Regions and Countries

	Table of Contents
p. 7 of 20 BACK | NEXT I. Country Performance Assessment II. Country Operational Strategy III. Sector Strategies IV. Subregional Economic Cooperation V. Donor Activities and Aid Coordination VI. Cofinancing and Catalyzing External Resources VII. ADB’s Operational Program VIII. Economic and Sector Work Program IX. Local Cost Financing

Country Assistance Plans - Philippines

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II. Country Operational Strategy

A. The Country Operational Strategy

27. ADB’s Country Operational Strategy (COS), which was revised in 1998, conforms closely to the Government’s new development priorities outlined under the MTPDP released in 1999. The strategy places increased importance on poverty reduction and social development. In particular, the strategy envisages that ADB’s assistance program should concentrate on promoting equitable growth, better provision of basic social services such as health care and basic education, and management and protection of the environment. Promotion of equitable growth would require increased attention to rural development, more balanced regional development, with special emphasis on the Southern Philippines (provinces in Mindanao and parts of the Visayan region), and policies and programs to improve the country’s infrastructure, with emphasis on greater private sector participation. Efforts to improve the quality of health services and education should focus mainly on improving people’s access to primary health care and basic education. Environmental protection should focus on the management of natural resources and urban environment. Since many of these subjects are now devolved to the LGUs, it would necessitate greater interaction between ADB and the local governments. The strategy also addresses, through its sectoral focus, issues relevant to the currency turmoil, including capital market development. Sectoral reform initiatives will also assist private sector participation and restore investor confidence.

B. Progress in Implementation

28. Given the equity and social development focus of the strategy and the increased importance of ADB’s policy related operations in the traditional infrastructure sectors, the annual CAPs have aimed at changing the lending composition towards poverty reduction and social development objectives. Although the incidence of poverty had been declining prior to the financial crisis, progress had been slow. The crisis is also likely to have halted the decline. Emphasis on poverty reduction is therefore crucial. Sectorally, the share of traditional infrastructure projects, especially power generation and construction of airports, ports and communication facilities, has decreased in number and volume over the last few years. Correspondingly, the share of irrigation, roads (especially rural roads), primary health care, basic education, environmental management, and urban social services (including urban water supply and sanitation) has increased (see also details of project mix in Section VII).

C. Poverty Partnership Agreement

29. Although the existing COS had already initiated a strategic shift towards poverty alleviation, a process of revision of the COS has been started to bring it further in line with ADB’s new overarching strategic objective of poverty reduction. ADB, together with UNDP and the World Bank, has been supporting a countrywide internal consultation process initiated by the Government with all stakeholders. This process is expected to lead to a workable poverty reduction strategy that finds universal acceptance. This process is currently ongoing and is expected to be entered into in early 2001. A partnership agreement with the Government will then be entered into, paving the way for preparing a new COS in 2001.

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