.68 2,714.70 0.20

6 NDF 15.21 680.61 1.68 75.27 13.53 605.33 0.04

Commercial 1,864.76 83,429.53 289.29 12,942.63 1,575.48 70,486.90 5.08

1 CEXIM 799.18 35,755.27 219.33 9,812.92 579.85 25,942.35 1.87

2 BAC 210.40 9,413.39 - - 210.40 9,413.39 0.68

3 ECGD 137.56 6,154.64 - - 137.56 6,154.64 0.44

4 EDC 124.44 5,567.45 2.26 101.16 122.18 5,466.29 0.39

5 BNP Paribas 138.51 6,196.87 35.61 1,593.36 102.89 4,603.52 0.33

6 CHI 59.97 2,682.86 4.07 182.00 55.90 2,500.86 0.18

7 BBV 52.15 2,333.24 0.02 0.90 52.13 2,332.34 0.17

8 RZOA 46.87 2,097.18 - - 46.87 2,097.18 0.15

9 FP 39.90 1,785.10 2.18 97.31 37.72 1,687.79 0.12

10 CCDF 44.20 1,977.44 14.16 633.30 30.04 1,344.15 0.10

11 Banco Santander 25.73 1,151.19 - - 25.73 1,151.19 0.08

12 Bank of America 25.38 1,135.46 0.03 1.14 25.35 1,134.32 0.08

13 ANZ/EFIC 22.75 1,018.01 0.57 25.58 22.18 992.44 0.07

14 ERSTE (Austria) 21.81 975.74 0.00 0.00 21.81 975.74 0.07

15 NDF 27.17 1,215.43 6.42 287.23 20.75 928.19 0.07

16 ICO 18.86 843.63 - - 18.86 843.63 0.06

17 ING Bank N.V. 17.52 784.05 - - 17.52 784.05 0.06

18 EFIC 14.80 662.15 0.72 32.31 14.08 629.84 0.05

19 SOCIETE GEN 12.59 563.27 0.11 5.14 12.47 558.13 0.04

20 FORTIS BANK 7.96 355.95 - - 7.96 355.95 0.03

% to

Total

Net Cumulative

CommitmentsCreditor

Cumulative

Commitments

Cumulative

Cancellation

(Table XI, continued)

14

Inclusive of the cumulative loan commitments, are current year’s commitments on new loans amounting to P129.33 billion (US$2.89 billion) as presented in Table IX.

3.1.2 By Project Sector

Of the five project sectors, the commitments of implementing agencies for project

categorized under the infrastructure sector accounts for 45.12 percent as presented in Table XII.

3.1.3 By Implementing Agency

The NGAs cumulative net commitments represent 76.69 percent of the total of P1.39

trillion (US$30.99 billion) with the DOF and DPWH commitments accounting for 28.71 percent and 15.61 percent, respectively, as presented in Table XIII.


21 Bancaja 7.01 313.82 - - 7.01 313.82 0.02

22 SIDA 10.00 447.40 3.81 170.29 6.19 277.11 0.02

Difference between totals and sum of components is due to rounding off

% to

Total

Net Cumulative

CommitmentsCreditor

Cumulative

Commitments

Cumulative

Cancellation

(Table XI, continued)

USD PHP% to

TotalUSD PHP

% to

TotalUSD PHP

% to

Total

Infra. 15.978 714.864 46.57 1.994 89.189 60.01 13.985 625.675 45.12

GID 4.344 194.340 12.66 0.291 13.038 8.77 4.052 181.302 13.08

AARNR 4.749 212.455 13.84 0.766 34.272 23.06 3.982 178.184 12.85

SRCD 7.702 344.593 22.45 0.159 7.107 4.78 7.543 337.486 24.34

ITT 1.541 68.931 4.49 0.112 5.011 3.37 1.429 63.920 4.61

Total 34.314 1,535.18 100.00 3.322 148.62 100.00 30.991 1,386.57 100.00

Table XII - Cumulative Commitments, Cancellation and Net Loan Commitment by Sector (in billion)

Cumulative Commitments


Cumulative Cancellation Net Commitments

% to Cumulative

Commitments10% 90%

Project

Sector

100%


Total 34,313.43 1,535,183.00 3,321.78 148,616.52 30,991.65 1,386,566.48 100.00

NGAs 25,670.05 1,148,478.18 1,901.31 85,064.48 23,768.75 1,063,413.69 76.69

1 DOF 9,224.15 412,688.31 327.25 14,641.16 8,896.90 398,047.15 28.71

2 DPWH 5,143.41 230,115.98 306.81 13,726.47 4,836.60 216,389.50 15.61

3 DOTC 2,470.73 110,540.62 364.62 16,313.23 2,106.11 94,227.40 6.80

4 DSWD 1,915.23 85,687.30 4.41 197.11 1,910.82 85,490.19 6.17

% to

Total

Table XIII - Cumulative Commitments, Cancellation and Net Commitments by Implementing Agency

(in million)

Cumulative Net

CommitmentsImplementing

Agency

Cumulative

Commitments

Cumulative

Cancellation

15


5 DepEd 1,336.41 59,791.18 81.48 3,645.52 1,254.93 56,145.65 4.05

6 DA 1,264.27 56,563.52 201.31 9,006.60 1,062.96 47,556.92 3.43

7 DAR 1,152.60 51,567.49 91.01 4,071.98 1,061.59 47,495.50 3.43

8 DOE 754.84 33,771.50 36.69 1,641.47 718.15 32,130.02 2.32

9 DENR 772.88 34,578.70 370.91 16,594.72 401.97 17,983.99 1.30

10 DILG 376.44 16,842.00 43.48 1,945.14 332.97 14,896.86 1.07

11 DOH 356.66 15,956.92 33.69 1,507.41 322.97 14,449.51 1.04

12 SC 321.90 14,401.81 1.29 57.71 320.61 14,344.10 1.03

13 BOC 193.42 8,653.75 0.13 5.67 193.30 8,648.08 0.62

14 BFAR 89.73 4,014.31 12.05 539.34 77.67 3,474.97 0.25

15 PRRC 88.63 3,965.14 12.00 536.89 76.63 3,428.25 0.25

16 TESDA 45.70 2,044.55 1.41 63.09 44.29 1,981.46 0.14

17 DTI 45.39 2,030.87 7.58 339.09 37.81 1,691.78 0.12

18 NAMRIA 25.73 1,151.19 - - 25.73 1,151.19 0.08

19 BFP 24.60 1,100.63 - - 24.60 1,100.63 0.08

20 DOT 16.88 755.40 0.65 29.10 16.23 726.30 0.05

21 PMMA 15.96 713.94 0.10 4.30 15.86 709.65 0.05

22 UP/PGH 13.56 606.60 - - 13.56 606.60 0.04

23 OP 9.93 444.32 0.14 6.23 9.79 438.09 0.03

24 BIR 11.00 492.14 4.30 192.23 6.70 299.91 0.02

GOCCs 8,422.85 376,838.20 1,403.63 62,798.30 7,019.22 314,039.90 22.65

1 DBP 1,606.03 71,853.79 143.86 6,436.37 1,462.17 65,417.42 4.72

2 LBP 1,311.95 58,696.52 109.87 4,915.41 1,202.08 53,781.11 3.88

3 NIA 810.81 36,275.86 51.24 2,292.44 759.58 33,983.43 2.45

4 PSALM 1,053.05 47,113.40 321.30 14,375.08 731.75 32,738.32 2.36

5 LRTA 826.81 36,991.34 135.11 6,044.72 691.70 30,946.61 2.23

6 BCDA 490.07 21,925.56 7.46 333.69 482.61 21,591.87 1.56

7 NPC 578.26 25,871.35 113.28 5,068.01 464.98 20,803.34 1.50

8 MWSS 271.16 12,131.79 28.56 1,277.85 242.60 10,853.93 0.78

9 PPA 245.66 10,990.61 8.03 359.41 237.62 10,631.20 0.77

10 NLRC 400.00 17,896.00 219.21 9,807.24 180.79 8,088.76 0.58

11 SBMA 235.36 10,530.05 71.85 3,214.67 163.51 7,315.38 0.53

12 LWUA 205.58 9,197.77 85.85 3,840.71 119.74 5,357.05 0.39

13 PNOC 168.65 7,545.46 81.40 3,641.98 87.25 3,903.48 0.28

14 PHIVIDEC 68.62 3,069.88 0.01 0.37 68.61 3,069.51 0.22

15 PNR 45.46 2,033.70 0.01 0.24 45.45 2,033.46 0.15

16 SBGFC 36.84 1,648.42 - - 36.84 1,648.42 0.12

17 NFA 19.53 873.65 0.04 1.58 19.49 872.08 0.06

18 PTA 11.22 502.11 0.01 0.56 11.21 501.56 0.04

19 LLDA 15.00 671.10 8.20 366.72 6.80 304.38 0.02

20 PEZA 22.79 1,019.83 18.36 821.22 4.44 198.61 0.01

LGUs 220.53 9,866.62 16.85 753.73 203.69 9,112.89 0.66

1 ARMM 184.61 8,259.26 6.39 285.89 178.22 7,973.37 0.58

2Provl Gov't-

LDN35.93 1,607.36 10.46 467.84 25.47 1,139.52 0.08


% to

Total

Cumulative Net

CommitmentsImplementing

Agency

Cumulative

Commitments

Cumulative

Cancellation

(Table XIII, continued)

16

3.2 Availments – P1.08 trillion (US$24.13 billion)

As of December 31, 2014, cumulative availments reached P1.08 trillion (US$24.13 billion) or equivalent to 77.86 percent of the total net commitments as presented in Chart III. Of these, P75.97 billion (US$1.70 billion) or 7.04 percent represent availments during the year. 3.2.1 By Creditor

The cumulative and current year availments from different creditors are presented

in Table XIV with the biggest cumulative availments from multilateral creditors at 49.03 percent and 67.53 percent, respectively.

USD PHP USD PHP

Total Availments 24.129 1,079.531 100.00 1.698 75.970 100.00

Bilateral 10.726 479.864 44.45 0.538 24.067 31.68

1 JBIC 8.455 378.261 35.04 0.342 15.307 20.15

2 ECGD 0.508 22.720 2.10 0.00

3 BNP Paribas 0.353 15.792 1.46 0.031 1.381 1.82

4 AFD 0.312 13.978 1.29 0.133 5.922 7.80

5 KFW 0.275 12.315 1.14 0.001 0.056 0.07

6 US Public Laws 0.234 10.475 0.97

7 KEXIM 0.149 6.653 0.62 0.031 1.401 1.84

8 ICO 0.117 5.246 0.49

9 ANZ/EFIC 0.093 4.141 0.38

10 EFIC 0.089 3.994 0.37

11 FP 0.044 1.964 0.18

12 KFAED 0.020 0.884 0.08

13 SOCIETE GEN 0.015 0.650 0.06

14 KBC BANK 0.014 0.610 0.06

15 FORTIS BANK 0.010 0.456 0.04

16 ITALY II 0.010 0.434 0.04

17 Artigiancassa 0.008 0.354 0.03

18 Belgian 0.008 0.339 0.03

19 JFA 0.004 0.201 0.02

20 SFD 0.004 0.195 0.02

21 SIDA INEC 0.002 0.103 0.01

22 LEONIA BANK 0.002 0.099 0.01

Multilateral 11.829 529.255 49.03 1.147 51.299 67.53

1 ADB 6.706 300.053 27.79 0.683 30.540 40.20

2 IBRD 4.931 220.636 20.44 0.446 19.946 26.26

3 IFAD 0.095 4.236 0.39 0.008 0.379 0.50

4 EIB 0.051 2.292 0.21

5 OPEC 0.032 1.433 0.13 0.010 0.434 0.57

6 NDF 0.014 0.605 0.06

Commercial 1.574 70.412 6.52 0.013 0.604 0.80

1 CEXIM 0.578 25.872 2.40 0.013 0.594 0.78

2 BAC 0.210 9.410 0.87 0.000 0.010 0.01

3 ECGD 0.138 6.155 0.57

Table XIV - Cumulative and Current Year Availments by Creditor (in billion)

CreditorCumulative Availments % to

Total

CY Availments % to

Total

17


Cumulatively, the infrastructure sector is the greatest beneficiary of ODA loans at

42.77 percent. However, for current year, the SRCD sector availed significant percentage of the loan at 80.66 percent.


The NGAs availments reached P796.05 billion (US$17.79 billion) or 73.74 percent

of the total availments. The GOCCs availed P274.37 billion (US$6.13 billion) or 25.72 percent whereas LGUs availed P9.11 billion (US$0.20 billion) or 0.84 percent. The cumulative and current year availments by implementing agency, grouped by government sector, is presented in Table XVI.

USD PHP USD PHP

4 EDC 0.122 5.466 0.51

5 BNP Paribas 0.103 4.603 0.43

6 CHI 0.056 2.501 0.23

7 BBV 0.052 2.332 0.22

8 RZOA 0.047 2.097 0.19

9 FP 0.038 1.688 0.16

10 Credit Com'l de France 0.030 1.344 0.12

11 Banco Santander 0.026 1.151 0.11

12 Bank of America 0.025 1.134 0.11

13 ANZ/EFIC 0.022 0.992 0.09

14 ERSTE (Austria) 0.022 0.976 0.09

15 NDF 0.021 0.928 0.09

16 ICO 0.019 0.844 0.08

17 ING Bank N.V. 0.018 0.784 0.07

18 EFIC 0.014 0.630 0.06

19 SOCIETE GEN 0.012 0.558 0.05

20 FORTIS BANK 0.008 0.356 0.03

21 Bancaja (SMCF-Spain) 0.007 0.314 0.03

22 SIDA 0.006 0.277 0.03


Total

CY Availments % to

Total

(Table XIV, continued)

USD PHP USD PHP


1 Infra. 10.321 461.764 42.77 0.231 10.343 13.61

2 SRCD 5.336 238.732 22.11 1.370 61.275 80.66

3 GID 4.052 181.302 16.79 0.000 0.000 0.00

4 AARNR 3.026 135.366 12.54 0.087 3.882 5.11

5 ITT 1.394 62.367 5.78 0.010 0.470 0.62

CY Availments % to

Total

Table XV - Cumulative and Current Year Availments by Project Sector (in billion)


Total

18

USD PHP USD PHP


NGAs 17.793 796.053 73.74 1.586 70.970 93.42

1 DOF 7.891 353.026 32.70 1.091 48.818 64.26

2 DPWH 3.548 158.729 14.70 0.094 4.192 5.52

3 DSWD 1.019 45.600 4.22 0.275 12.302 16.19

4 DOTC 0.992 44.402 4.11 0.030 1.358 1.79

5 DepEd 0.956 42.757 3.96 0.001 0.034 0.04

6 DAR 0.808 36.130 3.35 0.065 2.877 3.79

7 DA 0.552 24.683 2.29 0.022 0.997 1.31

8 DILG 0.330 14.896 1.38 -

9 SC 0.321 14.344 1.33 -

10 DOH 0.320 14.303 1.32 0.001 0.054 0.07

11 DOE 0.314 14.052 1.30 0.002 0.083 0.11

12 DENR 0.199 8.928 0.83 0.005 0.239 0.31

13 BOC 0.193 8.649 0.80 -

14 BFAR 0.078 3.475 0.32 -

15 PRRC 0.077 3.428 0.32 -

16 TESDA 0.044 1.947 0.18 -

17 DTI 0.037 1.671 0.15 0.0001 0.006 0.01

18 NAMRIA 0.026 1.151 0.11 -

19 BFP 0.025 1.101 0.10 0.0002 0.010 0.01

20 DOT 0.016 0.726 0.07 -

21 PMMA 0.016 0.710 0.07 -

22 UP/PGH 0.014 0.607 0.06 -

23 OP 0.010 0.438 0.04 -

24 BIR 0.007 0.300 0.03 -

GOCCs 6.132 274.366 25.42 0.112 4.987 6.56

1 DBP 1.219 54.521 5.05 0.059 2.623 3.45

2 LBP 0.855 38.258 3.54 0.024 1.064 1.40

3 PSALM 0.732 32.738 3.03 -

4 LRTA 0.692 30.947 2.87 -

5 BCDA 0.483 21.592 2.00 -

6 NIA 0.476 21.291 1.97 0.028 1.254 1.65

7 NPC 0.465 20.803 1.93 -

8 MWSS 0.241 10.797 1.00 -

9 PPA 0.237 10.631 0.98 -

10 NLRC 0.181 8.089 0.75 -

11 SBMA 0.164 7.315 0.68 -

12 LWUA 0.108 4.852 0.45 0.0001 0.002 0.00

13 PNOC 0.087 3.904 0.36 -

14 PHIVIDEC 0.069 3.070 0.28 -

15 PNR 0.045 2.033 0.19 -

16 SBGFC 0.037 1.648 0.15 -

CY Availments % to

Total

Table XVI - Cumulative and Current Year Availments by Implementing Agency (in billion)

Implementing AgencyCumulative Availments % to

Total

19

DOF availed loans from different creditors for various program loans such as Development Policy Support Program, Local Government Financing and Budget Reform Program, Health Sector Development Program, Power Sector Development Program and Banking Sector Reform Program, among others. The programs and projects with significant share in current year availments implemented by the different implementing agencies are presented in Table XVII.

