The Intergovernmental Fiscal Policy Board (IFPB) has approved the guidelines on official development assistance (ODA) loans for the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM), paving the way for the region’s access to foreign-assisted projects and programs that will support its inclusive development.

Co-chaired by Finance Secretary Ralph G. Recto and Bangsamoro Government Minister of Finance, Budget and Management Ubaida C. Pacasem, the IFPB was created under the Bangsamoro Organic Law (BOL) to deal with revenue imbalances and fluctuations in the regional financial needs and revenue-raising capacity of the BARMM.

“With these ODA guidelines, we are equipping the BARMM with the tools needed to shape its future and write its own success story. This unlocks limitless opportunities for the BARMM––from infrastructure development to socioeconomic programs that create jobs, boost incomes, and lift communities out of poverty,” Secretary Recto said during the signing ceremony on the said guidelines on September 3, 2024 at the Department of Finance (DOF) office in Manila.

“Beyond financing, this will provide the BARMM with access to knowledge, technology transfers, capacity-building, and a wealth of experience from experts and development partners around the world,” he added.

Pursuant to the BOL, the ODA guidelines authorize the Bangsamoro Government to contract loans, in cash or in kind, from governments of foreign countries, their agencies, and instrumentalities or multilateral institutions or organizations.

Under the guidelines, the Bangsamoro Government can take out loans to finance investment, social, and economic development projects for the welfare of the people of the Bangsamoro, provided that ODAs must only be used in the absence of other financial instruments in the capital market and that it must contain a grant element of 25%.

Meanwhile, ODA funds cannot be used for telephone programs, projects required by law to be handled by the private sector, or for financing private corporations that have access to commercial credit.

The guidelines also detail the Bangsamoro Government’s instrumentalities that may be involved in the ODA loan process, the pertinent documents for technical and financial evaluation, as well as the procedure for the approval of ODA loans to the BARMM in coordination with the National Government.

With the ODA guidelines in place, Secretary Recto expressed full confidence in the Bangsamoro Government’s ability to leverage opportunities, harness concessional ODAs effectively, and manage partnerships with utmost prudence and foresight.

He said the progress achieved by the IFPB is a clear reflection of the coherent and supportive relationship between the National Government and the Bangsamoro Government in realizing their shared goal of greater fiscal autonomy, self-governance, and lasting peace for the people in the BARMM.

“For us in BARMM, this is more than just a tick on our to-do list, but a step-board on the ladder toward BARMM’s fiscal sustainability, toward the achievement of the Bangsamoro Development Plan, toward the advancement of the welfare of the people in BARMM, and toward our contribution to the achievement of our country’s sustainable development goals,” Minister Pacasem said.

The IFPB guidelines on ODA loans was signed after it was approved by both parties during the seventh IFPB Meeting.

Among the items also discussed during the meeting were the tax study group deliverables.

These include the process and procedure for the collection and sharing of revenue and remittance of the BARMM’s shares in national taxes as well as the rules to implement payment of taxes by corporations, partnerships, and firms in accordance with the BOL.

Both sides likewise discussed updates on the transition plan for the transfer of tax administration functions from the Bureau of Internal Revenue (BIR) to the Bangsamoro Revenue Office (BRO), including the establishment of a digitalized tax administration system for the BARMM.

Other items taken up were updates on the appointed Bangsamoro Government members to the Governance Board of the Al-Amanah Islamic Investment Bank of the Philippines (AAIIBP), the proposed transfer of the Development Bank of the Philippines’ (DBP) share in the AAIIBP to the Bangsamoro Government, and the issuance of certificates of tax exemption to cooperatives in BARMM.

Secretary Recto assured the Bangsamoro Government officials of the DOF’s full commitment to empowering BARMM with sound fiscal and economic policies to ensure the region’s long-term sustainability and realize the most hopeful expectations of the Bangsamoro people.

“[T]he DOF is your steadfast ally. Makakaasa po kayo sa aming tulong sa lahat ng inyong hakbangin. Nandito po kami, laging handang gumabay at sumuporta sa inyo,” he added.

Joining Secretary Recto from the National Government were IFPB Alternate Member and Department of Budget and Management (DBM) Undersecretary Wilford Will L. Wong; IFPB Alternate Member and National Economic and Development Authority (NEDA) Undersecretary Carlos Bernardo O. Abad Santos; and IFPB Alternate Member and Department of Trade and Industry (DTI) Assistant Secretary Kristian R. Ablan.

IFPB Member and Ministry of Trade, Investments, and Tourism (MTIT) Minister Abu Amri A. Taddik; IFPB Member and Bangsamoro Finance Office – MFBM Director Sittie Amirah K. Pendatun; and IFPB Alternate Member and Bangsamoro Planning and Development Authority (BPDA) Director Kadil Sulaik, Jr. attended the meeting.

Officials present from the DOF were IFPB NG Secretariat and Undersecretary Bayani Agabin; Chief-of-Staff and Undersecretary Maria Luwalhati Dorotan Tiuseco; Undersecretary Charlito Martin Mendoza; Undersecretary Renato Reside; Undersecretary Joven Balbosa; and Assistant Secretaries Dakila Elteen Napao.

Other attendees were Development Bank of the Philippines (DBP) President and CEO Michael O. De Jesus; Acting Chairman/Chief Executive Officer and Member of the Board of Directors of the AAlIBP Amilbahar P. Amilasan, Jr.; and Bangsamoro Planning and Development Authority Project Development Officer V and Chief of ODA Coordination Division Hasna Abubakar Adam.