THE PROJECT MAKING PROCESS OF JAPANESE-FUNDED SCHOOL BUILDINGS:

A CASE STUDY OF JAPANESE GRANT AID IN THE PHILIPPINES

OHARA ATSUJI

A Thesis Submitted to the Asian Center University of the Philippines

Diliman, Quezon City

In Partial Fulfillment of the Requirements for the Degree of Master of Arts in Philippine Studies

June 2001

APPROVAL SHEET

This thesis entitled The Project Making Process of Japanese-Funded School Buildings: A Case Study of Japanese Grant Aid in the Philippines prepared and submitted by OHARA ATSUJI, in partial fulfillment of the requirements for the degree of Master of Arts in Philippine Studies is hereby approved by the thesis committee and endorsed to the Dean.

RUPERTO P. ALONZO Critic

/(cJ.,tdc ·c_, ?7i i ./'· frt ' /J1 {1-dtt-­NAT ALIA M.L.M. MORALES, Ph.D.

!?n yyn -h; h !? u.Z NORMITA G. RECTO, Ph.D.

Adviser

Member

Accepted in partial fulfillment of the requirements for the degree of Master of Arts in Philippine Studies.

Nti ARMANDO ~~\ JR., Ph.D.

Dean

Acknowledgment

The writing of this thesis was on,e of the most frustrating periods in my

life. It could have gone on endlessly without the generous help and inspiration of

may people. r would thus like to express my deepest gratitude to the following for

helping bring this study into completion:

The members of my Thesis Committee: Dr. Normita G. Recto, Dr.

Natalia Ma. Lourdes M. Morales, and Prof. Ruperto P. Alonzo for their advise

and suggestions on how to improve my work. I would Hke to particularly express

my added appreciation to Dr. Recto for her patient supervision and warm

encouragement. This research was an interdisciplinary study. My analysis of data

and review of related researches were made clearer by the insights I gained from

my panel members who are experts in their respective fields: Dr. Recto in Theory <".'

of Organizational Behavior; Dr. Morales in Political Science; and Prof. Alonzo in

Economics;

The Asian Center staff for assisting me in communicating with the

members of my Thesis Committee;

The Ministry of Education, Culture and Sports, the Rotary Foundation

and the International House in Osaka for the scholarship grants which provided

me the great opportunity to study at the University of the Philippines; and

. Finally, my dear parents, Koji Ohara and Yoko Ohara for generously

giving me living and study allowances although I chose to study somewhere far

from their place.

Despite all the generous assistance and kind understanding I received

from all the foregoing individuals and institutions, responsibility for all errors in the

interpretation of events and omission of details in this thesis is mine alone.

ABSTRACT

This study focused on Japan's Official Development Assistance (ODA) to the

Philippines. Particularly, the overall administrative capacity of both the Japanese

and the Philippine governments was examined with respect to the decision-making

process at various stages of Japanese grant aid programming and utilization. To

understand the dynamics involved in the entire process of Japanese grant aid

programming and utilization in the Philippines, the study analyzed two Japanese

grant-assisted school building projects in the Philippines jointly undertaken by the

Japanese and Philippine governments. The case study approach was used to

present a description of the process of acquiring and implementing Japanese grant

aid-projects in the Philippines.

Specifically, this study traced the administrative process undergone by two-

school building projects financed by the Japanese ODA in the Philippines; namely,

the Typhoon-Resistant School Building Project (TRSBP) and the Educational

Facilities Improvement Program (EFIP). The following questions served to provide

focus to the study:

1. What is the Japanese Official Development Assistance (ODA) Program?;

2. What process was observed by the Japanese and the Philippine governments in undertaking two school building projects in the Philippines; namely, the Typhoon-Resistant School Building Project (TRSBP) and the Educational Facilities Improvement Program (EFIP)?; and

3. How does the school building project-making experience help improve the efficient and successful utilization of Japanese Grant Aid In the Philippines?

iv

Analysis of the data generated the following answers to the above questions:

1. The Japanese Official Development Assistance (ODA) Program to the

Philippines began as "baisho" or war reparations. Japan extended economic

assistance to the Philippines to compensate for the damages and sufferings it had

inflicted on the ·latter during the Second World War. The Philippines was allocated

$550 million, the largest amount among countries that received Japanese

reparation aid. This did not mean however that the Philippines got the entire

amount in currency. Instead, most of the reparation aid came in the form of

Japanese products and services to help the recipient country realize its

development projects in agriculture, fisheries, electric power, and the other sectors.

As a general rule, no rich country ever extended its ODA to a needy country

for purely humanitarian considerations. Often, the assistance was proffered "with

strings attached 11 such as the use of the donor country's experts and products (so it

gets to market its excess products to the recipient country) in the grant aid-assisted

project. To the Japanese, however, the role of the ODA was not limited to this

obvious economic agenda. It also functioned as a political instrument in promoting

the country's foreign policy. With its limited military presence in other countries

after World War 11, Japan of late has largely relied on' its ODA to prop up its

diplomatic relations with other countries.

2. At the project identification stage, which commenced in the late 1980s, the

Japanese government was eager to support the new Philippine government under

then President Corazon Aquino. Unfortunately, the Philippine government, as

reflected in its agencies like the Department of Education, Culture and Sports

v

(DECS), was not fully familiar with the Japanese grant aid scheme so it welcomed

the help of outsiders, in this case, the Mitsubishi Corporation, in formulating project

proposals.

The first project, Typhoon-Resistant School Building Project (TRSBP), was

identified in an uncommonly short time; in consequence, the project formulators and

evaluators seem not to have deliberated well on every aspect of the project which

then resulted to quite, literally, a costly flaw. Both the Japanese and the Philippine

governrnents failed to minimize, if not altogether avoid, serving the interests of big

Japanese companies allowing the latter to ·receive considerable benefits from the

grant aicl projects to the detriment of the intended major beneficiaries, the needy

elernentary and high school students in the far-flung areas of the Philippines.

On the Philippine side, the DECS seemingly did not vigorously push for

changes in the Typhoon-Resistant School Building Project (TRSBP) since it was

able to get a second school building project from the Japanese ODA (i.e., the

Educational Facilities Improvement Program [EFIP]) besides there were no

apparent criticisms and claims from the administration or, worse, from outsiders

like the media. Consequently, the Japanese administration represented by the

Japan International Cooperation Agency (JICA) and the· Ministry of Foreign

Affairs (MOFA) did not have difficulty in pushing through with the costly school

building projects because of less pressure from its Philippine counterpart.

In a sense. the Educational Facilities Improvement Project (EFIP) was a

rectification of the TRSBP mistake because the former utilized Philippine-made

materials which brought the cost of construction considerably lower than that of

YI

the TRSBP. Despite the fact that the EFIP is still costlier than a similar ADB­

sponsored project, the circumstances surrounding its implementation (from the

basic design study stage ·to the completion stage) were not marked with

irregularities as was in the case of the TRSBP.

3. An important lesson drawn from the grant-aid experience was/is the need

for well thought out and/or properly evaluated proposals to avoid flaws that might

have critical implications in the future. It is thus recommended that agencies

seeking foreign assistance should follow clear-cut procedures not only for

proposal evaluation but also for the eventual implementation of the project.

Moreover, to prevent another costly mistake in future ODA-projects, the

two cooperating governments should work openly together and on an equal basis

with each other to provide maximum benefits to the grant aid's intended

beneficiaries. This is the essence of real cooperation despite the unequal status

implied in the donor - recipient relationship between the two countries.

Finally, this study concluded that, in a sense, these school-building

projects were a commentary on the Japanese foreign policy. By immediately

extending its assistance to the then very popular fledgling Aquino government,

Japan ·scored high points not only in the eyes of the Filipino community but also

in the. world community especially since it was sponsoring a politically correct

program; that is, promoting quality education through upgrading educational

facilities specifically, school buildings. Nevertheless, beyond scoring diplomatic

points, Japan showed its sincerity in helping the Philippine government achieve

its developmental goals by agreeing to finance these two high cost long-term

vii

projects

In the final analysis, the Japanese did not only score diplomatic points from

the school building projects but they happened to earn economic gains as well

inasrnuch as the contractor for the two projects was a Japanese firm and, in the

case of the first project (TRSBP), the materials were also procured in Japan.

When the DECS officials raised the very high cost of the TRSBP and

suggested modifications to lower the cost in order to put up more buildings and

classrooms, the Japanese responded by approving another school building

project (the EFI P) so as not to lose face in the diplomatic community (a revision

of an approved ODA project is an admission of sloppy evaluation on their part at

the initial stages of the project). Obviously, the Filipinos did not have cause to

complain against such "tender mercies."

Up to the projects' completion, the Japanese team was in control of every

aspect of the projects despite the official agreement that it should be the

Philippine side that would take care of the day-to-day supervision of the projects.

This showed that it was still the Japanese government that had control over the

administration of the projects reflecting the unequal relationship between the two

governments in terms of the ODA. As donor, Japan exercised power over its

projects ignoring its own frequent assertion for the need for collaboration and

consultation with the recipient countries. This instance once more proves the

truisrn that it is still the one who has the money (or economic means) that wields

true political power/influence.

·viii

TABLE OF CONTENTS

Title Page

Approval Sheet Title Page n Acknowledgment iii Abstract 1v Table of Contents 1x List of Figures xii List of Tables xiii

Chapter 1 THE STUDY IN PERSPECTIVE 1

Background of the Study 1 Research Problem 5 Objectives of the Study 6 Significance of the Study 6 Research Methodology 8 Scope and Limitation 9 Definition of Terms 10

A. According to Source 10 B. According to Terms/Conditions 10 C. According to the Kind of Grant Aid 11 D. Other Kinds of Aid 11

Organization of the Study 12 Notes 13

2 REVIEW OF RELATED LITERATURE and ANALYTICAL DESIGN 15 Review of Related Literature 15 Analytical Design 19

A. Pre-implementation Phase 19 B. Implementation Phase 20 C. Post-implementation Phase 20

~~ n

3 AN OVERVIEW OF JAPAN'S OFFICIAL DEVELOPMENT (ODA) PROGRAM 23 Introduction 23 History 23

ix

The Development ofJapanese ODA 25 ODA Distribution by Sector 30 Terms and Conditions of ODA 31 ODA Policy 34 ODA Distribution by Region 38 Japanese ODA to the Philippines 41 Notes 48

4 JAPANESE ODA ADMINISTRATION IN THE PHILIPPINES 50 Introduction 50 Process Undergone by Japan's Grant Projects In the Philippines 50

A. Project Proposal Screening at the NEDA 51 B. Project Formulation/Selection through the

Japanese Embassy 54 c. Project's Basic Design Study Conducted by the JICA 54 D. Final Project Preparation and Appraisal

by the Japanese Government 57 E. Formal Project Implementation after

Exchange of Notes between Gove'fnments 58 F. Post-evaluation of Project 60

Japanese Administration 61 A. Ministry of Foreign Affairs 61 B. Japan International Cooperation Agency (JICA) 63

)> Lack of Japanese Personnel to Handle ODA Matters 67 )>Relationship Among Japanese Organizations 69

Philippine Administration 70 A. National Economic Development Authority (NEDA) 70 B. Public Investment Staff 74 C. Department of Education, Culture & Sports (DECS) 75

Notes 78

5 Case Study: CONSTRUCTING TWO JAPANESE GRANT AID-ASSISTED SCHOOL BUILDING PROJECTS 80 Introduction 80 Overview of the Two School Building Projects 81 Background of the Projects 83

A. Classroom Shortage 83 B. Construction Cost 87

Project Cycle Stages 90 A. Project Identification 90 B. Project Formulation/Preparation 95 c. Project Appraisal 96 D. Post Implementation 104

Evaluation 109

x

Notes 112

6 FINDINGS, CONCLUSION and RECOMMENDATIONS 114 Overview 114 Findings 114

A. Reviewing the Japanese ODA 114 B. TRSBP and EFIP: The lmplementation of

the ODA Program 115 C. Reasons for the TRSBP's High

Construction Cost 118 D. Reasons for Both Governments not

Changing the High Cost Materials 119 E. Reasons for both Governments Using the

Inexpensive Materials for the EFIP 120 Conclusion 121 Lessons drawn from the Projects and 123

Bibliography 125 Appendices 134

xi

Fig.urc

I. I 2.1 ! .,

2.~l

2.)

3.1 .3.2 .3 .. \ .H 3.5 .3. ()

LIS'l' OF FIG lJ Rl1:S

Title Page

Project Cycle Management 2 I ODA Net Disbursements by Major Donors 27 Japanese ODA Annual Charge and GNP Share 27 Public Polls on Economic Cooperation in the Future 29 Japanese Bilateral ODA by Regional Distribution 40 Japanese Granl Aid to the Philippines, 1970- l ()()() 43 Flow Chart of .Japanese Grant A id Process 53 Economic Cooperation Bureau or the MOFA 65 Role of J ICA in lhc Grant A id Process 66 ODA Volume per Sta IT of A id Administration 69 Structures of NEDA Board and Nl:DA Secretariat 73 Organization of DECS related to Japanese School Building Projects 77 Timetable ofTRSBP Phases 1-V :111d EFIP Phases I-Ill 99

xii

Ta hies

~.I ") ")

") ' -·)

.2. ~

-t ··I ~

.:1. \

·1 ... j .:1 ·\

-U>

.:1. 7

4.X .:i. <)

-UO

.:I_ 11

.:J. I ::

.:!, I\

LIST OF TABLES

Title

Distribution or Bilat<:rnl ODA Co111initmenls by Sector f'1k~j or Recipients of .I apancse Gr:111t /\id (FY I l)86- I <)<.)t))

Sec torn I Distribution or .I apa11esc (lra11t A id to I he Philippines, I %8-1997 Major .Japanese Cirant /\id Sectors: A111ounl and Share of Total .Japanese Grant Aid to 1111:'. Philippines .lapa1h:se Grant /\id Project. lo the Philippines Related to Educ<1tion/Manpower. FY 1986-199<) Comparison of the TRSl3P and the 1::i:1P National Budget Allocation orDITS N Li rn her of Stu cl en ts in Pub I i c Pr i 111 a ry an cl Secondary Schools Pu pi I-teacher Ratio in Seleclccl 1\ SEAN Count rics

Number of Teachers and Teachers' Salary Sc~tle Comparative Construction Cost or Dirtcrent School Building Projects Overview or Formal Process orTIZSBP and 1:1:1p Es ti mated Typhoon Damages lo School Bui ld.ings Overvievv or Basic Design Study on TRSBP and EFI P Req ucstecl Region and Nu111 ber or Sci 1uols in TRSBP Phase I School Design Types of th~ TRSIW School Design Types of the FF! P Sekckd Schools at the Idenlilic:1tio11 and Implementation Stages

~Ill

Page

4 I

44

45

47 82 ~u

89 90 94

100

IOI 103 103a

104

Chapter 1

THE STUDY IN PERSPECTIVE

Background of the Study

In a relatively short time, Japan quickly became the world's largest source of

Overseas Development Assistance (ODA). In 1970, Japan was just second to

France as the biggest source of ODA among Overseas Development Cooperation

members. However, about two decades later, in 1989, it became the largest donor

in terms of amount to developing countries. The Japanese government from then on

consistently donated large amounts to developing countries. For the year 2000 for

example, the Japanese total ODA amounted to· $13,06 million (P653, 073 million)

exceeding those of the United States ($9,581 million or P479, 030million), Germany

($5,034 million or P251, 689 mil.lion), the United Kingdom ($4,458 million or P222,

891 million) and· France ($4,221 million or P 211,041 million). 1

The Philippines, as one of the developing countries, has long been the

recipient of Japanese ODA. In fact, since the end of the 1970s, Japan has been (and

still is) one of the biggest sources of ODA to the Philippines. Interestingly, such an

ODA to the Philippines has generated controversy among the entities involved.

Robert Orr ( 1990), an American researcher, has observed that Japan's ODA to the

Philippines is the only one among the Association of Southeast Asian Nations

(ASEAN) that has posed a problem to Japanese policymakers, mainly because of

the inefficiency of the ODA administration in the Philippines. 2

Following the fall of the Marcos regime in February 1986, the Subcommittee

on Asia and Pacific Affairs of the United States House Foreign Affairs Committee

revealed the scandal surrounding the ODA administration during the Marcos regime.

Japanese researchers and journalists described the Marcos scandal as a symbol of

the wastefulness of the Japanese ODA. 3 Charles E. Morrison ( 1988), an American

researcher, also claimed that the Marcos case was the clearest example that the

Japanese ODA reinforced existing regimes within the ASEAN. 4

The Japanese government indeed perceived the Marcos scandal as the origin

of the criticisms of its ODA to the Philippines5 so much so that in April 1986, the

Japanese Diet established the first Special Investigation Committee on the ODA to

probe and discuss the scandal. This does not mean, however, that the Philippines is

the only country which has corruption charges arising from the Japanese ODA. The

only difference is that the scandals surrounding the Japanese ODA cases are

seldom exposed in other countries while the Japanese ODA to the Philippines has

become a big issue because of the following factors: big amounts involved: the long

Japanese ODA experience of the Philippines: the latter's geographic closeness to

Japan; and the Philippines' relative openness to data access. 13

Interestingly, after the investigation of the Marcos-related ODA scandal, the

Japanese government even increased its ODA to the Philippines during the

succeeding Aquino and Ramos administrations. In 1992, for instance, Japanese

ODA (net disbursement basis) to the Philippines amounted to $1,030.67 million,

representing 66.9% of the total bilateral ODA received by the Philippines for that

year. / The amount also represented 12.1 % of the total Japanese bilateral ODA in

2

the same year.

Comparatively, the American ODA for that year amounted to just $229 million,

representing only 14.8% of the total bilateral ODA received by the Philippines for

1992. 8 The Philippines has experienced a decreasing American ODA beginning

1992 following its Congress' rejection of the continued presence of US military bases

in the country. 9 This is mainly because a large amount of ODA from the US to the

Philippines came from the Economic Support Fund (ESF) which was tied to the

presence of the US military bases in the Philippines. With the rejection of the US

military bases, the Philippine Department of Finance (DOF) reported that the country

lost an estimated P3 billion or about $100 million annually in ESF inflows .. A

Japanese high official interviewed by this researcher explained such loss by saying

that it is rather difficult to justify the huge amount of American ODA to the Philippines

without its military bases. 10

Then Secretary of Finance, Roberto de Ocampo (1994), expressed the

Philippine government's expectation from Japanese ODA, following the decrease in

American ODA to the Philippines:

The Philippines is moving forward to participate in the dynamism of the Asian region and we are confident of Japan's support and assistance.'.'

In return, the Ramos administration, installed in 1992, took steps to

reorganize its ODA administration. In 1994, the Japanese government, during its

High Level Mission on Economic and Technical Cooperation to the Philippines,

requested the Philippine government to improve its ODA absorption capacity and

efficiency. The Japanese delegates in that Mission also explained to the Philippine

government the following:

3

The Japanese government's effort to expand the total volume of its ODA does not mean that Japan will automatically increase its ODA to all recipient countries. [We] take into consideration the strong request for further appropriate ODA implementation which should not be taken for granted. 12

Dennis T. Yasutomo (1986) earlier commented about the overwhelming

support of the majority of Japan's populace for ODA even as many other donor

cou_ntries were experiencing "aid fatigue". 13 But, at present, a Japanese observer

has also noticed, "aid fatigue" in Japan, similar to that experienced in Europe and

the USA. 14 Such observation was confirmed by a Japanese national poll's finding

that strong support for ODA is decreasing among the Japanese.

In about the forty-year history of Japanese ODA to the Philippines, two

school building projects have, so far, received the biggest Japanese grant aid

basically because these projects met the popular agenda on human

development, basic education and "Education for All".

The first of these projects was identified in 1987, one year after the Aquino

administration was installed but construction only started in 1989. The project

was called the Typhoon-Resistant School Building Project (TRSBP). This project

aimed to construct primary and secondary school buildings using a prefabricated

construction method in which essential construction materials like panels and

frames -were procured in Japan. 15 When it was completed in 1994, the project

was able to provide 1,391 classrooms for 360 primary and secondary high

schools all over the Philippines. Project cost was 3504.4 million pesos, 76% of

which would come from Japanese grant aid. 16

The second Project, which was called the Educational Facilities Improvement

Program (EFIP), similarly aimed to put up school buildings but this time, using

4

reinforced concrete materials that are available in the Philippines. Specifically, this

project planned to provide more than 1, 737 classrooms for 423 primary and

secondary schools in the Philippines from 1993 to 2001. Project cost was estimated

at 3,976.1 million pesos, 93.9% of which would also come from Japanese grant aid 11

The main contribution of these two projects in the Philippines was providing

school buildings and classrooms for primary and secondary schools to alleviate the

shortage of classrooms.

Research Problem

This study is focused on Japan's Official Development Assistance (ODA) to

the Philippines. It attempts to look into the process of undertaking two Japanese

grant-assisted school building projects. These two projects are worth noting

because their construction cost are way above the cost of similar Asian

Development Bank (ADB) projects (the first is five times more while the second is

three times more than the ADS projects). 18

Specifically, the study attempts to answer the following questions:

1. What is the Japanese Official Development Assistance (ODA) Program?;

2. What process was observed by the Japanese and the Philippine

governments in undertaking two school building projects in the Philippines; namely,

the Typhoon-Resistant School Building Project (TRSBP) and the Educational

Facilities Improvement Program (EFIP)?; and

3. How does the school building project-making experience help improve the

efficient and successful utilization of Japanese Grant Aid In the Philippines?

5

Objectives of the Study

The present study attempts to examine the existing project-making process of

Japanese grant aid to the Philippines. Specifically, the author seeks to study the

actual project-rnaking process undertaken by the Japanese and the Philippine

governments using two school building projects as case studies.

The main objective of this study is to show how both governments administer

grant aid projects presenting the entire process beginning from project identification

up to project termination.

Significance of the Study

Foreign grant aid is an important development input in a developing country

like the Philippines because domestic financial sources are inadeq~ate. For the

Philippine government, Japan has been a top donor since the late 1970s, except in

1987. At the same time, the Philippines has always been one of the top five

recipients of Japanese ODA. The Philippines has, so far, received Japanese grant

aid - financed projects totaling to 194 billion yen until 1996. 19

It Is noteworthy, however, that despite the two countries' relatively long period

of cooperation as well as the huge amounts of Japanese ODA to the Philippines, the

grant aid project-making process is not yet fully understood in both Japan and the

Philippines.

The ODA's project making process is complex, and goes on at many levels

and stages cornposing of formal and informal processes. So far, most papers and

books on ODA administration have tended to discuss it as a controversial issue

6

rather than as an academic matter because of the unfortunate Marcos-related

scandal surrounding the Japanese ODA Program. There are very few case studies

done on the whole project-making process of Japanese ODA to the Philippines.

This study therefore will add to the scant literature focused on the process of

implernenting grant aid projects.

It is generally recognized that case studies of projects may not be enough to

sufficiently explain the ODA administration in the Philippines. However, the two

projects (the TRSBP and the EFIP), which are the focus of this study, have certain

advantages to mitigate various limitations. First, the combined length of the two

projects adds up to 10 years making these projects a"ppropriate bases of the

analysis of the ODA administration during the Aquino and Ramos governments.

Second, the 990 buildings covered under these two projects are located nationwide.

Ancl, third, education, the improvement of which is the main purpose of these two

projects, is universally recognized as important investment in human capital. 20

Furthermore, there have been no apparent public criticisms about these two

Japanese projects unlike the other yen-sponsored economic infrastructure projects

such as the Batangas ports. With the case study of the two school building projects,

the author hopes to show the routine work involved in ODA administration.

This study particularly hopes to contribute in the:

1. understanding of the Japanese Official Developrnent Assistance (ODA)

Program;

2. understanding of the actual project making process undertaken by both

the Japanese and Philippine governments through the Japanese ODA;

3. improvement of the utilization of Japanese Grant Aid in the Philippines.

7

Research Methodology

The case study approaclr is used to present a description of the process of

acquiring and implementing Japanese grant aid - assisted school building projects in

the Philippines. Specifically, the study traces the process undergone by these

projects according to the stages in the Prr~ject (w::le Manogerne/11 rPCAIJ 1"1etlwd

(1998) by way of answering the questions raised in the research problem.

The overall administrative capacity of both the Japanese and the Philippine

governments is examined particularly with respect to the organizational structure

and decision-making process at various stages of Japanese grant aid programming

and utilization, including project identification, project formulation, project

implementation and evaluation. To capture the dynamics involved in the entire

process of Japanese grant aid programming and utilization in the Philippines, two

Japanese grant aid - assisted projects are subjected to closer analysis. Institutional

arrangements, whether formally or informally, are also analyzed to identify where

gaps, overlaps or duplications persist in the existing project cycle.

Particularly, the study reviewed the roles of different entities, principally, the

Japanese Embassy, the Japan International Cooperation Agency (JICA), the

National Economic Development Authority (NEDA), and the Department of

Education, ~ulture and Sports (DECS) in these school building projects. It also

discussed the role of the Japanese private sectors in supplementing the efforts of

both governments.

Part of the methodology is docullleutary a1111lysis. The researcher reviewed

the documents of both governments such as the basic design study reports on these

8

school building projects for the data analysis of these two projects. Information frorn

these docurnents was supplemented by the data gathered from 11d111i11islcn·tl

111u·slio111wirc . .:; and pcrsu11ul i11tL'ruiews 1rnd ol1~,·n 1 11lio11s.

Scope and Limitation

This study analyzes the project-making process undergone by Japanese

grant aid - assisted projects in the Philippines according to the Project Cycle

Management (PCM) Method.

This is a case study of two Japanese granted school building projects in the

Philippines covering the period 1986, when President Aquino came into power. to

1998. Figures prior to 1986 are used as the starting point of analysis for this study.

' Statistics regarding other nations' ODA to the Philippines, notably that of the UnilE:!d

States are used as a point of comparison. Multilateral Japanese ODA through the

World Bank ancl ADB are not included in this study.

The study also does not delve deeply into the ODA policies and its economic

impact but it, nevertheless, recognizes that these are, indeed, significant issues.

These aspects are thus treated as integral part of the ODA administration and

process.

To facilitate analysis of grant aid capacity, the existing system for grant aid

administratio11 in the Philippines is constructed in terms of structure ancl actual

operating methods applied in grant aid programrning and utilization. To place the

systern of grant aid administration in its proper context. the rnachinery for Philippine

development adrninistration is made an integral part of the documentation.

9

Definition of Terms

ODA terminologies are often referred to in this study. It is therefore useful lo

have at the outset a list of these terms and their definitions.

With respect to the source, terms, purpose, and conditions of their utilization,

ODA can be classified into the following different types:

A. 1\ccurdi11g to Source

1. Bilateral - ODA secured by a government and its corporate agencies from

another governrnent on an official basis.

2. Multilateral - ODA secured from international agencies either owned or

controlled by member governments but with no national identity.

H.1\ccurdi11s to Tl'rrns/Co11ditio11s

1. Grant Aid - Money furnished with no obligation of repayment. It is financial

aid of the best quality and is extended mostly through the Ministry of Foreign Affairs

(MOFA) and, sometimes, through the Japan International Cooperating Agency

(JICA).