USD PHP USD PHP

17 NFA 0.019 0.872 0.08 -

18 PTA 0.011 0.502 0.05 -

19 LLDA 0.007 0.304 0.03 0.001 0.044 0.06

20 PEZA 0.004 0.199 0.02 -

LGUs 0.204 9.113 0.84 0.0003 0.013 0.02

1 ARMM 0.178 7.973 0.74 0.0003 0.013 0.02

2 Provl Gov't-LDN 0.026 1.140 0.11 -

CY Availments % to

TotalImplementing Agency

Cumulative Availments % to

Total

(Table XVI, continued)

USD PHP

1,453.07 65,010.37 100.00

1,366.12 61,120.23 94.02

1,091.14 48,817.73 75.09

1 3080-PHIEmergency Assistance for Relief and

Recovery from Typhoon Yolanda300.00 13,422.00

2 3111-PHI

Local Government Finance and Fiscal

Decentralization Reform Program-

Subprogram 1

250.00 11,185.00

3 8328-PH

Second Development Policy Loan to

Foster Inclusive Growth: Supplemental

Financing for Post-Typhoon Recovery and

Amendment to the Original Loan

Agreement

IBRD 201.25 9,003.93

4 PH-SB1 Post Disaster Stand- by Loan JBIC 207.53 9,284.67

5CPH 1013-

01 L

Local Government Finance and Fiscal

Decentralization Reform Program AFD 132.37 5,922.14

274.98 12,302.50 18.92

1 7805-PH 29.07 1,300.58

2 8218-PH 34.98 1,564.79

3 8335-PH 97.99 4,383.96

4 3100-PHI 37.49 1,677.30

5ADB2662

PHISocial Protection Support Project 75.46 3,375.86

86.66 3,877.16 5.96

58.63 2,622.99 4.03

1ADB2515

PHICredit for Better HealthCare ADB 5.65 252.99

2JBIC PH-

P243Environmental Development Project 52.90 2,366.71

3JBIC PH-

P245

Logistics Infrastructure Development

Project0.07 3.30

ADB

IBRD

ADB

JBIC

Table XVII - Programs and Projects Implemented by Agencies with Significant Share in CY

Availments (in million)

DOF

DBP

CY Availments % to

TotalCreditorImplementing Agency/ Loan Acct No./Project Name

NGAs

DSWD

GOCCs

Social Welfare and Development Reform

Project

KALAHI-CIDSS National Community-

Driven Development Project

Total

20

3.3 Undrawn Commitments – P307.03 billion (US$6.86 billion)

Of the 425 ODA loans from 50 creditors with cumulative net loan commitments of P1.39 billion (US$30.99 billion), commitments for 87 loans from 19 creditors were not fully drawn with undrawn balances of P307.03 billion (US$6.86 billion).

3.3.1 By Creditor

The loans with biggest undrawn balances or unavailed commitments are loans from

IBRD under multilateral creditors which represents 36.60 percent of the total undrawn balances as presented in Table XVIII.

USD PHP

28.03 1,254.17 1.93

1JBIC PH-

P254

National Irrigation Sector Rehabilitation

and Improvement ProjectJBIC 1.93 86.34

2 CHI-6 Agno River Integrated Irrigation Project CEXIM 13.27 593.75

3IBRD 7709

PH

Participatory Irrigation Development

ProjectIBRD 10.52 470.71

4KEXIM PHL-

15Jalaur River Multi Purpose Project Stage II KEXIM 2.31 103.37

0.29 12.98 0.02

0.29 12.98 0.02

1IBRD 7912-

PH

Additional Financing for ARMM Soial Fund

ProjectIBRD 0.29 12.98

LGUs

ARMM

(Table XVII, continued)

NIA

CY Availments % to

TotalCreditorImplementing Agency/ Loan Acct No./Project Name

USD PHP USD PHPNo. of

LoansUSD PHP

Total 10,861.76 485,954.95 3,999.11 178,919.97 87 6,862.65 307,034.98 100.00

Bilateral 4,761.57 213,032.71 1,729.49 77,377.36 44 3,032.08 135,655.35 44.18

1 JBIC 2,974.14 133,063.04 936.59 41,903.26 20 2,037.55 91,159.78 29.69

2 KEXIM 456.31 20,415.35 70.37 3,148.44 8 385.94 17,266.92 5.62

3 BNP Paribas 671.76 30,054.70 352.99 15,792.65 3 318.78 14,262.05 4.65

4 ECGD 500.00 22,370.03 289.02 12,930.84 3 210.98 9,439.20 3.07

5 KFW 61.46 2,749.74 22.26 995.82 5 39.20 1,753.93 0.57

6 Artigiancassa 31.44 1,406.56 7.92 354.13 1 23.52 1,052.43 0.34

7 SFD 19.98 893.85 4.36 194.99 1 15.62 698.86 0.23

8 SOCIETE GEN 15.02 671.97 14.52 649.82 1 0.49 22.14 0.01

9 FP 12.60 563.85 12.60 563.81 1 0.00 0.04 0.00

10 ICO 18.86 843.63 18.86 843.61 1 0.00 0.01 0.00

Multilateral 5,735.35 256,599.54 1,906.44 85,294.32 37 3,828.91 171,305.22 55.79

1 IBRD 3,516.46 157,326.61 1,025.65 45,887.62 15 2,490.81 111,438.99 36.30

2 ADB 2,005.24 89,714.43 762.61 34,119.14 12 1,242.63 55,595.29 18.11

3 OPEC 77.00 3,444.98 20.00 894.88 4 57.00 2,550.10 0.83

% to

Total

Table XVIII - Net Commitments and Cumulative Availments of 87 Loans with Undrawn Balances by Creditor

(in million)

Creditor

Net Commitments Cumulative Availments Undrawn Balances

21


The infrastructure sector with the highest cumulative net commitments has also the

highest undrawn balances representing 53.39 percent of the total undrawn balances as presented in Table XIX.


DPWH and DOTC with the highest number of loans have also the highest amounts

of undrawn balances representing 18.78 percent and 16.23 percent, respectively. However, in terms of meeting their commitments, 10 implementing agencies have not met 23.85 percent to as high as 56.27 percent of their commitments as manifested in the percentage of their undrawn balances to their net commitments as of December 31, 2014 as shown in Table XX.


LoansUSD PHP

4 IFAD 75.97 3,398.82 46.95 2,100.65 4 29.02 1,298.17 0.42

5 EIB 60.68 2,714.70 51.23 2,292.03 2 9.45 422.68 0.14

Commercial 364.83 16,322.71 363.17 16,248.29 6 1.66 74.41 0.02

1 CEXIM 205.76 9,205.51 204.17 9,134.71 2 1.58 70.80 0.02

2 BAC 130.85 5,854.44 130.77 5,850.86 2 0.08 3.58 0.00

3 ICO 18.86 843.63 18.86 843.61 1 0.00 0.01 0.00

4 FP 9.37 419.13 9.37 419.10 1 0.00 0.02 0.00


% to

TotalCreditor

Net Commitments Cumulative Availments Undrawn Balances

(Table XVIII, continued)


LoansUSD PHP

1 Infra. 5,516.84 246,823.33 1,853.21 82,912.70 51 3,663.63 163,910.63 53.39

2 SRCD 3,837.34 171,682.38 1,630.04 72,928.09 14 2,207.29 98,754.29 32.16

3 AARNR 1,356.02 60,668.40 399.00 17,851.29 18 957.02 42,817.11 13.95

4 ITT 151.56 6,780.85 116.85 5,227.89 4 34.71 1,552.96 0.51

Total 10,861.76 485,954.95 3,999.11 178,919.97 87 6,862.65 307,034.98 100.00

Table XIX - Net Commitments and Cumulative Availments of 87 Loans with Undrawn Balance by Project

Sector (in million)

Creditor

Net Commitments Cumulative Availments Undrawn Balances% to

Total

% to Net Cumulative

Commitments100.00 36.82 63.18



LoansUSD PHP

Total 10,861.76 485,954.95 3,999.11 178,919.97 87 6,862.65 307,034.98 100.00

NGAs 9,215.34 412,294.22 3,239.46 144,933.65 69 5,975.87 267,360.58 87.08 64.85

1 DPWH 2,191.86 98,063.95 903.07 40,403.52 24 1,288.79 57,660.44 18.78 58.80

2 DOTC 1,258.83 56,320.23 145.18 6,495.35 11 1,113.65 49,824.87 16.23 88.47

3 DOF 1,715.05 76,731.34 708.78 31,710.59 4 1,006.28 45,020.74 14.66 58.67

4 DSWD 1,756.10 78,568.09 864.51 38,678.33 5 891.59 39,889.76 12.99 50.77

% to Net

Commit

ments

Table XX - Net Commitments and Cumulative Availments of 87 Loans with Undrawn Balance by

Implementing Agency (in million)

% to

Total

Undrawn BalancesSector/

Implementing

Agency

Net Commitments Cumulative Availments

22

3.4 Repayments – P372.56 billion (US$8.33 billion)

As of December 31, 2014, cumulative repayments to principal loans reached P372.56 billion (US$8.33 billion), which is equivalent to 34.51 percent of the total cumulative availments. This is relatively higher by 1.90 percent compared to 2013 repayment in relation to availments of only 32.61 percent. Of this amount, P41.75 billion (US$0.93 billion) or 11.21 percent represent repayment during the year. Comparative figures are presented in Table XXI.

3.4.1 By Creditor

The details of repayments to creditors are shown in Table XXII.


LoansUSD PHP

5 DA 610.48 27,312.99 99.23 4,439.73 4 511.25 22,873.26 7.45 83.74

6 DOE 429.28 19,205.76 25.20 1,127.43 3 404.08 18,078.34 5.89 94.13

7 DepEd 300.00 13,422.00 0.75 33.56 1 299.25 13,388.45 4.36 99.75

8 DAR 582.06 26,041.53 328.03 14,675.92 7 254.04 11,365.61 3.70 43.64

9 DENR 234.53 10,493.00 32.10 1,436.09 5 202.43 9,056.91 2.95 86.31

10 DOH 25.00 1,118.68 21.73 972.02 2 3.28 146.66 0.05 13.11

11 TESDA 7.00 313.18 6.24 279.06 1 0.76 34.12 0.01 10.90

12 DTI 17.89 800.52 17.42 779.59 1 0.47 20.94 0.01 2.62

13 DILG 87.24 3,902.96 87.23 3,902.47 1 0.01 0.49 0.00 0.01

1,646.42 73,660.73 759.64 33,986.33 18 886.78 39,674.40 12.92 53.86

1 LBP 525.88 23,527.72 178.91 8,004.28 5 346.97 15,523.43 5.06 65.98

2 NIA 417.16 18,663.64 133.47 5,971.66 4 283.68 12,691.98 4.13 68.00

3 DBP 552.57 24,721.83 309.01 13,825.07 5 243.56 10,896.76 3.55 44.08

4 LWUA 12.24 547.80 0.95 42.53 1 11.29 505.27 0.16 92.24

5 MWSS 116.60 5,216.77 115.33 5,159.88 1 1.27 56.90 0.02 1.09

6 NPC 21.97 982.97 21.97 982.91 2 0.00 0.06 0.00 0.01

% to Net

Commit

ments


GOCCs

% to

Total

Undrawn BalancesSector/

Implementing

Agency

Net Commitments Cumulative Availments

(Table XX, continued)


Cumulative Availments 24.13 1,079.53 23.29 1,034.02 0.84 45.51

Cumulative Repayments 8.33 372.56 7.60 337.23 0.73 35.33

Repayment rate (%) 34.51 32.61 1.90

Table XXI - Comparative Repayments in relation to Availments

Particulars

Amount (in billion)

2014 2013Increase/ (decrease)

USD PHP USD PHP

Total Repayment 8,327.13 372,556.01 100.00 933.15 41,749.17 100.00

Bilateral 3,717.34 166,313.95 44.64 430.31 19,252.12 46.11

1 JBIC 2,660.80 119,043.99 31.97 333.36 14,914.48 35.72

2 ECGD 486.99 21,787.95 5.85 7.93 354.94 0.85

3 BNP Paribas 78.80 3,525.41 0.95 38.39 1,717.40 4.11

4 KFW 87.06 3,895.25 1.05 8.42 376.49 0.90

% to

Total

Table XXII - Cumulative and Current Repayment by Creditor (in million)

Current RepaymentCreditor

Cumulative Repayment % to

Total

23

USD PHP USD PHP

5 US Public Laws 100.81 4,510.41 1.21 11.29 505.05 1.21

6 ICO 32.78 1,466.79 0.39 5.57 249.02 0.60

7 KEXIM 21.39 956.78 0.26 4.19 187.61 0.45

8 FP 14.00 626.28 0.17 1.64 73.16 0.18

9 ANZ/EFIC 92.56 4,141.16 1.11 9.36 418.89 1.00

10 EFIC 89.27 3,993.82 1.07 3.32 148.35 0.36

11 SIDA INEC 2.30 102.88 0.03 0.00 0.00 0.00

12 Belgian 0.11 4.81 0.00 0.11 4.81 0.01

13 JFA 2.02 90.47 0.02 0.22 10.05 0.02

14 ITALY II 9.21 412.20 0.11 0.97 43.39 0.10

15 LEONIA BANK 2.21 98.85 0.03 0.00 0.00 0.00

16 KFAED 14.73 658.81 0.18 1.26 56.28 0.13

17 FORTIS BANK 9.05 404.89 0.11 0.75 33.74 0.08

18 SFD 4.00 178.77 0.05 1.00 44.69 0.11

19 SOCIETE GEN 4.36 194.95 0.05 1.45 64.98 0.16

20 KBC BANK 4.91 219.47 0.00 1.09 48.77 0.12

Multilateral 3,619.00 161,914.16 43.46 412.61 18,459.97 44.22

1 ADB 2,468.91 110,459.13 29.67 218.72 9,785.37 23.44

2 IBRD 1,093.91 48,941.31 13.14 182.46 8,163.19 19.55

3 IFAD 11.30 505.50 0.14 2.62 117.23 0.28

4 NDF 1.22 54.48 0.01 0.27 12.11 0.03

5 EIB 26.89 1,203.11 0.32 5.44 243.41 0.58

6 OPEC 16.78 750.63 0.20 3.10 138.65 0.33

Commercial 990.79 44,327.90 11.90 90.23 4,037.08 9.67

1 CEXIM 221.60 9,914.34 2.66 58.09 2,598.73 6.22

2 BAC 81.28 3,636.44 0.98 12.26 548.29 1.31

3 BNP Paribas 96.81 4,331.34 1.16 5.98 267.56 0.64

4 RZOA 15.93 712.52 0.19 3.79 169.58 0.41

5 CHI 54.34 2,430.97 0.65 3.12 139.79 0.33

6 ERSTE (Austria) 2.73 121.97 0.03 1.82 81.31 0.19

7 ECGD 137.56 6,154.64 1.65 - - -

8 EDC 122.18 5,466.29 1.47 - - -

9 SOCIETE GEN 12.47 558.13 0.15 - - -

10 ING Bank N.V.

(Netherlands)

14.02 627.24 0.17 1.75 78.40 0.19

11 Bancaja (SMCF-

Spain)

7.01 313.82 0.08 - - -

12 FORTIS BANK 5.55 248.53 0.07 0.80 35.81 0.09

13 Banco Bilbao Vizcaya 52.13 2,332.34 0.63 - - -

14 Credit Com'l de

France

30.04 1,344.15 0.36 - - -

15 FP 30.88 1,381.37 0.37 1.28 57.44 0.14

16 NDF 12.72 568.93 0.15 1.34 60.16 0.14

17 EFIC 14.08 629.84 0.17 - - -

18 ANZ/EFIC 22.18 992.44 0.27 - - -

19 Banco

Santander(SMCF-

25.73 1,151.19 0.31 - - -

20 SIDA 6.19 277.11 0.07 - - -

21 Bank of America 25.35 1,134.32 0.00 - - -

% to

Total

Current RepaymentCreditor

Cumulative Repayment % to

Total

(Table XXII, continued)

24


Of the cumulative and current year repayments, 58.31 percent and 53.98 percent, respectively, were paid for the loans falling under the infrastructure sector accounts as presented in Table XXIII.

