2013 consolidated audit report on official development ... - coa…€¦ · coa commission on audit...

2013

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 5 2.0 HIGHLIGHTS OF THE REPORT 6 3.0 STATUS OF ODA-FUNDED PROJECTS Outstanding Balances 10 Availments 15 Repayments 17 Commitments 21 Undrawn Commitments 29 Debt Service Expenditures 34 4.0 AUDIT OBSERVATIONS AND RECOMMENDATIONS 43 4.1 Agency- specific Observations and Recommendations 4.1.1 Department of Agriculture (DA) 44 4.1.2 Department of Agrarian Reform (DAR) 52 4.1.3 Development Bank of the Philippines (DBP) 57 4.1.4 Department of Environment and Natural Resources (DENR) 60 4.1.5 Department of Energy (DOE) 65 4.1.6 Department of Public Works and Highways (DPWH) 68 4.1.7 Department of Social Welfare and Development (DSWD) 72 4.1.8 National Irrigation Administration (NIA) 80 4.1.9 Department of Transportation and Communications (DOTC) 87 4.1.10 Other Agencies’ finding 90 4.2 Common Audit Observations 92 4.3 General Audit Recommendations 93 4.4 Status of Implementation of Prior Years’ Audit Recommendations 95 5.0 CHART I Sources and Utilization 4 II Programs and Projects Status 6 III Loan Availments, Repayment and Balances by Type of Creditor 7 IV

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

8

V Changes on Loan Outstanding Balance 10 VI Outstanding Balance by Creditor Type 10 VII Outstanding Balance by Creditor (Details) 11 VIII Number of Loans Outstanding Balance by Sector 12

IX Cumulative Availments by Sector 15 X Commitments by Type of Creditor 22 XI Cumulative Commitments, Cancellation and Net Commitments by

Sector 24

XII Cumulative Commitments, Cancellation and Net Commitments by Implementing Agency

25

XIII Undrawn Balance by Sector 28 XIV Debt Service Expenditures 30 XV Principal Repayment by Type of Creditor and Type of Loans 35 XVI Comparative Interest Payment 37 XVII Commitment Fees by Creditor Type anf Loan Type 39 XVIII Status of Implementation of Prior Years’ Audit Recommendations 95 6.0 TABLES I Status and Breakdown of Loans 3 II Debt Service Expenditures by Creditors 8 III Debt Service Expenditures by Sector 8 IV Commitment Fees by Type of Creditor and Type of Loans 9 V Highest Five Outstanding Balance by Sector 12 VI Outstanding Balance by Implementing Agency 14 VII

VIII Current Year Availments by Creditor Comparative Repayment

15 16

IX Current and Cumulative Repayments by Creditor 17 X Current and Cumulative Repayments by Implementing Agency 19 XI List of New ODA Loans 20 XII Cancelled Commitments for 2013 21 XIII Cumulative Commitments, Cancellation and Net Loan Commitment

by Creditor 22

XIV Cumulative Commitments, Cancellation and Net Commitments by Implementing Agency

25

XV Net Commitments, Cumulative Availments and Undrawn Balance by Creditor

27

XVI Net Commitments, Cumulative Availments and Undrawn Balance by Sector and Implementing Agency

29

XVII Debt Service Expenditures by Creditor 31 XVIII Debt Service Expenditures Paid by BTr 32 XIX Debt Service Expenditures Paid by GOCCs 34 XX Debt Service Expenditures Paid by BTr for the Implementing

Agencies Account 35

XXI Interests by Type of Creditor and Loans 37 XXII Interests on Loans Paid by BTr 38 XXIII Interests on Loans Paid by GOCCs 38 XXIV Commitment Fees by Implementing Agency 40 XXV Commitment Fees by Implementing Agency and Project 40 XXVI DA - Project Status and Loan Summary Profile 45 XXVII DA - List of Projects with Audit Observations 45 XXVIII DAR - Project Status and Loan Summary Profile 53

XXIX DAR - List of Projects with Audit Observations 53 XXX DBP - Project Status and Loan Summary Profile 58 XXXI DBP - List of Projects with Audit Observations 58 XXXII DENR - Project Status and Loan Summary Profile 61 XXXIII DENR - List of Projects with Audit Observations 61 XXXIV DOE - Project Status and Loan Summary Profile 66 XXXV DPWH - Project Status and Loan Summary Profile 69 XXXVI DPWH - List of Projects with Audit Observations 69 XXXVII DSWD - Project Status and Loan Summary Profile 73 XXXVIII DSWD - List of Projects with Audit Observations 73 XXXIX NIA - Project Status and Loan Summary Profile 81 XXXX NIA - List of Projects with Audit Observations 81 XXXXI DOTC - Project Status and Loan Summary Profile 88 XXXXII DOTC - List of Projects with Audit Observations 88 XXXXIII Status of Implementation of Prior Years’ Audit Recommendations 95

2WHSMP Second Women’s Health and Safe Motherhood Project 4 Ps Pantawid Pamilyang Pilipino ProgramABC Approved Budget of the ContractACIR Assistant Commissioner of Internal RevenueACT Area Coordinating TeamADB Asian Development BankAGDB Authorized Government Depository BankALCO Asset Liability Committee ANF Air Navigation Facilities Modernization ProjectAO Accountable OfficerAOM Audit Observation MemorandumAPL Adaptable Program LoanAPP Annual Procurement PlanAPR Annual Procurement RequestARBs Agrarian Reform BeneficiariesARCP II Agrarian Reform Communities Project IIARE Acknowledgment Receipt of EquipmentARIIP Agno River Integrated Irrigation Project ARISP II Agrarian Reform Infrastructure Support Project, Phase II ARISP III Agrarian Reform Infrastructure Support Project, Phase III BAC Bids and Awards CommitteeBACC Board of Audit and Compliance CommitteeBAC/TWG Bids and Awards Committee /Technical Working GroupBFP Bureau of Fire ProtectionBIHC Bureau of International Health CooperationBIR Bureau of Internal RevenueBOC Bureau of CustomsBOE Bureau of Equipment BPIP Banaoang Pump Irrigation Project BRS Bank Reconciliation StatementBSMPC Barangay Sub-Project Management CommitteeBSP Banko Sentral ng PilipinasBSAARP Bacolod-Silay Airport Access Road ProjectBTr Bureau of the TreasuryCAAP Civil Aviation Authority of the PhilippinesCAF Contract Approval FormCBIM Community-Based Infrastructure ManualCBPM Community Based Procurement ManualCCA Certificate of Completion and AcceptanceCCT Conditional Cash TransferCEXIM The Export-Import Bank of ChinaCFA Implementation Management Agreement CFL Compact Fluorescent LampsCHARMP

Cordillera Highland Agricultural Resource Management Project CHI-I China National Construction and Agriculture Machinery ICIP Construction In ProgressCNAA Collective Negotiation AgreementCNMEG China National Machinery and Equipment Corp. GroupCOA Commission on AuditCOS Contract of ServiceCSF Container Service Fee CY Calendar YearDA Department of AgricultureDAC Deputy Area CoordinatorDAR Department of Agrarian ReformDBM Department of Budget and Management DBP Development Bank of the Philippines

LIST OF ACRONYMS

LIST OF ACRONYMS

DENR 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 HealthDOTC Department of Transportation and CommunicationsDPWH Department of Public Works and HighwaysDSI Design Science IncorporatedDSWD Department of Social Welfare and DevelopmentDTI Department of Trade and IndustryDVs Disbursement VouchersECGD Export Credit Guarantee Department - Deutsche BankEGF Efficient Government FundEIB European Investment BankEME Extraordinary and Miscellaneous expensesEMF Environmental Monitoring FundEVAT Expanded Value Added Tax FAD Financial Accounting DepartmentFAPs Foreign Assisted ProjectsFAPsO Foreign-Assisted Project Office (FAPsO)FB Farmers BeneficiariesFEF front-end feeFFIs Foreign Funding Institutions FIMAS Finance & Management ServiceFIU Field Implementing UnitFIR Final Inspection ReportFLI Foreign Lending InstitutionFMIS Financial Management Information SystemFMR Financial Monitoring ReportFMSM Finance Management Sub-ManualFOREX Foreign Exchange FS Financial StatementFMO Fund Management OfficeFO Field OfficeFXRC Foreign Exchange Risk CoverFXRCF Foreign Exchange Risk Cover FeeGAA General Appropriations ActGAAM Government Accounting and Auditing Manual GCF Green Climate FundGEF Global Environment FacilityGFI Government Financing InstitutionsGMA Greater Maritime AccessGOP Government of the Philippines GOCCs Government Owned and Controlled CorporationsGPA Good Practice AwardsGPPB Government Procurement Policy BoardGSD General Services DivisionGSIS Government Service Insurance SystemHCAAP Help for Catubig Agricultural Advancement ProjectHH HouseholdHREA Head Revenue Executive AssistantHSDP Health Sector Development Project IAs Implementing AgenciesIARCDSP Italian Assistance to the Agrarian Reform Community

Development Support Program

LIST OF ACRONYMS

IBRD International Bank for Reconstruction and DevelopmentICS Inventory Custodian SlipIFAD International Fund for Agricultural DevelopmentIMA Implementation Management Agreement IMOs Irrigation Management OfficesIRPEP Irrigated Rice Production Enhancement ProgrammeIRR Implementing Rules and RegulationsIT Information TechnologyJBIC Japan Bank for International CooperationJICA Japan International Cooperation AgencyJEV Journal Entry VoucherJEXIM Export-Import Bank of Japan JRMP Jalaur River Multipurpose ProjectKC-AF KALAHI CIDSS - Additional FinancingKALAHI-CIDSS Kapit-Bisig Laban sa Kahirapan-Comprehensive and KFAED Kuwait Fund for Arab Economic DevelopmentKFW Kreditanstalt für WiederaufbauLADP Laguindingan Airport Development ProjectLAMP 2 Second Land Administration and Management ProjectLBP Landbank of the PhilippinesLBP-TOD Landbank of the Philippines-Treasury Operations Dept.LCCA Local Currency Current AccountLGUs Local Government UnitsMBURD Mega Bridges for Urban and Rural DevelopmentMCCT Modified Conditional Cash TransferMCT Municipal Coordinating TeamMDS Modified Disbursement SystemMICTSI Mindanao International Container Terminal Services, Inc.MIDSAAD Mindanao Sustainable Agrarian and Agriculture Development

ProjectMNGAS Manuals on the New Government Accounting SystemMOA Memorandum of AgreementMOOE Maintenance and Other Operating ExpensesMRDP Mindanao Rural Development ProgramMIRP Mindanao Road Improvement ProjectMWSS Manila Water and Sewerage SystemNCA Notice of Cash AllocationNCAA Non-Cash Availment AuthorityNCIP National Commission on Indegenous PeoplesNCISP Non-intrusive Container Inspection ProjectND Notice of DisbursementNEDA National Economic Development Authority NG National Government NGAs National Government AgenciesNGAS New Government Accounting SystemNGDAD National Government Debt Accounting Division NGOs Non-Governmental OrganizationsNGOs/POs Non-Governmental Organizations/Peoples' OrganizationNGP National Greening ProgramNHTO National Household Targeting Office NHTS-PR

National Household Targeting System for Poverty ReductionNIA National Irrigation Administration NIA-BPIP National Irrigation Administration - Banaoang Pump Irrigation

Project NIA-RIO National Irrigation Administration-Regional Irrigation OfficeNIADP New Iloilo Airport Development Project

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

LIST OF ACRONYMS

NLRC North Luzon Railway CorporationNPC National Power CorporationNPSBE National Program Support to Basic Education NPSENRMP National Program Support for Environment and Natural

Resources Management Program NOA Notice of AwardNPSTAR National Program Support for Tax Administration Reform NRIMP 2 National Roads Improvement and Management Project 2NRM Natural Resource ManagementOCM Overhead, Contingencies and MiscellaneousODA Official Development AssistanceOECF Overseas Economic Cooperation FundOGCC Office of the Government Corporate CounselOPEC Organization of the Petroleum Exporting CountriesORs Official ResceiptsOTC Over the CounterPAMANA PAyapa at MAsaganang PamayaNAnPAR Property Acknowledgement ReceiptPAS Philippine Accounting StandardsPBG Performance Based GrantPC Property CustodianPD Presidential DecreePDCI PHILJA Development Center IncorporatedPDS Philippine Dealing SystemPFRS Philippine Financial Reporting StandardsPPE Property Plant and EquipmentPEEP Philippine Energy Efficiency ProjectPEZA Philippine Economic Zone AuthorityPHIC Philippine Health Insurance CorporationPI Public InfrastructurePIA PHIVIDEC Industrial AuthorityPICE Philippine Institute of Civil EngineersPIDP Participatory Irrigation Development ProjectPIM Project Implementation Manual PLGU Provincial Local Government UnitPMIS Property Management Information SystemPMO Project Monitoring OfficePMST Project Management Support TeamPMU Project Monitoring UnitPHILJA Philippine Judicial AcademyPNOC Philippine National Oil CorporationPNR Philippine National RailwaysPO Purchase OrderPOW Program of WorkPPE Property, Plant and Equipment PPELC Property, Plant and Equipment Ledger CardPRDP Philippine Rural Development ProjectPS Procurement ServicePSO Project Support OfficePTC PHILJA Training Center PUV pool unit valuePWS Portable Water SystemPWU Provincial Women's UnionRA Republic ActRFO Regional Field OfficeRIGP Regional Infrastructure for Growth ProjectRITO Regional Information Technology Officer

LIST OF ACRONYMS

RMG Resource Management GroupROP Republic of the PhilippinesRPCI Report of Physical Count of InventoriesRPCPPE Report on the Physical Count of Property, Plant and

Equipment RPMT Regional Project Monitoring Team RPMO Regional Project Management OfficeRO Regional OfficeRORO Roll-On Roll-Off ROW Right of WayRSB Reinforced Steel barsRSMI Report of Supplies and Materials IssuedRTLA Retail Term Loan AgreementRuMEPP Rural Micro-Enterprise Promotion ProgrammeSADP I Selected Airports Development Project, Phase ISARO Special Allotment Release OrderSBGFC Small Business Guarantee and Finance CorporationSBP School Building ProjectsSC Supreme CourtSCs Stock CardsSCHARMP Second Cordillera Highland Agricultural Resource

Management ProjectSFD Saudi Fund for DevelopmentSL Subsidiary Ledger SLCs Supplies Ledger CardsSMEDSP Small & Medium Enterprise Development Support ProjectSMEFP Small Medium Enterprise Financing ProgrammeSOE Statement of ExpendituresSPs Sub-ProjectsSPCR Sub-Project Completion ReportSPSP Social Protection Support ProjectSPISP Southern Philippines Irrigation Sector ProjectSPU Supply and Property UnitSRRFPDP Social Reform Related Feeder Ports Development Projects SWDRP Social Welfare and Development Reform ProjectTADP Third Airports Development Project TCT Transfer Certificate of TitleTELOF Telecommunications Office TESDA Technical Education and Skills Development AuthorityTESDP Technical Education and Skill Development ProjectTSP Technical Service ProviderUCPB United Coconut Planters BankUSD US DollarsVAT Value Added Tax WB World Bank WFP Work and Financial Plan

1.0 INTRODUCTION

1

CONSOLIDATED AUDIT REPORT ON OFFICIAL DEVELOPMENT ASSISTANCE

FOR THE CALENDAR YEAR 2013

1.0 INTRODUCTION

1.1 Legal Basis

Official Development Assistance is governed by Republic Act (R.A.) No. 8182, as amended by R.A. No. 8555, approved on June 11, 1996, 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 (P.D.) No. 1939, the law amending R.A No. 4860. The ODA loan continued to be the favored source of financing for the priority development projects of the country due to its lower interest rate and longer maturity periods compared to other foreign loans.

Section 2 of the subject law defines ODA 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 the 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 R.A. No. 4860, as amended”.

2

The main law on public debt is R.A. No. 4860, issued on August 8, 1966 entitled:

Under Section 1 of the above 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.

Section 2 provides that the total amount of loans, credits and indebtedness,

excluding interests, which the President is authorized to incur 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.

Regarding the guarantee extended by the National Government (NG) to the

Government Owned and Controlled Corporations (GOCCs), the 1987 Philippine Constitution provides under Section 20, Article VII, that the President may 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 the 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. This provision is likewise reiterated under Section 3 of RA No. 4860 which states that the President of the ROP is likewise authorized, in behalf of the ROP, to guarantee, upon such terms and conditions as may be agreed upon, foreign loans extended directly to, or bonds for sale in international markets issued by, corporations owned or controlled by the Government of the Philippines for industrial, agricultural or other economic development purposes or projects authorized by law.

“ An Act Authorizing the President of the Philippines to Obtain such Foreign Loans and Credits, or to Incur such Foreign Indebtedness, as may be Necessary to Finance Approved Economic Development Purposes or Projects, and to Guarantee, in behalf of the Republic of the Philippines, Foreign Loans Obtained or Bonds Issued by Corporations Owned or Controlled by the Government of the Philippines for Economic Development Purposes including those Incurred for Purposes of Re-lending to the Private Sector, Appropriating the Necessary Funds Therefor, and for Other Purposes”.

3

Another legal basis for public debt is PD No. 1939. This was issued on June 27,

1984 amending R.A. No. 4860 by increasing foreign debt limit 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 ten years except those contracted in the interest of national security and rehabilitation resulting from natural calamities. It amended the last paragraph of Section 3 of R.A. 4860 which state that 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 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.

1.2 Scope and Content

The scope and content of the report are as follows:

1.2.1 The data on 406 ODA loans contracted and guaranteed by the National Government (NG) from January 1, 1995, as provided in Section 7 of R.A. No. 8182, up to December 31, 2013 are featured in this report.

There are two types of ODA loans: project loan and program loan. Project loans are foreign loans obtained to finance specific projects. Program loans are multi-purpose foreign loans not used to finance specific projects, but are conditioned on basic changes in economic, monetary or fiscal policies, among others. The loans comprise of 56 program loans and 350 project loans with cumulative net commitment amounting to P477.394 billion (US$10.753 billion) and P840.433 billion (US$18.929 billion) respectively. Table I shows the status and breakdown of these loans.

1.2.2 The loans were obtained from multilateral, bilateral and commercial creditors and utilized in five sectors: Infrastructure (Infra); Social Reform and Community Development (SRCD); Industry, Trade and Tourism (ITT); Agriculture, Agrarian

Program Project Total USD PHP5 50 55 5.588 248.0674 9 13 2.714 120.511

47 285 332 21.374 948.974- 6 6 0.006 0.275

56 350 406 29.682 1317.827USD 10.753 18.929 29.682PHP 477.394 840.433

Table I – Status and Breakdown of Loans

Cumulative Net Commitment

(in billion)

Cumulative Net Commitment

(in billion)StatusBreakdown

Active

1317.827

NewClosedCancelledTotal

4

Reform and Natural Resource (AARNR); and Governance and Institutions Development (GID). The graphical presentation of sources and utilization is shown in Chart 1.

Chart 1 – Sources and Utilization

1.2.3 The sources of the data in this report are the following:

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

b) List of ODA loans signed during the year – the list is sourced from the

Department of Finance (DOF) and National Economic Development Authority (NEDA).

c) Summary of Debt Service Expenditures - Foreign – debt service pertaining to

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

d) Actual Debt Service, ODA - Funded Projects – debt service pertaining to

payments made directly by the GOCCs for the NG Guaranteed loans prepared by concerned GOCCs.

1.2.4 Consolidated Audit Observations and Recommendations as of December 31, 2013

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.

Sources (Creditor Type) Sources

(Creditor Type)

5

1.3 Methodology

The Commission on Audit (COA) maintains a database on ODA loans which is updated annually based on the Status Report on NG Direct and Guaranteed Loans submitted by the BTr. The data on the Status Report were validated from the DMAD, BTr and implementing agencies. The status of projects and loans were solicited from the agencies and respective auditors and verified from the NEDA Portfolio Review Report.

Based on updated data file, schedules were prepared for ODA loans by creditor,

sector and implementing agency with data on commitments, availments, repayments and outstanding and undrawn balances per loan account and project. The sectoral classifications of loans/projects used were based on NEDA reports. Data in tables, charts and narrative reports were taken from the reports.

All balances were translated to the 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) then translated to Philippine Peso (PhP) using the exchange rate at reporting date.

In compliance with Section 8 (b) of R.A. No. 8182, as amended which mandated

the COA to conduct an audit of each ongoing and completed projects and submit report to Congress, the Auditors of National Government Agencies (NGAs), GOCCs and Local Government Units (LGUs) concerned, prepared and submitted to the National Government Sector (NGS) the audit observations and recommendations for consolidation. The consolidated audit observations and recommendations were grouped into audit issues related to Budget, Procurement, Financial Performance, Physical Performance, Project Sustainability and Other Issues.

2.0 HIGHLIGHTS OF THE REPORT

6

2.0 HIGHLIGHTS OF THE REPORT

The NG had contracted 406 ODA loans (excluding 7 cancelled loans) financing 336 programs and projects of the Government with net loan commitments of P1.318 trillion (US$29.68 billion) as of December 31, 2013. Of these programs and projects, 253 had been completed, 63 are on-going, and 12 have not yet started while 8 has been cancelled.

In 2013, 13 new loans were

contracted with net loan commitments of P120.51 billion (US$2.71 billion), 88.83 percent of these amounting to P107.06 billion (US$2.41 billion) remain undrawn, with no commitment fee paid by the NG.

Chart II – Programs and Projects Status

2.1 Loan Balances and Distribution

2.1.1 Outstanding Balances– P696.79 billion (US$15.69 billion)

As of December 31, 2013, out of 406 ODA loans, 328 had an outstanding balance amounting to P696.79 billion (US$15.69 billion) payable to three types of creditors, namely: Bilateral, Multilateral and Commercial.

2.1.2 Availments – P1.03 trillion (US$23.30 billion)

Total cumulative availments as of December 31, 2013 amounted to P1.03

trillion (US$23.30 million) while the current availments summed up to P36.40 billion (US$819.88 million).

In terms of sectoral distribution, the Social Reform and Community

Development is the major recipient of this year’s loan availments amounting to P23.55 billion (US$530.42 million) or 64.69 percent, followed by Infrastructure – P8.21 billion (US$185.00 million) or 21.25 percent, Agriculture - Natural Resources and Agrarian Reform – P3.99 billion (US$89.82 million) or 10.96 percent, Industry, Trade and Tourism – P0.55 billion (US$12.40 million) or 1.51 percent, and Governance and Institutions Development – P0.99 billion (US$2.23 million) or 0.27 percent.

Among the implementing agencies, the NGAs availed a total of P747.24

billion (US$16.83 billion), while the GOCCs and LGUs got P276.94 billion (US$6.24 billion) and P9.84 billion (US$0.22 billion), respectively.

2.1.3 Repayments – P337.23 billion (US$7.60 billion)

Cumulative repayments of P337.23 billion (US$7.60 billion) or 33.61

percent of the total availments were made to the following creditors: Bilateral – P152.45 billion (US$3.43 billion) or 45.21 percent, Multilateral – P142.80 billion (US$3.22 billion) or 42.35 percent and Commercial – P41.98 billion (US$0.95 billion) or 12.45 percent.

7

Shown below are the loan cumulative Availments, Repayments and outstading balances as of December 31, 2013, summarized as to type of creditor.

Chart III - Loan Availments, Repayment & Balances by Type of Creditor

(in billion peso)

2.2 Commitments – P1.47 trillion (US$33.14 billion)

The cumulative loan commitments as of December 31, 2013 totaled P1.47 trillion or US$33.14 billion. The cumulative cancellation of commitments reached P153.36 billion (US$3.45 billion) or 10.42 percent of the cumulative commitments.

The net loan commitments of P1.32 trillion (US$29.68 billion) were sourced

from the following creditors: Bilateral – P639.16 billion (US$14.40 billion), Multilateral – P593.77 billion (US$13.37 billion) and Commercial – P84.89 billion (US$1.91 billion).

For the current year, 13 new loans were contracted from five creditors. While five loan accounts with On the other hand, P2.56 billion or US$57.72 million from five loan accounts were cancelled representing unused/undisbursed balances of loan accounts.

2.3 Undrawn Commitments – P283.81 billion (US$6.39 billion)

For the year, the undrawn balances of commitments of P283.81 billion (US$6.39 billion) represent 21.54 percent of the net loan commitments, of which, P152.43 billion (US$3.43 billion) or 53.71 percent is from Bilateral creditors, P118.57 billion (US$2.67 billion) or 41.78 percent from Multilateral creditors and P12.82 billion (US$0.29 billion) or 4.52 percent from Commercial creditors.

Creditor Type Cumulative Availments

Cumulative Repayment

Outstanding Balance

Commercial 72.08 41.98 30.10 Multilateral 475.20 142.80 332.40 Bilateral 486.74 152.45 334.29 Total 1,034.02 337.23 696.79 % to Cumulative availments 100.00% 32.61% 67.39%

8

Shown Chart IV are the loan cumulative net Commitments, Availments and

Repayments, as well as its balances as of December 31, 2013, summarized as to type of creditor.

Chart IV - Loan Cumulative Net Commitments, Availments

and Undrawn Balances by Type of Creditor (in billion peso)

2.4 Debt Service Expenditures– P61.58 billion

During the year, the total debt service paid to creditors amounted to P95,149.04 billion, broken down as follows: Principal – P80.01 billion or 84.09 percent, Interest – P13.74 billion or 14.44 percent, Commitment Fees – P0.20 billion or 0.21 percent and Other charges – P1.20 billion or 1.26 percent as shown in Table II below.

Principal Interest Commit- ment Fees

Other Charges Total % to Total

1 Bilateral 24,786.01 6,138.86 172.63 751.04 31,848.54 33.472 Multilateral 48,098.16 6,734.65 28.00 386.16 55,246.98 58.063 Commercial 7,122.33 867.30 2.97 60.93 8,053.52 8.46

80,006.50 13,740.81 203.61 1,198.13 95,149.04 100.00

84.09 14.44 0.21 1.26 100.00

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

Creditor Type

TotalPercentage to total

Creditor Type Net Commitments

Cumulative Availments

Undrawn Balance

Commercial 84.89 72.08 12.81 Multilateral 593.77 475.20 118.57 Bilateral 639.17 486.74 152.43 Total 1,317.83 1,034.02 283.81 % to Net Commitments 100.00% 78.46% 21.54%

9

The breakdown of debt service expenditures by Sector is shown in Table III.

