The Philippines has sufficient buffers to cushion the eventual phaseout of concessional Official Development Assistance (ODA) following its upgrade to upper-middle income economy status, a Department of Economy, Planning, and Development (DEPDev) official said Friday.

Concessional ODA refers to foreign aid loans extended by governments or multilateral institutions to developing nations.

In an interview on Bagong Pilipinas Ngayon, DEPDev Undersecretary Rosemarie Edillon said the phaseout of concessional loans comes with a three-year transition period, giving the country time to adjust through measures already put in place.

Among these is the Public-Private Partnership (PPP) Code of the Philippines, or Republic Act 11966, which was signed into law on Dec. 5, 2023.

Edillon said the law provides an alternative source of financing by enabling the implementation of government programs and infrastructure projects with private sector participation, reducing reliance on multilateral institutions and other providers of concessional financing.

She said the PPP Code establishes the legal framework needed to attract private sector investments for infrastructure and other priority projects.

“And this one will actually free up resources para naman doon sa mga kailangan ng spending ng gobyerno na hindi papasukan ng private sector. So, nakalatag na iyong ating legal and policy framework para diyan (And this one will actually free up resources for those needing government spending that does not need private sector funding. The legal and policy framework has been laid down for this),” she said.

The World Bank earlier said its decision to reclassify the Philippines as an upper-middle income economy was driven by broad-based economic gains that raised the country’s gross national income per capita to USD4,850, exceeding the USD4,636 threshold.

Edillon also cited the Bangko Sentral ng Pilipinas’ continued push for financial inclusion, which has expanded Filipinos’ access to financing while encouraging financial institutions to develop more innovative investment products. These initiatives, she said, are expected to broaden funding sources available to businesses.

She added that large companies can also tap the international capital market for additional financing.

“So, dahil nga nasa upper-middle income country tayo, again there is now that facility for them so ang kailangan lang is magtuluy-tuloy, magtuluy-tuloy itong ating magandang pinapakita in terms of macroeconomic fundamentals, in terms of policy stability (So, because we are already an upper-middle income country, again, there is now that facility for them, and we only need to sustain the positive macroeconomic fundamentals, in terms of policy stability),” Edillon said. (PNA)