Domestic finance driving AsiaPac sustained growth

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PH shows significant results while striving to improve services – UNDP

Domestic sources of finance are emerging as a key driving force for sustainable development in Asia-Pacific, with the Philippines showing significant results while striving to deliver improved public services under its Millennium Development Goals (MDGs), a United Nations unit said in a report.

“These new sources of finance allow us to expand the existing development cooperation and partnership,” UN Assistant Secretary-General and United Nations Development Program (UNDP) Director for Asia and the Pacific Haoliang Xu said in a statement on Wednesday.

From a Philippine perspective, the UNDP report which was issued along with Xu’s statement, said: “At a middle level in income and human development, with significant fiscal space, and where official development assistance now represents a small fraction of total financial flows, the country is committed to making more effective use of its internal resources to fulfil its development goals.”


The UNDP report—“Together for a sustainable future: Achieving the SDGs (Sustainable Development Goals) in Asia and the Pacific through government co-financing”—said public finance in the region accounts for 44 percent of total domestic finance, while private finance accounts for about 45 percent of the local resources overall.

“Higher growth rates, broader prosperity and more efficient tax collection have been among the factors boosting domestic resources for investment in continued progress,” the report said.

It observed that many countries in the region are going through a transition into middle-income countries, citing the number of such countries in Asia-Pacific rising to 28 from 16 in the past decade.

However, over the past two decades, international public finance, particularly official development assistance (ODA), has been on a decline, with records showing the amount equivalent to 13.5 percent of the total financial inflows in the region in 1990 going down to 3.4 percent in 2012, the UNDP report said.

“As a result, countries are designing new financing strategies that mobilize contributions from a wide range of sources, including the private sector,” UNDP said.

The UNDP said while all countries want resources to make the greatest possible contributions to development, having the right knowledge, capacities and systems in place to make the best choices is essential, and it helps countries in Asia and the Pacific achieve this through co-financing.

“The transformation of development finance translates into increased demand for our services from governments in Asia-Pacific,” said Xu. “Our portfolio of government co-financed programs quadrupled over the past two years.”|

UNDP’s government co-financed portfolio in Asia-Pacific currently stands at US$116 million, according to the report.

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