A Newsletter of the World Bank 1 i V Countey Office Manila L December 2001 Volume 7 No.2 WB Commends President Arroyo's Commitment to Economic Reforms T he World Bank welcomes President Arroyo's commitment to deepening _ - economic reforms as the Philippines seeks to weather the current global economic downturn. . r "We offer full support to its efforts in reducing poverty and improving the lives - of more Filipinos, especially in areas where basic social services need strengthening," ' said Bank President James D. Wolfensohn who met President Arroyo in Washington, .' D.C. in November. The Bank noted the importance of economic reforms that will strengthen public expenditures and financiala management, increase public revenues, WB PresidentJames D. Wolfensohn welcomes President Gloria Macapagal-Arroyo during the loan signing and ensure fiscal sustainability. agreement for the LGU Urban Water and Sanitation Project and presentation of grant agreement for the preparation of the proposed Mindanoo Social Fund Project (Phase 2). Looking on are Finonce SecretaryJose It also commended President Arroyos Isidro Coamacho, WB VP for East Asia and the Pacific Jemal-ud din Kassum and other officials. commitment to improving governance and urged that further actions be taken to enhance the effectiveness of reforms. facilities that are currently managed by Mindanao Social Fund to~~~~ ~ enac th,fetvnesorfrs municipalities. (Please see related story on For instance, it cited the need to muiipls (President Arroyo was also presented with implement the rules and regulations for page 2.) the signed agreement for the preparation the Anti-Money Laundering Act. Finance Secretary Jose Isidro Camacho and design of the proposed second phase Before the meeting, President Arroyo and Development Bank of the Philippines of the Mindanao Social Fund Project. witnessed the signing of the $30 million- President Remedios Macalincag signed A grant of $1 million from the Japanese loan for the Local Government Unit on behalf of the Philippine Government Government's Policy and Human Urban Water and Sanitation Project, while Vice President for East Asia and the Resource Development Fund will finance which aims to encourage private sector Pacific Jemal-ud din Kassum signed on the preparation and design of the project, investments in water supply and sanitation behalf of the Bank. including the conduct of social assessments (*= 3 *WB OKs Urban Water for LGUs,p2 LGU Portal Launched,p7 In This Issue US I M Grant for Laguna de Bay, p3 WB Cited by CODE-NGO, p7 Highlights of CAS Consultations,p4-S WB Publications, p8 * Bank Report on Solid Waste, p6 c - WB OKs US$30M Loan for LGU UrbanWater Project Y he World Bank has approved a US $30-million loan for the Local Government Units (LGUs) Urban Water - f and Sanitation Project. The project is the second phase of a $250 uh Ii/ millionfour-phase adaptable loan program for investments in water supply and . 7 ~ - sanitation facilities managed by LGUs or L municipalities. -. n i X__ 4 To be implemented by the Development j* Bank of the Philippines, the project will expand its coverage to an additional 100 r |__ water utilities being managed by LGUs. President Gloria Macapagal -Arroyo and WB President James Wolfensohn witness the signing of the LGU Urban The project seeks to help water utilities Water and Sanitotion Project between the Philippine Govemment represented by Finance SecretoryJose Isidro improve operational efficiency and Comacho and Development Bonk of the Philippines President Remedios Mocolincog and the Bank represented accountability to consumers, facilitate by VP for East Asia and the Pacific Jemal-ud din Kassum. private sector participation, and leverage outsourcing operations and maintenance 800,000 residents will receive reliable, private financial flows into the water and responsibilities for constructed facilities affordable and sustainable water and sanitation sector. through lease contracts with private sanitation services. operators. The project design adopts a participatory o3 process that will decide on service levels When the fourth phase of the program is and tariffs. It also provides incentives for completed, some 250 municipalities with Small Grants Program Welcomes Proposals The World Bank Small Grants Program (SGP) n Deadline of applications: March 15, 2002. Request for accepts proposals from civil society that are officially smaller amount is preferred, but larger grants may also based and operating in the provinces, be allowed but only to a maximum amount of $ 10,000. SGP supports activities that promote networking, Inquiries or applications, or both, maybe sent by mail dialogue and dissemination of information and enhance or faxed to: partnership among various stakeholders. Ms.Angie Ibus For fiscal year (July I, 2001 to June 30, 2002), SGP will Operations Officer, Participation/Civil Society Relations World Bank Office Manila focus on supporting activities for the empowerment 23/F The Taipan Place of marginalized and vulnerable groups. Emerald Ave., Ortigas Center Activities may include, but not limited to, workshops, Pasig City seminars, publication or production of audio-visual Tel. 637-5855 to 64/917-3064 materials, information dissemination, dialogue and other Fax. 637-5870 innovative networking efforts. e-mail: aibus@worldbank.org 2 WBNews RP Gets US$1M Grants for Laguna de Bay T_ - - The GEF grant will help the LLDA review The Philippine Government recently s +#ew w lhe Philippine Government recently . - investment programs and plans for Mt. received a combined US$ I million in grants from the Japanese Governmenit .,.