The Peace Fund had initially generated pledges of support from the donor community but the country’s dismal track record in the effective use of official development assistance (ODA) dampened initial enthusiasm over the project.
The Peace Fund, officially known as the Multi-Donor Trust Fund for Mindanao (MDTF), was the brainchild of former Finance Secretary Jose Isidro Camacho who wanted the donor community to dole out grants that would finance development projects in Mindanao once the peace treaty is signed between the government and the Moro Islamic Liberation Front (MILF).
According to the Department of Finance (DOF), however, the donor community wanted to conduct a needs assessment first in order to find out exactly what would be required by the war-torn areas of Mindanao.
Acting Finance Secretary Juanita Amatong told reporters that the concern of both the government and the donor community was to avoid duplication in the projects and programs already being implemented considering that resources were scarce.
Initially, Amatong said the programs would be rationalized and the use of the Peace Fund would be based on needs that would emerge out of the assessment.
She said a number of bilateral donors already have on-going programs in Mindanao, especially Japan which has already begged off from contributing to the Peace Fund.
The US has also decided not to participate in the creation of the fund which is being spearheaded by the World Bank.
The US decision follows that of Japan which earlier decided it would not contribute to the MDTF since it already had significant and well-funded livelihood and development projects in Mindanao.
Amatong told reporters that MDTF would continue to be led by the WB even without the participation of the US and Japan. She said other bilateral donors have already pledged to contribute.
The US Agency for International Development (USAID) had originally considered providing part of the initial funding for the $50-million grant facility intended for development projects in the war-torn areas of Mindanao.
The USAID already has a $20-million facility originally intended for the specific purpose of assisting the demobilization and reintegration of the MILF.
During the early negotiations for the MDTF, it was suggested that USAID’s $10 million would instead be added to the Peace Fund which would be used for more general requirements in reconstruction such as health, education and other basic services.