3.4.3 By implementing Agency

Repayments by NGAs accounts for 64.87 percent and 66.12 percent of cumulative

and current year repayments, respectively, as presented in Table XXIV.

USD PHP USD PHP

Total Repayments 8,327.13 372,556.01 100.00 933.15 41,749.17 100.00

1 Infra. 4,855.40 217,230.71 58.31 503.73 22,536.84 53.98

2 SRCD 1,407.31 62,962.98 16.90 130.53 5,839.79 13.99

3 GID 1,014.93 45,407.83 12.19 113.08 5,059.01 12.12

4 AARNR 561.83 25,136.28 6.75 110.24 4,931.93 11.81

5 ITT 487.67 21,818.22 5.86 75.58 3,381.60 8.10

Table XXIII - Cumulative and Current Year Repayment by Project Sector (in million)

Project SectorCumulative Repayments % to

Total

CY Repayments % to

Total

USD PHP USD PHP

Total 8,327.13 372,556.01 100.00 933.15 41,749.17 100.00

NGAs 5,401.96 241,683.58 64.87 616.99 27,604.34 66.12

1 DOF 1,871.05 83,710.92 22.47 216.55 9,688.61 23.21

2 DPWH 1,409.46 63,059.37 16.93 143.45 6,417.92 15.37

3 DOTC 627.88 28,091.47 7.54 35.98 1,609.64 3.86

4 DAR 247.45 11,071.11 2.97 42.96 1,921.94 4.60

5 DILG 244.35 10,932.10 2.93 11.01 492.40 1.18

6 DepEd 230.11 10,295.03 2.76 40.55 1,814.05 4.35

7 DA 216.31 9,677.69 2.60 25.57 1,143.94 2.74

8 DOE 120.77 5,403.27 1.45 24.48 1,095.19 2.62

9 DOH 103.38 4,625.30 1.24 16.57 741.19 1.78

10 DENR 65.35 2,923.82 0.78 8.76 391.93 0.94

11 SC 51.52 2,304.78 0.62 18.56 830.30 1.99

12 BFAR 48.53 2,171.15 0.58 1.76 78.86 0.19

13 BOC 40.80 1,825.58 0.49 12.89 576.54 1.38

14 DSWD 36.25 1,621.68 0.44 8.17 365.42 0.88

15 NAMRIA 25.73 1,151.19 0.31 0.00 0.00 0.00

16 PRRC 20.21 904.41 0.24 3.57 159.87 0.38

17 DTI 11.35 507.63 0.14 1.44 64.44 0.15

18 TESDA 8.10 362.20 0.10 2.64 118.30 0.28

19 PMMA 7.74 346.07 0.09 0.99 44.52 0.11

20 UP/PGH 7.61 340.29 0.09 0.33 14.80 0.04

21 OP 5.88 263.26 0.07 0.24 10.69 0.03

22 DOT 2.13 95.27 0.03 0.53 23.81 0.06

GOCCs 2,811.86 125,802.74 33.77 310.05 13,871.59 33.23

1 PSALM 702.13 31,413.10 8.43 49.77 2,226.50 5.33

2 LBP 410.67 18,373.37 4.93 44.47 1,989.78 4.77

3 NPC 406.54 18,188.43 4.88 24.67 1,103.69 2.64

% to

Total

Table XXIV - Cumulative and Current Year Repayments by Implementing Agency (in million)

Implementing AgencyCurrent RepaymentCummulative Repayment % to

Total

25

3.5 Debt Service Expenditures – P56.11 billion

Total debt service for the year amounted to P56.11 which is relatively lower by 41.03 percent when compared to debt service expenditures in 2013 as shown in Table XXV.

3.5.1 By creditor

Of the total debt service expenditures, P28.92 billion, equivalent to 51.54 percent represent payments to bilateral creditors with the biggest payments made to JBIC in the amount of P20.15 billion representing 35.90 percent of the total debt service as presented in Table XXVI.

USD PHP USD PHP

4 DBP 248.86 11,133.92 2.99 43.39 1,941.09 4.65

5 LRTA 220.61 9,870.03 2.65 29.40 1,315.31 3.15

6 NLRC 180.79 8,088.76 2.17 45.20 2,022.19 4.84

7 PPA 153.13 6,851.03 1.84 15.22 681.00 1.63

8 NIA 130.83 5,853.17 1.57 13.92 623.00 1.49

9 PNOC 87.25 3,903.48 1.05 0.00 0.00 0.00

10 MWSS 74.31 3,324.52 0.89 8.37 374.62 0.90

11 BCDA 55.38 2,477.82 0.67 15.82 707.93 1.70

12 LWUA 48.59 2,173.70 0.58 4.43 198.18 0.47

13 SBMA 42.86 1,917.48 0.51 6.65 297.62 0.71

14 NFA 14.83 663.64 0.18 1.16 51.99 0.12

15 PHIVIDEC 11.25 503.23 0.14 2.25 100.64 0.24

16 SBGFC 8.17 365.47 0.10 1.90 85.01 0.20

17 PNR 7.67 343.14 0.09 2.30 102.74 0.25

18 PTA 5.20 232.45 0.06 0.55 24.46 0.06

19 PEZA 1.73 77.52 0.02 0.22 9.69 0.02

20 LLDA 1.08 48.48 0.01 0.36 16.16 0.04

LGUs 113.31 5,069.69 1.36 6.11 273.24 0.65

1 ARMM 105.26 4,709.35 1.26 4.98 222.96 0.53

2 Provl Gov't-LDN 8.05 360.33 0.10 1.12 50.28 0.12

% to

TotalCreditor

Current RepaymentCummulative Repayment % to

Total

(Table XXIV, continued)

Amount % to Total Amount % to Total Amount % to 2013

Principal 42,849.05 76.36 80,006.50 84.09 (37,157.45) (46.44)

Interest 11,162.74 19.89 13,740.81 14.44 (2,578.07) (18.76)

Commitment Fee 201.53 0.36 203.61 0.21 (2.08) (1.02)

Guaranty Fee 1,678.64 2.99 15.08 0.02 1,663.56 11,031.56

Other Charges 220.26 0.39 1,183.04 1.24 (962.78) (81.38)

Total 56,112.22 100.00 95,149.04 100.00 (39,036.82) (41.03)

2013 Increase/ (decrease)

Table XXV - Comparative Debt Service Expenditures in CY 2013 and 2014 (in million PHP)

Particulars2014

26

GRAND TOTAL 56,112.21 100.00 42,849.05 11,162.74 201.53 1,678.64 220.26

Bilateral 28,922.18 51.54 21,860.13 5,593.60 114.79 1,329.01 24.66

1 JBIC 20,145.32 35.90 14,769.95 4,030.85 69.85 1,253.42 21.25

2 BNP Paribas 2,356.27 4.20 1,961.11 361.03 33.91 - 0.21

3 JEXIM 2,156.26 3.84 1,875.78 280.48 - - 0.00

4 USPL 1,483.58 2.64 1,084.03 397.59 - - 1.96

5 KFW 542.79 0.97 379.86 100.37 1.35 61.20 0.02

6 ECGD 445.07 0.79 411.63 33.34 - - 0.10

7 KEXIM 238.75 0.43 151.18 76.87 9.68 - 1.02

8 ANZ 237.46 0.42 234.87 2.58 - - 0.00

9 EIB 213.17 0.38 168.43 30.35 - 14.39 -

10 JFA 210.14 0.37 114.20 95.90 - - 0.04

11 ICO 183.10 0.33 162.71 20.39 - - 0.00

12 EFFIC 146.52 0.26 144.66 1.86 - - 0.00

13 AFD 128.78 0.23 - 128.78 - - 0.00

14 FP 93.32 0.17 79.37 13.94 - - 0.00

15 FORTIS BANK 77.24 0.14 77.24 - - - 0.00

16 SOCIETE GEN 76.75 0.14 72.92 3.78 - - 0.05

17 KFAED 67.50 0.12 56.99 10.52 - - 0.00

18 KBC BANK 53.58 0.10 53.58 - - - 0.00

19 Saudi Fund 45.40 0.08 44.46 0.94 - - 0.00

20 Belgian 20.58 0.04 17.15 3.43 - - 0.00

21 Artigiancassa 0.59 0.00 - 0.59 - - 0.00

Commercial 2,942.76 5.24 2,033.56 876.79 2.03 20.26 10.12

1 CEXIM 910.89 1.62 483.72 410.56 1.99 14.29 0.33

2 BAC 810.05 1.44 586.38 218.40 0.03 - 5.25

3 RZOA 314.06 0.56 184.89 129.00 - - 0.17

4 BNP PARIBAS 306.20 0.55 297.07 9.13 - - 0.00

5 CNCAM 145.81 0.26 140.55 5.27 - - 0.00

6 ERSTE

(Austria)

118.90 0.21 84.54 34.36 - - 0.00

7 ING Bank NV 89.98 0.16 87.61 2.37 - - 0.00

8 NORDIC 85.36 0.15 69.09 11.45 - 4.52 0.31

9 FP 77.44 0.14 61.66 14.32 - 1.45 0.00

10 FORTIS BANK 46.80 0.08 38.06 7.28 - - 1.46

11 BLA 34.37 0.06 - 31.77 - - 2.60

12 ICO 2.88 0.01 - 2.88 0.00 - 0.00

Multilateral 24,247.28 43.21 18,955.37 4,692.35 84.71 329.37 185.48

1 ADB 12,173.05 21.69 10,292.31 1,790.87 79.53 24.79 (14.45)

2 EIB 118.25 0.21 110.27 7.98 - - 0.00

3 IBRD 11,661.14 20.78 8,284.14 2,860.62 5.17 304.58 206.63

4 IFAD 124.62 0.22 118.59 21.24 - - (15.21)

5 NORDIC 19.17 0.03 12.67 - - - 6.50

6 OPEC 151.04 0.27 137.39 11.64 - - 2.01

0.00 - less than five thousand

% to

Total

Table XXVI - Debt Service Expenditures by Creditor

Particulars

Amount (in million pesos)

Total Principal Interest Commit-

ment Fee

Other

Charges

Guaranty

Fee

27

3.5.2 By Implementing Agency The BTr payments for loans directly used by NGAs and those relent to GOCCs

amounted to P40.47 billion of which P31.17 billion represent payment to principal while P13.26 billion or 23.24 percent represent payments for interest, commitment fees and other charges. On the other hand, GOCCs payments direct to their creditors for loans guaranteed by the NG amounted to P15.64 billion as presented in Table XXVII.

GRAND TOTAL 56,112.21 100.00 42,849.05 11,162.74 201.53 1,678.64 220.26

40,469.20 0.00 31,165.68 8,940.33 170.93 - 192.26

NG-Direct 38,554.89 68.71 29,746.60 8,449.91 170.93 - 187.44

1 DOF 12,404.57 22.11 9,389.25 2,907.29 18.75 89.28

2 DPWH 9,014.86 16.07 7,139.86 1,842.85 30.93 1.21

3 DepEd 2,636.34 4.70 1,873.69 738.74 - 23.91

4 DAR 2,607.04 4.65 2,095.87 491.39 27.67 (7.89)

5 DOTC 2,110.83 3.76 1,733.82 333.10 26.03 17.87

6 DOE 1,431.49 2.55 1,199.59 203.15 20.64 8.10

7 DA 1,400.51 2.50 1,148.80 252.20 1.94 (2.43)

8 DOH 1,142.78 2.04 843.64 296.61 0.30 2.22

9 NIA 1,076.58 1.92 765.69 321.40 3.80 (14.31)

10 SC 891.50 1.59 820.69 70.81 - 0.00

11 DSWD 767.48 1.37 364.19 316.91 23.70 62.68

12 DILG 699.13 1.25 479.81 216.16 - 3.16

13 BOC 631.74 1.13 483.72 148.02 - 0.00

14 DENR 494.08 0.88 377.62 106.63 17.09 (7.25)

15 ARMM 274.15 0.49 190.72 81.39 - 2.05

16 PPA 237.46 0.42 234.87 2.58 - 0.00

17 PRRC 178.41 0.32 163.16 15.24 - 0.00

18 TESDA 169.79 0.30 125.79 40.57 - 3.43

19 BFAR 88.19 0.16 79.51 8.51 - 0.17

20 PG-LDN 74.66 0.13 57.27 17.40 - 0.00

21 DTI 66.19 0.12 63.63 2.55 - 0.00

22 PMMA 51.81 0.09 47.29 4.52 - 0.00

23 DOT 31.36 0.06 26.04 5.32 - 0.00

24 LLDA 23.36 0.04 16.10 7.26 - 0.00

25 UP/PGH 15.41 0.03 14.57 0.83 - 0.00

26 BFP 14.51 0.03 - 9.24 0.03 5.24

27 OP 12.33 0.02 11.41 0.92 - 0.00

28 BIR 8.35 0.01 - 8.29 0.05 0.00

NG-Relent 1,914.31 3.41 1,419.08 490.42 - 4.82

1 LRTA 1,381.71 2.46 1,068.64 311.61 - 1.46

2 NFA 210.14 0.37 114.20 95.90 - 0.04

3 PHIVIDEC 145.47 0.26 115.83 29.64 - 0.00

4 LBP 129.17 0.23 113.27 15.18 - 0.71

5 NLRC 34.37 0.06 - 31.77 - 2.60

6 SBGFC 6.14 0.01 - 6.14 - 0.00

7 MWSS 7.30 0.01 7.14 0.17 - - 0.00

Table XXVII - Debt Service Expenditures by Implementing Agencies

Particulars


Total % to

TotalPrincipal Interest

Commit-

ment Fee

Guaranty

Fee

Other

Charges

Paid by BTr

28


Of the total debt service expenditures for the year, 47.92 percent were payments for

loans availed by the infrastructure sector as presented in Table XXVIII

15,643.02 0.00 11,683.37 2,222.41 30.60 1,678.64 28.00

NG-Guaranteed 15,643.02 27.88 11,683.37 2,222.41 30.60 1,678.64 28.00

1 PSALM 4,210.42 7.50 3,695.45 53.46 - 461.51 -

2 DBP 3,634.12 6.48 2,409.47 658.96 12.29 550.63 2.77

3 LBP 2,579.26 4.60 2,057.48 276.11 5.17 238.92 1.58

4 BCDA 1,270.52 2.26 833.38 217.02 - 219.81 0.31

5 NFA 936.49 1.67 620.26 316.23 - - 0.00

6 MWSS 680.33 1.21 366.67 295.77 0.75 17.13 0.00

7 LRTA 645.99 1.15 440.44 136.59 - 51.86 17.10

8 PTA 470.00 0.84 329.65 62.19 - 76.20 1.96

9 PPA 423.73 0.76 299.19 68.06 - 56.47 -

10 LWUA 276.10 0.49 215.61 59.14 1.35 - -

11 SBGFC 240.08 0.43 228.89 11.19 - - 0.00

12 PNR 154.24 0.27 102.90 41.66 9.68 - 0.00

13 NPC 66.72 0.12 44.92 14.66 - 2.86 4.28

14 PTA 40.66 0.07 29.18 8.24 - 3.24 -

15 PEZA 14.35 0.03 9.87 3.14 1.35 - -

Particulars


Total % to


Commit-

ment Fee

Guaranty

Fee

Other

Charges

(Table XXVII, continued)


Paid by GOCCs

1 Infra. 26,888.05 47.92 21,100.76 4,469.57 127.33 1,135.14 55.25

2 GID 8,770.81 15.63 6,690.07 2,079.62 0.05 0.00 1.07

3 AARNR 7,860.95 14.01 5,971.02 1,744.12 27.20 144.21 (25.61)

4 SRCD 7,831.54 13.96 5,186.86 2,366.79 42.79 47.36 187.74

5 ITT 4,760.85 8.48 3,900.33 502.63 4.16 351.92 1.81

Total 56,112.21 100.00 42,849.05 11,162.74 201.53 1,678.64 220.26

76.36 19.89 0.36 2.99 0.39


% to Total

Table XXVIII - Debt Service Expenditures by Project Sector

Particulars


Total % to


Commit-

ment Fee

Guaranty

Fee

Other

Charges

29

3.6 Outstanding Balance – P706.98 billion (US$15.80 billion)

As of December 31, 2014, ODA loans has an outstanding balance of P706.98 billion (US$15.80 billion) which is higher by P10.19 billion (US$0.11 billion) compared with last year’s balance of P696.79 billion (US$15.69 billion). The increase was due to adjustments, revalua-tion of foreign currency, and current year transactions (avail-ments and repay-ments). The details are shown in Table XXIX.

