Opening of the Philippines Country Office
Remarks by
Günter Hecker
Country Director
Philippines
Press Conference
1 March 2001
Secretary Canlas, ladies and gentlemen:
Welcome to the Asian Development Bank. I am delighted that you are here today to learn about the Philippine Country Office, why we have opened it, how it will operate, and what ADB and the Government hopes it will achieve.
This morning ADB was graced with a visit by President Macapagal-Arroyo. She and ADB President Chino jointly inaugurated the Office.
The story of ADB and the Philippines goes back to 1965 when ADB's founders held a conference in Manila to choose a home for the new institution. They chose Manila, and ever since then ADB and the Philippines have had a special relationship. But the Philippines is more than just our home; it is one of our most important clients. We have over the years made 183 loans to the Philippines, totaling close to $8 billion, and we have provided more than 100 million dollars' worth of technical assistance. Last year, we approved $470 million for new projects, and we have a pipeline program for the next three years of around $1 billion.
ADB first established an office outside Manila in 1981. That was in Bangladesh. Since then we have opened offices and missions in 16 countries. It is ADB policy in fact to have resident missions in all of its developing member countries. We believe that these missions, each fully dedicated to a particular member country, help us get closer to those we serve. It is, therefore, only logical to have such a mission for the Philippines also.
So why have we established PhCO? It has been set up because we need to strengthen ADB's partnership with the Government, other donor agencies, the private sector and civil society. We think the Office will improve the responsiveness of ADB's Philippine operations and strengthen ADB's client orientation. It is a one-stop shop for ADB operations in the Philippines. This should be a convenience to those who have dealings with the Bank and provide a sharper focus to our Philippine operations, with better coordination and more effective representation. Our initial staff of 10 officers, including five Philippine nationals, have all volunteered for duty on this desk. They are dedicated and hard-working. They should be able to make a real difference.
Which raises the question, do they need to make a difference?
The answer is "yes". The Philippines has borrowed from ADB nearly $8 billion over the years. Past assistance focused on infrastructure (45%), especially energy and road projects and agriculture (25%) - particularly irrigation projects to develop fisheries, forestry and coastal resources. Philippines is one of ADB's active clients, borrowing some US$400 million annually during the last decade. But its record of project implementation is poor, with long delays in disbursement and utilization of funds, and worse-than-average records of project success.
Today's priorities include development of the Southern Philippines, where there is a high incidence of poverty. Rural poverty in Mindanao will be addressed through development of infrastructure, strengthening transmission system for rural electrification, microfinance and improved forest and coastal resources management to assist the development of poor upland and coastal communities. Attention will also be given to projects that address urban poverty, e.g., the Poor Urban Communities Project and Metro Manila Urban Services for the Poor. PhCO will also help the Government develop the private sector, provide technical assistance in policy areas including governance, trade and environment, and assist in capacity building for at national and local level.
We want these projects and programs to succeed. PhCO is now ADB's primary interface with the Government, and with other development stakeholders in the Philippines, including NGOs. It is responsible for all operational aspects of ADB's relationship with the Philippines. We think PhCO can make a difference.
In particular we want to help the poor of the Philippines.
ADB's overarching goal is to end poverty in Asia and the Pacific. All of ADB's work is being reoriented to better serve the interests of the poor. Pro-poor projects will account for 40 percent of ADB's lending volume this year. In consultation with the Philippine government, and with NGOs, civil society and other donor agencies, ADB is conducting a major analysis of poverty in the Philippines. We are looking forward to signing in April a partnership agreement with the Government for poverty reduction.
Let me conclude my opening remarks with a few comments about the Philippine economy and its development prospects.
It is the economy of course that is the key to lifting the poor out of poverty. But the economy's performance depends greatly on the Government's policies, programs and projects. Given the country's debt profile, the need to contain the budget deficit is important, although the latter is not large for a developing country. The major issue is on the revenue side of the budget. The Government will simply have to focus on tax collection, evasion and rationalization.
Our preliminary estimate for the GDP growth in 2001 at around 3 percent. Investor confidence is recovering, but the difficulties are not over. As well as the budget deficit, there are the cyclical decline in global and regional economic performance, the Mindanao problems, the possible El Nino effect-so many things. There is also the fundamental problem of enormous disparities of wealth and income in the Philippines. It requires a wise and effective Government economic team to get to grip with all these matters. I am sure Secretary Canlas will have something to say about this. For ADB's part, let me reiterate our willingness to help in whatever we can.
Ladies and gentlemen, the Philippine Country Office is doing business. We aim to make a difference!
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