Section 2June 11, 1996, Sec./Art. 2

Official Development Assistance (ODA). - For purposes of this Act, ODA is a loan or loan and grant which means all of the following criteria:

(a) It must be administered with the objective of promoting sustainable social and economic development and welfare of the Philippines;

(b) It must be contracted with governments of foreign countries with whom the Philippines has diplomatic, trade relations or bilateral agreements or which are members of the United Nations, their agencies and international or multilateral lending institutions;

(c) There are no available comparable financial instruments in the capital market; and

(d) It must contain a grant element of at least twenty-five percent (25%). Grant element under this Act is the reduction enjoyed by the borrower whenever the debt service payments which shall include both principal and interest and expressed at their present values discounted at ten percent (10%) are less than the face value of the loan or loan and grant. The grant element of a loan or loan and grant is computed at the ratio of (i) the difference between the face value of the loan or loan and grant and the debt service payments to (ii) the face value of the loan or loan and grant.