Bill specifying standards for foreign loans approved by House panel
MANILA, Philippines — A substitute bill that would outline standards for foreign loans or official development assistance (ODA) programs has been approved by the House of Representatives committee on ways and means.
During the hearing on Monday, lawmakers moved to approve a substitute bill to House Bill No. 7135, authored by committee chairperson and Albay 2nd District Rep. Joey Salceda.
All members present voted in favor of the bill except for Makabayan bloc member and Alliance of Concerned Teachers (ACT) party-list Rep. France Castro.
If enacted, the bill would amend Republic Act No. 8182 or the Official Development Assistance Act of 1996 by placing several safeguards like a line insertion in Section 2 of the law, ensuring that the donor government would issue a guarantee for at least 85 percent of the commercial component of the loan.
Article continues after this advertisementThere is also a proposed amendment to Section 4 of the law, explicitly stating that the ODA’s proceeds would be used to “promote human security and development.”
Article continues after this advertisementThe bill will also allow the Department of Finance relief from value-added tax for certain ODA loans and grants.
In a statement on Saturday, Salceda said that the ODA Act must also be amended for the primary reason that it would give the Philippines the “flexibility to acquire top-of-the-line air equipment and naval capabilities” that are needed to defend the country’s territories, particularly the Philippine airspace and the West Philippine Sea.
Salceda added that the 27-year-old law includes certain restrictions, like a grant component floor of 40 percent of the total ODA loans, and at least 25 percent of each loan.
He said it also has no provisions for private sector participation in financing.
“That hinders us from acquiring, say, French submarines although France has already signaled its intent to make loans for these available,” Salceda said
