Announcement of Meeting of the Consultative Group for the Philippines on May 31, 1973

INTERNATIONAL BANK FOR .RECONSTRUCTION AND DEVELOPMEN·T 1818 H STREET, N.W., WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 May 31, 1973 Subject: Meeting of the Consultative Group for the Philippines The following announcement was made by the European Office of the World Bank: "The third meeting of the Consultative Group for the Philippines was held in Paris on May 29 and 30, 1973 under the chairmanship of the World Bank. Representatives of the following countries were present: Australia, Canada, France, Germany, India, Japan, New Zealand, Spain, Switzerland, United Kingdom and the United States. Also represented were the International Monetary Fund, the United Nations Development Programme, the Asian Development • Bank, the Coonnission of the European Cormnunities and the Organization for Economic Cooperation and Development·. The Philippine Delegation was led by the Honorable Vicente Paterno, Chairman of the Board of Investments. "The Group discussed a report prepared by the World Bank on the Current Economic Position and Prospects of the Philippines. It was agreed that the economy was recovering well after the setbacks created by the serious floods of mid-1972. The Philippines had mounted an impressive rehabilitation program which had been generously supported by asslstance from countries represented at the meeting. The Group welcomed the economic and social reforms which had been announced in recent months, and was particularly encouraged by the success of the program to raise Government revenues, whose relatively low level had been a matter for coLcern in the past. It also welcomed the prospect of further increases in public revenues and investment programs. The Group • noted that progress was being made in developing a large.r number of projects suitably prepared for external assistance. In that light a m.unber of countries  - 2 - • and agencies indicated rising levels of commitments for development projects to ,. :~upport this program • "The Group discussed the survey of the Philippine agricultural sector prepared by the World Bank and heard an account by the Philippine delegation of the Agrarian • Reform Program. It was noted that rice production had been badly set back by last year's floods. Production was still inadequate to meet domestic demand and self- sufficiency was unlikely to be reached until the rnid-1970s. The Group agreed on the importance of promoting.agricultural development in a way which would both re- sult in a rapid increase in agricultural production while at the same time ensure rising incomes and employment for the poorer membe~s of the rural community. A number of the countries and agencies welcomed a Philippine proposal to undertake projects on an integrated area development basis and indicated that they would also welcome further opportunities to provide financial support for the agricultural development program. "The Group noted with satisfaction that disbursements of official development assistance in 1972 (excluding disbursements of assistance provided in direct re- sponse to the 1972 floods) had been over $100 million, more than double the level of 1971. On the basis of corrmrl.tments already made, disbursements in 1973 were likely to be substantially higher. The recent improvement in the prices of Philippine exports and the more comfortable foreign exchange position was welcomed. It was noted that it was too early to assess whether the present export price levels could be sustained. It was agreed that the improvement in export earnings, if sustained, could be used to increase reserves, reduce the debt burden to more tolerable levels. and support an appropriate level of imports for development purposes. Accordingly continued efforts to expand exports would be needed. "The Group welcomed the measures taken by the Philippine Government to improve the climate for foreign private investment. These measures were expected to en- large the contribution of private foreign capital to Philippine development. "It was provisionally agreed that the next meeting of the Group would be held in October 1974, probably in Paris." - 0 - •