Recent Economic Development The Philippine economy re-ignited in the last quarter of 2010, pushing annual GDP growth to rates not seen in over 30 years. After a brief softening of activity in the third quarter of 2010—in which GDP contracted by 0.8 percent quarter-on-quarter, based on seasonally adjusted (q/qsa), the Philippines economy posted a robust growth performance in the fourth quarter with GDP expanding 3 percent q/qsa (7.1 percent year-on-year). This resulted in a 2010 annual growth rate of 7.3 percent, the highest since 1976, and in sharp contrast with the 1.1 growth rate of 2009. Importantly, GDP per capita grew by a strong 5.3 percent in 2010, against a contraction of 0.9 percent in 2009 and growth of 0.1 percent on average during the 1980s and 1990s against 6.5 percent in the region during these same decades. The growth performance of the Philippines was also strong in regional comparison. Philippines Quarterly Update (January 2011)
World Bank Assistance to the Philippines The World Bank Country Assistance Strategy for the Philippines for 2010-2012 has greater focus on poverty reduction, a strategic shift in the Bank’s approach to development in the country. With a central goal of achieving growth that works for the poor, the World Bank Group (WBG) will support the Philippines in pursuing macroeconomic stability, an improved investment climate, better public service delivery for the poor, reduced vulnerabilities to income shocks and natural disasters, and better governance.
Addressing the country’s fundamental development challenges, the new CAS focuses on poverty alleviation measures and on operationalizing governance in all Bank-supported activities. It also addresses emerging global challenges such as climate change, disaster risk management, and the financial crisis and emphasizes a knowledge agenda that supports the Philippines in addressing its own development challenges.
The new CAS pilots deeper integration of the operations of World Bank and the International Finance Corporation (IFC), the private sector financing arm of the WBG. The Bank is prepared to provide support amounting to US$700 million to US$1 billion per year for the next three years, coupled with a robust program of analytical and advisory activities. IFC’s program would be in the range of US$250-US$300 million per year. Specific areas of joint IFC and Bank collaboration are in infrastructure, agribusiness, and the financial sector. Another member of the World Bank Group, the Multilateral Investment Guarantee Agency (MIGA), will provide guarantees to foreign investors against losses caused by non-commercial risks, as well as technical assistance to help countries disseminate information on investment opportunities.
As of end February 2011, the Philippines active portfolio consists of 26 active projects with a total net commitment amounting to USD 1.8 billion. This includes 17 loans, three Global Environment Facility (GEF) supplements (not counted separately in the system) and nine stand alone grants which are also monitored as part of the investment loan portfolio (EC-TF for Health, Mindanao TF, AusAID-SPHERE, Ozone Trust Fund, GEF-Electric Coops, GEF-Manila Third Sewerage Project, GEF-Integrated Organic Pollutants Management Projects (IPOPs), GEF-Climate Change Adaption, and GEF-Chillers).
NON-LENDING PORTFOLIO
As of February 28, 2011, the Philippines trust funds (TFs) portfolio comprised 95 active country-specific trust funds with total net grant amount of $161.6 million. Sixteen trust fund accounts, consisting of an 2 Ozone TFs, 5 standalone GEF projects, 3 GEF supplements (not counted separately), and 6 recipient executed TFs ( >$5million), are also being monitored under the investments portfolio (counted as 8 active projects, excluding GEF-IPOP that is not yet effective).
PARTNERS
The Philippines Development Forum (PDF) is the primary mechanism of the Government for facilitating substantive policy dialogue among stakeholders on the country’s development agenda. It also serves as a process for developing consensus and generating commitments among different stakeholders toward critical actionable items of the Government’s reform agenda.
The PDF has evolved from the traditional Government-Donors Consultative Group (CG) process, which was expanded into a multi-stakeholder forum that facilitates substantive policy dialogue on the country’s development agenda among participants from national and local government units, civil society, academia, private sector, and the international development partners. This is the fiftth annual PDF held since its transformation in 2005.
The World Bank Office in Manila Leonora Aquino-Gonzales, Senior External Relations Officer Tel: (632) 917-3003 Fax: (632) 637-5870 Email: Lgonzales@worldbank.org
The External Affairs Office in Washington D.C. Carl Hanlon, Regional Communications Manager (East Asia and the Pacific) Tel: (202) 473-8087 Email: chanlon@worldbank.org
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