Commitment fees paid during the year for the undrawn balance amounted to P203.61 million or 0.07 percent of the total undrawn balance of commitments of P283.81 billion. Presented in Table IV are the types of loans with the amount of commitment fees paid to each type of creditor.

2.5 Audit Observations and Recommendations

The audit observations and recommendations which are significant and common among implementing agencies were summarized while iissues/observations particular to an agency are separately presented as agency-specific and both are grouped into audit issues related to Budget, Procurement, Financial Performance, Physical Performance, Project Sustainability and Other Issues.

Principal Interest Commit-

ments Fees

Other Charges Total % to Total

1 Infra. 35,735.97 6,584.22 163.36 981.38 43,464.92 45.682 GID 27,440.68 2,614.60 0.60 29.75 30,085.63 31.623 AARNR 8,374.40 1,675.36 13.65 85.91 10,149.31 10.674 SRCD 3,961.54 2,030.75 16.99 14.16 6,023.44 6.335 ITT 4,493.91 835.88 9.01 86.93 5,425.74 5.70

80,006.50 13,740.81 203.61 1,198.13 95,149.04 100.00

84.09 14.44 0.21 1.26 100.00

Total

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

Sector

Percentage to total

NG Direct NG Relent

NG-Guaranteed Total % to Total

1 Bilateral 137.68 - 34.95 172.63 84.792 Multilateral 18.62 - 9.38 28.00 13.753 Commercial 2.97 - - 2.97 1.46

159.27 - 44.33 203.61 100.00

78.23 0.00 21.77 100.00

Creditor Type


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

3.0 STATUS OF ODA –FUNDED

PROGRAMS AND PROJECTS

10

3.0 STATUS OF ODA-FUNDED PROJECTS

3.1 Outstanding Balance – P696.79 billion (US$15.69 billion)

As of December 31, 2013, the ODA loans has an outstanding balance of P696.79 billion (US$15.69 billion) which is lower by P46.20 billion (US$2.39 billion) compared with last year’s balance of P742.99 billion (US$18.09 billion). The decrease was caused by the adjustments, revaluation of foreign currency, and current year transactions (availments and repayments). The details are shown in Chart V:

3.1.1 By Type of Creditor The outstanding balance of ODA loans is payable to the following creditors: Bilateral – P 334.29 billion (US$7.53 billion) or 47.98 percent, Multilateral – P332.40 billion (US$7.49 billion) or 47.70 percent and Commercial – P30.10 billion (US$0.68 billion) or 4.32 percent. Chart VI presents the outstanding balance of ODA loans by creditor type as of December 31, 2013.

Of the outstanding ODA liabilities to bilateral creditors, the amount of P282.02 billion (US$6.35 billion) or 84.37 percent is payable to Japan Bank for International Cooperation (JBIC). For multilateral creditors, the liabilities to ADB and IBRD reached P168.22 billion (US$3.79 billion) or 50.61 percent and P159.46 billion (US$3.59 billion) or 47.97 percent, respectively. The breakdown are shown in the graphical presentations in the next page.

11

Chart VII – Outstanding Balance by Creditor (Details)

Bilateral Creditors

Multilateral Creditors

The amount due to commercial

creditors are mostly for CEXIM – P17.59 billion (US$396.25 million) or 58.45 percent, Bank of Austria Creditanstalt – P7.18 billion (US$161.77 million) or 23.86 percent and Raiffeissen Zentralbank Osterreich Aktiengeselschaft – P1.77 billion (US$39.84 million) or 5.88 percent, among others. The breakdown is shown in Chart VII.

Commercial Creditors

3.1.2 By Sector

Of the 406 loans, only 328 had an outstanding balance of P696.79 billion (US$15.69 billion) which is shared by the five sectors. Comparative figures are shown in Chart VIII.

12

Presented in Table V is the list of loans with the five highest outstanding balance

per sector.

US$ PHP 6,108.14 271,189.01 100

1 JBIC PH-P226 Subic-Clark-Tarlac Expressw ay Project

BCDA JBIC 507.26 22,521.14 8.30

2 ADB2282 PHI Pow er Sector Development Program Cluster

DOF ADB 353.43 15,691.59 5.79

3 JBIC PH-P211 LRT Line I Capacity Expansion Project, Phase II

LRTA JBIC 169.61 7,530.45 2.78

4 JBIC PH-P171 MM Strategic MRT Devt.(Line 2) Project, Phase II

LRTA JBIC 163.40 7,254.52 2.68

5 BNP PARIBAS JPY33.9B

Tulay ng Pangulo para sa Kaunlarang Pang-Agraryo

DAR BNP PARIBAS

162.92 7,233.15 2.67

TOTAL 1,356.61 60,230.85 22.212,916.29 129,477.51 100

1 ADB2840-PHI Governance in Justice Sector Reform Program- Subprogram 2

DOF ADB 300.00 13,319.40 10.29

2 ADB2489 PHI Governance in Justice Sector Reform Program

SC ADB 270.94 12,029.38 9.29

Infrastructure

Governance and Institution Development

Table V - Highest Five Outstanding Balance by Sector(in million)

Loan Account Number Name of Project IA Creditor

Amount % to Total - by Sector

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

Chart VIII – Number of Loans and Outstanding Balance by Sector

2012 2013 2012 2013 2012 2013 2012 2013 2012 2013 2012 2013

No. of Loans 162 159 20 19 75 75 55 56 21 19 333 328Outstanding Ba lance (in bi l l ion peso)

314.32 271.19 150.23 129.48 101.85 96.42 127.52 154.97 49.07 44.73 743 696.8

TotalITTParticulars

Infra. GID AARNR SRCD


13

(Table V, continued)

US$ PHP 3 IBRD 7913-

PHFood Crisis Response Development Policy Operation: Supplemental Support for Post-typhoon Recovery

DepEd IBRD 250.00 11,099.50 8.57

IBRD 7424 PH First Development Policy Loan Program

DOF 250.00 11,099.50 8.57

4 ADB2545 PHI Development Policy Support Program, Subprogram3

DOF ADB 238.48 10,588.20 8.18

5 ADB2450 PHI Development Policy Support Program Cluster-Sub Program 2

DOF ADB 236.89 10,517.42 8.12

TOTAL 1,546.32 68,653.40 53.022,171.72 96,420.13 100

1 JBIC PH-CL 020 (POLICY LOAN)

MM Air Quality Improvement Sector Development Program

DOF JBIC 288.44 12,806.08 13.28

2 IBRD 7615 PH Food Crisis Response Development Policy

DOF IBRD 200.00 8,879.60 9.21

3 JBIC PH-P199 Environmental Infrastructure Support Credit Program, Phase II

DBP JBIC 166.32 7,384.29 7.66

4 JBIC PH-P203 Agrarian Reform Infrastructure Support Project, Phase II

DAR JBIC 92.42 4,103.47 4.26

5 JBIC PH-P196 Central Luzon Irrigation Proj./Casecnan Multi-purpose Irrigation & Pow er Project

NIA JBIC 81.40 3,614.03 3.75

TOTAL 828.58 36,787.46 38.153,490.56 154,973.96 100

1 8085-PH DISASTER RISK MGMT.DEV. W/ CAT

DOF IBRD 500.00 22,199.00 14.32

2 2872-PHI Increasing Competitiveness for Inclusive Grow th- Subprogram 1

DOF ADB 350.00 15,539.30 10.03

3 IBRD 7805-PH

Social Welfare and Development Reform Project

DSWD IBRD 340.08 15,099.03 9.74

4 8238-PH Second Development Policy Loan to Foster More Inclusive Grow th

DOF IBRD 300.00 13,319.40 8.59

5 8050-PH Phil. Dev. Policy Loan to Poster

DOF IBRD 250.00 11,099.50 7.16

TOTAL 1,740.08 77,256.23 49.851,007.44 44,728.37 100

1 JBIC PH-P198 Industrial Support Services Expansion Program, Phase II

DBP JBIC 285.67 12,683.18 28.36

2 ADB2278 PHI Financial Market Regulation & Intermediation Program Cluster

DOF ADB 157.08 6,974.04 15.59

Agriculture, Agrarian Reform and Natural Resources

Social Reform & Community Development

Industry, Trade and Tourism




14

(Table V, continued)

US$ PHP 3 JBIC PH-P189 Domestic Shipping

Modernization Program, Phase II

DBP JBIC 135.14 5,999.84 13.41

4 ADB2199 PHI Microfinance Development Program

DOF ADB 119.15 5,289.80 11.83

5 JBIC PH-P157 Metro Cebu Dev. Proj. III (Cebu South Reclamation)

LBP JBIC 68.38 3,036.08 6.79

TOTAL 765.42 33,982.93 75.98



The difference between the totals and the sum of the components is due to rounding off 3.1.3 By Implementing Agency

Of the outstanding liabilities, the amount of P523.49 billion (US$11.79 billion) or

75.13 percent was availed by the NGAs while P168.79 billion (US$3.80 billion) or 24.22 percent was for the account of the GOCCs. The balance of P4.51 billion (US$0.10 billion) or 0.65 percent is for the LGUs. Shown below is the total loan outstanding balance with the number of NG direct and relent loans and NG guaranteed loans.

US$ PHP

NGAs 230 0 230 11,790.81 523,488.20 75.13GOCCs 30 62 92 3,801.70 168,787.77 24.22LGUs 6 0 6 101.65 4,513.01 0.65 Total 266 62 328 15,694.16 696,788.98 100

% to Total

Implementing Agency

NG Direct and Relent

loans

NG Guaranteed

Total No. of Loans

Amount(in million)


Out of the total outstanding balance for NGAs, the amount of P236.24 billion

(US$5.32 billion) or 45.13 percent belongs to DOF, representing program loans for NGAs fund requirements. The DPWH also got P109.38 billion (US$2.46 billion) or 20.90 percent for the different government infrastructure projects such as construction and improvement of roads, bridges and highways, flood control projects and restoration/ rehabilitation of waterways, among others. The DepEd had P34.61 billion (US$0.78 billion) or 6.61 percent for projects implemented to support basic education.

On the part of the GOCCs, DBP has an outstanding balance of P42.51 billion

(US$0.96 billion) or 25.18 percent while the other implementing agencies with more than 10 percent share on the total GOCCs outstanding balance are LRTA, LBP and BCDA.

For the LGUs, only two implementing agencies shared in the total outstanding

balance, with P3.57 billion (US$80.42 million) or 79.12 percent for the account of ARMM while the amount of P0.94 billion (US$21.23 million) or 20.88 percent was attributed to the Provincial Gov’t. of Lanao Del Norte.

3.2 Availments – P1.03 trillion (US$23.29 billion)

As of December 31, 2013, cumulative availments reached P1.03 trillion (US$23.29 billion)

or equivalent to 70.28 percent of the total net commitments as presented in Chart III. Of these, P36.40 billion (US$0.82 billion) or 3.52 percent constitute availments during the year.

Table VI – Outstanding Balance by Implementing Agency (in million)

15

3.2.1 By Creditor Of the cumulative availments, Bilateral creditors provided the biggest amount of

P486.74 billion (US$10.96 billion) or 47.07 percent, of which P388.61 billion (US$8.75 billion) or 79.84 percent came from JBIC. Loans availed from multilateral creditors totaled P475.20 billion (US$10.70 billion) or 45.96 percent mostly coming from ADB – P268.32 billion (US$6.04 billion) or 56.46 percent and IBRD – P200.24 billion (US$4.51 billion) or 42.14 percent. Availments from Commercial creditors summed up to P72.08 billion (US$1.62 billion) or 6.97 percent. The graphical presentation is shown in Chart III while details by creditor is presented in Table XV.

The current

availments of P36.40 billion (US$819.88 million) are broken down as follows: Bilateral– P7.66 billion (US$172.48 million) or 21.04 percent, Multilateral – P27.83 billion (US$626.88 million) or 76.46 percent and Commercial – P0.91 billion (US$20.52 million) or 20.52 percent. Breakdown of current loan availments by creditor is shown in Table VII.

3.2.2 By Sector

Cumulative availments of P1.03 trillion were shared by the following sectors: Infrastructure – P481.14 billion (US$10.84 billion) or 46.53 percent, Governance and Institution Development – P175.89 billion (US$3.96 billion) or 17.01 percent, Social Reform and Community Development – P175.06 billion (US$3.94 billion) or 16.93 percent, Agriculture, Natural Resources and Agrarian Reform – P137.71 billion (US$3.10 billion) or 13.32 percent and Industry, Trade and Tourism – P64.21 billion (US$1.45 billion) or 6.21 percent. Table XVI shows the breakdown of availments.

Under the Infrastructure sector, the

DPWH availed P172.01 billion (US$6.54 billion) which accounted for 35.75 percent of the cumulative availments for the implementation of different projects.

Current year availments were

distributed to: SRCD – P23.55 billion (US$530.42 million) or 64.69 percent, , Infra. – P8.21 billion (US$185.00 million) or 22.56 percent, AARNR – P3.99 billion (US$89.82 million) or 10.96 percent, ITT – P0.55 billion (US$12.40 million) or 1.51 percent, and GID – P0.01 billion (US$2.23 million) or 0.27 percent.

Chart IX – Cumulative Availments by Sector (in billion pesos)

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

USD PHP

Total Availments 819.88 36,401.08 100.00

Bilateral 172.48 7,657.81 21.041 JBIC 120.35 5,343.44 69.782 ECGD 28.42 1,261.95 16.483 ICO 10.25 455.29 5.954 SOCIETE GEN 9.08 402.97 5.265 KFW 4.06 180.45 2.366 SFD 0.27 11.96 0.167 AFD 0.04 1.75 0.02

Multilateral 626.88 27,832.15 76.46

1 IBRD 501.37 22,259.98 79.982 ADB 122.61 5,443.47 19.563 IFAD 2.04 90.69 0.334 OPEC 0.86 38.00 21.06

Commercial 20.52 911.12 2.50

1 BAC 20.16 894.84 98.212 CEXIM 0.25 11.16 1.223 BNP Paribas 0.12 5.12 0.56

% to Total

Table VII - Current Year Availments by Creditor(in million)

CY AvailmentsCreditor

16

3.2.3 By Implementing Agency

The NGAs cumulative availments reached P747.24 billion (US$16.83 billion) or 72.27 percent, GOCCs – P276.94 billion (US$6.24 billion) or 26.78 percent and LGUs – P9.84 billion (US$0.22 billion) or 0.95 percent. The DOF got the highest availment of P316.10 billion (US$7.12 billion) or 30.57 percent of the total cumulative availments for its 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. Details are shown in Table XIV.

The current year availments by implementing agency is as follows: a. NGAs – P32.65 billion (US$735.29 million) or 89.68 percent; b. GOCCs – P3.26 billion (US$73.45 million) or 8.96 percent; and c. LGUs – P0.49 billion (US$11.14 million) or 1.36 percent. During the year, the DOF received P13.32 billion (US$0.30 billion) or 40.80

percent for the project Second Development Policy Loan to Foster More Inclusive Growth while the DSWD received P8.38billion (US$0.19 billion) or 25.68 percent for Social Welfare and Development Reform, Social Protection Support and KALAHI-CIDSS project.

The DBP received P1.87 billion (US$42.21 million) or 57.46 percent of the current

availments for GOCCs on the following projects: Environmental Development Project – P1.13 billion (US$25.46 million), Logistics Infrastructure Development Project – P0.48 billion (US$10.84 million), Credit for Better HealthCare - P0.26 billion (US$5.90 million) and Rural Power Project – P0.35 million (US$0.01 million). The amount of P0.77 billion (US$17.40 million) or 23.69 percent will be used by LBP for Agricultural Credit Support Project, Support for Strategic Local Development & Investment Project and Metro Manila Waste Water Management Project.

For LGUs, the amount of P0.49 billion (US$11.14 million) or one percent of current

year availments was received by ARMM as additional financing for ARMM Soial Fund Project and ARMM Social Fund for Peace & Development Project.

3.3 Repayments – P337.23 billion (US$7.60 billion)

As of December 31, 2013, cumulative repayments reached P337.23 billion (US$7.60

billion), which is equivalent to 32.61 percent of the total availments or an increase of 6.34 percent compared with 2012. Comparative figures are presented in Table VIII. Of this amount, P76.95 billion (US$1.73 billion) or 22.82 percent covered repayment during the year.

3.3.1 By Creditor

Cumulative repayments of P337.23 billion (US$7.60 billion) were made to the

following: Bilateral creditors – P152.45 billion (US$3.43 billion) or 45.21 percent,

Table VIII – Comparative Repayment

2013 2012Cumulative Availments 1,034.02 1,007.80 26.22 Cumulative Repayments 337.23 264.81 72.42 Repayment rate (%) 32.61 26.28 6.34

ParticularsAmount

(in billion) Increase/ (decrease)

Difference between totals and sum of components is due to rounding

17

Multilateral creditors – P142.80 billion (US$3.22 billion) or 42.35 percent and Commercial creditors – P41.98 billion (US$0.95 billion) or 12.45 percent.

The JBIC is the recipient of P106.58 billion (US$ 2.40 billion) or 69.91 percent of

the cumulative repayments among bilateral creditors, followed by KEXIM with P24.35 billion (US$0.55 billion) or 15.97 percent. For the multilateral creditors, ADB and IBRD received P100.10 billion (US$2.25 billion) or 70.10 percent and P40.78 billion (US$0.92 billion) or 28.56 percent, respectively.

Current year’s repayments of P76.95 billion (US$1.73 billion) were made to the

following creditors: Bilateral – P22.50 billion (US$0.51 billion) or 29.25 percent; Multilateral – P47.16 billion (US$ 1.01 billion) or 61.30 percent and Commercial – P7.28 billion (US$0.16 billion) or 9.46 percent.

The details of repayments by creditor are shown below.

Table IX – Current and Cumulative Repayments by Creditor (in million)

USD PHP USD PHP

Total Repayment 1,733.08 76,945.32 7,595.57 337,228.08 100.00

Bilateral 506.87 22,504.05 3,433.70 152,449.61 45.211 JBIC 357.79 15,885.00 2,400.59 106,581.55 69.912 KEXIM 58.24 2,585.94 548.48 24,351.56 15.973 KFAED 10.52 466.86 93.44 4,148.49 2.724 ITALY II 6.63 294.44 85.95 3,816.07 2.505 US Public Laws 10.35 459.57 77.65 3,447.57 2.266 KFW 7.42 329.38 73.80 3,276.77 2.157 ECGD 37.24 1,653.31 46.27 2,054.21 1.358 AFD 6.95 308.61 27.97 1,241.90 0.819 ICO 2.45 108.84 14.81 657.39 0.43

10 ANZ/EFIC 1.87 83.22 14.18 629.41 0.4111 FORTIS BANK 1.26 55.85 13.47 597.92 0.3912 Belgian 0.86 38.40 9.51 422.35 0.2813 JFA 1.11 49.37 9.45 419.69 0.2814 FP 1.25 55.50 4.38 194.24 0.1315 EFIC 1.67 73.95 3.33 147.89 0.1016 SFD 1.00 44.39 3.00 133.18 0.0917 LEONIA BANK - - 2.83 125.56 0.0818 SIDA INEC - - 2.53 112.48 0.0719 Artigiancassa 0.26 11.42 2.06 91.37 0.06

Multilateral 1,062.29 47,163.72 3,216.43 142,802.89 42.35

1 ADB 923.85 41,016.98 2,254.67 100,102.78 70.102 IBRD 132.94 5,902.40 918.46 40,777.99 28.563 NDF 2.37 105.08 19.38 860.59 0.604 OPEC 1.16 51.54 13.68 607.30 0.435 IFAD 1.69 74.96 9.22 409.55 0.296 EIB 0.29 12.77 1.01 44.70 0.03

Commercial 163.92 7,277.55 945.44 41,975.58 12.45

1 CEXIM 103.60 4,599.78 164.21 7,290.42 17.372 Banco 1.35 59.81 155.91 6,921.89 16.49

% to Total

Cumulative RepaymentCreditor

Current Repayment

18

(Table IX, continued)

USD PHP USD PHP3 ERSTE (Austria) - - 122.18 5,424.50 12.924 CHI 20.13 893.87 102.46 4,548.99 10.845 BAC 15.72 697.89 79.15 3,514.12 8.376 ING Bank N.V. - - 52.13 2,314.51 5.517 FP 6.52 289.65 51.21 2,273.66 5.428 SOCIETE GEN - - 33.74 1,498.06 3.579 Banco Bilbao Vizcaya 1.10 49.02 30.23 1,342.08 3.20

10 NDF - - 27.40 1,216.72 2.9011 Bancaja - - 25.75 1,143.42 2.7212 FORTIS BANK - - 24.91 1,106.08 2.6413 ANZ/EFIC 7.15 317.56 14.30 635.11 1.5114 EFIC - - 14.08 625.02 1.4915 RZOA 2.01 89.22 14.07 624.54 1.4916 ECGD 4.35 192.97 13.92 617.83 1.4717 ICO - - 7.01 311.42 0.7418 Bank of America - - 6.19 274.99 0.6619 Credit Com'l de 0.92 40.75 5.45 242.06 0.5820 EDC 1.04 46.26 1.04 46.26 0.1121 Credit Agricole 0.02 0.78 0.09 3.89 0.01

% to Total

Cumulative RepaymentCreditor

Current Repayment

3.3.2 By Sector

Repayment were applied to the following sectors: Infrastructure – P209.95 billion (US$4.73 billion) or 62.26 percent; Governance and Institutions Development – P46.41 billion (US$1.05 billion) or 13.76 percent; Agriculture, Natural Resources and Agrarian Reform – P41.30 billion (US$0.93 billion) or 12.24 percent; Social Reform and Community Development – P20.08 billion (US4 0.45 billion) or 5.95 percent; and Industry, Trade and Tourism – P19.48 billion (US$ 0.44 billion) or 5.78 percent.

3.3.3 By implementing Agency

Cumulative repayments made for NGAs totaled P223.75 billion (US$5.04 billion) or 66.35 percent while for GOCCs the amount is P108.15 billion (US$2.44 billion) or 32.07 percent and for LGUs it is P5.33 billion (US$0.12 billion) or 1.58 percent. For the DOF account, P79.86 billion (US$ 1.80 billion) representing 23.68 percent of the cumulative repayment was paid while for DPWH, the amount is P62.63 billion (US$1.41 billion) or 18.57 percent.

Current year repayments of P44.03 billion (US$1.07 billion) were made for the

following implementing agencies: NGAs – P59.21 billion (US$1.33 billion) or 76.95 percent; GOCCs – P17.48 billion (US$ 0.39 billion) or 22.71 percent and LGUs – P258.75 million (US$5.83 million) or 0.34 percent.

The current and cumulative repayments by implementing agency is presented in

Table X.

19

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

USD PHP USD PHP

Total 1,733.08 76,945.32 7,595.57 337,228.08 100.00

NGAs 1,333.65 59,211.18 5,039.65 223,750.39 66.351 DOF 748.95 33,251.85 1,798.79 79,862.60 23.682 DPWH 261.38 11,604.84 1,410.55 62,625.72 18.573 DOTC 71.53 3,175.79 582.37 25,856.11 7.674 DILG 36.47 1,619.27 259.70 11,530.09 3.425 DAR 58.82 2,611.62 222.74 9,889.07 2.936 DepEd 37.72 1,674.84 195.15 8,664.14 2.577 DA 39.39 1,748.90 191.43 8,498.90 2.528 DOH 14.45 641.40 96.61 4,289.48 1.279 DENR 8.39 372.31 56.94 2,528.11 0.7510 BFAR 6.59 292.56 46.89 2,081.66 0.6211 SC 16.99 754.16 32.96 1,463.21 0.4312 BOC 13.21 586.32 28.61 1,270.23 0.3813 DSWD 8.17 362.62 28.08 1,246.66 0.3714 NAMRIA - - 25.75 1,143.42 0.3415 PRRC 4.74 210.47 17.20 763.70 0.2316 TESDA 3.13 139.10 12.68 562.75 0.1717 DTI 1.36 60.56 9.91 439.80 0.1318 PMMA 1.14 50.66 7.73 343.14 0.1019 UP/PGH 0.33 14.68 7.28 323.00 0.1020 OP 0.27 12.17 6.47 287.40 0.0921 DOT 0.61 27.06 1.83 81.18 0.02

GOCCs 393.61 17,475.39 2,435.97 108,152.18 32.07

1 PSALM 77.88 3,457.75 655.20 29,089.68 8.632 LBP 48.82 2,167.48 385.68 17,123.26 5.083 LRTA 33.17 1,472.46 215.23 9,555.78 2.834 NPC 3.84 170.32 207.77 9,224.68 2.745 DBP 31.80 1,411.81 195.08 8,661.09 2.576 PPA 29.74 1,320.51 186.44 8,277.65 2.457 NLRC 90.40 4,013.46 135.60 6,020.20 1.798 NIA 31.37 1,392.80 125.26 5,561.13 1.659 PNOC - - 99.89 4,435.02 1.3210 MWSS 7.92 351.66 65.93 2,927.35 0.8711 LWUA 4.75 210.88 47.19 2,095.22 0.6212 BCDA 18.12 804.33 45.29 2,010.90 0.6013 SBMA 8.02 356.14 38.71 1,718.77 0.5114 PHIVIDEC 2.58 114.34 10.30 457.41 0.1415 SBGFC 2.18 96.58 7.18 318.66 0.0916 PNR 1.55 68.62 5.37 238.56 0.0717 PTA 0.63 27.80 5.32 236.30 0.0718 NFA 0.26 11.42 2.06 91.37 0.0319 PEZA 0.25 11.01 1.74 77.07 0.0220 LLDA 0.36 16.04 0.72 32.07 0.01

% to Total

Cummulative RepaymentCreditor

Current Repayment

20

(Table X, continued)

USD PHP USD PHP

LGUs 5.83 258.75 119.95 5,325.51 1.58

1 ARMM 4.54 201.62 112.01 4,973.24 1.47

2 Provl Gov't-LDN

1.29 57.13 7.93 352.27 0.10

% to Total

Cummulative RepaymentCreditor

Current Repayment

3.4 Commitments – P1.47 trillion (US$33.14 billion)

As of December 31, 2013, the NG had already contracted 406 loans with total commitments amounting to P1.47 trillion (US$33.14 billion), detail by creditor presented in Table XIII. Of these, 13 loans with a total amount of P120.51 billion (US$2.71 billion) or 8.19 percent were signed and granted during the year.

