- Rationale
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Poverty rates have declined in the Philippines in the past two decades, however, the absolute number of poor people has increased to over 26 million. More than two-thirds of poor households, or 17 million people, do not have access to microfinance services. Microfinance services are key to reduced vulnerability, and to increased income, entrepreneurial opportunities, and employment. Microfinance is the central strategy for poverty reduction in the Philippines under Republic Act 8425 Social Reform and Poverty Alleviation Act, and it is an important part of the Medium-Term Philippine Development Plan (MTDP) 2004-2010.
Despite Government commitment and development of the sector to date, further substantial reform measures are required to achieve the growth necessary to meet regular demand, achieve Government's goal of universal access, and address systematic weaknesses and distortions in the sector.
- Objectives and Scope
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The goal of the Microfinance Development Program (MDP) is to assist Government to reduce poverty and promote sustainable economic growth. The MDP supports the Millennium Development Goals of eradicating extreme poverty and hunger, promoting gender equality and empowering women. The MDP will contribute to these goals by achieving its objective of ensuring permanent access to sustainable institutional financial services for a majority of poor and low-income households and their microenterprises at competitive prices. A national financial literacy program including gender training will promote effective access and utilization of microfinance services. MDP will assist the Government to build viable microfinance institutions, and improve the performance of the microfinance sector, including reducing transaction costs associated with delivery of financial services and thereby increase sustained access to financial services by the poor. The poor will have opportunities to increase incomes and employment and improve their quality of life through access to sustainable and more responsive microfinance services including money transfer and remittance services that support investment and production.
- Policy Dialogue
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None
- Environment Category:
C
- Environment Impact and Mitigation
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- Social Aspects and Remedies
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- Benefits and Beneficiaries
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The MDP will provide significant benefits and positive impact on the poor. These include: (i) a deepened financial sector that fosters broad-based, economic growth, reduces poverty and contributes to macroeconomic stability; (ii) strengthened policy, legal and regulatory frameworks for an enabling environment that will increase transparency and disclosure; (iii) increased access to services for the poor in rural and remote areas, including saving services, and remittance services; (iv) improved sustainability and performance of service providers through accredited national training programs; and (iv) increased financial literacy and empowerment of the poor, and consumer protection for microfinance clients, including a viable system for the poor to make inquiries or complaints.
- Public Consultation
- Arranged by
- Date for Consultation :
- Groups Consulted :
- Beneficiary Participation in Formulation
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- Beneficiary Participation in Implementation
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- Consulting Services
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Not applicable.
- Procurement
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The loan proceeds will be used to finance the full foreign exchange costs (excluding local duties and taxes) of items produced and procured in ADB member countries, excluding ineligible items and imports financed by other bilateral and multilateral sources.
- Contacts
- Bank
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Julie Rogers
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Principal Financial Sector Specialist
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SLWP
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Tel. No.:
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E-mail:
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jrogers@adb.org
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- Executing Agency
- Department of Finance
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Contact Person
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Mr. Joselito S. Almario, Director III
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Tel. No.
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(63 2) 523 5678
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Fax. No.
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(63 2) 523 3825
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E-mail
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Contact Person
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- Remarks
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Projects 
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