ODA manifests goodwill between long-term allies

Over the weekend, there were two contrasting developments on the economic front. First, it was announced by the Seoul-based daily newspaper Hankyoreh that South Korea would stop processing a loan totaling some 700 billion Korean won, intended for the PBBM Rural Modular Bridge Project unilaterally sought by the Philippine government. Second, the Philippine government initiated confidence-building measures to ensure continuity of Japanese foreign aid, the largest source of official development assistance (ODA) to the Philippines.

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Figures compiled by the Department of Economic Development (DepDev, formerly NEDA) show that Japan is a significantly larger ODA provider than South Korea, extending tens of billions of dollars in assistance over the past five years, while South Korea's support was in the hundreds of millions, as of 2023. The Philippines’ Department of Finance (DOF) said that it has commenced discussions with the French government to fund the project, after it was “decided to halt previous discussions last year.”

The significance of ODA cannot be overemphasized. Major partners like Japan and South Korea provide significant assistance that propels economic development in terms of supplying infrastructure finance, enabling capital formation, as well as facilitating trade. Enhancing competitiveness, supporting human resource development, and augmenting pandemic response are vital areas of cooperation.