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Offending the donors

Official development assistance, or credits extended by more developed nations to emerging economies like the Philippines, by their very nature is given to promote the economic development and welfare of the recipient country.

The ODA loans come in different forms. They may assist an ally country to strengthen its military capabilities or in response to humanitarian crises like natural disasters. Rich countries like the US, Japan and the European Union quickly rushed their aid to the Philippines right after super typhoon “Yolanda” wreaked havoc across Eastern Visayas in 2013.

ODA loans carry very concessional rates to assist the recipient country that is understandably in need of foreign resources. The official aid may also be in the form of food, goods and materials, which are readily dispatched by donor countries or institutions at no cost.

It is, thus, a surprise when President Rodrigo Duterte blurted out last week that donor countries may withdraw their foreign aid in reaction to criticism to his anti-drug campaign that has already resulted in the death of 3,000.

President Duterte may not have fully grasped the context of ODA loans when hit back at his critics. He offended the donors when he dared them to withdraw their assistance. These same donors actually extend the aid to the Philippines because of the trust and confidence built over the years between the giver and the receiver.

The Philippines receives a lot of official aid that has helped fund the budget in the past. ODA loans from the US in 2014 stood at $1.2 billion, with Australia and the EU contributing $567 million and $327 million, respectively. The UN, meanwhile, extended $365 million. Such amount could go a long way in creating job opportunities and reducing poverty incidence in the Philippines.

Foreign donors are not expected to readily pull out their aid to the Philippines just because of Mr. Duterte’s outburst. But the donors may not be as generous and as responsive in the future if their assistance is not appreciated by the recipient.

Topics: Editorial , Offending the donors , Official development assistance , foreign aid
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