InTouch 4 (4)

A N e w s I et t e r of t he W or Id B ann I< 1 1 c C o u n t r y O f f i c e i n t h e P h i I i p p i n e s September 1999 Volume 4 Number 4 23223 LOGCOFI ND: Strengthening Local Goverment Units The Philippine government and-- the World Bank have signed a - US$100 million loan for the Local I Government Finance and Development (LOGOFIND) Project. Finance Secretary Edgardo B. Espiritu and Mr. Bernard Funck, principal economist of the World Bank Philippine Country Office, signed on behalf of the Government and the Bank, respectively. Made up of four components, the project will assist local government units (LGUs) in expanding and upgrading their basic infrastructure, services and facilities, and in strengthening their capacities in munici- pal governance, inivestment planning, revenue generation, and project develop- ment and implementation. It will also Mr. Bernard Funck (2nd from left), Principal Economist of the World Bank Philippine enhance capabilities at the national level to Country Office, and Finance Secretary Edgardo B. Espiritu sign the loan agreement for Local Government Finance and Development Project. Looking on from left are provide technical support and long-term Toru Hashimoto, Urban Planner,Team Leader/lnfrastructure,WB; Maribel Zonaga, financing for LGUs through the Municipal Program Officer,WB;Annie Fernandez, Division Chief, DOF; and Lily K. Gruba, Development Fund, the current conduit for Undersecretary, DOF. official development assistance to local government units. Real Property Tax Administration Program respond to the service and infrastructure The first component supports sub- and developing new initiatives in improving requirements of their constituencies by projects for the expansion, rehabilitation the revenue generating capabilities of local providing long-term credit financing and and improvement of basic infrastructure, governments. The fourth component seeks selected grants to social projects, training social and environmental services, and to reorganize the Municipal Development and capacity building programs. It should facilities under LGU stewardship. Another Fund through the setting up of new help enhance local governance and improve part provides training and capacity-building institutional structures, streamlined the financial resources of LGUs." for L.GUs in subproject development and processing procedures and decentralized Eligible subproiects to be financed implementation, municipal planning and field operations. by LOGOFIND include public markets, piloting new programs, among others. LOGOFIND is a major contribution of municipal water supply systems, transport A third component covers LGU resource the Department of Finance to the decentrali- terminals, health centers and school mobilization and monitoring which zationi process. SecreLary Espiritu said, "The buildings, among others. includes expanding the coverage of the project will allow local governments to uII p.2 Th ~niis Issue * World Development Report Launched, p2 Update on CAS, p4-5 1-n- i'n'is Issue . WB.IMF Meetings 1999, p3 WB News, p6-7  guidance to decision-makers, researchers World Development and others with keen interest in develop- _ , , , ~~~~~~~~~~~~~~~~~~~~ment Issues. Dr. Jesus P. Estanislao, former Finance RepotiLaunched Secretary, said, "The World Development Report offers refreshing perspectives- coherent, systemic perspectives. [It provides for] a better outcome for evervone as well as a call for civic-mindedness and All the WDR men. consciousness." Former Socio-Economic (From L-R) Dr. Planning Secretary Cielito Habito added, Cielito Habito, "The Report describes a freer mobility of Charles Kenny, goods and services. Tl he challenge to us is BSeon Evenett, that this freer flow would empower the poor Dr. Jesus Estanislao more so that we can narrow the gap and Anjum Altaf. [between rich and poorl." WDR 1999/2000 includes Selected World Development Indicators, an essential reference on recent development trends. The World Development Report (WDR) landscape in the next millennium. The 17fore on the aVorld Development Report T for 1999-2000 wvas formally launched in integration of the world economy Oli page 8.) the Philippines in a discussion forum in and the increasing demand for partnership with the Universitv of Asia and local autonomy will affect trade, the Pacific in Pasig City. The authors from capital flows, the global environ- the World Bank Headquarters Office in ment, decentralization and urban Washington DC made a brief presentation development. Countries are of the Report, followed by an open forum expected to seek a dynamic with participants from the NGOs/civil equilibrium at both international societv, academe, media, donor organiza- and subnational levels. The report tions and the business community. Two also proposes rules and proce- former cabinet members, Dr. Iesus dures on which to build a more Estanislao and Dr. Cielito Habito, com- effective approach to develop- mented on the Report. ment, provides valuable insight B u The latest edition of the WDR assesses into how varving viewpoints may