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World Bank Group President Backs Philippines' Reforms

October 27, 2011

Support for governance agenda, overcoming poverty, and dealing with disasters

MANILA, OCTOBER 27, 2011World Bank Group President Robert B. Zoellick today pledged strong support for the Philippines as the country implements its program for good governance and overcoming poverty, especially in creating opportunities for poor and vulnerable Filipinos.

Zoellick’s comments came on the second day of his visit to the country – a visit that includes meetings with the president and members of the government’s economic team, business and civil society representatives.

“My visit has helped me better understand the importance of President Aquino’s program for good governance and the government’s priorities to improve the business climate, develop infrastructure, increase investments in health, and education, and protect the most vulnerable people,”Zoellick said.

In his meeting with Philippines President Benigno S. Aquino III, Zoellick expressed his sympathies to the Filipino people for the lives lost during the recent typhoons. Reports by the National Disaster Risk Reduction and Management Council (NDRRC) show that the three calamities that recently hit the country— Typhoons Pedring (Nesat), Quiel (Nalgae), and Tropical Storm Ramon— have affected more than 700,000 families and caused the deaths of more than 100 people.

He assured President Aquino of World Bank support through a new financing agreement, which provides a US$500 million rapid response contingent line of credit the government can access for emergency relief, recovery and reconstruction after a major natural disaster.

Zoellick also announced the Philippines will receive a grant of US$2 million from the Global Facility for Disaster Reduction and Recovery for a program that will provide access to global best practices on disaster risk reduction. The funds - which will come from a partnership of 38 countries and seven international agencies including the World Bank - will support key priorities in the Philippines Disaster Risk Reduction and Management Plan, which is currently being finalized by the government and its stakeholders.

“I am impressed with the resilience the country has exhibited to recent external shocks, including the impact of typhoons and the El Niño effect,”Zoellick said. “The country’s strong financial and trade resources and economic fundamentals have helped cushion the impact of the global economic turmoil on the local economy.”

"The World Bank has been a valued partner in our government's efforts to achieve inclusive and sustained economic growth,"President Aquino said.

The World Bank Group President saw firsthand a government program that helps protect the most vulnerable people at the Pantawid Pamilya Program site in Pasay City.

Accompanied by the Department of Social Welfare and Development Secretary, Corazon Soliman, and the World Bank’s Vice President for East Asia and the Pacific, Jim Adams, Zoellick met families who are benefiting from a conditional cash transfer program, which provides cash to parents who send their children to school and for medical check-ups.

“The best safety net programs are those that deliver efficiently and effectively to the people who need support the most. It was heartening to hear women speak about their commitment to meet the requirements to send their children to school and to seek health care for their families,”Zoellick said.

“While the program here is very young, the tangible benefits are evidence of the value of these programs and highlight that good governance matters – with better targeting helping to empower poor people.”

The World Bank’s support to the Pantawid Pamilya Program has been substantial, through the US$405 million social welfare and development reform project with the Philippines Department of Social Welfare and Development.

The Philippines’ conditional cash transfer (CCT) program increases people’s annual incomes by 12.6 percent on average, resulting in cuts in the incidence of poverty by about six percentage points, according to research by the Bank and the Australian Agency for International Development (AusAID). By the end of 2011, the Pantawid Pamilya expects to cover 2.3 million households, or almost 62 percent of the poor households in the Philippines.

President Aquino said the conditional cash transfer program has been improved “so that it empowers not politicians, but the bosses they are supposed to serve – the Filipinos.”

The World Bank President’s visit also includes meetings with representatives from civil society organizations and the business sector. Zoellick said that civil society was playing a fundamental role in promoting good governance and furthering the country’s economic development.

“The Bank supports the Government’s moves to invite civil society organizations to be part of the budget scrutiny process. The Philippines has a very dynamic civil society and can offer much to the world in promoting constructive citizen engagement for good governance,” he said.

For his meeting with business leaders, Zoellick said the World Bank’s private sector arm, IFC, was intent on increasing its support for the country’s enterprises by raising its rural investments, promoting inclusive urban growth, and encouraging governance improvements for private sector development.

Zoellick said that during his meetings with government officials, including Finance Secretary Cesar Purisima, he was briefed on how the country plans to improve its competitiveness, while cushioning the economy from more external shocks. He also cited the need for acceleration of public spending, especially in infrastructure and human capital investment.

The Bank President also expressed his support for the government’s Public-Private Partnership (PPP) agenda, saying that the Bank also stands ready to assist, including through the newly established World Bank Group-Singapore Hub for Infrastructure Finance and Urban Development.

The World Bank Group has committed about $3.7 billion in support of the Philippines. This includes $2.6 billion for 18 projects in water and sanitation, health, education, and disaster management from the International Bank for Reconstruction and Development (IBRD), which lends to governments; and $933 million from IFC for investments in power, finance and insurance, industrial and consumer products, utilities, health care, and other sectors. Bank support has, for example, helped deliver stable power supplies to about five million residents of Bicol who’d suffered power shortages because of typhoons; benefitted more than a million households through new water systems, school buildings, day care centers, health stations, and post-harvest facilities through a community driven development project and IBRD/IFC support to the Manila Water Corporation contributed to more than six million people in Manila’s east gaining 24 hour access to drinkable water.