Of the new loans, P13.46 billion (US$303.07 million) or 11.16 percent was availed

and utilized by DOF, DENR and DSWD for two programs and one project namely: Social Welfare and Development Reform Project (Additional Financing), Second Development Policy Loan to Foster More Inclusive Growth and Integrated Natural Resources and Environmental Management Project. Table XI shows the list of ODA loans signed in CY 2013 and its availments.

US$ PHP US$ PHP TOTAL 2,714.33 120,510.97 100.00 303.07 13,455.53 100.00DPWH 102.36 4,544.59 3.77 - - 0.00

1 KEXIM PHL-14 KRW23B

Samar Pacif ic Coastal Road Project

Infra. KEXIM 21.88 971.30 21.37

2 PHL-17 Integrated Disaster Risk Reduction and Climate Change Adaptation Measures in the Low Lying Areas of Pampanga Bay

Infra. KEXIM 80.48 3,573.28 78.63

DOF 1,300.00 57,717.40 47.89 300.00 13,319.40 98.991 8238-PH Second Development Policy

Loan to Foster More Inclusive Grow th

SRCD IBRD 300.00 13,319.40 23.08 300.00 13,319.40 100.00

2 3080-PHI Emergency Assistance for Relief and Recovery from Typhoon Yolanda

SRCD ADB 500.00 22,199.00 38.46 0.00

3 8328-PH Second Development Policy Loan to Foster Inclusive Grow th: Supplemental

f

SRCD IBRD 500.00 22,199.00 38.46 0.00

DENR 120.41 5,345.74 4.44 2.82 125.03 0.931 I-890-PH Integrated Natural

Resources and Environmental Management Project

AARNR IFAD 20.41 905.94 16.95 0.00

2 2957-PHI Integrated Natural Resources and Environmental Management Project

AARNR ADB 100.00 4,439.80 83.05 2.82 125.03 100.00

DOE 400.00 17,759.20 14.74 - - 0.001 2964-PHI Market Transformation

through Introduction of Energy Eff icient Electric Vehicles Project

Infra. ADB 100.00 4,439.80 25.00

Availments % to Total

Table XI - List of New ODA Loans(in million)

% to Total

Loan Account Number

Name of Project Sector Creditor Commitments

21

(Table X, continued)

US$ PHP US$ PHP 2 8261-PHI Market Transformation Thru

Introduction of Energy Eff icient Electric Vehicles Project

Infra. ADB 300.00 13,319.40 75.00

DSWD 100.00 4,439.80 3.68 0.25 11.10 0.081 8218-PH Social Welfare and

Development Reform Project (Additional Financing)

SRCD IBRD 100.00 4,439.80 100.00 0.25 11.10 100.00

DOTC 691.57 30,704.24 25.48 - - 0.001 PH-P255 Capacity Enhancement of

Mass Transit Systems in Metro Manila Project

Infra. JBIC/JICA 411.07 18,250.55 59.44

2 PH-P256 New Bohol Airport Construction and Sustainable Environmet Protection Project

Infra. JBIC/JICA 102.47 4,549.56 14.82

3 PH-P257 Maritime Safety Capability Improvement Project for the Philippine Coast Guard

Infra. JBIC/JICA 178.03 7,904.13 25.74

Availments % to Total

% to Total

Loan Account Number

Name of Project Sector Creditor Commitments

The cumulative cancelled commitments as of December 31, 2013 reached P153.36 billion (US$3.45 billion) or 10.42 percent of the cumulative commitments of P1.47 trillion (US$33.14 billion).

During the year, cancellation of commitments amounting to P2.56 billion

(US$57.72 million) representing unused/undisbursed balances was made by the creditors of five loan accounts as shown in Table XII.

Of the amount cancelled, P1.27 billion (US$28.61 million) pertains to Multilateral

creditors while the balance of P1.29 billion (US$29.11 million) were for Bilateral creditors.

USD PHP

Total 57.72 2,562.67 Infrastructure 53.22 2,362.88

1 ADB2507 PHI Phil. Energy Eff iciency Project

DOE ADB 1.83 81.03

2 IBRD 7673 PH Rural Pow er Project (Additional Financing)

DBP IBRD 22.28 989.38

3 JBIC PH-P246 Post Ondoy and Pepeng Short Term Infrastructure Rehabilitation Project

DPWH JBIC 16.90 750.23

4 JBIC PH-P221 Help for Catubig Agr. Adv. Project, SI

NIA JBIC 12.21 542.25

Social Reform and Community Development 4.50 199.79 1 8035-PH Laguna Lake Development

AuthorityLLDA IBRD 4.50 199.79

Table XII - Cancelled Commitments for 2013(in million)

AmountLoan Account Number CreditorName of Project IA

22

3.4.1 By Creditor

Cumulative loan commitments as of December 31, 2013 amounted to P1.47 trillion or US$33.14 billion sourced from the following: Bilateral creditors – P724.89 billion (US$16.33 billion) or 49.27 percent, Multilateral creditors – P659.95 billion (US$ 14.86 billion) or 44.86 percent and Commercial creditors – P86.35 billion (US$1.94 billion) or 5.87 percent. The JBIC, a bilateral creditor, reported P555.64 billion (US$12.52 billion) or 37.78 percent of the total commitments while the ADB and IBRD, multilateral creditors, committed the amount of P361.92 billion (US$8.15 billion) or 24.60 percent and P285.58 billion (US$6.43 billion) or 19.41 percent, respectively.

Current year’s commitments or new loans totaling P120.51 billion (US$2.71 billion), as presented in Table XI, were sourced from Bilateral creditors – P35.25 billion (US$0.79 billion) and Multilateral creditors – P85.26 billion (US$1.92 billion).

The total net loan commitments by creditor are as follows: Bilateral – P639.16 billion (US$14.40 billion) or 48.50 percent, Multilateral – P593.77 billion (US$13.37 billion) or 45.06 percent and Commercial – P84.89 billion (US$1.91 billion) or 6.44 percent. Among the bilateral creditors, the JBIC had P488.64 billion (US$11.01 billion) accounting for 76.45 percent of the total bilateral net loan commitments. For multilateral creditors, the ADB and IBRD committed P326.92 billion (US$7.36 billion) or 55.06 percent and P255.25 billion (US$5.75 billion) or 42.99 percent, respectively. For commercial creditors, the CEXIM had the highest amount of P35.69 billion (US$0.80 billion) or 42.04 percent of the total commercial net commitments. Table XIII shows the complete list of foreign creditors and net loan commitments.

USD PHP USD PHP USD PHP

Total Net Commitments 33,136.33 1,471,186.56 3,454.19 153,359.15 29,682.13 1,317,827.41 100.00

Bilateral 16,327.10 724,890.52 1,930.87 85,726.62 14,396.23 639,163.90 48.501 JBIC 12,515.07 555,643.94 1,509.16 67,003.85 11,005.90 488,640.09 76.452 ECGD 822.97 36,538.11 - - 822.97 36,538.11 5.723 BNP Paribas 1,136.73 50,468.56 367.61 16,321.31 769.12 34,147.25 5.344 KEXIM 557.44 24,749.32 6.32 280.66 551.12 24,468.65 3.835 KFW 347.06 15,408.69 39.70 1,762.53 307.36 13,646.16 2.146 US Public Laws 220.00 9,767.56 0.87 38.67 219.13 9,728.89 1.527 AFD 206.48 9,167.08 - - 206.48 9,167.08 1.438 ICO 120.04 5,329.40 0.02 0.89 120.02 5,328.51 0.839 ANZ/EFIC 106.48 4,727.43 2.52 112.08 103.95 4,615.35 0.7210 EFIC 89.48 3,972.94 0.22 9.65 89.27 3,963.29 0.6211 FP 53.14 2,359.18 2.80 124.15 50.34 2,235.03 0.3512 Artigiancassa 36.05 1,600.57 - - 36.05 1,600.57 0.2513 SFD 20.00 887.89 - - 20.00 887.89 0.1414 KFAED 21.29 945.43 1.54 68.26 19.76 877.17 0.1415 SOCIETE GEN 17.22 764.66 - - 17.22 764.66 0.12

% to Total

Table XIII - Cumulative Commitments, Cancellation and Net Loan Commitment by Creditor(in million pesos)

Net Cumulative CommitmentsCreditor

Cumulative CommitmentsCumulative Cancellation

Chart X – Commitments by Creditor (in billion peso)


23

(Table XIII, continued)

USD PHP USD PHP USD PHP16 KBC BANK 15.63 693.73 0.00 0.00 15.63 693.73 0.1117 FORTIS BANK 11.67 518.33 - - 11.67 518.33 0.0818 ITALY II 11.17 495.95 0.05 2.20 11.12 493.75 0.0819 Belgian 8.62 382.90 - - 8.62 382.90 0.0620 JFA 5.18 230.14 0.04 1.71 5.15 228.43 0.0421 SIDA INEC 2.84 126.23 0.01 0.66 2.83 125.56 0.0222 LEONIA BANK 2.53 112.48 0.00 0.00 2.53 112.48 0.02

Multilateral 14,864.30 659,945.13 1,490.42 66,171.79 13,373.88 593,773.34 45.06

1 ADB 8,151.68 361,918.17 788.39 35,002.73 7,363.29 326,915.44 55.06

2 IBRD 6,432.30 285,581.06 683.11 30,328.59 5,749.19 255,252.47 42.993 IFAD 140.66 6,244.84 9.17 407.04 131.49 5,837.80 0.984 OPEC 97.00 4,306.61 7.97 354.03 89.03 3,952.57 0.675 EIB 26.50 1,176.55 - - 26.50 1,176.55 0.206 NDF 16.17 717.92 1.79 79.40 14.38 638.52 0.11

Commercial 1,944.93 86,350.91 32.90 1,460.74 1,912.03 84,890.18 6.44

1 CEXIM 803.98 35,694.90 0.13 5.77 803.85 35,689.13 42.042 BAC 241.27 10,711.83 0.08 3.51 241.19 10,708.33 12.613 BNP Paribas 156.64 6,954.38 - - 156.64 6,954.38 8.194 ECGD 155.91 6,921.89 - - 155.91 6,921.89 8.155 EDC 124.44 5,524.89 2.26 100.38 122.18 5,424.50 6.396 CHI 59.97 2,662.35 - - 59.97 2,662.35 3.147 RZOA 53.75 2,386.46 - - 53.75 2,386.46 2.818 BBV 52.15 2,315.40 0.02 0.89 52.13 2,314.51 2.739 FP 38.65 1,716.11 2.49 110.60 36.16 1,605.50 1.89

10 Credit Com'l de France

49.64 2,203.88 15.90 705.81 33.74 1,498.06 1.76

11Credit Agricole Indosuez

27.43 1,217.94 0.03 1.22 27.40 1,216.72 1.43

12 Banco Santander 25.75 1,143.42 - - 25.75 1,143.42 1.35

13 ERSTE (Austria) 25.01 1,110.33 - - 25.01 1,110.33 1.3114 ANZ/EFIC 25.55 1,134.58 0.64 28.51 24.91 1,106.08 1.3015 ICO 21.62 959.99 - - 21.62 959.99 1.13

16 ING Bank N.V. 20.10 892.19 - - 20.10 892.19 1.05

17 SOCIETE GEN 14.44 640.96 - - 14.44 640.96 0.7618 EFIC 14.80 657.09 0.72 32.07 14.08 625.02 0.7419 FORTIS BANK 9.12 405.05 - - 9.12 405.05 0.48

20 Bancaja 7.01 311.42 - - 7.01 311.42 0.37

21 Bank of America 10.00 443.98 3.81 168.99 6.19 274.99 0.3222 NDF 7.70 341.86 6.82 302.98 0.88 38.89 0.05

% to Total

Net Cumulative CommitmentsCreditor

Cumulative CommitmentsCumulative Cancellation


3.4.2 By Sector

Sectoral allocation of cumulative net commitments is as follows: Infrastructure –

P676.64 billion (US$15.24 billion) or 51.35 percent, Governance and Institutions Development – P176.12 billion (US$3.97 billion) or 13.36 percent, Agriculture, Natural Resources and Agrarian Reform – P163.86 billion (US$3.69 billion) or 12.43 percent, Social Reform and Community Development – P234.21 billion (US$5.28 billion) or 17.77 percent and Industry, Trade and Tourism – P67.00 billion (US$1.51 billion) or 5.08 percent. The breakdown of the amount by sector is shown in Chart XI.

24

Chart X - Cumulative Commitments, Cancellation and Net Commitments

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

Infra. 759.15 51.60 82.51 53.80 676.64 54.04GID 200.18 13.61 24.06 15.69 176.12 13.88AARNR 200.48 13.63 36.62 23.88 163.86 13.16SRCD 241.06 16.39 6.85 4.47 234.21 13.26ITT 70.32 4.78 3.32 2.16 67.00 5.67Total 1,471.19 100.00 153.36 100.00 1,317.83 100.00

% to Cumulative Commitments 100% 10% 90%

Type of CreditorCumulative Commitments Cumulative Cancellation Net Commitments

Difference between totals and sum of components is due to rounding off Cumulative cancellation of P153.36 billion (US$3.45 billion) or 10.00 percent of

cumulative commitments and distributed as follows: Infrastructure – P82.51 billion (US$1.86 billion) or 53.80 percent, Governance and Institutions Development – P24.06 billion (US$0.54 billion) or 15.69 percent, Agriculture, Natural Resources and Agrarian Reform – P36.62 billion (US$0.82 billion) or 23.88 percent, Social Reform and Community Development – P6.85 billion (US$0.15 billion) or 4.47 percent and Industry, Trade and Tourism – P3.32 billion (US$0.07 billion) or 2.16 percent.


The cumulative commitments are shared by NGAs – P1.06 trillion (US$23.98 billion) or 72.38 percent; GOCCs – P395.68 billion (US$ 8.91 billion) or 26.90 percent and LGUs – P10.67 billion (US$ 0.24 billion) or 0.73 percent. Chart XII shows the distribution of cumulative commitments, cancellation and net commitments by implementing agency.

25

Of the cumulative cancelled commitments of P153.36 billion (US$3.45 billion), P1030.65 billion (US$2.27 billion) or 65.63 percent is for NGAs, P51.92 billion (US$1.17 billion) or 33.85 percent for GOCCs and P0.79 billion (US$0.02 billion) or 0.52 percent for LGUs.

Net loan commitments

at year end of P1.32 trillion is for the following: loans directly contracted by the NG – P964.18 billion (US$21.72 billion) or 73.16 percent, GOCCs – P343.76 billion (US$7.74 billion) or 26.09 percent and for LGUs – P9.88 billion (US$0.22 billion) or 0.75 percent..

For the NGAs, more than 50 percent of the amount is accounted under the

following agencies: DOF – P360.50 billion (US$8.12 billion) or 37.39 percent, DPWH – P240.77 billion (US$5.42 billion) or 24.97 percent, DOTC – P84.87 billion (US$1.91 billion) or 8.80 percent; and DAR – P52.83 billion (US$ 1.19 billion) or 5.48 percent. Under the GOCCs, P66.70 billion (US$1.50 billion) or 19.40 percent and P57.20 billion (US$1.29 billion) or 16.64 percent were reported by the DBP and LBP, respectively. The share for LGUs is only P9.88 billion (US$0.25 billion) or 0.75 percent of the total loan net commitments. Shown in Table XIV is the Net Loan Commitments by Implementing Agency.

(Table XIV, continued)


Total 33,136.33 1,471,186.56 3,454.19 153,359.15 29,682.13 1,317,827.41 100.00

NGAs 23,983.82 1,064,833.56 2,267.00 100,650.17 21,716.82 964,183.39 73.161 DOF 8,760.96 388,969.02 641.16 28,466.04 8,119.80 360,502.98 37.392 DPWH 5,751.57 255,358.03 328.47 14,583.23 5,423.10 240,774.80 24.973 DOTC 2,299.18 102,078.82 387.55 17,206.40 1,911.63 84,872.43 8.804 DAR 1,270.94 56,427.25 81.08 3,599.88 1,189.86 52,827.37 5.485 DSWD 1,064.12 47,244.98 2.57 114.32 1,061.55 47,130.66 4.896 DepEd 1,058.98 47,016.60 84.24 3,740.15 974.74 43,276.44 4.497 DA 768.12 34,103.10 202.43 8,987.56 565.69 25,115.54 2.608 DOE 431.10 19,139.98 1.83 81.03 429.28 19,058.95 1.989 DENR 836.86 37,154.82 418.77 18,592.33 418.09 18,562.48 1.9310 DILG 417.11 18,518.99 44.08 1,957.07 373.03 16,561.93 1.72

% to Total

Table XIV - Cumulative Commitments, Cancellation and Net Commitments by Implementing Agency(in million)

Cumulative Net CommitmentsImplementing

Agency

Cumulative Commitments

Cumulative Cancellation


Chart XII - Cumulative Commitments, Cancellation and Net Commitments by Implementing Agency (in billion peso)

26

3.5 Undrawn Commitments – P283.81 billion (US$6.39 billion)

As of December 31, 2013, the undrawn balance of commitments reached P283.81 billion (US$6.39 billion) representing 21.54 percent of the total net commitments as shown in Chart IV.

USD PHP USD PHP USD PHP11 DOH 378.27 16,794.21 28.41 1,261.36 349.85 15,532.86 1.6112 SC 321.90 14,291.72 0.50 22.20 321.40 14,269.52 1.4813 BOC 198.22 8,800.55 0.13 5.77 198.09 8,794.78 0.9114 PRRC 90.63 4,023.58 12.00 532.79 78.63 3,490.79 0.3615 BFAR 90.57 4,021.15 12.05 535.22 78.52 3,485.93 0.3616 TESDA 71.24 3,162.91 13.14 583.29 58.10 2,579.61 0.2717 DTI 46.52 2,065.35 7.58 336.50 38.94 1,728.85 0.1818 BFP 28.21 1,252.45 - - 28.21 1,252.45 0.1319 NAMRIA 25.75 1,143.42 - - 25.75 1,143.42 0.1220 DOT 19.33 858.26 0.74 33.07 18.59 825.20 0.0921 PMMA 18.30 812.42 0.11 4.89 18.19 807.53 0.0822 UP/PGH 13.56 601.96 - - 13.56 601.96 0.0623 OP 11.39 505.61 0.16 7.09 11.23 498.51 0.0524 BIR 11.00 488.38 - - 11.00 488.38 0.05

GOCCs 8,912.13 395,680.75 1,169.37 51,917.74 7,742.76 343,763.00 26.09

1 DBP 1,602.74 71,158.62 100.45 4,459.87 1,502.29 66,698.75 19.402 LBP 1,410.92 62,642.11 122.50 5,438.93 1,288.42 57,203.18 16.643 NIA 868.16 38,544.54 52.31 2,322.37 815.85 36,222.16 10.544 LRTA 939.50 41,712.03 154.68 6,867.70 784.82 34,844.32 10.145 PSALM 1,063.98 47,238.79 328.54 14,586.35 735.45 32,652.44 9.506 BCDA 561.09 24,911.17 8.54 379.13 552.55 24,532.04 7.147 PPA 542.06 24,066.24 9.14 405.62 532.92 23,660.62 6.888 NLRC 400.00 17,759.20 - - 400.00 17,759.20 5.179 NPC 349.01 15,495.39 76.42 3,392.68 272.60 12,102.71 3.5210 MWSS 271.16 12,039.05 28.56 1,268.09 242.60 10,770.96 3.1311 SBMA 257.59 11,436.32 74.25 3,296.60 183.34 8,139.72 2.3712 LWUA 226.04 10,035.65 94.53 4,196.93 131.51 5,838.72 1.7013 PNOC 193.09 8,572.93 93.20 4,137.91 99.89 4,435.02 1.2914 PHIVIDEC 78.56 3,487.91 0.01 0.43 78.55 3,487.48 1.0115 PNR 46.88 2,081.52 0.01 0.25 46.88 2,081.27 0.6116 SBGFC 42.21 1,873.99 - - 42.21 1,873.99 0.5517 PTA 12.85 570.49 0.01 0.63 12.84 569.86 0.1718 LLDA 15.00 665.97 5.17 229.51 9.83 436.46 0.1319 NFA 5.18 230.14 0.04 1.71 5.15 228.43 0.0720 PEZA 26.10 1,158.70 21.02 933.05 5.08 225.65 0.07

LGUs 240.38 10,672.26 17.82 791.24 222.56 9,881.02 0.75

1 ARMM 199.24 8,846.02 5.85 259.69 193.39 8,586.33 86.90

2 Provl Gov't-LDN

41.13 1,826.24 11.97 531.55 29.16 1,294.69 13.10

% to Total

Cumulative Net CommitmentsImplementing

Agency

Cumulative Commitments

Cumulative Cancellation


27

3.5.1 By Creditor

Of the undrawn balance of commitments, P152.43 billion (US$3.43 billion) or 53.71 percent was from Bilateral creditors, P118.57 billion (US$2.67 billion) or 41.78 percent from Multilateral creditors and P12.82 billion (US$ 0.29 billion) or 4.52 percent from Commercial creditors. Shown in Table XV is the balance of undrawn commitments by creditor.


Total 29,682.13 1,317,827.41 23,289.72 1,034,017.06 6,392.41 283,810.35 100.00

Bilateral 14,396.23 639,163.90 10,963.05 486,737.30 3,433.19 152,426.60 53.711 JBIC 11,005.90 488,640.09 8,752.76 388,605.02 2,253.14 100,035.07 65.632 KEXIM 551.12 24,468.65 103.26 4,584.34 447.87 19,884.31 13.053 BNP Paribas 769.12 34,147.25 368.79 16,373.68 400.32 17,773.58 11.664 ECGD 822.97 36,538.11 581.41 25,813.57 241.55 10,724.53 7.045 KFW 307.36 13,646.16 260.24 11,554.10 47.12 2,092.06 1.376 Artigiancassa 36.05 1,600.57 9.08 402.97 26.97 1,197.60 0.797 SIDA INEC 2.83 125.56 2.83 125.56 15.64 694.20 0.468 SOCIETE GEN 17.22 764.66 16.66 739.46 0.57 25.20 0.029 FP 50.34 2,235.03 50.34 2,234.99 0.00 0.04 0.0010 ICO 120.02 5,328.51 120.02 5,328.50 0.00 0.02 0.00

11 US Public Laws

219.13 9,728.89 219.13 9,728.89 - - -

12 ANZ/EFIC 103.95 4,615.35 103.95 4,615.35 - - - 13 EFIC 89.27 3,963.29 89.27 3,963.29 - - - 14 AFD 206.48 9,167.08 206.48 9,167.08 - - - 15 Belgian 8.62 382.90 8.62 382.90 - - - 16 FORTIS BANK 11.67 518.33 11.67 518.33 - - - 17 ITALY II 11.12 493.75 11.12 493.75 - - - 18 JFA 5.15 228.43 5.15 228.43 - - - 19 KBC BANK 15.63 693.73 15.63 693.73 - - - 20 KFAED 19.76 877.17 19.76 877.17 - - - 21 LEONIA BANK 2.53 112.48 2.53 112.48 - - - 22 SFD 20.00 887.89 4.36 193.69 - - - Multilateral 13,373.88 593,773.34 10,703.29 475,204.65 2,670.59 118,568.70 41.78

1 ADB 7,363.29 326,915.44 6,043.56 268,322.19 1,319.73 58,593.25 49.422 IBRD 5,749.19 255,252.47 4,510.04 200,236.91 1,239.14 55,015.56 46.403 OPEC 89.03 3,952.57 21.91 972.72 67.12 2,979.85 2.514 IFAD 131.49 5,837.80 90.20 4,004.74 41.29 1,833.06 1.555 EIB 26.50 1,176.55 23.19 1,029.57 3.31 146.98 0.126 NDF 14.38 638.52 14.38 638.52 - - -

Commercial 1,912.03 84,890.18 1,623.39 72,075.12 288.64 12,815.06 4.52

1 CEXIM 803.85 35,689.13 560.45 24,883.00 243.39 10,806.13 84.322 BNP Paribas 156.64 6,954.38 115.86 5,144.06 40.77 1,810.33 14.133 CHI 59.97 2,662.35 55.90 2,481.75 4.07 180.61 1.414 BAC 241.19 10,708.33 240.92 10,696.23 0.27 12.10 0.095 SOCIETE GEN 14.44 640.96 14.30 635.11 0.13 5.85 0.05

% to Total

Table XV - Net Commitments, Cumulative Availments and Undrawn Balance by Creditor(in million)

Undrawn BalanceCreditor

Net Commitments Cumulative Availments


28

(Table XV, continued)

3.5.2 By Sector

The undrawn balance of commitments is shared by Infrastructure – P195.50 billion (US$4.40 billion) or 68.88 percent; Social Reform and Community Development – P59.15 billion (US$1.33 billion) or 20.84 percent; Agriculture, Agrarian Reform, Natural Resources and – P26.14 billion (US$0.59 billion) or 9.21 percent; Industry, Trade and Tourism – P2.79 billion (US$ 0.06 billion) or 0.98 percent and Governance and Institutions Development – P0.22 billion (US$5.04 million) or 0.08 percent. Chart XIII shows the undrawn balance of commitments by sector.

Presented in Table XVI is the details of net commitments, cumulative availments and undrawn balance of commitments by sector and by implementing agency.