3.6.1 By Type of Creditor Chart VI – Outstanding Balance by Creditor Type (in billion peso)

ODA loans with biggest outstanding balances were due to Multilateral creditors at 51.96 percent, followed by Bilateral creditors at 44.35 percent, and Commercial creditors at 3.69 percent.

The outstanding balances to lenders by types of creditors are presented in Table XXX.

US$ PHP % to

Total US$ PHP

% to

Total US$ PHP

% to

Total

1 JBIC 5.794 259.217 82.67 1 ADB 4.238 189.593 51.61 1 CEXIM 0.357 15.957 61.18

2 AFD 0.312 13.978 4.46 2 IBRD 3.838 171.694 46.74 2 BAC 0.129 5.773 22.13

3 BNP 0.274 12.267 3.91 3 IFAD 0.083 3.731 1.02 3 RZOA 0.031 1.385 5.31

4 KFW 0.188 8.420 2.69 4 EIB 0.024 1.089 0.30 4 ERSTE 0.019 0.854 3.27

5 USPL 0.133 5.964 1.90 5 OPEC 0.015 0.682 0.19 5 ICO 0.019 0.844 3.24

6 KEXIM 0.127 5.697 1.82 6 NDF 0.012 0.551 0.15 6 NDF 0.008 0.359 1.38

7 ICO 0.085 3.779 1.21 7 FP 0.007 0.306 1.17

8 FP 0.030 1.338 0.43 8 BNP 0.006 0.272 1.04

9 ECGD 0.021 0.932 0.30 9 ING Bank 0.003 0.157 0.60

10 SOCGEN 0.010 0.455 0.15 10 FORTIS 0.002 0.107 0.41

11 KBC 0.009 0.390 0.12 11 CHI 0.002 0.070 0.27

12 Artigiancassa0.008 0.354 0.11

13 Belgian 0.008 0.334 0.11

14 KFAED 0.005 0.225 0.07

15 JFA 0.002 0.111 0.04

16 FORTIS 0.001 0.051 0.02

17 ITALY II 0.001 0.022 0.01

18 SFD 0.001 0.016 0.01

7.008 313.550 100.00 8.210 367.340 100.00 0.583 26.084 100.00

Table XXX - Outstanding Balances by Specific Creditor (in billion)

Total

Multilateral

Creditor

Bilateral

Total

Creditor

Commercial

Creditor

Total

30


The Project Sector with the highest outstanding balances is the infrastructure

sector while the Industry, Trade and Tourism (ITT) sector has the lowest outstanding balances as graphically presented in Chart VII.

Chart VII – Number of Loans and Outstanding Balance by Sector

The difference between the totals and the sum of the components is due to rounding off

The first five loans under each project sector with big outstanding balances is

presented in Table XXXI.

US$ PHP

15,801.87 706,975.50 100.00

5,465.66 244,533.41 34.59

1 JBIC PH-P226Subic-Clark-Tarlac Expressw ay

ProjectBCDA JBIC 427.23 19,114.05 2.70

2 ADB2282 PHIPow er Sector Development

Program ClusterDOF ADB 322.79 14,441.40 2.04

Table XXXI - Five Loans under each Project Sector with big Outstanding Balances (in million)

Loan Account

NumberName of Project IA Creditor

Amount % to

Total

Infrastructure

Total Outstanding Balance

31

US$ PHP

3 JBIC-PSRPow er Sector Restructuring

ProgramDOF JBIC 168.51 7,539.15 1.07

4

BNP

PARIBAS

JPY33.9B

Tulay ng Pangulo para sa

Kaunlarang Pang-AgraryoDAR

BNP

PARIBAS151.18 6,763.99 0.96

5 JBIC PH-P211 LRT Line I Capacity Expansion

Project, Phase IILRTA JBIC 142.55 6,377.82 0.90

2,645.03 118,338.86 16.74

1 ADB2840-PHI DOF ADB 300.00 13,422.00 1.90

2 ADB2489 PHI SC ADB 254.15 11,370.51 1.61

3 IBRD 7424 PHFirst Development Policy Loan

ProgramDOF IBRD 250.00 11,185.00 1.58

3IBRD 7913-

PH

Food Crisis Response Development

Policy Operation: Supplemental

Support for Post-typhoon Recovery

DepEd IBRD 250.00 11,185.00 1.58

4 ADB2450 PHI DOF ADB 228.20 10,209.84 1.44

5 ADB2545 PHI DOF ADB 225.79 10,101.71 1.43

2,010.69 89,958.43 12.72

1

JBIC PH-CL

020 (POLICY

LOAN)

MM Air Quality Improvement Sector

Development ProgramDOF JBIC 242.05 10,829.25 1.53

2 IBRD 7615 PHFood Crisis Response Development

PolicyDOF IBRD 200.00 8,948.00 1.27

3 JBIC PH-P199Environmental Infrastructure

Support Credit Program, Phase IIDBP 139.68 6,249.31 0.88

4 CHI-6Agno River Integrated Irrigation

ProjectNIA 88.84 3,974.84 0.56

5 JBIC PH-P242Agrarian Reform Infrastructure

Support Project, Phase IIIDAR 84.64 3,786.93 0.54

4,774.16 213,595.81 30.21

1 8085-PH Disaster Risk Mgmt. Dev. w ith CAT DOF 500.00 22,370.00 3.16

2IBRD 7805-

PH

Social Welfare and Development

Reform ProjectDSWD 369.15 16,515.92 2.34

3 2872-PHIIncreasing Competitiveness for

Inclusive Grow th- Subprogram 1DOF 350.00 15,659.00 2.21

4 ADB2662 PHI Social Protection Support Project DSWD 324.66 14,525.18 2.05

5 8238-PHSecond Development Policy Loan to

Foster More Inclusive Grow thDOF IBRD 300.00 13,422.00 1.90

5 3080-PHI

Emergency Assistance for Relief

and Recovery from Typhoon

Yolanda

DOF ADB 300.00 13,422.00 1.90

906.33 40,548.99 5.74

1 JBIC PH-P198Industrial Support Services

Expansion Program, Phase IIDBP JBIC 239.91 10,733.75 1.52

2 ADB2278 PHIFinancial Market Regulation &

Intermediation Program ClusterDOF ADB 143.46 6,418.40 0.91

3 JBIC PH-P189Domestic Shipping Modernization

Program, Phase IIDBP JBIC 110.24 4,932.03 0.70

4 ADB2199 PHI Microfinance Development Program DOF ADB 106.68 4,772.86 0.68

5 JBIC PH-P157Metro Cebu Dev. Proj. III (Cebu

South Reclamation)LBP JBIC 54.75 2,449.52 0.35

JBIC

IBRD

ADB

Industry, Trade and Tourism

Loan Account

NumberName of Project IA Creditor

Amount % to

Total

(Table XXXI, continued)

Governance and Institution Development

Agriculture, Agrarian Reform and Natural Resources

Social Reform & Community Development

Governance in Justice Sector

Reform Program

Development Policy Support

Program Cluster

32

3.6.3 By Government Sector

The loan balances by government sector with the NGAs having the highest outstanding balance is shown in Table XXXII.

3.6.4 By Implementing Agencies

The agencies with significant loan balances are presented in Table XXXIII.

US$ PHP

293 0 293 12,390.91 554,369.53 78.41

22 13 90 125 3,320.58 148,562.76 21.01

7 0 7 90.37 4,043.21 0.57

322 13 90 425 15,801.86 706,975.50 100.00

PhP 574,106.70 21,250.70 111,618.09 706,975.50

US$ 12,832.07 474.98 2,494.82 15,801.87


Table XXXII - Outstanding Balances by Government Sector (in million)

NGAs

GOCCs

LGUs

Total

Amount

in Million

% to

TotalNG Direct

NG

Guaranteed

Total No.

of Loans

Amount

(in million)NG- Relent

loans

Implementing

Agency


706,975.50 100.00

12,390.91 554,369.53 78.41 3,320.58 148,562.76 21.01 90.37 4,043.20 0.57

1 DOF 6,019.57 269,315.49 38.09 1 DBP 969.75 43,386.74 6.14 1 ARMM 72.96 3,264.01 0.46

2 DPWH 2,138.35 95,669.69 13.53 2 LRTA 471.09 21,076.59 2.98 2 PGLDN 17.42 779.19 0.11

3 DSWD 982.98 43,978.75 6.22 3 LBP 444.44 19,884.31 2.81

4 DepEd 725.57 32,462.18 4.59 4 BCDA 427.23 19,114.05 2.70

5 DAR 560.10 25,058.79 3.54 5 NIA 345.07 15,438.28 2.18

Grand Total 15,801.87

Table XXXIII - Agencies with Significant Loan Balances (in million)


IA

Amount

(in million)% to

Total

LGUs

IA

Amount

(in million)% to

Total

GOCCsNGAs

IA

Amount

(in million)% to

Total

4.0 AUDIT OBSERVATIONS

AND

RECOMMENDATIONS

34

4.0 Audit Observations and Recommendations

As of 2014, a total of 419 (net of cancelled loans) ODA loans were extended to 24

National Government Agencies, 20 Government Owned and Controlled Corporations, and 2 Local Government Units (Table XIII) for the implementation of 301 projects and 45 programs. Of the total projects and programs, 280 were completed, 57 on-going, while 9 were not yet implemented.

As at year end, 11 loans have no availments yet, 72 were fully paid while 336 loans

have outstanding balances of ₱706.98 billion (US$15.80 billion) under the five sectors (Chart VI) namely:

1. Infrastructure - with the highest outstanding balance of ₱244.533 billion from 154

loan accounts. 2. Social Reform and Community Development – with total outstanding balance of

₱213.596 billion from 65 loan accounts. 3. Governance and Institution Development - with total outstanding balance of

₱118.339 billion from 18 loan accounts. 4. Agriculture, Agrarian Reform and Natural Resources – with total outstanding

balance of ₱89.958 billion from 79 loan accounts. 5. Industry, Trade and Tourism –with outstanding balance of ₱40.549 billion from

20 loan accounts. Audit observations and issues were noted on fund utilization and project

implementation by 18 implementing departments/agencies which are included in the Annual Audit Reports of the concerned agency and summarized herein categorized as:

4.1 Agency- specific Observations and Recommendations - presented on pages 34 to

68 by department/agency. 4.2 Common Audit Observations - grouped by issues presented on pages 68 to 71.

35

Source: http://www.dilg.gov.ph/

The Department is primary catalyst for excellence in local governance that nurtures self-reliant,

progressive, orderly, safe and globally competitive communities sustained by God-centered and

empowered citizenry.

The Department shall promote peace and order, ensure public safety, strengthen capability of local

government units through active people participation and a professionalized corps of civil servants.

Powers and Functions:

Assist the President in the exercise of general supervision over local governments;

Advise the President in the promulgation of policies, rules, regulations and other issuances on the general supervision over local governments and on public order and safety;

Establish and prescribe rules, regulations and other issuances implementing laws on public order and safety, the general supervision over local governments, the promotion of local autonomy and community empowerment and monitor compliance thereof;

Provide assistance towards legislation regarding local governments, law enforcement and public safety;

Establish and prescribe plans, policies, programs and projects to promote peace and order, ensure public safety and further strengthen the administrative, technical and fiscal capabilities of local government offices and personnel;

Formulate plans, policies and programs which will meet local emergencies arising from natural and man-made disasters;

Establish a system of coordination and cooperation among the citizenry, local executives and the Department, to ensure effective and efficient delivery of basic services to the public;

Organize, train and equip primarily for the performance of police functions, a police force that is national in scope and civilian in character.

4.1.1

36

DILG is the recipient of nine ODA loans under the Infrastructure sector with Cumulative

Net Loan Commitments of ₱14.90 billion (US$0.33 billion). The loans were intended for the

implementation of eight infrastructure projects, all of which were reported completed as of

December 31, 2014.

Table XXXIV - Project Status and Summary of Loans Profile (Amount in Million)

Audit of Emergency Network Project (ENP), one of the completed project, resulted in a number of deficiencies.

Table XXXV - Project Loan with Audit Observations (Amounts in Million)

AUDIT OBSERVATIONS and RECOMMENDATIONS

Audit Observations Recommendations

Project Performance Evaluation

The ₱1.3 billion worth of ENP equipment acquired out of loans secured in 2000 with outstanding loan balance of ₱1.07 billion (US$23.99 million) as of December 31, 2014 was prematurely abandoned. The equipment booked at the Central Office with a balance of ₱321.045 million was allegedly disposed thru public bidding in the amount of ₱195,880.00 while equipment valued at ₱637.841 million in the books of the Regional Offices are either idle or obsolete or unserviceable or destroyed. Apparently, the project was not maintained and its operation not sustained. The status of equipment in the Regional Offices follows: Region Status

I

IT equipment worth ₱62.758 million remained idle for years and kept in the storage area. Reported to have been operational only from 2003 to December 2008.

II

IT equipment worth ₱30.148 million remained idle and unutilized.

III

Remains operational but at times does not generate any data report because of technical and systems problem brought about by obsolescence and outdated equipment.

IV-A

Ceased to operate in the middle of CY 2007.

IV-B

Sustainability of IT equipment worth ₱70.792 million not assured due to lack of funding support and proper monitoring on the operation and maintenance of the equipment.

Central Office to: a) Review and reassess

the reasons and causes of its failure to avoid similar situation in the future.

b) Consider imposing

sanctions on the officials who, by neglect of duty, failed to sustain the program and/or could not totally account for all IT equipment.

Regional Offices to: a) Coordinate with the

Central Office on the proper disposal of non-operational equipment.

b) Evaluate the condition of the ENP equipment and assess their

USD PHP USD PHP USD PHP USD PHP

RZOA II ENP 28.79 1,288.24 28.79 1,288.24 - - - -

CY Availments Undrawn BalanceLoan No.

Project

Name

Net Loan Cumulative

37

V Destroyed by flood in 2008.

Region Status

VI

Obsolete and unserviceable IT equipment costing ₱62.758 million was already reclassified to Other Assets account with a net book value equal to 10 percent salvage value (fully depreciated).

VII

IT equipment worth ₱78.489 million was utilized only during a three week test run in 2004 due to lack of funding support for its maintenance. The Region is just waiting advice from the Central Office on the final disposition of the unutilized equipment. Based on the 2004 distribution of the ENP equipment, DILG RO7 was allocated ₱79.081 million worth of IT equipment. However, only ₱78.489 million worth of IT equipment was received by the Region. The difference of ₱0.592 million was not yet fully accounted for. Further, various ENP equipment could not be accounted/ located during the March 2, 2015 physical inventory.

VIII

Gutted by fire in 2005.

IX

No longer operational since April 2014 due to technical problems of the computer systems and obsolescence of the server as certified by DILG Technical/Maintenance ISTMS Office.

X

IT equipment costing ₱70.792 million is fully operational

XI

IT equipment not fully operational due to obsolescence and undelivered workstation proxy server.

XII

IT equipment costing ₱78.826 million are partially operational while ₱1.359 million was unserviceable.

XIII

IT equipment costing ₱70.826 million was no longer functional and considered idle since CY 2012.

CAR

Partly operational due to obsolescence and non-replacement of unserviceable parts. The operational cost of maintaining PATROL 117 with the use of the ENP is not commensurate to the benefits derived therefrom because only 3.75 percent of the calls received are legitimate.

usefulness taking into consideration the cost of its repair and maintenance.

38

4.1.2

Source: http://www.dswd.gov.ph/

DSWD serves as the national policy and

regulatory institution for social welfare and

development pursuant to Executive Order

No. 15. As the lead agency in social welfare

and development, the Department exercises

the following functions:

Formulates policies and plans which

provide direction to intermediaries and

other implementers in the development

and delivery of social welfare and

development services;

Develops and enriches existing programs

and services for specific groups, such as

children and youth, women, family and

communities, solo parents, older persons

and Persons with Disabilities (PWDs);

Registers, licenses and accredits

individuals, agencies and organizations

engaged in social welfare and

development services, sets standards and

monitors the empowerment and

compliance to these standards;

Provides technical assistance and

capability building to intermediaries; and

Provides social protection of the poor,

vulnerable and disadvantaged sector,

DSWD also gives augmentation funds to

local government units so these could

deliver SWD services to depressed

municipalities and barangays and provide

protective services to individuals, families

and communities in crisis situation.

