Gov’t races to approve 20–30 ODA-funded projects

MANILA, Philippines – The Marcos administration plans to fast-track the approval of 20 to 30 infrastructure and social sector projects to maximize official development assistance (ODA) financing before the Philippines gradually loses access to concessional loans following its transition to upper-middle income country (Umic) status.

This plan comes as the Philippines attained Umic status after nearly four decades as a lower-middle income economy, with its gross national income per capita reaching $4,850 in 2025, within the World Bank’s threshold of $4,636 and $14,375 for fiscal year 2027.

READ: Philippines eyes 25 ODA deals worth $10B

Article continues after this advertisement

While the upgrade marks a major economic milestone, it also means the country will eventually lose access to some concessional financing and grants from multilateral development partners such as the World Bank.

FEATURED STORIES

BUSINESS

BUSINESS

BUSINESS

However, the Department of Economy, Planning and Development (DepDev) said the Philippines had a three-year transition period before those preferential financing terms begin to diminish.

“The strategy is actually to approve all those in the pipeline before the three-year window closes. We’re doing a recalibration exercise where we firm up the investments until the end of this administration,” DepDev Undersecretary Joseph Capuno told reporters on Monday.

DepDev has yet to provide the list of these projects as of this writing.

Asked whether the country’s reclassification would put additional pressure on the government’s fiscal position, Capuno acknowledged that fiscal space remains tight, prompting a more selective approach to approving projects next year.

Article continues after this advertisement

“There is very limited fiscal space for next year. Our message is that we want to prioritize new projects in the social sector and slow down a bit on new infrastructure projects, while continuing to implement the ongoing ones,” he said.

But he clarified that infrastructure projects whose government funding requirements can be deferred to 2028 or projects that only require a small amount would have a better chance of securing approval,

Article continues after this advertisement

Meanwhile, DepDev Secretary Arsenio Balisacan stressed that the country’s reclassification does not mean concessional financing will disappear immediately.

READ: Does new upper-middle income status reflect PH reality?

“Even as we are already an upper-middle income country, there will still be development partners who, on a project basis, continue to provide us with concessional loans, especially for projects that are jointly seen as high-impact projects,” Balisacan said.

He added that while concessional financing will gradually diminish, the benefits of attaining Umic status are expected to outweigh the loss.

“What we mean by an economy that’s growing and sustaining its growth is that you must be doing well. It signals something important about the quality of your governance, the quality of your investment climate, the quality of your institutions, and the quality of your investment in public infrastructure,” he said.

Your subscription could not be saved. Please try again.

Your subscription has been successful.

As it is, the Umic upgrade is also expected to enhance the Philippines’ attractiveness to foreign investors, bolster its creditworthiness and increase investor interest in Philippine fixed-income assets. INQ