USD PHP USD PHP USD PHP6 FP 36.16 1,605.50 36.16 1,605.47 0.00 0.03 0.00

7 ICO 21.62 959.99 21.62 959.98 0.00 0.02 0.00 8 RZOA 53.75 2,386.46 53.75 2,386.46 - - - 9 ERSTE 25.01 1,110.33 25.01 1,110.33 - - - 10 ECGD 155.91 6,921.89 155.91 6,921.89 - - - 11 EDC 122.18 5,424.50 122.18 5,424.50 - - - 12 ING Bank N.V. 20.10 892.19 20.10 892.19 - - -

13 Bancaja 7.01 311.42 7.01 311.42 - - -

14 FORTIS BANK 9.12 405.05 9.12 405.05 - - - 15 Banco Bilbao

Vizcaya 52.13 2,314.51 52.13 2,314.51 - - -

16 Credit Com'l de France

33.74 1,498.06 33.74 1,498.06 - - -

17 NDF 0.88 38.89 0.88 38.89 - - - 18 EFIC 14.08 625.02 14.08 625.02 - - - 19 ANZ/EFIC 24.91 1,106.08 24.91 1,106.08 - - - 20 Banco

Santander(SMCF-Spain)

25.75 1,143.42 25.75 1,143.42 - - -

21 Bank of America

6.19 274.99 6.19 274.99 - - -

22 Credit Agricole Indosuez

27.40 1,216.72 27.40 1,216.72 - - -

% to Total

Undrawn BalanceCreditor



Difference between totals and sum of components is due to

29


Total 29,682.13 1,317,827.41 23,289.72 1,034,017.06 6,392.41 283,810.35 100.00

INFRA. 15,240.42 676,644.21 10,837.04 481,142.90 4,403.38 195,501.31 68.881 DPWH 5,423.10 240,774.80 3,874.24 172,008.68 1,548.86 68,766.13 35.172 DOTC 1,911.63 84,872.43 939.74 41,722.37 971.89 43,150.06 22.073 DOE 429.28 19,058.95 23.34 1,036.46 405.93 18,022.49 9.224 LBP 574.06 25,487.15 218.44 9,698.21 355.62 15,788.95 8.085 DBP 618.68 27,468.15 301.48 13,385.20 317.20 14,082.94 7.206 NLRC 400.00 17,759.20 180.79 8,026.93 219.21 9,732.27 4.987 NIA 253.39 11,249.99 39.97 1,774.40 213.42 9,475.59 4.858 PPA 532.92 23,660.62 342.45 15,204.23 190.47 8,456.39 4.339 DAR 379.75 16,860.13 222.90 9,896.16 156.85 6,963.98 3.5610 LWUA 131.51 5,838.72 118.20 5,247.68 13.31 591.04 0.3011 MWSS 242.60 10,770.96 232.00 10,300.12 10.61 470.85 0.2412 DILG 373.03 16,561.93 373.02 16,561.36 0.01 0.56 0.0013 PSALM 1,107.94 49,190.17 1,107.94 49,190.10 0.00 0.07 0.0014 BOC 198.09 8,794.78 198.09 8,794.78 - - 0.0015 DOF 866.50 38,471.00 866.50 38,471.00 - - 0.0016 DA 28.01 1,243.74 28.01 1,243.74 - - 0.0017 OP 11.23 498.51 11.23 498.51 - - 0.0018 LRTA 784.82 34,844.32 784.82 34,844.32 - - 0.0019 BCDA 552.55 24,532.04 552.55 24,532.04 - - 0.0020 SBMA 174.58 7,751.04 174.58 7,751.04 - - 0.0021 PHIVIDEC 78.55 3,487.48 78.55 3,487.48 - - 0.0022 PNR 46.88 2,081.27 46.88 2,081.27 - - 0.00

23 Provl. Govt of LDN

29.16 1,294.69 29.16 1,294.69 - - 0.00

24 ARMM 92.17 4,092.11 92.17 4,092.11 - - 0.005,275.13 234,205.23 3,942.88 175,055.77 1,332.25 59,149.46 20.84

1 DOF 2,873.89 127,595.13 1,873.89 83,197.13 1,000.00 44,398.00 75.062 DSWD 1,061.55 47,130.66 745.69 33,106.96 315.86 14,023.70 23.713 DOH 349.85 15,532.86 339.45 15,070.81 10.41 462.04 0.784 LLDA 9.83 436.46 5.83 258.65 4.01 177.82 0.305 ARMM 101.23 4,494.22 100.27 4,451.72 0.96 42.50 0.076 TESDA 58.10 2,579.61 57.34 2,545.75 0.76 33.86 0.067 BFP 28.21 1,252.45 27.95 1,240.92 0.26 11.54 0.028 PMMA 18.19 807.53 18.19 807.53 0.00 0.00 0.009 DepEd 724.74 32,176.94 724.74 32,176.94 - - 0.0010 DOT 18.59 825.20 18.59 825.20 - - 0.0011 UP/PGH 13.56 601.96 13.56 601.96 - - 0.0012 DBP 17.39 772.19 17.39 772.19 - - 0.00

3,966.81 176,118.45 3,961.77 175,894.51 5.04 223.94 0.08

1 BIR 11.00 488.38 6.75 299.51 4.25 188.87 84.342 SC 321.40 14,269.52 320.61 14,234.45 0.79 35.07 15.663 DOF 3,384.41 150,261.05 3,384.41 150,261.05 - - 0.004 DepEd 250.00 11,099.50 250.00 11,099.50 - - 0.00

GID

SRCD

% to Total

Table XVI - Net Commitments, Cumulative Availments and Undrawn Balance by Sector and Implementing Agency (in million)

Undrawn BalanceSector/ Implementing

Agency



30


The undrawn amount is reported under the following agencies: NGAs – P216.94 billion (US$4.89 billion) or 76.44 percent; GOCCs – P66.82 billion (US$1.51 billion) or 23.54 percent; and LGUs – P42.50 million (US$0.96 million) or 0.01 percent. Details of undrawn balance of commitments by implementing agency are shown in Table XVI.

3.6 Debt Service Expenditures – P95.15 billion

The amount of debt service paid to creditors totaled P95.15 billion composed of the principal – P80.01 billion or 84.09 percent; interest – P13.74 billion or 14.44 percent; commitment fees – P203.61 million or 0.21 percent and other charges – P1.20 billion or 1.26 percent. Chart XII shows the breakdown of the 2013 debt service expenditures.

Chart XIV - Debt Service Expenditures (in billion peso)

(Table XVI, continued)

USD PHP USD PHP USD PHP3,690.63 163,856.78 3,101.77 137,712.55 588.86 26,144.23 9.21

1 DENR 418.09 18,562.48 197.50 8,768.80 220.59 9,793.68 37.462 DAR 810.11 35,967.24 593.50 26,350.05 216.61 9,617.19 36.793 NIA 562.46 24,972.17 443.15 19,675.01 119.31 5,297.16 20.264 DA 537.68 23,871.79 505.33 22,435.61 32.35 1,436.19 5.495 DOF 645.00 28,636.50 645.00 28,636.50 - - 0.006 PRRC 78.63 3,490.79 78.63 3,490.79 - - 0.007 BFAR 78.52 3,485.93 78.52 3,485.93 - - 0.008 NAMRIA 25.75 1,143.42 25.75 1,143.42 - - 0.009 DBP 262.54 11,656.13 262.54 11,656.13 - - 0.0010 LBP 254.06 11,279.57 254.06 11,279.57 - - 0.0011 SBMA 7.58 336.66 7.58 336.66 - - 0.0012 PEZA 5.08 225.65 5.08 225.65 - - 0.0013 NFA 5.15 228.43 5.15 228.43 - - 0.00

1,509.14 67,002.75 1,446.27 64,211.34 62.87 2,791.42 0.981 DBP 603.68 26,802.27 571.08 25,354.60 32.61 1,447.68 51.862 LBP 460.30 20,436.46 430.97 19,134.17 29.33 1,302.29 46.653 DTI 38.94 1,728.85 38.01 1,687.40 0.93 41.45 1.484 SBGFC 42.21 1,873.99 42.21 1,873.99 - - 0.005 PTA 12.84 569.86 12.84 569.86 - - 0.006 SBMA 1.17 52.02 1.17 52.02 - - 0.007 DOF 350.00 15,539.30 350.00 15,539.30 - - 0.00

AARNR

ITT

% to Total

Undrawn BalanceSector/ Implementing

Agency



31

The amount paid as to the type of loans contracted is broken down as follows: loans

directly contracted by the NG – P76.07 billion or 79.95 percent; loans relent by NG to GFIs/GOCCs – P6.12 billion or 6.43 percent and loans by GFIs/GOCCs guaranteed by the NG- P12.96 billion or 13.62 percent.

Presented in Table XVII is the actual total debt service expenditures by loan and

creditor.

GRAND TOTAL 95,149.04 80,006.50 13,740.81 203.61 1,198.13

NG DIRECT 76,071.23 65,164.94 10,644.84 159.27 102.18

Bilateral 21,665.78 17,752.36 3,762.41 137.68 13.33 1 JBIC 10,606.14 8,007.26 2,560.76 30.00 8.12 2 JEXIM 3,699.77 3,353.22 346.55 - 0.00 3 ECGD- Deutsche Ban 2,725.82 2,652.06 72.16 - 1.60 4 BNP Paribas 2,203.57 1,710.07 384.43 106.97 2.10 5 USPL 530.80 445.28 85.11 - 0.41 6 ANZ/EFIC (Loan A) 431.82 425.47 5.81 - 0.54 7 Export-Import Bank of 400.41 306.51 93.70 - 0.20 8 EFFIC 289.92 280.88 9.04 - 0.00 9 ICO 227.09 202.85 24.23 0.01 0.00

10 AFD 124.39 - 124.31 - 0.08 11 French Protocol 92.98 78.21 14.68 - 0.08 12 KFW 79.70 62.11 16.79 0.71 0.09 13 KFAED No. 541 66.34 54.13 12.21 - 0.00 14 KBC BANK

51.56 51.52 - - 0.03

15 ITALY II

47.26 45.73 1.53 - - 16 Saudi Fund for

43.73 42.20 1.53 - 0.00

17 FORTIS BANK-DPWH 34.86 34.86 - - 0.00 18 SOCIETE GEN -

9.33 - 9.28 - 0.05

19 Artigiancassa 0.29 - 0.29 - 0.00 20 LEONIA BANK - - - - - 21 SIDA - - - - -

Commercial 3,879.92 3,258.90 614.37 2.97 3.69 1 BNP PARIBAS 968.05 943.74 23.59 - 0.71

2 Bank of Austria

875.93 665.52 208.53 0.16 1.72 3 Eximbank of China 788.82 542.26 243.11 2.81 0.64 4 SOCIETE GEN -

431.09 430.19 0.72 - 0.18

5 China Nat'l Const.&

283.33 272.17 10.99 - 0.18 6 Raiffeissen

260.71 181.19 79.30 - 0.23

7 ING Bank N.V.

85.86 82.29 3.58 - 0.00 8 ERSTE (Austria) 72.43 44.39 28.01 - 0.02 9 French Protocol 61.86 46.99 14.87 - 0.00

10 ECGD-Deutsche Bank

51.84 50.16 1.68 - 0.00

Multilateral 50,525.53 44,153.68 6,268.06 18.62 85.16 1 ADB 43,985.31 40,265.82 3,632.18 15.65 71.67 2 IBRD 6,272.06 3,665.24 2,611.26 2.97 (7.42) 3 European Investment

114.09 100.70 13.39 - 0.00

Table XVII - Debt Service Expenditures by Creditor(in million pesos)

Particulars Amount

Total Principal Interest Commitment Fees

Other Charges


32

Of the total debt service expenditures, P72.65 billion or 76.35 percent was paid by BTr and P22.50 billion or 23.65 percent was paid by GOCCs. Presented in Table XVIII and Table XIX are the details of payment made by the BTr per creditor and GOCCs by implementing agency, respectively.

TOTAL 72,650.84 63,095.69 9,287.97 159.27 107.91

NG DIRECT 72,440.18 62,928.85 9,249.87 159.27 102.18

Bilateral 21,658.67 17,752.36 3,755.30 137.68 13.33 1 JBIC 10,606.14 8,007.26 2,560.76 30.00 8.12 2 JEXIM 3,699.77 3,353.22 346.55 - 0.00 3 ECGD 2,725.82 2,652.06 72.16 - 1.60 4 BNP Paribas 2,203.57 1,710.07 384.43 106.97 2.10 5 USPL 530.80 445.28 85.11 - 0.41 6 ANZ/EFIC (Loan

431.82 425.47 5.81 - 0.54

7 KEXIM 400.41 306.51 93.70 - 0.20

Table XVIII - Debt Service Expenditures Paid by BTr per Creditor(in million pesos)

Particulars Amount


Other Charges


(Table XVII, continued)

4 IFAD 76.98 60.25 7.11 - 9.61 5 OPEC 61.14 49.76 4.12 - 7.27 6 Nordic Development 15.95 11.92 - - 4.04

NG RELENT 6,116.88 5,269.35 623.81 - 223.72 Bilateral 1,905.54 1,247.26 446.92 - 211.36

1 JBIC 1,710.22 1,143.77 355.13 - 211.32 2 JAPAN FOOD

194.59 102.76 91.79 - 0.04

3 Belgian 0.72 0.72 - - - Commercial 3,994.23 3,863.41 124.11 - 6.72

1 Eximbank of China 3,943.14 3,823.81 114.55 - 4.78

2 FORTIS BANK-LRTA 51.10 39.60 9.56 - 1.94 Multilateral 217.11 158.68 52.79 - 5.64

1 ADB 119.33 102.65 16.67 - 0.02

2 IFAD 84.39 43.42 35.35 - 5.62 3 IBRD 13.38 12.60 0.78 - 0.00

NG GUARANTEED 12,960.93 9,572.21 2,472.16 44.33 872.22 Bilateral 8,277.22 5,786.39 1,929.53 34.95 526.35

1 JBIC 8,060.93 5,634.64 1,874.47 34.95 516.87

2 KFW 146.29 118.09 18.73 (0.00) 9.47 3 Export Bank of Korea 70.00 33.67 36.33 - 0.00

Commercial 179.36 0.02 128.83 - 50.52 1 CHI 179.34 - 128.83 - 50.51

2 Nordic Development

0.02 0.02 - - 0.01 Multilateral 4,504.34 3,785.80 413.80 9.38 295.36

1 IBRD 2,795.59 2,383.21 217.00 4.35 191.04 2 ADB 1,708.75 1,402.59 196.81 5.03 104.32

Particulars Amount


Other Charges


33

Among the GOCCs, the PSALM had the highest payment made during the year

amounting to P5.23 billion, followed by DBP and NLRC for P4.10 billion and P3.94 billion, respectively. The payment for three NG Direct loans of DENR, TESDA and DAR was made through the disbursement facilities of Land Bank of the Philippines. The complete list of GOCCs debts service expenditures is shown in Table XIX.

(Table XVIII, continued)

8 EFFIC 289.92 280.88 9.04 - 0.00 9 ICO 227.09 202.85 24.23 0.01 0.00

10 AFD 124.39 - 124.31 - 0.08 11 French Protocol 90.60 78.21 12.31 - 0.08 12 KFW 74.96 62.11 12.05 0.71 0.09 13 KFAED No. 541 66.34 54.13 12.21 - 0.00 14 KBC BANK

51.56 51.52 - - 0.03

15 ITALY II

47.26 45.73 1.53 - - 16 Saudi Fund for

43.73 42.20 1.53 - 0.00

17 FORTIS BANK-

34.86 34.86 - - 0.00 18 SOCIETE GEN - L 9.33 - 9.28 - 0.05 19 Artigiancassa 0.29 - 0.29 - 0.00

Commercial 3,819.41 3,213.13 599.62 2.97 3.69

1 BNP PARIBAS 968.05 943.74 23.59 - 0.71

2 Bank of Austria

875.93 665.52 208.53 0.16 1.72 3 CEXIM 788.82 542.26 243.11 2.81 0.64 4 SOCIETE GEN -

431.09 430.19 0.72 - 0.18

5 China Nat'l

283.33 272.17 10.99 - 0.18 6 Raiffeissen

260.71 181.19 79.30 - 0.23

7 ING Bank 85.86 82.29 3.58 - 0.00 8 ERSTE (Austria) 72.43 44.39 28.01 - 0.02 9 ECGD 51.84 50.16 1.68 - 0.00

10 French Protocol 1.35 1.22 0.13 - 0.00 Multilateral 46,962.10 41,963.36 4,894.95 18.62 85.16

1 ADB 40,435.14 38,083.75 2,264.07 15.65 71.67 2 IBRD 6,272.06 3,665.24 2,611.26 2.97 (7.42) 3 European

114.09 100.70 13.39 - 0.00

4 IFAD 63.72 51.99 2.11 - 9.61 5 OPEC 61.14 49.76 4.12 - 7.27 6 Nordic

15.95 11.92 - - 4.04

NG RELENT 210.66 166.84 38.10 - 5.72 Bilateral 146.71 115.86 30.77 - 0.08

1 JBIC 146.71 115.86 30.77 - 0.08 Multilateral 63.95 50.99 7.32 - 5.64

1 ADB 51.90 44.71 7.17 - 0.02 2 IBRD 6.43 6.27 0.15 - 0.00 3 IFAD 5.62 - - - 5.62

Particulars Amount


Other Charges


34

TOTAL 22,498.20 16,910.81 4,452.84 44.33 1,088.29

NG DIRECT 3,631.05 2,236.09 1,394.96 - -

Bilateral 7.12 - 7.12 - - 1 DENR 4.74 - 4.74 - 2 NPC 2.38 - 2.38 - -

Commercial 60.51 45.77 14.74 - -

1 NPC 60.51 45.77 14.74 - -

Multilateral 3,563.43 2,190.32 1,373.11 - - 1 PSALM 3,423.08 2,059.60 1,363.48 - - 2 TESDA 127.09 122.46 4.63 3 DAR 13.26 8.26 5.00 - -

NG GUARANTEED 12,960.93 9,572.21 2,472.16 44.33 872.22

Bilateral 8,277.22 5,786.39 1,929.53 34.95 526.35 1 DBP 4,096.94 3,015.77 1,049.05 32.13 - 2 BCDA 1,309.71 844.44 227.81 - 237.46 3 LBP 1,063.28 695.54 244.00 2.82 120.91 4 LRTA 637.45 433.20 148.30 - 55.96 5 PPA 477.45 337.85 103.67 - 35.93 6 SBMA 381.45 246.76 64.86 - 69.83 7 LWUA 209.29 159.06 48.63 - 1.60 8 PNR 70.00 33.67 36.33 - 0.00 9 PEZA 15.83 10.05 3.44 - 2.33

10 PTA 15.83 10.05 3.44 - 2.33 Commercial 179.36 0.02 128.83 - 50.52

1 MWSS 179.34 - 128.83 - 50.51

2 DBP 0.02 0.02 - - 0.01 Multilateral 4,504.34 3,785.80 413.80 9.38 295.36

1 PSALM 1,805.92 1,565.59 81.62 - 158.72 2 LBP 1,605.70 1,442.44 60.43 4.35 98.48 3 MWSS 516.92 338.90 144.24 - 33.78 4 DBP 310.78 199.68 106.06 5.03 - 5 SBGFC 106.52 102.56 3.63 - 0.32 6 SBMA 89.21 81.91 3.25 - 4.05 7 LWUA 69.30 54.72 14.58 - 0.00

NG RELENT 5,906.22 5,102.50 585.72 - 216.06 Bilateral 1,758.83 1,131.40 416.14 - 211.28

1 LRTA 1,564.23 1,028.64 324.35 - 211.24 2 NFA 194.59 102.76 91.79 - 0.04

Commercial 3,994.23 3,863.41 124.11 - 4.78 1 NLRC 3,943.14 3,823.81 114.55 - 4.78 2 LRTA 51.10 39.60 9.56 -

Multilateral 153.16 107.69 45.47 - - 1 LBP 117.02 101.36 15.66 - - 2 DTI 29.18 - 29.18 - - 3 MWSS 6.95 6.33 0.62 - -

Table XIX - Debt Service Expenditures Paid by GOCCs(in million pesos)

Particulars Amount


Other Charges


35

3.6.1 Principal – P80.01 billion

3.6.1.1 By Creditor

Principal repayments amounting to P80.01 billion were made to the following creditors: Multilateral – P48.10 billion or 60.12 percent; Bilateral – P24.79 billion or 30.98 percent and Commercial – P7.12 billion or 8.90 percent.

Of the amount paid, P65.16 billion or 81.45 percent was for loans directly

contracted by the NG; P5.27 billion or 6.59 percent for NG relent loans and P9.57 billion or 11.96 percent for NG guaranteed loans. The details of repayment made are shown in Chart XV and Table XVII.

By Implementing Agency

Principal repayments made by BTr during the year for the account of

agencies totaled P63.10 billion. Of these, P31.26 billion or 49.54 was for DOF, for DPWH – P11.55 billion or 18.31 percent, for DOTC – P3.40 billion or 5.39 percent and for DAR – P2.70 billion or 4.28 percent. Table XX shows the complete list of principal repayment by implementing agency.

Of the amount repaid for DOF, P21.64 billion was for the Countercyclical

Support Facility program. Under the DPWH, P2.06 billion pertains to Sixth Road Project. Of therepayment for the account of DOTC, P1.17 billion was for the MM Air Quality Improvement Sector Development Project and for DAR. P835.97 million was for the projectTulay ng Pangulo para sa Kaunlarang Pang-Agraryo.

TOTAL 72,650.84 63,095.69 9,287.97 159.27 107.91

NGAs 67,751.01 58,763.05 8,777.27 124.02 86.68 1 DOF 34,467.16 31,256.35 3,177.52 - 33.29

Table XX - Debt Service Expenditures Paid by BTr for the Implementing Agencies Account(in million pesos)

Particulars Amount


Other Charges

Type of Creditor

36

(Table XX, continued)

2 DPWH 13,618.44 11,552.88 2,015.17 40.59 9.80 3 DOTC 3,820.35 3,400.52 416.00 0.74 3.08 4 DAR 3,291.01 2,698.86 522.48 59.34 10.33 5 DECS 2,450.52 1,613.13 832.20 0.08 5.11 6 DA 1,953.05 1,670.25 268.86 1.50 12.44 7 DILG 1,827.78 1,592.78 231.54 - 3.46 8 DOE 1,444.78 1,215.32 229.46 - 0.00 9 DOH 1,140.08 860.05 276.85 1.27 1.90

10 SC 824.47 737.38 86.93 0.05 0.10 11 BOC 693.17 542.26 150.27 - 0.64 12 DSWD 624.27 346.05 262.36 15.48 0.37 13 DENR 479.02 380.95 99.14 4.27 (5.33) 14 BFAR 295.97 279.39 16.91 - (0.33) 15 ARMM 263.59 163.42 97.32 - 2.85 16 PRRC 220.12 199.45 20.49 - 0.17 17 TESDA 120.58 83.63 34.82 - 2.13 18 Provl Gov't-LDN 77.40 58.41 18.89 - 0.10 22 DTI 68.48 59.37 3.48 - 5.62 25 DOT 32.54 26.84 5.69 - 0.02 26 UP/PGH 14.91 14.06 0.84 - 0.00 29 OP 12.71 11.70 0.99 - 0.02 30 BIR 7.16 - 6.62 0.54 0.00 31 BFP 3.48 - 2.41 0.16 0.92

GOCCs 4,899.82 4,332.64 510.70 35.25 21.23 1 PSALM 1,739.15 1,693.95 41.66 - 3.55 2 NIA 1,714.55 1,349.04 343.78 5.42 16.31 3 PPA 1,126.34 1,023.58 71.79 29.83 1.15 4 PHIVIDEC 146.71 115.86 30.77 - 0.08 5 PMMA 55.91 48.99 6.85 - 0.07 6 LBP 51.90 44.71 7.17 0.02 7 MWSS 6.43 6.27 0.15 - 0.00 8 SBMA 36.41 34.95 1.42 - 0.04 9 LLDA 22.42 15.30 7.10 - 0.01

Particulars Amount


Other Charges

Principal repayment for loans guaranteed by the NG was also reported by the GOCCs as shown in Table XIX.

3.6.2 Interest – P13.74 billion

Interest paid during the year totaling P13.74 billion increased by P178.67 million or 1.32 percent compared with last year’s payment of P13.56 billion. Comparative interest payments for four years is shown in Chart XVI.

37

3.6.2.1 By Creditor Interest payment was made to the following creditors: Multilateral – P6.73

billion or 49.01 percent, Bilateral – P6.14 billion or 44.68 percent and Commercial – P0.87 billion or 6.31 percent. The bulk of the amount of interest of P10.64 billion or 77.47 percent was paid for NG Direct loans while P0.62 million or 4.54 percent and P2.47 billion or 17.99 percent was for NG Guaranteed and NG relent loans, respectively.

Presented in Table XXI is the breakdown of amount paid per type of

creditor and loan, while the details by creditor are shown in Table XVII.

NG Direct NG Relent NG-Guaranteed Total % to total

1 Multilateral 6,268.06 52.79 413.80 6,734.65 49.012 Bilateral 3,762.41 446.92 1,929.53 6,138.86 44.683 Commercial 614.37 124.11 128.83 867.30 6.31

10,644.84 623.81 2,472.16 13,740.81 10077.47 4.54 17.99 100.00

Creditor Type


Table XXI - Interest Payment by Type of Creditor and Loans(in million pesos)

3.6.2.2 By Implementing Agency

The amount paid for the account of DOF totaled P3.18 billion or 34.21 percent of the total interest on loans paid by BTr, with the bulk of the amount of P2.75 billion going to Multilateral creditors. On the other hand, the BULK OF THE interest of P2.02 billion for the DPWH account, was paid to bilateral creditors. Presented in the Table XXIII is the breakdown of interests paid by the BTr for the account of implementing agencies by type of creditor.

38

The GOCCs paid interest directly to the creditors pertaining to their NG

Guaranteed and Relent loans. Shown in the Table XXIII is the list of GOCCs with the corresponding amount of interest paid on their loans.