2. Technical Cooperation (Assistance) - The primary objective is the transfer

of technology and knowledge. It works through human interaction and contributes lo

the promotion of mutual understanding between the .Japanese and the people of

developing countries. Most of these technical cooperation agreements are in the

forrn of governrnental committees and are usually implemented through the JICA.

3. Loan - usually called yen loan or "yen syatsukan". The recipient

government has an obligation to pay the interest, whether or not the maturity and

grace periods of the loan are on a short or long - term basis. This type of financial

assistance also requires a repayment of the principal loan. In maintaining a

10

minimum grant element of 25% 1 loans have to be more concessional than

cornmercial loans since commercial loans have a grant element of less than 25°/i).

The implementing agency for loans is the Overseas Economic Cooperation r=und

(OECF).

C. :kcurdi11s to tl11' killrf of Cra11t /\it!

(1) General Project Grant Aid - aims at supporting the construction of facilities

and equipment. Recipient sectors are roughly classified into medical health care,

education ancl research, agriculture, welfare and improvement of the environment,

and cornmunications and transport. Projects covered by this assistance are

generally less profitable and are mainly concerned with the upgrading of the

standard of living of the people or contributing to the development of human

resources.

(2) Disaster Relief - aims at providing urgent funds for the relief of victirns 1

refugees and evacuees affected by natural disasters and civil wars.

(3) Grant Aid for Cultural Activities - aims at providing funds to developing

countries for the purchase of materials utilized for the promotion of education and

research projects. conservation and utilization of cultural properties and remains,

holding cultural events and exhibitions. Each grant is worth less than 50 million yen

(approximately P12.5 million).

n. <)titer killll~ o/ A it!

1. Tied 1\id - qualified bidders for the supply of goods and services are

confined to those firms that are owned and controlled by nationals of the donor

country. The .Japanese Grant Aid is tied to Japanese companies. This is also true

for other donors. The criteria for Japanese firms qualified for Tied Aid are as follows:

11

1. The firm must be established under the Japanese law;

2. Majority of the firm's share holders must be Japanese nationals; and

3. The majority of board members must also be Japanese nationals. 21

Organization of the Study

This paper is divided into six chapters as follows:

Chapter 1 presents the main problem as well as describes the purpose and

significance, the scope and limitations and the research methodology of the study.

Chapter 2 presents the review of literature and the analytical design of the

study.

Chapter 3 explains the Japanese ODA giving its history, policies and budget

allocations to provide context to the Philippine grant aid experience.

Chapter 4 provides a discussion of the Japanese grant aid project-making

process. It also describes grant aid administration in the Philippines for a clearer

understanding of the case studies presented in the next chapter.

In Chapter 5, the author presents and analyzes the irnplications of two

nationwide school building projects in the Philippines that were funded by the

Japanese government. The chapter further shows the actual project-making

process using Project Cycle Management approaches.

Finally, Chapter 6 sums up the findings and presents the conclusions as well

as recornrnendc:itions arrived at in this study.

The next chapter shows a survey of related literature and presents the

analytical design of this study.

12

Notes

1 Developrnent Assistance Committee (DAC), OECD, "Net Official Development Assistance in 2000," April 29 2001. <http://www.oecd.org/dac/>. The Philippine Peso equivalent was based on the average dollar-peso exchange rate at the end of year 2000: $1 =P49.9980

Bangko Sentral ng Pilipinas. "PESOS PER US DOLLAR RATE", April 27 2001. <http://www.bsp.~1ov.ph/Statistics/sefi/P$MonAnn.ht111>

2 Robert M. Orr, Jr., The Emergence of Japan's Foreign Aid Power, New York: Columbia University Press, 1990, pp. 8 ·t-82.

:i Yokoyama Masaki, Firipin enjo to jiritu kosei ron: ~ozoteki boryoku no kol<ufuku [Aid to the Philippines and Theory of Independence: Beyond Structural Violence], Tokyo: Akashi Shoten. 1990 ancl Mainichi shimbun shakaibu ODA shuzaihan, Kokusai enjo bijinesu: ODA wa do tsukawarete iru ka [International Aid Business: How Is ODA Used?]. Tokyo: Mainichi shinbunsha, 1990.

4 Charles E:. Morrison. "Japan and the ASEAN Countries: The Evolution of Japan's Regional Role. In lnoguchi. Takashi and Okimoto, Daniel I., The Political Econorny_of Jagpn Volume 2: The Cl_1anginq International Context, Stanford: Stanford University Press. 1988. p. 439.

~, Gaimusho [MOFA] keizai kyouryoku kyoku cyousakeikaku-ka, "Tai firipin keizai kyoryoku taisyo l·"lOshin [Policy of Economic Cooperation to the Philippines]", February 15 1994.

Ii For instance, when foreign researchers intend to research in Indonesia, they n-1ust submit the research outline to Lembaga llumu Pengetahuan Indonesia (LIPI), the Indonesian governrnent research institution in order to get a research permission.

7 Gaimusho [MOFA] Keizaikyoryoku kyoku eel., 1-Vagukuni no Seifi.1 lwihl.~0_·!.!.E!!.i!!.._1f!_~4. >ls2L._~. 1994, p. 1 ·19.

i: Gaimusho [MOFA] Keizaikyoryoku kyoku eel., J.-Vagak.uni no Se(,li1 kaihalsu 1~·,?i<> /~J9./

Vol. I, 1994, pp.'118-119. ~i Gaimusho [MOFA] Keizaikyoryoku kyoku ed .. IFugukrmi no 5,'e(fi1 lwilwtsu 1~·1?io I 99-/

Fc1/. ~. 1994. p. 1 Hl. 10 Personal interview with Hirokazu Arai. Former Japanese Ambassador to the

Philippines, Tokyo, April 29. 1994. 11 Roberto cle Ocampo, "Closing Remarks of Secretary of Finance, Republic of the

Philippines: RP-Japan High Level Policy Dialogue on Economic and Technical Cooperation", February 25, 1994.

12 Gaimusho [MOFA] keizai kyouryoku kyoku cyousakeikakuka,"Tai firipin keizai kyoryoku taisyo hoshin", February 15 1994.

i:i Dennis T. Yasutomo, The Manner of Giving: Strategic Aid and Japanese Foreigr! eoli~y. Lexington MA: Lexington Books, 1986, p.3.

1•1 Interview with Mutsuya Araki. in Kokusai Kaihatsu Journal, 454, October 1994.

p.81.

13

1 ~ The Japanese government named this project as the "Projl;ct for Constructing Primar:­

and Secondary Schools" whereas the Philippine government called it "Typhoon-Resistant Sdwnl lh1ilding Project. (TRSBP)". This study uses the Philippim: name for the prnject hL'C:ltlSl' till·

typhoon-rl.'sistal\I Ctrnstruction mdlwd is a critical i'eature of" this projl'.CI. 11

j DI TS t-:IWITA !-'. "Project I mpkmcntcd by I ~I WITAI; l 990- l 9l));" 19<>7 ( unpubl islwd llll'l11l) }.

11 Ibid. 18 JICA ML1sho shikin kyoryoku gyoumubu,"Firipin kyouwakoku gatsuko kensetu

jigyou foroattupu cyousa houkokusyo," June 1994, p.14. 19 Gairnusho, Vol. 2, 1998, pp. 104-108. :w Jee-Peng Tan and Alain Mingat, Education in Asia: A Comparative StudY..Qf~os!

and Financing, Washington D.C.: World Bank, 1992, p.1. ?.I The ODA Terms and their definitions are adopted from the following: Romeo A Reyes, Official Development Assistance to the Philippines: A Stud_y_Qf

Administrative Capacity and Performance, Manila: NEDA, 1985 (Dissertation, University of the Philippines); MOFA. Japan's ODA 1993 Annual Report Tokyo: APIC, 1994; _NEDA, ODA Handbook Guidelines on the Availment of Official Development Assistance, Pasig: NEDA, 1992; and Gilbert S. C. Astillo, "Japanese Foreign Aid to the Philippines, 1980-1990," (M.A. Thesis, International University of Japan). 1992.

14

Chapter 2

REVIEW OF RELATED LITERATURE And ANALYTICAL DESIGN

Review of Related Literature

In the1990s, research on Japanese ODA increased as the Japanese ODA to

developing countries also increased; however, literature focused on the project-

making process of the ODA is still pitifully scant.

One of the earlier works on Japanese ODA is by Alan Rix ( 1980) which

states that the administrative process in Japanese aid is well defined with regard to

the formal allocation of responsibilities, but complex with regard to the process. He

writes that three ministries and an agency make up the decision-making system (Yon

Slwclw l\n;gi Tuisei) over the yen loan aid ·policy. These are the Ministries of Foreign

Affairs (MOFA), Finance (MOF) and International Trade and Industry (MITI), and the

Economic Planning Agency (EPA). In discussing the characteristics of these four

governmental organizations, Rix disproves the popular notion that the MOF wields

strong influence in the Japanese government's policy-making. He presents the MOF

as just one of the various agencies involved in foreign aid; however, its control of the

budget gave it principal leverage in inter-ministry discussions. In the same work, Rix

also comments that the MOFA's traditional ineffectiveness in the domestic political

round was not matched by the realities of foreign aid policy; thus, the MOFA often

led in domestic policy-making of foreign aid policy.

On the other hand, Rix recognizes the influence of the MIT! on aid policy

since aid and commercial policy have long been closely related with each other. He

15

regards the EPA as a minor force in the Japanese bureaucracy because of its

weakness in policy discussions. This weakness is partly attributable to the controls

exercised by other ministries. especially the MOF and the MITI, through a long­

standing ·system of transfer appointments of ministry officers in select EPA

positions.'

Some researchers similarly cornment that the complex Japanese aid

administrative system is an obstructio11 to the aid process. Bruce Koppel (1988)

particularly articulates the complaint of the· Philippine government concerning the

Japanese ODA to the Philippines: "Japan's complex bureaucratic decision-making

process, especially the rivalry between the Foreign and Finance Ministries, irnpede

Japan's immediate rapid response to the Philippine needs.? Robert M. Orr, Jr.

( 1990) further rernarks that the conflicts between and among Japan's Ministries have

allowed the private sector a greater role than it might have had under a more

centralized aid structure. 3

Recently, the Japanese government implemented some administrative

reforms concerning the ODA administration. First, on 1 October 1999, it established

the Japan Bank for International Cooperation (JBIC) by merging the Export-Import

Bank of Japan (JEXIM) and the Overseas Economic Cooperation Fund (OECF), an

implementing agency for yen loans.'1 Second, it decreased its ministries and

agencies from twenty-three to twelve on 1 January 2001. Among the four ODA

ministries and agency. the Economic Planning Agency (EPA) was acquired by the

Prirne Minister Office. In FY200·1, the Japanese government allocated an ODA

budget to the Prime Minister office as well as all the ministries and agencies. It

16

specifically allocated a 57.9% ODA budget to the Ministry of Finance and 45.9°/rJ to

the Ministry of Foreign Affairs. However, it is too early to judge the influence of

administrative reform on the effectivity of the ODA administration~·.

Among scholars, there seems to be no argument about who fills the gap

created by the inadequate capabilities of both the donor and the recipient sides. 5

Romeo A. Reyes ( 1993), a Filipino expert on ODA, mentions this third party when he

illustrates the role of the Japanese private sector in the Japanese grant aid:

"prospective Japanese suppliers give active assistance to prospective aid recipient

agencies in project identification, preparation and documentation. "7 Filologo Pante

Jr. ( 1988), another Filipino researcher, also recognizes the influence of the

Japanese private sector on grants supply allocation. He observes, "the problem with

Japanese grants is that the award for the supply of goods and services under grant

assistance projects does not seem to be always determined through competitive

bidding among qualified Japanese firms. 8 The present study will support Reyes' and

Pante's findings which were based on their own experiences of ODA in the

Philippines.

However, Yasutomo ( 1986) limits the power of the private sector with regard

to the yen loan maintaining that although "the Japanese business community does

influence aid policy, (but) its influence is restricted primarily to specific yen loan

projects. "!J

Yasutorno goes on to present the Japanese private sector's viewpoint.

Specifically, he writes that the business community is dissatisfied with the

government's ernphasis on basic human needs because there is little profit to be

17

made in projects of this kind. 10 This was especially true in the early 1980's, but the

Japanese private sector adjusted to the new trends despite their initial unwillingness

to do so. The case studies presented in this paper indeed show that the Japanese

private sector approved of these basic human needs projects.

The Japanese governrnent declared that its ODA carries the following basic

philosophy:

Many people are still suffering from famine and poverty in the developing countries. which constitute a great majority among countries in the world. From a humanitarian viewpoint, the international comrnunity can ill-afford to ignore this fact. 11

Some researchers have commented negatively about the actual

irnplementat:ion of this philosophy. According to Orr (1990), Japan's administrative

system, in addition to its personnel and training problems, makes spending the aid

budgets that Tokyo has allocated difficult. Larger aid budgets without corresponding

administrative reform continue to force Japanese planners to worry more about

spending these huge sums rather than about the quality of their assistance. i;!

Yasutomo ( 1986) also comments on the difficulty in project identification:

If aid is to expand rapidly and substantially. then the government must find larger numbers of projects. This is difficult given the reactive nature of aid policy and the current emphasis on effectiveness. and the need for recipient countries' absorptive capacity.1.1

In a similar vein, Reyes (1993) points out the positive ancl negative impacts

of the changes in the aid administration in the Philippines after 1986. On the

positive side. the reorganization ini~iated by President Aquino abolished redundant

3fJencies. For example, the Ministry of Human Settlements, which was involved with

almost all facets of governance. including the programming of the US government's

Economic Support Fund (ESF), ceased to exist. Nonetheless, many of its internal

18

organs and functions remained (such as the ESF Secretariat) but these were

transferred to other departments. On the negative side, it occasioned the

resignation or retirement of a great number of career officials and technical staff. 14

Analytical Design

A detailed analysis of the project cycle with respect to Japanese grant aid

utilization is made. Thus, efficiency, effectiveness, impact, relevance and

sustainability in the use of Japanese Grant Aid Project are measured through a

description and comparison of the two projects. The study does not resort to any

theoretical analysis because this is a case study so its main emphasis is just

description, particularly of the process of project making.

The case study of the school buildings is analyzed based on the Project

Cycle Management Method beginning from project identification to evaluation (See

Figure 1.1 ).

The National Economic and Development Authority (NEDA) explained the

risk of projects without adequate project cycle management in a practical manual for

agencies involved in development projects:

There is a greater risk of unwittingly misallocating resources to projects that would not yield sufficient returns to cover costs. or those that actually have cheaper alternatives of achieving the same ends, or premature projects that could actually

·generate a large stream of benefit if deferred etc. 15

Pre-i 111p le111e11 tn ti on Phase

According to the NEDA manual, project identification, project preparation (or

planning), appraisal and financing are categorized as pre-im·esrmenl phase. However,

this paper calls this same phase as the pre-i111p/e111e111ation phase. Project

19

identification 1s defined as the process of searching for promising investment

opportunities that are directed towards overcoming problems constraining the

achievement of desired development objectives, or towards exploiting an existing

development potential. 16 On the other hand, project preparation is the stage wherein

the overall feasibility of an identified project is established. The NEDA manual

mentions that at this stage, the project is now ready for appraisal and financing.

Once a project is found feasible in all respects, the next step calls for an

appraisal of the project both by those responsible for deciding on its implementation

and those from whom financing is sought. Figure 1.1 indicates appraisal and

financing in between planning and implementation.

I mplen1e11 lit tio11 Phase

Project implementation is perhaps the most important stage of the project

cycle. It covers a wide range of aspects and matters. Monitoring and supervision

start from the time detailed designs are carried on through the actual project

implementation. 17

Post-impleme11 ta ti on Phase

Post evaluation constitutes the last stage of the project cycle. Sometime

during the project's operation, post evaluation is undertaken to investigate the

project's performance and the direct and indirect impact of the development goals. 111

The following figure details the stages of the project management cycle.

20

Figure 1.1 Project Cycle Management

Other Projects

I Current Projl..'ct

(Feedback)

l.e:;so11s I.earned 1 Recor .1rnendation

ldentilication

E\·aluation

\

Post-implementation Phase

r····i;·;.~~i·;~·~i;·j~;~~~·;~·[~;i·i;·;;·;····;

j 1>l1ase '. ........................................................ :

Appraisal

j ~ Mo11itori11g .--------.:.

Implementation

Implement Pk1se

Nole: Produced this figure based on NEDA. Projecl Development fvlanu~il.

1985, p. 9. and Foundation for Advanced Studies on International

Development (Japan). MonitoriIH.!. and Evaluation Based on the PCM Method, 1998. p. ~.

)

This chapter presented a review of related literature as well as produced the

analytical design used in describing the administration of the grant aid making

process.

The next chapter presents a discussion of Japan's ODA .Program detailing

its history, its policies and its budget allocations.

21

Notes

1 Alan l:.Zix, Japan's Economic Aid, New York: St. Martin's Press. 1980.

:i Bruce Koppel, with the assistance of Hirohisa Kohama, Takahashi Akira. and Toru

Yanagihara. "Japan-U.S. ODA Cooperation: Perspectives from India, Indonesia and the

Philippines." Honolulu: East-West Center, Resource Systems Institution, 1988, p.17.

:1 Orr, p.60. 4 Japan Bank for International Cooperation, Birth of Japan Bank for International

Cooperation, 28 April 2001, (hhp://www.jbic.go.jp/english/release/others/1999/ nr99_01.html).

~' Ministry of Foreign Affairs, Syocyo betsu oda yosan: Jigyo yosan and ltsupan

kaikei (FY 200·1 Operation Budget and General Account Budget), 28 . April 2001,

(http://www.mofa.go.jpmofaj/gaiko/oda/siryo/shiryo_ 4/seifu13/shob_gy.htrnl

http://www.mofa.~JO.jp/mofaj/gaiko/oda/shiryo/shiryo _ 4/seitu 13/snob _ip.htrnl).

li Yasutorno, p.71.

and

' Rorneo A.Reyes, Absorptive Capacity for Foreign Aid: The Case of the

f:hilippines, Makciti: Philippine Institute for Development Studies, 1993, p.99. a Filologo Pante Jr., "Japan's Aid to ASEAN: Present Realities and Future

Ch9llenge," Makati: Philippine Institute for Development Studies. Working Paper Series No.88-08. June 1988, p.32.

1992.

9 Yasutorno, p.24.

II) Ibid. I p.7'1.

11 Japan's Official Development Assistance Charter. Cabinet Decision. June 30

i:~ Reyes, p.85.

i:i Yasutorno. p. 70. 1,, Reyes, p.85.

l'.i National Economic and Development Authority. Project Development Manual,

NEDA, 1984, p. ix.

ic; Ibid., p. 15. 11 Ibid .. p. 13 and p 275. 111 Ibid ... p. 14 and 303.

22

Chapter 3

AN OVERVIEW of JAPAN'S OFFICIAL DEVELOPMENT ASSISTANCE (ODA) PROGRAM

Introduction

Japanese Official Development Assistance (ODA) Projects to the

Philippines are not different from the status of Japanese ODA in other

developing countries. This chapter outlines the history of Japanese ODA

beginning with "baisho" or war reparation and also details the general

characteristics of Japanese ODA for a better understanding of the Japanese

ODA administration and process.

History

The transfer of official capital resources from Japan to the Philippines

was first initiated forty years ago as reparations for war damages known as

"baisho". Reparation programming was carried out from 1956 until 1976.

During this period, the Philippines was allocated $550 million, the largest

amount among countries that received Japanese reparation aid. Indonesia,

which was. the second largest recipient among nine countries, received only

$220 million, less than half the amount given to the Philippines. 1

The bulk of reparations came as products (spare parts and raw

materials) and services needed for development projects in agriculture,

fisheries, electric power, mineral resources, ·industry, transportation and

23

cornmunication, public works, education, and health and social welfare.

Japan was driven to extend economic assistance to the Philippines to

cornpensate for the damages and sufferings it had inflicted on the latter during

the war. Even when the Japanese occupation of the Philippines ended, the

Filipinos continued to harbor adverse feelings of resentment and bitterness

against the .Japanese. Before they agreed to renew economic and diplomatic

ties. with Japan, the Philippine government negotiated in all possible way to

maximize the compensation that Japan was willing to give. For all these

complex feelings, the reparations set the stage for the task Japan, as a source

of development assistance, was to assume in Philippine economy. 2

Procurements by reparation were tied to Japanese companies. At this

point, it was similar to grant aid condition. The following is an example of how

Japanese companies shifted to real business after reparations to the

Philippines had been made. The old red public phones made by Tamura

Electric Works Ltd., Tokyo were communication projects that were part of

Japanese reparations to the Philippines. Today, Tamura also provides the new

silver public phones in the Philippines. Tamura's business connection in the

Philippines that have grown through reparations has proven effective for

business. 3

Although reparations seem to differ from ODA, the Japanese

government has classified .. reparations as part of its historical ODA in

accordance to the current guidelines of the Organization for Economic

Development (OECD)'s Development Assistance Committee (DAC). Japanese

24

ODA. in its real sense, started in the Philippines toward the end of the 1960s

under the Marcos regime.

The Development of Japanese ODA

Japan was a relatively new country when it became a major donor. It

kept increasing its ODA budget especially in the late 1980s; thus, it has

maintained the position as the biggest ODA giver since 1989 with the notable

exception of 1991 (See Figure 2.1 ).

Japan, the second largest economy in the world today, gave an ODA of

$13,062 million (P577, 259 million) in 2000 comprising 0.27% of Its GNP. This

amount represented 24.6% of the total bilateral ODA by OECD, DAC members.

The second largest donor was the United States with $9,581 million (P423, 420

million) which was 0.10% of its GNP. In terms of GNP percentage, the United

Nations targeted 0.7% of GNP. An average of twenty-two DAC members were

able to reach 0.39% but Japan has never achieved its international target. Only

four countries, Denmark, Netherlands, Sweden and Norway achieved the UN

target in 2000. Japan was only the12th and the US, the world's largest economy,

remained in the worst position4 (See Figure 2.2).

The ODA expansion in the late 1980s was more than the Japanese

government's own efforts. Japan could not increase rapidly without an

exchange rate factor. Japanese yen appreciation after the Plaza agreement by

the major developed countries in September 1985· contributed to the Japanese

ODA's rapid growth. In 1981-1996, the average ·annual basis of ODA In terms

25

of US dollars is 8.5%. On the other hand, the Japanese yen basis is just 2. 7%.

This was very clear in 1986. The U.S. dollar basis of ODA disbursement

~jumped to 48.4% from 1985 but the Japanese yen basis increased only to 4.8%

(See Figure 2.2).

26

Figure 2. 1 ODA net disbursements by major donors

ll.S. S million

1<·1111(1 - . - - -1 \

---Jap:111

/·,/\ 'v. ---,

\

1-11111!1

I~ 111111

111.1111(1

·. -X-. hallLO:

- - - - c i..:ni1:111~

--•-1:.1--

-1.>.062

\ X- .-X-•-x./\

I 'J -- - x - \ ,-_ \

x - - -x. / .._ ...,_ / 'T - 'X ' I

X , _,,.,,.- ....... __ _,, \..v

I - . . r,,.. "-:x_ - · x / ..__::....x

/

.X ·x - - / "'"""-X:- .._ - ·:\JJ.\.I

', .-+-.l . .J5X

.i111111 x---x-.·-x..-::~x /---- /'5< L ~: __ .............. __ _..,./ ___.--·--·---.-·--·--·-·_............--·~. -x -1.221 l -~ _,,..,,..•--+--•

:; IJllll l·---· --+" ---·-- .. --·--· ti ---'-----~-~-~-~--~--~-~-~-~---'---'--~~-..__-~-~--'--~-~

X.llllll

(ttl(HI

I

xx XlJ l)IJ 'll l).j 9", ')(> 97 9X '>9 l)(J

.\01<· 1.,,·l11d111g I 1IL\ tu l·.;i~t.:m Eurup,· Sm11-. ... I ll·J ·1} l 1;\(. rv11111~1r~ ,,f For.:1g11 :\lbir~

Figure 2.2 Japanese ODA annual change and GNP share

O; 'u US Dalla· Basis %ctGNP

50

·Hl

JO

20

10

0

• 10

• ;•o

• :\U

·.m

./ -

J'-J!l! "' v.1 86

Seu ct! CJECD Ui\C. and M nstry of Fcro~J11 Attars

Bi'

0. 4

0. 3

0. 2

0 I

Japanese Yen Basis

() ()

')J l)l <)2 ')3 91 l}J

27

However, in 1996, the Japanese government decreased its ODA

disbursement as compared to the previous years not only on the basis of the

Japanese yen but also of the US dollar. This is first time that ODA was

decreased since 1985.

The Ministry of Foreign Affairs (MOFA) pointed out three factors for this

downtrend in 1996: the devaluation of Japanese yen; less requests frorn

International Financial Organizations to contribute funds; and the expansion of

payment for yen loan from recipients. 5

According to the Japanese Cabinet agreement on reform of financial

structure on 3 June 1997, the Japanese government should cut expenses lo

reduce government deficit up to FY 2003. Thus, the target ODA budget in FY

1998 was less than ten percent of that of the previous year. 6 The main reason

for the increase In ODA budget after 1997 was to help other countries in

surviving the financial crisis that rocked the Asian Region.

28

Figure 2.3 Public polls on Economic Cooperation in the future

1\s kss as possihk

Ill

Sto~p \ X x/.,,

.... - .. .._ - - - - ... x-x-x-x-x/x- -' - - ...., X ,,,.,x- S'.

.... - -x-/- -~x' X-X ,...,..-x-x-x-- Ni.1\ . - - - - ... - - -

'X,...,..- --x-X ~

ti I -- ----""---~

,,

, - ............ IX

l'>XI :;:·

At the same time, the Japanese seem to be changing their avowed

support for ODA. Previous annual public polls conducted by the Japanese

government usually showed high public support for Japanese economic

cooperation. But such public support went down to only 23.0% in 2000 from

41.4% in 1991. Conversely, those who thought that Japan should lessen its

ODA budget rose to 22.3% in 2000 from only 8.0% in the same year. Majority

of the respondents (73.6%) cited economic reasons why they think that Japan

should lesse·n or even altogether stop its-·ODA Program. They believed that the

governrnent should be more concerned with domestic issues rather than

international issues because of the country's decreasing economy. 7

29

ODA Distribution by Sector

The Ministry of Foreign Affairs lists basic education as the priority issue

and sector of Japan's ODA. The MOFA explained this issue as the access to

elementary education being hampered by a lack of funds, educational facilities,

teaching materials, and teachers. It also presented Japan's assistance in this

field which included the construction of school buildings and the provision of

equipment and materials. The MOFA, moreover, outlined the ODA Program's

achievements in basic education assistance:

In the five-year period beginning in 1993, Japan provided assistance for the construction of approximately 16,000 school buildings. In Jordan, for instance, ODA loans have been used in the construction of all primary and secondary school buildings. In Nepal, Japanese grant assistance l1as been used to provide materials needed for the construction of school buildings with entire communities participating in the actual construction work. Following this initiative, elementary school enrollment ratios in Nepal climbed from 64% in 1990 to 75% in 1994. 8

Japan's social infrastructure and services aid (e.g., education, public

health, water supply, and sanitation) have increased from 13.1 % in 1982/83 to

20.4% in 1992/93 (see Table 2.1 ). The allocation to the educational services

and investments also increased from 4.6% in 1982/83 to 6.0% in 1992/93.

