Gov’t targets USD 10.3 billion in ODA deals

The government is aiming to sign this year 25 official development assistance (ODA) agreements amounting to USD 10.3 billion (PHP 593.382 billion) before the country reaches upper middle-income status by mid-2026.

Finance Secretary Frederick D. Go said there are 10 ODA loans from Japan, 10 pipeline loans from South Korea, and five loan deals from France lined up for this year.

“These total 25 ODA loan agreements with a total value of USD 10.3 billion,” he said on Thursday.

Mr. Go said the Philippines is expected to be classified as an upper middle-income country (UMIC) by the World Bank within the year.

“We will be less reliant on concessional loans once the country moves into an upper-middle class according to the World Bank. So, we will have to find other sources of financing,” Mr. Go said, adding that he expects the government to be more reliant on public-private-partnership projects.

The Philippines has remained in the lower middle-income bracket since 1987, despite posting a higher gross national income (GNI) per capita of USD 4,470 in 2024. This was only USD 26 shy of the World Bank’s adjusted GNI per capita requirement of USD 4,496-USD 13,935 for UMIC status.

The Washington-based lender is scheduled to release its updated annual country status thresholds in July.

Mr. Go added that the government is eyeing alternative financing sources for projects in infrastructure, climate change, energy, and agriculture.

The government is also in discussions with the Asian Infrastructure Investment Bank (AIIB) to fund two projects this year.

This includes the Luzon Digital Connectivity project under the Department of Information and Communications Technology (DICT) worth USD 500 million and “Metro Manila Sponge City” under the Metropolitan Manila Development Authority (MMDA) worth USD 150 million.

“So those are the two that they are looking at but not certain yet. We are still discussing with the AIIB, DICT, and MMDA. The cooperation with AIIB continues to be robust,” Mr. Go said.

Since the start of the Marcos administration, the Philippines and Japan have signed 12 financing deals worth ¥910.38 billion (about PHP 341.2 billion).

As of December last year, Japan accounted for USD 13.9 billion or 33.54% of the Philippines’ total ODA portfolio.

Japan is the Philippines’ largest ODA loan provider and third-largest source of ODA grants.

Meanwhile, Mr. Go said the government is still awaiting clarification from the US on the newly imposed global tariffs.

“What we are hopeful for and what we assume it to be is that if they apply the 15% tariffs on us, it will continue to apply on the goods that they were applying a 19% tariff on. So, our assumption is all the goods that were exempted before, which are the semiconductors and the major agricultural exports, will continue to be not included in the list of items to be subjected to the new 15% tariff,” he said.

The US on Tuesday started collecting a temporary 10% global import tariff, but said it was working to raise it to 15%.

The Trump administration’s new tariff policy comes after the US Supreme Court ruled that President Donald J. Trump had exceeded his authority when he imposed the reciprocal tariffs.

The ruling had invalidated the tariffs imposed by the Trump administration on China, Japan, South Korea, Taiwan and Association of Southeast Asian Nations economies. Most Philippine-made goods had faced a 19% US tariff. — Aaron Michael C. Sy