Bernard Funck, Principal Economist of the World how the forces of globalization and localiza- be adapted to fit evolving reactors during the Philippine launch of the World tion are reshaping the international development concerns, and offers Development Report. l LOGOFIND... better information to monitor LGU fiscal and financial capabilities of local executives performance. and their staff through training and "The project reinforces the Bank's long- LOGOFIND is consistent with the technical assistance. standing commitment to strengthening government's efforts to address these LOGOFIND is the fourth in a series of fiscal decentralization and local self- challenges. It rationalizes the government's municipal development projects in which reliance," said Thomas Zearly, Principal policy of promoting self-reliance among the Bank has tapped the Municipal Develop- Operations Officer in the World Bank East LGUs and lays down the respective roles of ment Fund to on-lend funds to LGUs in Asia and Pacific Region. "It supports various participants in the financing of LGU the country. The MDF has proven to be an implementation of the government's LGU initiatives. effective mechanism in providing LGUs with financing policy and encourages LGUs to To ensure project continuity, appropri- direct access to affordable, long-term credit. access market-based credit while focusing ate incentives, conditionality and support public funding and capacity building on have been included to improve the mnanage- For more information about poorer LGUs, and social and environmental rial performance and financial standing of LOGOFIND, contact: projects." LGUs. For one, credit-worthv local govern- Toru Hashimoto, Urban Planner, LGUs in the Philippines face four ments may eventually move on to become | Team Leader/lnfrastructure, and Lito I League, Operations Officer, The World essential challenges: accelerating the viable partners of government financing Bank. Tel. 637-5855 to 64 development of the capital market for LGU institutions and private fund sources. I I financing, enhancing local capacity in the Additional measures for sustainability are r Annie Fernandez, Project Director, and delivery of local services, expanding local the provision of equity contribution from a Tel S26-7475 / 526-7335 resources mobilization, and organizing the LGUs, and enhancement of managerial T 5 2  B etween September 28 to 30, the World Bank, the International Monetary Fund, and some 20,000 finance l lobal Poverty Issues officials, central bankers and world leaders from 182 countries gathiered in Washingtos n Discussed atWB-I M F DC for their 54th annual meetings. It was the s * f last assembly of the world's top finance M eetings 1999 ministers before a new millennium sets in and the general mood reflected hope and optimism for a debt-burdened, poverty- property rights and contracts, which gives a than two dozen countries on anti-corrup- The upbeat mood was conplemented framework for bankruptcy laws and a tion programs, including training judges, by e major t pronouncees conmpomerty predictable tax svstem, if thev do not have organizing public national workshops, and by major pronouncernents on poverty I reduction and debt relief by World Bank an open and regulated financial system and training investigative journalists. president James AWolfensohn and IMF appropriate regulation and behavior that is managing director lichael Camdessus, transparent, their development is funda- respectivngy. mentally flawed and will not last." In his address to the Board of Governors He said that the Bank would give strong entitled Coalitions for Change, World Bank emphasis in the nears ahead to workingur Group President James D. Wolfensohn said, wth governments to strengthen structure "The crisis is not over. The challenge has andr. Wolfensohn proposed that within W barely, begun." He spoke of the need for Ni. Wof.sh prpoe tha wihi 0 barely bu"ethe next few months the Bank joins with R global rules and global behavior and called the United Nations and others to look at L on the global community to build "a new what each is doing on governance and international development architecture capacity building, assess strengths and to parallel the new global financial architec- expeces and assess toength ad B tue"a, rcietr experiences and decide how to move ahead. A ture.w He emphasized the Bank is already spend- N .Such an architecture would focus onN Suchperation between recipients and donors ing over $5 billion a year on governance K cooperation between recipientssn oos isus okn anonor cii sevcerfom and citizens of donor countries and on Issues, workmg on civil service reform, . breaking the chains of debt and poverty. It budget management, tax administration, breakg th chas ofdebt nd pvert. It legal reform, juudicialreeform,anndinnstitution should work towards a trade system with building. r Our dream is a rules and norms that are fair, comprehensive The Bang is now working with more world free of poverty and inclusive." T B is no wk wt mr --_-_-_---_-- The World Bank Group president described the proposed architecture