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The Philippines and ADB Sign Poverty Partnership Agreement at a Major Poverty Conference

MANILA, PHILIPPINES (10 October 2001) - The Philippines Government and the Asian Development Bank (ADB) today signed a Poverty Partnership Agreement at ADB headquarters in Manila.

Signing of Poverty Partnership Agreement President Chino and H.E. President Arroyo witness the PPA signing before 200 conference delegates. L to R: Sitting: Vice-President (East) Joseph Eichenberger, President Chino, H.E. President Arroyo, Sec. Romulo. Standing: Lisa Kulp , PED, Mr Panagariya, Sec. Teresita Quinto-Deles, Chief, PhCo, Gunter Hecker

The agreement was signed by Philippine Executive Secretary Alberto Romulo and ADB Vice-President (Region East) Joseph Eichenberger at a Conference on Poverty, Growth and the Role of Institutions. Philippine President Gloria Macapagal-Arroyo and ADB President Tadao Chino witnessed the signing.

The agreement marks the culmination of the continuing dialogue between the Philippine Government and ADB in poverty alleviation efforts in the Philippines. It also incorporates a mechanism to review performance, key indicators and institutional milestones to monitor performance and focus future actions to meet the desired targets.

To achieve its poverty reduction priorities, the Government, in partnership with ADB, will focus on the following key areas:

• Macroeconomic stability and equitable growth based on free enterprise;
• Agriculture modernization with social equity;
• Comprehensive human development and protecting the vulnerable; and
• Good governance

Measuring progress towards the shared vision of a poverty-free Philippines under this agreement will be based on agreed goals, strategies, and selected key indicators from the Medium-Term Philippine Development Plan.

ADB plans to provide a yearly loan assistance of between US$300 million and US$400 million, and a technical assistance program between US$6 million and US$9 million between 2002 and 2004 to the Philippine Government. Forty per cent of lending will be for projects targeting poverty reduction. Close monitoring and analysis of the poverty situation and benchmark targets through extensive consultations will also be a key component of ADB's assistance.

In supporting the government's efforts for sustained peace and development and poverty alleviation, ADB operations will have a special focus on Mindanao. The Philippines is one of ADB's most active clients during the last decade. To date, the Philippines has borrowed nearly US$8 billion to finance key development projects. ADB has had its headquarters in the Philippines since it opened in 1966.

Earlier, at the opening of the three-day conference, President Chino told some 200 delegates representing government, bilateral agencies, non-government organizations, civil society, and academia that adequate understanding of the key role of institutions has been a missing link in past development efforts to fight poverty. "Unless the institutions are appropriately developed, even the best designed strategies and policies will fail and economic incentives will not produce the expected results," said President Chino.

Mr. Chino emphasized that poverty reduction strategies must tackle the problems that impede economic and social development and poverty reduction. "If poverty means powerlessness, then it follows that assistance must focus on developing institutions that the poor can use to nurture their abilities, assert their interests, and access resources. Only when the poor and their interests are represented in institutions at national and local levels, policies to reduce poverty will work," he said.

Mr. Chino explained that ADB was in its second year of implementing its Poverty Reduction Strategy and several country-specific poverty analyses had been conducted to improve the understanding of the causes and consequences of poverty. "The poverty analysis serves as the base for conducting a dialogue, formulating a country strategy and program, and signing a Partnership Agreement with the government for poverty reduction."

Partnership Agreements for poverty reduction have already been signed with Bangladesh, Indonesia, the Lao People's Democratic Republic and Mongolia.

ADB has organized the three-day conference to discuss the relationship between economic growth and poverty reduction by examining the role of institutional, political, and socio-cultural factors. President Macapagal-Arroyo inaugurated the conference.

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