However. the economic infrastructure and services aid (e.g., transportation,

communication, and energy) still accounted for the largest share of Japanese

ODA, increasing its share from 32. 7% in 1982/83 to 43.8% in 1992/93.

In terms of grant aid, the allocation to social infrastructure and service is

larger compared to the economic infrastructure and service. For instance, in

1991, the portion of grant aid for the social infrastructure and services was

31.8% while that of the economic infrastructute and services is 12.2%. In 1994,

30

the portion of grant aid for the social infrastructure and services went up to

36.3% while that economic infrastructure and services is 13.7%. 9

The Philippine data on allocation of social infrastructure and services

are not available. However, the Philippine government described the Japanese

grant aid program as the only source of grant that could be used directly for·

construction, equipment, health, training, and similar facilities in the social and

agriculture sectors. 10

Terms and Conditions of ODA

In general, Japan provides grant aid, excluding technical assistance, to

countries whose GNP per capita is less than $1,195. 11 The use of Japanese

consultants and companies is usually a precondition for grant aid. An example

of a grant aid was the Special Yen Loan Package (otherwise known as the

Obuchi Fund) which required 50% Japanese procurement. This tied loan

package was intended to help countries affected by the 1997 Asian financial

crisis as well as to stimulate the Japanese economy.

On the contrary, the non-project grant aid for structural adjustment

support, mainly for Least· Low Developing Countries (LLDC) in sub-Saharan

Africa, is completely free from preconditions. Japan makes use of

organizations, such as the Crown Agents (the aid implementation agency of the

United Kingdom's Overseas Development Administrative) and the United

Nations Development Programme (UNDP), to carry out the program. 12

An OECD report reviewing the Japanese ODA has mentioned the

31

"untying" of grant aid from conditions. Since it began untying its development

loans in 1978, Japan has made considerable progress. 1991 was the fourth

year in a row for which fully "untied" loans were extended. The share of untied

lending in bilateral loan commitments has been steadily increasing from 83% in

1989 to 90°/t) in 1991.

The following table shows the different sectors benefiting from

Japanese ODA.

32

0"001

in S" I

t'f 6'S

OT n: 1n:1

lf()')

n

('{)

lJ'()

co Cl 1·0

\,"()

r'f s·r z·x ~'ti

)\'(l

<)'\)

s () Ll. l'l

'YLI

~·r

<fl

() z (,()

rt

er S<1

'J'H

(P.Jlll JO'';(,

Ui/C:MI

. >Vff< (.);JO Jl!IO.f.

88

~t t1 .. Joh1 ·111:t11:r ~· 1 "N '='u;is "·'1 '·'}I '""11:.1.""1"-"·) 111:-111<1111."·'< 1 1\, 1 < 1 r u i .• '·"'".\

()'()()I Ott'f I 1roo I tflff,

9·;: Lt[ 9· 1 OtJ I

I'll

ir·· (,"{)

t'I)

Cl. I (. L

x·u

l"l

f(l

S I z·o <»I ff()

('()

( ·c } ' (.'tJ

~ .. O I

•nn

Pl

ti

sos I Z I IS Lr9'1

[%

116l'<i

C.tl

Lf

'11>1

LZ OIJZ

<1Z <iZS ff8 Iii'"!

fO~'t

L9

r-11 ozs·1 s· 1 S<1I

z·r t9S ;:·s I S t!l'i:

n:r u.n-

x·r . ot~i (i'f)

I fl

I 0

r I)

(. (.

0'9

nit

(l!llll

JO '}~1

1:£1/£:(1(1(

<JZ I

fl

ti

l~X

Nil:

~ox

•Jt-L'Z

llOIJ(llll

s 'S'i l

(J'O

r·z 1·0

:ro f«: n1

f"LL

n

t"()

()'()

('()

LO <fl

<dl

er <1'L

('(1

X'L I

s·s fl'~ I l)(l

LS CIJI

l'fr

x·;: t'()

I fl

I 0

IJ't'

I'\:

z·s f'~ I

(l?llll

.JO "fat

XX/LXlll

ot·c:: II ())\

HZ vis· 1

1119'L

XI I

X' ()

(11)

s~· 1

sx i:<J[

Xll )\(,';;

9rl' I

M'S

mw1 LS

x~:~

i:!J<J'J

~rn

IH

<:I"'

x ~~r

l)()(:

r1~

z.0::·1

1101((!111

s; ·s 11

·n1111.11><b.1 :>PJdu11nu1 '"' p.-..st:q ;in:11111s.' 11:111:1:·• '"' < l. l 1< 111: ;•10\

0'11111 ff~'f

1J Ol Llf

I 0

() t

l.' l

L"tX

n

()'(

l)'[l

t 01

W~l.

O LI

•) 1·

(. (.(.

X'ft

1 ·z

l"fl

c (.

~ \'

<) t

('fl

(1!101

.JO n,;.

fX/i:Xt1 l

[

ft!

z:r

II lll"f

I~

tr

Xrt

Olf LI(,

(·()\)

~91

LXL

•>S~.:' I

SL

~I

XL

1·r1

~·11 I

r•>t

lllll((llll

$ S'l l

(l!lll,I,

p."l)t!."IO(Jl!llJJ

s< >~ >N 111 1.mddns S.10llt1p JP '-'l>0."1 :l\l)l!l)Slll!lllpV

.>:'>111:1s1ss1: \.-..11.1ff1:illl:l

p11: potl.I

1111111:11111:;';10.11llF'<1

''lll:)SIS'-1: ,"ltllllll:.1;';0.1.i

-'1111:.10111: .ltl).).lS (1!111,J.

.ltl).l,1S!J!11 I.\'

111s111101.

<'illl'(lll!\(

llOl)Olllllld \.11•11\;l ('Ill: ."1('1?11

111>1111111 ('Ill: ~lll'Jlll:q ..... 111:.1.1.

llllll."11\.llSllO.)

S."llJl'lllllll ,'\ \IPl:ll\'.(

.. ~1111111:-iq11111:1 \J

llOl}.'lll.llSllll.' p111: ;;111111111 . \.11s11p1q

.... .1111111.1u;';v

.;,111p.l> 110! pu po.1,1

:unpn.11,1:1,1111 .'111111110.-...1 1.''IJI()

\;;1;..11: I

111 • .,111d111 • .., ,,.,p 1 • ..,,1~1

'lllll)l: .... 111111111110.·1

11nds111:.1_1,

";J.1! \.l.lS p111: .1.1111.rn.11.;1:.IJll! .l!'lltttltlY.(

S;'l:ll \,l;)S pt11: :1.1111."11.ll'l!JJlll p:l."IOS Dl(I()

..;;i;i1.\.1:i..; 'fi11111111:1tl p111: 111."lt11do1 • ..,, • .,< l 1111111:11,1111\ll)ll! ·''ll(llcl

S."llllllll:l"~tlld lltllll:p1dll,J

1111111:11111:.; p111: \11lii11' 1;.11: \\

'llJl:.11 I ')ll;'llll)S.1 \Ill (Hll: "·'·'I\ l."1.; p:t10l)l::i11p:·J

S.l.1!_\,l,l' (llll! ,\.lll).Hl.l)St:.1,111! Jl!!.lOS

JOpa5 J\q SlUaWl!WUJO::> \;f0Q IBJalBl!q JO uognq!JlS!O ~ '(; a1qe1

In terms of amount, slightly less than half of grant commitments have

been reported as untied in recent years. These figures include local cost

financing. Grant procurement is limited to Japanese firms but not to Japanese

goods and services. 13

Since the 1988 fiscal year, MOF A has allowed the use of foreign

consultants to supplement Japanese consultants, if Japanese consultants

agreed to the arrangement. MOFA cites the following reasons to explain this

move: "to strengthen aid implementation systems and to conduct development

studies more effectively and efficiently." In fiscal year 1991, the use of foreign

consultants, albeit with ceiling both on the number of team members and on the

number of man-months, was increased from 25% to 50%. 14

ODA Policy

No donor ever offers the ODA to the developing countries only as

charity. Basically, the role of the ODA in Japanese diplomacy is much more

than that of the United States. After World War 11, Japan has limited its military

presence in other countries. The Japanese government no longer uses military

power as a tool of foreign policy. In this context, ODA becomes the most

powerful tool of Japanese diplomacy. This is confirmed by an OECD DAC

report which stated that ODA has become a central priority for the entire foreign

policy of Japan. 15

At the same time, the Japanese government even the MOFA still calls

the ODA as "Keizai kyoryo" or Economic Cooperation. This is one of the

34

unclear areas of ODA policy. Why has Ja Jan allocated large amounts to its

ODA Program? Is this for economic or po itical reason? These were among

the most commonly asked questions in prev )US researches.

The Japanese government offers ODA for a number of reasons

concerning its foreign policy and its national interests. At different periods. the

Japanese government has recognized the d11ferent ways for which the ODA can

be utilized. Brooks and Orr ( 1985) outline four pliases of postwar Japanese

ODA policy. These are: 1) as war reparations from the mid-1950s to 1965: 2)

as tied aid designed to promote Japanese · ~xports, from the mid-1950s to the

early 1970s; 3) as aid in the 1970s designe I lo promote interdependence with

resource-rich aid recipients, with the aim o1 fostering resource diplomacy, and

4) as LDC aid with emphasis on basic h 1rnan needs or "sensitivity to the

humanitarian needs of countries of strategic 1rnportance" 1(i

When the particular ODA policy to th1~ Philippines is considered, phases

2-4 should be adjusted. The military presence of the United States in the

Philippines must be either in phases 2 or 3. Orr ( 1990) commented that the

Japanese ODA to the Philippines has a stra ·~gic importance both to Japan and

the United States for according to an offici<: 1 of the US embassy in Japan, US

Undersecretary of State for Political Affair~ Michael Armacost, made it clear

that the United States hoped Japan would speed up its aid disbursement to

Manila. 17

The Japanese ODA to the Philippint"S in the 1970s and 1980s could be

categorized as Phase 3 while Phase 4 started from the time the Philippines

35

rejected the US Military bases. lnada Junichi (1990), a Japanese scholar, gave

a significant hypothesis for Phase 4.

lnada evaluated the Japanese ODA to the Philippines before the

Philippine Senate's rejection of the U.S. Military Bases Treaty. He predicted

the different motivations and reactions of the ministries in Japan about the

Philippine's response to the U.S. Bases Treaty. For example, he wrote that the

MOFA might lose the motivation to allocate huge amounts of aid to the

Philippines because the US has not requested this from Japan since the

withdrawal of its bases in the Philippines.

lnada also described the Japanese ODA policy as a political

cooperation stating, "the Philippines will become politically and economically

unstable without the support of the United States; therefore, Japanese

companies and banks in the Philippines will suffer from this instability." This

explains the economic interest of the Japanese goal on their ODA policy. 18

Actually in the 1990s, Japan started to give ODA to other countries,

such as Eastern Europe, Cambodia and Mongolia. The Japanese

government's spokesperson articulated the increasing international contribution

or "kokusai koken" of Japan, an idea couched almost entirely in terms of

material contributions to the flow of aid, and new forms of assistance to meet

specific development needs. 19 Japan has also included an aid package during

the Gulf Crisis. This counted as financial support and not as ODA because of

Kuwait's relatively high GNP.

It is difficult to clarify the policy in Phase 4 with just a single reason; that

36

1s, either political reason or economic recison. The Japanese government

should give clear reasons for the decrease ir 1 ODA to the Philippines in order to

support new recipients with a limited budget

MOFA explains that the Japanese C JA to the Philippines is a result of,

among others, the close mutual relation , f the two nations, their historical

association, trade and investments, 20 g !OfJraphical closeness, and the

Philippines' geographical position that astride major sea lanes. 21 Today, the

Japanese government also considers the· recipients' position in the UN,

especially its support for Japan as a perm.ment member in the UN Security

Council. i:~ The ODA Charter was app1 oved by the Cabinet on 30 June

1992. According to the ODA Charter, Jape nese ODA is subject to four basic

principles (See Appendix A):

1) pursue environmental conservation and c ::velopment in tandem;

2) avoid the use of ODA for military purposE ;:

3) pay attention to recipient countries' pract1 :es in relation to military expenditures. production of mass destruc 1ion weapons and arms export; and

4) pay attention to progress in democratizal·· m human rights·. ancl the market-orientation of the economy.

The Japanese government is mak1 ·1g an effort to follow ODA policy

according to the Charter although this is r Jt clearly illustrated particularly in

relation to the military. DAC in OECD viev ~cl Charter as the most significant

policy measure taken with respect to foreig aid since Japan launched its first

me?iurn-terrn target for aid in 1978. 23

For Japanese ODA to the Philippine:., 1994 was significant turning point

37

regarding policy and amount. The Japane~ 1 ~ government dispatched teams to

conduct High Level Policy Dialogues on Ee· 1nomic and Technical Cooperation

with the Philippine government in 1987 an1 I in 1994. A significant change in

Japan's position regarding ODA could be se1:~n upon comparison of the minute.s

of both dialogues.

In June 1987, the Japanese deleg; tion announced that Japan would

expand, as much as possible, its economic 1nd technical assistance to support

the efforts of th.e newly installed Aquino gc vernrnent to rebuild the Philippine

economy. 24 In contrast, on 2 February 1994, the Japanese delegation

explained that the Fifth Five-Year Mediurn-·1 erm ODA Target (decided in June

1993), which set a new target for the total volume of ODA from 1993 to 1997,

had been expanded to about $70-75 billion 140-50% compared to the previous

target). However, the delegation also mer tioned that this did not mean that

Japan would automatically increase its ODA to individual recipient countries. 25

Reiichi Takahashi, economic directo of the Japanese Embassy noted:

While you have more competitors now, the size of the pie is not growing as much as it used to be. 26

These new demands on the JapanE ·;e ODA would influence Japanese

ODA allocation to the Philippines in 1994 a··· would be explained further in the

following section.

ODA Distribution by Region

The Japanese government has 11ven priority to Asia, especially

Southeast Asia in the distribution of 0[ A.. In 1985, ODA allocation to

38

Southeast Asia was $861 million represen1 ng 37.6% of its total ODA budget

-(See Figure 2.4). However, in 1996, allocation to Southeast Asia went down to

22.2%. This means that Japan expanded 1he coverage of countries for ODA

disbursements beside the Southeast Asian 11ations. In 1970, Japan ranked as

the largest donor in only six countries but ir1 1995, Japan became top donor in

55 countries. 27

Thus, the grant aid portion of South1 ast Asia became smaller than total

portion of ODA allocation. In 1996, for ' 1stance, Southeast Asian nations

received 16.8% of Japanese grant aid. Malaysia and Thailand were not

included because both countries were now< ver the per capita GNP ceiling.

The following charts show the regic.ns in the world that have received

Japanese bilateral ODA and the specific countries that have been major

recipients of Japanese grant aid for the peri1 ·d ·1986 -1996.

39

Figure 2.4 Japanese Bilateral ODA by Regional Distribution

Net Disbursements (U.S.$ million) I 00'~';, ·'-' ---.-.---..,..-,----..-.....---.....-.---..--..---.--.----.--.---,--~-~-----~~

n

so·~·u

I IX %5 •

J~ 1.~S 1.~'I 1.~, 1.n 1506 1.~9 I.~'

'~ 1~ u 1.~IH '~ ~ 5~ 8~ I ~ ~ -, 995

%6 I."' 115 "'.' ~ II 1_333 M fl . . 5-1:.1

36-1

7>1 721 .~ 'I 561 ri

1.807

2.163

522

770

501~~

40%

1.738 H 513

11 H 2 .• ,3,

2.287 11

2.710

2.258

2.-121

3 •. 321 3.153

1,660

861 3.361

3.921 2 . .379

2.440

I O'~u 1.416 2.263

2.223 1.858

0°11

19SO 85 90 91 92 93 94 95 96 97 98 99

Note: Southl'.';ist :\s1a' ·Indonesia. Singapore. Thailand. Philippines. Mahi~ s1a. l'vl~ an mar. Vietnam. Caml,odia. I ~10s.

Source: !\fo11stn or Foreig.11 Affairs.

40

OOther

0 Latin America

ID Africa

OMiddle East

0 Other Asia

0 Southeast Asia

Table 2.2 Major recipients of Japanese grant aid (FY 1986-1999)

FY I Sl 2nd

I 9~(' l~angladi:sh 13.0<15 Th~1iland

1987 l.3angladi:sh 12.886 Thailand

1988 Bangladesh 13.642 Philippines

I 1)8\J Bangladesh 15.879 l'hi lippines

1990 Bangladesh 17.529 Philippines

! t)l)l Philippi11cs 1-1.017 Indonesia

I ()l)2 Philippi11es 14,657 China

1993 Philippines 16.643 China

I l)l)-1 Cambodia 11.821 Philippines

19<)5 Philippi11cs I 0.323 Vietnam

ll)% Phi Ii ppi ncs 10.731 \'idnam

I l)l)7 Philippi11cs I 0.543 Indonesia

1998 lndo11esia 20.884 Vietnam

1999 Philippines 10.172 Cambodia

Note: Japanese Fiscal Year (April-March). Source: Min is try of Foreign Affairs.

3rd

12,068 Phi Ii ppi ncs

12.371 Philippines

12.753 Pakistan

1-1.178 Pakistan

14.3-12 Indonesia

9.687 Bangladesh

8.237 Bangladesh

9.823 Cambodia

lU-13 · E!:,')'IH

S.908 Egypt

8.035 Egypt

9.366 Laos

8,186 Cambodia

S.603 Laos

Japanese ODA to the Philippines

Exchange of Noll's Basis (.Japanese vcn million) •.

-1th 5th

10.005 Burma 9,725 Sri Lanka 9.-115

11.060 Bunn a 9.582 Sri Lanka 9.5'27

10.873 Thailand 9.326 Sri Lanka 8.872

l).550 Thailand 8.882 Sri L~mka 8.-tn

S.309 Pakista11 7.556 Thailand ().(l(,6

8.2-18 Pakistan 7.288 Zambia 6.IJT2

S.O·B Indonesia 7.673 Pakistan 6.SSS

8.-127 Egypt 7.712 Indonesia 7.603

8.-1-ll) China 7,847 Nepal 7.5-19

7.025 Pakistan 6,807 Indonesia 6.719

7 .315 Cambodia 7.178 Bosnia 7.1-12

8.828 Vietnam 7.297 China 6.8%

7.605 China 7.605 Palestina 7,301

7.285 China 7.285 Palest ina 6.650

In 1969, Japan provided a $30 million loan to the Philippines to finance

the construction of a national trunk road now called the Maharlika highway.

This represented the first Japanese ODA to the Philippines. What soon

followed were annual yen loan packages to finance various infrastructure

projects. In recognition of Japan's established role, albeit principally through

reparations, of providing concessional financing for developmental purposes to

the Philippines, it became a member of the Consultative Group for the

Philippines in 1971. 28

41

Japanese grant aid to the Philippines begun in 1970 principally as food

assistance. Food assistance was a major project up to the mid-1970s.

Japanese grant aid for education started in 1975 to assist in procuring

equipment for anthropology in the amount of 7 million yen. This was followed

by the project on construction of educational facilities. The first of these

projects was the Philippine Center for Economic Development (PCED) at the

University of the Philippines, which amounted to 550 million yen in 1976.

Since the Japanese grant aid involved big amounts, it became like a

special fund for Japan's political power. Japanese grant aid like the US ESF

now required the approval of the Philippine President for its allocation. 29

For a time, the Philippines kept its priority position for Japanese grant

aid. Since 1986, Japanese grant aid to the Philippines ranked first five times. In

fact, from 1986 to 1996, the Philippines had always been among the top three

countries in terms of Japanese ODA allocation (see Table 2.2).

The amount of the Japanese grant aid to the Philippines had increased

constantly until 1993. The pattern of change in grant aid amounts appeared to

be an incremental model of aid giving. 30 In ~ 993, it was 16,642 million yen

almost two times the amount allocated in 1983. However, in 1994, it decreased

by 30.6% from that of the previous year (See Figure 2.5).

This big decrease was attributed to the Japanese escalating support for

relatively new recipients such as Vietnam and Cambodia within a limited

budget. Nonetheless, the number of projects did not drastically decrease as

compared to the drop in aid amount. This was because of the capacity of the

42

administrations especially the Japanese government to show incremental

decision-making. In relation to the sectoral amount distribution of Japanese

grant aid projects to the Philippines, the education/manpower sector got a

share of 63 projects in f968-1997 ranking first among the different priority

sectors. Second was the agriculture/forestry sector which was allocated fifty-

five projects in the same period (See Table 2.3).

Figure 2.5 Japanese grant aid to the Philippines, 1970-1999

million yen

18.000

16:000

14.000

12.000

10.000 10.005 8.356 8.294

8.000 8.184

6.840 6.000 .025

4.820 4.000

2.000

FY 1980 81 82 83 84 85 86 Annual

change 9.5 25.0. 13.5 22.2 -0.7 ·1.3 22.3 Number of

Pro1ects 5

Note: Based on the Japanese Fiscal Year Sourc·e: Ministry of Foreign Affairs.

87

10.5

16.642

14.178 14.332 14.657

4.0·,7

12.754

11.057 11.544

88 89 90 91 92 93 94 95

15.3 11.2 1.1 ·2.2 46 13.5 -30.6 -10.6

12 11 11

43

96 97 98 99

4.0 ·1.8 -43.9 72.1

Table 2.3 Sectoral distribution of Japanese grant aid to the Philippines, 1968-97

Numhcr of projects

Set: tor 1%8-75 197(>-XO 1981-95 19X6-90 1991-95 19%-1>7 1%8-97

Road & Bridges () () 3 5 2 II ·1·ra11sportatio11 [) () () () 2 I :111.:rg~ ii ·:k:1.:trie1 t~ () () () () () () ()

("01111111111i1:a11011s () () () () I 0 I W:ller\\orhs 2 I 12 2 19 .:\g.rinil1urdF11rc-s1 n (J x 9 13 19 6 55 l11dustni!'\'li11111g () () 7 (} () 10

I ·:dui:atio11:i'vla11p11\\ L'r 6 15 17 16 x 63 ivkdii:inL· & I kalth () 6 18

Social Sen ices () .l () () 9

Food /\id -l (} () () ()

1 >isash.:r Rdil.'!" () () 2 7 x 0 17

Other (J () () 5 2 ::: Total 6 20 -W 60 69 ., ~ _ _,

218

.\'0111-.·e fvlOF.:\. \\'ag.a Ku11i no Sciltt Kaihatsu Enjo. Vol. 2 .. 1997. 1998

However, the education/manpower sector 1s usually behind the

agriculture/forestry sector in terms of allocation of Japanese grant aid to the

Philippines except in 1983 and then again in 1988 when the Project for

Constructing Primary and Secondary School Buildings was started (See Table

2.4) ..

44

Table 2.4 Major Japanese Grant Aid Sectors:

Amo1111t a11d Sltnre a/Total Japanese Grant Aid to tlze PlzilippiHes

million yen (budgctary basis)

A gricul ture/F ores try Education/l'vlanpower

amount % amount ~/u

1981 2.600 43 2 2Y>5 Jll 8

1982 2.100 30.7 1,570 23.0

1983 .3.270 .391 4,066 48.7

1984 2.500 30. l 40 0.5

1985 4.561 55.7 91 11

1986 2.900 29.0 484 4.8

1987 .3.140 28.4 497 -l.5

1·988 4.420 .34.7 4.707 36.9

1989 7.190 50.7 338 24

1990 5,687 .39 7 4.046 28.2

1991 4.366 .31.1 3,391 24.2

1992 6.437 43.9 2.882 19.7

1993 4.049 2-U 3,820 23.0

1994 5,054 4.38 2,951 25.6

1995 3,498 33.9 i 1"""' -·-·'-' 21.6

1996 4.212 39.3 3,445 32.1

1997 2,271 21.5 1.827 17.3

1981-97 68.255 36.2 38,783 20.6

Source: tvlOF.·\. \Vaga Kuni no Seifu Kaihatsu Enjo Vol. 2 . 1997. 1998

Within the education/manpower sector, school-building projects chosen

as case studies for this research topped the priority list. For instance, the

Japanese budget for Constructing Primary and Secondary School Buildings in

1993 was 2,920 million yen that was almost 3,000 million yen, which is the

maximum limit of Japanese grant aid. On the other hand, the allocation for

most non-construction projects in the education/manpower sector such as the

equipment supply projects remained very small, only amounting to less than 50

million yen. School building projects could therefore be described as the

flagship project of Japanese grant-assisted education/manpower projects.

45

This chapter presented the history and the development of Japan's

Overseas Development Assistance (ODA) f rogram focusing on its activities in

the Philippines. Moreover. ODA policies an I aid allocations were discussed to

identify the priority areas/sectors of the prog· arn.

The following chapter further ex~·iains the Japanese ODA to the

Philippines with ernphasis on its specific pro1·~cts' administration and process

46

Table 2. 5 Japanese grant aid project to the Phi I ippines related Education/Manpo~er, FY1986-1999

million yen (budgetary basis) Rank Project Amount Year I Constructing Primary and Secondary School Buildings V 2.920 1993 2 Educational Facilities Improvement Program II 2.857 1994 3 Constructing Primary and Secondary School Buildings IV 2.795 1992 4 Constructing Primary and Secondary School Buildings III 2.745 1991 5 Constructing Primary and Secondary School Buildings II 2.659 1990 6 Constructing Primary and Secondary School Buildings I 2.576 1988 7 Wotn~'n Vocational Training Center 2.115 1996 8 lnstillltc orScience and Mathematics Education 2.046 1988 9 Educational Facilities Improvement Program Ill 1.-BO 1995 10 Educational Facilities Improvement Program Y-1 1.236 1998 11 Educational Facilities Improvement Program IY-l 1.233 1996 12 Educational Facilities Improvement Program IV-II 1.228 1997 13 Educational Facilities Improvement Program V-11 l.204 1999 14 Educational Facilities Improvement Program I 859 1993 15 F::ngint:cring Equipment for college T29 1990 16 \Vomcn Vocational Training Institute 708 1995 17 Secondary Education Instructional Equipment 598 1991 18 Secondary Education Instructional Equipment 567 1990 19 Women Vocational Training Center 505 1997 20 Reeducation program for youth 392 1986 21 Human Development Center program 366 1987 22 Women Vocational Training Institute 244 1989 23 Equipment for Committee on Spotts 50 1990 23 Equipment for college 50 1996 23 Equipment for National Museum 50 1997 26 Equipment for National Museum 49 1989 26 i\tlusical Instrument for College of Music, UP 49 1992 26 Equipment for DECS 49 1995 29 Light/ Audio Visual equipment for college 48 1986 29 Science Equipment for science high school 48 1991 29 Printing Machine for college 48 1994 32 Aw.lil) Visual/Light equipment for Ninoy Aquino park 47 1987 32 Equipment for Committee on National Park Development 47 1988 32 Equipment for CCP 47 1996 32 Audio Visual equipment to Mindanao State.University 47 1998 36 Emirnnmental education equipment for UP Cebu 46 1994 36 Audio Visual equipment for college 46 1995 38 1::quipmcnt for theater 45 1987 38 rvtusical Instrument for National Symphonic Orchestra 45 1989 40 Equipment for National Science Education Ceriter 44 1997 41 Sports and ·111eater Equipment 41 1990 41 Audio Visual/Science Equipment for college 41 1993 43 Audio Visual equipment l(>r DECS 39. 1987 44 t:quiprncnt !°or National Libnuy 38 1988 44 l'v1usical Instrument l(>r college 38 1992 46 Audio Visual t.:quipment ll)r DF A 34 1986

Tot:tl 33,098 Source: IVlOl·"A

47

Notes

1 .Akira Takahashi, "From reparations to Katagawari: Japan's ODA to the Philippines." In Bruce M. Koppel and Robert M. Orr (eds.), Japan's Foreign Aid: Power and Policy in a New Era, Boulder: Westview Press, 1993, p.65.

