Finance Undersecretary Gil Beltran said the country’s improving tax effort and reduced budget deficit is encouraging multilateral agencies to extend more donor aids. "They want to help us in our tax administration," he said.

Beltran said aid fund sources are coming after the country’s budget deficit is reduced to below three percent of gross domestic product. Last year’s budget shortfall of P146.5 billion is 2.8 percent of GDP.

For 2006, the DoF programmed $ 920 million or P48 billion worth of ODAs. This is $ 200 million or 27.77 higher from last year’s $ 720 million or P38.8 billion.

ODAs are highly concessionary loans, in fact the cheapest source of foreign borrowing. Of the $ 4 billion programmed for this year, $ 3.1 billion are commercial loans and the rest are donor aids.

Last year the DoF programmed higher ODA loans of P53 billion but only P38.8 billion went through. Observers said the donor aids did not come because of the government’s failure to show progress in privatizing National Power Corp. assets.

The National Economic Development Authority has been reviewing the government ODA policy. ODA-assisted projects usually require counterpart funding.

The review includes the modification and "value engineering" of new foreign funds to review budget and to redesign ODAs.

Reviving ODA funding is one way the National Government has had to push for to reduce foreign borrowing and foreign exchange risks.

Presently ODA utilization is very poor and the DoF and the Department of Budget and Management are rationalizing the country’s development financing profile.

Japan is still the biggest source of foreign aid. With the cumulative amount of Japan ODA to the country totalling $ 9.4 billion, the Philippines ranks as the third largest recipient, next to Indonesia and China. (LCC)