Regions and Countries

	Table of Contents
p. 14 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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F. Private Sector Operations

63. Basic prerequisites for the efficient functioning of the private sector are the development of the capital market and financial infrastructure; deregulation of industry, trade, and investment; and adoption of appropriate policies conducive to efficient market functioning. No private initiative will be forthcoming unless an appropriate legal framework and sectoral policy reforms, including deregulation and privatization, are in place. ADB will consider financial assistance and advisory services to catalyze the privatization of selected state-owned enterprises. Privatization of the public sector, especially in areas where private entities can perform better, such as power, transport, water, and municipal services, is a key issue and needs careful monitoring and facilitation. A need has also been identified to improve capacity at the regional level to identify infrastructure projects for Build-Operate-Own/Build-Operate-Transfer (BOO/BOT) financing and to attract sponsors to undertake these projects. ADB has engaged in policy dialogue in these areas in the past and proposes to continue the process.

64. In infrastructure, the focus in private sector operations will be on projects financing to address critical bottlenecks in such sub-sectors as power generation and transmission, water supply and wastewater treatment, solid waste management, transport, and rural telecommunications. In line with ADB’s commitment to poverty reduction, priority will be given to extend basic services to depressed communities (such as the recently approved Maynilad Water Services Project). Support will also be considered for private investment opportunities arising from the Government’s privatization exercises, particularly those involving ADB assistance such as the privatization of the NPC. With regard to financial intermediation, the emphasis will be on projects that facilitate financing of micro and small enterprises, as well as those that support ADB’s proposed capital market development program. Overall, efforts will be exerted to identify and pursue projects that could demonstrate the success of ADB’s public sector programs designed to create enabling conditions for the private sector. Since private sector projects cannot be pre-programmed, the success of ADB’s private sector operations will depend on emerging market opportunities and the availability of willing investors.

65. ADB will continue to review its existing private sector portfolio in the Philippines with a view to disposing of selected loans and equity investments to enable ADB to recycle its resources. Divestment will be subject to the following consideration:

1. that ADB’s development role in the project concerned has been fulfilled; and
2. that market conditions are appropriate for the divestment.

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