MANILA, Philippines – The World Bank is drawing up a new Country Assistance Strategy (CAS) for the Philippines that would provide funding support of between $700 million to $1 billion annually over the next three years.
The International Finance Corp., the private sector financing arm of the bank, is also expected to contribute additional funding of up to $300 million per year in specific areas such as 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.
In a statement, the World Bank said the new CAS for the Philippines aims to achieve growth for the poor and would support the government in pursuing macroeconomic stability, help improve the investment climate, and allow the government to provide better public service delivery for the poor.
The new CAS would likewise reduce vulnerabilities to income shocks and natural disasters, and lead to better governance, it added.
The new CAS for the Philippines will focus on poverty alleviation measures and on operationalizing governance in all World Bank-supported activities.
It would also address emerging global challenges such as climate change, disaster risk management and the financial crisis and emphasize a knowledge agenda that would support the Philippines in addressing its own development challenges.
According to World Bank country director Bert Hofman, this strategic focus means the institutions support for reforms, programs and projects that improve opportunities, especially for the poor, to participate in markets through strengthened human capital (good health and better education), reduced vulnerability to shocks and more economic prospects.
“This CAS continues the Bank’s support for the country’s development objectives. We hope to do more for poverty alleviation measures, not only because poverty reduction has been lagging, but also because the poor are most vulnerable to the impact of the global recession,” Hofman added.
In response, Finance Secretary Margarito Teves said the new CAS supports the current thrust of the government to increase public expenditures and provide greater assistance to the very poor, and sustain a respectable level of economic growth despite the global crisis.
Teves lauded the World Bank for “its continued support to the country’s development objectives and for allowing flexibility under the new CAS, which could help strengthen the country’s ability to deal with the current global financial and economic crisis.”
According to IFC resident representative Jesse Ang, the agency has developed instruments to help private firms deal with increased risk and liquidity constraints arising out of the global economic crisis.
These instruments include the Bank Capitalization Fund that provides equity funds to capitalize banks, the Expanded Trade Finance Program that guarantees trade-related payment obligations of financial institutions, the Infrastructure Crisis Facility that bridges the financing gaps in privately funded infrastructure projects facing financial difficulties, and the Global Microfinance Initiative that assists the microfinance sector serving the needs of small and micro-enterprises in the Philippines.
“IFC’s financial instruments are intended to help strengthen the private sector in dealing with the global crisis, upgrade vital infrastructure, generate jobs by supporting small and micro enterprises, and create more opportunities for the poor, especially those who are most affected by the economic distress,” Ang said.
Socioeconomic Planning Secretary Ralph Recto also welcomed the new CAS, saying the new framework for the World Bank Group’s operations in the Philippines is broadly aligned with the country’s updated Medium Term Philippine Development Plan (MTPDP) prepared by the National Economic and Development Authority (NEDA).
The MTPDP focuses on growth and job creation, energy, education, health, youth opportunity, anti-corruption and good governance.