.
It’s not news that Philippine President Rodrigo Duterte has been cursing the United States and the European Union in recent weeks. After all, the three-month-old leader of U.S.'s foremost Southeast Asian ally had not spared any opportunity to speak out about his utter disgust to his country's former colonizers. He even dared the U.S. to withdraw all its aid to the Philippines, one that comprises not only military, but also development assistance during natural disasters and capacity-building measures.
The United States, meanwhile, has declined to respond categorically to Duterte in a bid not to further aggravate the situation. It did so in a subtle manner though, using its local embassy's Facebook account to share photos of how the U.S. helped in the aftermath of the destruction left by typhoon Haiyan in 2013. Incidentally, by November 8, the Philippines would mark the third year anniversary of the catastrophic event and with a new government in place, it is unfortunate that there seems to be less to no effort to address the problem of tracing where billions and billions of aid received by the country is going.
Never mind Duterte's off-the-cuff remarks about not wanting official development assistance (ODA) anymore from the U.S. Even without it, the Philippines would still be receiving billions of assistance from the World Bank, its top ODA provider, and even some of its Asian neighbors such as Japan and South Korea. The point being is that the developing country should realize that its supposedly independent foreign policy will not get it easily disentangled from its international commitments, especially the help it has received and continue to receive at times of distress.
First, while indeed ODA as a proportion of the budget has consistently gone down, 80 percent of next year's foreign borrowings were actually shifted by Duterte's economic managers to ODA from bond issuance. This means that instead of raising money free from conditions by selling investment instruments, the government opted for the "cheaper" option of concessional loans from its development partners, said National Treasurer Roberto Tan. Conditions in ODA have so far not been tightened, he said, while some embassies, including that of the U.S., said there had been no changes on any of their aid program.
That is good news, indeed, but that also opens another problem. How this aid is spent is not exactly clear. Usually, aid donors come from various channels and their impact is assessed independently that of the government budget. This is despite aid being used to bridge the budget deficit. The result is not being able to fully account for the effect of aid on the entire development process. Independent assessments by donors themselves provide some idea, but for the policymakers, including ODA on the entire budget process is still a work in progress.
Globally, efforts have also started. The International Aid Transparency Initiative (IATI) already got the support of more than 450 entities, including countries, aid organizations, and other non-governmental groups. IATI itself is not a complete solution: it merely provides an avenue for donors and receivers to use a specific template on aid reporting and update the data at least every quarter. The Philippines had committed to implement the IATI standard, but until the previous government left last June, no action had been taken to that effect. Perhaps because the government itself is having a hard time accounting for the aid the country receives every year. For one, IATI only tackles programmed aid or those found in the budget. But as the Haiyan experience taught us, calamity-stricken countries like the Philippines often receive more humanitarian aid that is beyond what was programmed. For Haiyan alone, different figures on aid ranging from around 73 billion pesos to 160 billion pesos were floated. The truth is the coverage and the way aid measurements used may have accounted partly for the difference. Nevertheless, the failure to come up with a uniform approach on how to tackle aid was also to blame.
To this day, questions have remained on how funds for the rehabilitation of Haiyan-devastated areas were utilized. The public seems to be under the impression that aid is just a government matter whereas, in fact, non-governmental organizations are, more often than not, the ones with more capacity and less bureaucratic hurdles to respond to calamities. Of course, the problem was partly because of the nature of funds involved. Donations and assistance are treated as public money, and therefore, should be subjected to strict procurement and audit rules. Indeed, the Commission on Audit in the Philippines had come out with a report showing billions in funds during Haiyan response not accounted for. But this came more from the local government, not the national government, which brings into light the bureaucratic challenges of aid disposal.
The problem is not limited to aid recipients; it includes donors. South Korea, for instance, is having a difficult time tracking down aid, partly because of numerous agencies given budget for such purpose each year. Despite having a central aid agency, the Korea International Cooperation Agency, more than 40 other offices hold different amounts for international assistance each year. This makes it hard to take account of every centavo being shelled out and has resulted into some calls for the Korean government to ensure public money is not misused. Korea just joined IATI this year and has started publishing aid information last August.
For all of Duterte's thrust toward more independence for the Philippines, whatever that means, we should not be losing sight of international cooperation. Just like money is not the root of all evil, aid should not be stigmatized as a sign of dependency. Rather, as means for developing countries to get back to their feet whenever a tragedy like Haiyan hits, or for sustainable development. What the public should be calling for must be more transparency and more institutionalized mechanisms to ensure aid is going where it should and is used properly. There are many examples of how aid assisted former emerging economies toward development, and one of them is Korea. The Philippines could very well learn from the experience, instead of playing the arrogant independence card with almost nil efforts toward transparency and accountability in aid management.
About the author: Mr. Prinz P. Magtulis works as a business journalist in the Philippines, covering macroeconomy. He holds a master’s degree in public administration and conducts freelance policy research. His work will soon be published in the Asian Journal of Social Science and the International Journal of Public Administration. His research interests include public finance, political economy and governance.
Photo by Wikimedia Commons.
The views presented in this article are the author’s own and do not necessarily represent the views of any other organization.