- Makiling and Laguna de Bay. Based on and theWorld Bank's Global Environment ~ M 1l l this review, the LLDA will conduct and the World Bank's Global Environment ~technical, economic and environmental Facility (GEF) for the preservation and analy with ak d paricon . protection of Laguna de Bay. analyses with stakeholder participation. It will also develop an integrated Laguna de Bay is the largest lake in the ecosystems management program for country, covering half of the total 190,000 Mt. Makiling and Laguna de Bay. hectares of inland lakes, and the second Over IC million people are affected by largest in Southeast Asia, next to Lake the degradation of Laguna de Bay, which Toba in Indonesia. is now only 2.5 meters deep because of The grants-$988,400 from the Japanese j erosion of soil from its watersheds, Government and $25,000 from the brought about by rapid urbanization and GEF-will help the Laguna Lake industrialization. Development Authority (LLDA) prepare Much of its watersheds, once green and an environment and watershed h t an, _ project~~~ ~ for Launa de Bay> home to many wildlife, have given way management project for Laguna de Bay. :.s ^ t > to settlements and industries.Wastes The project aims to improve both the from industries and households have lake's water quality and volume through the World Bank. will help LLDA develop significantly affected the water quality local government units (LGUs) and in an investment program for high priority and the aquatic life that supports many partnership with the govemment, private projects, design community-driven people around it. Moreover, quarrying sector and civil society. environment and social programs, and has destroyed patches of the watershed strengthen the capacity of lake users such with the run-offs eventually settling in The grant from the Japanese as LGUs, govemment agencies and private the lakebeds. Government, which is administered by businesses in protecting the environment. " ~) 1 WB Commends PresidentArroyo's Commitment to Economic Reforms of the priority needs of communities in community-driven subprojects and basic by priority activities such as strengthening specific conflict-affected communities. services in support of the 1996 Peace the role, capacity and effectiveness of major The preparation work will build on the Agreement with the Moro National stakeholders in Mindanao. lessons from the ongoing Special Zone of Liberation Front. President Arroyo said she appreciated the Peace and Development (SZOPAD) Social But a large demand for community-driven responsiveness of the Bank to her program Fund Project and from other social fund subprojects and basic services is still unmet, of peace and development in Muslim projects in other parts of the world. especially in conflict-affected areas. The Mindanao. "The proposed second phase The first Mindanao Social Fund Project, second Mindanao Social Fund intends to of the Mindanao Social Fund is a key to which began in 1998, has been address a significant part of this unmet stability that will help the poor from implemented in SZOPAD areas and has demand by taking a more comprehensive conflict-affected communities of my been successful in the quick delivery of and sustainable strategy to be supported countr,y" she said. @ 3 WBNews For Country Assistance Strategy for RP WB Holds Multi-Stakeholder Consultations The Bank's mission is to help countries fight poverty by providing member- . . . . . countries with loans and policy advice, technical assistance and other non-lending ' services. Its assistance to the Philippines . 4 p'J_ is governed by the Country Assistance i- Strategy, which identifies and specifies . V : ,.~w- various development objectives and , priorities for the member-country. I W A smoll group workshop with stokeholders from the rurol sector The current CAS for the Philippines was prepared in consultation with the The consultations brought together various Rapid appraisal or quick scan was done government, private sector, academic stakeholders in government, both national during the consultations. Two top issues institutions, and NGOs and civil society and local; labor and business; non- emerged - governance and need to across the country. government organizations (NGOs), both improve implementation of programs and advocacy and operational; academic and projects. Restore Growth, Reduce Poverty research institutions. The Bank's CAS for the Philippines is . The summaries of discussion highlights Thviewed Bank's ory three Philippensres it The new CAS will be based on the Bank's and recommendations from these itrevaiewe reverynte yearshtodensurepthat experience in mplementig the current consultation meetings were then presented needs of the country. The resulting future strategy and the priorities identified in to the Bank staff and government officials the government's new Medium-Term assistance program is then reflected nm a Philippine Development Plan. It will be new GAS, which aims to restore economic presented to the Bank's Board of Executive growth while reducing poverty and Directors in the first half of 2002. improving equity. Six Sectoral