WB doubles aid to RP

MANILA, Philippines - Philippine initiatives on good governance have prompted the World Bank (WB) to double its assistance to the country next year.

From its current overall assistance of $650 million, the World Bank is looking at an increase in the order of $1.3 billion up to $1.5 billion, WB Country Director Bert Hofman told The STAR yesterday.

The WB is also expected to increase funding support for the government’s conditional cash transfer (CCT) program to the very poor.

Hofman said the aid increase was approved last week at the annual meeting in Washington of the WB and International Monetary Fund (IMF) with the Philippines’ economic team.

“We agreed basically on an increased envelope,” Hofman said. “The government has started a lot of initiatives that we believe are good for poverty alleviation and making growth work for the poor.”

He said initiatives of the Aquino administration to promote transparency in governance, including a new budgeting system, “are very important to us.”

“Transparency makes us more comfortable about the use of our money. On the basis of those things, we can do more,” Hofman said.

The WB is also considering participation in the public-private sector investment partnerships or PPP that President Aquino hopes will boost development and job generation efforts.

Hofman said among the PPP projects being eyed by the WB is the expansion of the Light Rail Transit system. Another is the improvement of the sewage system of the two water concessionaires in Metro Manila – Maynilad and Manila Water – to clean up Manila Bay.

Representing the Philippines at the annual WB-IMF meeting in Washington were Finance Secretary Cesar Purisima, Budget Secretary Florencio Abad and Socio-economic Planning Secretary Cayetano Paderanga Jr.

“We’re looking at a significant increase in our overall program,” Hofman said.

Manila has asked the WB for additional funding for the CCT, which requires certain actions from the very poor in exchange for regular cash handouts of varying amounts from the government.

Hofman said no specific figure has been mentioned for the increased aid. The WB has approved a five-year, $400-million loan as funding support for the CCT, which was developed with the bank’s technical advice in 2007 and launched in February 2008 by the Department of Social Welfare and Development.

The Asian Development Bank (ADB) is also providing financing for the CCT.

Then President Gloria Macapagal-Arroyo, in a State of the Nation Address, had said the program was inspired by the “Bolsa Familia” CCT program that was launched in Brazil in the mid-1990s. The Philippine version was called the 4Ps, for Pantawid Pamilyang Pilipino Program.

The 4Ps has served some 700,000 households so far this year, with a target of one million by yearend.

Next year, President Aquino wants the number of beneficiaries increased to 2.3 million households, and then to 4.3 million in subsequent years.

Hofman said the WB is prepared to increase its participation in the 4Ps as more beneficiaries are included.

Congress recently approved a P21-billion budget for the CCT for 2011. Among others, the program requires beneficiaries to send children to school for a prescribed period, or to have women get maternal health care, in exchange for regular cash handouts.

The WB and ADB are assisting in monitoring the disbursement of the funds. The WB also helped in the identification of those eligible for the handouts nationwide.

Earlier, the WB also raised its growth outlook for the Philippines for 2010 to 6.2 percent, from the original forecast of 4.4 percent.

Hofman attributed the improved outlook to consumer-led strong economic performance in the first six months, a rebound in exports and investment as well as sustained strong dollar remittances.