Davao City gets more foreign funding under Duterte

JC Gotinga
Now that Davao City's longtime mayor has become the most powerful man in the country, his city has taken its place at the ODA banquet table

MANILA, Philippines – Davao City has been the recent beneficiary of official development assistance (ODA) from foreign countries and entities.

Prior to former Davao City mayor Rodrigo Duterte’s ascent to the presidency in 2016, the city rarely figured in the country’s ODA portfolio. With the exception of its international airport, Davao City never got any big projects from ODA until recently.

Foreign funding is a contentious issue for President Duterte, a subject he has picked to get back at his critics.

Previously, the Duterte administration hit Philippine media for receiving foreign funds. They even claimed in a report that some news organizations that were recipients of these funds from Western governments were influenced by them. The Philippine Center for Investigative Journalism, Vera Files, and Rappler were named in the report that linked the media organizations to an alleged destabilization plot.

The journalists hit back, pointing out the government’s double standard. They argued that government has been using grants from other nations and institutions, most recently from China.

ODA is funding from foreign governments or international organizations such as the World Bank, the Asian Development Bank, and the European Union.

Davao City now has a growing list of big-ticket projects to be bankrolled by ODA, although most of them are still in the conceptual phase. 

What are these?

CHINA

A neighbor whom the President likes to call a “friend” is China, which only began planning ODA projects with the Philippines after Duterte brokered warmer ties by setting aside the sovereignty dispute over the West Philippine Sea.

During his Manila state visit in November 2018, Chinese President Xi Jinping signed 29 agreements with Duterte, including two on projects in Davao City. A third one was announced in March this year:

Davao City Expressway Project

Total cost: P24.5 billion (US$478.5 million)*
ODA type: loan

This was proposed by the Duterte administration and formalized in 2017.

Much of the 23.3-km expressway will be elevated – a la “skyway” – and will interconnect Davao City and decongest its downtown area. It will link the city’s port to the suburbs.

A team of Chinese contractors will conduct a 12-month feasibility study for the project.

The government has yet to say when it expects the expressway to be completed.

Davao River Bridge Project (Bucana)

Total cost: P1.5 billion ($29.3 million)*
ODA type: loan

This 800-linear-meter bridge will be part of the road network consisting of the Davao City Bypass Road, the Davao City Expressway, and the Davao City Coastal Road.

Mindanao Railway Project (first phase)

Total cost: P35.3 billion ($689 million)*
ODA type: loan

This 102 km train line will connect Digos, Davao, and Tagum cities, with a design speed of 160km/h.

Although currently slow going, the project is expected to be completed by 2021, before Duterte’s term ends in 2022.

JAPAN

Many of the projects that are further along toward implementation or completion are those funded by the Japanese government through its ODA agency, the Japan International Cooperation Agency (JICA):

Davao City Bypass Construction Project (South and Center Segments)

Total cost: P25.8 billion ($503.9 million)*
ODA portion: P22.4 billion or $437.5 million; balance to be covered by the Philippine government
ODA type: loan

This was proposed and signed in 2015, during the administration of former president Benigno Aquino III, according to the JICA website.

Actual work on the project began in 2017, under Duterte.

“This project is expected to reduce travel time from 1 hour and 44 minutes via the Pan-Philippine Highway and Diversion Road, to 49 minutes via the Davao Bypass road,” says the Build, Build, Build website.

This 45.2-km road will divert vehicular traffic from downtown Davao City to avoid gridlocks and to spur development in the suburbs. It will feature a 2.3-km tunnel through a mountainous area.

Although construction was supposed to have started last April, the Build, Build, Build website indicates that progress on “Project Design” is at 89%, and “Project Construction” still at 0%.

It is expected to be completed by 2022.

Other ongoing projects in Davao City funded by JICA 

  • Master Plan and Feasibility Study on Flood Control and Drainage
  • Survey on Grafted Seedlings Business for High-Quality and High-Yield Vegetables
  • Project for Capacity Development on Improving Solid Waste Management Through Advanced and Innovative Technologies
  • Project for Enhancing Solid Waste Management

JICA has around 80 ongoing projects in the Philippines. In fact, it has been the country’s largest ODA source in the last two decades.

Embarking on his October 2017 official visit to Japan, Duterte called Japan a “true friend” of the Philippines.

ASIAN DEVELOPMENT BANK

The Asian Development Bank (ADB), which funded the upgrading of Davao City’s Francisco Bangoy International Airport in the early 2000s, has designed a modernized bus system and will be financing it:

High Priority Bus System

Total cost: P3.6 billion ($70.3 million)
ODA type: loan

The project will overhaul the city’s public transportation system by building an organized network of bus terminals, bus stops, and waiting stations.

Implementation is expected to begin this year and be completed by 2022, understandably the finish line for many of the Duterte administration’s projects.

ODA benefits

Note that ODA comes in two modes: loans and grants. Grants are usually given to humanitarian or educational projects. Infrastructure projects, especially those in the billions of pesos, normally get ODA through loans.

These projects listed above are only a small portion of the Philippines’ ODA portfolio, which still includes many projects in Metro Manila, where 13% of the national population is crammed within 0.2% of the country’s total land area.

Mindanao as a whole has constantly received ODA but it goes mostly to humanitarian aid and recovery from conflict. For instance, the United States Agency for International Development (USAID) Growth with Equity in Mindanao (GEM) Project from 1995 to 2013 concentrated mainly on the Autonomous Region in Muslim Mindanao or ARMM and other conflict-stricken areas.

Because Davao is relatively prosperous, most of the help went to its needier neighbors.

But now that its longtime mayor has become the most powerful man in the country, Davao City has taken its place at the ODA banquet table.

“Because the seat of government is Manila, most of the investment, most of the ODA, of course went to where the national government wanted to put it. And most of that went to just 3 regions: Central Luzon, NCR, Southern Tagalog. That speaks of priorities,” said Ramon Casiple, executive director of the Institute for Political and Electoral Reform.

Casiple told Rappler, Duterte is fulfilling his “Mindanao first” campaign promise, and that “it is about time” Davao City got an economic boost from ODA. Before this, much of the foreign resources that poured into the city were private investments from the Japanese and the Chinese, which, Casiple said, explains his affinity to Japan and China.

So malaking bagay na naging presidente siya kasi (So it’s a big deal that he became president because) he became the national government,” Casiple added.

Although these ODA sources specify requirements and conditions before putting their money into developing countries like the Philippines, it is ultimately the recipient country’s government that directs exactly where that money goes to.

The President’s Cabinet agencies do the nitty-gritty work: The departments of public works, transportation, tourism, social welfare, education, etc propose projects for ODA funding. The National Economic and Development Authority (NEDA) reviews, refines, and chooses the most viable among project plans, and then the Department of Finance (DOF) presents those plans to ODA sources to get funding.

The President can have a lot of sway over foreign funding of government projects because his secretaries handle it.

In the last 3 decades, ODA has made for roads, bridges, dams, electric lines, fisheries, schoolhouses, hospitals, government halls, and other goodies in many parts of the country, especially the poorest ones. 

But what most Filipinos know to be the showcase of foreign-funded blitz is Metro Manila: highways with crisscrossing megalithic overpasses, tunnels and flood control systems, ports and airports, the LRT, and soon, the country’s first subway train system. – Rappler.com

*$US1 = P51.2

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JC Gotinga

JC Gotinga often reports about the West Philippine Sea, the communist insurgency, and terrorism as he covers national defense and security for Rappler. He enjoys telling stories about his hometown, Pasig City. JC has worked with Al Jazeera, CNN Philippines, News5, and CBN Asia.