2 Maria Eleanor Victoria Guanino, "Japanese Bilateral ODA to the Philippines and Its Administrative Performance in the Sphere of Project Loan Financing," M.A. Thesis, International University of Japan, 1988, p.29.

3 Atsuji Ohara, "Kieru Akadenwa (Abolishing Red Public Phone)," Asahi shimbun, September 17 1991.

4 Development Assistance Committee (DAC), OECD,"Net Official Development Assistance in 2000,"April 29 2001. <http:www.oecd.org/dac/>. The Philippine Peso equivalents were based on the average dollar-peso rate at end of 2000: $1 =P49.9980. Bangko Sentral ng Pilipinas, "PESOS PER US DOLLAR RATE", April 27 2001 <http://www.bsp.gov. ph/Statistics/sefi/P$MonAnn. htm>

5 Gaimusho, Waqakuni ... , Vol. 1, 1997, p.9.

6 Gaimusho, Wagakuni ... , Vol. 1, 1997, p.11-12.

7 General Affairs Agency," Keizaikyoryoku wo susumenai riyu (Reason not to support)," April 27 2001. <http://www8.cao.go.jp/survey/gaikou_01/images/zu16.gif>

8 Ministry of Foreign Affairs, "Priority Issues and Sectors : Japan's ODA Annual Report 1999," (http://www.mofa.go.jp/policy/oda/summary/1999/ref2_02.html) April 27 2001.

9 Gaimusho, 1992, p.97. and Gaimusho, 1995, p.106. (commitment basis)

10 Reyes, p.9_9.

11 Kokusai kyouryoku suishin kyoukai (APIC) Supervised by Gaimusyo, Keizai kyuryoku no tebiki, Tokyo: APIC, 1994, p.31. This was the guideline during the Japanese fiscal year of 1992. GNP statistics was taken from the 1990 World Bank record.

12 MOFA, Japan's ODA: Annual Report 1993, p.115.

13 OECD, Aid Review 1992/93: Report by the Secretariat and Questions for the Review of Japan, Paris: OECD, 1993, p.18.

14 MOFA, Japan's ODA 1992, p.103.

15 OECD, p.7.

16 William Brooks and Robert Orr, Jr. "Japan's Foreign Economic Assistance," Asian Survey 25 (March 1985): pp.322-340. Quoted in David M. Potter, Japan's Foreign Aid to Thailand and the Philippines, New York: St. Martin's Press, 1996, p.17.

17 Orr, p.120.

48

18 lnada Junichi, "ODA to nihon gaiko: tai firipin enjo nitsuite no jirei kenkyu," in Takeshi lgarashi ed., Nihon no ODA to Kokusai Chitsujo, Tokyo: Nihon kokusai mondai kenkyusyo, 1990, p.69-70.

19 Alan Rix, Japan's Foreign Aid Challenge: Policy Reform and Aid Leadership, New York: Routledge, 1993, p.163.

20 Gaimusho, Wagakuni ... , Vol. 2, 1994, p.115.

'.!I Interview with a MOFA Asia Bureau official, Feburary 26, 1994.

22 Interview with a MOFA official, September 25, 1997.

23 DAC, OECD, Japan: development co-:operation review series No. 13, 1996, Paris: OECD, p. 7.

24 "Minutes of the Discussion of the RP-Japan High Level Policy Dialogue on Economic and Technical Cooperation," June 1987.

25 "Minutes of the Discussion of the RP-Japan High Level Policy Dialogue on Economic and Technical Cooperation, "February 25 1994.

26 Ma. Luz Baguioro, "Japan hints of reduced aids to RP," The Manila Times, June 1, 1995, p.13.

27 Ibid .. p.26.

28 Takahashi, p.67.

~Reyes, 1985, p. 34. 30 David M. Potter, Japan's Foreign Aid to Thailand and the Philippines, New

York: St. Martin's Press, 1996, p.32.

49

Introduction

Chapter 4

JAPANESE ODA ADMINISTRATION IN THE PHILIPPINES

Both the process and the administration of the ODA are complex

requiring consultation$ and negotiations between governments at a number of

levels and stages from project identification to evaluation/termiriation. Thus,

each government has a planning agency and different implementing agencies.

The ODA process in both governments seems more complicated than the

budgetary coordination with each government. Even some personnel in

administration, especially in implementing agencies or line agencies have

difficulty in handling Japanese ODA projects.

In the subsequent sections, this study describes the Japanese ODA

process, particularly the Japanese grant aid. Then, it outlines grant aid

administration mainly in relation to the school building projects in the

Philippines.

Process Undergone by Japan's Grant Projects 1 In the Philippines

The project-making process of grant aid is divided into five stages: 1)

project identification/finding; 2) project formulation/planning; 3) appraisal; 4)

implementation; and 5) evaluation/termination. The distinction among these

stages is sometimes blurred because the stages overlap (See Figure 3.1 ).

50

The grant aid process begins with ;)roject identification, followed by

project formulation then continues up to appraisal. Normally. the period

between project identification and project a >praisal takes at least two to three

years.

A. Pro/t'd Proposal Scree11i11g al tile Nf:[)A

Philippine government agencies and 111eir regional offices are 1asked to

develop projects, prioritize and submit ~11·oject proposals to the National

Economic Development Agency (NEDI ) for screenmg and eventual

forwarding of the project proposals to the !apanese government through the

Japanese Embassy. The evaluation of pri 1rities using the criteria set by the

Philippine government is the main respons bility of the NEDA. 2 For instance,

the NEDA specifies the requirement by sti, ·ulating that the cost of Japanese

grant aid project ranges from 500 million ) 1:;n to 3 billion yen.; According to

the information shared by a former NEDA dficial, submitted project proposals

to the NEDA are passed on by the NEDA F' Jblic Investment Staff (PIS) to the

agency's concerned sector staff for comn ents/evaluation. For instance, a

school building project or a health facilitiE ; project is referred to the NEDA

Social Development Staff (SOS) while a rur ti infrastructure project is reviewed

either by the NEDA Agriculture Staff or the -~EDA Infrastructure Staff.

The NEDA Regional Office (NRO) cc ncerned also previously reviewed

region-specific project proposals but sine. last year. the concerned sector

staff at the NEDA Central Office took ovE r such responsibility because the

. 51

staff at the NEDA Central Office took over such responsibility because the

NROs tended to be more the proponents than independent reviewers.

Under the 1991 Local Government Code (LGC), a local government unit

(LGU) can negotiate and secure financial grants from foreign assistance

agencies without the necessity of securing clearance or approval from any

department, agency or office of the national government. 4 However, the

Japanese government still receives LGU proposals through the national

government principally through the NEDA which is the lead agency in

evaluating local proposals seeking foreign assistance by way of grants or

loans. 5

The following chart shows the process undergone by Japanese grant

aid-assisted projects in the Philippines.

52

igure 3.1 Flow Chart of Japanese Grant Aid Process

I

Screening in

NEDA

Submission to Japanese government

through embassy

Screening of

Proposals

Basic Design Survey

Consultation with Embassy, JICA

Office

53

Evaluation

Implementation

Exchange of Notes

B. J>rvfecl Furm11/ario11/Se/eclio11 t/Jrouglr tire /n11a1tese £111lwssy

After the proposals have been reviewed, the NEDA Secretariat

recommends proposals to the NEDA Boa1 d. Once approved by the NEDA

Board, the NEDA Secretariat submits these, through the Department of

Foreign Affairs (DFA), to the Japanese Embassy. Actually, before official

receipt of project proposals, the Economic :3ection of the Japanese Embassy

in the Philippines consults and negotiates with the Philippine administration,

the NEDA in particular.

After the Japanese Embassy receivc~s the proposal, it is sent to the

MOFA l\.ci:ui kyo111yok11 kyolw (Economic Cnoperation Bureau). At this stage,

the initiative of project formulation is tranderred from the Philippines to the

Japanese government. This means that 1he Philippine government cannot

enter the project formulation process done by the Japanese government. In

the early 1990s, the Japanese government received only about ten proposals

from the Philippine government annually. Seven to twelve projects were

approved during a ten-year period (198-/-1997).(i Presently_, the present

tendency of the Japanese government to select about five projects from about

twenty project proposals from the Philippim~ government. 7

C. Proit·ci's Basic Dcsigll Study Cu11d11cred uy Utl' JICA

When the MOFA has finally selectE d a proposal, it directs JICA to

conduct a basic design study. At the samE~ time .. the MOFA consults with the

54

MOF and other related Japanese ministries such as the MITI, the Ministries of

Transportation, Agriculture, Forestry and I :isheries. J ICA is also allowed to

comment on the proposals. The MOFA 1hen prepares to conduct a basic

study survey of the following year's budge!: and selects projects with a two­

year advance budget by the end of August For instance, 31 August 2001 is

the start of the basic study survey that \Nill be completed in FY2002 and

implementation of the project will commence in FY2003.

Deciding on a request means the aclual appraisal of the Project. The

Japanese government attempts to formulcde the project draft based on the

primary request of the recipient country through the basic design study. A

J ICA official explains that the basic des1 1;Jn study examines the project's

position vis-a-vis the requesting country's national development plan, and

ensures that the attainable objectives exp·:~cted results are clear and that a

competent management system is ready to carry out the project effectively. x It

also presents the cost evaluation and draft design of the proposed project.

JICA also sometimes requests a Preli111inary Study, ji.:en clwso, to collect

primary data and information before the conduct of the Full-Scale Study or

ho11kuk 11 crousu. When the basic design study has been completed, J !CA

sometimes sends its draft report and a h::am to the recipient countries to

explain the draft and collect additional dat ~ for the final draft. In fiscal year

1992. the Japanese government conduded 106 basic design studies,

including Preliminary Studies and draft report explanations out of 619

55

proposed grant aid projects. l) In fiscal year 1993, 45 Preliminary Studies were

planned. 75 Full-Scale Studies were scheduled, and 44 draft report

explanation teams were organized (budget basis). 10

The JICA Procurement Department calls for the bidding of consultants

for basic design studies through public announcements. It has increased its

announcements from once a month to twice a month since April 1993. 11 It

takes at least thirty days from public announcement to bidding. 12 JICA selects

at least three, normally five to six consultants for bid participants and

coordinates the schedule with the MOFA and related ministries. In the

selection, JICA considers not only the offered price but also the technical skill

of the consultant. 13

A full-Scale Study is composed of three stages, namely: 1) preparation

which is done in Japan, 2) visit to recipient countries, and 3) analysis, which is

also done in Japan. 14

For example, the Japanese Survey team visits project sites and meets

with Philippine agencies, such as the NEDA and the DECS. After the survey,

the consultant submits the basic survey reporl to JICA, the MOFA, and other

related ministries in Japan as well as to the Philippine government. The basic

survey report serves as the draft of the project; but the consultants are the

ones who finalize the project plan.

Normally, the pledge of aid to specific projects is manifested in the

record of discussion between the Philippine government and the Mission

56

dispatched annually during the middle of the year by the Japanese

government. Presentation of the projects. however, is made to the Mission in

the following year. 15

D. Fi11"/ f>rojccr Prepnratio11 a11d Apprnis11l l1_11 111<? /apa11esl' Gover11111enl

Official appraisal of the project is the next step. After the basic study

survey, a proposal that has an approximate budget of 300 million yen or more

is scanned at the Investment Coordination Committee (ICC). 1'' Currently, the

ICC requires all project proposals to include a unit cost analysis as well as unit

cost cornparisons with similar ongoing projects or recently completed ones.

This cost effectiveness study is required of all project proponents.

As commented earlier, the distinction between project preparation and

project appraisal is vague. Project preparation in the Japanese ODA Program

is actually the basic design survey. The .. llCA official whom this researcher

interviewed explained the overlapping: "Tl1eoretically, we select and decide

grant aid projects even after basic design ~ urvey. However, to drop out from

appraisal list is, in fact, a very rare case because of the cost of consulting fee

of the basic design survey. 17 The MOFA Economic Cooperation Bureau

negotiates with the MOF Budget Bureau and explains to related ministries and

agencies about the final draft. After the approval of the national budget,.

including the total ODA allocation by the Japanese Diet, the Cabinet decides

on each project formally. The MOFA then finalizes the content of Exchange of

57

content of Exchange of Notes (E/N) between Japan and the recipient country.

A formal commitment through the E/N, follows not later than March (end of the

Japanese fiscal year) of the following year. Normally, the Japanese

Ambassador to the Philippines and the Secretary of the DFA do this in the

Philippines.

E. F o nn n l Project I mp lerneHtn tio11 after Exclu111ge of Notes bet7ueeu govenuuell ts

The Philippine government starts the implementation of the project as

soon as the contract has been signed. Since the Japanese budget is on a

one-year basis, the preliminary aspects of the project such as the signing of

E/N and contracts, project implementation, and principal payment must be

completed within a single fiscal year.

Normally, within a month after E/N, the Philippine government is obliged

to make a banking arrangement (B/A) with an authorized foreign exchange

bank of Japan, usually the Mitsubishi Tokyo Financial Group (formerly Tokyo­

Mitsubishi Bank) to open a special yen account for the purpose of receiving

the fund granted by the Japanese government. 18 After the Japanese

government has made the money transfer, the bank immediately makes the

payment to the Japanese company under the Authorization to Pay (A/P)

agreement. On the part of the Japanese company, there is no risk that it will

not receive the money while the Philippine government cannot touch the

money at this stage.

58

The J ICA then examines the contract, studies the specifications for

facilities and equipment, undertakes contracts with banks with which the

recipient government would be making banking arrangements, and studies the

provision of these arrangements.

The implementing agency in the recipient country undertakes a contract

with an accredited Japanese company through competitive bidding in Japan,

except for consultant.s. The JICA advises the implementing agency in the

recipient country to hire the same contractor/consultants, who conducted the

basic study survey. The interviewed JICA Manila Official stated that the

Philippine government normally accepts JICA's advice except hiring some

consultants, who did not work effectively during the basic design survey. 19

High-ranking officials of implementing agencies must visit Japan for

bidding but the Japanese government does not give financial assistance for

these visits that are quite costly. The same JICA official confessed that this

indeed is a gray zone since it is not clear whether it should be the Philippine

government that pays or it should be the private company. 20 The recipient

government has to choose the Japanese consultant who will conduct the basic

design survey. 21 The Japanese consultant then presents a detailed design

(DID) and prepares the tender document.

The only required counterpart contribution from the recipient agency in ·

the Philippines during the construction stage is land and facilities such as

electricity, water supply and drainage. Local fund is necessary only after

59

construction is completed for the project's operation and normal maintenance.

The Department of Budget Management (DBM) releases local funds to the

recipient agency.

F. Post-e11aluntio11 of Project

Generally there is no particular mechanism for the review and post­

evaluation of all Japanese funded projects although the Japanese government

does realize the significance of evaluation. Since the project periods vary, it is

difficult to compare the total number of ODA projects with the number of

evaluations for these projects. For instance, in fiscal year 1992, the Japanese

government evaluated four projects in the Philippines. 22 The NEDA states that

the period covering the presentation of a specific project as a candidate for aid

up to the evaluation of the aid and project takes several years. 23

If a follow-up cooperation is necessary for the operation and

maintenance of facilities or equipment procured under a previous aid, JICA

sends a team and takes measures, including the provision of spare parts and

the dispatch of engineers for repairs needed to increase the sustainable

effectiveness of projects. 24

60

Japanese Administration

A. Mi11istry of Foreig11 Affnirs (MOFA)

A major actor in Japanese ODA administration is the Ministry of Foreign

Affairs (MOFA). it is responsible for foreign policy in Japanese government.

Within the MOFA, the Economic Cooperation Bureau has primary

responsibility for ODA (See Figure 3.2).

Policy on yen loans is jointly formulated by the MOFA. the Ministry of

Finance (MOF), the Ministry of International Trade and Industry (MIT!), and

the Economic Planning Agency (EPA). Because there is no ministry that sits

above these four government branches on aid administration, each conducts

aid consultations using its own bureaucratic perspective.

The process of Grant Aid is more centralized than the process of yen

loans. It is handled by the MOFA and the MOF, which gives the MOFA

greater influence in project formulation and appraisal. The MOF mainly shows

its power in the process of formulating the total ODA budget. Implementation

of the grant aid projects is handled by JICA and the relevant line agencies in

the Japanese government, further decentralizing the process of administering

the projects. 25

During the project formulation stage, the Bureau Grant Aid Division has

the primary responsibility of negotiating with recipients, the Japanese

embassy and other Japanese ministries and agencies. When the MOFA

negotiates with the MOF to secure the budget, high-ranking officers like

61

bureau chiefs take charge of the negotiations. The MOFA handles almost 90%

of all budgets for grant aid although 18 ministries and agencies also have

connections with grant aid. Even after implementing an administrative reform

on January 2001, ten ministries and agencies are still handling the ODA

budget.

The MOFA is active in improving the ODA condition such as grant

element and untied loans, among Japanese ministries. The ministry often

used the DAC and US requests to support its own conditionalities against

those of the other ministries. Contrarily, the MOF prefers to isolate Japan's

ODA administration from DAC and US policies. 26

The Economic Section of the Japanese embassy based in recipient

countries is the gateway of ODA negotiation with the recipient. It is a

miniature Japanese bureaucracy because it is composed of officials from the

different ministries. This Economic Section in the Japanese Embassy has a

staff of ten officers including a Section Chief from the MOFA, two MOFA

officers, and officers assigned from the ministries of labor, transportation,

construction, agriculture, health and welfare, MITI, and finance. 27 Generally,

the officers from the Ministry of Agriculture, Fishery and Forest take charge of

the JICA Manila office.

62

13. /a 1,1111 I 11 tern a tio1111 I Coopera Uo11 Age11cy (fl CA)

J ICA. created in 197 4. is mainly responsible for providing technical

assistance for approved ODA projects. However, its role under the grant aid

is limited. In spite of its limitations, JICA is known as a symbol of Japanese

grants aid since it is visible among Japanese ministries and agencies because

it is an implementing agency (See Figure 3.3).

It has about 850 staff members, excluding about 250 staff members in

the emigration department, in Japan, and in 52 overseas offices. 2x

JICA is managed and supervised mainly by the MOFA. In fact, JICA's

president comes from the MOFA. For instance, former JICA president

Yanagiya Kensaku was the former Vice-Minister of MOFA. As JICA president,

he described. himself as [My role is only] a "cogwheel." 2<> This self-description

also aptly describes the stance of JICA in ODA administration.

Some JI CA staff members agree on the criteria set by the agency for its

staff such as neutrality and obedience. Orr ( 1990) however points out the

limited promotion opportunity within JICA as one of its most serious problems.

Of the 18 ·departments in the Agency, JI CA's original staff manages only

seven of the departments. Bureaucrats from six other ministries retain control

of these remaining eleven departments. Orr insists that such a set-up has a

detrimental effect on the morale of the career staff members.

For instance, 23 members joined the High Level Mission on Economic

and Technical Cooperation to the Philippines in February 1994. Delegates

63

from JICA, OECF and the Export-Import Bank of Japan were given the status

of adviser. However, a JICA veteran official was not allowed to comment

during the meetings unlike the relatively young career officers from other

ministries who expressed their opinions freely.

The following figures show the organizational structure of the Economic

Cooperation Bureau of the Japanese Ministry of Foreign Affairs (MOFA) and

the role of JICA in the grant aid process.

64

Figure 3.2 Economic Cooperation Bureau of the Ministry of Foreign Affairs

Director-General

[. Dcput~ l )ircctor-( icncral Deputy Director-General

NGOs Assistance Division

Aid Policy Division

Overseas Disaster Assistance Division

Rescan.:h and Programming Division

Evaluation Division

iv!ullilateral Co-operation Division

Technical Co-operation Division

De\ dopmcnt Co-operation Division

Loan Aid Division

Grant Aid Division

Suurc:e: OECD, Developml!nt Co-operation Review Series: Japan, I 996 , p.26.

65

Figure 3.3 Role of JICA in Grant Aid Process

Request Hi--I

Basic Design Study

• Prdiminary

Survey

• Full-scale

Survey

Specifications Survey

Japanese Cabinet

Approval

Source: JICA, For the Future of the Earth. 1994, p.24.

Exchange of

Notes

Procurement &

Construction

- Implementation

- Administrative by JICA

Follow-up Service

At present, however, JICA's role in the grant aid process is gradually

increasing. It has established, starting in 1986, aid study groups for specific

countries and aid sector. JICA has already organized an aid study group for

the Philippines in 1986 and 1993. 30

J ICA has also carried out project formulation as well as project

confirmations. For example, in fiscal year 1992, J ICA sent fact-finding

missions to developing countries for project formulation surveys on 30 projects

and for project confirmation surveys on 80 projects, compared with the 28 and

15 respectively that it conducted in fiscal year 1988.

The JICA office in Manila is located at the Pacific Star Building, Makati.

The Japan Bank for International Cooperation (former OECF and the export-

import Bank of Japan), the Japan External Trade Organization (JETRO), the

Nihonkoei, the biggest Japanese consultant· company, and some major

66

Japanese companies are also housed in the same building. A JICA staff

member explained that its Filipino staff could not adequately handle the

information coming in because most of the documents from Tokyo are in

Japanese. 31

As of March 1 1994, besides the JICA staff, there were 50 JICA experts,

and contract workers, and 64 Japanese Overseas Volunteers (JOCVs) in the

Philippines. JICA Philippines has the second biggest number of staff

members, next to JICA Indonesia. At this same time, there were only eight

Japanese staff members at the Japanese Embassy Economic section and five

at the OECF office. The J ICA office has the biggest Japanese staff in the

Philippines.

During the fiscal year 1993, JICA conducted 17 development surveys;

eight basic design surveys, 14-project type technical cooperation, and three

supply the equipment projects in the Philippines. J ICA also sent 372 trainees

and 149 youths from the Philippines to Japan for various technical and

educational tours. Moreover, the JICA Manila office has supervised 21 grant

aid projects in the Philippines.

Lack of Japanese Personnel to handle ODA matters

The lack of staff is one of the serious issues in Japanese ODA

administration. 32 In fact, Japan is ranked among the most thinly staffed

OECD DAC Members. 33 In 1997, the Japanese ODA volume per staff of ODA

67

administration is $4.84 million, which is three times that of the Canadian

government. A Japanese ODA official handles the most number of projects as

compared to officials of other donor countries (See Figure 3.4 ).

This under- staffing situation affects the Japanese capacity to manage

the grant aid projects effectively. The OECD commented that Japan's

intention to continue moving to expand its social development and

participatory programs are even more staff intensive. Further strengthening of

the government's personnel is required to bring the Japanese staff number to

prevailing international standards for foreign programs. 34 For example, eleven

out of fifty-two JI CA overseas offices in fiscal year 1994 have less than two or

only one staff member managing the JI CA Headquarters. 35

In addition to lack of staff, there is the problem of short-term assignment

where an employee is assigned to a department or section for only two to four

years. More notably, no single employee supervises the total project process.

Such a situation prevents the training of the staff to become experts on a

particular phase or contour of the whole project process.

The following figure shows the number of personnel in charge of ODA

administration.

68

Figure 3.4 ODA Volume per Staff of Aid Administration

llSS million (1

4

()

.l:tpan

1.54 2.80

us Frnncc

Nole: OD:\ V nlumdNumbcr of Stall, Based on 1997 tlaw.

1.71

Gcnmmy

Source: !vlOFI\. Waga Kuni no Scifu Kaiha1su Enju, 1998, p 99.

3.07

l3ri1ish

Relationship among Japanese Organizations.

l.57

Can<ala

2.38

llaly

The Japanese embassy usually organizes a monthly meeting with the

JICA, the OECF, and the Export-import Bank of Japan and JETRO. The first

secretary of the Economics section of the Embassy receives reports from the

JICA office regarding technical assistance. Structurally, the first secretary

does not need to report grant aid projects, particularly at the project

formulation level, to JICA. The office Instead receives information and

instruction through the J ICA headquarters in Tokyo. 36

JI CA does not have regular meetings with other donor agencies for

future projects; however, the Japanese embassy is a member of all these

meetings together with the implementing agencies in the Philippines. The

OECF also conducts regular meetings with implementing agencies to follow

up yen loan projects. JICA only attends meetings with these agencies when

the embassy organizes them.

69

Philippine Administration

A. Nalio11al Eco110111ic Develop111ent A11tltority (NEDA)

NEDA was created in 1972 as the government's central planning body,

exercising the functions then separately vested in the National Economic

Council (NEC), the Presidential Economic Staff (PES) and other economic

bodies.

After the February 1986 revolution, President Aquino issued E.O. No. 5

on 12 March 1986, directing a government-wide reorganization to promote

economy, efficiency and effectiveness in the delivery of public services. On

22 July 1987, EO No. 230 was issued reorganizing the NEDA. Its

implementation was completed on 16 February 1988 when the NEDA

commenced operations under its reorganized set up.

The NEDA consists of its Board and its Secretariat. The powers and

functions of the NEDA reside in the NEDA Board. It is the country's highest

social and economic development planning and policy coordinating body (See

Figure 3.5).

The NEDA Board is composed of the President of the Philippines as

chairperson, the Director-General of the NEDA Secretariat as vice­

chairperson, and the Secretaries of Finance, Trade and Industry, Agriculture,

Environment and Natural Resources, Public Works and Highways, Budget and

Management and Interior and local Government.

70

Pursuant to Sec. 4 of EO 230, the President is empowered to modify the

membership of the Board whenever deemed necessary, thus the following

merr1bers have been added. The Secretaries of Health, Foreign Affairs, and

Agrarian Reform (per Memorandum Order [MO] No. 164, dated 21 March

1988): the Secretary of Science and Technology (per MO No. 235, dated 19

May 1989): the Governor of the Centr_al Bank and the Chairperson of the

Coordinating Council on the Philippine Assistance Program (per MO No. 242,

dated 14 June 1989); and the Secretary of Transportation and

Communications (per MO No. 321, dated 26 September 1990).

