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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

C. Social Infrastructure and Environment

44. The Government and ADB acknowledge that a robust population control program is a prerequisite for ensuring that the gains achieved in social development and environmental protection are sustainable and assist in poverty reduction. The Government's commitment to this policy is becoming more explicit as evidenced by its articulation in the MTPDP. Opportunities for policy dialogue in this area are thus expected to increase and technical assistance for capacity building activities has been programmed. Sector strategies in the social sector including the environment, will aim at preserving and further improving the advances made in the key socioeconomic indicators in the medium term. In addition, a key concern is balanced regional development with attention to urban issues as the majority of Filipinos are now residing in urban areas.

1. Education

45. Limited budgetary resources and rapid population growth have limited improvements in basic education services. In recent years, insufficient investment in basic education has been accompanied by a decline in education quality, continued low retention rates, and increasing class sizes. This could adversely affect Philippine competitiveness in the world economy. The major issues affecting education are the poor management of resources across the sector, low education quality, the haphazard expansion of higher education at the expense of basic education, and inequitable access at all levels. To improve quality and reduce inequities in basic education, the Department of Education, Culture and Sports (DECS) has embarked upon a process of decentralization. The Presidential Commission on Education Reform (PCER) recommends the urgent reform of higher education in order to rationalize the system and reduce public funding to universities. A phased withdrawal of public funding from higher education is recommended.

46. ADB operations in the sector will focus upon poverty reduction and enhancing global competitiveness. The recommendations of the PCER for fundamental education reform will be supported to effect efficiency, quality and equity improvements in basic education, higher education and skills training. More effective management and use of resources will be encouraged through the reform of education financing, restructuring of higher education, rationalization of the skills development system, and decentralization. In DECS, Commission on Higher Education (CHED) and Technical Education and Skills Development Authority (TESDA), the capacity of the central level to develop policy, assure quality, and monitor and evaluate the system will be strengthened. At the same time, the focus on school based management and learning centered curriculum will be supported. In higher education, the emphasis will be on better quality and increased cost recovery, with the eventual aim of freeing more resources for basic education. To offset the impact of higher fees on low-income families, scholarship programs will be expanded. A similar strategy will be followed in skills training, where support will target greater private sector involvement and more scholarships. The priority in basic education will be expanding access of undeserved and marginalized groups, improving the quality and relevance, improving efficiency and effectiveness, institutionalization of early childhood education, and strengthening local culture and sports.

2. Health and Nutrition

47. New challenges have emerged as a result of changes in the pattern of diseases and institutional structure. The high population growth rate is affecting development and contributing to high poverty. While infectious disease remains a threat, non-communicable diseases such as cancer and cardiovascular disease have emerged as important causes of mortality. Continued high incidence of tuberculosis is a concern in the Philippines, particularly as it affects the poor disproportionately. The devolution of health services to LGUs requires intensive efforts to strengthen their planning and management skills. At the national level, the Department of Health (DOH) needs to provide technical leadership for national health programs, develop national health policies, and introduce efficient monitoring. There has been over-emphasis on curative rather than preventive health care services and health promotion. Serious geographic inequities also exist. Attention to social insurance reform is required owing to the high costs of treatment of chronic illnesses for the poor and the inadequacy of the social security system. Health care financing initiatives, including improved cost recovery, better targeting of subsidies, closer cooperation with the private sector, and development of health insurance and other risk sharing schemes, are needed. Improved regulation is necessary to enable better provision of services by the private sector. The high population growth rate of 2.2 percent has contributed to deteriorating quality of education and health services, accelerating urbanization, pollution, and environmental degradation. There is evident need for reproductive health services and demonstrated unmet demand for family planning services. Increased attention to population issues and related programs is therefore necessary and will be achieved through intensified dialogue with the Government and civil society, and through focused investments. The Government’s medium term development strategy in the health sector addresses several of these concerns. It emphasizes enhancing support capacities for devolved health care, improving health care financing, implementing an action agenda for improvement of nutrition standards, and integrating population management as an integral part of development policies and programs.

