Country Assistance Program Evaluation for the Philippines (2003)
Since the Asian Development Bank's (ADB) inception in 1966, it has been involved in the process of the Philippines' economic development, being one of the country's most important development partners.
This country assistance program evaluation (CAPE) takes a long-term perspective but focuses particularly on the period since 1986. Its objective is to assess the relevance, effectiveness, sustainability and institutional and other developmental impacts of ADB's overall assistance program.
The CAPE is based on in-depth reviews of relevant ADB documents and studies as well as those from other development agencies. It benefited from discussions and interviews with key resource persons from the Government, private sector, and civil society as well as ADB staff, including the Philippine Country Office, which provided a wide diversity of views and perceptions about the strengths and weaknesses of the ADB assistance program.
Issues and lessons
The outcome of investment projects in the Philippine portfolio has not been encouraging. Given the lack of success in a large number of investment projects, it seems that ADB's lending program has not had a major impact on economic growth or poverty reduction.
Similarly, the impact of the ADB program on institutional development has been mixed. Implementation and operational problems are common in most sectors.
The importance of nonlending assistance has increased in recent years. Its contribution to policy reform and institutional development has been tangible though also affected by uncertain sustainability. Although ADB's assistance program has been relevant, it has been less than effective and has had a moderate impact on institutional development. Sustainability remains a problem for many ADB interventions. The program is rated partly successful.
ADB's development assistance program in the Philippines offers five important lessons:
- Political and macroeconomic stability is a critical factor behind the success of a development assistance program.
- Project success requires careful project preparation.
- Project design should be relatively simple.
- Sustaining development impact requires close monitoring during implementation and after project completion.
- The success of the assistance program depends on its ability to nurture institutional development.
- Helping the Philippines achieve its development potential should be the main thrust of ADB's development assistance program. To attain this goal, ADB should adopt a steady, relatively modest and selective lending program.
- In light of shortage of counterpart funds, the Government has been working with ADB to downscale and redesign projects, and cancel unutilized funds. These are moves in the right direction, but more needs to be done.
- To improve the performance of its lending program, ADB needs to strengthen its ability to conceptualize projects and screen them. Project design is likely to improve with the enhanced involvement of beneficiaries and consultation with key stakeholders. There is also a need to increase the organizational capacity of local government units so that they can play a more effective role in the development process.
- To assist efforts in reducing poverty and promoting social development, ADB's future lending operations can focus on such areas as microcredit, education and health facilities, potable water supplies, and road transport in rural areas.
- As program lending will continue to be important, ADB should consider the question of timeframe for meeting conditionalities. The more important consideration should be sustainability rather than the speed of implementation of reforms.
- As ADB is going to play an active role in the social sector, its economic, sector, and thematic work should give greater attention to analyzing policy and institutional constraints in this sector.
- The ability of ADB to provide effective assistance in the future will depend on its capacity to deepen its relationships with the broader society beyond the government. The active participation of nongovernment organizations and civil society in country strategy and program formulation will improve the relevance quality of ADB interventions.
- Executive Summary
- Economic Background
- ADB Assistance Strategy
- ADB's Lending Program
- ADB's Nonlending Activities
- Development Partners, Aid Coordination, and Development Concerns
- Lessons, Conclusions, and Recommendations