39

As of December 31, 2014, the Department availed seven loans to implement five projects, four of which are still on-going. Table XXXVI below, presents the status of five projects and the loan summary profile with Net Loan Commitments amounting to ₱85.49 billion (US$1.91 billion).

Table XXXVI - Project Status and Loan Summary Profile (Amounts in Million)

Audit of two on-going and one completed projects resulted in a number of deficiencies.

Table XXXVII - List of Project Loans with Audit Observations (Amounts in Million)



1. Project Implementation Evaluation

1.1 Implementation of 4Ps under the SWDRP and SPSP

needs continuous monitoring and improvement to ensure efficient fund utilization and timely delivery of assistance to rightful beneficiaries. The recurring deficiencies noted follows:

a) The balances of funds transferred to the Land Bank

of the Philippines (LBP) are accumulating manifesting either undistributed grants to beneficiaries or excessive fund transfers. Reasons for non-payment to beneficiaries included failure of active members to claim payments, payments waived or put on hold by the system, duplicate names, or system’s error or fraud. Out of ₱15.323 billion funds transferred to LBP covering eight regions for CY 2014 payment through Over the Counter (OTC) scheme-regular payout, only ₱13.725 billion was reported utilized/disbursed as of December 31, 2014 leaving undistributed balance of ₱1.598 billion.

b) The database of beneficiaries remained inaccurate.

For November to December 2014 payroll alone with corresponding amount of ₱3.54 million, 1,872 cases of double entries or duplicate household names were noted. Two cases are confirmed for delisting

Management to require: City/Municipal Link to:

a) Intensify validation of all unpaid active beneficiaries and those with deficiencies in amount and coordinate with the LBP to facilitate payments thereof.

b) Intensify prompt reporting/

monitoring of Talaarawan of the grantees to facilitate resolution of complaints and grievances and to minimize receipt of complaints or grievances.

c) Conduct regular validation and updating of the data base to delist non-compliant beneficiaries considering the provisions of 4Ps Manual of Operations and ensure that funds transferred to LBP would not exceed the requirements of beneficiaries compliant with 4Ps


TOTAL 862.29 38,578.99 751.10 33,604.39 104.52 4,676.45 111.19 4,974.60 ADB2662 PHI SPSP Ongoing 400.00 17,896.00 324.66 14,525.18 75.46 3,375.86 75.34 3,370.82 IBRD 7959-PH KC-AF Completed 57.29 2,563.29 57.29 2,563.29 - - - - IBRD 7805-PH SWDRP Ongoing 405.00 18,119.70 369.15 16,515.92 29.07 1,300.58 35.85 1,603.78


Project

Name

Project

Status

Net Loan Commitments Cumulative Availments

40


while 53 other cases, which are old duplicates, are still for further validation in Region VI.

c) Cash grants received by 417 or 9.38 percent of the 4,445 4Ps Household beneficiaries of Region VI covering pay period November to December 2014, were deficient due to delayed updating of database.

d) There were 7,613 complaints of non-receipt or

underpayment of grants filed thru the Grievance Redress System. They claimed to have submitted the required Certification of Compliance and updated information. Their requests for retroactive payments have been reportedly approved and awaiting for the scheduled retroactive payments.

e) Grants amounting to ₱32.456 million for 6,687

beneficiaries, who are not collecting their grants for three (3) to five (5) consecutive pay periods or are non-compliant with the conditionalities of the 4Ps were still deposited to the LBP resulting in accumulation of idle cash. This amount could have been used to finance other priority programs of the agency or the inclusion of other poor qualified beneficiaries to the Program. Management claimed that out of 6,687 beneficiaries who have not claimed their grants for several pay periods as of December 31, 2014, 596 are no longer for inclusion in the payroll re-uploading for the next payroll period. Their entitlement to grant may be revived depending on the resolutions of their specific cases.

f) The frequency of verification of compliance with education, health, nutrition and FDS conditionalities of 4Ps beneficiaries of six times in a year or every two months is tedious and costly considering the reported percentage of non-compliance of only three to five percent.

g) Continuous payments of ₱3.529 billion grants to

499,648 beneficiaries thru Over-the-Counter (OTC) scheme when ATM facilities are available resulted in unnecessary bank service fees estimated at ₱149.894 million, not to mention administrative costs in supervising and monitoring OTC pay-out, submitting liquidation reports, and preparing documentation requirements before and after the pay-out, such as print-out of Payrolls, Acknowledgement Receipts (ARs) and list of paid/unpaid beneficiaries.

h) As of February 27, 2015, 67 Disbursement Vouchers

(DV’s) amounting to ₱5.844 million under 4P’s remained unsubmitted to the Office of the Auditor.

conditionalities.

d) Prepare and transmit promptly to the Central Office thru the Regional Director, complete results of validation of beneficiaries with Double Entry or Duplicate 4Ps Household Beneficiaries for appropriate action.

e) Coordinate closely with the Local

Government Officials for the determination, identification and prompt reporting of 4Ps duplicate household beneficiaries in order to maintain the integrity of the data base.

Concerned DSWD Official to: a) Consider reducing the frequency

of compliance verification to save on administrative costs and prevent data integrity risks by considering the following:

1. Attendance of students

reflected in year-end school report card, in accomplishing CV-F2 for monitoring education compliance of children beneficiaries or basis for education entitlement for the ensuing year or grants.

2. A longer period than bimonthly

for accomplishing CV-F1 as HH beneficiary information do not significantly change within the year.

3. Appropriate period for

accomplishing CV-F3 and CV-F4 considering existing conditions.

b) Limit payment of grants thru OTC

in areas without available ATM facilities to save on bank service charges and other administrative costs.

c) Require the Accountant to submit

41


Likewise, Regional Accountant failed to submit Report of Checks Issued and Disbursement Vouchers covering the period November to December 2014. Thus, the correctness and validity of claims could not be determined.

the Disbursement Vouchers to COA within the period prescribed under COA Circular No. 95-006 dated May 18, 1995.

1.2 The implementation of projects under KC-AF in Regions

CAR, V and VI intended to improve the responsiveness of local governments to community needs, encourage communities to engage in development activities and deliver benefits to barangay residents through individual sub-projects was delayed as show below:

Calendar

Year Condition

2013 Sixty nine (69) sub-projects, representing 42 percent of the total sub-project in Region VI, funded by the Millenium Challenge Corporation, scheduled to be completed by March 2014 remained uncompleted as of December 2014.

2014 Out of 821 sub-projects prioritized in CY 2014, only 229 were completed as of year-end. The implementation of 157 are still on-going while construction of 247 others are yet to be started.

Management claimed that delays in project implementation are due among others, to lack of interest of contractors to engage in community sub-projects in geographically isolated barangays, effect of typhoon Ruby and delay in the request for funding of concerned community.

Management to: a) Require the KC-Regional Project

Management Office to hasten the completion of uncompleted SPs especially those with overdue completion dates; and

b) Strictly monitor the implementation of on-going projects and hasten implementation of Sub-Projects (SPs) not yet started.

1.1 The targeted percentage in CY 2014 of municipalities

covered by the KC-AF area that will provide KALAHI-CIDSS Additional Financing (AF) was not attained. Only 30 municipalities, equivalent to 38.96 percent, met the 30 percent LGU Counterpart Commitment (LCC) which is way below the 80 percent performance indicator. This may result in the non-funding of other SPs of the community and limit the number of beneficiaries who may be able to avail of the benefits due from the program.

Management to verify and look into Municipalities that did not comply with the requirements of the MOA of providing 30 percent of the costs of the project and take appropriate action to ensure sustainability and success of KC projects;

2. Financial Performance

2.1 Unreliable Balances of Financial Statement Accounts

The balances of four accounts as of December 31, 2014 cannot be relied upon due to unreconciled amounts and unrecorded reconciling items as tabulated below:

PN/LAN Account Amount (In Mil.)

Deficiency

SPSO/ Due from ₱ 1.724 Not reconciled with

Management to: a) Communicate with the PS-DBM

to demand immediate delivery of supplies covering the Certificate of Balance amounting to ₱2.932 million or equivalent to the reconciled amounts of Due from

42

Audit Observations Recommendations IBRD No. 7805 &

NGAs- PS DBM the Certificate of Balance issued by

PN/LAN Account Amount (In Mil.)

Deficiency

ADB No. 2662

PS-DBM

Cash In Bank, LCCA

20.224 Unrecorded reconciling items & non/delayed preparation of BRS

KALAHI CIDDS - AF

Cash in Bank, LCCA

4.055 Unutilized project fund returned by barangays to DSWD, not recorded in the books of DSWD

Donations 4.039 Accumulated Surplus/(Deficit)

0.016

Cash in Bank, LCCA

99.316 Cash balances of the Special Accounts of the KC-AF-LP, which expired on May 31, 2014, were not remitted to the National Treasury as prescribed in the General Appropriations Act (GAA) for FY 2014, thus, may result in the non-adjustment of the National Government borrowings. Moreover, the BTr was not properly informed on direct release by the DSWD to the creditors of the amount of ₱6.062 million.

NGAs-PS DBM;

b) Require the Accountant to regularly prepare the monthly BRS for all bank accounts to determine reconciling items and immediately prepare adjusting/ correcting entries;

c) Submit the BRS to the Auditor

within the prescribed period for review, determine the composition of the balances and take appropriate action such as returning to the National Treasury or to the source/donor agency any unutilized cash balance from completed projects or dormant bank accounts;

d) Require DSWD Field Offices to

strictly observe the submission of copies of deposit slips or transfer notices to the DSWD Central Office Accounting Office and for Central Office Accounting to regularly monitor and follow-up submission by DSWD Field Offices.

e) Furnish DOF and BTr of the LBP

bank debit memo pertaining to the return/refunds of loan proceeds with corresponding letters authorizing withdrawal and deposit of ₱6.062 million and $1.690 million to Wachovia Bank NA, New York, of IBRD;

f) Stop the practice of directly

refunding/ returning unwithdrawn loan balances to the creditors; and

g) Remit to the BTr the amount of

₱18.573 million representing balance of Cash in Bank – LCCA of KC-AF-LP which was closed on May 31, 2014.

43

The Department of

Energy (DoE) is

mandated by RA

7638 (Department of

Energy Act of 1992)

to prepare, integrate,

coordinate, supervise

and control all plans,

programs, projects

and activities of the

Government relative

to energy exploration,

development,

utilization, distribution

and conservation.

In its pursuit to

improve the quality of

life of the Filipino by

formulating and

implementing policies

and programs to

ensure sustainable,

stable, secure,

sufficient, and

accessible energy,

commits to render

efficient service with

utmost integrity and

professionalism.

Reference: http://www.phileep.org/

One of the key objectives of the Philippines Energy Efficiency Project (PEEP) is the demonstration of the societal benefits of implementation of a series of energy efficiency projects in the commercial, residential and public sectors. In addition it addresses a key public health issue of residual mercury that is likely to increase through the implementation of EE projects.

Source: http://www.phileep.org/

4.1.3

44

The DOE availed four loans for the implementation of two projects under the Infrastructure

Sector with Net Loan Commitments totaling ₱32.13 billion (US$429.28 million). The status of

four projects as well as the loan summary profile is shown in Table XXXVIII.

Table XXXVIII - Project Status and Loan Summary Profile (Amount in Million)

Audit of one completed and one on-going projects resulted in a number of deficiencies.

Table XXXIX- List of Projects with Audit Observations (Amounts in Million)




1.1 The attainment of the objectives of E-trike projects may

be adversely affected by delay in project implementation and absence of criteria for monitoring accomplishments vis-à-vis financial utilization as shown below:

a) The implementation of the project was delayed by 15

months which may result in late delivery of services. Moreover, on account of slowed down availments of loan proceeds, the project already incurred interests, commitment charges and management fees, amounting to ₱28.394 million (USD 0.64 million) as of December 2014.

b) The effectiveness of financial utilization which is

almost 0.94 percent of the loan proceeds as of year-end cannot be assessed due to the absence of pre-assigned weights and percentage of project work activities.

The E-trike Project Mangement Unit (PMU) to: a) Hasten/expedite the

procurement process and strictly observe the timelines/period of implementation to avoid incurrence of additional interests, commitment charges and management costs.

b) Assign weights and percentages for each expected output to enable effective assessment of the project’s physical delivery rate in relation to financial utilization or actual expenditures.

1.2 The attainment of the objectives of PEEP, a project

completed on December 31, 2013 with project costing

The executing agency to:


TOTAL 429.28 19,205.76 25.20 1,127.43 1.85 82.98 404.08 18,078.34

ADB2507 PHI PEEP Completed 29.28 1,309.76 24.54 1,097.96 1.20 53.52 4.73 211.80

2964-PHI 100.00 4,474.00 - - - - 100.00 4,474.00

8261-PHI 300.00 13,422.00 0.66 29.46 0.66 29.46 299.34 13,392.54 E-Trike Ongoing

Net Loan

Commitments

Cumulative

AvailmentsCY Availments Undrawn Balance

Loan No.Project

Name

Project

Status

45


₱2.116 billion, of reducing the cost of power generation and adopting energy saving measures cannot be effectively and objectively assessed due to:

a) Inadequate monitoring mechanisms and non-

submission of reports in the reduction of energy consumption by most Project Proponents/Partners.

b) The project partners, District and Party List

Representatives, Department of Social Welfare and Development and the Province of Leyte, under Component 1.2 National Residential Lighting Program with allocation of ₱604.04 million did not submit the required CFL Distribution Monitoring Forms. In effect, a total of 2.042 milion pieces of CFLs, costing ₱168.720 million could not be accounted for. There is therefore no assurance of any energy savings generated from the usage of such CFLs.

a) Require project proponents and partners, to submit reports on the actual energy consumption and savings in electricity to determine if the objectives of the project were attained; and

b) Require project partners to submit all CFL Distribution Monitoring Forms to account for the 2.042 million CFLs.


Disbursements of project funds amounting to ₱46.185 million for the retrofitting of Lighting System at Burnham and Wright Parks, Baguio City: street lighting and LED traffic lights in Cagayan de Oro City; and supply, delivery, installation and commissioning of LED traffic/signal/pedestrian lights for traffic lighting retrofitting at 159 intersections in Metro Manila were not supported with adequate documentation.

Submit immediately the documents and requirements for review and evaluation of the contracts by the COA Technical Audit Specialists.

46

4.1.4

Source: http://www.nia.gov.ph/

47

NIA availed 13 loans to finance the construction of 12 irrigation projects, seven of which

were reportedly completed as of December 31, 2014. The status of the 12 projects and the

summary of loans profile are shown in Table XXXX.

Table XXXX - Project Status and Summary of Loans Profile (Amounts in Million)

Audit of four on-going and two completed projects resulted in a number of deficiencies.

Table XXXXI - List of Project Loans with Audit Observations (Amounts in Million)




1.1 Deficiencies on contracting and/or procurement

Procurement of 66 vehicles was not compliant

with AO No. 233, as amended by AO No. 15 dated May 25, 2011, Implementing Rules and Regulations of R.A 9184 and GPPB Manual of Procedures for procurement of goods:

PN/LAN No. of units

Deficiency

NISRIP/ JBIC PH

P254

16 a) No approval by the Secretary of DA and recommendation by DBM;

b) Allowed bidder w/ the lowest calculated bid (LCB) to withdraw its bid proposal without imposing penalty;

c) Incurred delay, procurement process completed in 314 days, which is 190 days beyond the period prescribed in the revised IRR of RA No. 9184

d) No post evaluation/qualification of the bidder with LCB.

