MANILA: The Intergovernmental Fiscal Policy Board (IFPB) approved the guidelines on official development assistance (ODA) loans for the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) to support inclusive development, the Department of Finance (DOF) said on Tuesday.
The IFPB, which is co-chaired by Finance Secretary Ralph Recto and Bangsamoro Government Minister of Finance, Budget and Management Ubaida Pacasem, was created under the Bangsamoro Organic Law to deal with revenue imbalances and fluctuations in the regional financial needs and revenue-raising capacity of the BARMM.
In a statement, the DOF said the guidelines were signed Tuesday at its office in Manila.
The IFPB guidelines on ODA loans were signed after they were approved by both parties during the seventh IFPB Meeting.
The DOF said the ODA guidelines authorize the Bangsamoro government to contract loans, in cash or in kind, from governments of foreign countries, their agencies, and instrumentalities or multilateral institutions or orga
nizations.
Under the guidelines, the Bangsamoro government can take out loans to finance investment, social, and economic development projects for the welfare of the people of the Bangsamoro, provided that ODAs must only be used in the absence of other financial instruments in the capital market and that it must contain a grant element of 25 percent.
ODA funds, however, cannot be used for telephone programs, projects required by law to be handled by the private sector, or for financing private corporations that have access to commercial credit.
The guidelines also detail the Bangsamoro government’s instrumentalities that may be involved in the ODA loan process, the pertinent documents for technical and financial evaluation, as well as the procedure for the approval of ODA loans to the BARMM in coordination with the national government.
‘With these ODA guidelines, we are equipping the BARMM with the tools needed to shape its future and write its own success story. This unlocks limitless opportunities for t
he BARMM –from infrastructure development to socioeconomic programs that create jobs, boost incomes, and lift communities out of poverty,’ Recto said during the signing ceremony.
‘Beyond financing, this will provide the BARMM with access to knowledge, technology transfers, capacity-building, and a wealth of experience from experts and development partners around the world.”
Recto is optimistic that with the guidance in place, the Bangsamoro government will be able to leverage opportunities, harness concessional ODAs effectively, and manage partnerships with utmost prudence and foresight.
Pacasem, meanwhile, welcomed the signing of the guidelines.
‘For us in BARMM, this is more than just a tick on our to-do list, but a step-board on the ladder toward BARMM’s fiscal sustainability, toward the achievement of the Bangsamoro Development Plan, toward the advancement of the welfare of the people in BARMM, and toward our contribution to the achievement of our country’s sustainable development goals,’ Pacasem sai
d.
Other items discussed during the meeting were the tax study group deliverables.
These included the process and procedure for the collection and sharing of revenue and remittance of the BARMM’s shares in national taxes, as well as the rules to implement payment of taxes by corporations, partnerships, and firms in accordance with the BOL.
Both sides also discussed updates on the transition plan for the transfer of tax administration functions from the Bureau of Internal Revenue to the Bangsamoro Revenue Office, including the establishment of a digitalized tax administration system for the BARMM.
Items also taken up were updates on the appointed Bangsamoro government members to the Governance Board of the Al-Amanah Islamic Investment Bank of the Philippines, the proposed transfer of the Development Bank of the Philippines’ share in the AAIIBP to the Bangsamoro government, and the issuance of certificates of tax exemption to cooperatives in BARMM.
Source: Philippines News Agency