Countries and Regions

	Table of Contents
p. 18 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

---

VII. ADB’s Operational Program

A. The Proposed Program

76. For 2001-2003, the proposed lending program includes 16 projects for a total amount of $945 million against an indicative planning figure (IPF) of $900 million ($1,080 million with 20 percent over-programming allowance, see Appendix 4). The annual IPF for the Philippines has been scaled down from $400 million in the past to $300 million taking into account past disbursement performance and the high level of undisbursed balance which stood at approximately $1.7 billion at end 1999. The projects in the 2001-2003 pipeline are based on the current COS and the current recovery needs of the economy. Project selection has also considered past implementation performance and capacities of executing agencies. Though predominantly project loan based, the program contains a mix of all lending modalities: project loans, program loans, sector development program loans, and loans through government financial institutions (GFIs). Program loans constitute less than 20 percent of the overall 2001-2003 program size. Components of several loans, particularly in the social sector, are being channeled through the national Government or GFIs to local governments.

77. The proposed project mix in the program shows an emphasis on socio-environmental development and poverty alleviation (see Appendix 5). For the year 2001-2003, 50 percent of the 16 projects are either classified as core poverty intervention or poverty intervention. Projects having crosscutting environmental or human development concerns constitute 50 percent by number in 2001 and 58 percent in 2002-2003. The sectoral allocation of projects shows that projects focusing on social infrastructure, agriculture and natural resources comprise 75 percent by number in 2001 and 58 percent in 2002-2003.

78. The program addresses poverty reduction through a strategic emphasis on areas lagging in development, and through incorporation of strong anti-poverty features on project design. The program gives priority to the development of the Southern Philippines which has a high incidence of poverty. Thus, three projects are dedicated solely to Mindanao. Several others have large Mindanao components. The program includes several projects which emphasize rural development. For example, rural poverty will be addressed through development of Infrastructure for Rural Productivity Enhancement Sector Project (2001), Rural Roads (2002), Rural Electrification (2002), Rural Microfinance (2003), and Strengthening Transmission Systems for Rural Electrification (2003). The proposed Mindanao Community-based Forest Resource Management Project (2002) and Integrated Coastal Resources Management Project (2003) will assist development of poor upland and coastal communities respectively, as well as address environmental concerns. Attention is also being given in the program to address urban poverty concerns through the Development of Poor Urban Communities Project (2002) and Metro Manila Urban Services for the Poor (2003), in particular. The program also attaches high priority to the basic human development needs of the poor through its human development projects in health and education.

79. The forward TA program is balanced between project preparatory assistance and advisory assistance. Of the latter, areas covered include policy and capacity building assistance to the national and local governments. Policy areas being considered are governance (judicial reform and local governance), trade policy, and the environment. Capacity building assistance is proposed to assist the Government in regulation and cost control of the natural gas sector; further assistance to the Philippine Deposit Insurance Corporation; strengthening private sector participation in education; assistance to the local ARMM Government in Mindanao; and for strengthening local government capacities in a phased manner through a cluster of TAs (in addition to an ongoing TA, two are planned in this area in 2001 and 2002).

80. The proposed loan and technical assistance pipeline for 2001-2003 is summarized in Table 1. Detailed lists of the pipeline projects are in Appendix 4, and a breakdown by type and sector in Appendix 5. Project profiles for firm 2001 loans are attached as Appendix 6.

B. Philippine Country Office

81. The Philippine Country Office (PhCO) is being established within ADB headquarters. The PhCO will strengthen ADB’s client orientation by establishing a streamlined and coordinated operational communication channel. This will contribute to advancing ADB's partnership with the Philippine government and civil society, and improving the responsiveness of ADB’s Philippine operations. The visibility of ADB’s operations in the Philippines will increase, particularly vis-à-vis other donors. In addition, the PhCO is expected to improve the quality of ADB operations in the Philippines by providing sharper focus on Philippine operations, better coordination, and effective representation. Policy dialogue with the Government will be elevated to higher level than is the current case, and this should enhance implementation of ADB’s lending portfolio. These will assist in improving the effectiveness of ADB’s poverty reduction program in the country.

Back VI. Cofinancing and Catalyzing External Resources	Next VIII. Economic and Sector Work Program