Management to: a) Comply with AO No. 15 and secure

approval/authority to purchase motor vehicles from the DA and the recommendation from DBM;

b) Ensure compliance with the Revised IRR of RA No. 9184 and the Manual of Procedures and require the Bids and Award Committee (BAC) to complete procurement activities within the prescribed time including issuance of BAC resolution/s or minutes of meeting or decisions on issues on procurement;

c) Conduct investigation to determine the

causes and the persons liable for the non-issuance of post qualification/evaluation report for the bidder with the LCD and non-completion of bid evaluation within seven days from the opening of the bids;


TOTAL 324.37 14,512.71 242.13 10,832.84 25.72 1,150.80 82.25 3,679.88 ADB1668 PHI SPISP Completed 50.00 2,237.60 50.01 2,237.60 - - - - CHI-1 BPIP Completed 30.91 1,383.03 30.91 1,383.03 - - - - CHI-6 ARIIP Ongoing 89.15 3,988.74 88.84 3,974.84 13.27 593.75 0.31 13.90 IBRD 7709 PH PIDP Ongoing 70.36 3,147.91 36.66 1,640.18 10.52 470.71 33.70 1,507.73 JBIC PH-P221 HCAAP Ongoing 32.58 1,457.67 32.58 1,457.67 - - - - JBIC PH-P254 NISRIP Ongoing 51.36 2,297.77 3.12 139.52 1.93 86.34 48.24 2,158.25

CY Availments Undrawn BalanceLoan No. Project Name Project Status

Net Loan Cumulative

48


PN/LAN No. of units

Deficiency

PIDP/ IBRD

7709 PH

17 No evaluation and recommendation from the DBM as required under AO No. 15

NISRIP/ JBIC PH-P254

16 Determination of ABC not compliant with the Manual resulting in ABC higher by 25 per cent to 87 per cent than the price quoted by the winning bidders. Moreover, price of hydraulic excavator is 24 per cent higher than the contract price of the same item recently acquired by NIA for Participatory Irrigation Development Project (PIDP – IBRD 7709 PH).

PIDP/ IBRD 7709 PH

17 Determination of ABC or Estimated Project Cost not compliant with Manual resulting in higher acquisition cost compared to current prevailing price or a total difference of ₱323,000.00. Volume discount not also availed by Management.

d) Collect from the bidder with LCB the amount of penalty for changing the bid proposal after its bid was declared as the LCB as required under the GPPB Guidelines on the use of Bid Securing Declaration;

e) Exercise due prudence required of a

government official in the determination of ABC by conducting comprehensive survey of the current market price taking into consideration volume discounts that could be availed of to come up with reasonable ABC;

f) Submit the details of the computation of

the ABC of Contract No. NISRIPD-S-1 with complete supporting documents; and

g) Conduct investigation to determine the

cause/s and the person/s liable for awarding the contract that was disadvantageous to the government.

1.2 Delayed project implementation

1.2.1 Implementation of three projects were

delayed, either due to delayed procurement process, bad weather condition and late provision of drawings and designs.

PN/LAN Reason for the delay/non-

completion Amount (In Bil.)

ARIIP/ CHI-6

Failure of NIA to timely provide construction drawings and designs, unworkable site conditions and variation order.

₱ 0.265

PIDP/ IBRD 7709

PH

Failure of the Contractor to observe contract period and lack of monitoring by project officials.

0.032

1.740

HCAAP/ JBIC PHP

P221

Prolonged procurement process and bad weather conditions.

0.576

Negative slippages at 49.97 per cent and 53.06 per cent as of December 31, 2014 of two contracts scheduled to be completed on September 30, 2014.

TOTAL ₱ 2.613

Management to: a) Ensure complete and accurate feasibility

studies and design to avoid delay due to additional works/variation orders in the implementation of future irrigation projects;

b) Ensure that the Contractor strictly observe the contract period as stipulated in the Contract and Notice to Proceed and pursuant to Section 8.4 of Annex E of Republic Act (RA) No. 9184;

c) Require the Regional Office Engineering

and Operations Division key personnel to closely monitor the project implementation to immediately address any problem, thus ensuring the timely completion of the project or that project is on schedule.

d) Enforce liquidated damages for the

projects which are not completed within the targeted date of completion without valid reasons.

49


1.2.2 The non-completion of ARIIP within the loan expiration date of December 31, 2013 even resulted in outstanding payable in the amount of US$7.333 million or ₱327.181 million which remained unfunded as of December 31, 2014.

e) Consider rescinding the contracts of contractors with negative slippages and forfeiture of their performance security.

f) Request funding from DBM for projects

validated to be in accordance with plans and specifications and acceptable to the end users.

1.3 Delayed project turn-over

Completed projects under ARIIP were not immediately turned-over to the concerned NIA field office for operation, maintenance and protection, thus, exposing these assets to natural elements and possible pilferages which may result in wastage/loss of government funds.

Management to coordinate with NIA Regional Office No. I and the Construction Management Department of NIA - Central Office for the conduct of an inventory of facilities and equipment pursuant to NIA Memorandum Circular No. 43, s 2009 and formal turnover of the project to NIA Regional Office No. I.


2.1 Unreliable balances of Financial Statements Accounts

2.1.1 The balances of PPE account as of December

31, 2014 cannot be relied upon due to non-recording of completed projects:

PN/LAN Deficiency Amount

(In billion)

ARIIP/ CHI-6 CIP account not yet closed to the proper PPE account despite completion of project.

Not reported BPIP/CHI-1 ₱ 1.904 SPISP/ ADB

1668 PHI 3.015

TOTAL ₱ 4.919

Management to comply with Section 41, Volume I, MGAS and NIA Memorandum Circular No. 44 dated July 20, 2007 and transfer the cost of completed projects to proper PPE accounts.

2.1.2 The balance of Cash in Bank-LCCA-FO account under PIDP of ₱4.267 million as of December 31, 2014 cannot be ascertained due to late preparation of Bank Reconciliation Statements.

The Chief Accountant to implement measures that will enable the Irrigation Management Office (IMO) designated accountants to prepare and submit BRS on time, for review evaluation and adjustments as warranted, of the reported CIB-LCCA-FO account balance to ensure the accuracy and reliability of the reported balance in the financial statements.

3. Non-compliance with existing regulations

Rules and regulations on remittance of taxes withheld and liquidation of cash advances within the prescribed period were apparently not adhered to under SPISP as discussed below:

Management to: a.) Analyze the account balances to

determine completeness and accuracy of the recorded Tax

50


a) Taxes withheld and statutory contributions accumulated under account Due to Bureau of Internal Revenue (BIR) with a balance of ₱9.897 million as of December 31, 2014.

b) Unliquidated cash advances recorded under Due

from Officers and Employees account as of December 31, 2014 amounted to ₱1.614 million.

Remittance Advice (TRA) and statutory contributions, particularly, the carry forward balances from previous years and unremitted taxes withheld;

b.) Make necessary adjustments in the books and take appropriate actions on unremitted taxes; and

c.) Require concerned officers and

employees of the Regions to immediately liquidate their outstanding cash advances, otherwise withhold their salaries as prescribed under COA Circular No. 97-002. Send demand letters to officers and employees who are no longer in the service, to settle their unliquidated cash advances.

4. Incomplete/inadequate documentation or supporting documents

Transactions were approved, paid and recorded in the books and submitted to the Auditor’s Office without complete documentation.

PN/LAN Deficiency Amount (In Mil.)

PIDP/ IBRD

7709 PH

Equipment transferred to NIA Regional Office XI by NIA Central Office was recorded despite lack of supporting documents.

₱ 1.325

Expenses for trainings conducted not supported with documents.

2.102

Supporting documents of infrastructure contracts including basis for time extensions not submitted to COA.

65.458

TOTAL ₱ 68.890

Management to: a) Ensure strict compliance with COA

rules and regulations on the submission to the Audit Team of copy of perfected contracts duly supported with documents, plans and drawings including documents supporting time extension; and

b) Process only claims with complete documentation.

51

The Department of Public Works and Highways (DPWH) is one of the three departments of the government undertaking major infrastructure projects. The DPWH is mandated to undertake (a) planning of infrastructure, such as national roads and bridges, flood control, water resources projects and other public works, and (b) design, construction, and maintenance of national roads and bridges, and major flood control systems.

The DPWH function as the engineering and construction arm of the Government tasked to continuously develop its technology for the purpose of ensuring the safety of all infrastructure facilities and securing for all public works and highways the highest efficiency and quality in construction.

Source: www.dpwh.gov.ph

4.1.5

52

The DPWH is the recipient of the biggest ODA loans under the Infrastructure Sector with

cumulative net loan commitments of ₱216.39 billion (US$ 4.84 billion). It availed 79 loans for

the implementation of 66 projects, 51 of which were reported completed as of December 31,

2014. Table XXXXII below, presents the status of the 66 projects as well as the loan summary

profile as of December 31, 2014.

Table XXXXII- Project Status and Loan Summary Profile (Amount in Million)

Audit of seven on-going and two completed projects, resulted in a number of deficiencies.

Table XXXXIII- List of Project Loans with Audit Observations (Amount in Million)




1. Unrecouped advances

1.2 Unrecouped advances to contractors with

terminated contracts which amounted to ₱132.163 million as of December 31, 2014 may eventually result in loss of government funds if not acted upon at once.

Project Name Loan Account No. Amount

(In Million)

BCRP ICO (EUR 15.7 M) ₱ 9.870

7.944

CIP SFD 1/433 108.559

POPSTIRP Ph-P246 3.084

Cala Tollways Grant 2.706

TOTAL ₱ 132.163

Management to: a) Require the concerned Project

Management Office (PMO) to process immediately the required document and fast track the evaluation/computation of the works accomplished and materials delivered by the Contractor; and

b) Require the contractor to

immediately refund any unrecouped amount.


TOTAL 912.68 40,833.14 378.09 16,915.58 61.68 2,759.38 534.59 23,917.56 BNP PARIBAS

JPY4.1B

MBURD Ongoing 21.76 973.54 21.76 973.54 - - - -

IBRD 7552 PH NRIMP Ongoing 232.00 10,379.68 116.28 5,202.27 36.06 1,613.18 115.72 5,177.41 ICO BCRP Completed 2011 18.86 843.63 18.86 843.61 - - 0.00 0.01 ICO BCRP Completed 2011 18.86 843.63 18.86 843.61 - - 0.00 0.01 JBIC PH-P231 UBCPRD Ongoing 152.18 6,808.35 152.18 6,808.35 - - - - Export-Import Bank

of Korea (PHL-10)

GSFORP II Ongoing 29.21 1,306.76 10.47 468.33 4.01 179.63 18.74 838.44

PH-P247 RUPP Ongoing 339.07 15,170.03 34.11 1,526.06 16.37 732.57 304.96 13,643.97 JBIC PH-P253 FRIMP Ongoing 62.64 2,802.48 1.91 85.35 1.91 85.35 60.73 2,717.13 JBIC PH-P250 ARBP PH II Ongoing 38.11 1,705.04 3.68 164.45 3.32 148.65 34.43 1,540.58


Project

NameProject Status

Net Loan Commitments Cumulative Availments

53


1.3 Recovery of advance payments amounting to

₱52.066 million was not started from the first progress billing of contracts for Package II, Visayas, Iloilo Capiz Road which is tantamount to delaying recoupment. This may also result in unrecouped advances if the project was not completed as planned.

Management to provide a justification/ explanation on the practice of non-recoupment of advance payments from the first progress billing.

2. Unreliable balances of financial Statements Accounts

2.1 The balance of account “Construction in Progress -

Infrastructure Assets” cannot be relied upon as this included completed projects and abnormal and unreconciled balances amounting to ₱32.830 billion.

PN/ LAN FS Bal.

(In Billion) Deficiency

Amount (In Billion)

NRIMP/ IBRD

7552 PH

₱137.689

Misclassified assets ₱ 4.959

Abnormal/negative balances

0.016

Unreconciled balances 24.104

9.125 Misclassified completed project

3.711

RUPP/ JICA

PH-P247

0.540 Abnormal/negative balances

0.040

TOTAL ₱ 32.830

Management to: a) Reclassify completed projects

from Construction in Progress – Infrastructure Assets accounts to the appropriate asset accounts. In the event of subsequent claim of contractors for final billing of the project, payment should be debited direct to Public Infrastructure account;

b) Request the PMO Directors to

submit to the Accounting Office documentary requirements for completed projects and details of the status of Financial Claims. In case of any pending claims or documentary deficiencies, communicate/instruct the concerned PMOs to send letters to the contractors with corresponding disclosures in the Notes to Financial Statements;

c) Make the necessary adjusting

entries to correct SL balances of projects with abnormal balances;

d) Facilitate review and analysis of

significant unreconciled balances to establish the details and validity of the CIP account balances and ensure fair presentation of these accounts in the financial statements; and

e) Set time frame within which to

resolve issues on unreconciled balances.

54


2.2 The balance of the Cash-National Treasury,

Modified Disbursement System (MDS) account of BCRP cannot be relied upon because the book balance did not reconcile with the bank balance due to errors in recording transactions and unrecorded reconciling items as of December 31, 2014. There are also unutilized Notice of Cash Allocations (NCA) in the amount of ₱3.380 billion and Notice of Transfer of Allocation (NTA) amounting to ₱86,381.64 which were not transferred by the Bank to the account of the concerned office.

Management to: a) Require the Accounting Office to

properly analyze and verify each item in preparing the Bank Reconciliation Statements;

b) Require the Accountant to take up

in the books of accounts unrecorded disbursements and bank charges; and

c) Require the concerned officials to

prepare a realistic Monthly Cash Program for the implementation of programs and projects.

2.3 The account Advances to Contractors of NRIMP 2

and RUPP was understated by a net amount of ₱10.016 million due to erroneous recording of transactions as shown below:

PN/LAN Deficiency

Effect of error

(under)over (In Million)

NRIMP 2/ IBRD 7552 PHI

Amount of ₱1.306 million was erroneously credited to Advances to Contractors instead of ₱2.612 million

₱ 1.306

RUPP/ PH-P247

Unrecorded 15 percent advance payment

(11.529)

Recoupment not recorded in the books

0.207

Net Understatement ₱ 10.016

Management to require the Accounting Division to take up in the books unrecorded recoupment from contractors and to correct erroneous entries for fair presentation of the account.


2.1 Delayed implementation of projects

2.1.1 Delay in the implementation of five projects

resulted in the late delivery of services. In two projects, it even resulted in the incurrence of commitment fees in the amount of ₱19.906 million due to slow absorption capacity of loan utilization. Among the reasons for the delay are slow procurement process, road right of way problems, incurrence of negative slippages, suspension and time extensions.

Project Name

Loan Account No. Commitment

Fees (In Million)

FRIMP JBIC PH-P253 ₱ 3.758

RUPP JICA PH-P247 16.148

Concerned PMO to: a) Fast track the implementation of the

Projects to maximize utilization of loan proceeds and avoid incurrence of large commitment fees;

b) Provide project partners regular

update on the status of the Project, including other related information such as changes in the procurement process and implementation schedule;

c) Monitor project implementation and

55


Project Name

Loan Account No. Commitment

Fees (In Million)

GSFORP II Exim Bank of Korea (PHL-10)

MBURD BNP PARIBAS JPY 4.1B

UBCPRD JBIC PH-P231

TOTAL ₱ 19.906

ensure that the project is on schedule and, if warranted, issue suspension order once the slippage is more than negative 15%; and

d) Impose liquidated damages to the

contractors.

2.1.2 The requirement to enter into contract with the

bidder within 10 days upon receipt of Notice of Award, was not strictly observed resulting in delayed implementation of project. The contract was entered into only after 67 calendar days. (Road Upgrading & Preservation Project (RUPP)

Management to explain the deficiencies noted to enable us to conduct further review and evaluation of the contract.

2.2 Deficiencies in contracting/procurement

The limitations prescribed under existing rules and

regulations in arriving at reasonable contract cost were not observed unnecessarily increasing contract cost in significant amounts.

Project Name/ LAN

Deficiencies

RUPP/JICA PH-P247

Contractor’s profit margin and Overhead, Contingencies and Miscellaneous (OCM) charged against the project exceeded the maximum percentage allowable under D.O. 72 while Medical Kit was included in the computation of Construction Safety and Health Item resulting in increased contract cost by ₱2.568 million.

ARBP Ph II/JBIC PH - P250

The contract cost exceeds the Approved Budget for the Contract (ABC) by ₱230.340 million or 23.66 percent which is beyond the allowed variance for the award of contract under Foreign-Assisted Projects. This is due to improper imposition of 12 percent VAT, OCM and Profit mark-up to direct cost of some pay items.

Management to require the concerned officials to explain the deficiencies noted to enable us to conduct further review and evaluation of the contract. If the justifications or explanations are not meritorious, to require the contractor to refund the variance or deduct the amount from any money due the contractor or from retention money or other securities posted by the contractor, whichever is practicable.

