Countries and Regions

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p. 9 of 20 BACK | NEXT I. Country Performance Assessment II. Country Operational Strategy III. Sector Strategies A. Agriculture B. Infrastructure C. Social Infrastructure and Environment D. Governance Dimensions of ADB Operations E. Gender Dimensions of ADB Operations F. Private Sector Development IV. Subregional Economic Cooperation V. Donor Activities and Aid Coordination VI. Cofinancing and Catalyzing External Resources VII. ADB’s Operational Program VIII. Economic and Sector Work Program IX. Local Cost Financing

Country Assistance Plans - Philippines : III. Sector Strategies

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III. Sector Strategies

A. Agriculture

30. With more than 70 percent of the poor residing in rural areas, poverty in the Philippines is primarily a rural problem. Rural development is essential for poverty reduction and is a key element in the ADB country strategy. However, agriculture, the mainstay of the rural population, is a lagging sector in the Philippines. The sector requires substantial increase in investments, and improved policy environment for attaining higher rural productivity. As the poor rely considerably on natural resources for their sustenance, and environmental degradation is a major concern in the Philippines, sustainable environmental management is also a major element of the ADB strategy and the subject of continuing dialogue with the Government.

1. Agriculture and Rural Development

31. Low productivity and weak competitiveness remain the key challenges confronting the sector. Raising rural productivity and profitability would require major improvements in rural infrastructure. An intensive effort should be made to improve farmers’ access to productive resources as well as to quality support services, particularly those devolved to LGUs. Strengthening the sector’s competitiveness is an urgent task considering the globalization trend.

32. Recognizing the urgency for revitalizing the sector, the Government enacted in 1997 the Agriculture and Fisheries Modernization Act (AFMA). AFMA commits the Government to speedy poverty alleviation, food security, sustainability, global competitiveness, and peoples’ empowerment as the guiding principles of rural development. AFMA provides for increased public investment in rural facilities, including irrigation, farm-to-market roads, and rural water supply. The Government is also committed to advancing the policy and institutional reforms envisaged under the Grains Sector Development Program which aims to promote a more competitive grains sector.

33. ADB’s program will respond to the urgent need to remove infrastructure bottlenecks. This approach has proven effective in raising small farmers’ income. To ensure that the poor will benefit from rural infrastructure investment, ADB assistance will also stress strengthening agriculture support services through:

1. improving the poor’s access to effective and sustainable rural financial services;
2. raising the competitiveness of the farming sector including small farmers in the face of globalization; and
3. improving research and extension services through innovative institutional and funding mechanisms and increased private sector participation (e.g., provision of integrated production and marketing services and support for enterprise development).

To remove policy and institutional weaknesses in the sector, ADB will continue to promote:

1. rationalizing the institutional framework, particularly the roles of national government agencies, LGUs, NGOs, and local communities;
2. establishing adequate mechanisms to channel additional funds to LGUs for devolved activities;
3. building LGUs’ capacity for planning, implementation, and coordination of development projects; and
4. expanding community-level involvement in the entire process of project design, implementation, and monitoring through improved collaboration with NGOs and POs.

2. Forestry and Natural Resources

34. The majority of the rural poor in the Philippines continue to rely on diminishing natural resources for their source of livelihood. Improving the poor’s income and living standards will require well-targeted interventions promoting sustainable production technology and providing alternative livelihood and basic social services to the resource-dependent communities. At the same time, efforts should be made to rehabilitate the economic and environmental value of degraded natural resources, such as denuded watersheds and overfished coastal waters. Government’s strategy in the area of natural resources management includes:

1. institutional change with the convergence initiative (involving closer interaction between the Departments of Agriculture, Agrarian Reform, and Environment and Natural Resources) as its centerpiece;
2. adoption of environment-friendly technologies and practices;
3. better management and allocation of natural resources; and
4. strengthening the use of economic instruments for protection of natural resources and the environment. An array of legislative action to support this strategy has also been planned.

35. While supporting such interventions, ADB will stress:

1. adoption of an appropriate policy environment;
2. establishing an adequate institutional framework by rationalizing the roles of national government agencies, LGUs, NGOs, and local communities; and
3. promoting community-based resource management by advancing decentralization and promoting greater local participation.

In supporting water resource development, ADB assistance will focus on both augmenting water availability through better environmental management of watersheds as well as improving water use efficiency. The latter objective would require:

1. upgrading and rehabilitating existing irrigation schemes (i.e., through the provision of support in the rehabilitation of watersheds of existing irrigation systems);
2. improving cost recovery for operations and maintenance of national and communal irrigation systems (i.e., through the formulation of market based instruments to capture the value of the water resources generated through the maintenance of the watershed area); and
3. strengthening the capacity of community organizations, including irrigators’ associations, for effective water resource management. ADB’s interventions in the forestry sector will be aimed at helping the poor in the target upland areas, including the indigenous cultural communities, develop more sustainable agriculture and forest-based livelihood activities and gain access to basic support services in community-based forestry management (CBFM) areas.

ADB will support policy initiatives to strengthen the CBFM framework, including forestland reclassification, rationalization and strengthening of tenurial instruments, and law enforcement strengthening. In supporting fisheries and coastal resource management, ADB will assist the Government in:

1. addressing needs of fishermen, particularly those who are poor in managing the coastal environment and whose living standards are being affected by depleting fish stocks;
2. reformulating a comprehensive national policy and institutional framework on the integrated coastal resource management program and in developing a national program based on the updated national policy and framework;
3. implementing integrated coastal resource management measures to manage and conserve marine environment and coastal resources; and
4. building the capacity of national and local agencies and community organizations involved in marine and coastal environment resource management.

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