Assisting the NEDA Board in the performance of its functions are the

following five cabinet-level interagency committees:

1) Development Budget Coordination Committee (DBCC);

2) Infrastructure Committee (INFRACOM);

3) Investment Coordination Committee (ICC);

4) Social Development Committee (SOC); and

5) Committee on Tariff and Related Matters (CTRM).

The Investment Coordination Committee (ICC) is in charge of major

projects including foreign-assisted projects It is also tasked to evaluate the

monetary, fiscal and balance of payments implication of major national

projects and to recommend to the President of the Philippines the timetable

for the implementation of these projects. The ICC further checks projects

costing more than 300 million pesos. It is composed of the ICC Cabinet

71

Committee and ICC Technical Board which deliberate on the project's

economic, financial, social, technical and institutional aspects. ' 7 All projects

that eventually go to the ICC have first to undergo the rigorous evaluation

process at the concerned NEDA sector as discussed earlier in this chapter.

The NEDA Secretariat serves as the research and technical support arm

of the NEDA Board. It also provides technical staff support and assistance to

the NEDA board, including the conduct of studies and formation of policy

measures and other recommendations on the various aspects of development

planning and policy formulation; and coordmation, evaluation and monitoring

of plan irnplernentation.

The Secretariat is headed by a Director-General who carries the rank

and title of Secretary of Socio-economic Planning and Development and

exercises general superv1s1on and control over the technical . and

administrative personnel of the Secretariat. The NEDA secretariat is

composed of the following:

1) National Planning and Policy Staff;

2) Agriculture Staff;

3) Trade, industry and Utilities Staff;

4) Social Development Staff; and

5) Pubic Investment Staff. >x

72

Figure 3.5 Structure of NEDA Board and NEDA Secretariat

. . .

• •M r;nmmluL)n

rhl.IJpp(nc Nattonal Volunt.c:cr ScNlce Coon1.l.n.a Un,(

~-PbJ.11 pp<.n.c tns U l u le '°'"~pmcnt Stud.lea • ·

PopulaUoo Coca.m.l.ulon

NEDA BOARD

CX:v-clopma"lt Budtct. CoocdtnaUon Committee

• 1rtfnaatnJcturc Commtltcc

• Investment CoordtnaUon Commlltcc

• Social Dvelopmcnl Commlllcc

: Commlllcc on Tariff a.nd Reio.led Mallen __ :..._ _____ _,.:,. ______ _

DIRECTOR-GENERAL

• l'<.ATIONAL DKV!:LOPldJ.UfI'

OF'FICE

REGIONAL D E:VE:LOPMEITT

OITICE

CENTRAL SUPl'ORT OFFICE

irm~ Il~IID£ ~~ccm~ir.£ml!£ir

«» m. «?t £.Illl 22£ ir 11 «» Il£.IL ~ mn un:mu:nni; PER?:.O. 2:10

DmECTOR-GENERAL

R.ltOIOHAL D~J"MJ!:HT

omcz

lol.Aft/l.IJU<rxT O'lrC>flMATlOIC

en n:ws GT ATf'

Source: Dcn!lopmcnt (nformarion Staff NEDA, National Economic & Development Authority, 1!>02

B. />11/1/ic /m1csil11e11t Staff

In 1988, during the NEDA's organization, the External Assistance Staff

(EAS) was abolished and replaced by the Public Investment Staff (PIS). The

EAS had a small unit for research financing its projects through ODA. After

the reorganization, about ten employees were added to the PIS research

Division.

As of March 1993, the PIS had 42 employees including a director and an

assistant director. Out ·of the 42 employees. 32 were considered technical

personn_el while 10 were non-technical personnel (e.g. secretary). The PIS is

composed of four divisions; 1) Program Support Division, 2) Program

Formulation Division, 3) Program Financin~J I Division (Bilateral ODA such as

USAID. Japan) and 4) Program Financing II Division (Multilateral ODA such as

United Nation Development Programme (UNDP), World Bank and Asian

Development Bank (ADB).

The average age of the technical staff (excluding the director and

assistant director) is between 24-26 years old. About 60% of the staff is

female. The technical staff members generally· have backgrounds on

economics or business and come from the University of the Philippines,

Ateneo De Manila University, De La Salle University and University of Santo

Thomas.

The PIS has the following functions: ("1) Provides technical staff support

in the coordination and review of the flow of official development assistance to

74

the country to ensure consistency with national development priorities; (2)

Provides technical staff support in the review of proposed programs and

projects on a global basis; (3) Provides technical staff support in the

preparation of a rolling medium-term public investment program, where the

sources and uses of funds for priority programs and projects are indicated;

(4)Develops and recommends the criteria and system for evaluating projects;

(5)Monitors the status of proposed and pipeline projects for possible funding

assistance by foreign donor institutions; and (6)serves as the bureau for ICC.

C. Department of Educatio11, Culture aHd Sports (DECS)

For the Japanese-financed school building construction projects, the

responsible agency is the Department of Education, Culture and Sports

(DECS. The Office of the Planning Service of the DECS prepares project

proposal including facilities and project region and school selection

coordinating with the Bureau of Elementary Education, the Bureau of

Secondary Education and the Regional Office.

During the project formulation stage, the Educational Development

Projects Implementing Task Force (EDPITAF) within the DECS becomes part

of the project making process conducting meetings with the JICA-dispatched

Basic Design Study Team. The Japanese team mainly negotiates with the

DECS through EDPITAF after the project's appraisal stage.

75

The EDPITAF was established in the 1970s during the Marcos

administration primarily to facilitate the implementation of foreign-assisted

educational projects. Presently, the EDPITAF consists of two divisions: the

Technical Service Division and the Administrative & Financial Service Division

and has 59 staff members. 39

The EDPITAF has established a Management Unit/Office for each

foreign-assisted project such as the Management Office for JICA Projects that

handles the school building construction project. The EDPITAF and the J ICA

co-supervise the implementation of the Project with the cooperation of the

DECS regional office and concerned Japanese consultants and contractors.

The JICA Management Unit of the DECS is composed of 10 staff

members including a project manager, a supervising project manager and an

engineer40 (See Figure 3.6).

According to nine volumes of basic design study report on TRSBP and

EFIB, the Japanese study team recorded about 70 officials of DECS as

interviewees. It was clear that some officials in significant positions such as

two undersecretaries, the Education Planning Analyst for OPS, the Executive

Director of EDPITAF and the Chief of EDPITAF were Interested in working for

Japanese school building projects.

The following chart shows the DECS' administrative structure for the

Japanese-assisted school building projects.

76

Figure 3.6 Organization of DECS related to Japanese School building Projects

ll111~.HI nJ

l:t ... ·nh:ut.11'

I du, al1tt11

I { 'ui11t..ulu111

I h,;,1,,.·l,,tHn11t

l>n 1~1u11

I

ll111~:au ul

, ........ oiHl;1ry Ethu.:atum

I ( ::tll\..1tlt11ll

u ... ~ t:I· •1111u1t

Ut\ISIOfl

I Ri:s:t..·:u,.!

" Stallsltt.

D1,·1s101.

I

I

I Starr

l.h. .. \'d111u11c-11I

D1v1s.1011

Pl;uuuo,;.:

&

Piok!1:uu

Dn1stou

IJ1!iu.:ull'la11~

I I' IUjeCI

[)1,.•\'(.'i<)plllt.:111

,'\:,

E\·alu:.11011

01\·1s1on

s~""~ _ _J

1'1t\$1Ctl

l»hllith.').

hlm:atlo11

I)"-·' dupm ... ·111 l'ro.1c..:l

lmph.·uh.:nlmg Tash.

Fon:~

I I I

\d111u~l1all\ l'

r ... ·d111u:1I

sl'l\11..l'

D1ns1tlll

I I

JIC\

t;1111

h11:11n1.1I

S\..'t\Hl'

Dl\t:>Wll

Source· Basic Design Study Repon ::ir: The Project for U1e Educational Fac1ht1es lm1·rnve111E:nt Program (Pl1ase IV)

This chapter traced the structural organization of Japanese ODA

administration in the Philippines. Specifically, It presented the pivotal roles of

the JICA and the NEDA in evaluating project proposals submitted to the

Japanese ODA Program. The latter part of the chapter introduced the

administrative process undergone by the Japanese aid-assisted school

building projects of the DECS, which are presented as case studies in this

paper.

The following chapter gives a more thorough discussion of these two

DECS school building projects.

77

Notes

1 NEDA, ODA Handbook: Guidelines on the Availment of Official Development Assistance, Pasig: NEDA, 1992, p. 11-18 and pp. 111-59-61. Somucho gyousei kansatsukyoku, Seifu kaihatsu enjo no genjo to kadai, 1988, pp. 26-27., p.36. and p.47. Kokusai kyouryoku suishin kyoukai, Keizai kyouryoku sankae no tebiki, 1994, pp. 25-37.

2 Florian A. Alburo, "Aid and the Growth Process: Its Role and Institutional Setting in the Philippines." In Dante Canlas and Hideyoshi Sakai ed., Studies in Economic Policy and Institutions: The Philippines, Tokyo: Institute of Development Economies, 1990, p.80.

3 Ibid. p.111-59.

4 Section 17 and 23, The 1991 Local government Code. 5 Gaimusyo keizai kyouryoku kyoku cyousakeikakuka, "Tai firipin keizai kyouryoku

taisyo houshin," February 15 1994, p.13. 6 A number of approved projects were counted as grant aid projects since these

projects all had more than 100 million yen budgets. 7 Ibid. 8 JICA, Kokusai kyoryoku jigyoudan nenpo 1993, Tokyo: JICA, 1993, p.56.

9 JICA, Annua! Report 1993, 1993, p.56. and Gaimosyo, Vol.1, 1993, p.296.

1° Kokusai kaihatsu journal, 439, September 1993, p. 72.

11 Ibid. p.88.

12 Kokusai kaihatsu journal, 431, January 1993, p.67.

13 Ibid. 439, September 1993, p.23.

1-1 Ibid. 438, August 1993, p.72.

15 Romeo A. Reyes, Absorptive Capacity for Foreign Aid: The Case of the Philippines, Manila: the Philippine Institute for Development Studies and the International Center for Economic Growth, 1993 p.98.

16 Personal Interview with a JICA Official, May 8 2001. 17 Personal Interview with a JICA Official, May 8 2001. 18 OECF kaihatsu enjyo kenkyuukai, Keizai kyouryoku yougo jiten, Tokyo: Toyo

keizai shinposya, 1993, p.46.

19 Personal Interview with a JICA Official, May 8 2001. 20 Ibid.

78

21 Kokusai kaihatsu journal, 431, January 1993, p.67.

22 Gaimusyo keizai kyoryokukyoku, Keizai kyoryoku hyoka hokokusyo, June 1993.

23 NEDA, 1992, p.60.

2~ JICA, Annual Report 1993, Tokyo: JICA, 1993, p.56-57.

25 Potter, p.11.

26 Ibid. p.3.

27 OECD, Development Co-operation Review Series: Japan, 1996, OECD, p.59. 28 JICA, "For the Future of the Earth," 1994, p.4.

29 Asahi shimbun evening edition, January 7 1993.

30 MOFA, Japan's ODA 1993, p.73.

31 Personal Interview with JICA staff members. 32 The staff members under the Japanese ODA administration either is work at the

MOFA, the JICA, the OECF or other Japanese ministries.

33 OECD, 1996, p.28.

34 Ibid. 35 Gaimusyo, Vol. 1., 1994, p.176.

36 Personal Interview with JICA Manila staffs January 31 1994.

37 NEDA, 1992, p.6.

38 Chapter 3, Administrative Code. 39 JICA and Mohri Architect & Associates Inc., Basic Design Study Report on The

Project for the Educational Facilities Improvement Program (Phase IV) Japanese Version, 1996, p.79.

-W Ibid.

79

Chapter 5

Case study: CONSTRUCTION OF TWO JAPANESE GRANT AID-ASSISTED

SCHOOL BUILDING PROJECTS

Introduction

This chapter presents a case study of the actual project-making

process of two school buildings constructed in the Philippines financed

through Japanese grant aid.

These two school building projects are ranked first and second

biggest in terms of amount of Japanese grant aid allocated to the

Philippines. Each project was composed of five Phases receiving nearly

the maximum of Japanese grant aid provided for each phase. The two

projects took more than ten years to complete since the first project's

identification in 1987 and the termination of the second project's last phase

this year (2001 ). Thus, this case study approach is advantageous in

observing the routine process of Japanese grant aid project to the

Philippines.

First, the study provides the overview of two different projects to answer

the need for educational facilities in the Philippines. This chapter first presents

the background of the project including its construction cost. Afterwards, it

explores the project-making process and project cycle of the school building

projects.

80

Overview of the Two School Building Projects

The first school building project was identified in 1987 but construction

only started in 1989. This project was called the Typhoon-Resistant School

Building Project (TRSBP and was primarily designed to construct primary and

secondary school buildings using a prefabricated construction method in

which essential construction materials like panels and frames were procured

in Japan. 1 The project, which was completed in 1994, provided 1,391

classrooms for 360 primary and secondary high schools in the Philippines.

Project cost was 3504.4 million pesos, 76% of which came from Japanese

grant aid. 2

The second project, named the Educational Facilities Improvement

Program (EFIP), aimed to build school buildings using reinforced concrete that

was/is readily available in the Philippines. The EFIP put up more than 1,735

classrooms for 423 primary and secondary schools in the Philippines between

1993 and 1999. Project cost was estimated at 3,976.1 million pesos, 93.9% of

which came from Japanese grant aid~ (See Table 4.1 ).

As could be gathered from the above data, the main contribution of the

two projects to the Philippines are the numerous school buildings and

classrooms built for the primary and secondary schools nationwide. These

projects, therefore, helped to alleviate the shortage of classrooms in the·

Philippines.

The two projects were obviously different from each other in terms of

construction method. The TRSBP utilized prefabricated structures while the

81

EFIP made use of reinforced concrete structures. The difference in

construction method was reflected in their construction costs wherein the

TRSBP incurred a higher amount than the EFIP. Contrarily, the EFIP supplied

more classrooms than did the TRSBP despite the fact that the EFIP's total

budget was 7.4% lower than the TRSBP's.

The following table compares the features of the two school building

projects.

Table 4.1 Comparison of the TRSBP and the EFIP

Project Name

Sector Performance Problem

Requirements of Project

Construction Method

Implement Duration

Number of School Number of Classroom(a) Project Budget Japanese grant aid Philippine budget Total

Typhoon-Resistant School Bui !ding Project (TRSBP)

Chronic shortage or school facilities especially due to the 1987 typhoon damages.

1. Typhoon-resisting capabilities 2. Durability 3. Short Construction Period

Prefabricated structure

1989 - 1994

360 (Secondary: 219) I ,391 (Secondary: 858)

mill ion pesos 3,553.3

822.5 4,3 55.S

Note: (a} Included science laboratory

Education Faci I ities Improvement Project (EFIP)

Still lack of education facilities due to financial difficulties, further natural disasters and the high annual population increase.

1. Economy 2. Uniform construction 3. Durability 4. Short Construction Period

Reinforced concrete structure

1 993 - 2001

423 (Secondary: 211) 1. 7 3 7 (Secondary: 915)

million pesos 3,81 7 .80

215.5 4,033.30

Source <~(/1usic /)utu: Basic Design Study Report on the Project for Constructing Primary

an~! Secondary Schools. Basic Design Study Re12on on the Project for the I;..~h1catio11(!.LFa<.:ilitiesJ.mprovement Program (Phase I & V)and DECS-EDPlT AF

82

Background of Projects :~

A. Classroolll Shortage

The 1987 Philippine Constitution provides that the Philippine

government should give priority to the educational budget. Consequently, the

government's budget allocation to the DECS is increased almost every year.

The Education budget had always been more than 10% of the total national

budget si nee 1989. Estioko ( 1994) however commented that being given the

highest budgetary priority did not automatically mean being given sufficient

funds 4 (See Table 4.2).

Table 4.2 National Budget Allocation to DECS

Fiscal Year

1988

1989

1990

1991

1992

1993

199.+

1995

1996

National Budget

in million peso

162.250.0

227.421.0

225. 780.0

298.950.0

308.370.0

309,437.0

322,695.0

387.398.0

394.860.0

DECS

in million peso

15,100.3

23,578.8

28, 177.8

32,950.0

34,530.0

33.840. I

37,956.9

44,911.9

53,880.0

Share of Pt!rcent increase

l"ational Budget

% %

9.3 22.5

10.4 56.1

12.5 19.5

11.0 16.9

11.2 4.8

10.9

11.8 12.2

11.6 18.3

13.6 20.0

Soun.:e· 8as!_c 0.~?J,g!} Study Report on the Project for the Educational Facilities Improvement Program Phase I-IV

Recognizing the importance of educating the citizenry, the DECS

formulated the policy designed to facilitate and encourage children to attend

school in order to acquire the necessary knowledge and skills they will need

as adults. One such policy was offering secondary education for free

83

beginning school year 1988-89. For more effective implementation and

monitoring of its policies, all local public primary and secondary schools have

been placed under the administration of DECS. ·;,i::··

In 1994, the required age for Grade I pupils was revised from seven

years old to six and half years old, and in 1995, this age requirement was

further lowered to six. years old.

Consequently, this lowered age requirement, which translated into

easier access to basic education, increased student population in the primary

and secondary levels (See Table 4.3). The DECS also prioritized the hiring of

teachers in order to meet the considerable increase in the student population.

However, today's public school teachers are still heavily burdened with big-

sized classrooms in spite of the DECS' effort to hire more teachers. For

instance, in 1994, the number of pupils per teacher was 36.8 in the primary

school and 51.8 in the secondary school.

According to a study by World Bank researchers, Tan and Mingat

(1 ~92), the pupil-teacher ratio in the Philippines was the highest among five

ASEAN countries. It is notable that the Philippines was the only country that

exceeded 30 in student ratio 5 (See Table 4.4).

84

Table 4.3 Number of Students in public primary and secondary schools

Primary Percent Secondary increase

1991 10,595,713 4,173,568

1992 10,678,919 0.8 4,422,673

1993 10,731,453 0.5 4,590,037

1994 10,903,529 1.6 4,762,877

1995a 11,469,201 5.2 4/872/860

a. DECS estimate·''. Source : Basic Design Study ReQort on EFIP, Phase IV, pp. 5-6.

Ta~le 4.4 Pupil-teacher ratio in selected ASEAN countries

Indonesia

Malaysia

Philippines

Singapore

Thailand

Primary

1980

32.4

27.3

30.4

30.8

24.7

1985

25.3

24.l

30.9

27.l

19.3

Secondary

1980

14.9

22.8

34.1

19.4

Source: Education in Asia: a comparative study of cost and financing, the World Bank

Percent increase

6.0

3.8

3.8

2.3

1985

15.3

22.1

32.3

20.4

19.6

Aware of the key role of teachers in making education more accessible

as well as in delivering quality education, the DECS hired more public school

teachers and at the same time increased the latter's compensation. Thus, in

1994, the number of teachers in public primary and secondary school was

394,329 registering an increase of 9.9% from 1988. Teacher's salary in 1994

was also raised becoming more than double that in 1988 (See Table 4.5). This

prioritizing of teachers' welfare was also reflected in the DECS budget for 1996 in

which 95% was allocated to salary while only two percent was earmarked for the

construction of educational facilities. It is therefore ironic that in its effort to

improve the situation of teachers, the DECS, in the process, fails to address the

85

urgent need of the studentry for more school buildings and classrooms

Table 4.5 Number of Teachers and Salary Scale of Teachers

i:;esos

Primary Percent Second. a Percent Total Percent M:>nthly Percent

increase increase increase Salary b increase

1988 289,719 1.7 69,226 0.0 358,945 1.4 1,949 10.0

1989 289,761 0.0 75,950 9.7 365,711 1.9 3,540 81.6

1990 289,958 0.1 77,652 2.2 367,610 0.5 3,540 0.0

1991 294,485 1.6 80,645 3.9 375,130 2.0 3,540 0.0 ..... : 1992 294,539 0.0 81,627 1.2 376,166 0.3 3,540 0.0

1993 296,150 0.5 84,438 3.4 380,588 1.2 4,240 19.8

1994 302,551 2.2 91,778 8.7 394,329 3.6 5,240 23.6

a. Secondary

b. Monthly salary for pubic school teacher (grade one)

Source: ~!l..StlJQy Reooa on EFIP Phase IV pp. 8-9.

It has been quite obvious that the DECS could not achieve the target

goal of its School Building Program (SBP). Thus, a part of the President's

Social Fund (PSF), with some foreign assistance, has been allocated for the

construction of additional school buildings and classrooms. Even the Parent-

Teachers Association (PTA) in each area and business groups like the

Federation of Filipino-Chinese Chamber of Commerce and Industry (FFCCCI)

have attempted to help construct classrooms in order to address the acute

lack of classrooms in Philippine schools.

In CY 1994, The DEC's School Building Program (SBP) had a total

appropriation of P4.16 billion. Out of the 10, 118 elementary school

classrooms targeted to be constructed for 1994, only 6,999 classrooms or

69.13% were completed as of December 31, 1994. Likewise, only 1 ,006

classrooms or 56.13% of the 1, 790 classrooms targeted for secondary schools

86

were constructed. ci Despite the additional classrooms, there were still 12,000

out of the 43,000 barangays in the Philippines that did not have schools or

enough classrooms. 7 In SY 1996, the shortage of classrooms was 25,000 for

elementary schools and 17,000 for secondary schools.

Due to classroom shortages, many schools have initiated a two-shift

system wherein students were divided into morning classes and afternoon

classes. Some schools that have severe classroom shortages even had to

resort to a three-shift system.

B. Co11structio11 Cost

The main objective of the two Japanese sponsored projects was to

construct school buildings for primary and secondary schools in the

Philippines. The first project, Typhoon-Resistant School Building Project was

proposed to remedy the chronic shortage of classroom facilities in the primary

and secondary levels by constructing typhoon resistant prefabricated school

buildings. Moreover, the school buildings were also designed to become

evacuation centers during typhoon months since the sturdy materials used

are supposedly typhoon-resistant.

Similarly, the second project, the Educational Facilities Improvement

Program (EFIP) was designed to improve access to quality education through

the provision of quality education facilities in public elementary and secondary

schools. 8

The expected benefits from the two projects were practically the same.

87

In the TRSBP, these expected impact and benefits were stated as:

1) Academic Instruction As planned. the teachers are utilizing the school buildings for academic subjects. thereby enhancing the quality of academic instruction and upgrading the learning attitudes and habits of the school children.

2) Social Contribution Other than formal institution during off-school hours. the school buildings are also utilized by the school and community residents for school assemblies and programs. barangay activities and training venues which further promotes the social values of the school children, teachers and area residents.

3) Evacuation Center During period of natural calamities, the school buildings could be used as places of refuge.

The TRSBP's objectives were echoed in the EFIP:

The project will benefit elementary and secondary students through the construction of classrooms. The classrooms can be utilized for formal and informal instructions and for livelihood training. The same will accommodate a greater nu~mber of pupils in a classroom atmosphere conductive to better learning. ..

However, one obvious difference between the two projects is that the

TRSBP put up school buildings that were intended to be utilized as evacuation

centers by constructing typhoon resistant prefabricated buildings. The Basic

Design Study Report on the TRSBP supported the plan to construct typhoon-

resistant prefabricated school buildings by emphasizing the damage

periodically wrought by typhoons as one factor in the shortage of educational

facilities. 0 Such consideration made the TRSBP quite different from the El FP

in terms of construction method, construction design and construction cost.

JICA's Basic Design Study Report on EFIP presented a much clearer

distinction between the two projects according to construction cost. According

to this report, the construction cost of the TRSBP was so far the highest

among school building projects of the Philippine Government as well as those

88

that were ODA-financed. The construction cost of TRSBP was 87,600 yen per

square meter, equivalent to approximately 25,028 pesos per square meter (1

peso = 3.5 yen). The cheapest school building project constructed by the

President's Social Fund was 14,300 yen (4,085 pesos) per square meter.

Compared to TRSBP's construction cost per square meter, EFlP's was 16% to

20% lower while the DECS standard's was 25% and ADB was from 51-59%

lower (See Table 4.6).

Table 4.6 Comparative Construction Cost of Different School building Projects

Projel:t

TRSBP (Japan)

EFIP (Japan)

USA!D ESF Projct

DECS standard

ADB Project

President's Social Fund

Construction period

3 months

4 months

7-12 months

5 months

-+months

4 months

Construction cost yen per square meter

87.600

44,800-51,300

36,700

22,300

14,000-17 ,500

14,300

Su11ru: · Basic Design Studv Repo11 on Educational Facilities Improvement Program (Phase IV)

Generally, educational infrastructures are less controversial than

economic infrastructures such as a power plant, a port, and an airport since

education is an important investment in human capital. Nonetheless.even if

there are basically no controversies on school building projects, the actual

project-making process still go through a series of discussions and

documentation between donor and recipient countries (See Table 4. 7).

89

Table 4.7 Overview of Formal Process of TRSBP and EFIP PROJECT CYCLE PRINCIPAL EVENTS PRINCIPAL PRINCIPAL RESULTS

STAGES PARTICIPANTS l. Project Identification Review of national and sectoral Philippine Side Definition of projects

priorities, plans and programs, DECS (P)"'· I NEDA goals, objectives, identification of project. Japanese Side principal issues, general

Embassy, JICA scope and time frame. 2. Project Prepa ration Feasibility studies to establish Philippine Side Feasibility studies

project viability. DECS examination, the Japanese Side economic, financial MOFA, JICA (P), aspects of the project. Consultant

3. Appraisal Comprehensive project review Philippine Side Exchange of Notes by MOFA DECS (P) Cabinet Appraisal

Japanese Side (P) MOFA Cabinet

4. Project Detailed design, procurement of goods Philippine Side Completion of project Implementation and service, construction, operational DECS

testing and start up. Project Japanese Side Commissioning of supervision conducted by DECS and JICA, Consultant, project JICA with consultant. Constructor

5. Evaluation Confirmation of termination. Review Philippine Side Project complementation of projects. Finding and DECS report. recommendation. Japanese Side Project performance

MOFA, JICA (P) audit reoort.

'(P) = Organization having primary responsibility for activities in the particular stage.

Project Cycle Stages

A. Project ldeutif1catioll

The Japanese government was willing to assist the newly-installed

Aquino administration and grant aid was one of the best ways to express

Japan's willingness to assist the Philippine government. Thus, Japanese

grant aid allocated the amount of 10,005 million yen for FY 1986 and 11,057

million yen for FY 1987. In 1987, the Japanese government also undertook to

increase the grant aid to the Philippines in its next year's budget.

The Medium-term Philippine Development Plan ( 1987-1992) designed

by the NEDA facilitated the identification of the grant aid projects by the

Japanese administration in coordination with the Philippine government. At the

same time, the US government encouraged ·the Japanese government to

assist the Philippines. Undersecretary of State, Michael Armacost, urged the

90

Vice Minister of Japan's MOFA, Yanai, to expedite aid disbursements to the

Philippines in March 1987. 10

However, the Japanese embassy in Manila, a gateway for the

Philippine government's formal grant aid proposals to Japan were confronted

with difficult issues in 1987. At the end of March. kidnappers released Mr.