56

Executive Order No. 192 mandates the DENR to be the primary government agency responsible for the conservation, management, development, and proper use of the country’s environment and natural resources, specifically forest and grazing lands, mineral resources, including those in reservation and watershed areas, and lands of the public domain, as well as the licensing and regulation of all natural resources as may be provided for by law in order to ensure equitable sharing of the benefits derived therefrom for the welfare of the present and future generations of Filipinos.

To accomplish this mandate, the Department is guided by the following objectives:

1. Assure the availability and sustainability of the country's natural resources through judicious use and systematic restoration or replacement, whenever possible

2. Increase the productivity of natural resources in order to meet the demands for forest, mineral, and land resources of a growing population;

3. Enhance the contribution of natural resources for achieving national economic and social development;

4. Promote equitable access to natural resources by the different sectors of the population; and

5. Conserve specific terrestrial and marine areas representative of the Philippine natural and cultural heritage for present and future generations.

DENR is tasked to formulate and implement policies, guidelines, rules and regulations relating to environmental management and pollution prevention and control.

Source: www.denr.gov.ph

4.1.6

57

DENR availed 13 loans under the Agriculture, Agrarian Reform and Natural Resource

(AARNR) sector with a Net Loan Commitments of ₱17.98 billion (US$401.97 million) for the

implementation of 10 projects. The status of 10 projects as well as the loan summary profile is

shown in Table XXXXIV.

Table XXXXIV - Project Status and Loan Summary Profile

Audit of three completed and three on-going projects resulted in a number of deficiencies.

Table XXXXV - List of Projects with Audit Observations (Amounts in Million)



Financial Performance

1. Unreliable balances of Financial Statements accounts

1.1 The balances of account Property, Plant and

Equipment (PPE) of six projects as of December 31, 2014 cannot be relied upon due to misclassification of equipment, unaccounted properties and erroneous computation of depreciation as shown below:

PN/LAN

FS NBV

Amount Deficiency

(In Million)

ICRM/ ADB231

1 PHI ₱9.732

₱0.017 Misclassification of unserviceable equipment

0.216 Unaccounted properties

0.059 Erroneous computation of depreciation

INREMP/ ADB Loan 2957-PHI

₱0.892 ₱3.823 Understatement of ICTE


1.292 Unrecorded IT equipment

0.048 Understated depreciation expense

The OIC-Chief, Property and Supply Management Division to: a) Submit to the Accounting Division the

Inventory and Inspection Report of Unserviceable Property (IIRUP) as basis of the accountant in reclassifying items to Other Assets account;

b) Conduct inventory of PPE and

unserviceable properties to verify their existence and serviceability including those recorded under Other Assets account

c) Conduct appraisal and cause the disposal

of unserviceable properties in accordance with existing regulations; and

d) Exert efforts to locate unaccounted


TOTAL 280.65 12,556.06 96.83 4,331.99 4.75 212.64 183.82 8,224.07

ADB2311 PHI ICRMP Completed 33.80 1,512.21 21.22 949.51 2.94 131.59 12.58 562.71

IBRD 7298 PH LAMP 2 Completed 15.31 684.93 15.31 684.93 - - - -

IBRD 7470 PH NPS-ENRM Completed 50.00 2,237.00 50.00 2,237.00 - - - -

KFW-02 CBFMMP Ongoing 4.80 214.82 3.86 172.57 0.17 7.73 0.94 42.26

JBIC PH-P248 FMP Ongoing 76.73 3,433.10 3.46 154.84 1.48 66.16 73.27 3,278.26

2957-PHI INREMP Ongoing 100.00 4,474.00 2.98 133.15 0.16 7.16 97.02 4,340.85

CY Availments Undrawn BalanceLoan No. Project Name

Project

Status

Net Loan

Commitments

Cumulative

Availments

58


PN/LAN

FS NBV

Amount Deficiency

(In Million)

LAMP2/

IBRD 7298 PH

0.812

0.812

Equipment dropped from the books of Fund 102 but unrecorded in Fund 101

0.626 Unserviceable property

0.480 Project closed as of March 31, 2014 but assets were not yet closed and transferred to Fund 101

NPS-ENRM

P/ IBRD 7470 PH

19.550 1.758 Unreconciled book and Inventory report balances

CBFMMP/ KFW-

02

0.300 0.011 Erroneous computation of depreciation

FMP/JBIC PH-P248

0.126 0.126 Misclassification of office equipment

1.980

1.580 Unreconciled book & inventory report balances


properties and trace the responsible/accountable personnel.

The OIC-Chief, Accounting Division to: a) Properly record transactions upon

completion of documentation.

b) Reclassify unserviceable properties to Other Assets account using the IIRUP as the basis.

c) Review the computations of the depreciation applied to the PPE and make the necessary adjustments in the books in order to present accurate balances of the PPE, Depreciation Expense and Accumulated Depreciation accounts in the Financial Statements;

d) Close the asset accounts of completed

projects and effect the transfer to Fund 101 after reconciling the balance of the Due from NGAs account with PS-DBM and NAMRIA; and request for the return of the unused cash advance and/or liquidation report; and

e) Update and reconcile Accounting records

with Property records.

1.2 The balances of Accounts Payable and Other

Payables under ICRMP of ₱10.532 million and ₱0.002 million, respectively, are doubtful as these were composed of long outstanding accounts aging more than two years and accounts already paid.

LAN Amount (In Mil.)

Deficiency

ADB 2311 PHI

₱ 1.680 Long outstanding payable aging two years and above.

8.771 Accounts payable already paid directly by the Asian Development Bank (ADB) to suppliers/ consultants/ contractors.

The OIC-Chief, Accounting Division, to verify and analyze long outstanding payable accounts and to revert to Accumulated Surplus/Deficit all outstanding payable accounts aged over two years which do not have any valid claimants pursuant to the provisions of Section 98 of P.D. 1445.

2. Unliquidated Fund Transfer

The accomplishments of the project partners were not assessed by the DENR as the funds transferred to them remained unliquidated as

Management to exert efforts in enforcing the submission of liquidation documents of fund transferred to BFAR and PWU, including the

59


of December 31, 2014.

Project Name/LAN

Fund Transfer No. of days

unliquidated To Amount (In Mil.)

ICRMP/ ADB2311 PHI

BFAR ₱ 24.892 91 to over 2 years

NPS-ENRMP/ IBRD 7470 PH

PWU (NGO/PO)

0.480 More than 3 years

list of participants with complete address, pursuant to Section 4.6 of COA Circular No. 94-013 and Section 89 of PD 1445, especially since the project already ended in June 30, 2014.

3. Delayed recording of transactions

PPE purchased in CYs 2012 and 2013 under NPS-ENRMP were taken up in the books only in CY 2014.

The OICs Accounting Division to record completely and promptly in the books, transactions and liquidation reports as required under COA Circular No. 94.013.

4. Inaccurate/inappropriate documentation of transactions amounting to ₱20.650 million

Journal Entry Vouchers (JEVs) for refund and liquidation of funds transferred under NPS-ENRMP were recorded even without supporting or with incomplete documents.

LAN Deficiency Amount (In Mil.)

IBRD 7470 PH

Liquidation of funds transferred to the EMB were supported with liquidation reports from various LGUs and not from EMB contrary to the requirement of COA Circular No. 94-013 dated December 13, 1994.

6.897

The OIC-Chief, Accounting Division, to cause the submission of the duly approved Liquidation Reports by EMB Head, verified by EMB Auditor for evaluation and to support JEV. Meantime, revert back to Due from National Government Agencies the reported liquidation of EMB until submission of the liquidation documents including the Auditor’s Credit Notice.

60

The Department is responsible for the promotion of agricultural development by providing policy framework, public investments, and support services needed for domestic and export-oriented business enterprises.

To fulfill its mandate, it shall primarily be concerned in improving farm income and generating work opportunities for farmers, fishermen and other rural workers. It shall encourage people participation in agricultural development through sectoral representation in agricultural policy-making bodies to ensure that the policies, plans and programs of the Department are formulated and executed in a manner that would satisfy their needs.

It shall also use a bottom-up self-reliant farm system approach with emphasis on social

justice, equity, productivity and sustainability in the use of agricultural resources.

Source: www.da.gov.ph and www.daprdp.net

4.1.7

61

The Department availed 23 loans under the Agriculture, Agrarian Reform and Natural

Resource (AARNR) sector with a total net loan commitments of ₱47.56 billion (US$1.063

billion) to finance 20 projects of which 2 are ongoing during CY 2014. Table XXXXVI presents

the status of the 20 projects as well as the loan summary profile.

Table XXXXVI - Project Status and Loan Summary Profile (amount in million)

Audit of the two on-going projects resulted in a number of deficiencies.

Table XXXXVII - List of On-going Projects with Audit Observations (Amounts in million)




The effectiveness and sustainability of some components of SCHARMP may be compromised on account of non-compliance with existing laws and regulations and inadequate monitoring of project implementation as manifested below:

Project Observations

Community Watershed Conservation and Reforestation

Absence of regular maintenance activities by the People’s Organizations (POs) in the plantation sites may adversely affect the effectiveness and sustainability of the reforestation and agro-forestry projects. DA failed to impose submission by Non-Government Organization (NGOs)/POs of liquidation documents on fund transfers amounting to ₱3.129 million which remained unliquidated for over two years.

Management to: a) Continuously monitor compliance by POs

with their responsibilities outlined in the covenant. The POs are supposed to ensure growth and survival of the seedlings and the ultimate success of the reforestation and agro-forestry projects.

b) Validate if Tinanang Incorporated had

implemented its reforestation project according to its work plan and evaluate if the causes for late or non-implementation are reasonable, otherwise, cause the immediate refund of the funds transferred to them.

c) Strictly enforce submission of liquidation

reports by NGOs/POs as required under COA Circular No. 2007-001 and stop releasing funds to NGOs/POs with unliquidated fund transfers.


TOTAL 33.40 1,494.24 22.27 996.39 13.78 616.56 11.13 497.85

IFAD 749-PH 23.40 1,046.84 14.37 642.80 7.59 339.76 9.03 404.04

OPEC 1224-P 10.00 447.40 7.90 353.59 6.19 276.80 2.10 93.81 CHARM

Net Loan Cumulative CY Availments Undrawn BalanceLoan No.

Project

Name

62


In the absence of documents, DA was not able to assess the implementation of projects by the contracted NGOs/POs.

Livelihood Assistance Fund (LAF)

DA failed to enforce compliance by the Livelihood Interest Groups (LIGs) with their business plans which may compromise the success of the project and their ability to pay on time.

Improvement of Pethal-Ekip Farm to Market Road with Bridge in Bokod, Benguet

The Province of Benguet released advance payment of ₱2.18 million to a contractor with negative slippage of 52.59 percent instead of terminating the contract as provided in the rules. This may not only put to risk the quality of the project and timeliness of project completion but may also result in possible loss of ₱2.18 million of government funds.

d) Require LIGs to strictly adhere to their business plans to ensure success of the projects and avoid loan repayment default. Closely monitor their accomplishments and fund utilization, particularly those LIGs which deviated from their original business plans.

e) Continue the conduct of trainings of LIGs

on financial literacy and bookkeeping to equip them with adequate knowledge on managing their finances and increasing their potential of sustaining their business operations.

f) Coordinate with the Province of Benguet,

on the status of the project and the need to observe and implement the rules on procurement to safeguard the interest of the government.


2.1 Disbursement Vouchers amounting to ₱5.96

million are yet to be submitted to the audit team; hence, validity of these payments could not be ascertained.

Require the Accountant to immediately submit the DVs duly supported with complete documentation, to the audit team as required under existing regulations.

2.2 Laxity on the part of the Project Support

Office (PSO) in processing payments to suppliers of catering services and lodging resulted in overstated SCHARMP’s expenses by ₱132,180.00.

Require Project Support Office to:

a) Ensure that all expenditures are properly

supported by documents sufficient to establish the validity and correctness of the claims.

b) Immediately refund overpayment of ₱132,180.00.

63

Reference: http://www.dotc.gov.ph/

Source: http://laguindinganinternationalairport.com/

Source: http://www.dotc.gov.ph/


The Department of Transportation and Communications (DOTC) is the primary policy, planning, programming, coordinating, implementing and administrative entity of the executive branch of the government on the promotion, development and regulation of a dependable and coordinated network of transportation and communications systems, as well as in the fast, safe, efficient and reliable transportation and communications services. The Department's functions can be classified into four major groups, namely:

Policy Formulation Regulatory and

Enforcement Infrastructure Development International Cooperation


4.1.8

64

DOTC is a recipient of 37 ODA loans under the Infrastructure sector with Cumulative

Net Loan Commitments totaling ₱94.23 billion (US$2.11 billion). The loans were intended for

the implementation of 33 infrastructure projects that would provide efficient, effective, and

secure transportation systems which are globally competitive, compliant with international

standards, and responsive to the changing times.

Of the 33 projects, 23 projects were reportedly completed as of December 31, 2014.

The status of the 33 projects as well as the summary of loans profile is shown in Table

XXXXVIII.

Table XXXXVIII - Project Status and Summary of Loans Profile (Amount in Million)

Audit of eight project which are a combination of completed, on-going and not yet started projects resulted in a number of deficiencies.

Table XXXXIX - List of Project Loans with Audit Observations (Amounts in Million)



1. Project Performance Evaluation

Delayed implementation of the CEMRTMMP and the NBAC-SEPP adversely affected the timely and efficient delivery of benefits that could be derived therefrom. This is in addition to adverse effect on timely availment of the loan proceeds which resulted in payment of commitment fees amounting to ₱26.028 million for CY 2014 alone. The delay in project implementation was reportedly caused by prolonged procurement of consultancy services, civil works and land acquisition problem with several lots still under

Management to: a) Prioritize and immediately settle

procurement issues, and land and right of way acquisition issues to hasten project implementation;

b) Require the concerned PMOs to adopt an effective project monitoring system to keep track of the project implementation schedule vis-à-vis the approved


TOTAL 655.84 29,342.45 143.05 6,400.26 13.71 613.45 512.79 22,942.20 ADB1536 PHI TADP Completed 12.16 543.95 12.16 543.95 - - - - JBIC PH-P190 SADP PH I Completed 19.38 867.04 19.38 867.04 - - - - JBIC PH-P219 SADP PH II Completed 53.48 2,392.87 53.48 2,392.87 - - - - EIBKorea PHL-5 LADP Ongoing 26.00 1,163.03 20.53 918.64 0.54 24.38 5.46 244.38 EIB DIADP Completed 26.50 1,185.61 23.19 1,037.50 - - 3.31 148.11 EIBKorea PHL-11-EDCF PPADP Ongoing 69.79 3,122.44 14.31 640.25 13.17 589.07 55.48 2,482.19 PH-P255 CEMRTMMP NYI 359.03 16,063.22 - - - - 359.03 16,063.22 PH-P256 NBAC-SEPP Ongoing 89.50 4,004.29 - - - - 89.50 4,004.29


Project

Name

Project

Status

Net Loan Cumulative

65

expropriation.

disbursement schedule embodied in the loan agreement in order to avoid further delays; and

c) Henceforth, undertake pre-implementation

activities prior to loan effectivity to be able to comply with loan conditions within the prescribed period/target date.


2.1 Unreliable Balances of Due From Account

The balances of Due from NGAs, GOCCs and LGUs, under Fund 102 for TADP, SADP I and II, DIADP and ANF were improperly stated due to unreconciled/unconfirmed balances. Around 99.5 percent of the reported balances were long outstanding balances with 84.71 and 14.79 percent thereof outstanding since 1985 and 2001, respectively, as of December 31, 2014. Refunds amounting to ₱5.625 million were also recorded despite absence of adequate documents.

Management to:

a) Strictly adhere to COA Circular No. 94-013 dated November 13, 1994 and pertinent provisions of the MOA with concerned IAs;

b) Make a strong representation with the officials of concerned IAs to submit liquidation reports. Any unused amount reflected in the books of the IAs should be returned to DOTC;

c) Regularly reconcile account balances with

the IAs to ensure that reconciling items are immediately detected and corrected; and

d) Submit the necessary supporting

documents to support the refunds of TELOF and DPWH, otherwise prepare the necessary adjustments to restore the outstanding receivables from the said IAs; and reconcile the balance of NEDA.