Meetings To prepare for the CAS for July 2002 to June 2005, the World Bank held a series From September to November 2001, the Jr of multi-stakeholder consultations during Bank organized a series of six sectoral the last quarter of 2001. consultations, as well as meetings with v -- . _ donors and a special meeting with WB staff and government officials. U w Von Pulley at the meeting. - The consultations reviewed the government's new Medium-Term from the National Economic and Philippine Development Plan in relation Development Authority, Department of with the current CAS to determine which Finance, Department of Budget and - - * t : strategy worked well and which did not. Management, Commission on Audit and ~~~~~~~~~~~~ ~~~~~~~~~~other government agencies. _ 'l- q The meetings also drew lessons from the implementation of the CAS in the past The Bank also contracted a team of three years, identified current and facilitators and documentors, who are u i ll' - _L__> _ ~~~emerging issues rclevant to various sectors, social development practitioners coming Participants from the rural sector note the Banks and identified a number of strategic from the civil society and the academe. correct focus on Mindonoo ond rural infrostructure. changes. 4 WBNews Summary of Feedback of Stakeholders During the Consultations Procurement-too many laws and ,I' regulations, many layers of approval, , ^ t . long process, absence of M&E (no _ - ___ _ -- --. government agency to monitor IT_Ilk- A procurement) - ' w < _i i4 B _ *IFinancial management-weak capacity, __iF s- _ r ;,r - ~ inadequate IT structure, weak reporting 4w- _ - '- ' it*7 _ 2!1i system, lack of understanding and ', d ~ . Ecoordination in implementing reforms r w w ,. _. * Local governance - political -r l_: . -.-W -; _ - if ^ interferences, weak project implementation 9!_ ,- ^\' w . a capacity, fixing accountability (M&E), flow of funds Porticiponts from vorious government agencies discuss the country's major development issues. SOME RECOMMENDATIONS OF THE PARTICIPANTS Urban Development * Explore micro supply-side reforms to Rural Development generate growth-deregulation to *bStrangaytothen ational government fromthe increase competition, agrarian reform, * Integrate the provision of services for the barangay to the national government land reform, privatization and banking rural poor under a sustainable * Promote stronger ivolvement of NGOs regulations development framework and communities*Imrvficlmngmn,epiay * Provide low-cost housing to the urban poor * Improve fiscal management, especially Make social assessment and capacity * Give national support to brown revenue mobilization, risk management building parts of every instrument on , . . and national government-LGU links environment agenda and social projects * Strengthen the financial sector rural development. for LGUs * Continue blend of lending and non- Urban Development * Reach out more effectively to LGUs lending services in support of Human Development poverty reducing growth *Implement the National Land Use Code; its guidelines and standards for creating * Give closer attention to cross cutting Rural Development and Natural cities and managing them should be issues critical to the sector-population, Resource Management clearly set. g Emphasnze capaacty bulding for LGUs, * General consistency of regional -Give priority to capacity building and civil society and community partners management sco ataneswith the training of LGUs in such areas as policy and synchronize inputs and services of government's MTPDP priorities, except reform, land use planning and national government agencies, LGUs for the timing of some interventions enforcement, and solid waste and NGO partners * There is correct focus on Mindanao management. * Adopt family- and community-centered and rural infrastructure Human Development approaches in addressing drop out or * Emphasis must also be placed on out- of-school youth concerns interventions related to enhancing -Assure and sustain civil society - Provsde support to the worio ng poor natural resource management, participation in evaluating programs and and assistance to displaced workers. productivity and market linkages, projects. access to rural finance, and support to IPs * Support projects in population education Infrastructure Development * Institutional capacity assessments, especially for LGUs and NGOs, are critical. and management such as reproductive * Address inadequate infrastructure which * Social assessments and capacity building health contributes to the slow pace of rural should be integral aspects of bank Governance development interventions * Support rural roads-concerns about * Provide technical assistance to LGUs in O&M on myriad of investments Good and Effective Governance information technology, general * Look into the high cost of transport, * Cross-cutting concerns: management, financial management and especially shmpping Manpower-competence, knowledge, procurement, monitoring and evaluation. * Improve traffic management and reuerto ,. poiia itrfeec efficient public transport remuneration, potical miterference * Intensify electorate education to include Logistical support-facilirte anduITthe use of competence index, criteria for Sustainable Poverty infrastructure Reducing Growth Oversight, monitoring, evaluation and selecting govemment officials and report accountability