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ADB’s Safeguard Policy Update Philippines Consultation

Opening Remarks by
Tom Crouch
Deputy Director General
Southeast Asia Department

28-29 November 2007
ADB Headquarters, Auditorium C & D, Manila

On behalf of my colleagues, I extend a very warm welcome to all of you.

Thank you for taking time from your busy schedules to join us for this dialogue on safeguard policies and practices. It is very encouraging to see representatives from so many constituencies, all with an abiding interest in safeguard policies and practices. We have representatives from government agencies, civil society organizations, the private sector, and development finance institutions.

This gathering -with its special focus on the Philippines-is the third in an ongoing series of consultations. Earlier ones were conducted on a sub-regional basis, involving participants form multiple countries. The first was in Bishkek, Kyrgyz Republic, and the second (focusing on Indigenous Peoples safeguards), which was completed yesterday, was held at ADB.

The ADB-Philippines partnership is more robust than ever. The strength of the ADB-Philippines partnership is founded in four characteristics:

• Host, unique among ADB’s 67 members.
• Major shareholder, representing an important channel for Philippines voice on policy matters. Finance Secretary Teves sits on the Board of Governors, and Executive Director Jimenez represents the Philippines on ADB’s resident Board.
• Major client, cumulatively Philippines has borrowed more than $8 billion since it joined as a founding member in 1966.
• Major supplier, winning a substantial amount of contracts for consultancy, goods and services financed by ADB loans and TA.

Based in part on recent greater alignment of ADB’s strategy and operations with Philippine priorities, in 2006 ADB had the highest lending level since 1998, the highest level of disbursement ever, and the first net resource transfer from ADB to Philippines since 1997. On the other side of the ledger, Philippine consultants and companies continue to do very well in winning contracts.

While the ADB-Philippines relationship is very robust, the country’s prospects also are brighter than they have been for quite some time. Fiscal consolidation, the centerpiece of the government’s reform agenda, has progressed on track. Macro-economic performance indicators are sound: growth above 5% since 2003, and 7.5% in 1H’07; inflation very moderate; FX reserves about 5 months of import coverage; remittances from OFWs seemingly bulletproof against the vagaries of global events.

Of course, we must not become complacent. These sorts of results require continuous and astute husbanding; it will always be a work-in-progress. More effort is needed to improve the investment climate, reduce poverty, make growth more inclusive, and eradicate corruption.

I take time to mention these aspects of the ADB-Philippines partnership and Philippine economic performance, because they relate directly to our topic. That relationship concerns the risk that better economic performance might be achieved at the cost of some other development outcomes.

This brings us to the importance of the environmental and social safeguards.

Effective safeguards are a cornerstone of poverty reduction and sustainable, equitable development. Effective safeguards ensure there is no marginalization of some groups. Effective safeguards ensure inclusive development.

In more concrete terms, effective safeguards ensure projects take sufficient care that all affected people, especially the vulnerable and poor, are not harmed in the development process, and that if there are negative impacts action is taken to mitigate them. Philippines has made substantial process in devising and improving its own national safeguards systems. In dialogue with ADB and others, the Philippines has established substantial legal and regulatory frameworks in environmental assessment, involuntary resettlement, and indigenous peoples safeguards. The framework and approaches for Indigenous Peoples are, in fact, often spoken of internationally as a model for other countries. Implementation, though, has often lagged, and this too has been noted. This is a key aspect of the safeguards framework, which can often be degraded by insufficient attention to the three “I”s – implementation, implementation, and implementation.

The Philippines has emerged as one of the leaders for customizing the Paris Declaration on Aid Effectiveness (PD) - signed by over 150 countries and agencies – including the Philippines and ADB - in March 2005. The PD is anchored on five pillars: Ownership, Alignment, Harmonization, Managing for Results, and Mutual Accountability.

A core element of the customization of the global aspirations of the PD for Philippine circumstances was establishment of the inter-agency Harmonization Committee, whose efforts are supported directly by ADB. The Harmonization Committee pays special attention to the three safeguards we are discussing today: environment, resettlement and indigenous peoples.

ADB is updating its three safeguard policies on environment, involuntary resettlement, and Indigenous Peoples. Today, we have the opportunity to bring our energies together so that ADB’s safeguard policy becomes more suited to the country context, by openly and transparently discussing our experiences, sharing our concerns, and listening to each other with respectful understanding. We at ADB can certainly improve our understanding of what needs to be done regarding the development of ADB’s DMCs by listening carefully and learning from you during these meetings.

Like so much of what we do under the ADB-Philippines partnership, development and implementation safeguard policies are a joint responsibility, for which we must be jointly accountable. We are especially eager to hear of the Philippines efforts in these three areas. I am confident that with such a gathering of experienced and expert persons, many ideas will emerge to further enrich the proposed safeguard policy statement.

Maraming salamat po.