Regions and Countries

	Table of Contents
p. 12 of 20 BACK | NEXT I. Country Performance Assessment II. Country Operational Strategy III. Sector Strategies A. Agriculture B. Infrastructure C. Social Infrastructure and Environment D. Governance Dimensions of ADB Operations E. Gender Dimensions of ADB Operations F. Private Sector Development 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 : III. Sector Strategies

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D. Governance Dimensions of ADB Operations

53. Through its operations, ADB is addressing each of the concerns on governance which have been highlighted in Section I.D.

54. In the area of anticorruption, attention will be focused on improving the functioning of the COA so that it can play a more effective role in improving the accountability of public expenditures and preventing corruption. To enable the Government to put in place appropriate check and balance mechanisms, COA will need to play a key role. At the same time, it is important to improve public sector procurement to improve efficiency and reduce opportunities for corruption.

55. To improve public services, it is necessary to:

1. accelerate privatization or restructuring of public enterprises such as NPC, NFA, PNR;
2. improve capacity of regulatory agencies such as the Energy Regulatory Board, Air Transport Office, MWSS, SEC, Philippine Deposit Insurance Corporation (PDIC); and
3. strengthen implementation of high priority public sector projects through capacity building of the Presidential Committee on Flagship Programs and Projects.

On the latter, continued dialogue on improving project implementation performance is being maintained through the CPRM process, which has been intensified. The key policy that needs to be pursued is to reduce the role of the Government in directly providing services while improving efficiency of the functions that need to be retained by the Government.

56. To assist the decentralization process, ADB will promote devolution of national government activities. The transparency and predictability of transfer of development funds from the national to local governments has to be improved, and the capacity of local governments in planning, implementing, and financing development activities needs to be strengthened. ADB is undertaking an increasing number of projects involving participation of local governments which will further strengthen the process of decentralization.

57. ADB is encouraging greater participation by the private sector, NGOs and civil society groups in matters of public concern. This is being achieved through their increased participation in the design and implementation of ADB projects in the country, including country strategy formulation, the CAP process, and seminars and workshops on important development issues. With regard to ADB-supported projects, arrangements will be made to enable civil society participation in all stages of the project cycle, including project identification, formulation, implementation, and evaluation.

58. ADB is actively engaged in furthering the development efforts in the Southern Philippines. It has been one of the most active donors in the area and its ongoing and forward program has several initiatives focusing specifically on the area’s development. Projects are being taken up, despite difficulties, particularly in areas affected by civil strife that are greatly lagging behind in development. The Brunei Darussalam-Indonesia-Malaysia-Philippines East ASEAN Growth Area (BIMP-EAGA) process (see Section IV below) is also being revitalized through TA projects.

59. On money laundering, ADB supports current reform initiatives that give more power of supervision to the Bangko Sentral ng Pilipinas (Central Bank of the Philippines). As this has recently been disclosed as a concern by G7’s FATF, ADB will pursue this issue in its policy dialogue with the Government, particularly in the context of its financial sector operations.

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