June 05, 1999
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| June 05, 1999 | atimes.com | |
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| Southeast Asia World Bank has formula for Philippines recovery CEBU CITY - The World Bank has cited six priority areas in which improvement is needed for the Philippines to simultaneously achieve the twin goals of economic recovery and poverty reduction. In a recent report, the bank said that to promote economic recovery, there is a need to maintain macroeconomic stability, enhance investor confidence, accelerate measures to strengthen the banking system and corporate sector, and mobilize long-term savings. The report noted that the Philippines' prospects for significant poverty reduction over the medium-term is promising. According to the bank: * The Philippines needs to enhance human development and social safety nets for the poor. It needs to build a caring and prosperous society and the economic recovery program should be accompanied by measures to strengthen the social safety net and to improve poverty targeting and action plans to reduce poverty and income inequalities. * It needs to accelerate environmental sustainable growth of agriculture by making it more competitive internationally and improving natural resource management. A national urban development agenda needs to be developed and implemented to address the challenges of urban service provision and threats to environmental health in urban areas. * It needs to develop infrastructure, which is essential to support stronger growth. Critical reforms need to be undertaken in the power and transport sectors. * It needs to create an enabling environment for private sector growth, which will be crucial in generating stronger growth and jobs for the expanding labor force. * It needs to improve governance and combat corruption. The system for economic and political governance needs improvement in order to create a more effective partnership between the national and local governments and enhance the peace and order of the nation. The World Bank report said that it is committed to helping the Philippines achieve these goals by implementing an economic recovery program that removes barriers to economic growth and poverty reduction and restores investor confidence at home and abroad. It will involve measures to sustain domestic demand, to improve efficiency and transparency in the government, and to strengthen the banking system, while adhering to a macroeconomic adjustment program which is endorsed by the International Monetary Fund (IMF), the report added. The report said that as of Dec. 31, 1998, the bank portfolio for the Philippines totalled $2.8 billion for 28 ongoing projects. Projects in the rural development sector constitute about 33 percent of the portfolio, consistent with the bank's strategy to promote broad-based economic growth and poverty reduction, it said, and noted that the energy sector accounts for about 25 percent, infrastructure 16 percent, the human development sector about 9 percent and others (including adjustment loans) about 17 percent. A Country Portfolio Performance Review (CPPR) with the government of the Philippines in December 1998 agreed on significant measures to restructure the existing portfolio in view of the crisis and performance issues, the report revealed. From June to December 1998, the report said the bank approved four loans for a total of $623.3 million to shore up the banking system, support private enterprise credit, bolster rural finance systems to alleviate poverty and better serve rural areas, and improve small towns access to basic services. The Banking System Reform Loan ($300 million) supports the country's banking reform program whose goal is to strengthen the banking system and enable it to better withstand current difficulties and future shocks. To assist private sector enterprises affected by the credit crunch and currency crisis, it said Private Enterprise Credit Support Project ($150 million) provides support to the rural economy to overcome the difficulties created by the regional financial crisis and the devaluation of the peso. The Local Government Unit (LGU) Urban Water and Sanitation Project ($23.3 million) is providing safe water and improved sanitation services to small towns. This loan is the first of three to be disbursed through the World Bank's adaptable program loan which aims to fundamentally change the way small towns gain access to financing for basic municipal services. In addition to its lending program, the report said the bank is providing technical assistance and analytical advise. (Asia Pulse/PNA) | |||||||||
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