TOTAL 2,352.79 267.67 1,832.38 4,452.84 1001 PSALM - - 1,445.09 1,445.09 32.452 DBP 1,049.05 - 106.06 1,155.11 25.94

Bilateral Commercial Multilateral Total

Table XXIII- Interests on Loans Paid by GOCCs(in million pesos)

Particulars Amount

% to total

TOTAL 3,786.07 599.62 4,902.28 9,287.97 1001 DOF 423.30 - 2,754.22 3,177.52 34.212 DPWH 1,807.94 4.63 202.60 2,015.17 21.703 DECS 110.53 - 721.67 832.20 8.964 DAR 379.33 13.72 129.42 522.48 5.635 DOTC 350.32 - 65.68 416.00 4.486 NIA 191.57 94.93 57.28 343.78 3.707 DOH 9.21 87.45 180.20 276.85 2.988 DA 92.43 8.89 167.54 268.86 2.899 DSWD - - 262.36 262.36 2.82

10 DILG 17.11 201.67 12.75 231.54 2.4911 DOE 229.46 - - 229.46 2.4712 BOC - 150.27 - 150.27 1.6213 DENR 6.46 - 92.68 99.14 1.0714 ARMM 34.10 - 63.22 97.32 1.0515 SC - - 86.93 86.93 0.9416 PPA 64.16 7.63 - 71.79 0.7717 PSALM - - 41.66 41.66 0.4518 TESDA 2.90 28.01 3.91 34.82 0.3719 PHIVIDEC 30.77 - - 30.77 0.3320 PRRC - - 20.49 20.49 0.2221 Provl Gov't-LDN 18.89 - - 18.89 0.2022 BFAR - - 13.71 13.71 0.1523 LBP - - 7.17 7.17 0.0824 LLDA - - 7.10 7.10 0.0825 PMMA 6.85 - - 6.85 0.0726 BIR - - 6.62 6.62 0.0727 DOT 5.69 - - 5.69 0.0628 DTI - - 3.48 3.48 0.0429 BFAR 3.20 - - 3.20 0.0330 BFP - 2.41 - 2.41 0.0331 SBMA - - 1.42 1.42 0.0232 OP 0.99 - - 0.99 0.0133 UP/PGH 0.84 - - 0.84 0.0134 MWSS - - 0.15 0.15 0.00

0.00 - with value less than five thousand


Table XXII - Interests on Loans Paid by BTr(in million pesos)

Particulars Amount

% to total


39

(Table XXIII, continued)

TOTAL 2,352.79 267.67 1,832.38 4,452.84 1003 LRTA 472.65 9.56 - 482.21 10.834 MWSS - 128.83 144.86 273.69 6.155 LBP 244.00 - - 244.00 5.486 BCDA 227.81 - - 227.81 5.127 NLRC - 114.55 - 114.55 2.578 PPA 103.67 - - 103.67 2.339 NFA 91.79 - - 91.79 2.06

10 LBP - - 76.09 76.09 1.7111 SBMA 64.86 - 3.25 68.11 1.5312 LWUA 48.63 - 14.58 63.21 1.4213 PNR 36.33 - - 36.33 0.8214 DTI - - 29.18 29.18 0.6615 NPC 2.38 14.74 - 17.12 0.3816 DAR - - 5.00 5.00 0.1117 DENR 4.74 - - 4.74 0.1118 TESDA - - 4.63 4.63 0.1019 SBGFC - - 3.63 3.63 0.0820 PEZA 3.44 - - 3.44 0.0821 PTA 3.44 - - 3.44 0.08

Bilateral Commercial Multilateral Total Particulars

Amount % to total


3.6.3 Commitment Fees – P203.61 million

3.6.3.1 By Creditor

Commitment fees represent the charges made by creditors based on undrawn commitments which may be due to the delay in project implementation that slowed down availments of loan proceeds. The amount presented in this section is the actual amount paid to the creditors, excluding the capitalized commitment fees. Details by type of creditor and the breakdown of creditor are presented in Table XVII while the graphical presentation is presented in Chart XVII.

40

Total commitment fees paid in CY 2013 for loans directly contracted by the

NG amounted to P159.27 million or 78.23 percent while for NG guaranteed loans, payment totaled P44.33 million or 21.77 percent.

3.6.3.2 By Implementing Agency

The top five agencies where the bigger part of commitment fees were paid by the NG are as follows: DAR – P59.34 million or 29.14 percent, DPWH – P40.59 million or 19.94 percent, DBP – P37.16 million or 18.25 percent, PPA – P29.83 million or 14.65 percent and DSWD – P15.48 million or 7.60 percent. The details of commitment fees by Implementing Agency are presented in Table XXIV .

TOTAL 172.63 2.97 28.00 203.61 1001 DAR 59.34 - - 59.34 29.142 DPWH 40.59 - - 40.59 19.943 DBP 32.13 - 5.03 37.16 18.254 PPA 29.83 - - 29.83 14.655 DSWD - - 15.48 15.48 7.606 LBP 2.82 - 4.35 7.18 3.527 NIA 2.61 2.81 - 5.42 2.668 DENR 3.86 - 0.41 4.27 2.099 DA - - 1.50 1.50 0.73

10 DOH 0.71 - 0.56 1.27 0.6311 DOTC 0.74 - - 0.74 0.3612 BIR - - 0.54 0.54 0.2713 BFP - 0.16 - 0.16 0.0814 DECS - - 0.08 0.08 0.0415 SC - - 0.05 0.05 0.02


Table XXIV - Commitment Fees by Implementing Agency(in million pesos)

Particulars Amount

% to total


The agencies and projects with the amount of commitment fees paid and the creditors to which these fees were paid are shown in Table XXV.

Total 203.61 100.00

Bilateral 172.64 84.791 DAR 59.34 34.37

JBIC PH-P251 Mindanao Sustainable Agrarian and Agriculture Development Project

JBIC 2.46

BNP PARIBAS JPY33.9B

Tulay ng Pangulo para sa Kaunlarang Pang-Agraryo

BNP Paribas 56.88

2 DENR JBIC PH-P248 Forestland Management Project JBIC 3.86 2.242 DOH KFW No.7113011 Health Sector Reform Project KFW 0.71 0.41

3 DOTC JBIC PH-P228 New Communications, Navigations Surveillance/Air Traffic Mgmt.

JBIC 0.74 0.43

Table XXV – Commitment Fees by Implementing Agency and Projects(in million pesos)

Creditor Loan Description % to Total

Amount IA Loan Number

41

3.6.4 Other Charges – P1.20 billion

The Other Charges of P1.20 billion consist of: Guarantee fee P1.04 billion, Cable and handling fee – P63.05 million, Currency pooling and other fees - P50.89 million and Service charge – P39.83 million.

(Table XXV, continued)

4 DPWH 40.59 23.51 JBIC PH-P246 Post Ondoy and Pepeng Short Term

Infrastructure Rehabilitation Project JBIC 0.37

JBIC PH-P252 Pasig-Marikina River Channel Improvement Project, Phase III

JBIC 5.05

JBIC PH-P253 Flood Risk Management Project for Cagayan River, Tagoloan River, and Imus River

JBIC 3.22

JBIC PH-P249 Central luzon Link Expressway Project

JBIC 9.73

JBIC PH-P250 Arterial Road Bypass Project, Phase II

JBIC 1.95


Mega Bridges for Urban and Rural Development Project

BNP Paribas 20.26

ICO Bridge Construction and Replacement Project

ICO 0.01

5 NIA JBIC PH-P254 National Irrigation Sector Rehabilitation and Improvement Project

JBIC

2.61 1.516 PPA BNP PARIBAS

JPY23.5B Greater Maritime Access (GMA) Ports BNP

PARIBAS 29.83 17.287 DBP 32.13 18.61

JBIC PH-P243 Environmental Development Project JBIC 17.40 JBIC PH-P245 Logistics Infrastructure Development

Project JBIC

14.73 8 LBP JBIC PH-P244 Agricultural Credit Support Project JBIC 2.83 1.64

Commercial 2.97 1.46

1 BFP BA 232.180 EUR20.4M

Austrian-Assisted Bureau of Fire Protection Capability Building Program

BAC 0.16 5.28

2 NIA CHI-6 Agno River Integrated Irrigation Project

Eximbank of China

2.81 94.72

Multilateral 28.00 13.751 DA IBRD 7440 PH Mindanao Rural Development

IBRD 1.50 5.34

2 DENR IBRD 7470 PH National Program Support for

IBRD 0.41 1.453 DOH 0.56 2.01

ADB2137 PHI Health Sector Development Project ADB 0.17 IBRD 7290 PH Second Women's Health & Safe IBRD 0.40

4 LBP 4.35 15.54 IBRD 7311 PH Manila Third Sewerage Project IBRD 0.37 IBRD 4833 PH Support for Strategic Local IBRD 3.98

5 DBP ADB2515 PHI Credit for Better HealthCare ADB 5.03 17.96

6 BIR IBRD 7431 PH National Program Support for Tax

IBRD 0.54 1.957 DECS IBRD 7393 PH National Program Support for Basic

Education Project IBRD 0.08 0.28

8 DSWD ADB2662 PHI Social Protection Support Project ADB 15.48 55.29

9 SC IBRD 7191 PH Judicial Reform Support Project IBRD 0.05 0.18

Creditor Loan Description % to Total

Amount IA Loan Number


42

Foreign exchange gains or losses are incurred for debt service payments for loans on account of the Currency Pooling System and Exchange Risk Pooling System which were introduced to distribute equitably the foreign exchange risk associated with the loan among all borrowers at any given time. Every loan is assigned a share of the total of each currency outstanding proportional to its share of the total outstanding in the pool. Thus, at all times, each loan reflects the same currency composition as that of the pool. The pooling system does not eliminate the foreign currency exchange risk, but distribute it equally among borrowers. During the year, a net foreign exchange loss of P15.08 million was reported.

4.0 AUDIT OBSERVATIONS

AND

RECOMMENDATIONS

43

4.0 Audit Observations and Recommendations

As of 2013, a total of 406 ODA loans were extended to 24 National Government

Agencies, 20 Government Owned and Controlled Corporations, and two Local Government Units (Table XIV). As at year end, 328 loans were with outstanding balances classified under the five sectors (Chart VIII) namely:

1. Infrastructure - with the highest outstanding balance of P 271.19 billion with the

highest total loan count of 159 among the five sectors.

2. Social Reform and Community Development – ranked second in terms of outstanding balance of P154.97 billion for a total of 56 loans.

3. Governance and Institution Development - this sector has a total outstanding balance of P129.48 billion representing 19 loans availed by departments/agencies.

4. Agriculture, Agrarian Reform and Natural Resources - ranked 4th in terms of total

outstanding balance of P96.42 billion but the 2nd in terms of total loan count of 75 5. Industry, Trade and Tourism – the sector with the least outstanding balance of

of P44.73 billion for a total loan count of 19. Audit observations and implementation issues were noted on funds utilization and project

completion/accomplishments on 22 implementing departments/agencies which are categorized as:

4.1 Agency- specific Observations and Recommendations- presented in succeeding

pages per department/agency.

4.2 Common Audit Observations - grouped into six categories such as: Budget, Procurement, Financial Performance, Physical Performance, Project Progress Sustainability, and Others

44

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

In the fulfillment of this mandate, it shall be the primary concern of the Department to improve farm income and generate work opportunities for farmers, fishermen and other rural workers. It shall encourage people's participation in agricultural development through sectoral representation in agricultural policy-making bodies so that the policies, plans and programs of the Department are formulated and executed to satisfy their needs.

It shall also use a bottom-up self-reliant farm system approach that will emphasize social justice, equity, productivity and sustainability in the use of agricultural resources.

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

4.1.1

45

The Department availed of the loan under the Agriculture, Agrarian Reform and Natural Resource (AARNR) sector with a total net loan commitments of P 25,115.54 million (US$565.69 million) to finance 19 projects. Table XXVI presents the project status and the loan summary profile.

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

In the audit conducted during the year, audit observations were noted on the two projects:

Table XXVII - List of Projects with Audit Observations (amount in million)

AUDIT OBSERVATIONS and RECOMMENDATIONS

Below is the summary of audit observations together with the recommendations on the two projects:

Audit Observations

Recommendations

Budget Funds totaling P28,625,797.74 were included in the Cash-LCCA accounts and earmarked for 13 rural infrastructure subprojects which 40 percent CFA-GOP counterpart were already fully released to the concerned LGUs instead of

Management: a) remit the amount of P28,625,797.74 to the Treasury in accordance with COA-DBM-DOF Joint Circular No. 1-97 dated January 2, 1997; and b) the Finance Head determine total

USD PHP USD PHP USD PHP USD PHP22 TOTAL 19 565.69 25,115.54 533.34 23,679.35 19.19 852.01 32.35 1,436.19 3 Ongoing 3 110.21 4,892.97 77.86 3,456.78 19.19 852.01 32.35 1,436.19

17 Completed 14 419.98 18,646.31 419.98 18,646.31 - - 0.00 0.00 NYI

2 Cancellled 2 35.50 1,576.27 35.50 1,576.27 - - - -

CY Availments Undrawn BalanceLoan

CountProject Status

Project Count

Net Loan Commitments


USD PHP USD PHP USD PHP USD PHPTOTAL 93.75 4,162.40 62.54 2,776.62 18.92 840.18 31.21 1,385.78

IBRD 7440 PH

Mindanao Rural Development Project Phase II

Ongoing 83.75 3,718.42 60.82 2,700.41 18.62 826.88 22.93 1,018.01

OPEC 1224-P Second Cordillera Highland Agricultural Resource Management Project (CHARM2)

Ongoing 10.00 443.98 1.72 76.21 0.30 13.30 8.28 367.77

CY Availments Undrawn BalanceLoan No. Project Name

Project Status



46

Audit Observations

Recommendations

remitting to the Bureau of Treasury as the purpose for which such funds were allocated has been served. (Project: Mindanao Rural Development Program (MRDP) Adaptable Program Loan (APL) – 2)

funds pertaining to the 40 percent CFA-GOP counterpart deposited in the UCPB account and transfer the same to the PNB account for proper accounting and handling of funds.

Procurement Lapses/Deficiencies Post-qualification process was not properly conducted which resulted in the awarding of infrastructure project for the Second Cordillera Highland Agricultural Resource Management Project (SCHARMP) to a contractor with doubtful qualifications; thus, the quality and completion of the project on time was not guaranteed/assured.

The Project Support Office coordinate with PLGU Abra to submit its justification on the noted lapses to the Local Provincial Audit Team and to strictly conduct the post-qualification process.

Financial Performance Project : Second Cordillera Highland Agricultural Resource Management Project (SCHARMP) The SCHARMP disbursed the amount of P39,706.13 for the insurance coverage of seven motor vehicles which are not recorded as assets of SCHARMP in the books of accounts, thus, payments for said transactions are deemed ineligible.

The Project Support Office only should cover insurable assets which are in their books of accounts and discontinue the renewal of insurance of said vehicles. Transfer the CHARMP 1 accounts to the General Fund, as recommended in the AOM issued regarding CHARMP 1.

Non-submission/preparation of the detailed engineering for the SCHARMP infrastructure project in Abra totaling P28,255,717.50; thus, evaluation could not be made whether the awarded project exceeded the Approved Budget of the Contract (ABC) or has met the minimum equipment requirement for the contract.

The Project Support Office follow-up with PLGU Abra the submission of the required documents to the Local Audit Team.

The PLGU of Abra did not impose liquidated damages amounting to P5,107,550.81 arising from the contractor's failure to complete the work within the stipulated contract time.

The Project Support Office to coordinate with the Provincial Local Government Unit of Abra to enforce the collection of the liquidated damages from the contractor.

(Project: Mindanao Rural Development Program (MRDP) Adaptable Program Loan (APL) – 2) The cancellation of four subprojects with GOP counterpart allocation totaling P26,186,000.00 from the Acceleration Program was reported in the Physical Accomplishment Report however, funds for these projects remained in the Cash-LCCA account.

Management to: a) remit the amount allocated on cancelled sub-projects; b) require the Financial Analyst/Management Analyst to strictly monitor accounts assigned to them to avoid similar occurrence; and c) demand in writing immediate refund of funds amounting to P3,479,577.28 from the concerned LGU. Furnish COA copy of the demand letter or official receipt for the refund made.

47

Audit Observations

Recommendations

The cancellation of four subprojects with GOP counterpart allocation totalling P26,186,000.00 from the Acceleration Program was reported in the Physical Accomplishment Report however, funds for these projects remained in the Cash-LCCA account. (Project: Mindanao Rural Development Program (MRDP) Adaptable Program Loan (APL) – 2)

Management to: a) remit the amount allocated on cancelled sub-projects; b) require the Financial Analyst/Management Analyst to strictly monitor accounts assigned to them to avoid similar occurrence; and c) demand in writing immediate refund of funds amounting to P3,479,577.28 from the concerned LGU. Furnish COA a copy of the demand letter or official receipt for the refund made.

Expenditures charged to IRPEP Fund in the amount of P1,493,619.77 were ineligible because these expenses were inconsistent with the Programme Financing Agreement between International Fund for Agricultural Development (IFAD) and the Government of the Philippines. (Project: Irrigated Rice Production Enhancement Programme (IRPEP))

Management to: a) Strictly comply with the Programme Financing Agreement between IFAD and the Government of the Philippines and use the fund for the purposes specified in the agreement; b) Comply with DBM Issuances on the grant of employees’ benefits and bonuses to avoid disallowances in audit; and refrain from charging the fund with this nature of expenses; c) Replenish the expenditures from Subsidy of Fund 501 of P1,493,619.77 which was charged to IRPEP fund; and d) Henceforth, exercise prudence in the discharge of fiscal responsibility particularly in the disbursement of funds to avoid wastage of government funds.

Physical Performance The attainment of the objectives and targets of the Second Cordillera Highland Agriculture Resource Management Project (SCHARMP) may be adversely affected since its Project Support Office (PSO) expended only P55,900,603.38 or 10.19 percent of its total allotment of P548,823,915.98 as a result of the following: (a) slow liquidation of funds transferred to implementing agencies and NGOs/POs; and (b) delay in the implementation of infrastructure projects.

The Project Support Office closely follow-up with implementing agencies and NGOs/POs liquidations of fund transfers. The Project Support Office fast track the implementation of the programmed sub-projects to attain the Project’s objectives.

Project: Mindanao Rural Development Program (MRDP) Adaptable Program Loan (APL) - 2 Others Property, Plant and Equipment totalling P2,695,513.92 under the AusAID Grant and GEF funds were not properly classified; thus, affecting balances of individual PPE accounts at year-end.

Management require the Program Accountant to make the necessary adjustments to properly classify items to correct balances of affected accounts.

Lapsed NCA totaling P4,534,829.52 was not yet reverted to the National Treasury as of December 30, 2013.

Management inform/advice LBP-Bajada Branch, Davao City, in writing, to revert the unutilized funds to the Treasury.

Funds transferred to LGUs in CY 2013 Management: a) require the Program

48

Audit Observations

Recommendations

representing 40 percent CFA counterpart for RI sub-projects totaling P381,373,438.46 were found to have been fully liquidated in MRDP books casting doubt on the correctness of the Due from LGUs account balance as of December 31, 2013.

Accountant and the Financial Analyst concerned to make a thorough review of the transactions and make the necessary adjustments to correct the individual account of the LGUs concerned; and b) submit to the Audit Team all liquidation reports pertaining to the above transactions for audit.

Funds released to LGUs totaling P22,756,998.44 on July 26, 2012 were erroneously classified under account 136 instead of account 138; thus, understating Due from LGUs and correspondingly overstating Due from NGAs account as of December 31, 2013.

The Program Accountant prepare the necessary adjusting entries and instruct the Financial Analyst in charge of the accounts to properly post/record the same to the individual subsidiary ledger of LGUs.

Aging of Due from LGUs account revealed that P294,313,898.96 or 62.11 percent of the total balance as of December 31, 2013 remained unliquidated ranging from 181 days to more than two years contrary to the provisions of the MOA that monthly submission of liquidation report is required.

Management monitor strictly the submission of liquidation reports especially so that the program is about to finish.

Purchase of plane tickets for the officials and employees of the Department’s regional field offices and other agencies totaling P375,467.25 were not supported with approved travel order and other required documents to warrant the payments contrary to COA Circular 2012-001 dated June 14, 2012 and Executive Order No. 298, casting doubts on the validity of such transactions.

Management: a) require the Accountant to submit the following documents: (1) Duly Approved Activity Design/activity conducted, (2) copy of the MRDP invitation letter addressed to the different agencies, (3) Approved travel order of the agency representative being invited, (4) Purchase Order duly approved by MRDP Head/duly authorized representative, (5) certified copy of liquidation report and boarding pass/travel by concerned officials/employees, and, (6) certification from the Accountant of the partner-agency that there is no claim for the same travel expenses (plane ticket and travel allowances during the duration of the travel) thereat; and b) the Accountant only process payments with complete documentary requirements as duly certified by him on the face of the DVs.

Liquidation reports/boarding pass of PRDP employees were not submitted to indicate that the plane tickets totaling P582,023.43 were actually used, thereby casting doubts on the actual incurrence of the travel expenses.

Management : a) require the concerned officials and employees to submit the duly approved travel order, certified copy of the liquidation report and boarding pass and certification from the Accountant of the requesting office that there is no claim for the same travel expenses (plane fare) thereat; b) require the presentation of a duly approved travel order as basis for processing the plane

49

Audit Observations

Recommendations

ticket; and c) require the submission of original boarding pass together with the copy of the liquidation report as soon as the travel is completed.

Purchase/withdrawal of gasoline totaling P522,332.02 is not supported by duly approved requisition and issue voucher or equivalent instead an approved Driver’s Trip Ticket is presented to the gasoline provider for withdrawal. In addition, Monthly Report of Fuel Consumption is not submitted, both documents required under COA Circular No. 77-61 dated September 26, 1977.

Management require: a) the Administrative Officer to use the form prescribed under COA Circular No. 77-61 dated September 26, 1977; and b) the submission of reports pertaining to fuel consumption on a monthly basis covering the one month period in accordance with the above-cited circular.

Charges on fuel were made for vehicles allegedly owned by DA-CO totaling P146,447.52, in violation of regulations on the disbursement of funds.

Management: a) submit justification for authorizing charges of fuel to MRDP as these cannot be allowed in audit. Also, furnish the Audit Team copies of the Certificate of Registration of vehicles as proof that these are indeed government vehicles; and b) require the submission of driver’s trip ticket to ascertain that government motor vehicles are used exclusively and strictly for official business.

Unsettled disallowances as of December 31, 2013 totaling P8,761,608.80.

Management: a) cause the settlement of disallowances before the Program will end in December, 2014; b) require the Accountant to prepare the necessary adjusting entry to correct the double entry of P2,000.00, copy furnish the Audit Team; and c) collect thru payroll deductions from concerned employees, issue official receipts and remit to the Bureau of Treasury as soon as possible.

Project: Second Cordillera Highland Agricultural Resource Management Project Unnecessary travel expenses amounting to P27,721.12, as defined under Section 3.2 of COA Circular No. 85-55A were incurred due to changes in flight schedules/rebooking of tickets without the proper approval of the authorized official.

MRDP Officials: a) properly plan all travels before booking their flights so that unnecessary traveling expenses due to rebooking, surcharges, no show fees, re-issuances of tickets and the like can be avoided; and b) require that rebooking of tickets shall first be approved by the authorized official and shall form part of the supporting documents of the liquidation report.

The non-preparation of the Report of Supplies and Materials Issued (RSMI) by the Supply and Property Unit, in violation of the provisions of Section 43, Volume I and Section 62, Volume II

The Project Support Office: (a) require the Supply and Property Unit to prepare and submit monthly the RSMI to the Accounting Unit for recording the issuances of

50

Audit Observations

Recommendations

of the Manual on the New Government Accounting System (MNGAS) overstated the year-end balance of the Spare Parts Inventory account by P644,538.89 and understated its related expense account by the same amount.

inventories in the books of accounts; (b) require the Accounting Unit to prepare an adjusting entry to correct the balances of the Spare Parts Inventory account and its related expense account.

Insurance coverage for the 10 motor vehicles procured in CY 2012 was not renewed for the period March 22, 2013 to March 01, 2014 contrary to Section 5 of Republic Act No. 656 and the General Policies and Policy on the Use of Vehicles prescribed in the Project Implementation Manual (PIM) designed for the fifth component of the SCHARMP - Project Management and Coordination; thus, exposing the Government to possible losses in the event of damage or loss.

The Project Support Office ensure that all its project vehicles are covered with comprehensive insurance at all times, as stipulated in Section 5 of R.A. No. 656 and the policies on transport vehicles in the PIM, to avoid exposure to possible losses.

Non-maintenance of Stock Cards and Supplies Ledger Cards by the Supply and Property Unit (SPU) and the Accounting Unit, respectively, as provided in Section 43, Volume I and Section 12, Volume II of the MNGAS, may contribute to a weak internal control in monitoring the inventories on hand.

The Project Support Office require the Accounting and Supply Units to maintain SLCs and SCs, respectively, and ensure that their balances are reconciled regularly.

Project: Irrigated Rice Production Enhancement Programme (IRPEP) Management failed to submit inventory reports of office equipment totaling P2,067,150.60. Office Equipment purchased were not supported with Acknowledgement Receipt of Equipment. No equipment subsidiary ledger card maintained by the agency. Thus; equipment accountability could not be established.

Management instruct the inventory committee with the Property Officer or Custodian to complete their conduct of physical inventory of these equipment totaling P2,067.150.60; b) Inventory Report be prepared after the actual physical count of the equipments and submit a copy of said report to be booked-up to the Accountant of NIA R10; and c) Acknowledgement Receipt of Equipment (ARE) be issued at once the holder or users of these equipment is identified.

Payment of honorarium in the total amount of P854,437.27 net of tax of P58,331.89 were not supported with the documents required under DBM Circular No. 2007-2 dated October 1, 2007.

Management strictly adhere with DBM Circular No. 2007-2 and submit complete documents to support the payment of honorarium such as: project plan, outputs and accomplishment reports; and b) Payment of honorarium shall be charged to Corporate Fund.