Wakaoji, the general manager of the Manila branch of Mitsui Corporation, a

major Japanese trading company, after four months of confinement. For the

Japanese, his kidnapping created tension in Japan's diplomatic relations with

the Philippines.

The Marcos scandal was an added source of uncertainty for

Japanese administrators. On August 27, 1987, the Japanese National Tax

Administration Agency finished its investigation on the ODA scandal under the

Marcos government. It collected about 800 million yen tax and penalty from

six Japanese companies involved in the scandal representing unreported

income of about 1,600 million yen. 11

The MOFA also decided to establish a research committee on ODA to

the Philippines in January 1987. 12 The Japanese government dispatched a

High Level Mission on Economic and Technical Cooperation to the Philippines

headed by former Minister of the MOFA Okita Saburo in June 1987. 13 Prime

Minister Takeshita Noboru also visited Manila in December 1987 to attend the

ASEAN meeting and meet with President Cory Aquino. This was a diplomatic

highlight for both countries.

91

The Japanese embassy was obliged to confirm projects in the

Philippines that will cover the Japanese next fiscal year before the Prime

Minister came to the Philippines aside from undertaking to solve the Marcos

scandal related to the Japanese ODA Program.

The Economic Section Chief in the Japanese Embassy sought

appropriate proposals. He had the primary responsibility of receiving,

screening and prioritizing project proposals from the Philippines. A Japanese

businessman working at the planning section of the Manila branch of

Mitsubishi Corporation, one of Japan's major trading companies, met the

Economic Section Chief and got information about the lack of project

proposals.

After getting this information, this businessman thought of a school

building project that sought to address typhoon damages within the Japanese

grant aid scheme. The Mitsubishi Corporation then rushed to give a proposal

to the DECS and the Japanese Embassy. Afterwards, the Mitsubishi

Corporation also assisted the DECS in drawing the design of the project and

proposal draft since the DECS has not yet had a Japanese grant aid project

that involved a big amount of money. t-t Finally, the DECS submitted a

proposal for the TRSBP to the Japanese embassy through the NEDA.

92

The NEDA explained the schedule for submission of requests in its

handbook. The deadline of submission for Japanese FY 1990 (April 1990-

March 1991) was as early as January or February of 1989. 15 Accordingly, the

regular deadline for FY 1988 was February of 1987. Mitsubishi Corporation

contributed the project identification of TRSBP. Without its help, the TRSBP

might not have been identified. However, the DECS proposed Phase I of the

TRSBP only mentioned the typhoon damage component in 1987. The JICA

Basic Design Report on this Phase I also outlined the typhoon damages only

in August and September of 1987 16 (See Table 4.8). These facts thus suggest

that the TRSBP's proposal was submitted after the official Japanese deadline.

The OECD-DAC has emphasized that in project identification, the

initial project screening process is crucial since rejection of a project proposal

is rare, once major project preparation has started. 17 This implies that all

approved projects have undergone rigorous evaluation including the TRSBP.

The NEDA manual also suggested that consultations during the

project identification stage must be as broad as possible to include not only

the proponents but also the possible opponents, and above all, the potential

beneficiaries. 18 Hence, the identification of a project in just a short period

such as in the case of the TRSBP did not allow for a thorough consultation

between the Japanese government and the Philippine government.

On the other hand, the Japanese and Philippine governments did not·

need an informal planner cum consultant like the Mitsubishi Corporation for

the project identification of EFIP. The two governments identified the EFIP

93

through formal negotiations quite unlike the circumstances surrounding the

identification of the TRSBP.

Not surprisingly, the Japanese government has received criticism

regarding the construction cost of the TRSBP from the World Bank and the Asian

Development Bank. A Japanese official confessed, "World Bank and ADB

claimed that even the EFIP was expensive although the DECS was silent on the

matter." 19 Japanese government confirmed that the OECF financed World

Bank's Philippine education project in 1991-1994 and ADB's project in 1999 but

these respective projects did not cost as much as the TRSBP and the EFIP.

Table 4.8 Estimated Damages to school buildings by Typhoon million esos

Maine Ni tang Si sang Herming Trining Nemeng Pepang Total Region Aug 19,84 SeQ 1,84 1987 Aug 13,87 1987 SeQ-87 1987

I 363.1 0.0 0.0 0.0 0.0 0.0 465.9 829.1 II 61.4 0.0 73.0 0.0 0.0 25.7 48.0 208.0

III 76.1 0.0 0.0 0.0 0.0 0.0 0.0 76.1 IV 0.0 17.8 282.4 831.1 17.6 0.0 0.0 1,148.8

v 0.0 0.0 1,603.3 260.6 0.0 0.0 0.0 1,863.9

VI 0.0 159.3 0.0 0.0 0.0 0.0 0.0 159.3 VII 0.0 886.1 0.0 0.0 0.0 0.0 0.0 886.1 VIII 0.0 210.6 0.0 0.0 0.0 0.0 0.0 210.6

vx 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

x 2.0 1,678.6 0.0 0.0 0.0 0.0 0.0 1,680.6

XI 2.5 45.3 0.0 0.0 0.0 0.0 0.0 47.8

XII 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Total 505.1 2,997.6 1,958.7 1,091. 7 17.6 25.7 513.9 7,110.3

Source: Basic Design Study ReQort on the Project for Constructing Primaa and Secondary Schoolbuildings, Phase I, p. 29.

94

B. Projecf" Fvr111ulatiu11/Preparntio11

Project formulation for Japanese grant aids were finalized through the

basic design survey and submission of basic design study report including

proposed project sites and architectural drafts.

The MOFA instructed the JICA Tokyo office to conduct a basic design

study after consultation with the Ministry of Finance (MOF) and the Ministry of

International Trade and Industry (MITI). Interestingly, the MOFA did not

require a preliminary study for the TRSBP. Such a move meant that the

TRSBP was as good as accepted under the Grant Aid Program because only

very rarely do projects get rejected after the Basic Design Study. 20

Mohri Architect & Association, Inc. won the bid for consultancy of

TRSBP I. In the 1980s, Mohri Architect Inc. was not a major Japanese

consultant firm. The TRSBP was their first grant aid project in the

Philippines. 21 However, the firm went on to become consultant for all the

phases of TRSBP as well as the EFIP.

JICA organized the basic design study team for TRSBP Phase I that

included a Grant Aid Planning and Survey Department, a JICA official, an

Economic Cooperation Division International Trade Policy, the MITI, and four

consultants from Mohri Inc. A MOFA official served as leader of the survey

team for the TRSBP except in its Phase I. On the other hand, a JICA official

acted as leader of the EFIP. Mohri, Inc. assigned four consultants for the

TRSBP's Phases I - V and EFIP's Phase I. It further increased the number of

its consultants for the rest of the EFIP Phases. For instance, eight of its

95

consultants joined the basic design survey of EFIP Phase V in 1998. 22

In the TRSBP Phase I, the basic design study team stayed in the

Philippines from 15 June 1988 to 4 July 1988. Besides doing a field survey

and having discussions with the DECS and other agencies, the Mohri

consultants wrote the basic design study draft in consultation with the MOFA

and the JICA.

The Japanese study team's stay in the Philippines was about 20 days

for TRSBP's Phase I - V and EFIP I. However, the stay was expanded from

31 days to 41 days when the EFIP Phase II was conducted in 1993. Team

leaders from the JICA and the MOFA officials stayed in the Philippines from 7

to 11 days only but the Mohri firm's consultants stayed here the entire 41

days.

The basic design study team mainly met and discussed with the DECS

officials which included the DECS Undersecretary, the director of Office of

Planning of the EDP IT AF, the Bureau of Secondary and Bureau of Elementary

Schools personnel and planners and engineers. The JICA and MOFA officials

returned to Japan after signing the Minutes of Discussion with the DECS

Undersecretaries (See Attachment 4.1 ).

C. ProJecl Appraisal

Normally, the basic design study team should have been dispatched to

the Philippines before the next Japanese fiscal year that starts in April. (See

Figure 4.1; Table 4.9). The study team for the two projects did not follow this

standard policy because the members came well within the fiscal year .

. 96

Another proof that the TRSBP went against the normal process followed by

Japanese grant aid projects was that the TRSBP proposal was still just an

abstract at its Phase I. It was not yet fully prepared even after the project

identification stage. For instance, the design of the elementary school that

was attached to the Minutes of Discussions on 24 June 1988, was very simple

(See Attachment 4.2). In addition, the remaining four phases were proposed

only for secondary schools although Phase I was divided into 22 primary

schools and 50 secondary schools. The regions proposed by the DECS to be

the project sites for the latter Phases were also changed during the actual

formation and implementation stages (See Table 4.10).

Moreover, although a cost estimator from Mohri, Inc. has joined the

basic design study and collected data related to construction costs, the firm

did not come up with a construction cost which was the standard operating

procedure for all foreign projects. A construction cost report only came out

during the EFIP's Phase 111. It is indeed notable that all reports on these two

school building projects mentioned only the overview of other school building

projects. At most, the TRSBP's Phase II basic study design report just

presented the total amount of a similar ADB Project undertaken in 1990. 23

Despite having undertaken its own field survey, the TRSBP's study team used

the data only as criteria for proposed school projects that have not received

any assistance from other donors like the ADB and the USAID.

The official document for project formulation is the Basic Design Study

Report. The DECS and JICA officials normally use the report as a guidebook

97

even during the implementation stage since it includes the needs, objectives,

benefits, selection of sites, pictures of schools and engineering design of the

proposed project. Consultants no longer need to present alternative projects

as well as give criticisms regarding the project since the MOFA, which is their

principal client has already practically approved the project after the Basic

Design Study.

Cost estimates for both the Japanese budget and the Philippine

budget were presented in the Basic Design Study on the EFIP. However, this

was only available in the Japanese version but not in the English version. The

JICA official clarified the apparent discrepancy:

We have no intention to eliminate cost estimates in the English version. We gave this information to the DECS in the other document. Recently, we publisl1ed the basic design study report based on a guideline that included the cost estimate even in the English version.

Interestingly, a middle level official of the DECS complained about the

difficulty of accessing the information on the project's construction cost.

Whether excluding the cost estimates in the English version of the report is

careless mistake or a deliberate action, it still reflected the unequal

relationship between the donor and the recipient.

98

Figure 4.1 Timetable of TRSBP-Phase I - V and EFIP-Phase I - III

1988 11

3 -I 5 6 7 8 9 10 II I~

TRSBP·Phase I G/5·7 /-1

'8DS R IO(l-1 EN

1 !}89 I 1990 I I : :1 -l :; (i 7 8 9 10 l t 12 I 2 3 4 S 6 7 8 9 I 0 1 l 12

2/18 T

ITRSBP·Phase I( 1/14·2/5 7/13

·nos R EN

1992 ; t~l!n

1991 I 2 3 4 S 6 7 B 9 10 11 l2

9/25 T

TRSBP·Phase III 2/20-3/14 8/2 l

BOS R EN

·1 D95 3 -I 5 6 7 8 !J I 0 11 I:!\ I '.! :1 ·I 5 Ii 7

l 9D4 8 91011121 l 2 J 4 5 0 7 8 ~ 10 I I 121 I :! :I ·I 5 Ci 7 8 !I 10 11 I:!

i MOFA Post Evaluation for TRSI3P·Phase I ff) l II')

TRSBP-Phase IV 3/30-4/l 8 8/7

BOS R EN

BDS .. Ba.sh: Di.:sign Stuc.lr

,., L

TRSBP·Phase Y l:.'i.ll//~:.' 7/15 I 11/30

Bl>S : ll EN T

lJICA Follow-up Survey for ~RSBP l m <S> I 1 I : I

1 EFIP·Phase I 'l l·~;'.!l·J/15 5/lli·S/25 l:l/16 11/15

BSR DRE R EN I T I

EFIP·Phase II 11/9· l 2/!>l 2/21 ·3/:! 7 I I 5

OHE .. Bask lk~ign S1udy Dr,111 l<i-port 1 .. :-;pl•111;111011 R .. Basic Dl·slgn S1udr lkpon s11bm1111:-:-irn1 L'l • f.-.;,·hangl' ol Noll's I ,. l 1:rmlnilli110 of l'roi•'l'I

11') = Publi~h 111 Pust l:\ahw111u1 lh·p11rl <U ,. halual.iun Sur\'c}' in lh,· l'h1hppi1w~ t)l .. Submissli1111 of l·ollu\\'·llp S11r'''\

BSR 1 DRE R f~ __

EFIP·Phase III

11/1'1 T

J/H/IU 5/21 ·5/:lO D/2(i nos DRE R EN

1992 3 -I s 6 7 8 9 10 11 12

1D% I 2 :1 ·I

10/15 T

5 1; 7 ~ !I I 0 11 12

T

Table 45{ Overview of Basic Design Study on TRSBP and EFIP

Members Dare Philippine

TRSBP Team lcadcr(JIC...\) 20 days DECS: PHASE I MITl:l Leader, f\llTI Undersecretary:2

Consulrants:-t l l days OPS(a):5,GAO(b):2, BEE(c):2 BSE(d):2 , Region Office V:8

DPWH:6

PHASE II Lcadcr:MOF:\ 2] days DECS ConsultanrsA Leader: I 0 days Secretary, Undcrsccreatray:2

OPS:l. BSE:l Region Office VTH:5

DPWH:3 PHASE IIf Lcader:MOFA 23 days DECS

ConsuJtants:.:t Leader:? days Secretary, Undersecretary: 1 Asst. Secretary: l

OPS: 1, EDPITF(c):G, BSE: 1 DECS-Consulrants:l, Other. l

PHASE lV Lead er:f\l OFA 20 days DECS JICA:t Leader: I 0 days Secretary, Undersec.:2. Asst. Sec.: I Consultants:4 OPS: l, EDPIT:\f :9, BEE:2, BSE:2

Region Office Vl:l l, X:6 NEDA:2

PHASE V Leader:MOFA 20 days DECS JIG\ Leader:6 days Secretary, Undersec.:l, Asst. Sec.:l Consultants:4 OPS:2, EDP IT Af :8, BEE:2, BSE:S

Other:3 Region Office 1:2, III:2

EFIP Lcadcr:JICA 23 days DECS PHASE I MOFA 4 Leader:? days Secretary, Undersecretary:2

Consultnts:4 ED PIT AF:8, BEE:2, BSE:S Region Office lV: 12

PHASE I1 Leader:JICA - 31 days DECS ConsultantsS Leader:8 ·days Secretary, Undersecretary:2

Asst. Secretary: 1 OPS:2, EDPITAF:l6, BEE:3,BSE:2

Region Office V:6, XI:4, X.II:3 ARM:M:4

PHASElII Leader:JICA 41 days DECS JICA, Consultants:6 Lcader:8 days Secretary, Undersecretary:2

Asst. Secretary: 1 OPS: 10, EDPITAF:4, BEE: l. BSE:2

PHASE IV Lcadcr:JICA ]~)days

Region Office VI: 17, VH:8, X: 12 DECS

Consulrants:ti Leaded~ days Undcrsccrcrary:2 .. ~sst. Secretary: 1

OPS: l ], EDPITAF:3. BEE:2 Region Office 11:2, IV:8, Vlll:S

NEDA:?

(a)OPS •Office ot Planning Service, (b)GAO =Grant Administration Office (c)BEE •Bureau of Etcm4!ntary Education, (d)BSE == Bureau of Secondary Education (e)EOPITAF"" EducationaJ Oe\!elopmcnt Projects lrnplemcnttng Task Force (OSROC • Sotl Research and Development Center (g)JOCV •Japan Overseas Cooperation Volunteers, (h)OISCA - Japanese NGO (i)NCSMEM ... National Center for Science & Mathematics Education Materials (j)FCCC •federation of FlUplno-Chincse Chamber of Commerce

!Japanese Embassy:2 JICA:J

Embassy:2 JlCA:3

Embassy:2 JICA:3

Embassy:2 JICA:4

Embassy:2 JICA.:3 SRDC(f)-JICA E.."Cpert: 1

Embassy:2 JICl\:4

Embassy:l JICA.:3

Embassy:l JICA:3

JICA:3, ISMED: 10 OECF:2. J OC\'(g}: l OlSC...\(h):2, Adoviser: l Australian Embassy NCSf\tEM(i), FCCC(j) ADB, UNDP

Source: Basic Deslcm Study Reoort on the Project for Constructjng Primw and Secondary Schoolbuildjoas Phase!-V Basic Design Stydy Reoort on the Protect for the Educational Facilitjes Improvement Program .PbaseHV

100

Table 4.1 O Requested Regions and Number of Schools in TRSBP Phase I

Region Primary Secondary

Phase Request Implementation Request Implementation Request Implementation

Phase I v v 22 22 50 50

Phase II L II, VII, IV VIII 0 22 72 47

Phse III III, X II, IV 0 22 72 50

Phase IV VI VLX 0 22 72 50

Phase V I, II I, III 0 53 72 22

Source: JICA, Basic Design Study on TRSBP Phase I

Nonetheless, the DECS eventually realized the high construction cost

for the proposed classrooms. This was also documented once in the fifth

volume of the Basic Design Study Report on the project. According to the

report, in January 1990, the DECS requested for the simplification of the

project plan so that the school building unit construction cost could be lowered

in order to have more school buildings constructed. The request was made

during the basic design study team's stay in the Philippines for the TRSBP's

Phase 11 formulation. 2~ Nevertheless, the Japanese administration was not

willing to change the construction method to accommodate the DECS request.

This did not mean that the Japanese administration ignored all

changes requested by the Philippine government. It did implement minor

changes to the project. First, the administration offices and workshops

planned in the TRSBP Phase I were no longer planned for the other phases.

Secondly, the construction method of the toilet in Phase II was changed from

the original prefabricated material to Philippine specifications. Because of

these changes, the number of classrooms was increased. The school building

101

design on TRSBP-Phase II now provided from two to eight classrooms for

each building whereas the school building design in Phase I only had three to

four classrooms per building. (See Table 4.11)

To be included in the Japanese school building project, a public school

should request to the EDPITAF through the DECS' Regional Office. However

some schools did not go through the usual route in becoming beneficiaries of

the grant aid. A principal of a primary school in Palawan mentioned that his

school got an additional building from the TRSBP through the support of a

congressman and· a senator although it was not clear what kind of influence

these government officials had in the selection of schools as TRSBP

beneficiaries.

Project allocation to primary and secondary schools was also flexible.

The allocation priority proposed on the TRSBP's Phases I-IV was for

secondary schools while in the TRSBP Phase V and EFIP I & II priority was

for primary schools and finally in the EFIP 111 & IV, the allocation was equally

divided between the two school levels (See Table 4.12). The DECS exercised

only a limited influence during the project's formulation stage. Nonetheless,

Japan finally agreed to use the concrete method to lower the construction cost

of the EFIP which the NEDA Board approved through Resolution No. 31

series of 1992. 25

The following two tables show the school design types of the TRSBP

and the EFIP respectively. The third table reflects the projected number of

schools that will be benefited by the two school building projects.

102

Table 4.11 School Design type of the TRSBP

Phases 1'/S Typcs Classrooms Olli cc/ Science

Toilet Scales Recipient Workshop Laboratory square meter Schools

TRSBP DEC S'S l'(a) 4 ()

Request S(b) A 4 () I 0 Design Ii 4

PllASE I I' A () 234.00 14 B 4 () 288.00 8

s ;\ 0 I 288.00 37 B 4 0 342.00 9 c 5 432.00 4

PHASE II p A 0 0 133.50 8 () () 187.50 10 c 4 () () 241.50' l)

c..-c 8 () () 457.50 2 s S(c)+A 2 0 223.50

S+B 3 0 277.50 22 S+C 4 0 331.50 13 S+D 5 0 385.50

S+l3+A 5 0 385.50 S+B+C 7 0 493.50 S+B+D 8 0 547.50 S+C+C 8 0 547.50

PHAS[ Ill p B 3 0 () 187.50 13 c 4 0 0 241.50 9

s S+A 2 0 223.50 S+B 3 0 277.50 13 S+C 4 0 331.50 22 S+D 5 0 385.50 14

PHASE IV p B 3 0 0 186.50 9 c 4 0 0 240.50 13

s S+A 2 0 I 222.50 4 S+B 3 0 276.50 14 S+C 4 0 330.50 15 S+D 5 0 384.50 17

PHASE V p l3 3 0 0 228.88 19 c 4 0 0 293.00 13 D 4 0 0 357.13 21

s S+B 0 0 335.75 I S+C 4 0 0 399.88 2 S+D 0 0 464.00 19

(a) P = Primary School. (b) S =Secondary School (c) S =Science Laboratory Source: 13asic Design Studv Report on the Project for Constructing Primarv and Secondarv Schoolbuildings Phase I-Y

103

Table 4.12 School Desi n t Phases PIS Types Class·

c1ence Toilet

ca es square ec1p1en rooms ~oclisboo I abocatocl:'. wetec: Sc boo ls

EFIP A 3 0 0 236.00 6 PHASE I B 4 0 0 302.50 3

c 5 0 0 369.00 9 D 6 0 0 607.70 1

A+C 8 0 0 568.50 1 B+C 9 0 0 635.00 1

S(c)+A 3 0 335.75 2 S+B 4 0 402.25 1 S+C 5 0 468.75 5

S+C+C 10 0 801.25

PHASE II p A 3 0 0 239.45 23 8 4 0 1 305.95 23 c 5 0 0 372.45 30 D 6 0 0 611.15 1

C+A 8 0 0 571.95 C+B 9 0 0 638.45

s A+S 3 0 1 350.27 4 A 3 0 0 239.45 1

B+S 4 0 1 1 416.77 12 C+S 5 0 1 1 483.27 17

c 5 0 0 1 372.45 D+S 6 0 1 721.97

C+S+A 8 0 1 682.77 C+S+B 9 0 1 749.27

PHASE Ill p 3 0 0 235.80 39 s 3 0 1 350.26 27

3 0 0 235.80 3

PHASE IV p 3 0 0 244.16 45 s 3 0 1 357.42 42

3 0 0 244.16 29

PHASE V p 2A 2 0 0 0 138.74 1 3A 3 0 0 0 208.11 1 SA 5 0 0 0 346.85 1

2·6A 6 0 0 0 544.79 1 2·6A+T 6 0 0 1 587.79 6

2 x 3A+T 6 0 0 1 459.22 4 3A+T 3 0 0 1 251.11 3 2A+T 2 0 0 1 181.74 8 SA+T 5 0 0 1 389.85 1

2A+3A+T 5 0 0 1 389.35 1 4A+T 4 0 0 1 320.48 1

s 2-4A+S 4 0 1 0 562.69 2 4A+T 4 0 0 1 320.48 14

4A+S+T 4 0 1 1 432.85 31 3A+S+T 3 0 1 1 363.48 5 2-4A+T 4 0 0 1 440.30 4 2·2A+S 2 0 1 0 415.20 4

3A+T 3 0 0 1 251.11 1 2A+T 2 0 0 1 181.74 1

2A+S+T 2 0 1 1 294.11 1

(a) P =Primary School, (b) S =Secondary School (c) S = Science Laboratory, (d) T = Toilet Source of Basic Data: 6a~ii:; Q!ill!iga St!.!QJ'. Rt\QQQ Qn th~ PrQj~~t fQ( !b~ Ed!.!!::gtiQnal Fg~iliti~:i lmQ[QV~l!!~DI Pr:Qgq;1m Phas~ l.V

103a

Table 4.13 Selected Schools during the identification and implementation stages

DECS First Screening

Proposed I Total Elementary Secondary Schoo Is 1 Schoo Is %

I

1RSBP PHPSE I .. .. .. .. . . PHPSE II 72 91 .. .. ..

PHASE III .. 73 23 31.5 50

PHPSE IV .. .. . . .. ..

PHPSE V .. 75 50 66.7 25

total

EFIP

PHASE I .. 53 37 69.8 16

PHASE II .. 148 100 67.6 48

PHASE III 120 110 67 60.9 43

PHASE IV .. 140 58 41.4 82

PHASE V 216 216 101 46.8 115

iota I

Source of Basic Data: ~sign Stndy Report on TRSBP Phasel-V Basic fPsign St!!dy Report on EFIP Phasel-Y

D. Project Implementation

0' 7o

..

..

68.5

..

33.3

30.2

32.4

39.1

58.6

53.2

Project School

Total Elementary Secondary Schoo Is % OJ

10

72 22 30.6 50 69.4

69 22 31.9 47 68.1

72 22 30.6 50 69.4

72 22 30.6 50 69.4

75 53 70.7 22 29.3

360 141 39.2 219 60.8

30 21 70.0 9 30.0

117 79 67.5 38 32.5

69 39 56.5 30 43.5

116 45 38.8 71 61.2

91 28 30.8 63 69.2

423 212 50.1 211 49.9

The implementation stage begins after the Exchange of Notes (E/N).

Tendering is usually conducted two to three months after E/N (See Table

4.14 ). Construction work should be completed within one year according to

Japanese budgetary rule. Officially, the DECS, specifically the EDFITAF, is

the responsible agency for the project's implementation. The DPWH is

responsible only for the construction work that will be borne by the Philippine

government while the Japanese consultants are responsible for the evaluation

of the prefabricated system, preparation of detailed designs and tender

documents, and assisting the DECS with tendering. These consultants also

104

supervise the procurement and construction done by Japanese companies. u,

The Japanese contractor works with a Philippine sub-contractor. Both

governments should agree on the role of each in the implementation of the

basic design study.

The specific tasks of · the Philippine government during the

implementation phase are as follows:

1) Securing of project sites;

2) Site clearing prior to commencing project construction work;

3) Incidental work, such as gardening and fencing;

4) Construction of access roads to Project sites prior to the commencement of project construction work;

5) Installation of facilities for distribution of electricity, water supply, drainage and other incidental facilities to project sites when needed;

6) Obtaining building, occupancy and all necessary permits for the project with respect to the laws and regulations of the Philippine government;

7) Securing the necessary budget and personnel for the proper and effective maintenance of project school buildings and equipment:

8) Exempting taxes and all other levies and duties and ensuring prompt unloading and customs clearances at the port of disembarkation in the Philippines for project materials and equipment;

9) Exempting Japanese nationals involved in the project from customs duties, internal taxes in the Philippines with respect to the supply of the equipment and services under the verified contracts;

1 O) According to Japanese nationals whose services may be required in connection with the supply of the products and the services under verified contracts for their entry into the Philippines and stay therein for the execution of the projects;

11) Bearing of commissions to the Japanese foreign exchange bank for the banking services based on Banking Arrangement in accordance with the standard grant procedure;

12) Bearing all expenses other than those to be borne by the Grant. necessary for the construction of the school buildings as well as for the transportation and installation of the equipment; and

13) Effective operation and management of the facilities and equipment to be provided under the Grant Aid.