systems card for incumbents. * Since quality of growth is important, Restrictive, unclear, fragmented rules For complete report on the consultations, visit support investments in human resources and regulations wwwworldbonkorgph and rural infrastructure are necessary Genuine participation of stakeholders WBNews World Bank Report Urges Fast Action on Garbage "Time is ticking away and we need to act fast on the A,; fast piling and stinking problem of garbage." This ' l -- was raised in the Philippine Environment Monitor 2001, a World Bank report ' E W iFk that focuses on solid waste ww _ Z- Secretory Heherson Alvorez and Country Director Robert Vance Pulley plant a tree to symbolize the launch management. of the Philippine Environment Monitor at the Pura Kalaw Elementary School in Quezon City. Secretary Heherson Alvarez of the Leader for the Monitor, cited the * In 1997, only 10% of solid waste Department of Environment and increasing rates of garbage production was landfilled. Today, the situation Natural Resources launched the and the lack of progress in developing has worsen as only 2% of waste is Monitor with World Bank Country safe disposal facilities. "This is the disposed of in controlled dumps or Director Robert Vance Pulley at the reason the Monitor focused on solid sanitary landfills, while 75% is left Pura Kalaw Elementary School in waste," he said. "It is clearly one of to rot in open uncontrolled dumps. Quezon City. the priority and visible concerns in Only 5% of hazardous waste is The launch was attended by national facilities that include recycling, recycled or treated properly. and local government officials, composting and sanitary landfilling, Premature closing of Carmona and representatives of civil society, the should be urgently implemented." San Mateo landlfills due to donor community and media. Alarming Picture environmental concerns, local Secretary Alvarez stressed the need to The Monitor paints an alarming opposition to new sites, and lack change behavior even at an early ag^e ofcmrhnierccigsse aste "success ,o then Ecologial Sld picture of the garbage situation in cause garbage pile-ups in Metro as the "success of the Ecological Solid P Waste Management Act will require the country. Manila. behavior and culture change." It cited some facts: * The effects of rotting garbage and Mr. Pulley complimented the * Each Filipino generates almost half untreated toxic waste government and civil society on the a kilo of garbage daily. Ten million contamination of ground and passage of the Ecological Solid Waste tons of garbage generated in 2001 surface water, flooding, disease and Management Act in early 2001 . "The would increase 40% by 2010, or burning of waste-endanger the bigger challenge now is to enforce even more if cities or the economy health of the public and hurt the the law-turning it into action by grow more rapidly than forecast. most. moving from advocacy to actions, poo t resulting in benefits for people and * Only 70% of garbage is collected the environment. in urban areas and only 40% in ruara. Th siuto is wos For free copies of the Environment Monitor Patchamuthu Illangovan, in pr commuitie s Contact: Charito Cabalang-Sanalila, Patchamuthu~~~ Ilnoa In poor communities. ccabalang@worldbank.org or tel. 917-3034 Environment Specialist and Team 6 WBNews WB Launches Philippine LGU Portal development; education; health and for their priority development needs. heeWorld Bank Office Manila recently nutrition; environment; capacity building; "This will immediately initiate dialogue launched the Philippine LGU Assistance'' Portal on the web, a one-stop shop for and energy and other products. with the implementing agency," he information on Bank-supported products Country Director Robert Vance Pulley explained. and services for local government units said the idea for the LGU Portal grew He added that succeeding steps in the (LGUs) in the Philippines. out of the Bank's efforts to bring itself application, including pro-forma The Bank also gives free CD-ROM to closer to LGUs. "The LGUs are at the documents required by the LGUs. The CD-ROM, which replicates forefront of development efforts in the implementing agency are also included the website, contains a brief description country," he said. "We are committed in the project detail pages on the ofthe w rjebite objcntainsvab des,criptone , to helping them in the difficult task of website. Of the project objectives, components, terms and conditions, and LGU eligibility seek new and innovative ways to reach On the other hand, he said LGUs with requirements. It also contains a list of our clients." ongoing projects may contact the names and contact information on the our clients." concerned implementing agency through staff of implementing agencies that Mr Pulley said the LGU Portal also seeks e-mail, thereby eliminating the costs manage the projects and the Bank's staff to facilitate communication and exchange entailed by long distance calls or travel. that supervise the projects. of information among its users by using For those without access to the Net, In the portal, LGUs can find useful and a range of media and web-based the free CD-ROM has printable versions relevant information on Bank-supported communications. of the application forms that can be mailed to relevant implementing products and services in eight sectors, He said interested