World Bank lends more to RP despite sanctions

ABS-CBN News

Posted at Feb 12 2009 05:03 PM | Updated as of Mar 03 2009 12:03 AM

Despite blacklisting Filipino construction firms alleged to be colluding to rig road project bidding, the World Bank is set lend more to the Philippines in the next four years, finance secretary Gary Teves said on Tuesday.

During the senate hearing on the controversial move of the World Bank to sanction the involved firms--one of them reportedly have ties to First Gentleman Mike Arroyo--Teves said the multilateral lender is increasing its lending program to the Philippines by an average of $700 million to $1 billion over a period of four years.
This amount is part of the second phase of the World Bank-funded National Roads Improvement and Management Project (NRIMP). The blacklisted Filipino firms were bidding for $33 million-worth road projects under the first phase of NRIMP.

The NRIMP is part of the lender's Country Assistance Strategy in the Philippines. Projects under NRIMP Phase 2 are worth $232 million.

From the lessons of their investigation on the alleged bid-rigging under NRIMP Phase 1, the World Bank team have built in more stringent anti-corruption measures in the NRIMP Phase 2 project design to ensure greater transparency, independent procurement assessment and technical audit, and private sector participation.

According to Budget Secretary Rolando Andaya, Jr., the local anti-corruption group, Transparency and Accountability Network, is participating as the private sector representative in the assessment of NRIMP Phase 2 projects.

In a statement, the World Bank said, "The proposed lending will reverse the negative net transfers and would result in an increase in the Philippines' share of total (World Bank) lending to 3.6% in 2012."

World Bank pointed out that there was a decline in its lending to the Philippines from $3.1 billion in fiscal year 2005 or 3.0% of total Bank loan portfolio to $2.7 billion in fiscal year 2008 or 2.8% of total portfolio.

"They have seen that we are serious in our efforts to improve governance and that we are not letting up in our fight against corruption," Secretary Teves said.

He added that the confidence of the World Bank in the country is further demonstrated with the approval of two more loans after the challenges encountered in NRIMP Phase 1. These loans were the Food Crisis Response Loan worth $200 million which we expect full disbursement soon and the Bicol Power Restoration Project worth $12.94 million which has been completed already.