Country Assistance Program Evaluation for the Philippines: Increasing Strategic Focus for Better Results (2008)

Date: June 2008
Type: Evaluation Reports
Country:
Subject:
ADB administration and governance; Evaluation
Series: Country Assistance Program Evaluations

Description

This second country assistance program evaluation for the Philippines covers operations from 2003 to 2007. It was prepared to provide directional inputs to the next country partnership strategy. The main objectives of the evaluation were to

  • review how past lessons have been used in formulating strategies
  • assess the responsiveness and effectiveness of ADB assistance program in the Philippines for this period, and
  • identify lessons and recommendations for Management's consideration in future programming

The first Philippines country assistance program evaluation was completed in 2003, covering ADB's assistance since 1966, but focusing on the 1980s and 1990s.

Summary of findings

  • Selectivity based on country specific constraints, government commitment, stakeholder involvement, and a medium term policy reform engagement was a more effective approach. At the beginning of the evaluation period, ADB's lending operations experienced a range of problems including implementation delays, shifting political support for reforms, and a dearth of counterpart finance. ADB changed its strategy from a broad-based approach to a focus on addressing critical constraints to tackle fiscal policy weaknesses, public sector governance, energy sector restructuring, and decentralization through a combination of program lending and technical assistance support.
  • Regional focus on the southern Philippines presents some positive results but improvements are needed. Regional focus on the Southern Philippines presented an opportunity to build positive synergies between agricultural development, small and medium enterprise (SME) development, and regional cooperation; and progress was made on improving the provision of basic urban services. Project lending in the Autonomous Region of Muslim Mindanao faced a number of implementation problems leading to delays in delivery of assistance suggesting the need for alternative approaches.
  • Contributions to improving the private sector enabling environment were limited to specific sectors. Support for fiscal, energy, and nonbank financial reforms contributed to improving the private sector enabling environment. However, new support for transport and water infrastructure has not been forthcoming. Concerns over handling of right-of-way issues requiring resettlement, lack of competitiveness with other bilateral development partners, and perceived high transaction costs of ADB-administered projects have limited ADB's contribution to large-scale transport and water infrastructure.
  • Addressing good governance and corruption has moved beyond project boundaries to a sector focus. ADB has helped the Government to spotlight the need to reform competitiveness more broadly if the country is to sustain growth and generate the employment and incomes necessary to address exclusion and income poverty.
  • Support for local service delivery is relevant and would benefit from systematic support through decentralization. To sustain development of local service delivery, decentralization needs to be progressed more systematically. Lessons from support to health sector reforms in provincial public expenditure reviews and management, together with initiatives to strengthen provincial planning and expenditure management systems offer opportunities for application to other sectors. Reform support for local government finance is a key step to systematically reengaging the Government in decentralization and links to the overall fiscal management agenda.
  • The overall rating for ADB's assistance program in the Philippines during the evaluation period is “successful”, with needs, however, for improvement in several areas of the country partnership strategy.

Conclusions and recommendations

The evaluation recommends that the next country strategy

  • deepen the strategic focus on improving national public finance governance and management through continued support for (i) the Government's fiscal reforms including the revenue effort from income tax and customs collection and related institutional reforms, and (ii) improved budget allocations for priority sectors including infrastructure, education, agriculture, and health
  • deepen support for local governance and decentralized service delivery to improve public expenditure efficiency and governance
  • continue to support private sector enabling environment improvements by (i) building on microfinance reforms with a focus on constraints to increasing access by the poor, (ii) identifying and introducing alternative approaches over and above the current facility to improving SME access to bank finance, (iii) systematically assessing and identifying where and how ADB can best contribute to infrastructure development, and (iv) strengthening of the judiciary to improve enforcement of the rule of law
  • focus on poor provinces to address poverty reduction and build on synergies between local development and regional cooperation initiatives by (i) supporting linkages between rural development, SME development, and regional trade opportunities; (ii) replicating support for local urban services and utilities; (iii) developing programmatic approaches to supporting local-level rural and urban development; and (iv) using a regional development approach and pooled financing for supporting peace and development initiatives in the Autonomous Region of Muslim Mindanao
  • enhance services to the client through expanded policy dialogue, further harmonization with development partners, greater use of programmatic approaches, balance staff resource allocation, and clarifying the country office role

Contents

  • Executive Summary
  • Map
  • Introduction
  • Development Challenges and the Government's Plans
  • Asian Development Bank's Assistance Program and Performance
  • Evaluation of the Sector Assistance Program
  • Findings, Lessons, and Recommendations
  • Appendixes