Countries and Regions

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p. 4 of 4 BACK | NEXT I. Development Situation II. Implementation of the Country Strategy and Program III. Portfolio Management Issues IV. Country Performance and Lending Levels

Country Strategy and Program Update 2002-2004: Philippines

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IV. Country Performance and Lending Levels

A. Lending Level Proposed

27. For 2002-2004, the proposed lending program includes 18 projects totaling $945 million against an indicative planning figure of $300 million annually for three-year period.⁶ The annual figure for the Philippines was scaled down from $350 million in 2000 to $300 million, taking into account disbursement performance and absorptive capacity.

B. Loan Program

28. The loan program supports the Government’s development priorities elaborated in the updated MTPDP and aligns with the COS for the Philippines, revised in 1998, which aims to reduce poverty, promote equity, improve social services delivery, protect the environment, and promote good governance. The program has been well balanced among these priorities and shows an emphasis on socioenvironmental development and poverty alleviation. About half of the 18 projects are core poverty interventions or poverty intervention. The identified priority projects are in the areas of basic education and health services; urban services development, especially housing; electrification; rural roads; rural development; natural resources and environmental management; governance; and enhancement of industrial competitiveness. The loan program for 2002-2004, as agreed with the Government, is shown in Appendix 4.

29. Project selection has also considered past implementation performance and capacities of executing agencies. Though predominantly project loan based, the program contains a mix of all lending modalities: project loans, a TA loan, program loans, sector development program loans, and loans through government financial institutions. Components of several loans, particularly in the social sector, are being channeled through the national Government or its financial institutions to local government units.

30. In conjunction with its lending program, ADB will continue to actively pursue cofinancing from official and commercial sources (including export credit agencies) to effectively address the important thematic priorities for ADB operations in the Philippines. ADB will maintain its dialogue with the Government to identify the best financing solutions to the projects, specifically the use of its credit enhancement products.

C. Technical Assistance and Economic and Sector Work Program

31. The 2002 TA program consists of 12 projects totaling $7.6 million. Nine other TAs, totaling $4.9 million, are programmed for 2003-2004. The TA program is balanced between project preparatory and advisory TA. The advisory TA program will support the (i) structural and policy reforms in governance, power and energy, trade policy, rural roads, and environment; and (ii) capacity building and institutional strengthening programs for national agencies and local governments in ODA project processing and monitoring, housing development, education, and governance.

32. ADB, in close collaboration with the Government and other external agencies, will conduct economic and sector work (Appendix 5) focusing on (i) macroeconomic and public sector analysis, including country economic review and updates, public finance review, governance assessment, private sector assessment, and civil service review; and (ii) assessments of sectors where ADB has been or will be involved, including microfinance, health, energy, and irrigation.

D. Summary of Changes

33. Project selection briefs and TA concept papers for ADB assistance are given in Appendix 6. Major changes in the composition of the loan program shown in the Country Assistance Plan (2001-2003) are summarized in the table:

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