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p. 89 of 95 BACK | NEXT Message from the Chairman of the Board of Directors Members, Capital Stock and Voting Power The Record Abbreviations 2004 in Review: Board of Directors' Report Special Theme: The Changing Face of the Microfinance Industry: Building Financial Systems for the Poor Part 1: Institutional Effectiveness Part 2: Poverty Reduction Strategic Priorities Thematic Priorities Regional Perspectives East and Central Asia Mekong The Pacific South Asia Southeast Asia Indonesia Malaysia Philippines Part 3: Financial Statements: Management's Discussion and Analysis

Annual Report 2004 : Part 2: Poverty Reduction

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Philippines

Strategy and Policy Dialogue. Due to steadily tightening government fiscal conditions and uncertain financing mechanisms, several high priority projects reaching advanced stages of preparation in 2004 were put on hold. A new CSP reflecting current fiscal constraints is under preparation. Meanwhile, ADB (i) addressed fiscal imbalance through interventions in the power sector, the single largest contributor to the consolidated fiscal deficit and largest drain on public sector finances; (ii) supported decentralization and managing local government unit (LGU) revenues and expenditures; and (iii) developed programs in governance, health systems, and financial market regulation. These efforts will be complemented by project financing and facilities from ADB's private sector operations. By improving the local investment climate, long-term partnerships will be established with financially sound and well-managed LGUs to undertake development projects without national government budget support.

ADB collaborated with the government, the World Bank and the Japan Bank for International Cooperation to achieve a more manageable portfolio and efficient project implementation. The government and ADB conducted two exercises on portfolio management and performance monitoring and evaluation. Despite adverse impacts on disbursements due to budget constraints, the portfolio showed remarkable improvement in project implementation performance indicators including a significant reduction in undisbursed loan amounts and a reduction in the proportion of projects at risk. This was achieved by strong collaboration from government oversight agencies and executing agencies and closer supervision and administration by ADB.

Loans and Technical Assistance. ADB approved four loans totaling $446.0 million including $213 million for a health sector development program, private sector projects of $200 million for peso swap and financing, and $33 million for the purchase and resolution of a finance corporation's portfolio of nonperforming loans. Ten technical assistance grants totaling about $6.0 million were approved to support agrarian reform, power sector reforms, infrastructure, basic education, microfinance and SMEs, transport, LGU development, and governance. The JFPR also provided a grant of $1.5 million.

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