Audit disallowances issued last Calendar Year 2012 amounting to P409,286.66 remained unsettled as of December 2013 contrary to Section 7 of COA Circular No. 2009-006 dated

Management send demand letters to all concerned with outstanding disallowances and enforce immediate settlement either through withholding of salaries or other

51

Audit Observations

Recommendations

September 15, 2009. compensation due to the persons liable or institute other remedies to cause the settlement; and b) Require the Finance Head of IMO to submit to the Accountant of NIA Regional Office No. 10 copies of Notice of Disallowances and the Refunded Amount if any, to book up the unrecorded audit disallowances and settlements.

52

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

Reference:http://dar7.net.ph/

The Department of Agrarian Reform (DAR) leads the implementation of the Comprehensive Agrarian Reform Program (CARP) through land tenure improvement, agrarian justice, and coordinated delivery of essential support services to client-beneficiaries.

"To lead in the implementation of agrarian reform and sustainable rural development in the countryside through land tenure improvement and provision of integrated development services to landless farmers, farmworkers and small landowner-cultivators, and the delivery of agrarian justice"

Reference:http://dar7.net.ph/

4.1.2

53

As the lead implementing agency of Comprehensive Agrarian Reform Program (CARP), it availed of the loans under the Infrastructure and the Agriculture, Agrarian Reform and Natural Resource (AARNR) sectors with a total net loan commitments of P 52,827.37 (US$1,189.86) or 4.01 percent of the total cumulative net commitment which are used to finance 21 projects; 6 is still on-going, 14 already completed, while 0ne was not yet implemented. Table XXVIII shows the project status and the loan summary profile.

Table XXVIII - Project Status and Loan Summary Profile

(amount in million)

Audit conducted during the year showed observations in the following three ongoing projects:

Table XXIX - List of Project Loans with Audit Observations (amount in million)

USD PHP USD PHP USD PHP USD PHP22 TOTAL 19 565.69 25,115.54 533.34 23,679.35 19.19 852.01 32.35 1,436.19 3 Ongoing 3 110.21 4,892.97 77.86 3,456.78 19.19 852.01 32.35 1,436.19

17 Completed 14 419.98 18,646.31 419.98 18,646.31 - - 0.00 0.00 2 Cancellled 2 35.50 1,576.27 35.50 1,576.27 - - - -


CountProject Status

Project Count



USD PHP USD PHP USD PHP USD PHPTOTAL 1,189.86 52,827.37 816.39 36,246.20 65.03 2,887.24 373.47 16,581.17

ADB2465 PHI

Agrarian Reform Communities Project II

Ongoing 70.00 3,107.86 12.82 569.14 6.61 293.66 57.18 2,538.72

JBIC PH-P242

Agrarian Reform Infrastructure Support Project, Phase III

Ongoing 112.17 4,979.96 79.90 3,547.60 20.81 923.85 32.26 1,432.36

JBIC PH-P222

Mindanao Sustainable Settlement Area Development Project

Completed 55.10 2,446.41 55.10 2,446.41 - - - -

JBIC PH-P251

Mindanao Sustainable Agrarian and Agriculture Development Project

Ongoing 57.62 2,558.33 5.90 261.99 5.90 261.99 51.72 2,296.35


Project Status



54


Hereunder are the audit observations noted as well as the recommended courses of actions:

Audit Observations

Recommendations

Physical Performance Project: Mindanao Sustainable Agrarian and Agriculture Development Project (MinSAAD) Out of 72 units of constructed shallow tube wells with pumps and engines under the Agrarian Reform Infrastructure Support Program III (ARISP III), seven units were found to be inoperative and unutilized in Barangay Montero, Banayoyo, Ilocos Sur and Barangay Langayan, Currimao, Ilocos Norte, thus, the benefits to be derived from the project were not fully attained to the detriment of affected farmer-beneficiaries.

a. Identify other locations where the five shallow tube wells may be installed as other farmers may benefit from its utilization; b. Request the affected farmer-beneficiaries of barangay Langayan to keep the five inoperative and unused engine pumps as protection of the same from loss through theft and damage from elements.

Others Project: Agrarian Reform Communities Project (ARCP) II Expenditures of other foreign-assisted projects, such as MINSAAD (general services) and ARISP III (repair of motor vehicles) in the amount of P54,187.74 and P248,550.00, res-pectively, were charged against ARCP2 funds, thus, overstating the latter’s expenses.

Explain/justify charging of expenditures of other foreign-assisted projects to ARCP2 funds.

Meals and snacks purchased amounting to P303,199.00 for meetings undertaken and attended by ARCP2 personnel and consultants for the project were charged to Representation Expense (783).

Stop charging meals and snacks to Representation Expenses for activities attended by ARCP personnel and consultants for the project since the activities being undertaken are part of their regular duties /works which were being done during regular working hours.

There were expenses charged to the account Other Maintenance and Operating Expenses for payments of CNA Incentives to Contract of Service personnel and to those charged to Consultancy Services in the total amount of P840,000.00 which is not in accordance with the DBM Circular Nos. 2006 -01 dated February 1, 2006 and 2010-1 dated April 28, 2010.

Stop the payment of CNA benefits for those who are not included/provided for in DBM Circular Nos. 2006 -01 dated February 1, 2006 and 2010-1 dated April 28, 2010.

Fund transfers to FAPsO - GCF Trust in the books of ARCP II in the amount of P33,715,593.38 for calendar years 2012 and 2013, recorded as Due from Central Office has no corresponding reciprocal account in the books of Central Office (CO) in violation of Executive Order No. 431 dated May 30, 2005 and Section 395 of the GAAM.

Submit immediately all the required documents supporting the transfers and liquidations in accordance with the standards of documentation of disbursements prescribed in Section 4(6) of P.D. 1445 and COA Circular No. 2012-001 dated June 14, 2012

55

Audit Observations

Recommendations

Purpose/nature of payment for Contract of Service Personnel and those whose salaries were charged to Consultancy Services amounting to P264,000.00 taken up as Other Maintenance and Operating Expenses, were not specified in the DV/Payroll, nor documents to support as basis of payment were attached, thus the validity of the expenses are doubtful and irregular in nature.

Submit pertinent supporting documents and cite legal basis of payment thereof.

Project: Agrarian Reform Infrastructure Support Project, Phase III (ARISP Ph III) Unauthorized payment of medical allowance to DAR FAPsO Contract of Service Employees assigned at the Agrarian Reform Infrastructure Support Project (ARISP) III at P6,000.00 each for the year 2013 in the total amount of P126,000.00 due to absence of law authorizing the grant of Health Care/Medical Allowance provided in the GAA for 2013.

Refund the allowance received which was disallowed under ND No. 2014-003-102(2013) dated May 29, 2014.

Project: Mindanao Sustainable Agrarian and Agriculture Development Project (MinSAAD) Travel allowances totalling P10,268.00 were granted to three drivers for travel of staff to different places/areas not covered by the MinSAAD Project.

Indicate in the travel orders the purpose of the trip and justify/explain the travel to places which are not within the coverage area of the MinSAAD Project.

Expenses were still incurred for MinSSAD, a project completed four years ago, for the production of video information material amounting to P150,000.00 and was charged against MinSAAD Project which resulted in overstatement of the latter's project cost.

Justify the incurrence of expenses for a project already completed four years ago and further explain why non-MinSAAD related expenses were charged against its funds.

Representation Expenses totalling P132,035.63 incurred during staff meetings/other activities and BAC-related expenses were considered unnecessary pursuant to COA Circular No. 2012-003.

Justify/Explain: a. food expenses incurred during staff meetings and other activities of personnel considering such activities are their regular functional duties; b. BAC expenses charged against project funds instead of from income/receipts from sale of bid documents; and c. why ICXA Catering bill showed food bought from Jollibee and Kenny Rogers.

The claims of honorarium by officials and personnel of DAR and FAPsO totalling P1,005,300.00 from January to December 2013 was suspended in audit due to non-attachment of supporting documents required under Budget Circular No. 2007-2 dated October 1, 2007.

Settle the suspension through compliance with the requirements and or refund of the honorarium received.

56

Audit Observations

Recommendations

The grant of benefits amounting to P118,423.50 and P195,390.50 in 2012 and 2013, respectively, including clothing allowance of P5,000.00 to Contractual Service personnel is not in consonance with Civil Service Commission Resolution No. 062254 dated December 20, 2006; hence disallowed in audit.

Require all persons responsible/liable to settle immediately the audit disallowances

Payments to Land Bank of the Philippines totalling P850,000.00 for the purchase of gift checks was disallowed in audit due to absence of law authorizing the grant of gift checks and absence of appropriation for gift checks provided in the GAA for 2013.

Refund the allowance received.

Procurement of office supplies included toner totalling P561,720.00 despite having an existing contract with ECOPY Corporation for the rental of Sharp copier including supplies of toner.

Explain why toners were purchased despite the existence of a contract for a Sharp copier which already included supplies such, as toner.

57

The DBP, under its new charter, is classified as a development bank and may perform all other functions of a thrift bank. Its primary objective is to provide banking services principally to cater to the medium and long-term needs of agricultural and industrial enterprises with emphasis on small and medium-scale industries.

Reference: https://www.devbnkphl.com

4.1.3

58

The Development Bank of the Philippines availed 19 loans from the Infrastructure,

Agriculture, Agrarian Reform, Natural resources (AARNR) and Industry, Trade and Tourism (ITT) sectors with a total net loan commitments of P66,698.75 million (UD$1,502.29 million) to finance 17 projects; 11 of which were already completed while six are still ongoing. Table - XXX present the project status and the summary loan profile, while Table - XXXI presents the two completed projects which disclosed audit observations in the audit conducted during the year.

Table XXX - Project Status and Summary Loan Profile

Table XXXI – List of Projects with Audit Observations


Hereunder are the audit observations noted in the audit of project funds during the year:

Audit Observations

Recommendations

Financial Performance Project: Regional Infrastructure for Growth (RIGP) Non-payment of foreign exchange risk cover fee required in the Memorandum of Agreement (MOA) by and between the National Government (NG) and the Development Bank of the Philippines (DBP) understated Other Expenses by P113,331.83.

Observe consistency in computing FXRC fee for all ODA projects. Compute FXRCF in accordance with the provisions of the MOA and remit payment of FXRCF to the Bureau of Treasury; and Take up the necessary adjustment in the books.

The Bank incurred expenses of P5,264,963.55 on the RIGP due to unutilized borrowed funds.

Adopt aggressive marketing strategies towards prospective clients to attain the purpose of the loan facility; and

USD PHP USD PHP USD PHP USD PHP19 TOTAL 17 1,502.29 66,698.75 1,152.49 51,168.13 42.21 1,873.83 349.80 15,530.62 6 Ongoing 6 627.94 27,879.27 278.12 12,347.95 42.21 1,873.83 349.82 15,531.32

13 Completed 11 874.35 38,819.48 874.37 38,820.18 0.01 0.35 (0.02) (0.70)


CountProject Status

Project Count



USD PHP USD PHP USD PHP USD PHPTOTAL 190.69 8,466.47 190.69 8,466.47 - - - -

JBIC PH-P189 Domestic Shipping Modernization Program, Phase II

Completed 184.22 8,179.00 184.22 8,179.00 - - - -

KFW No. 15 #1095708

Industrial Pollution Control I

Completed 6.47 287.47 6.47 287.47 - - - -


Project Status



59

Audit Observations

Recommendations

Consider marketing the program to other financial intermediaries to participate in the relending of funds to their respective borrowers.

Project: Industrial Pollution Control I; Domestic Shipping Modernization Program, Phase II Claims of the bank from the National Government (NG)/ Bureau of Treasury (BTr) pertaining to payments of ODA borrowings disclosed an over billing of P47.370 million for the year 2013 due to the conversion of the 3rd currency (Euro and Yen) to US$/Peso which differed from what is required of PAS 21, the same policy adopted by DBP in its Manual of Procedures and the Memorandum of Agreement by and between DBP and the Department of Finance (DOF), thus resulting to the overstatement of income by the same amount.

Compute FXRC claims from the BTr/NG in accordance with PAS 21, BSP Cir. 494, DBP’s Manual of Procedures and Memorandum of Agreement by and between the DBP and DOF; and Make the necessary adjustments to correct the overbilling to the NG.

Projects: 17 projects under the four sectors INFRA/ ITT/ SRCD/ AARNR The Bank’s Miscellaneous Liability includes the amount of P1.355 million consisting of the mark-to-market value of foreign exchange risk cover of P0.301 million and net revaluation gain of P1.054 million on foreign borrowings obtained under Official Development Assistance (ODA) resulting in overstatement of total liabilities by P1.355 billion and understatement of retained earnings by the same amount in violation of the provisions of BSP Circular No. 494, PAS 21 & 39 and MB Resolution No. 1063 dated August 14, 2008.

Effect the necessary corrections and/or adjustments in the project’s financial statements to comply with the applicable Philippine Accounting Standards and BSP rules and regulations.

60

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 shall be 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.

Formulate implement and supervise the government's policies, plans and programs pertaining to the management, conservation, development, use and replenishment of the country's natural resources and ecological diversity; and

Reference:www.denr.gov.ph

4.1.4

61

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

(AARNR) sector with a Net Loan Commitments of P18,562.48 million (US$418.09 million) for the 13 loans corresponding to 10 projects. The project status as well as the loan summary profile is shown in Table - XXXIII.

Table XXXIII - Project Status and Loan Summary Profile

In the audit conducted during the year, four ongoing and one completed projects were identified with some findings/observations.

Table XXXIV - List of Projects with Audit Observations

USD PHP USD PHP USD PHP USD PHP13 TOTAL 10 418.09 18,562.48 197.50 8,768.80 17.57 779.99 220.59 9,793.68 4 Ongoing 3 177.16 7,865.59 74.16 3,292.63 17.57 779.99 103.00 4,572.97 6 Completed 5 120.53 5,351.15 120.53 5,351.15 0.00 0.00 2 NYI 1 120.41 5,345.74 2.82 125.03 2.82 125.03 117.59 5,220.72 1 Cancellled 1


CountProject Status

Project Count




ADB2311 PHI

Integrated Coastal Resources Management Project

Ongoing 33.80 1,500.65 18.28 811.66 5.36 238.15 15.52 688.99

IBRD 7298 PH

Second Land Administration & Management Project

Completed 15.36 682.00 15.36 682.00 - - 0.00 0.00

IBRD 7470 PH

National Program Support for Environment and Natural Resources Management Project

Ongoing 50.00 2,219.90 50.00 2,219.90 8.75 388.42 - -

KFW-02 Community-Based Forest and Mangrove Management Project in Panay and Negros

Ongoing 5.51 244.46 3.87 171.75 0.53 23.46 1.64 72.71

JBIC PH-P248

Forestland Management Project

Ongoing 87.85 3,900.59 2.01 89.32 0.11 4.93 85.84 3,811.27


Project Status



62


Hereunder are the noted observations together with the suggested recommendations:

Audit Observations

Recommendations

Budget Low utilization of project funds was noted in the following projects which affected the timely and efficient delivery of benefits to its beneficiaries:

a. P30,300,000.00 or 7.37 percent of the budget of P411,007,819.00 while the rate of physical accomplishment is 86.03 percent for the National Program Support for Environment and Natural Resources Management Program (NPS-ENRMP);

b. P232,771,719.00 or 42.42 percent of its budget of P548,781,739.00 while the rate of physical accomplishment is 21.43 percent for the Integrated Coastal Resources Management Project (ICRMP);

c. 72.76 percent of its budget of P9,527,190.00 or P6,931,680.00 while the rate of physical accomplishment is 32.99 percent of its targets for CY 2013 for the Community-Based Forest and Mangrove Management Project (CBFMMP); and

d. P71,806,291.91 or 21.25 percent of its budget of P337,940,000.00 during the year, while the rate for physical accomplishments is 34.61 percent for those implemented activities in the Forestland Management Project.

Management and the Project Manager strategize and exert extra efforts to accomplish the scheduled activities as per WFP to ensure the timely and full project implementation; thus, giving more value for money invested for the project.

Physical Performance Due to slow project implementation, a huge unspent cash balance totaling P340.295 million for the National Program Support for Environment and Natural Resources Management Program (NPS-ENRMP) was not utilized, hence, resulted in the non- implementation of the projected activities in CY 2013.

Management exert best efforts to accomplish the scheduled activities as planned to ensure full attainment of the objectives set for an effective and successful undertaking giving more value for money invested for the project. Also, require Management to justify the Project’s failure to utilize the huge outstanding cash balance at end date of its project on December 31, 2013.

Others Total reported receivables of P33.002 million is unreliable due to (a) long outstanding unliquidated fund transfers to NGAs/NGOs expended for project implementation

The OIC – Chief, Accounting Division to: a) monitor and enforce the immediate liquidation of funds transferred to implementing agencies by issuing demand

63

Audit Observations

Recommendations

totaling P33.002 million; (b) unrecorded liquidation of P13.908 million; and (c) overstatement of refund amounting to P9,751.00. (National Program Support for Environment and Natural Resources Management Program (NPS-ENRMP)

letters pursuant to COA Circulars 94-013; b) review the accounting entries made and accordingly adjust the error and misclassification; and c) enforce the immediate liquidation of funds transferred to PWU pursuant to COA Circular 94-013 by issuing demand letters to facilitate the evaluation of the impact and status of projects implemented in relation to the amount spent.

The balances of Property, Plant and Equipment (PPE) accounts as of December 31, 2013 in the three projects were inaccurate/unreliable, as follows:

1. P3 million with a reported net book value of P1.89 million due to the (a) inclusion either in the books, inventory report or both, of unaccounted and transferred properties amounting to P342,789.55.00 and P780,789.55, respectively; (b) unserviceable equipment not reclassified to Other Assets account amounting to P13,525.00; and (c) unreconciled difference of P19,470.00 between the balances per books and the inventory reports. (Integrated Coastal Resources Management Project (ICRMP);

2. P9.092 million with a reported net book

value of P3.066 million is unreliable because of the following: (a) inclusion of unlocated properties of P3.907 million in the books and inventory report; (b) unserviceable equipment not reclassified to Other Assets account amounting to P438,411.36; and (c) unreconciled difference of P18,700 between the balances per books and the inventory reports, thus, affected the fair presentation of the project’s asset in the financial statements. (Second Land Administration and Management Project (LAMP 2); and

3. P47.46 million with a reported net book

value of P28.47 million is inaccurate because of: (a) unreconciled difference of P2.51 million between the balances per books and the inventory reports;

The Property Officer - (i) prepare and submit to the accounting unit the proper documentation for the transferred properties as a basis of the accountant in the dropping of the various equipment from the books of accounts; (ii) submit to the accounting division the Inventory and Inspection Report of Unserviceable Property as basis of the accountant in reclassifying the items to Other Assets Account; (iii) conduct appraisal and cause the disposal of the unserviceable properties in consonance with Section 79 of P.D. 1445; The Chiefs, Accounting Division and GSD - update and, accordingly, reconcile their respective records of PPE accounts to fairly present the balance of the account in the financial statement.

64

Audit Observations

Recommendations

and (b) net overstatement due to error in the computation of the depreciation for IT Equipment resulting in overstatement of Depreciation Expense and Allowance for Depreciation accounts by P767,749.06. (National Program Support for Environment and Natural Resources Management Program (NPS-ENRMP)

The Due to Bureau of Internal Revenue account as of December 31, 2013 has an abnormal debit balance of P272,384.59 which is not in conformity to COA Circular No. 2004-008 dated September 20, 2004. (National Program Support for Environment and Natural Resources Management Program (NPS-ENRMP)

Make the necessary adjustments by recording the taxes withheld previously unrecorded in the books to eliminate the abnormal balance and reconcile the balances per General Ledger, Subsidiary Ledgers and Schedule of Due to BIR to establish the correct Due to BIR account balance.

Reported liabilities totaling P3,763,215.38 are doubtful because of long outstanding payables aged more than two years totaling P1,680,509.58 which should have been reverted to the unappropriated surplus of the government pursuant to Section 98 of PD 1445. (Integrated Coastal Resources Management Project (ICRMP)

The accountant to: i) verify and analyze long outstanding payable accounts; and ii) revert to the Government Equity all outstanding payable accounts aged over two years which do not have valid claimants pursuant to the above cited regulation.

65

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.

The DoE, 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.

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

4.1.5

66

The DOE is the recipient of the third biggest loan under the Infrastructure Sector with Cumulative Net Commitments totalling P19,058.95 million (US$429.28 million), representing 9.22 percent of the total Infrastructure Cumulative Net commitments (Table XVI). The total loan commitments were intended for the two infrastructure projects intended to ensure sustainable, stable, secure, sufficient, and accessible energy. The Project Status as well as the loan summary profile is shown in Table - XXXIV.

Table XXXIV - Project Status and Loan Summary Profile

The Philippine Energy Efficiency Project (PEEP) is supported by a loan from the Asian Development Bank amounting to US$31.1 million. The loan agreement was signed on March 2, 2009 while the availment period was from May 2009 to December 2013. The loan is primarily intended to reduce the cost of power generation, through investments in energy efficient lighting and lighting systems, appliances, adoption of energy saving measures in buildings and improvement of equipment testing facilities.


Audit of the PEEP fund disclosed the following audit observations, with corresponding recommendations:

Audit Observations

Recommendations

Procurement The procurement method used by the agency in contracting the services of three suppliers for the venues of the Quarterly and Final Project Status Reviews of the Philippine Energy Efficiency Project (PEEP) with costs aggregating to P1.22 million was not in

The PEEP-Project Management Unit (PMU) submit explanation why no quotations were obtained from other suppliers to ensure competitiveness of prices.

USD PHP USD PHP USD PHP USD PHP3 TOTAL 2 429.28 19,058.95 23.34 1,036.46 15.84 703.34 405.93 18,022.49 1 Completed 1 29.28 1,299.75 23.34 1,036.46 15.84 703.34 5.93 263.29 2 NYI 1 400.00 17,759.20 - - 400.00 17,759.20

ADB2507 PHI

Phil. Energy Efficiency Project

Comple-ted

29.28 1,299.75 23.34 1,036.46 15.84 703.34 5.93 263.29

2964-PHI Market Transformation through Introduction of Energy Efficient Electric Vehicles Project

NYI 100.00 4,439.80 - - 100.00 4,439.80

8261-PHI Market Transformation Thru Introduction of Energy Efficient Electric Vehicles Project

NYI 300.00 13,319.40 - - 300.00 13,319.40


CountProject Status

Project Count



67

Audit Observations

Recommendations

accordance with the ADB Procurement Guidelines and Alternative Methods of Procurement prescribed in the Revised Implementing Rules and Regulations (IRR) of Republic Act No. 9184. Physical Performance A total of 1,453,600 pieces of Compact Fluorescent Lamps (CFLs) worth P120.11 million or 40 percent of the procured 3.6 million pieces CFLs for distribution to selected residential customers nationwide with total cost of P297.47 million could not be fully accounted due to the non-submission of CFL Distribution Monitoring Forms by some District and Party List Representatives. As a result, correctness of the amount liquidated could not be ensured. Also, excess/unutilized amount of the funds transferred to PS-DBM amounting to P1.51 million remained uncollected to date.

The management exert more effort to obtain from the District and Party List Representatives the accomplished “Annex B” or CFL Distribution Monitoring Forms to fully account for the 1,453,600 pieces of CFLs worth P120.11 million and submit a report to COA for audit purposes and follow up the refund of the excess/unutilized amount of funds transferred to PS-DBM.

Others The apparent gap between the reported overall physical delivery rate of the PEEP of 100 percent and financial utilization rate of only 78.54 percent at closing date on December 31, 2013 could not be ascertained due to savings or uncompleted project activities because of the non-submission of revised work and financial plan in support to the approved time extensions. Moreover, the reported annual energy savings of 321.805 GWh equivalent to P3,22 billion could not also be validated due to non-submission of supporting documents.

Management submit immediately the revised work and financial plan and supporting documents on the reported annual energy savings for validation and audit purposes.

68

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) the planning of infrastructure, such as national roads and bridges, flood control, water resources projects and other public works, and (b) the design, construction, and maintenance of national roads and bridges, and major flood control systems.

The DPWH functions 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. Reference:www.dpwh.gov.ph

4.1.6

69

The DPWH is the recipient of the biggest ODA loans under the Infrastructure Sector with cumulative net commitments of P240,774.80 million (US$ 5,423.10 million) or 18.27 percent of the total cumulative net commitments as shown in Table XVI. The whole amount was intended for the infrastructure projects to facilitate and fast-track the needed infrastructure support of the economy. The 79 loans totalling P172,008.68 million availed by the DPWH was used to finance 67 projects; which, as of December 31, 2013, 44 projects have been completed, 16 are ongoing, six are not yet implemented and one was cancelled., Table XXXV presents the project status as well as the loan summary profile as of December 31, 2013.

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

The table below presents the list of projects where audit observations were noted in the course of audit.

Table XXXVI - List of Project Loans with Audit Observations

USD PHP USD PHP USD PHP USD PHP79 TOTAL 67 5,423.10 240,774.80 3,874.24 172,008.68 82.04 3,642.46 1,548.86 68,766.13 18 Ongoing 16 1,970.57 87,489.41 893.68 39,677.72 76.65 3,402.91 1,076.89 47,811.70 54 Completed 44 2,985.44 132,547.36 2,976.54 132,152.48 4.11 182.30 8.89 394.88 6 NYI 6 464.36 20,616.81 1.29 57.25 1.29 57.25 463.07 20,559.55 1 Cancellled 1 2.73 121.23 2.73 121.23 - -

Undrawn BalanceProject Status

Loan Count

Project Count

Net Loan

Cumulative Availments CY Availments

USD PHP USD PHP USD PHP USD PHPTOTAL 930.37 41,306.62 634.05 28,150.39 55.36 2,457.88 296.32 13,156.23

BNP PARIBAS JPY4.1B

BNP PARIBAS


Ongoing 39.26 1,743.02 24.91 1,106.11 - - 14.35 636.91


BNP PARIBAS


Ongoing 222.47 9,877.11 143.04 6,350.48 7.18 318.90 79.43 3,526.63

ECGD-Deutsche Bank Y2.9B Comm'l

ECGD Tulay ng Pangulo sa Barangay

Completed 27.94 1,240.56 27.94 1,240.56 - - - -

IBRD 7552 PH

IBRD National Roads Improvement and Management Project 2

Ongoing 232.00 10,300.34 80.22 3,561.65 33.81 1,501.27 151.78 6,738.68

JBIC PH-P237

JBIC Central Mindanao Road Project

Completed 30.09 1,335.81 30.09 1,335.81 - - - -

JBIC PH-P246

JBIC Post Ondoy and Pepeng Short Term Infrastructure Rehabilitation Project

Ongoing 77.31 3,432.22 77.31 3,432.22 9.59 425.62 - -

JBIC PH-P220

JBIC Rural Road Network Development Project, Phase III

Ongoing 43.15 1,915.76 43.15 1,915.76 - - - -

CY Availments Undrawn BalanceCreditorLoan

No. Project Name Project Status



70

(Table XXXVII, continued)


Hereunder are the audit observations and the corresponding recommendations which are discussed in details in the audit report of the agency.