105

On the other hand, the Japanese government took charge of the

following:

1) Procurement of project's equipment and materials in Japan and their shipment to project sites in the Philippines:

2) Procurement of project equipment, materials and labor in the Philippines and their transportation to project sites; and

3) Construction of project facilities. 27

From the above lists, it is clear that the Japanese side have few but,

nonetheless, important roles during the implementation stage. In reality, a

Japanese consultant supervised construction on a day-to-day basis although

the basic design report stated that such supervision should be done by the

Philippine government (as stipulated in task number 13 above). This task was

done by the Philippine side only since the TRSBP's-Phase Ill. The DECS-

EDPITAF now received monthly reports from Japanese consultant directly

supervising the everyday construction operations. But it was still the JICA

Manila office that organized regular meetings with the Japanese consultants.

the contractors, the DECS and DPWH personnel to thresh out time schedules

and issues concerning the projects.

The Mohri firm was selected as consultant for all phases of the two

Projects even though bidding for consultancy should have been done for each

phase. The firm actually just prepared the tender documents based on the

basic design study report. Two months after the E/N of TRSBP-Phase I, the

Mitsubishi Corporation and Shinnhon Steel Consortium won the tender as

suppliers while the Kumagaigumi, a major construction company, won as the

contractor. A high ranking official from the DECS went to Japan for these

106

biddings. It is worth noting that a Mitsubishi staff member has revealed that

the Mitsubishi Corporation won the bidding since it knew the correct prices of

construction materials for the staff members themselves were the ones who

gave the information to the DECS. 28 Consequently, the Mitsubishi Corporation

and Shinnihon were the dominant material and equipment suppliers for all the

TRSBP's phases. Kumagaigumi won bidding as contractor for the TRSBP

and the EFIP except for Phase Ill of the TRSBP. Bidding was merely a

ceremony although Philippine officials still went to Tokyo to conduct bidding

for each phase of the two projects. They were assisted by the JICA. The

JICA official interviewed explained that the contractor of the project's first

phase had an advantage over the other bidders because of familiarity with the

project. 29

Prefabrication materials such as lightweight shaped steel and

prefabricated panel were obtained in Japan. The construction started in

January 1989. The basic design study team had already selected 72 public

schools divided into 22 primary schools and 50 high schools. Daet, Naga,

Legaspi and Sorsogon were the project sites based on requests from the

DECS.

The EDP IT AF was the implementing arm of the DECS for these school

building projects. Ten members of the EDPITAF staff worked for these

projects. They were composed of a project manager, a supervising project ·

officer, two project officers, two engineers, a clerk, a record officer and two

drivers.

107

Joining the EDPITAF staff were two Japanese consultants, four

Filipino consultants and sixteen Filipino engineers. They were all involved in

the construction aspect of the projects. The JICA Manila office and the

Japanese embassy also received report from the consultants.

Japanese officials seldom visit project sites except for the

groundbreaking and inauguration ceremonies since these ceremonies are

good public relation opportunities to the Japanese. These become opportune

times to make people aware of the Japanese ODA activities. JICA reported in

its newsletter the presence of Japanese officials during the groundbreaking

ceremony of the EFI P Phase V at the Santa Maria Central School in

Zamboanga City. 30

The ground breaking ceremony, attended by Minister Tsukasa Kawabata of the Embassy of Japan, Resident Representative of JICA, Hideo Ono, Zamboanga City Congressman Celso Lobregat and DECS Undersecretary Dr. Victor Andres Manhit, kick-off the new project which plans to build 47 new school buildings in Western Mindanao.

The public relations mileage given the Japanese government during

such ceremonies could not indeed be underestimated.

Japanese research and educational institutes under the MOFA were

instructed to monitor the projects to optimize the operation and management

of these on-going projects, ensure accountability to the investors and draw

lessons from experience. 31 However, there was no official feedback regarding

the construction method and cost of the projects although officials of both

governments realized the need for such reports to have a better picture of the

projects.

108

Evaluation

The Japanese embassy conducted post evaluation for the TRSBP in

1991 after the termination of the project's Phase 111. J ICA also dispatched the

basic design study team of TRSBP Phase IV in March 1992. During the 1991

Japanese fiscal year, the Japanese embassy evaluated four projects,

including the TRSBP, bridge construction along rural roads, construction of a

fishery port, and the construction of a center for agricultural promotion in

Bohol. The embassy conducted its evaluation in March 1992. They were able

to visit 13 of the 72 schools under the projects.

The evaluation report stated that the color and design of the buildings

matched the natural features of the Philippines but it also reported some

problems regarding doorknobs. the water supply, and the maintenance and

electricity costs. The report further suggested the possibility of assistance for

the construction of a deep well. 32

This evaluation report did not however comment on the construction

cost itself although this was raised in the basic design study of Phase II by the

DECS in 1990, as has been mentioned in the project formulation section of

this study.

After the completion of the first project, JICA sent a follow-up survey

team to the Philippines in March 1994. The team compared the first project.

with the other foreign-assisted school buildings in the Philippines such as the

ADS-financed Project and the USAI D granted Project. Their report aimed to

provide the Japanese government feedback so the latter can have a basis of

109

comparison for their other projects such as the EFIP.

Regarding the projects' construction methods, the JICA team report

recognized that there was no definitive difference between the two projects'

buildings where the TRSBP type cost much higher and the EFIP type cost

much less than the former. However, the report pointed out that the use of

prefabricated materials might result in some future problems such as in the

maintenance and repair of buildings since these prefabricated materials still

needed to be procured in Japan.

On the matter of technology transfer, the report suggested that local

construction methods, under the supervision of Japanese technical

instructors, would be more useful than the prefabricated construction method.

As well, the Japanese consultants should conduct a short~term training

program for the personnel directly involved in the constructions. The

Mitsubishi Corporation manager, however, refused the report's suggestion for

Japanese technology transfer to the Philippines.

As regard the impact on local economies, the report averred that local

construction would still be more beneficial than the prefabricated construction.

This was in a way justified by the team's finding that although the

prefabricated construction method took from four to five months to complete

while the construction method using local materials took about six months, this

difference in construction time did not translate into a significant superiority or

inferiority of one type of construction over the other.

Regarding the cost, the TRSBP was five ·times higher than the DECS'

110

standard school building, due to transportation expenses and the purchase of

prefabricated materials. The report recommended the need for further survey

and analysis about cost and construction method for future projects to avoid

the TRSBP's literally, costly mistake.

The· report nonetheless concluded that there was no inconsistency

between the selection of the prefabricated method and the project's objective

to provide emergency assistance to schools with damaged buildings. At the

same time, the report supported the local method for the second project (i.e.,

the EFIP). This was the first time that the project's high construction cost was

commented on and recorded in a Japanese document. Surprisingly, this

report was kept confidential; even the DECS was neither provided a copy nor

informed by JICA regarding its contents.

The basic design study on the TRSBP-Phase V and EFIP-Phase I

commenced just before the J ICA follow-up survey but, at last, the Japanese

construction costs were outlined in the basic design study report on the EFIP-

Phase 11. It should however be noted that the construction costs borne by the

Philippine side had been disclosed since the TRSBP's Phase 11. 33 The

compa.rison of construction costs with other foreign-assisted school projects

although much delayed was finally done in the basic design study on the EFIP

Phase Ill.

This chapter described the project-making cycle of the two Japanese

grant aid-assisted school building projects; namely, the TRSBP and the EFIP.

It also pointed out issues arising from the construction costs of the projects.

The next chapter presents the findings and recommendations of this study.

1 l l

Notes

1 The Japanese government named this project as the Pn~ject j(Jr Constructing Primw:1· and Secondw:1' Schools whereas the Philippine government called it the J)·p/10011-Resistont School Building Pn~i<1ct. (TR5,'IJP;. This study uses the Philippine name because the typhoon-resistant construction method is a critical factor in this project.

2 DECS EDPITAF, "Project Implemented By EDPITAF 1990-1995," 1997 (unpublished memo).

3 Ibid. 4 Estioko, Leonardo R., History of Education: A Filipino Perspective, Society of

the Divine Word, 1994, p. 206. 5 Tan, and Mingat, Education in Asia: a comparative study of cost and

financing, Washington DC. p. 178. 1992. 1' DECS, "1994 Annual Report," March 1995, Pasig: DECS, pp. 2-3. 7 JICA and Mohri, Architect & Associates, Inc., Basic Design Study Report on

the Project for The Educational Facilities lmprovernent Program (Phase IV) in the Republic of the Philippines (Japanese Version), July 1996, p. 9.

·" DECS EDPITAF l) JICA, Basic Design Study Report on The Project for Constructing Primary

and Secondary Schools in the Republic of the Philippines, August 1988, p 1., p. 42. and p. 101.

111 Orr, p. 120. 11 Yokoyama, 1990, p.130. 12 Mainichi Shimbun, January 18, 1987 13 Yokoyama, p. 134. 14 Series of Interviews with a planner at the Mitsubishi Corporation in 1992.

This researcher could not confirm the particular date of project formulation due to limitations in accessing documents and unclear information gathered from personal interviews. However, it was confirmed that the TRSBP was identified and formulated in an unusually short time.

15 NEDA, ODA Handbook:guidelines on the availment of official development

assistance. Pasig: NEDA. 1992, p.111-67. 16 JICA, Basic Design Study Report on the Project for Constructing Primary

and Secondary School Buildings in the Republic of the Philippines, August 1988, p. 29.

17 OECD, Development Assistance Manual: DAC principles for effective aid, Paris: OECD, 1992, p. 34.

18 NEDA, Project Development Manual, NEDA, 1984, p. 17. 19 JICA Official, May 8 2001.

:!U Ibid. 21 Kokusai Kaihatsu Journal, 441, October 1993 22 JICA and Mohri, Architect & Associates, INC Basic Design Study Report on

the Project for the Improvement of Educational Facilities (phase V) in the Republic of the Philippines. December 1998, p. AP1.

112

2' JICA, March 1990, p.61.

2·~ Ibid. p. 48. 2 ~ DECS EDPITAF, 1997. 21

' JICA, August 1988, p.86. 21 JICA, Basic Design Study Report on the Project for Constructing Primary and

Secondary School Buildings (Phase Ill) in the Republic of the Philippines, 1991, p. 100. ::x Interview with the Mitsubishi Corporation Staff in July 1, 1992. 2'1 JICA Official, May 8 2001

11' JICA Manila Office, JICA in the Philippines: JICA Newsletter, April 27 2001.

<http://www.jica.org.ph/jicaphil06.html> ;i Foundation for Advanced Studies on International Development (FASID).

Monitoring and Evaluation Based on the PCM Method, Tokyo: FASID, 1998, p.4. -'2 Gaimusho keizaikyoryoku kyoku, Keizai Kyoryoku Hyoka Hokokusho, June

1993, pp. 373-375 . . n JICA, Basic Design Study Report on the Project for Constructing Primary and

Secondary School Buildings (Phase II) in the Republic of the Philippines, 1990, p. 126.

113

Chapter 6

FINDINGS, CONCLUSION And RECOMMENDATIONS

Overview

The study has examined the project-making process of two Japanese

grant aid projects in the Philippines. It also described the actual project cycle of

constructing school buildings in the Philippines. This chapter answers the

research problem presented in Chapter 1 and reviews the findings of the case

study presented in Chapter 5.

Findings

A. U.C7.1iewi11g tile /apa11ese ODA

Official Development Assistance (ODA) is often extended by rich or

developed countries to poor countries to aid the latter in their development

endeavors. Japan generally provides grant aid to countries whose GNP per

capita is less than $1, 195. Like the other donor countries, Japan never ever

offers the ODA to the developing countries only as charity. Usually, the

Japanese ODA comes as a tied loan package often stipulating as precondition

the employment of Japanese consultants and companies to the grant aid

project.

The Japanese Official Development Assistance (ODA) Projects to the

Philippines began as "baisho" or war reparations. Japan extended economic

assistance to the Philippines to compensate for the damages and sufferings it

114

had inflicted on the latter during the Second World War. Reparation

programming was carried out from 1956 until 1976. During this period, the

Philippines was allocated $550 million, the largest amount among countries that

received Japanese reparation aid. This did not mean however that the

Philippines got the entire amount in currency. Instead, most of the reparation

aid came in the form of Japanese products and services to help the recipient

country realize its development projects in agriculture, fisheries, electric power,

and the other sectors.

As a general rule, no rich country ever extends its ODA to a needy

country for purely humanitarian considerations. Often, the assistance is

proffered "with strings attached" such as the use of the donor country's experts

and products (so it gets to market its excess products to the recipient country)

in the grant aid-assisted project. To the Japanese, however, the role of the

ODA is not limited to this obvious economic agenda. It also functions as a

political instrument in promoting the country's foreign policy. With its limited

military presence in other countries after World War 11, Japan now largely relies

on its ODA to prop up its diplomatic relations with other countries.

B. TRSBP a11d EFIP: The lmplemeutatio11 of tlze ODA Program

Two school building projects under the Japanese ODA Program

constructed a total of 3, 126 classrooms for 783 primary and secondary schools in

the Philippines. In keeping with their objectives. the two projects contributed in

alleviating the chronic shortage of classrooms in the Philippines.

l l 5

At the project identification stage, especially in the late 1980s, the

Japanese government was eager to support the new Philippine government

under then President Corazon Aquino. Unfortunately, the Philippine government,

as reflected in its agencies like the DECS, was not fully familiar with the

Japanese grant aid scheme so it welcomed the help of outsiders, in this case, the

Mitsubishi Corporation, in formulating project proposals.

·in this situation, the Mitsubishi Corporation generated the concept of a

Typhoon Resistant School Building Project (TRSBP) using a prefabricated

construction method whereby the construction materials were to be procured in

Japan. The catch here however was that the Mitsubishi Corporation, with

another Japanese company, Shinnihon, became the major supplier of the

materials needed for the project benefiting much from the arrangement in the

process. A direct consequence of using imported materials was the high cost of

construction, which in turn limited the number of classrooms and school buildings

built by the Japanese ODA grant. Had relatively cheaper but quality local

materials been used, (like in the case of the EFIP) more classrooms should have

been provided more public schools nationwide.

The TRSBP was identified in an·uncommonly short time; in consequence,

the project formulators and evaluators seem not to have deliberated well on

every aspect of the project which resulted in quite, literally, a costly flaw. Both

the Japanese and the Philippine governments failed to minimize. if not altogether

avoid, serving the interests of big Japanese companies allowing the latter to

receive considerable benefits from the grant aid projects to the detriment of the

I 16

of the intended major beneficiaries, the needy elementary and high school

students in the far-flung areas of the Philippines.

But the role that big business played in the two case studied projects only

mirrored the unequal status between the donor and the recipient governments. In

reality, the relationship between the Japanese government and the Japanese

private sector is very tight so it did not really come as a surprise when the

Japanese government gave significant responsibilities to Japanese companies in

administering the country's overseas grant-assisted projects. At or after the

project formulation stage, the companies represented by their consultants

performed major and critical roles in the administration of a specific project from

its basic design survey to the supervision of its daily operations at the

construction site.

The Japanese government hired these consultants as their contract

assistants, with the latter generally acting as the farmer's messengers. One

cannot therefore expect much from these consultants in terms of raising

issues or presenting alternatives regarding construction costs, for instance.

One surprising, albeit not unexpected, finding of this study was the

limited role played by the Philippine government in these two school building

projects. The Japanese government supposedly expected the former to be

the troubleshooter at the construction sites but the study revealed that it was

still the Japanese government, through its consultants, that wielded true

power in every aspect of the project. The relationship between the Japanese

government and its Philippine counterpart in the context of the school building

I 17

projects was clearly vertical or unequal despite Japan's repeated declaration

of the importance of consultation and cooperation with the recipient countries.

C. /fr11so11s for tire TI~SBP's /Jig!t co11structio11 cost

The case study revealed that both governments identified and

formulated projects using relatively high cost construction materials. One

reason for this was that the first project, the TRSBP - so far, the biggest

Japanese grant aid project in the Philippines - was identified a bit hurriedly

leaving not much time for both parties to thoroughly evaluate all aspects of the

proposed project.

It was also the case that the Japanese administration was very willing

to assist the fledgling Aquino administration at the time the project was

proposed. However, Japanese embassy and MOFA officials neither had the

time nor the personnel to assess ODA projects properly especially because

they were then faced with a scandal under the Marcos administration that was

also related to Japanese ODA. This was compounded by the fact that the

DECS had no experience in administering Japanese grant aid projects. In

such a situation, the Mitsubishi Corporation was then allowed to play a critical

role during the project formulation stage. At the beginning, both governments

were glad of Mitsubishi's contribution since this corporation was the originator

of the school building project. Had there been no help from Mitsubishi, both

the Japanese embassy and the MOFA would have lost face with the Aquino

government and the DECS would have missed the opportunity to receive

funds for constructing direly needed school buildings and classrooms.

118

The confidence shown by both governments in the Mitsubishi

Corporation would prove to be premature because the latter was not actually a

volunteer group but basically a business entity. Its proposal to use the

prefabricated construction method was in reality calculated to bring the

corporation profits instead of a consultant's fee. In this sense, the biggest

beneficiary of the school-building projects had been the Mitsubishi Corporation

and the other business groups that were involved in the project.

D. H. c1bu llS for [)()tit guvenullell ts 110 t clrn 1igi11g tire /1 ig!t cost 11rn terin ls

The DECS had actually earlier commented on the high construction cost

before the basic design study of the TRSBP-Phase II just before the

completion of Phase I. It is not clear whether the Japanese administration

realized the high construction cost as an issue before the DECS came out

with its official observations and suggestions on the matter. But as things

stood, Japanese officials were not likely to change anything about the project

even if they did know as can be gleaned from the rather terse statement of a

JICA official: "Please don't criticize about cost. This is a successful pioneer

project." These officials were thus likely to be satisfied with the TRSBP

despite its flaws since it symbolized the popular idea of grant allocation being

used for a worthy social cause. Previously, the social sector was not a priority

area of the Japanese ODA.

In addition, these Japanese officials would similarly lose face if they

admit to changing the total scheme of the TRSBP after the project's official

implementation. The OECD-DAC had expressed that the project identification

119

stage, which is the initial project screening process is crucial since rejection of

a project proposal is rare, once major project preparation has started.

On the Philippine side, the DECS claimed that the high cost

construction method was only applied once in the entire five Phases of the

TRSBP's basic design study though the DECS was certainly not satisfied with

the minor changes to the project allowed by the Japanese administrators. The

DECS seemingly did not vigorously push for changes in the TRSBP since it

was able to get a second school building project from the Japanese ODA (i.e.,

the EFIP) besides there were no apparent criticisms and claims from the

administration or, worse, from outsiders like the media. Consequently, the

Japanese administration represented by the JICA and the MOFA did not have

difficulty in keeping their stance regarding the school building projects

because of less pressure from its Philippine counterpart.

E. T<.ct1so11s for llotlt govemllle11ts usiug tlte i11expe11si1.1e lllnterials for the EFJP

The single purpose and objective of both the TRSBP and the

Educational Facilities Improvement Project (EFIP) was basically to provide.

school buildings and classrooms, which the Philippines badly needed although

the two projects differed form each other in terms of their Japanese budget,

their construction materials, and even their project names. The budget

implementers solved the high construction cost issue the "soft-landing way".

No Japanese officials were hurt; on the contrary, all were rather happy since

·the TRSBP was finished successfully according to the Japanese embassy

120

officials' evaluation. The DECS was also happy with another package of

thousands of classrooms through the courtesy of Japanese ODA.

In a sense, the EFIP was a rectification of the TRSBP mistake because

the former utilized Philippine-made materials which brought the cost of

construction considerably lower than that of the TRSBP. Despite the fact that

the EFIP is still costlier than a similar ADB-sponsored project. the

circumstances surrounding its implementation (from the basic design study

stage to the completion stage) were not marked with irregularities as was in

the case of the TRSBP. Both governments therefore willingly undertook the

second project.

Conclusion

The Official Development Assistance extended by Japan to the

Philippines in the form of the two school building projects has proven that in

the context of foreign cooperation, it is indeed difficult to isolate the economic

from the political agenda. These school building projects were more of a

commentary on the Japanese than on the Filipino.

By immediately extending its assistance to the then very popular

fledgling Aquino government, Japan scored high points not only in the eyes of

the Filipino community but also in the world community especially since it was

sponsoring a politically correct program; that is promoting quality education

through upgrading educational facilities specifically. school buildings. But

beyond scoring diplomatic points, Japan showed its sincerity in helping the

121

Philippine government achieve its developmental goals by agreeing to finance

two high cost long-term projects. Nevertheless, as a matter of ODA policy, it

did not give the grant aid simply as a dole out because there were also

conditions attached to it such as the involvement of a Japanese team in the

supervision of the projects.

In the final analysis, the Japanese did not only score diplomatic points

.from the school building projects but they happened to earn economic gains

as well inasmuch as the contractor for the two projects was a Japanese firm

and, in the case of the first project (TRSBP), the materials were also obtained

from Japan.

For its part, the Philippine government was in a so-called "win-win

situation" because it was able to provide thousands more of classrooms for its

public schools despite and mainly because of the controversy surrounding the

first project. When the DECS officials raised the very high cost of the TRSBP

and suggested modifications to lower the cost in order to put up more

buildings and classrooms, the Japanese responded by approving another

school building project (the EFIP) so as not to lose face in the diplomatic

community (a revision of an approved ODA project is an admission of sloppy

evaluation on their part at the initial stages of the project). Obviously, the

Filipinos did not have cause to complain against such "tender mercies."

122

Up to the projects' completion, the Japanese team was in control of

every aspect of the projects despite the official agreement that it should be the

Philippine side that would take care of the day-to-day supervision of the

projects. This showed that it was still the Japanese government that had

control over the administration of the projects reflecting the unequal

relationship between the two governments in terms of the ODA. As donor,

Japan exercised power over its projects ignoring its own frequent assertion for

the need for collaboration and consultation with the recipient countries. This

instance once more proves the truism that it is still the one who has the money

(or economic means) that wields true political power/influence.

Lessons and Recommendations drawn from the projects

An important lesson from the grant-aid experience is the need for well

thought out and/or properly evaluated proposals to avoid flaws that might have

critical implications in the future. A major project such as the TRSBP should

be thoroughly deliberated upon before being submitted for foreign grant aid

consideration. It is thus recommended that agencies seeking foreign

assistance should follow clear-cut procedures not only for proposal evaluation

but also for the eventual implementation of the project.

As had been noted in the findings of this study, the cooperation that

existed between the Japanese government and its Philippine counterpart in

the administration of the ODA school building projects was not really done on

an equal footing since the Japanese had control of the situation from the start.

123

To prevent another costly mistake in future ODA-projects, the two

governments should work openly together and on an equal basis with each

other to provide maximum benefits to the grant aid's intended beneficiaries.

This is the essence of real cooperation despite the unequal status implied in

the donor - recipient relationship between the two countries.

124

Bibliography

BOOKS

Alatas. Sayed Hussein, Corruption and the Destiny of Asia, Singapore: Simon & Schuster (Asia).1999.

Alburo. Florian A., "Aid and the Growth Process: Its Role and Institutional Setting in the .. Philippines". in Dante Canlas and Hideyoshi Sakai eds., Studies in Economic Polif.Y 0.!:!QJnstitutions: The Philippines. Tokyo: Ajia keizai kenkyusyo (Institute of Developing Economic). 1990.

Almonte. Jose T., "The Politics of Development in the Philippines," KASARINLAN, Vol.9. No. 2 & 3, 1993.

Balisacan, Arsenio M. and Katsumi Nozawa, eds., Structures and Reforms for Rural D~'{eloQJJ1ent. Tokyo: Institute of Developing Economies, 1993.

Brewer.Garry D. and Peter de Leon, The Foundation of Policy Ana.!Y.§is, Chicago: The Dorsey Press. 1983.

Broad. Robin, Unequal Alliance: 1979-1986, Quezon City: Ateneo de Manila University Press, 1988.

Ca1i1in. Ledivina V. ed., Public Administration in Asia and the Pacific, Bangkok: UNESCO 19~)1.

_ .. --··- _______ ., Bureaucracy for Democracy: The Dynamics of Executive-Bureaucracy Interaction During Governmental Transitions, College of Public Administration University of the Philippines, International Center for Economic Growth and Philippine Institute for Development Studies, 1992.

Cassen,Robert & Associates, Does Aid Work?: Report to an lntergovernment Task Force, Oxford, Clarendon Press, 1986.

Chipongian, Arleen Canieso, "Official Development Assistc;mce Program of Japan and its Impact on the Social Economic and Environmental Well-being of Recipient Countries," Tokyo: Mitsubishi Public Affairs Committee, 1993.

Co., Edna Estifania A., "Management of Policy Formulation: The Generics Act of 1988," etiili.22J.r~_Journal of Public Administration. No. 3 & 4, (July -October) 1998.

CPA Stucly Team, "Report and Recommendations on NEDA and Regional Development," E.t1ili.Qpine Journal of Public Administration. No 3, 1989.

de Dins. E:mrnanuel S. and Gonzalo M. Jurado, "The Philippine Economy: A Conspectus of Recent Developments", KASARINLAN, Vol.5 No.1 & 2. 1989.

125

--·· and Joel Rocamora, Of bonds & bondage: a reader on Philippine debt, Amsterdam: Transnational Institution, Quezon: Philippine Center for Policy Studies and Freedom from Debt Coalition. 1992.

---· "Notes on Philippine Growth and the Government's Medium-Term Plan". KASAl31NLAN. Vol.9, No. 2 & 3, 1994.

Downs.Geroge W.Jr., Bureaucracy, Innovation and Public Policy, Lexington, Mass: D.C. Heath, 1976.

Dubsky. Homan. Technocracy and Development in the Philippines. Quezon, University of the Philippines Press 1993.

Elevazo, Aurelio 0. And Rosita A., Philosophy of Philippine Education, Mandaluyong City: National Book Store, 1995.

Dye.Thomas R., Understanding Public Policy, 2nd edition. Englewood Cliff, Prentice-Hall, 1972.

Estioko. Leonardo R., History of Education: A Filipino Perspective, Society of the Divine Word, ·1994_

Foundation for Advanced Studies on International Development (FASID), Monitoring af}_Q _!;_yaluation Based on the PCM Method, Tokyo: FASID, 1998.

Freedom frorn Debt Coalition, Debt Reader, Quezon City: Freedon1 from Debt Coalition ·199·1.

Guzman, Haul P. de and Mila A. Reforma, eds., Government and Politics of the Philippines. Singapore: Oxford University Press, 1988.

Habito. Cielito F, "The 1993-1998 MTPDP: Paving the Way for Philippines 2000", KASARINLAN, Vol.9, No. 2 & 3, 1994.

Hashimoto, Suguru, Kaihatsu gyousei (Development Administration). in Masaru Nishio and Micl1io Muramatu, eds., Koza gyouseigaku dai 1 kan: Gyousei no hatsuten (Lecture on Public Administration Vol 1.: Development of Public Administration), Tokyo: yubikaku, 1994.

