December 11, 2017 | MANILA, PHILIPPINES

Gov’t tightens controls over foreign funding

THE Office of the President (OP) said it ordered government agencies to seek authorization before negotiating and signing international agreements involving borrowing, guarantees, and grants.

A new Memorandum Circular (MC) issued by Malacañang seeking to tighten up the process for seeking foreign funding said enhanced coordination is needed. MC 16, signed by Executive Secretary Salvador C. Medialdea on April 11, instructs the agency pursuing the foreign funding to seek OP authorization before negotiations begin.

Under current procedures, the Department of Foreign Affairs (DFA) acts as the “lead” agency in evaluating international agreements while the Department of Finance (DoF) is tasked to “supervise” fiscal activities related to domestic and foreign debt incurred by the government.

OP approval can be dispensed with if the DFA or DoF “determines that the nature or scope of the agreement does not require such authorization.” MC 16 did not spell out which deals do not require OP authorization.

“The President is the sole organ of the country’s foreign relations and the constitutionally assigned chief architect of its foreign policy,” MC 16 read in part.

“Authorizations for the negotiation and signing of international agreements, or agreements covering borrowings, guarantees, and foreign grants shall be granted in writing through Full Powers, Special Authority, Letter of Memorandum signed by the President, or the Executive Secretary ‘by authority of the President,’” it said.

In a statement issued Tuesday, Presidential Spokesperson Ernesto C. Abella said the new MC “ensures that all agreements entered into by the government undergo thorough evaluation of all the agencies concerned, specially the DFA which is the lead agency for PH’s foreign relations.”

“Considering the massive and growing interest of foreign governments and investors in the country, the Office of the President has deemed it appropriate to issue the MC to ensure the effective and efficient coordination among agencies,” Mr. Abella added.

The Philippines received a record $7.93 billion in actual foreign direct investment (FDI) last year, according to data released by the Bangko Sentral ng Pilipinas.

However, Philippine FDIs lags the region due to poor infrastructure, high power costs and foreign ownership restrictions in key industries.

Meanwhile, President Rodrigo R. Duterte has attracted “close” to P1 trillion in official development assistance (ODA) from China and Japan in his first seven months in office, Finance Secretary Carlos G. Dominguez III told reporters in Davao City in January. -- Ian Nicolas P. Cigaral