Audit Observations

Recommendations

Budget Only ₱443.34 million out of the total contract cost of ₱767.47 million was covered with a Certificate of Availability of Funds, thus, the amount of ₱324.13 million remained unfunded and unobligated. (Mindanao Road Improvement Project & Mindanao 2nd Road Improvement Project)

Submit written explanation on the deficiencies noted to facilitate further review and evaluation of the contract.

Payments made to some sub-projects under Cluster RB 38 undertaken by O.R. Sarmiento Construction exceeded the obligated amount by ₱4.13 million, thus, resulting in the negative balances in the Subsidiary Ledger (SL). (Post Ondoy and Pepeng Short Term Infrastructure Rehabilitation Project)

Require the Accounting and Budget Division to reconcile the postings in the SL and make the necessary adjustments to correct the negative balances of the Advances to Contractors account for each sub-project and the overcharging of obligations.

Procurement Contract costs exceeded the COA estimated costs by ₱43.11 million due to over-estimated quantity in the ABC; thus, the incurrence of excessive project cost on the part of the government. (Rural Road Network Development Project, Phase III & Central Mindanao Road)

Explain the excessive difference and if not meritorious, require the contractor to refund the variance of ₱43.111 million or deduct the amount from any money due the contractor or from the retention money or other securities posted by the contractor, whichever is practicable.

USD PHP USD PHP USD PHP USD PHPJBIC PH-P231

JBIC Urgent Bridges Construction Project-Rural Development

Ongoing 174.23 7,735.44 174.23 7,735.44 - - - -

Export-Import Bank of Korea (PHL-9)

KEXIM Bacolod-Silay Airport Access Road Project

Completed 14.18 629.36 8.49 376.78 3.95 175.43 5.69 252.58

KFAED No. 541

ZOTH Mindanao 2nd Road Improvement Project

completed 19.76 877.17 19.76 877.17 - - - -

Saudi Fund for Development

ZOTH Mindanao Roads Improvement Project

Ongoing 20.00 887.89 4.36 193.69 0.27 11.96 15.64 694.20

OPEC 1446P

OPEC Road Improvement and Institutional Development Project

NYI 30.00 1,331.94 0.56 24.70 0.56 24.70 29.44 1,307.24

CY Availments Undrawn BalanceCreditorLoan

No. Project Name Project Status



71

Audit Observations

Recommendations

There was a 100 percent increase or ₱2.17 million from the original costs of ₱2.17 million for the Temporary Cofferdam for Bridge Construction and Craneway Flatform Bridge Type. (Bacolod-Silay Airport Access Road)

Explain the deficiencies noted and cause the immediate submission of the required documents including photos of the temporary facilities.

Improper imposition of 12 percent VAT, Overhead, Contingencies and Miscellaneous (OCM) and mark-up to direct cost of the pay items under Part A-Facilities of the Engineer and Part B-Other General Requirements resulted in overstated Approved Budget for the Contract (ABC) with a corresponding excess contract price of ₱14.58 million. (Mindanao Road Improvement Project; Mindanao 2nd Road Improvement Project and Road Improvement and Institutional Development Project)

Compute the billing/s for the procurement of various pay items under the “Provision for the Facilities for the DPWH Engineer & Staff” based on actual procurement/ purchase price duly supported with complete/required documents. Observe extra caution in the preparation of the cost estimate and meticulously conduct post-evaluation of financial bids.

Financial Performance Additional rental cost of motor vehicles of ₱2.96 million for 37 months due to extension of project duration in excess of the 24 months contract cost for rental and fuel/maintenance in the amount of P12.8 million and non-compliance with Sections 1.7 and 1.8 of Department Order No. 03 on purchased or rented vehicles by the Bureau of Equipment (BOE) rendered the transactions of doubtful validity. (Mindanao Road Improvement Project)

Comply with the provisions of Department Order No. 03 series of 2010, regarding purchase/rental of service vehicles under the Engineers Facilities.

Advances to contractors amounting to ₱18.91 million remained unrecouped as of December 31, 2013, thereby placing the Government at a disadvantaged position for possible loss of government funds. (Mindanao Road Improvement Project)

Deduct immediately from the Design Science Inc. (DSI) billings the amount of ₱3.12 million representing cash advances for the detailed engineering and from the cash advances for construction supervision amounting to ₱15.79 million to recover government funds.

Physical Performance Of the 137 bridges expected output, only 89.78 percent or 123 bridges were completed as of December 31, 2013 for the Urgent Bridges Construction-Rural Development Projects, while out of the 47 projects proposed for implementation under National Roads Improvement and Management (NRIMP) II, only 11 were completed while 24 are ongoing; thus, resulting in the deferment of the delivery of services to the public and depriving the intended beneficiaries the full benefits that could be obtained from the timely implementation and completion of projects.

The NRIMP-PMO and the SBAC for NRIMP II facilitate the conduct of procurement evaluation procedures and activities, and fast-track the procurement process in order to implement and complete the infrastructure projects on time and within schedule. Maximize loan utilization to achieve the loan objectives and provide benefits to the public.

72

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

The DSWD is tasked under RA No. 5416 to develop and implement a comprehensive social welfare program consisting of (1) preventive and remedial programs and services for individuals, families and communities; (2) protective, remedial and developmental welfare services for children and youth; (3) vocational rehabilitation and related services for the physically handicapped, ex-convict and individuals with special needs; and (4) training and research and special projects.

4.1.7

73

DSWD availed five loans, and in fact the second biggest recipient of the loan under the

Social Reform and Community Development sector with a total Net Commitments of US$ 1,061.55 million or P47,130.66 million and Cumulative Availments of US$ 745.69 or P33,106.96.

As a social protection agency, it implements the Conditional Cash Transfer (CCT) Program and Pantawid Pamilyang Pilipino Program (4Ps) as well as ensure a functional National Household Targeting System (NHTS) of social protection programs.

Another major program funded by ODA loans is the Kapit‐Bisig Laban sa Kahirapan ‐ Comprehensive and Integrated Delivery of Social Services(Kalahi‐CIDSS) which isa povertyalleviationprogram that uses a community‐driven development (CDD) approach.

As of December 31, 2013, the Department has four on-going and one completed projects. Table - XXXVII presents the project status and the loan summary profile.

Table XXXVII - Project Status and Loan Summary Profile

Presented in Table II are the project funds which bear audit observations as disclosed in the course of audit.

Table XXXIII - List of Project Loans with Audit Observations

USD PHP USD PHP USD PHP USD PHP5 TOTAL 4 1,061.55 47,130.66 745.69 33,106.96 188.80 8,382.16 315.86 14,023.70 4 Ongoing 3 964.12 42,805.18 648.26 28,781.48 188.80 8,382.16 315.86 14,023.70 1 Completed 1 97.43 4,325.48 97.43 4,325.48 - -

CY Availments Undrawn BalanceLoan Count

Project StatusProject Count

Net Loan


USD PHP USD PHP USD PHP USD PHPTOTAL 1,061.55 47,130.66 745.69 33,106.96 188.80 8,382.16 315.86 14,023.70

ADB2662 PHI

Social Protection Support Project

Ongoing 400.00 17,759.20 249.20 11,064.09 83.10 3,689.36 150.80 6,695.11

IBRD 7959-PH

KALAHI-CIDSS (Additional Financing)

Ongoing 59.12 2,624.99 58.72 2,607.26 16.86 748.52 0.40 17.72

IBRD 7805-PH

Social Welfare and Development Reform Project

Ongoing 405.00 17,981.19 340.08 15,099.03 88.59 3,933.19 64.92 2,882.16

IBRD 7147 PH

Kapit-Bisig sa Kahirapan-Comprehensive & Integrated Delivery Of Social Service-CIDSS

Completed 97.43 4,325.48 97.43 4,325.48 - - - -

8218-PH Social Welfare and Devt Reform Project (Additional Financing)

Ongoing 100.00 4,439.80 0.25 11.10 0.25 11.10 99.75 4,428.70


Project Status



74


Relative to the audit of project funds, hereunder are the summary of audit observations and the recommended courses of actions:

Audit Observations

Recommendations

Budget Out of the PHP10.35 billion fund transferred by the DSWD Central Office to the Land bank of the Philippines (LBP) for the payment of 4Ps benefits in the regions for CY 2013 thru the Over-the-Counter (OTC) scheme, only P10.04 billion was utilized/disbursed as of December 31, 2013; thereby, leaving a balance of P309.32 million, representing unpaid amount intended for beneficiaries in seven regions, PP90.17 million of which were unclaimed grants of active beneficiaries in regions IVA, VI, IX and CARAGA; thus, resulted in the accumulation of idle funds with the bank.

Concerned officials/ employees intensify the validation of all unpaid beneficiaries and require prompt reporting on the status of the beneficiaries in order that the corresponding changes are effected to arrive at a more reliable and accurate database. This will also ensure that the succeeding release of funds is just enough for the intended beneficiaries to avoid the accumulation of idle cash in LBP which could have been used for other activities necessary for the proper implementation of the program.

Financial Performance The GOP financial counterpart in the amount of P64.35 million for the KALAHI-AF was not utilized for its intended purpose due to the following: a) charging of expenses of other foreign assisted projects (FAPs); and b) advance funding by the DSWD for expenditures chargeable against the loan proceeds which were not immediately reimbursed, thus depriving all other expenses of the KC-AF project for CY 2013. Further, the inclusion of expenses of other FAPs and PAMANA resulted in the overstatement of reported expenditures in the books of KC-AF. Also, validation of 86 Sub-Projects (SPs) of KC-AF amounting to P55.76 million revealed that 14 sub-projects costing P14.04 million being reported as 100 percent completed as of December 31, 2013 despite deviations from the approved plans and specifications; thus, depriving the community beneficiaries of the benefits due them.

Stop the use of GOP financial counterpart for grants of sub-projects; disburse the same according to its intended purpose; and make necessary adjustments/ reclassification of the payments to its respective or appropriate funds for consistency or proper reference.

Duplicate names in the 4Ps payroll totalling to approximately P46.50 million for

Require the 4Ps Focal Person to prepare and transmit promptly to the DSWD Central Office,

75

Audit Observations

Recommendations

CY 2013 for 4,114 beneficiaries not only resulted in the incurrence of additional costs for the double payment of grants, deprived other people rightfully entitled to the program but also misstated the Cash accounts and the Donations account.

thru the Regional Director, the complete and final result of validation of the Double Entry or Duplicate 4Ps household (Beneficiaries) so that appropriate action be made. Conduct immediate validation on the beneficiaries subjected to “further validation.” Require prompt reporting on the periodic validation of 4Ps household to facilitate the reporting of the changes on the status or condition of any member under the program and to monitor the cash grant. For the National Project Management Offices (NPMOs), effect the immediate deletion of beneficiary found to have duplicate name in order to generate an accurate input on the databases of NHTS-PR and the 4Ps.

Unaccounted disbursements of 4Ps/CCT grants through OTC were noted: (i) recorded refunds of grants from Land Bank of the Philippines in the amounts of P8.68 million of ineligible beneficiaries and P2.45 billion unclaimed grants, representing 0.06 percent and 10 percent of the CCT payroll thru cash cards and OTC of P14.08 billion and P24.84 billion, respectively, were not completely supported; and (ii) the practice of DSWD RO to request funding for repayments of unclaimed OTC CCT grants or inclusion to the next payroll period without the required documentations resulted in the non-payment of grants to the beneficiaries.

Strictly comply with Section 4(f) of PD 1445 by requiring the payroll process on repayments of unclaimed OTC grants be duly supported with the covering voucher and check to pinpoint responsibility and accountability.

Grants of P429.50 million were paid to 240,321 HH beneficiaries which could not be found in the NHTO list of validated and registered beneficiaries and P518 million to MCCT beneficiaries, contrary to Special Provision No. 5 of the CY 2013 GAA; thus, may be considered irregular and further resulted in additional cost to the government in the distribution of CCT.

The Pantawid Pamilya NPMO Project Manager: (a) require the Regional Information Technology Officer (RITO) to explain the reasons for the deletion of the 4Ps beneficiaries and their reactivation; and the inclusion of beneficiaries with doubtful data pursuant to the comment of National Household Targeting Office- Central Office (NHTO-CO); (b) to immediately delist unregistered/unvalidated payroll-beneficiaries from the Payroll System, if found to be with unauthorized household (HH) ID, and cause their replacement of qualified beneficiaries to the Program; (c) source the 4Ps database directly from the NHTO data to avoid unauthorized grants to unregistered/unvalidated HH beneficiaries of the program; and (d) submit authority for the expansion of the regular Cash Conditional

76

Audit Observations

Recommendations

Transfer (CCT) to Modified Cash Conditional Transfer (MCCT) program, include MCCT beneficiaries found to be qualified after assessment/validation in the National Household Targeting System for Poverty Reduction (NHTS-PR) database and post the MCCT payroll information of beneficiaries in the database similar with Pantawid. Also, the RPMO conduct continuous monitoring, evaluation and validation of Program beneficiaries.

Funds transferred of P19.77 million to the BSPMC remain unutilized as of 31 December 2013; thus, cast doubt on the reliability of the implemented SPs, depriving the local households of the benefits due them and uncertainty that the objective of improved social capital as set forth in the Loan Agreement will not be fully attained before its closing date. (KALAHI-CIDSS-AF)

Require the Area Coordinators to strictly supervise the adherence of the BSPMC to the period of implementation; and monitor and follow up with the local officials concerned for the immediate allocation/ appropriation of the LLC and the timely and opportune release thereof as provided in the MOA.

Validation of 86 Sub-Projects (SPs) of KC-AF amounting to PHP55.76 million revealed that: (i) Fourteen sub-projects costing P14.04 million being reported as 100 percent completed as of December 31, 2013 despite deviations from the approved plans and specifications; thus, depriving the community beneficiaries of the benefits due them. (KALAHI-CIDSS-AF)

Require the ACT and BSPMC to act on the immediate correction of defects/deficiencies noted for the full continuity and functionality of the SPs for the benefits of the intended beneficiaries.

Purchases of some materials for the construction of 2 units 6.90 linear meter double barrel box culvert under KALAHI-CIDDS Project in Barangay Anahaw, Alegria, Surigao del Norte with total approved project cost of P3.34 million were excessive by PHP0.56 million, contrary to PD No. 1445 and COA Circular No. 85-55A. (KALAHI-CIDSS-AF)

Require the Regional Community Infrastructure Specialist to meticulously check and review every details of the Program of Work to avoid excesses or deficiencies in the future and control/monitor the purchases and issuances of materials for the sub-projects.

Unliquidated payrolls for 4Ps beneficiaries under the various LBP conduits for CY 2013 had accumulated to P1,629.92 million of which PHP411.55 million were in the FOs for verification, P844.19 million with the conduits and P364.17 million were unpaid. (SWDRP-SPS)

RPMO conduct regular monitoring of the liquidation reports by various LBP conduits to facilitate timely recording thereof and intensify the validation of unpaid grantees to ensure that the release of funds to only valid 4Ps beneficiaries.

Physical Performance

77

Audit Observations

Recommendations

In the review of the validation forms, results revealed: (i) out of the 30,646 children beneficiaries, 5,651 or 18.44 percent are school dropped-outs due to lack of finances and/or working as laborers, housemaids and salesgirls and boys, hence; the risk that the household beneficiaries will remain chronic poor, adversely affecting the ultimate objective of the program to break the cycle of poverty; (ii) 428 beneficiaries identified as either barangay officials, government employees, spouses/children are working abroad or belong to middle income bracket whose inclusion in the program are inconsistent with the target beneficiaries of 4Ps from the poorest sector of the society, resulting in improper utilization of government funds of P1,566,800.00, thus, the non-achievement of 4Ps objectives; (iii) the absence of health centers and lack of health personnel and other health facilities make it extremely difficult for beneficiaries to comply with health conditionality of the program; (iv) Five years after the implementation of the program in FO IX, the economic condition of the household beneficiaries did not improve, indicating that the program failed to achieve its goal of breaking the intergenerational cycle of poverty among poor households despite the fact that other forms of financial assistance were extended to them; and (v) Complaints on the non-receipt of the CCT grants paid thru cash cards reported by 4Ps beneficiaries in FO I, III, V and CAR within CY 2008 and 2013 defeated the very purpose of the program to extend financial aid to the beneficiaries. (Social Welfare and Development Reform Project and Social Protection Support Project)

DSWD address the issues identified and strengthen the monitoring aspects for more effective program implementation to break the cycle of poverty among Filipino households.

On-going SPs of KALAHI-CIDDS with downloaded grants amounting to P120.70 million were not completed within the four to six months period of implementation.

Require the Barangay Sub-Project Management Committee (BSPMC) to fast track submission of requirements as provided in the Community Based Procurement Manual (CBPM) to ensure timely release of community grants and adopt efficient and timely procurement procedures in accordance with the CBPM.

Project Progress Sustainability The local government units failed to Require the concerned officials of the Regional

78

Audit Observations

Recommendations

provide funds for the Community Grants Kapit-Bisig Laban sa Kahirapan-Comprehensive and Integrated Delivery of Social Services-Additional Financing (KALAHI-CIDSS-AF) in the total amount of P1.24 million for the operation and maintenance of completed sub-projects contrary to the agreement provided for in the KC-Finance Manual.

Project Management Office (RPMO) to make representations and remind the concerned LGUs of their obligation of providing funds and other necessary support to ensure the proper operation, maintenance, and sustainability of the sub-projects.

Others Valid obligations totalling to P1.11 million were not recorded as of 31 December 2013 resulted to the understatement of the accounts Account Payables and the related Expense/Asset accounts by P1.11 million, PHP0.024 million and P1.09 million, respectively. (KALAHI-CIDSS-AF)

Issue a memorandum requiring the submission of all the valid obligations of the Department for recording of valid obligations before closing of the books.

The non-issuance of official receipts as evidence of payment of services of P0.47 million cast doubt on the award of contracts to consultants not registered with the BIR as well as the payment of the correct amount of taxes due to possible under declaration of income for failure to report the required official receipts. (KALAHI-CIDSS-AF)

Management to: (i) require the consultants to issue the covering ORs and submit approved progress/final reports or output to support the consultancy claims; ii) withhold retention money for consultancy contracts; and iii) do not engage with supplier/creditor who are not BIR registered and do not issue offic8ial receipt.

Purchases of PPE in the amount of P11.98 million in 2013 out of KALAHI-Loan Proceeds and GOP funds were without prior approval by the National Government Offices and World Bank contrary to COA-DBM Joint Circular No. 2-97 and Office of the President and World Bank Guidelines on Procurement of Goods, Works, and Non-Consulting Services, respectively. (KALAHI-CIDSS-AF)

Submit the post-facto approval from the Office of the President and the NCC for the appropriate equipment purchased and the 2013 procurement plans and their updates or modifications as approved by the Bank and with their no objection letter before implementation.

Non-compliance to KC-Community-Based Infrastructure Manual (CBIM) instructions such as the BSPMC’s custody of the accomplished Final Inspection Report, Sub-Project Completion Report and the Certificate of Completion and Acceptance duly approved and signed, may expose the project ownership to exploitation, non-maintenance of the projects and contrary to KC Manual. (KALAHI-CIDSS-AF)

Direct the RPMO/ACT/MCT to conduct final inspection of the SPs and prepare the FIR, SPCR, CCA and furnish copy to the barangay local government and other stakeholders.

The unrecorded balances in the books of KC-AF amounting to P0.93 million due to returned balances of community grants and erroneous recording resulted to the

Instruct the Municipal Financial Analyst to maintain and update their cashbook daily or on a weekly basis at the very least, to avoid, over or under expenditures of the funds. Likewise,

79

Audit Observations

Recommendations

understatement of Cash in Bank account as of 31 December 2013. (KALAHI-CIDSS-AF)

transfer of excess funds has to be supported with BSPMC resolution as required.

The physical existence, accuracy and reliability of accounting and property records of Property, Plant and Equipment (PPE) totaling to P86.44 million as of 31 December 2013, remained doubtful due to the inability of the Property & Supply Officer to submit/conduct complete physical inventory and to reconcile with the records of the Accounting Unit, contrary to the provision of Section 490 of GAAM Volume I. (KALAHI-CIDSS-AF)

Direct the Property and Supply Officer Designate to conduct complete physical inventory of all property, plant and equipment regularly, in order to determine its physical existence and condition. The result thereof shall be checked on the property cards as against the equipment ledger cards and the total shall be compared with those in the general ledger. If there are any discrepancies between the physical count and booked PPE, it must be investigated, cleared and reconciled immediately.

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

4.1.8

R.A. No . 10 155 ( G.A. Act FY 2012) GCG MC No. 2012-07

ADMINISTRATOR'S CORN! It Today is:

Tuesday, 7 October, 2014

The powers and functions of NIA under RA 3601, as amended by PO 552 and PO 1702, include the following :

1. To investigate, study, and develop all available water resources in the country, prlmanly for Irrigation purposes;

2. To plan, design, construct, and/or improve all types of irrigation projects and appurtenant structures;

3. To operate, maintain, and administer all national Irrigat ion systems (NIS);

4. To supervise the operation, maintenance, and repair, or otherwise, administer temporarily all communal and pump lrngation systems constructed, Improved, and/or repaired wholly or partially with government funds;

5. To delegate the partia l or full management of NIS to duly organized cooperatives or associat ions;

6. To construct multiple-purpose water resources projects designed primarily for irrigation, and secondarily for hydraulic power development and/or other uses such as Rood control, drainage, land reclamation, domestic water supply, roads and highway construction, and reforestation, among others, Provided, that the plans, designs, and the construction thereof, shall be undertaken in coordinat ion with the agencies concerned;

7. To charge and collect from the beneficiaries of the water f rom all lrngatlon systems constructed by or under Its administration, such fees or administrat ion charges as may be necessary to:

• cover the cost of operation, maintenance, and insurance;

• recover the costs of construction w1th1n a reasonable period of t ime to the extent consistent with government policy;

recover funds or port1ons thereof expended for the construction and/or rehab11itat1on of communal Irrigation systems (CIS) which shall accrue to a special fund for ln1gatlon development.

ACTIVITIES Project Preparation

Construction of Irrigation System Operation and Maintenance of NIS

Institutional Development Rehabilitation and Improvement

81

The National Irrigation Administration (NIA) has a total cumulative net commitments of P36,222.16 million (US$ 815.85 million), representing 2.75 percent of the total cumulative net commitments as shown in Table XIV. It ranked seven and third among the recipients of ODA loans under the Infrastructure Sector and Agriculture, Agrarian Reform and Natural Resource (AARNR) Sector, respectively, as presented in Table XVI. The NIA has availed of 13 loans in the amount of P21,449.41 million to finance the construction of 13 irrigation projects, wherein seven have been completed while six are ongoing. The project status and the summary of loans profile is shown in Table - XXXIX while the list of project loans with audit observations is presented in Table XXXX.

Table XXXIX - Project Status and Summary of Loans Profile

Table XXXX - List of Project Loans with Audit Observations

USD PHP USD PHP USD PHP USD PHP13 TOTAL 12 815.85 36,222.16 483.12 21,449.41 13.71 608.51 332.73 14,772.75 6 Ongoing 6 500.12 22,204.32 171.45 7,612.17 13.71 608.51 328.67 14,592.15 7 Completed 6 315.73 14,017.85 311.66 13,837.24 4.07 180.61

NYICancellled


CountProject Status

Project Count




ADB1668 PHI

Southern Philippines Irrigation Sector Project

Completed 50.01 2,220.49 50.01 2,220.49 - - - -

CHI-1 Banaoang Pump Irrigation Project

Completed 34.98 1,553.07 30.91 1,372.46 - - 4.07 180.61

CHI-6 Agno River Integrated Irrigation Project

Ongoing 89.15 3,958.25 75.57 3,355.24 0.25 11.16 13.58 603.01

IBRD 7709 PH

Participatory Irrigation Development Project

Ongoing 70.36 3,123.84 26.14 1,160.53 7.66 340.08 44.22 1,963.31

JBIC PH-P254

National Irrigation Sector Rehabilitation and Improvement Project

Ongoing 58.80 2,610.66 1.36 60.42 1.77 78.60 57.44 2,550.24


Project Status



82

(Table XXXXI, continued)


Presented below are the audit observations noted in the course of audit of on-going and completed projects and the corresponding recommendations, which are discussed in details in the audit report of the agency.

Audit Observations

Recommendations

Procurement There were no complete plans and drawings for Civil Work Contracts procured for the implementation of the Help for Catubig Agricultural Advancement Project (HCAAP); hence, the reasonableness of the contract prices and the validity of the contract work accomplishments billed and paid in the total amount of P662.12 million could not be evaluated/verified.

Submit immediately the Copy of the approved original Cross-Sectional Plans for every 20-meter interval per location (Catubig, Hagbay, & Bulao) for main and lateral canals including service road for HCAAPI-C-1, HCAAPD-C-2, and HCAAPD-C-3. Ensure compliance with COA rules and regulations on the submission of documents supporting infrastructure contracts.