LGUs who have agencies namely: water supply, sanitation and access to the Net may submit an Online drainage; infrastructure; rural Letter of Intent to access project funds O WB's Partnership with Civil Society Cited The World Bank Philippines was government officials, donors, and media. X. The World Bank Philippines was recognized for giving importance to the The Bank was the only multilateral role of civil society in the Bank's policies institution among the 21 honorees . . f and programs by CODE-NGO during recognized by CODE-NGO. CODE-NGO is a coalition of major The award, received by Country Director NGOs dedicated to social development l Robert Van Pulley, cited the Bank "for in the Philippines. It has seven national constantly working to increase civil networks and five regional networks, society participation in their representing more than 3,000 NGOs i undertakings." and cooperatives nationwide. President Gloria Macapagal-Arroyo Non-profit organizations number Country Director Robert Vonce Pulley receives the presented the award, a tapestry on more than 60,000 in the country. oword from President Glorio Mocopagol-Arroyo bamboo especially made by local artists Development NGOs like CODE-NGO during the I Oth anniversary of CODE-NGO. from Mindanao, before a large crowd are estimated at over 5,000. rm of civil society from all over the country, LI 7 l~~~~~~~~~~~~~~~~b l Global Economic Prospects 2002: World Development Report 2002 MakingTrade Work for the World's Poor l ~ November2001 August2001 ia = ~~~273 pages A256pages This year's Global Economic Prospects argues for reshaping the The World Development Report 2002: Building Institutions for Markets global architecture of world trade to promote development and undertakes the complex issue of the basic institutions needed for markets poverty reduction. to function properly. The report focuses on four policy areas: ! The report goes beyond a simple examination of institutional structure L and explores the functions of institutions. Recognizing that one size does * Using the World Trade Organization (WTO) ministerial to not fit all, the report asks: "What do all institutions which support markets launch a development round of trade negotiations that would do?" reduce global trade barriers The answer is simple: institutions channel information, define and enforce E properry rights, and increase or prevent competition. Understanding the * Engaging in global collective action to promote trade outside 8 functions that current institutions and their proposed replacements would the negotiating framework of the VWTO provide is the first step. * Adopting pro-trade development policies of high-income The report contends that once you have identified the institutional countries unilaterally functions that are missing, you can then build effective institutions by following some basic principles: Enacting new trade reform in developing countries. - Complement what already exists in terms of supporting institutions, The report contends that the policies recommended in these four human capacities and technology. areas would reshape the global trade architecture in a way that * Innovate to suit local norms and conditions. Experimenting with would enhance the prospects of developing countries and reduce new structures can provide a country with creative solutions that world poverty. work. While the most likely scenario is for recovery beginning in 2002, * Connect communities of market players through open information today's slow growth of global trade and weakening financial flows flows and open trade. Open trade and information flows create to all but the most creditworthy countries has impeded growth demand for new institutions and improve the functioning of existing in developing countries. structures. * Compete among jurisdictions, firms and individuals. Increased The report concludes that the long-term promise of a well- competition creates demand for new institutions as old ones lose implemented trade reform is therefore tangible: a world with a their effectiveness. It also affects how people behave, improving much higher standard of living, hundreds of millions lifted out institutional quality. ofpoverty, and a sharp increase in children living beyond their These broad lessons and careful analyses, which link theory with pertinent fifth birthday to become productive citizens of the world. evidence, are provided in the report, which contains selected world PM ;development indicators. To orderWorld Bank Group publications, contact Or visit our 24-hour online website at To borrow, contact: International Booksource Center Inc. www.worldbank.org/publications The World Bank Country Oflice Manila 1127-A Antipolo Street, Barangay Venezuela 23/F,The Taipan Place, Emerald Ave. Makati City, Tel. (632) 896-6501 / 6505 / 6507 Or-tigas Center, Pasig City Fax (632) 896-1741 Tel. 637-5855 to 64 I The World Bank Country Office Manila Place 23/F The Taipan Place I Stamp JiJ a v.hi Emerald Ave., Ortigas Center, Pasig City I Here InTouch is a quarterly newsletter of the World Bank Country Office Manila. All correspondence may be addressed to: The World Bank Country Office Manila 23/F,TheTaipan Place Emerald Ave., Ortigas Center, Pasig City Tel. 637-5855 to 64 Editorial Staff. Robert Vance Pulley, editorial adviser Leonora A Gonzales, editor Charito C. Sanalila, production assistant