Aware of the country’s rapid economic growth over recent years and the slow reduction in poverty and job creation for its people, the World Bank acknowledged it was time to review its strategy for its partnership with the Philippines.
World Bank Country Director Motoo Konishi said the group will give top priority to projects and assistance that will step up poverty reduction and shared prosperity among Filipinos, using the group’s best analytical and monitoring tools to ensure that such interventions clearly benefit the poor.
Financial assistance and investment will continue to be an element of the new strategy, involving possibly more than $1 billion over the next two years.
In a statement issued on Friday, the World Bank Group (WBG) announced it was adopting the new Country Partnership Strategy (CPS), which will serve as a guide for its engagement in the Philippines from 2015 until 2018.
The Group said its Board of Executive Directors has endorsed the new strategy for the Philippines, which supports the country’s goal of promoting and sustaining inclusive growth.
Financial and non-lending support
The CPS is joint strategy of the three members of the Group: the International Bank for Reconstruction and Development (IBRD), also known as the “World Bank”; the International Finance Corporation (IFC), which focuses on the private sector in developing countries; and the Multilateral Investment Guarantee Agency (MIGA), which provides political risk insurance to private sector investors and lenders.
The Group said the indicative new financial commitment from IBRD may average $800 million a year, along with non-lending support in the form of analytical and advisory assistance.
IFC has committed $250-$300 million in investments in the next couple of years, it added.
The new CPS supports the country’s development programs in five key engagement areas:
First, transparent and accountable governance, which focuses on strengthening public financial management, improving fiscal transparency and financial accountability, and supporting greater demand from citizens for government accountability;
Second, empowerment of the poor and vulnerable, including improving health and education outcomes, strengthening social protection and ensuring the availability of more timely and improved measurements of poverty;
Third, rapid, inclusive and sustained economic growth, which addresses initiatives promoting economic policy reform for inclusive growth, boosting private sector development by improving the investment climate for firms of all sizes, developing greater access to finance, and increasing productivity and job creation, especially in rural areas;
Fourth, climate change, environment, and disaster risk management, through increasing physical, financial and institutional resilience to natural disaster and climate change impacts, and improving natural resource management and sustainable development;
Lastly, peace, institution building, and social and economic opportunity, which is concerned with supporting social and economic development in conflict-affected regions in Mindanao, including the Bangsamoro.
“The World Bank Group will help mobilize private sector investment and support job creation. IBRD, IFC and MIGA will work together more closely on engagements in sectors like agriculture and agri-business, trade and logistics, infrastructure and public-private partnerships – programs and projects that will help generate more opportunities for small and micro-entrepreneurs to flourish and create more jobs,” said Karin Finkelston, IFC Vice President for Asia Pacific.
Public and private resources
World Bank Vice President for East Asia and Pacific Axel van Trotsenburg said that with the Philippines among the fastest-growing countries in the world, the strategy offers a unique opportunity for the Group to support the government’s efforts to improve the lives of the poor and vulnerable by creating more jobs and better opportunities.
“We will leverage our public and private resources to help Filipinos build resilience to economic shocks from natural disasters and climate change and to build shared prosperity including for people in Mindanao seeking the rewards of peace,” Trotsenburg said.
The WBG also recognized that strong macroeconomic fundamentals have enabled the Philippines to record high growth rates in the last several years. Translating high-growth rates into faster decline in poverty and the creation of more and better jobs, however, remains an urgent challenge.
“In particular, we will focus on areas and sectors where poverty is very high,” Konishi said.
The Group said that the new CPS benefited from extensive consultations with various stakeholders in different parts of the country, including civil society representatives, national and local government officials from oversight and implementing agencies, private/business sector, academia, members of the legislature and other development partners.
Meanwhile, Finance Secretary Cesar V. Purisima said that the new CPS of the World Bank Group is an affirmation of its support for the country’s development objectives.
“The strategy’s continuing focus on good governance, strengthened public finances and fiscal transparency will support the Aquino administration’s efforts to continue the virtuous cycle of expanding our fiscal space for greater investments in infrastructure and social services,” he said.
Socioeconomic Planning Secretary and Director General Arsenio Balisacan of the National Economic and Development Authority (NEDA) explained that the new partnership strategy is in line with the goals of the Updated Philippine Development Plan 2011-2016.
“The Aquino government focuses on attaining sustained high economic growth that is inclusive. More equitable access to development opportunities will ensure that even the poor will gain from and contribute to growth through highly productive and quality employment and effective social safety nets to protect the vulnerable sectors of society. World Bank Group support through the CPS will help us achieve that,” he said.