Financial Performance The paid overrun/increase of quantity for Item Nos. 104.b – Canal Excavation (Hard) and 106.b - Structure Excavation (Hard) in the amount of P168.77 million covered by the Second Revised Final Firmed Up Contract was not supported with investigation and inspection conducted, explicitly concluding the necessity of the increase of quantity. Likewise, the work was implemented before the approval by the NIA Board of Directors of the Second Revised and Final Firmed-up Contract Quantities and Costs, in violation of GC-16.Cb of the Contract. Moreover, the time frame for processing of the Second Revised and Final Firmed-up Contract Quantities and Costs exceeded the time frame limit from the preparation up to approval by NIA of thirty

Take appropriate action to collect the P168,77 million paid to Hanjin under Progress Billing Nos. 24 and 25 and Final Progress Billing No. 26 covering the subject Overrun; and File appropriate charges against all officials responsible in the evaluation, verification and approval of payments made to Hanjin, if warranted.


Help for Catubig Agr. Adv. Project, SI

Ongoing 37.30 1,656.16 37.30 1,656.16 1.36 60.42 - -

KEXIM PHL-15 KRW227B

Jalaur River Multi Purpose Project Stage II

Ongoing 216.09 9,593.84 2.66 118.24 2.66 118.24 213.42 9,475.59


Project Status



83

Audit Observations

Recommendations

calendar days, in violation of GC-16.A5e of the Contract. (Help for Catubig Agricultural Advancement Project) The amount billed and paid to the contractors exceeded the actual costs by an aggregate amount of P18.93 million based on validated works accomplishments. (Help for Catubig Agricultural Advancement Project)

Require the contractors to refund the excess payment of P14.16 million and ₱4.77 million relative to Progress Billing Nos. 1 to 3 and PB No. 1 under Contract Nos. HCAAPD-C-1 and HCAAPD-C-2, respectively; File charges against persons found responsible/liable for misrepresentation/ reporting incorrect accomplishments, review and approval of payments made to Contractor; and

Ensure that all succeeding Progress Billings are reviewed and evaluated such that only actual accomplishments are paid.

Physical Perfromance NIA’s partial take-over of the contract works covered by Contract No. HCAAPI-C-1, with Hanjin Heavy Industries and Construction Co. Ltd., particularly the Construction of Hagbay and Bulao Sub-projects amounting to P245.18 million, resulted in an increased cost of implementing the sub-projects by P159.43 million without attaining the purpose of the partial take over to meet targeted project completion date of August 25, 2010. (Help for Catubig Agricultural Advancement Project)

Ensure adherence to Section 2, 4(4) and 102 of PD No. 1445 and exercise due diligence of a good father of the family in carrying out the duties and responsibilities of government officials entrusted with government funds and resources;

Consider revising the terms of the future infrastructure contracts relative to the provision on NIA’s Right to Take Over or Delete Part of Contract Works to effect the following:

- Applicable if the Contractor has fault in the delay of implementation of Contract Works;

- Implementation of Deleted Part of Contract Work shall not entail additional cost to NIA; and

- Deletion of the provision that states “NIA or its representative shall not be civilly liable for any act done by them in pursuance of these provisions.”; and

File appropriate charges against all officials responsible in the evaluation, recommendation and approval of the Partial Take Over or Delete Part of Contract Works under Contract No. HCAAPI-C-1, if warranted.

84

Audit Observations

Recommendations

Delays in the implementation of Irrigation Projects resulted in the non-optimization of the use of government funds and delay of services to farmers. Furthermore, failure to enforce liquidated damages from the contractors found to have incurred tremendous delay in the completion of their projects have resulted in the loss of government funds contrary to Section 8.1, Annex “E” of the Revised IRR of RA 9184. (Agno River Integrated Irrigation Project implemented by NIA)

Monitor the project implementation and ensure that the project is on schedule and if necessary, issue a suspension once the slippage is more than the tolerable level. Ensure the strict observance of the contract period stipulated in the contracts and Notice to Proceed. Take over the implementation of the long overdue projects in accordance with the provisions of the contract and with RA 9184. Strictly adhere to the provisions of RA 9184 and its IRR and those of the contract in the implementation and granting of contract time extensions and submit complete documents to support the extension granted in the implementation of contracts. That appropriate sanction such as blacklisting the contractors from participating in any government contract, forfeiture of performance security or deduct the liquidated damages from any amount due them to indemnify the government for any loss suffered from non-compliance with provisions of the contract.

The Banaoang Pump Irrigation Project was not yet fully operational as of December 31, 2011 thus delaying the provision of irrigation to farmer beneficiaries. (Banaoang Pump Irrigation Project implemented by NIA)

Management should ensure the 100% completion of the projects including all reports/documents of the BPIP before end of March 31, 2012 so that a smooth turn over to the Irrigation System will be achieved, thus the project will become fully operational.

Project Sustainability NIA’s partial take over of the contract works coupled with the termination of the Contract between Hanjin and NIA resulted in the reduction of design irrigation area for Contract No. HCAAPI-C-1 from 4,550 hectares to 2,550 hectares. Moreover, after incurring expenditures of P813.57 million, the completed Catubig Right Main Canal has only irrigated/benefited an area of 160 hectares as of April 30, 2013. (Help for Catubig Agricultural Advancement Project implemented by NIA)

Exert effort to fast track the completion of the Contract Works covered by Contract Nos. HCAAPD-C-1 and HCAAP-D-C-2 in order to generate additional irrigated areas. Conduct extensive study to determine the worthiness of continuing the Project.

Others NIA could not account for the construction materials valued at P34.68 million left at the site by Hanjin in view of the termination of Contract No. HCAAPI-C-1. Moreover, NIA did

Complete the inventory taking to fully account for the ₱34.68 million construction materials left by Hanjin at the Project site and furnish the audit team with the result of the inventory

85

Audit Observations

Recommendations

not deduct from the progress billings paid, the cost of construction materials, supplies and equipment valued at P3.284 million withdrawn by other contractors from these inventory. (Help for Catubig Agricultural Advancement Project)

made. Immediately collect from the concerned contractors the amount representing the cost of construction materials withdrawn in the total amount of P3,283,924.

Determine the cost of laboratory supplies and apparatus, one unit base radio, and 10 generator sets withdrawn from NIA and require the contractors concerned to pay the amount immediately. Deduct from future Progress Billings the cost of materials withdrawn by the Contractors in addition to what was reported.

Bank Deposits of P2.27 million representing payment of lots to various landowners for right of way expropriated by NIA were classified as dormant accounts by the bank due to the inability of the agency to inform the bank in writing of the purpose of said deposits. Hence, may result in loss of funds if not claimed within 10 years. (Banaoang Pump Irrigation Project)

Inform the bank of the nature and purpose of the deposits to avert its classification as dormant accounts.

Cash bond amounting to P100,000.00 for the construction of irrigation structures and road crossing along the highway remained unclaimed from the DPWH although the project has long been completed. (Banaoang Pump Irrigation Project)

Make representation with the DPWH management for the immediate refund of the cash bond.

Disallowances of P38,828.30 of which the amount of P25,600.00 pertains to previous years remained unsettled as of December 31, 2011 which is not in conformity with the provisions of Section 7.1.1 of COA Circular No. 2009-006 dated September 15, 2009. (Banaoang Pump Irrigation Project)

Require all persons responsible/liable to settle the audit disallowances within the prescribed period. Likewise, request authority to write off the amount of P25,600.00 from the COA Commission Proper through the General Counsel.

The termination of Contract No. HCAAPI-C-1 is not in accordance with the terms and conditions of the Contract and was approved beyond its expiration date of December 31, 2010; hence, no legal basis. Moreover, due to termination of the contract, liquidated damages due to delay in the prosecution of the contract work estimated at P112.46 million was not imposed. (Help for Catubig Agricultural Advancement Project implemented by NIA)

Since the approval of the termination of Contract No. HCAAPI-C-1 of Hanjin with NIA is without legal basis, Management : Take appropriate action to collect from Hanjin the liquidated damages amounting to P112.46 million.

File appropriate charges against all officials responsible in the evaluation, verification and approval of the termination of Contract No.

86

Audit Observations

Recommendations

HCAAPI-C-1, if warranted.

The lots needed as right of way for the Construction of Irrigation, Canals and Laterals in an aggregate amount of P60.49 million as of were not yet registered with the Registry of Deeds, thus, the ownership of these properties has not been transferred to the NIA. (Banaoang Pump Irrigation Project implemented by NIA)

The Project Manager facilitate registration with the Registry of Deeds to assure ownership of NIA over the acquired properties.

The correctness of the CY 2013 year-end balance of Cash account amounting of P161.84 million cannot be ascertained due to the presence of long outstanding reconciling items in the Bank Reconciliation Statements which management failed to substantiate. (Jalaur River Multipurpose Project, Stage II implemented by NIA)

Require the Accountant to identify the nature of these long outstanding reconciling items and to draw a Journal Entry Voucher (JEV) to incorporate the necessary adjustments.

The management of NIA-ARIIP incurred delay per its June 30, 2013 submission of disbursement reports and all paid vouchers which were not in accordance with COA Circular No. 95-006 dated May 18, 1995 and Section 43(4) of PD 1445. Also, management failed to submit contracts and complete documents to support payments of progress billings of infrastructure contract as required by COA issuances, namely: COA Memorandum No. 91-704 dated February 27, 1991; COA Circular No. 87-278 dated November 12, 1987; COA Memorandum No. 2005-027 dated February 28, 2005; and COA Circular 2009-001 dated February 12, 2009. (Agno River Integrated Irrigation Project implemented by NIA)

For the timely examination of disbursements, it is strictly recommended that concerned personnel of NIA-ARIIP shall be required to submit the mandatory disbursement reports and all paid vouchers to the Auditor in accordance with COA Circular No. 95-006 dated May 18, 1995 and Section 43(4) of PD No. 1445.

87

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

Reference: http://laguindinganinternationalairport.com/



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 three major groups, namely:

• Policy Formulation • Regulatory and

Enforcement • Infrastructure Development • International Cooperation

4.1.9

88

DOTC is the second biggest recipient of ODA loans under the Infrastructure sector with Cumulative Net Commitments totalling P96,565.41 million (US$2,174.99 million) or 7.33 percent (including 1 project originally implemented by PPA) of the total Cumulative Net commitments. The loans were intended for the infrastructure projects for the country to have efficient, effective, and secure transportation systems that are globally competitive, compliant with international standards, and responsive to the changing times.

The 35 loans availed for DOTC were used to finance 30 projects: wherein 21 projects are completed, four are still ongoing and four are not yet implemented while one was cancelled. The project status as well as the summary of loans profile are shown in Table XXXXI while the list of project loans with audit observation are presented in Table XXXXII.

Table XXXXI - Project Status and Summary of Loans Profile

Table XXXXII - List of Project Loans with Audit Observations

USD PHP USD PHP USD PHP USD PHP35 TOTAL 30 2,174.99 96,565.41 1,012.63 44,958.96 14.19 629.99 1,162.36 51,606.45 5 Ongoing 4 565.91 25,125.35 111.20 4,937.15 13.38 594.18 454.71 20,188.20

25 Completed 21 903.94 40,132.98 900.63 39,986.00 - - 3.31 146.98 4 NYI 4 705.15 31,307.08 0.81 35.81 0.81 35.81 704.34 31,271.27 1 Cancellled 1

Undrawn BalanceProject Status

Loan Count

Project Count

Net Loan Commitments Cumulative Availments CY Availments

USD PHP USD PHP USD PHP USD PHPEFIC IV Search & Rescue

VesselsCompleted 38.51 1,709.82 38.51 1,709.82 - - - -

ICO (US$7M)

Maritime Safety Improvement Project, Phase 3

Completed 7.01 311.42 7.01 311.42 - - - -

JBIC PH-P228

New Communications, Navigations Surveillance/Air Traffic Mgmt. (CNS/ATM) System Development Project

Ongoing 209.55 9,303.76 35.10 1,558.20 12.18 540.97 174.46 7,745.57

JBIC PH-P190

Selected Airports (T/L) Development Project, Phase l

Completed 22.19 985.11 22.19 985.11 - - - -

JBIC PH-P160

NW Air Navigation Facilities Modernization Project (3)

Completed 58.95 2,617.47 58.95 2,617.47 - - - -

JBIC PH-P219

Selected Airports (T/L) Development Project, Phase lI

Completed 61.23 2,718.71 61.23 2,718.71 - - - -


Project Status



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(Table – XXXXIII, continued)

In the course of audit, two audit observations were noted, summary of which and the recommended courses of actions are hereunder shown:

Audit Observations

Recommendations

Others New Iloilo Airport Development Project (NIADP) and Laguindingan Airport Development Project (LADP) The non-reversion of the cash balance totaling ₱8.85 million maintained with the Authorized Government Depository Bank (AGDB) deprived the government of much needed resources contrary to Department of Finance (DOF), Department of Budget and Management (DBM) and Commission on Audit (COA) Joint Circular No. 4-2012 dated September 11, 2012 and Section 4 of the General Provisions of Republic Act (RA) No. 10352, the FY 2013 General Appropriation Act (GAA).

Deposit/ transfer immediately the cash balances of EMF, EGF, EGF Cash Fund and NIADP to the account of the National Treasury pursuant to DOF, DBM and COA Joint Circular No. 4-2012 and Section 4 of the General Provisions of RA No. 10352, the FY 2013 GAA.

Procurements displaced from the Environmental Monitoring Fund (EMF) totalling ₱902.39 thousand lacked the necessary supporting documents, contrary to Section 4.4 of Presidential Decree No. 1445 (PD 1445.

Submit the required documents pursuant to Section 4.4 of PD 1445 and the related MOA for the implementation of LADP.


New Iloilo Airport Development Project

Completed 136.12 6,043.37 136.12 6,043.37 - - - -

PHL-5 Laguindingan Airport Development Project

Ongoing 20.07 891.11 2.01 89.15 - - 18.06 801.96

European Investment Bank

Davao International Airport Development Project

Completed 26.50 1,176.55 23.19 1,029.57 - - 3.31 146.98


Greater Maritime Access (GMA) Ports

Ongoing 223.86 9,939.03 44.74 1,986.36 - - 179.12 7,952.68


Project Status



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4.1.10 Other findings disclosed in the audit of project funds in the following agencies:

Audit Observations

Recommendations

Budgetary Issues Funds totaling ₱1.49 million representing unexpended balances of completed projects remained deposited with the current account maintained at the LBP-FTI branch instead of returning/reverting the same to the National Treasury. (Technical Education and Skills Development Project implemented by TESDA)

Management to remit the balances of unutilized balance to the National Treasury

Procurement Issues The incurrence of high additional projects costs for customs duties and taxes in the importation of the 76 fire trucks which reached to ₱151.20 million and the administrative costs of ₱7.64 million or a total additional cost of ₱158.84 million could have been avoided had the Bureau of Fire Protection (BFP) procure fire trucks from well-known and competitive supplier in the locality. (Austrian Assisted BFP Capability Building Program for Selected Priority Cities/ Areas in the Philippines implemented by BFP)

Management make strong representation with the DOF and DILG to refrain from importing fire trucks through loan availment instead should procure from local suppliers in order to avoid taxes and administrative expenses.

Financial Performance The SINOMACH’s reported and paid accomplishments of US$104.43 million was valued only at US$81.47 million considering the actual validated accomplishments and the original unit costs. This is granting that it is allowed to be compensated based on quantum meruit. As NORTHRAIL has paid SINOMACH a total of US$210.49 million, the SINOMACH was already overpaid by US$129.02 million. The entire amount may even be considered a waste of government resources in the event that any accomplishment in the project will no longer be used. The interest of the government was not protected under the contract as it contained provisions which are disadvantageous to the government. These include payments of advances equivalent to 30 percent of the contract cost and assumption of construction risks and responsibilities that should be assumed by the contractor under the turnkey/ design and build contract. (North

NORTHRAIL to make representations with the Regional Trial Court of Makati for the speedy resolution of all pending NORTHRAIL related cases, the decision of which can be used by NORTHRAIL as guide in its arbitration with the SINOMACH. In order to avoid the occurrence of similar problems in the future NORTHRAIL's projects, it is recommended that NORTHRAIL ensure that its contracting is compliant with RA No. 9184 and all applicable laws, rules and regulations.

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Luzon Railways Project Phase 1 Section 1 implemented by NLRC) Physical Performance The Project Coordinating Office for NPSBE was not able to prepare accomplishment report for the 4th quarter of CY 2012 as required under the Basic Education Sector Reform Agenda Operations Manual (revised as of June 17, 2008) despite the completion of the project on December 31, 2012; while the physical performance report as of the 3rd quarter shows incomplete information to reflect actual progress of physical completion of each of the activities of the project component. As such, the overall performance of the project as of completion date cannot be properly assessed. (National Program Support for Basic Education Project or NPSBE implemented by DepEd)

Management require the Project Coordinating Office to: a) submit explanation/reasons on the non-preparation of the progress/accomplishment report as of the 4th quarter of CY 2012; b) coordinate with concerned implementors for activities under Components 1 and 3 with no available data since August 2010 to submit status report on actual outputs/accomplishments as of project completion; c) ensure that the required progress/accomplishment report are prepared to determine if the planned activities were fully accomplished within the allotted budget in order to correspondingly address issues and concerns involving project implementation; d) submit Project Terminal Report

The Financial Monitoring Report (FMR) for CY 2013, showing the targeted vis-a-vis actual accomplishments and disbursements, as required by the World Bank and other stakeholders, in accordance with Section 4.02 of the Loan Agreement, was not prepared completely upon/after the closing of the Project, hence, the Project performance and resulting outcomes/outputs for CY 2013 can neither be measured nor determined. (Second Women’s Health and Safe Motherhood Project or 2WHSMP implemented by DOH)

That the DOH-BIHC and Finance Service prepare a complete FMR for CY 2013 in order to assess the performance of the Project.

Others Loan proceeds in the amount of ₱99.52 million utilized for the renovation/ rehabilitation project of the PHILJA Training Center (PTC) and recorded under Construction-in-Progress account was reclassified to Office Buildings account after final inspection and acceptance of the project; however, it was not disclosed in the Notes to the Financial Statements that the lot on which the building stands is still registered in the name of PHILJA Development Center, Inc. (PDCI). (Judicial Reform Support Project implemented by SC)

Management to: a) require the Accounting Division to make the necessary disclosure in the Notes to the Financial Statements that the lot on which the renovated/rehabilitated building stands is still registered in the name of PDCI ; and b) consider directly making PHILJA the owner of the property by: 1) completing and implementing the work plan to acquire the remaining shares of PDCI stocks owned by private shareholders; and 2) registering the Deed of Assignment of Real Property entered into by and between the PDCI (Assignor) and the PHILJA (Assignee) on May 30, 2013.

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4.2 Common Audit Observations are presented in summary, as follows:

4.2.1 Financial Performance

4.2.1.1 Long outstanding fund transfers to NGAs, GOCCs and LGUs in the total amount of ₱120.54 million for implementation of the projects remained unliquidated/unutilized within the prescribed period under Section 4.6 of COA Circular No. 94-013 dated December 13, 1994 due to laxity of management to monitor liquidation of cash advances resulting in the accumulation of outstanding balances and non-attainment of the project objectives. (Implemented by NIA, DOTC, DTI & DSWD)

4.2.1.2 Cash advances totaling ₱1.62 billion granted to officers and employees

remained unliquidated within the prescribed period even if the purpose for which these were granted has already been served due to lack of proper monitoring and absence of strict enforcement on liquidation, in violation of Presidential Decree 1445 and COA Circular No. 97-002 dated February 10, 1997 pertinent to the grant, utilization and liquidation of cash advances. The liquidation of these balances are almost nil due to unknown whereabouts of some accountable officers. (Implemented by NIA, DOTC & DSWD)

4.2.1.3 Management failed to maximize the utilization of the loan due to the

delays encountered for various reasons and in undertaking the different project activities towards full implementation of the programs and projects which affected the attainment of the desired outputs and the low availment rate resulting in incurrence by the government of commitment fees totaling ₱545.13 million as of December 31, 2013 which could have been avoided or reduced to a minimum amount had there been timely and speedy implementation by the agency. (Implemented by BIR, DPWH, DOE, DOTC, NLRC, BFP & DOH)

4.2.1.4 The balances of the Property, Plant and Equipment (PPE) accounts as of

December 31, 2013 totaling ₱9.40 billion were inaccurate/unreliable due to (a) inclusion/non-inclusion either in the books, inventory report or both, of unaccounted and transferred properties; (b) unserviceable equipment not reclassified to Other Assets account; (c) unreconciled differences between the balances per books and the inventory reports; (d) non-provision/erroneous computations of depreciation expenses/allowance for depreciation; and (e) unrecorded PPE in the books. (Implemented by DAR, DENR, NIA, BIR, BOC, DPWH & DSWD)

4.2.1.5 Statutory monthly contributions/deductions payable to GSIS and the BIR

totaling PhP11,724,198.46 as of December 31, 2013, remained unremitted, in violation of Section 6(b) of RA No. 8291 and Revenue Regulations No. 2-98. (NIA and DPWH)

4.2.1.6 Inaccurate/unreliable various account balances as of December 31, 2013

such as Cash- in-Bank – Local Currency, Current Account, Receivable accounts, Due to Bureau of Internal Revenue account, Construction in Progress (CIP) accounts, Land account, Bonds/Loans Payable accounts, PPE accounts and Construction-in-Progress-Agency Assets, totaling PhP11,487198064.88 due to: (a) unreconciled differences between the books and bank balances; (b) delayed submission of the Bank Reconciliation Statement (BRS) which ranged from 46 to 264 days delay; (c) long outstanding unliquidated fund transfers to

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NGAs/NGOs expended for project implementation; (d) unrecorded liquidation; (e) overstatement of refund; (f) absence of reconciliation and complete subsidiary ledgers to support the account; (g) failure to reclassify to the appropriate Public Infrastructure (PI) accounts the completed infrastructure projects; (h) inadequate/incomplete information provided in the accounting records; (i) absence of comprehensive inventory report on all land acquisition/other errors and deficiencies; (j) retention of the cost of lots for projects already conveyed to other agencies/local government units. (DAR, DENR, NIA, DPWH, DOTC, MWSS and DECS)

4.2.1.7 Long outstanding Payables totaling ₱70.04 million aged more than two

years and parcels of lots with area of 28.82 hectares were expropriated/acquired by NIA yet remained unpaid and not booked as Accounts Payable at the end of the year. (DENR, NIA and BIR)

4.2.1.8 Understatement/overstatement of various accounts totaling ₱3.69 billion

due to various reasons such as: (a) erroneous recording or non-recording/inappropriate recording of transactions; (b) non-payment of foreign exchange risk cover fee (FXRCF) required in the Memorandum of Agreement (MOA); (c) non-compliance with appropriate laws, rules and regulations; (d) failure of management to compel the concerned agencies to settle their accountabilities, and additional fund transfers were granted without requiring the Implementing Agencies (IAs) to first liquidate their balances that resulted in the accumulation thereof; (e) negative confirmation of account balances which negated the accuracy of the recorded balance as of year-end; (f) non-revaluation of foreign-denominated loans in accordance with Philippine Accounting Standards (PAS) 21, NGAS Volume 1, Chapter 2 (X) and Bangko Sentral ng Pilipinas (BSP) Circular No. 494 s. 2005; (g) Failure to use timely pool unit value in valuing bills payable to the International Bank of Reconstruction and Development; (h) erroneous recording of Foreign Exchange Risk Cover (FXRC) fees paid to NG. (SC, DBP, DPWH, DOE, DOTC, PHIVIDEC, LBP, SBGFC, DOH and DSWD)

4.2.1.9 Irregular/unnecessary/unauthorized/erroneous charging of various

expenditures and/or disbursements of project funds totaling ₱35.80 million was without legal basis. (DAR, NIA and DOH)

4.2.2 Others

4.2.2.1 Non-compliance of project policies, laws, rules and regulations of various

transactions totaling ₱420.64 million resulted in audit disallowances. (DAR and DSWD)

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 Ensure project readiness and ability of agencies to implement, own and

maintain the project;

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4.3.1.2 Identify potential/actual problems of projects using the NEDA-PMS

Quarterly Alert Mechanism Report and identify the root causes of delays to make the necessary and appropriate measures to be taken;

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 Follow strictly the existing accounting and auditing rules and regulations on the grant, utilization and liquidation of cash advance/fund transfer to prevent the accumulation of huge balance of the accounts;

4.3.1.5 Maintain the required accounting records and reconcile reciprocal and

related accounts; 4.3.1.6 Reconcile regularly the balance of cash recorded per book and per bank;

and 4.3.1.7 Conduct regular physical inventory of supplies and equipment and

reconcile the accounting records with the 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 the immediate request for loan cancellation with the

Foreign Funding Institutions (FFIs) to minimize payment of commitment fees. Negotiate with FFIs the refund of the corresponding front-end fees for the amount cancelled. 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 for the delays in project implementation and require the IAs to explain the causes of delay; and

4.3.2.2.3 Establish effective networking among IAs, LGUs, DBM and

other concerned agencies. Facilitate compliance with loan conditions for loan effectiveness and completion of the project as scheduled.

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;

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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 468 prior years’ audit recommendations reported in last year’s individual audit report on the projects/implementing agencies concerned, 149 or 32 percent were implemented, 138 or 29 percent were partially implemented or in-progress, 181 or 39 percent were not implemented, as presented in Chart XVIII, with details shown in Table XXVI.

Table XXXXIII – Status of PY’s Audit Recommendations Audit

Sector Implement

ed

Partially Implement

ed

Not Implement

ed Total Percentage

NGS 98 89 80 267 57.05%

LGS 11 17 4 32 6.84%

CGS 40 32 97 169 36.11%

TOTAL 149 138 181 468 100%

Percentage 32% 29% 39% 100%

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

Deficient planning and preparation; Lack or shortage of manpower complement;

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Deficiencies in control procedures; Non-submission of evaluation reports and guidelines for evaluation; Need to engage third party reviewer; Extension of project duration or period of accomplishment; Coordination issues; Land disputes and/or road right of way issues; Delayed procurement activities; Delayed reconciliation statements; Classification and recording issues; and Reorganization and change of project officers.

2013 consolidated audit report on official development ... - coa…€¦ · coa commission on audit...

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