Country partnership

Visiting Europe for only the second time and then the United States, President Aquino had something to crow about: the country’s economic growth.

While seen to be lower than originally projected at the start of the year, the Philippines’ growth rate is still one of the best in the region.

The economy has been growing steadily since (daang matuwid has to admit it) the last years of the Arroyo administration, and the country is now rated investment grade, although we’ve not yet reached the “A” levels.

With the sustained rosy outlook, however, come several nagging questions: when will the masses feel the benefits of growth? When will investment grade translate into investments? Where are the meaningful jobs, the improved livelihood opportunities? When will the second part of the campaign slogan “kung walang corrupt, walang mahirap” be reflected in a significant reduction in the poverty rate?

If it’s any consolation to the administration, the Philippines is not the only country where equitable growth has been elusive. This is according to the World Bank Group, which has launched a four-year Country Partnership Strategy to assist the Philippines in achieving inclusive growth.

The World Bank likes P-Noy’s governance, with his emphasis on fighting corruption to promote growth and ease poverty. In the final months of the Arroyo administration, concerns about corruption prompted the WB and at least one major donor government to hold on to millions of dollars in official development assistance for the Philippines. The ODA was released only after P-Noy had assumed office.

When World Bank Group President Jim Yong Kim visited the Philippines last July, he was profuse in his praise for the country’s performance under P-Noy. WB officials told me Kim was impressed by P-Noy’s focus on addressing corruption and climate change and achieving peace to ease poverty and make growth inclusive.

The WB under Kim has twin goals: to eliminate extreme poverty – subsistence on less than $1.25 a day (about P55) – to just three percent of the global population by 2030, and to promote shared prosperity.

Those are ambitious objectives. Along this line, the WB is pouring its vast resources into helping countries achieve the twin goals.

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The WB isn’t going into this program blindly. WB officials are asking the right questions about the Philippines: why isn’t growth – the second fastest in Asia – translating into jobs? Why is manufacturing weak?

Kathryn Hollifield is asking those questions. The WB’s country program coordinator for the Philippines and Vietnam is in town to discuss the Country Partnership Strategy with Philippine officials.

“You can grow but it may not be shared,” WB Country Director Motoo Konishi told me.

WB officials had been puzzled by official statistics showing that the poverty rate remained largely unchanged for many years, even with the introduction of the conditional cash transfer (CCT) program seven years ago during the Arroyo administration.

The WB has been the biggest supporter of the CCT, which has achieved impressive success in countries notably Brazil. In the Philippines, the next phase of the expanded CCT is to wean its millions of beneficiaries from dependence on cash handouts, by providing livelihood opportunities.

About 40 percent of Filipinos live below the poverty line, with many classified as extremely poor. Konishi is happy to tell me that today the poverty level is down by three percent, which translates into approximately 2.5 million people.

The Country Partnership Strategy, which will receive an average of $800 million in WB funding every year, covers nearly all sectors. Hollifield explained that the program has an integrated approach to development. The strategy addresses a wide range of issues including support for small and medium enterprises, tax reform, open government data, water management and yes, the Bangsamoro peace process.

Long before the scandals over the pork barrel and Disbursement Acceleration Program erupted, the WB began working with the government to overhaul the budget system, aiming to make it transparent and easy to track.

The WB’s indicative lending program will give priority to climate change, agriculture and agribusiness, urban transport, water and sanitation, public health and flood control.

WB officials would not go into details, but the flood control program has a master plan that Konishi told me is “a really, really well thought of plan” covering all aspects including engineering, water pumping modernization, and relocation of informal settlers.

I warned them that with elections approaching, political will is at its weakest for dismantling vote-rich informal settlements particularly in Metro Manila.

WB officials seem unfazed. The bank has a lot of other programs to pursue under the Country Partnership Strategy, which WB directors endorsed last June.

The WB is adopting a “geotagging” system, which allows policy planners to see where government personnel and resources are specifically deployed and where there are deficits in supplies and services.

Geotagging, which provides a sort of map for poverty incidence, agricultural production and other matters, is being applied in Camarines Sur by Rep. Leni Robredo, widow of the late interior and local government secretary Jesse.

Hollifield and other WB executives are meeting with Philippine government officials to discuss specific areas where the bank can help promote its twin goals.

The WB is hoping to hold up the Philippines as a model for other developing countries.

“That is our dream: to build something from the ground up in places with very weak political backing,” Hollifield told me.