2.2 Non-compliance with Existing Rules

Payment to job order personnel of compensation, travelling expenses and honoraria amounting to ₱13.095 million for PPIADP, NBAC-SEPP and CNS/ATM were not in line with COA Circular 2012-003 and pertinent Civil Service Commission (CSC) rules and regulations. The Job Order personnel were paid on a monthly basis in amounts ranging from ₱30,000 to ₱50,000 which is not compliant with CSC Resolution No. 020790 as amended by CSC Memorandum Circular No. 12 dated June 5, 2002 and June 14, 2004, respectively, mandating payment on a daily basis. On the other hand, job order personnel are not entitled to travelling expenses and honoraria as these are applicable only to government personnel.

Management to strictly adhere with the provisions of CSC Resolution No. 020790, as amended by CSC Memorandum Circular No. 12, GAAM and other COA issuances and DBM Memorandum Circulars providing guidelines on contracting of services and hiring of Job Order personnel. Moreover, require all recipients to refund all payments not in accordance with existing regulations.

66

Reference: http://www.dar.gov.ph/

Source: http://dar7.net.ph/

The Department of Agrarian Reform

(DAR) leads the implementation of the

Comprehensive Agrarian Reform

Program (CARP) and sustainable rural

development in the countryside through

land tenure improvement, provision of

integrated development services to

landless farmers, farmworkers and small

landowner-cultivators, delivery of

agrarian justice and coordinating delivery

of essential support services to client-

beneficiaries.

The following are its specific functions:

To provide Land Tenure security to

landless farmers through land

acquisition and distribution; leasehold

arrangements' implementation and other

LTI services;

To provide legal intervention to Agrarian

Reform Beneficiaries (ARBs) through

adjudication of agrarian cases and

agrarian legal assistance;

To implement, facilitate and coordinate

the delivery of support services to ARBs

through Social Infrastructure and Local

Capability Building (SILCAB);

Sustainable Agribusiness and Rural

Enterprise Development (SARED); and

Access Facilitation and Enhancement

Services (AFAES).

Source: http://dar7.net.ph/ &

http://www.dar.gov.ph/

4.1.9

http://dar7.net.ph/

67

As the lead implementing agency of CARP, DAR availed 23 ODA loans under the

Infrastructure Sector, and the Agriculture, Agrarian Reform and Natural Resource (AARNR)

Sector with total net loan commitments of ₱47.495 billion (US$1.062 billion) to finance 21

projects; eight of which are still on-going as of December 31, 2014. The status of the 21 projects

and the loan summary profile are presented in Table XXXXX.

Table XXXXX - Project Status and Loan Summary Profile (amount in million)

In the audit of three on-going projects, a number of deficiencies were noted:

Table XXXXXI - List of On-going Projects with Audit Observations (Amounts in million)



Financial Performance

1. Unreliable Property Plant and Equipment (PPE) Account

The balances of PPE accounts under the three loan accounts as of December 31, 2014 cannot be relied upon due to unreconciled/unadjusted balances, unrecorded PPE, non-conduct of or incomplete inventory taking, and inclusion of unserviceable property as shown below:

PN/LAN Amount (In Mil.)

Deficiency

MINSAAD/ JBIC PH-P251

₱ 19.950 Non-conduct of or incomplete physical inventory taking

4.192 Unrecorded PPE

3.006 PPEs transferred to Regional and Provincial Offices

ARCP II/ OPEC 1225-P

0.457 Unreconciled balances of PPE accounts

0.359 Unserviceable property included in the PPE

ARCP II/ OPEC 1225-P

0.145 Overstatement of furniture and fixtures account

47.522 PPEs transferred to Regional and

Management to: a) Conduct complete inventory

taking of all assets and prepare Report on the Physical Count of Property, Plant and Equipment (RPCPPE) supplying all required information/data, certified correct by members of the Inventory Committee and approved by Head of the Agency;

b) Reconcile records of

Accounting Division with the Property Division and make necessary adjustments in the books of accounts;


TOTAL 178.30 7,977.02 100.62 4,501.94 22.52 1,007.64 77.67 3,475.08

JBIC PH-P242 ARISP III 97.97 4,383.11 84.64 3,786.93 13.07 584.65 13.33 596.17

OPEC 1225-P ARCP II 30.00 1,342.20 1.71 76.71 0.34 15.28 28.29 1,265.49

JBIC PH-P251 MINSAAD 50.33 2,251.72 14.27 638.30 9.11 407.71 36.06 1,613.42


Project

Name

Net Loan

Commitments

Cumulative

Availments

68


PN/LAN Amount (In Mil.)

Deficiency

Provincial Offices

ARISP PH III/ JBIC PH-P242

₱ 7.292 Unreconciled balances of PPE accounts

61.677 Non-conduct of or incomplete physical inventory taking

0.302 Unserviceable property included in the PPE

0.593 PPEs still in the possession of retired or resigned or transferred personnel

0.203 PPEs transferred to Regional and Provincial Offices

IARCDSP/JBIC PH- P242; MINSAAD/JBIC PH-P251; & ARISP PH III/ OPEC 1225-P

0.273 Non-conduct of or incomplete physical inventory taking

c) Reclassify unserviceable properties to other assets account; and

d) Submit original copy of

RPCPPE to the Accounting Section, for forwarding/ submission to the Office of the Auditor not later than January 31 of each year.

2. Non-compliance with R.A. 656

Fourteen (14) units of 4 x 4 pick-up Hi-Lux was insured with the People’s General Insurance Corporation in the amount of ₱566,302.52 instead of with the General Insurance Fund as required under RA 656 and Section 489 of GAAM.

Management to justify insurance of vehicles with a private insurance company and not with the GSIS.

69

4.2 Common Audit Observations of Other Agencies with ODA Loans



1.1 Unreliable Financial Statement balances Account

The balances of various accounts as of December

31, 2014 cannot be relied upon due to unrecorded,

unreconciled and not duly supported/documented

transactions as shown below:

IA PN/ LAN

FS Acct.

Deficiency Amount (In Bil.)

BOC

NCISP Ph I & II/ CEXIM

PPE Unrecorded 30 units X-ray machines received in 2006 and 2007.

₱5.999

Fund 151

CSF collections remitted in full to the National Treasury instead of treating 75 percent thereof as Trust Fund.

0.588

Dep Ed

NPSBEP/ IBRD 7393 PH

PPE Amount reflected in the FS for school buildings does not tally with its subsidiary ledgers.

4.351

CIP Not supported with SLs or schedule.

0.286

PHIVI-DEC

MCTP/ JBIC PH-P213

Income Accts.

Understatement of CY 2014 collections due to computation of concession fees based on net revenues instead of gross receipts as required under Section 9.1, Article 9 of the Concession Contract. Thus, sales discount and income from rental and other miscellaneous activities were not included.

22.342

DTI RuMEPP/ IFAD 0661-PH

Recei- vable Accts.

Overstatement of assets & understatement of expenses in view of unliquidated fund transfers or cash advances to DTI Regional Offices.

35.837

Unliquidated fund transfers to SBGFC now SBC for disbursements under the RuMEPP

3.150

MDFO HSRASP/ KFW 20066 5109

Recei-vable Accts.

The balance of account Due from LGUs as of year-end amounting to ₱10.414 million cannot be relied upon due to: a. Long outstanding

balances of ₱7.036

.010

Accountants to: a. Record the 30 units X-ray

scanning equipment in the books of accounts using the documents supporting their acquisition; (BOC)

b. Disclose in the Notes to Financial

Statements the value of the X-ray scanning equipment as well as their status, conditions and whereabouts; (BOC)

c. Reclassify ₱587.578 million to

BOC Fund 151 (Trust Fund account) and to inform the BTr accordingly pursuant to Section 2 of E. O. 625. Henceforth, record all CSF collections under Fund 151 to support the sustainability of the NCIS Project; (BOC)

d. Explain and submit supporting

documents for the noted difference between the SL amount and the FS amount and make necessary adjustments/ corrections to reflect the correct balance of the School Buildings account. Likewise, to prepare SL or schedule for CIP account; (DepEd)

e. Enforce the collections from

Mindanao ICTSI with respect to the uncollected variable concession fees in the amount of P22.342 million. Otherwise, a Notice of Charge shall be issued accordingly; (PHIVIDEC)

f. Require the concerned DTI

Regional Ofices and SBGFC, now Small Business Corporation (SBC), to liquidate all outstanding cash advances through submission of the required

70

IA PN/ LAN

FS Acct.

Deficiency Amount (In Bil.)

million aged one to two years; b. Overstatement of

recording of liquidation report by ₱70.00; and

c. Existence of negative balances of ₱66,252.72.

DOH HSRA- SP/KFW No. 7113011

Liability Accts.

Payments to GITEC Consultant through direct payment scheme not recorded in the books of accounts as

Consultancy Services Accounts Payable due to failure to receive copy of JEV from BTr. The non-recording resulted in understatement of affected accounts.

50.411

reports and refund of unused balance and prepare the adjusting entries; (DTI)

g. Record liquidation reports/SSAFs

submitted by LGUs, require implementing LGUs immediate submission of required reports and to strictly adhere with COA Circular No. 94-013 and the MOA; (MDFO) and

h. Secure copy of JEV from BTr

covering payments made to the Consultant and make the necessary adjustment in the books of accounts upon receipt thereof. (DOH)

1.2 Non-compliant with PAS

Non-compliance by MWSS and DBP with PAS likewise affected the reliability of the Financial Statement accounts as shown below:

IA/PN/ LAN

Deficiency Amount

(In Million)

MWSS/ AWUAIP Ph II/ CHI-7

Depreciation was recognized only when asset was reclassified to PPE and not upon use as required under PAS 16.

₱218.733

Borrowing cost was capitalized to PPE

269.680

Inclusion of cost of consultancy services for feasibility study and preliminary design of the project incurred in 2005 to PPE

18.500

DBP: LGUUWSP Ph II/IBRD 7080-PH;

RPP/IBRD 7204-PH;

EISCP/JBIC PH-P170;

DSMP PH II/ JBIC PH-P189;

IPCLP I/ KFW No. 15 #1095708

Claims by DBP from the NG/BTr, pertaining to CY 2014 payments of ODA borrowings was overstated due to inconsistent conversion policy of currency with PAS.

23.942

Management to:

a. Take into consideration the

provisions in PAS 16, 21, 23 and 38 to arrive at an accurate balance of the PPE-Other Structures account; thereafter, prepare the appropriate adjusting entries;

b. Secure written approval from the

BTr on the current practice observed by DBP in the settlement of the foreign currency- denominated ODA borrowings considering its inconsistency from FXRC Claims definition.

71


Inadequate Planning

The attainment of the objectives of two projects was adversely affected by inadequate planning as discussed below:

IA PN/LAN Deficiency Amount (In Bil.)

BOC NCISP Ph I & II/ CEXIM

Three of the unrecorded 30 units of X-ray equipment amounting to ₱5.999 billion were not being fully utilized which manifest lack of need for the same in Regions where these were distributed.

No amount indicated

DOH HSRA/SP/ KFW No. 7113011

Non-inclusion in the Memorandum of Agreement of the delivery date for each deliverable and penalty clause provision resulted in the delayed attainment of the project objective for the technical assistance for health facilities.

₱ 7.720

Moreover, despite three years extensions granted by the Kreditanstalf fur Wiederaufbau (KfW), from December 30, 2011 to December 30, 2014, DOH was still not able to avail loan proceeds amounting to €2.396 million or ₱142.749 million, thereby incurring commitment fees of €5,851.73 or ₱338,129.17.

Management to:

a. Evaluate the needs of each

port/sub-port for X-ray machines taking into consideration the number of arriving containerized cargoes and redistribute if warranted to maximize the benefits to be derived from its use and improve the collection of CSF; (BOC)

b. Encourage importers, shipping

lines and other stakeholders to use Batangas Port as the Port of Entry to maximize the utilization of the machines stationed thereat. Meantime that the machine were not in use, initiate measures to properly maintain them to avoid rapid obsolescence; (BOC)

c. Sustain NCIS project using CSF

collections allocated for its maintenance as provided under Section 2 of E.O. 635; (BOC)

d. Instruct BIHC to consider

providing for deadline for each required deliverable to facilitate timely completion and submission of report. Likewise, a penalty clause should also be incorporated in the MOA so that reasonable penalty could be imposed to erring contracting party for non-compliance thereof. (DOH)

e. Require BIHC PMO to strengthen

its monitoring function and ensure that project implementation and disbursements are within the budget and project duration per Loan agreement. (DOH)

72

4.3 General Audit Recommendations

In view of the significance of the foregoing observations and the need for appropriate

actions by the Implementing Agencies and intervention by the Congress and oversight agencies, we recommend the following:

4.3.1 For the Implementing Agencies

4.3.1.1 Consider project readiness and ability to implement, own and maintain the

project before submitting project design/proposal to ensure smooth implementation of the project and avoid delay and unnecessary commitment fees and other charges;

4.3.1.2 Identify potential/actual problems and root causes of delays in project

implementation using among others, the NEDA-PMS Quarterly Alert Mechanism Report and take necessary and appropriate measures to address the same;

4.3.1.3 Exert best efforts to comply with loan conditionalities within the prescribed

period/target date to facilitate project start-up activities;

4.3.1.4 Strictly follow existing accounting and auditing rules and regulations on the grant, utilization and liquidation of cash advance/fund transfer to prevent accumulation of account balances;

4.3.1.5 Maintain the required accounting records and reconcile reciprocal and

related accounts including cash account and bank balances;

4.3.1.6 Conduct regular physical inventory of supplies and equipment and reconcile accounting and property records.

4.3.2 For the Oversight Agencies

4.3.2.1 National Economic Development Authority

4.3.2.1.1 Sustain the review of necessity of projects, project design and

implementation strategies, and absorptive capacity of implementing agencies to undertake and own projects; and

4.3.2.1.2 In the review of project feasibility studies, consider lessons

learnt from similar projects as aid in determining project design deficiencies and viability under review.

4.3.2.2 Department of Finance

4.3.2.2.1 Facilitate request for loan cancellation with the Foreign Funding

Institutions (FFIs) to minimize payment of commitment fees. Ensure that the amounts of loans contracted are necessary and can be absorbed by the IAs;

4.3.2.2.2 Institute a system where IAs are informed of commitment fees

paid by the NG due to delays in project implementation and require explanation from the IAs on the causes of delay; and

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4.3.2.2.3 Establish effective networking among IAs, LGUs, DBM and other concerned agencies. Facilitate compliance with loan conditions to ensure loan effectiveness and timely completion of projects.

4.3.2.3 Department of Budget and Management

4.3.2.3.1 Ensure adequate and timely release of project funds, both

loan/grant proceeds and GOP counterpart funds; 4.3.2.3.2 Consider inclusion of debt service and commitment fees against

implementing agencies’ budget for proper accountability and reporting of expenditures; and

4.3.2.3.3 Release immediately the Non-Cash Availment Authority to

facilitate the recording of settlement of liabilities for goods delivered and services rendered.

4.3.2.4 Congress of the Philippines

4.3.2.4.1 Consider the funding requirements for FAPs in the approval of

IAs’ budgets to ensure continuous project implementation and minimize incurrence of commitment fees.

4.4 Status of Implementation of Prior Years’ Audit Recommendations

Out of the 360 prior years’ audit recommendations reported in last year’s individual audit reports on the projects/implementing agencies concerned, 126 or 35 percent were implemented, 130 or 36 percent were partially implemented or in-progress, 104 or 29 percent were not implemented, as presented in Chart VIII, with details shown in Table XXXXXII.

Chart VIII- Status of Implementation of PY's Audit Recomendations

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Table XXXXXII - Status of PY’s Audit Recommendations

Audit Sector Implemented Partially

Implemented Not Implemented Total Percentage

NGS 96 89 74 259 71.94

CGS 30 41 30 101 28.06

TOTAL 126 130 104 360 100

Percentage 35 36 29 100

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

Lack or shortage of manpower complement; Non-submission/non-availability of records/reports or result of evaluation; Coordination with project partners still ongoing; Classification and recording issues or issuance of new rules/guidelines; On-going updating of PPE schedules and locating of missing PPE; Reorganization and change of project officers; Fortuitous events like bad weather condition; Accounting and Property units still in the process of reconciling their records; Settlement of disallowances thru partial payments: Implementation issues and concerns; Failure of the bank to provide bank statement on time; Reconciliation of accounts still in process; Incomplete proof of ownership of properties.

Documents

Commission on Audit - The Official Website of the ......2.0 HIGHLIGHTS OF THE REPORT 6 3.0 STATUS OF ODA-FUNDED PROJECTS Commitments 11 Availments 16 Undrawn Commitments 20 Repayments