The Philippines still has a long way to go before it achieves all the agreements set in the Paris Declaration on Aid Effectiveness, according to a baseline study made by the government. A report on the Baseline Study and Survey of the Government of the Philippines' Compliance with the Paris Declaration Commitments was recently made by the Harmonization Committee on Aid Effectiveness, which includes the National Economic and Development Authority.

The Philippines still has a long way to go before it achieves all the agreements set in the Paris Declaration on Aid Effectiveness, according to a baseline study made by the government.

A report on the Baseline Study and Survey of the Government of the Philippines' Compliance with the Paris Declaration Commitments was recently made by the Harmonization Committee on Aid Effectiveness, which includes the National Economic and Development Authority.

The report focused on the country's performance in meeting the 12 indicators of the Paris Declaration. These are Indicator 1, Partners have operational development strategies; Indicator 2, Building reliable country systems; Indicator 3, Aid flows are aligned on national priorities; and Indicator 4, Strengthen capacity by coordinated support.

Other indicators considered were Indicator 5a, Use of country Public Financial Management Systems; Indicator 5b, Use of Country Procurement Systems; Indicator 6, Avoiding parallel implementation structures; Indicator 7, The predictability of aid; Indicator 8, Untying aid; Indicator 9, Use of common arrangements or procedures; Indicator 10a, Joint country missions; Indicator 10b, Joint country analytical work; Indicator 11, The Quality of country performance assessment framework; and Indicator 12, Availability of mechanisms for mutual assessment of progress.

"Of the nine quantitative indicators measured, [the government] has so far achieved the 2010 target for only one indicator [Indicator 4, Coordinated capacity development] . There were noted declines from the 2005 baselines to the 2006 reported progress in five indicators [Indicator Nos. 5a, 5b, 6, 10a and 10b]. On the other hand, improvements were noted only in three indicators [Indicators 3, 7 and 9]," the report stated.

The report stated that in Indicator 2, the country is doing well, since it has already been implementing a lot of system reforms, including the enactment of the Procurement Reform Law in January 2003 and the establishment of the single oversight body, like the Government Procurement Policy Board, to oversee all matters affecting public procurement.

However, the main challenge for the government is on its ability to operationalize and sustain the systems and reforms that are currently underway.

"While progress has been made in putting these reforms in place, a lot of work still needs to be done in capacity development and information dissemination in order to achieve the Paris Declaration objective of transparency and accountability for both the country and the DPs [development partners]," the report stated.

In terms of Indicator 3, which is a quantitative indicator, the Philippines' score card showed that there was a slight improvement in the reflection of aid disbursed by DPs in the government's budget.

The set target by 2010 is to halve the proportion of aid disbursements to the government sector not included in the budget in 2005, with at least 85 percent reported on budget. With a baseline ratio of only 26 percent in budget inclusion in 2005, this improved to 32 percent as of December 2006, or an increase of only six percentage points.

The report said this is still a long way from achieving the minimum threshold of 85-percent budget inclusion by 2010. But, the target for 2010 is to halve the proportion of aid flows to government sector not reported in government's budget.

"Aid flows recorded in the GAA [General Appropriation Act] are significantly less than what the DPs disburse to the government sector. The GAA provides for the ODA [official development assistance] loan allocations that go to the various line agencies of the government but excludes those ODA loans that go to government-owned and -controlled corporations [GOCCs] and the government financial institutions [GFIs]," the report stated.

The report said this is because of the limited information capture. The report said there is great challenge in closing the gap between what is captured in the GAA and aid disbursed by DPs to the government.

Indicator 5b, meanwhile, focuses on the use of national procurement systems when funding is provided to the government. The indicator measures the volume of aid that uses the country's procurement systems as a percentage of the total aid provided to the government. The target for 2010 is to reduce the gap by one-third.

For 2005, DP use of the government's procurement system was 37 percent and declined to 29 percent as of December 2006. The report stated that more than half of the DPs used the country's procurement system both in 2005 and 2006.

"The relatively low usage could be because of the fact that foreign-assisted projects do not use local procurement procedures but instead use International Competitive Bidding procedures as their procurement method. This is especially true for loan-assisted projects in the Philippines, " the report stated.

The survey was sent and distributed to 33 development partners in the Philippines and 27 responded. Together, these partners account for at least 95 percent of the ODA in the country.

The respondents include the Asian Development Bank, Australia/AusAID, Austria, Canada/CIDA, China, Danish Ministry of Foreign Affairs, European Commission, European Investment Bank, Finland, France, Germany/GTZ/ KfW, International Fund for Agricultural Development, Italy, Japan/Japan International Cooperation Agency, Korea/Koica, the Netherlands, New Zealand/NZAID, Norway, Spain/AECI, Sweden/SIDA, Switzerland, UK/Department for International Development, United Nations Development Programme, United States/USAid and World Bank.

Source: BusinessMirror.