Vol. XXII, No. 35-A
Saturday, September 13, 2008 | MANILA, PHILIPPINES
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Today’s Headlines
Billion-peso buffer fund in ’09 to support infrastructure projects
A billion-peso standby buffer fund has been set aside in next year’s budget to lessen foreign exchange risks of foreign-assisted infrastructure projects.
In a statement, Budget Secretary Rolando G. Andaya Jr. said the General Fund Adjustment (GFA) will ensure that projects will not be hampered "because there is no mechanism for fund augmentation when forex (foreign exchange) loss is incurred."
Mr. Andaya said the GFA will cover additional costs due to revaluation after the project’s implementation, and from increased expenses due to inflation, in which case the government goes back to the foreign donor for additional assistance.
The government usually asks donors to fast-track the fund release when the cost is cheaper due to a strong peso. On the other hand, a weaker peso against the dollar tends to slow down project implementation. In both cases, additional funding is expected from the original allotment.
Mr. Andaya said the P1-billion fund has safeguards against possible diversion.
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