48. In the medium-term, ADB’s priorities are to assist the Government to manage:

  1. the transition of DOH from top-down service provider to catalyst of preventive and promotive services for the poor, with special attention to prevention of chronic diseases and occupational illnesses, and as an enabling facilitator in the sector;
  2. the transition of public health personnel to LGUs through local health partnerships, with attention to the reorganization of the public health service and merit-based career paths;
  3. the transition to more accessible and affordable health care through prudent health financing reform; and
  4. efforts at improving public and private partnership. These priorities have been highlighted in the 1999 Philippine Health Sector Study (PHSS) jointly undertaken by ADB, the World Bank and the Government and are reflected in the loan and technical assistance projects in the forward program.

3. Urban Development

49. The Philippines has one of the highest rates of urbanization in the world, with the urban population growing at an annual rate of 5.14 percent. The rapid pace of urbanization has stretched the capacity of urban infrastructure services, and facilities to their limit. This has resulted in both increased levels of service deprivation, particularly among the urban poor and environmental degradation. It is estimated that about 35 percent of the urban population are squatters and slum dwellers, living in unserviced or poorly serviced communities. It is therefore necessary to place high priority on continued policy interventions and effective investment in urban development to help the urban poor get access to basic urban services. Special emphasis should be given to assist the weak LGUs whose capacity to provide basic urban services is limited. The Government’s medium term strategy focuses on providing shelter to the urban poor and on greater allocations of public resources for socialized housing.

50. Based on the policy framework developed through the TA for the National Urban Policy Framework, ADB will continue to support the Government's urban sector policy reforms. This support will include:

  1. assisting the Government in strengthening the institutional structure and capacities;
  2. rationalizing the financing mechanism for urban development under the decentralized government system;
  3. building financial, institutional, and administrative capacities of LGUs;
  4. promoting public-private partnerships for development of urban infrastructure and delivery of urban services; and
  5. encouraging an integrated approach to urban development initiatives. Poverty alleviation, upgrading basic urban infrastructure, and sector policy reforms will be the key focus in the formulation, design, and implementation of urban sector projects.

Enhancing urban poor communities’ access to municipal services, housing, and land tenure, and improving the urban environment will operationalize this strategy through loan and TA projects in the program.

4. Environment

51. As stated above, the major issues in the sector are inadequate policy and legal framework, and weak institutional capacity at the national and local levels for environmental planning, management, and enforcement. There is also a need to promote environmental awareness and introduce more market-based instruments for environmental management. The Government’s strategy for environmental protection is comprehensively dealt with under the Philippine Agenda 21 while ADB’s medium-term strategy for the sector is mainly provided under policies for protection of natural resources (see Sections I.C.3 and III.A.2 above).

52. ADB’s operations will continue to focus on advancing reform initiatives needed for establishing a more effective policy and institutional framework. In doing so, ADB will support interventions that will link poverty reduction and environmental management through optimizing participatory planning and implementation. In promoting terrestrial and marine resource management, ADB support will aim at directly benefiting the poor who rely on the natural resource base for their livelihood. ADB will also assist the Government in developing new frameworks for bringing together the local communities, the private sector, and the Government to achieve optimum benefit for poor local communities while preserving biodiversity. In addressing the urban environment problems, ADB will continue to support the Government’s efforts, particularly air pollution in large regional urban centers, which has a detrimental effect on health, particularly of the poor. To promote pollution control, ADB will provide technical assistance to help the Government develop appropriate industrial and environmental policies (such as ensuring that the power sector complies with the Clean Air Act) to promote cleaner production and advance technology transfer of cleaner production technologies. Furthermore, urban environmental concerns will be addressed in urban development projects in general, which will have components for solid waste, water supply and sanitation, and land use.



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D. Governance Dimensions of ADB Operations