WASHINGTON, September 26, 2014 – The Philippines’ program for achieving inclusive growth got a major boost today with the approval of a new financing operation designed to sustain support for reforms necessary to strengthen job creation
The World Bank’s Board of Executive Directors approved a new development policy loan (DPL) worth US$300 million to support the government’s budget for programs to increase investments in infrastructure as well as education and health of the poor, reduce the cost of doing business to boost job creation, and ensure fiscal transparency. These are government priorities under the Philippine Development Plan 2011-2016
DPLs provide quick-disbursing assistance to countries undertaking reforms. These support policy and institutional changes needed to create an environment conducive to sustained and equitable growth, based on the borrower-country’s own development agenda.
“Reforms in the last several years have yielded strong growth and macroeconomic stability for the country, leading to significant job creation and poverty reduction. But we can do much more to generate more and better jobs and bring millions of Filipinos out of poverty,” said Finance Secretary Cesar V. Purisima. “Support for these reforms from the international community as well as the different sectors of society will help the country consolidate these gains and sustain the reform momentum to make them irreversible.
The Philippine economy remains one of the fastest growing in East Asia and Pacific region. It grew by 6 percent in the first half this year, after an impressive 7.2 percent in 2013 and 6.6 percent in 2012. The latest poverty statistics show 3 percentage points decline in poverty rate between the first semesters of 2012 and 2013, from 27.9 percent to 24.6 percent.
“The Philippines continues to reap the results of its diligent efforts to achieve inclusive growth. The World Bank is pleased to ramp up support for accelerating reforms through this new assistance and other programs,” said World Bank Country Director Motoo Konishi. “Implementation of important infrastructure projects, improving the investment climate for small and medium enterprises, increasing investment in the health and education of poor families, and greater government transparency and good governance are concrete measures for enhancing growth that creates jobs and reduces poverty.
Specifically, the new financing supports the following programs:
- Provision of more farm-to-market roads and the improvement of roads around tourism areas;
- Simplification of registration and licensing procedures to encourage small and medium enterprises to flourish;
- Update of the National Household Targeting System (NHTS) to ensure that qualified poor families can be enrolled for the government’s social welfare programs, including PhilHealth insurance coverage;
- Expansion of the coverage of the conditional cash transfer program to children up to 18 years of age to encourage them to finish high school;
- Implementation of important fiscal reforms including the implementation of the tobacco and alcohol excise taxes to improve fiscal sustainability; and
- Implementation of reforms to standardize budget, expenditure, audit, and reporting classifications for agencies, as a critical foundation for modernizing public financial management information systems in the Philippines
The NHTS, also called Listahanan, is an information system that identifies who and where the poor are. Managed by the Department of Social Welfare and Development, the database of poor families is made available to national government agencies and other stakeholders, enabling them to identify potential beneficiaries of social protection programs
The new financing also supports the Open Data Initiative through data.gov.ph. Led by the Office of the President and Department of Budget and Management, the portal features at least 600 data sets from government agencies which can be accessed and shared by the general public.
“The government sees transparency around the use of public resources as fundamental to institutionalizing governance reforms. By making government data available to the general public, the government can get better feedback from citizens on how it can best deliver social services while making those in public service more accountable,” said Kai Kaiser, World Bank Senior Economist
Mr. Kaiser said the government will further enhance a number of portals to promote budget transparency and public spending through OpenReconstruction (provides information on government reconstruction efforts), OpenRoad (provides information on tourist areas and farm-to-market roads), and OpenLGU (requires local government units to post financial and procurement information online for greater transparency)