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Aid Should Not Be an Issue for Duterte—The Use of it Should
November 3, 2016
It’s not news that Philippine President Rodrigo Duterte has been cursing the United States and the European Union in recent weeks. After all, the three-month-old leader of U.S.'s foremost Southeast Asian ally had not spared any opportunity to speak out about his utter disgust to his country's former colonizers. He even dared the U.S. to withdraw all its aid to the Philippines, one that comprises not only military, but also development assistance during natural disasters and capacity-building measures.
The United States, meanwhile, has declined to respond categorically to Duterte in a bid not to further aggravate the situation. It did so in a subtle manner though, using its local embassy's Facebook account to share photos of how the U.S. helped in the aftermath of the destruction left by typhoon Haiyan in 2013. Incidentally, by November 8, the Philippines would mark the third year anniversary of the catastrophic event and with a new government in place, it is unfortunate that there seems to be less to no effort to address the problem of tracing where billions and billions of aid received by the country is going.
Never mind Duterte's off-the-cuff remarks about not wanting official development assistance (ODA) anymore from the U.S. Even without it, the Philippines would still be receiving billions of assistance from the World Bank, its top ODA provider, and even some of its Asian neighbors such as Japan and South Korea. The point being is that the developing country should realize that its supposedly independent foreign policy will not get it easily disentangled from its international commitments, especially the help it has received and continue to receive at times of distress.
First, while indeed ODA as a proportion of the budget has consistently gone down, 80 percent of next year's foreign borrowings were actually shifted by Duterte's economic managers to ODA from bond issuance. This means that instead of raising money free from conditions by selling investment instruments, the government opted for the "cheaper" option of concessional loans from its development partners, said National Treasurer Roberto Tan. Conditions in ODA have so far not been tightened, he said, while some embassies, including that of the U.S., said there had been no changes on any of their aid program.
That is good news, indeed, but that also opens another problem. How this aid is spent is not exactly clear. Usually, aid donors come from various channels and their impact is assessed independently that of the government budget. This is despite aid being used to bridge the budget deficit. The result is not being able to fully account for the effect of aid on the entire development process. Independent assessments by donors themselves provide some idea, but for the policymakers, including ODA on the entire budget process is still a work in progress.
Globally, efforts have also started. The International Aid Transparency Initiative (IATI) already got the support of more than 450 entities, including countries, aid organizations, and other non-governmental groups. IATI itself is not a complete solution: it merely provides an avenue for donors and receivers to use a specific template on aid reporting and update the data at least every quarter. The Philippines had committed to implement the IATI standard, but until the previous government left last June, no action had been taken to that effect. Perhaps because the government itself is having a hard time accounting for the aid the country receives every year. For one, IATI only tackles programmed aid or those found in the budget. But as the Haiyan experience taught us, calamity-stricken countries like the Philippines often receive more humanitarian aid that is beyond what was programmed. For Haiyan alone, different figures on aid ranging from around 73 billion pesos to 160 billion pesos were floated. The truth is the coverage and the way aid measurements used may have accounted partly for the difference. Nevertheless, the failure to come up with a uniform approach on how to tackle aid was also to blame.
To this day, questions have remained on how funds for the rehabilitation of Haiyan-devastated areas were utilized. The public seems to be under the impression that aid is just a government matter whereas, in fact, non-governmental organizations are, more often than not, the ones with more capacity and less bureaucratic hurdles to respond to calamities. Of course, the problem was partly because of the nature of funds involved. Donations and assistance are treated as public money, and therefore, should be subjected to strict procurement and audit rules. Indeed, the Commission on Audit in the Philippines had come out with a report showing billions in funds during Haiyan response not accounted for. But this came more from the local government, not the national government, which brings into light the bureaucratic challenges of aid disposal.
The problem is not limited to aid recipients; it includes donors. South Korea, for instance, is having a difficult time tracking down aid, partly because of numerous agencies given budget for such purpose each year. Despite having a central aid agency, the Korea International Cooperation Agency, more than 40 other offices hold different amounts for international assistance each year. This makes it hard to take account of every centavo being shelled out and has resulted into some calls for the Korean government to ensure public money is not misused. Korea just joined IATI this year and has started publishing aid information last August.
For all of Duterte's thrust toward more independence for the Philippines, whatever that means, we should not be losing sight of international cooperation. Just like money is not the root of all evil, aid should not be stigmatized as a sign of dependency. Rather, as means for developing countries to get back to their feet whenever a tragedy like Haiyan hits, or for sustainable development. What the public should be calling for must be more transparency and more institutionalized mechanisms to ensure aid is going where it should and is used properly. There are many examples of how aid assisted former emerging economies toward development, and one of them is Korea. The Philippines could very well learn from the experience, instead of playing the arrogant independence card with almost nil efforts toward transparency and accountability in aid management.
About the author: Mr. Prinz P. Magtulis works as a business journalist in the Philippines, covering macroeconomy. He holds a master’s degree in public administration and conducts freelance policy research. His work will soon be published in the Asian Journal of Social Science and the International Journal of Public Administration. His research interests include public finance, political economy and governance.
Photo by Wikimedia Commons.
The views presented in this article are the author’s own and do not necessarily represent the views of any other organization.
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