Hottuta,Takaao ed., Zusetu Nihon no Zaisei Heisei 5 nen ban (Japan's Finance 1993), Tokyo: Toyo Keizai Shinposya, 1993.

lnada.Junichi, "ODA to nihon gaiko (Japanese ODA and Diplomacy): tai firipin enjo nitsuite no jirei kenkyu (Case Study of Japanese ODA to the Philippines)," in Takeshi lgarashi, ed., Nihon no ODA to Kokusai Chitsujo (Japanese ODA and International Order). Tokyo: Nihon kokusai mondai kenkyujo, 1990.

Kokusai kyouryoku suishin kyoukai (APIC) Gaimusyo kansyu (Under theSupervision of Gaimusyo), Keizai kyouryoku sankae no tebiki (Manual on Participation for Economic Cooperation), Tokyo: Kokusai kyouryoku suishin kyoukai (APIC), 1994.

126

Koppel.Bruce M. and Rober M. Orr, eds., Japan's Foreign Aid: Power and Policy in a New _!;g Boulder: Westview Press, 1993.

Lirn. Joseph Y. and Katsumi Nozawa eds., Decentralization and Development in the Philippines, Tokyo: Institute of Develoment Econornies, 1992.

Mainichi shimbun shakaibu ODA shuzaihan, Kokusai enjo bijinesu: ODA wa do tsukawarete iru ka (ODA Business: How Does it Spend?), Tokyo: Aki shobo, 1990.

Malaluan. Nepo A., "Philippines 2000 and the Politics of Reform", KASARINLAN, Vol.9. No. 2&3.1994.

Montes. Manuel F., Koike,Kenji et al., National Development Policies and the Business -~ector in the Philippines, Tokyo: Ajia Keizai Kenkhu Sho (Institute of Development Economies), 1988.

OE.CD. "Aicl F~eview ·1992/93: Report by the Secretariat and Questions for the Review of Japan, "Paris: OECD, 1993.

·-··--·· !}_ev!~LQJ)ment Co-operation Review Series: Japan, Paris: OECD, 1996.

Ohno. Takushi, War Reparations and Peace Settlement: Philippine-Japan Relations_ 194.§:: 1956, Manila: Solidaridad Publishing House, 1986.

Orr.Robert M.,Jr., The Emerqence of Japan's Foreign Aid Power, New York: Columbia University Press, 1990.

Ozawa. lchiro, Blueprint for a New Japan: the Rethinking of a Nation, Tokyo, Kodansha International 1994.

Pante. Filogo, Jr., "Japan's Aid to ASEAN: Present Realities and Future Challenges," ~prkingfll2er Series No. 88-08, Manila: Philippine Institute for Development Studies, June .. 1988.

ancl Rorneo A. Reyes, "Japanese and U.S. Development Assistance to the Philippines: A Philippine Perspective", Working Paper Series No. 89-07, Makati, Philippine Institute for Development Studies, April 1989.

Phela11. Bernadette E.,"Japanese ODA and Private Sector Development in the Philippines and Thailand: A Comparative Analysis," Philippine Review of Economics and B~sines~. Volume XXXll, No. 1, June 1995.

Portter, David M., Japan's Foreign Aid to Thailand and the Philippines, New York: St. Ma1iin's Press, 1996.

Ramos.Fidel V., "Philippines 2000:0ur Development Strategy," KASARINLAN Vol. 9 Nos.2 & 3, 4th Quarter 1993 & 1st Quarter 1994.

127

Reyes, Rorneo A., Official Development Assistance to the Philippines: A Study of J\dministrative Capacity and Performance, Manila: NEDA 1985.

-··-- ___ .• J. Absorptive Capacity for Foreign Aid: The Case of the Philippines, Makati, Philippine Institute for Development Studies, 1993.

Rix. Alan. Japan's Economic Aid: Policy-making and Politics, New York. St. Martin's Press. 1980.

-----·- __ J. Japan's Foreign Aid Challenge: Policy Reform c:ind Aid Leadership, New York: Houtleclge, 1993.

l~ocarnora. Joel. Hanneke van Eldik Thieme and Ernesto M. Milario, European Official Oeveloprnent Assistance to the Philippines, Manila: Council for People's Development and Transnational Institute, 1992.

Sto. Tomas. Patricia A., "Civil Service Reforrn in the Philippines", Quezon City: Eastern f~egional Organization for Public Administration," Occasional Paper No. 91-1. Septernber, 1991.

_________ . .i."The Philippine Bureaucracy: A Question of Numbers", Paper presented at th~a(!! P. de Guzman's Lecture Series, College of Public Administration, University of the Philippines, February 1994.

Taclen1. Eduardo C .. "Japan. the US, and Official Developrnent Assistance to the Philippines", KASARINLAN, Vol.5 No.4. 1990.

Takayanagi. Akio, "Why Japanese Aid is Ineffective in Reducing Poverty''. KASARINLA~. Vol.5 No.4, 1990.

Tanacla, Wigberto E., "Is There No Room for Nationalism in the Medium -Tenn Developrnent Plan?," J<ASARINLAN, Vol.9, No. 2 & 3, 1994.

T an.J, ~e-Peng and Alain Mingat, Education in Asia: A Comparative Study of Cost and .f_inanci1J.Q., Washington, D. C.: World Bank, 1992.

Toyo l<eizai Shinposha, Kaisya shikiho (Quartely Directory of Corporations): Third Quarter 1993 issue, Tokyo:Toyo keizai shinposya, June 1993.

Toyo l<eizai Shinposha, 94' Kaigai Shinshutsu Kigyou Soran (Directory of Overseas Japanese Companies): Kunibetsuhen (By Country), Shukan Toyo Keizai Rinjizokan (Weekly Toyo Economics Special issue), Tokyo:Toyo Keizai Shinpo Sya, March 22 1994.

UP School of Economics, "A Time for Hard Decisions". KASARINLAN, Vol.5, No.1 & 2, 1989.

Varel<:l, Amelia P., Administrative Culture and Political Change, Quezon City: College of Public Administration, University of the Philippines, 1996.

Yasutomo. Dennis T., Japan and the Asian Development Bank, New York: Praeger, 1983.

128

________ _t The Manner of Giving: Strategic Aid and Japanese Foreign Policy, Lexington: Lexington Books, 1986.

Yokoyama. Masaki, Firipin enjo to jiritu kosei ron: kozoteki boryoku no kokufuku, Tokyo: Akashi syoten, 1990

___ ,"Marcos' Yen for Corruption", KASARINLAN, Vol.5 No.4. 1990.

Yoshikawa. Yoko. Nitsupi Ba is you qaikou Kousyou no kenkyu 1949-1956 (Diplomacy on Japan-RP War Reparation 1949-1956), Tokyo: Keiso syobo. 1991.

Younn. Alexander K.. The Sogo Shosha: Japan's Multinational Trading Companies. Colorado: Westview Press, 1979.

Zhao, Quansheng, Japanese Policymaking: The Politics Behind Politics: Informal Mechanisms and the Making of China Policy, Hong Kong: Oxford University Press, ·1995 (Originally published by Praeger Publishers in 1993).

GOVERNMENT PUBLICATIONS and DOCUMENTS

Acl111inistrative Management Bureau, Management and Coordination Agency, Prime rylinister's Office, Organization of the Government of Japan 1992, Tokyo, 1992

Gaiinusyo keizai kyoryo kukyoku (MOFA Economic Cooperation Bureau), Keizai kyoryoku hyoka hokokusyo (Economic Cooperation Evaluation Report), June 1993

Gaimusho (MOFA) keizai kyouryoku kyoku (Econornic Cooperation Bureau) ed., Wagakuni no Seifu Kaihatsu Enjo 1994 (Japan's ODA 1994 Annual Report). 2 Volumes, Tokyo: Kokusai kyoryoku suishin kyokai (Association for Promotion of International Cooperation, APIC), 1994

Gairnusyo (MOFA) keizai kyouryoku kyo.ku (Economic Cooperation Bureau) c:yousakeikakuka (Research and Programming), "Tai firipin keizai kyouryoku taisyo hoshin "(The Basic Position Paper of High Level Mission on Economic and Technical Cooperation to the Philippines), February 15, 1994

Cai11111syo, Keizai kyoryoku sanka e no tebiki (Manual on Participation of Economic Cooperation). Tokyo, Kokusai kyoryoku suishin kyokai (APIC), 1992

-··---- .. Keizai kyouryoku kyoku (Economic Cooperation Bureau), Cyousakeikakuka (Research and Programrriing Division), Tai Philippines keizai kyouryoku sougo chousadan taisyo houshin (the Basic Position Paper of High Level Mission on Economic and Technical Cooperation to the Philippines, Feburary 15, 1994

129

Institute of Administrative Management Under the Supervision of Management and Coordination Agency Prime Minister's Office, Organization of the Government of Japan, Tokyo: Gyousei kanri kenkyu Center, 1992

JICA. Basic Design Study Report on the Project for Constructing Primary and Secondary School Buildings in the Republic of the Philippines, August 1988

________ , Basic Design Study Report on the Project for Constructing Primary and Secondary School Buildings (Phase II in the Republic of the Philippines, March 1990

-·--·· ___ , Basic Design Study Report on the Project for Constructing Primary and Secondary School Buildings (Phase Ill) in the Republic of the Philippines, June 1991

-----···· _, Seinen kaigai kyouryokutaiin bosyu youkou (Recruitment Guide for JOCV): Heisei 5 nenban. 1993

____________ . Kokusai kyoryoku iigyoudan nenpo 1993 (JICA Annual Report 1993). Tokyo: JICA, 1993

----·--··-·For the Future of the Earth, Tokyo:JICA, 1994

-··--··---·-1. Philippine kunibetsu enjyo kenkyuukai houkokusyo(Second) (Report by Research Commitee for Assistance to the Philippines, March, 1994

Mohri,/\rcl1itect & Associates, Inc .. Basic Design Study Report on the Project for Constructing Primary and Secondary School Buildings (Phase IV) in the Republic of the Philippines. Tokyo: JICA, June 1992

-----·--· _. Basic Design Study Report on the Project for Constructing Primary and Secondary School Buildings (Phase V) in the Republic of the Philippines, Tokyo: JICA, March 1993

----····-·--' Basic Design Study Report on the Project for the Educational Facilities Improvement Program (Phase I) in the Republic of the Philippines, Tokyo: JICA, July 1993

Ministry of Foreign Affairs, Japan's ODA, Tokyo, Association for Promotion of International Cooperation (APIC)

_______ . Diplornatic Bluebook Japan's Diplomatic Activities, Tokyo, lnfoPlus, Inc.

National Statistical Coordination Board, Philippine Statistical Yearbook, Makati: National Statistical Coordination Board ·

National Economic Development Authority (NEDA), Project Development Manual, Makati: NEDA, 1984

----. ODA Handbook: Guidelines on the Availrnent of Official Development Assistance, Pasig: NEDA, 1992

·----· Philippine Development Report 1987-1992, Pasig: NEDA, 1993.

130

Sornucho (Management and Coordination Agency) .gyousei kansatsukyoku (Administrative Inspection Bureau), seifu kaihatsu enjo no genjo to kadai, Tokyo: Okurasyo insatsukyoku, 1988

THESIS

Castillo. Gilbert S., "Japanese Foreign Aid to the Philippines. 1980-1990," M.A. Thesis. International University of Japan, 1992

Gu;:rnino. Maria Victoria. "Japanese Bilateral ODA to the Philippines and it's Administrative Performance in the Sphere of Project Loan Financing," M.A. Thesis, International University of Japan, 1988

Maret. Jeffrey, "Japan's Official Development Assistance at Work in Asia," M.A. Thesis, Sophia University, 1994

INTEHVIEWS AND ASSISTANCE

Advie11to.Floro 0., Project officer 1, OECF Manila Office, (OECF Manila Office), September '13. ·1 ~.194

Aquino, Crazon C.,Former President, (Cojuangco Building), November 11, 1993

Arai. I lirokazu, Japanese Ambassador to the Philippines, (Manila Hotel), February 24, 1994, (Hiroo, Tokyo), April 29, 1994

Cruz. Amelita A., Deputy Exective Director, EDPITAF-DECS

~e Vera.Ma. Lourdes G., Chief, EDPITAF-RPDD

Fukucla, Shigeki. JICA Manila Office Official. May 8 and 9 2001

Habito. Cielito F.Secretary of Socio-Economic Planning and Director General of NEDA, (Central Bank), February 26, 1994

Halili,Jojo M., Desk Officier, Bilaterals Group, Public Investment Staff, NEDA

Hayashi,Kentaro, Third Secretary, Political Section, Ernbassy of Japan

lbaraqi,Emiko. Assistant Resident Representative, JICA Philippines Office, (Sugi, Makati). September 2, 1994

!hara.Jun, Political Director, Embassy of Japan

131

lsicloro,Carmelita E.D., Senior Transportation Development Officer, Land Transportation Office, Department of Transportation & Communication

Katayama.Yutaka, Special Assistant, Political Section. Embassy of Japan

Kis1·1imori, Hajime, Second Southeast Asia Division Asian Affairs Bureau, (Ministry Of Foreign Affairs), May 9, 1994. (Hotel New Otani) June 1, 1994

Kita~pwa, Yasuhiko, Asia & Oceania team, Regional Coordination Dept. B, MiTsubishi Corporation, (Mitsubishi Corporation.Tokyo), October 27, 1993

i<.il.:1m11ra, Takanori, Counseller, Embassy of Japan (Mandarin Oriental), Feburary 22. 1994

f<obayashi, Nobuyuki, Assistant Resident Representative, JICA Philippine Office

Machida.Satoshi, Deputy Representative, JICA Philippine Office, (Manila Nikko Garden Hotel), September 8, 1994

Ma1unaga,Masahide, Public Relations Division. JICA, (Asahi Seimei Hall, Tokyo), June 3, 1994

Miyawaki,Setsu, First Regional Division, Planning Department, JICA

Nakamori.Ayako, Japan Overseas Cooperation Agency, Development Information Staff. NEDA

Negropante. John D., U.S. Ambassdor to the Philippines, (University of the Philippines, Diliman), August 26, 1994

Na~JC.Hio, Yoshiko, Research Commitee for Assistance to the Philippines, (Pasig), August 18 and 20, 1994

Nozawa,Katsumi. Research Commitee for Assistance to the Philippines, (Pasig), August 18 and 20, 1994

Ohno f akushi, Bureau Chief. Asahi Shimbun Manila Bureau

Pelisn 1ino. Flor, Pubiic Investment Staff, NEDA

Sakisaka,Kayako, Project Formulation Adviser, JICA Philippine Office

Shirnizu,Takeo, Planning Department, JICA, (Manila Hotel), February 24, 1994

Suna9a,Kazuo, Economic Director, Embassy of Japan (Embassy of Japan)

Takahashi,l~eiichiro, Economic Director, Embassy of Japan (Embassy of Japan), August 2, 1994

Tanaka,Hideo, Chief Representative, OECF Manila Office:(OECF Manila Office), July 19,1994

132

Ueno. Yuclai, Political Division, Embassy of Japan, several times in 1993-1995

Wacla.Yoshio, Representative, OECF Manila Office. (Pasig), August 20, 1994, (Makati), August 31, 1994

· Yashirna Koji. First Secretary, Economic Division, Embassy of Japan, (Embassy of Japan, August 2, 1994

Yosllibe,Hiroshi, General Manager. Mitubishi Corporation, Manila Branch, 1994.

NEWS PAPERS AND MAGAZINES CONSULTED

t\si::.1.~eek

6sciJ:~. Shimbun t\~~~l.l!. Evening News flus)n\~Ss World E.are~_tern Economic Review Kokill?.ai Kaihatu Journal (International Development Journal) ~':lQ.Q-9 News Daily NihQ!J .. Keizai Shinbum _Ehil.1Qpine Daily Inquirer PhiliQpine Star Ma1_~l1_~1 Bulletin fY.'.!al;~_ye_

133

Appendix A

I. Japan's Official Development Assistance Charter

Cabinet Decisions June 30, 1992

In order to gankT broader support for Japan's Official De,·elopmt!nt Assistance (ODA) through better understanding both at home and abroad and to implement ii more effectively and efticiently, the government or Japan has established the following Charter for its ODA.

1. Basic Philosophy l'vhlny peopk are still suffering from famine and poverty in the developing countries. which constitute a great majnrity among countries in the world. From a humanicarian viev,1)oint. the international community can ill afford to ignore this foct. The world is now striving to build a society where freedom. human rights. democracy and other values are ensured in peace and prosperity. We must recognize the fact of interdependence among nations of the international comrnuni ty and that stability and the further development of the developing \·Vorld is indispensable to the peace and prosperity of the entire \VOrld. Environmental conservation is also a task for all humankind, which all countries, developed and developing alike. mus1 ,,·ork together to tackle. It is an important mission for Japan, as a peace-loving nation. to play a role commensurate with its position in the \VOrld to maintain world peace and ensure global prosperity. . Bearing these points in mind. Japan attaches central importance to the support for the self-help efforts of de\'eloping rnuntries towards economic take-off. lt will therefore implement its ODA to help ensure the efficient and foir distribution of resources and "good governance" in developing countries through developing a \Vi de range of human resources and socioeconomic infrastructure. including domestic systems. and through meeting the basic human needs (BHN). thereby promoting the sound economic de,·eiopment of the recipient countries. In so doing, Japan will work for globally sustainable development while meeting the requirements of environmental conservation. Such assistance is expected to further promote the existing friendly relations between Japan and all other countries, especially those in the developing world.

2. Principks Taking into account comprehensively each recipient country's request. its socioeconomic conditions, and Japan's bilateral relations with the recipient country . .Japan's ODA \.vill be provided in accordance with the principles of the United Nations Charter (especially those of sovereign equality and non-intervention in domestic matters), as well as the follo\ving four principles.

(I) Environmental conservation and development should be pursued in tandem.

(2) Any use or ODA for military purposes or for aggravation of international conflicts should be avoided.

(3) Full attention should be paid to trends in recipient countries' military expenditures, their development and production of mass destruction weapons and missiles. their export and import of arms, etc., so as to maintain and strengthen international pt.!ace and stability. and from the viewpoint that developing countries should place appropriate priorities in the allocation of their resources in their own economic and social development.

( 4 J Full attelllion should be paid to dTorts for promoting democratization and introduction of a market­orientcd economy. and the situation regarding the securing of basic human rights and freedoms in the recipient country.

3. Priority

( I ) Regions

Historically. geographically, politically and economically, Asia is a region close to Japan. East /\.sian countries. especially member countries of the Association of South East Asian Nations (ASEAN). constitute one of the most economically dynamic regions in the world, and it is important for the world economy as a whole to sustain and promote the economic development or these countries. There are. however. some Asian countries where large segments of the population still suffer frnm poverty. Asia. therefore. will continue to be a priority region for Japan's ODA.

lt is also necessary to be mindful of the poverty and the economic difliculties in the world as a whole. Japan will therefore extend cooperation, befining its position in the world, to Africa, the Middle East. Latin America, Eastern Europe. and Oceania. Due consideration will be paid in particular to Least among Less Developed Countries (LLDCs).

(2) Issues

(a) Approach to Global Problems Recognizing that it is important for developed and developing countries to cooperate in tackling global problems such as the environment and population, Japan will support efforts being made by developing countries to overcome these problems.

(b) Basic Human Needs To help people suffering from famine and poverty, refugees, and others, Japan will provide assistance to the BHN sector and emergency humanitarian aid.

(c) Human Resources Development, Research and Other Cooperation for Improvement and Dissemination of Technologies A priority of Japan's ODA will be placed on assistance to human resources development which, in the long term. is the most significant element of self-help efforts towards socioeconomic development and is a basic factor for the nation-building of developing countries. Japan will also promote cooperation for the improvement and dissemination of technologies, such as research cooperation that will add to research and development as well as adaptive capabilities of developing countries.

(cl) Infrastructure Improvement Priority will be placed on assisting infrastructure improvement, which is a prerequisite to socioeconomic development.

{e) Structural Adjustment Japan \Viii provide support to structural adjustment. so that the entrepreneursh~p and the vitality of the private sector in recipient countries can be fully exerted in the market mechanisms, and to their efforts for a solution to the accumulated debt probkm.

4. Mrasurcs for the Effective Implementation of Official Development Assistance

( 1) Japan will promote intensive policy dialogues with recipient countries. with a view to collecting and analyzing relevant information on these countries. and sharing with them basic perceptions on their development policies, taking into account their requests and ideas.

(2) To respond to the various needs of developing countries in different stages of development. Japan's ODA will take advanlage, to the maximum extent possible. of the merits of loans, grants, technical coo perm ion and other forms or assistarn.:I:!. All of these forms of assistance will be organically linked tog.ether and COlH·dinated.

(3) 'v\lhen called for. there will be appropriate communication and cooperation with aid agencies of other donor countri1:.·s. United Nations agencies and international financial institutions, as well as Japanese local gm·ernments and private organizations such as labor and business organizations. In particular. efforts wi II be made to ensure that Japan's perspective on ODA is adequately reflected in the cooperation through international organizations. while taking full advantage of the expenise and political neutrality of these organizations. There \\·ill also be cooperation with and appropriate support to non-governmental Drganizations \N<.10s). while respecting their independence.

( 4) Japan's o\\11 development policies and experiences, as well as those of countries in East and Southeast /\sia which han~ succeeded in economic take-off will be put to practical use.

(5) In implementing environmental ODA. Japan will make the.· best use of its technology and know-ho,,·. which it has acquired in the process of successfully making environmental conservation and economic devclup111e11t L'ompat ibk.

( 6) ln ordt!r to contribute to the transfer of technology suitable to the level of development of the recipient countries. Japan will promote the development ofrelevant technologies and \Vil! provide such assistance as \viii enabk the adequate utilization of the knowledge and technologies possessed by other de\·eJoping countries.

(7) In transferring technology and know-hov.i. Japan \viii make use of those possessed by the Japanese private sector as well as by the government, and provide support for technical cooperation by the private sector.

( 8) In order to cope with transnational regional problems, Japan will cooperate more closely with international organizations and other frameworks for regional cooperation such as the Asia-Pacific Economic Cooperation (APEC).

(9) A close relationship will be maintained bet\veen ODA. direct investment and trade, so that those three can promote the development or de,·eloping countries organically. For this purpose. ODA \viii be more closely linked to and be supportive of economic cooperation in the pri\·ate sector through trade insurance and such organizations as the Export-Import Bank of Japan.

(I 0) Cooperation and research to find and formulate adequate development projects will be enhanced. For the ti.1ture improvement of its ODA, project evaluations, including third party evaluations and joint evaluations with recipients and other donors and organizations, will also be strengthened.

(I I) Regional studies or developing countries. studies of development policy. and comprehensive evaluation of ODA \viii be forther promoted.

( 12.) Full consideration will be given to the active participation of \\·omen in development, and to their obtaining bem:lits from development.

( 13) Full consideration will be given to the socially weak, such as the disadvantaged, children and the elderly.

( 14) Consi(kration will be given to redressing the gap between the rich and the poor and the gap among various regions in developing countries.

( 15) Japan's OD/\ activities will be conducted \Vith full care to see that they do not lead to injustice or corruption in the recipient countries.

5. Measures to Promote Understanding and Support at Home and Abroad The following measures will be adopted to ensure that ODA is implemented with public understanding both at home and abroad and to secure the participation of the Japanese people.

( l) Making ODA Information Public

While taking into account such matters as diplomatic relations with recipient countries, more information regarding the ODA activities will be made available to the Diet and to the public.

(2) Enhancement of Public Relations and Development Education

Organized public relations activities and educational programs on development assistance will be promoted.

6.0DA Implementation System

(I) Recruitment. Training and Utilization of Competent Aid Personnel

In order to recruit. train and utilize fully the talents of competent ODA personnel, training institutes of aid experts will be enhanced to foster more development experts, private enterprise consultants and others.

(2) Ensuring Effective and Efficient Mechanisms to Implement ODA

Communication and consultation between relevant ministries and agencies will be promoted for the effective and efficient implementation of ODA. In addition. cooperation between the two aid­implementing organizations, the Japan international Cooperation Agency (JICA) and the Overseas Economic Cooperation Fund (OECF) will be intensified. At the same time, the ODA implementation functions of these two organizations will be improved. In order to obtain further cooperation from the private sector, efforts will be made to extend such support to this sector as will appropriately cover the related operating expenses.

(3) L:nsuring the Safety or ODA Personnel Dispatched Overseas

Continued efforts will be made to safeguard the lives and personal safety of ODA personnel dispatched to developing. areas. and to provide necessary assistance in the event of unexpected incidents.

(I 5) Japan's ODA activities will be conducted \vith full care to see that they do not lead to inj corruption in the recipient countries.

5. Measures to Promote Understanding and Support at Home and Abroad The f(.)llowing measures will be adopted to ensure that ODA is implemented with public unde both at home and abroad and to secure the participation of the Japanese people.

(I) Making ODA Information Public

While taking into account such matters as diplomatic relations with recipient countries. n inl<.mnation regarding the ODA activities ~will be made available to the Diet and to the pt.:

(2) Enhancement of Public Relations and Development Education

Organized public relations activities and educational programs on development assistanc• promoted.

6.0DA Implementation System

( 1) Recruitment. Training and Utilization or Competent Aid Personnel

In order to recruit. train and utilize fully the talents of competent ODA personnel, trainin1 aid experts will be enhanced to foster more development experts, private enterprise const others.

(2) Ensuring Effective and Efficient Mechanisms to Implement ODA

Communication and consultation between relevant ministries and agencies will be promo e!Tective and efficient implementation of ODA. In addition. cooperation between the two implementing organizations, the Japan International Cooperation Agency (JICA) and the Economic Cooperation Fund (OECF) will be intensified. At the same time, the ODA imp runctions of these two organizations will be improved. In order to obtain further cooperat private sector, efforts will be made to extend such support to this sector as will appropriat related operating expenses.

(3) Ensuring the Safety or ODA Personnel Dispatched Overseas

Continued efforts \vill be made to safeguard the lives and personal safety of ODA persorn to developing areas. and to provide necessary assistance in the event of unexpected incidc

MINUTES OF DISCCSSIONS

ON

THE PROJECT FOR CONSTRUCTINGS PRIMARY AND SECONDARY

SCHOOLBUILDINGS IN

THE REPUBLIC OF THE PHILIPPINES

In response to the request of the Government of the Republic of the

Philippines. the Government of Japan decided to primary and secondary

schoolbuildings and the Japan International Cooperation Agency (JICA) sent to

lhe Philippines the study team headed by Mr . .luro Chikaraishi. Second Basic

Design Study Division, Grant Aid Planning & Sun·ey Department, JICA from

.lune 15 to July 4. 1988. The team had a series of discussions on the Project with

the of fi c i a Is concerned of the Government of the Rep u b I i c of the Phi I i pp in es and

conducted a filed survey in Region V.

As a result of the study, both parties agreed to recommend to their

respective Governments that the major points of understanding reached between

them, attached herewith, should be examined towards the realization of the

Project.

JURO CHIKARAISHI

Leader

Basic Design Study Team

Manila, June 24. 1988

Japan International Cooperation Agency

ADRIANO A. ARCELO

U n<lersec retary

DECS. Manila

VICTOR U. ORDONEZ

Undersecretary

DECS, Manila