as a coalition which recognizes that the environ- Prospects For East Asia in 1998, private forecasters foresee only metkofr the (From the World Bank Annual Report 1999) sluggish growth, if that, for calendar year ment knows no borders. He pushed for h Fo 1999.A Japanese recovery is crucial to the implementation of international agreements FY99 saw the East Asian financial crisis stabilization and prosperity ofAsian econ- on climate change, desertification and abate, and the hard work of recovery omies. Another risk stems from the still begin. Reputed for its fast growth, sound robust U.S. and European economies: if biological diversity, and full funding to be management, and income equity, the they enter recession,Asian exports would provided to the Global Environment Facility. region is now emerging from it worst eco- suffer and likely cut short recovery. It will also be a coalition that focuses on nomic collapse in modern times. Current Still, profound changes already taking harnessing new vaccines to eradicate AIDS, account balances, dangerously in deficit in place in EastAsia bolster the region's long- early 1997, have swung into large surplus- term prospects. Not only do savings rates malaria, TB and polio, and it makes the es, enabling sizable reserve accumulations. remain high and past investments in edu- information revolution truly universal in The region has enjoyed more stable ex- cation continue-ingredients for the East cognizance of the wide-ranging impact of the change rates since early 1998, and inter- Asian "miracle" years-the economic technological revolution on development est rates have fallen to pre-crisis levels. crash has forced a new thinking about pre- These developments have provided the vious accepted ways of doing business. A Mlr. Wolfensohn also placed governance foundations for recovery in the region, but new EastAsia is being built: one with stron- issues at the center of development. Saying recovery remains uneven.The Republic of ger financial institutions and corporations that the causes of financial crisis and poverty Korea's recovery has been rapid and im- and one where openness applies not just are one and the same, he warned: "Countries pressive. Philippines, Malaysia, andThailand to trade and finance but increasingly to are projected to show positive, though information and even politics. may come up with sound fiscal and monetary slow, economic growth, and Indonesia will East Asia, according to present Bank policy, but if they do not have good gover- probably continue to stagnate forecasts, is on its way to becoming the nance, if they do not confront the issue of The recovery is also fragile. One of the fastest-growing region among developing corruption,iftheydonotave comp te risks relates to the Japanese economy. De- countries in 2000. (More on the Annual legal system which protects human rights, spite a large stimulus package announced Report on p. 8.) 3  UPDATE ON THE CAS Dissemination Following the endorsement by the Board, user-friendly copies of the Philippine Country Assistance Strategy document have been printed and distributed to a wide sector of stakeholders. The main of the CAS. T he most notable is recipients of the Report were those who that the CAS has become a attended the CAS consultations last year. public document. Many participating POs and NGOs CAS Dialogues were pleased at the Bank's Ms. Heidi Hennrich-Hanson, the CAS efforts to be more transparent, Task Team l.eader, visitcd the Phil]ip- accountable and open to publicl _! pines in July to discuss the new CAS with scrutiny. Another strength the government, NGOs and civil society. noted was the Bank's openness Jn July and August, five consultation to participation from civil X; workshops were held in different parts society. Participants to the five of the country. The feedback sessions consultations were encouraged ' _ _ _ followed from the CAS consultations to suggest ways of attracting Ms. Hennrich-Hanson Cpartiants to the GAS feedback held last year wherein representatives public cooperation in the workshop in the National Capital Region. from people's organizations and non- monitoring of the implementation governmental organizations identified of the CAS. key issues in the CAS' main areas of In terms of CAS' strategic Weaknesses concern. The participants enumerated priorities, many participants pointed Along with the perceived strengths, their recommendations to the Bank on out that the CAS' objectives of ensuring the participants to the consultations also these areas. the delivery of basic services to the poor, directed the Bank's attention to a few During the feedback consultations, improving education, focusing on ongoing concerns as well as new issues attended by Mr. Vinay Bhargava, infrastructure development in the engendered by the CAS. The most promi- Country Director, and other Bank staff, provinces and addressing corruption nent issue raised was the CAS' apparent the participants cited the major strengths are among its strengths. emphasis on privatization. A number of A~~~~~~~~~~~~~~~~~ 1Rw~~~~~~~~~~~~~~~~~~~~~~1 Enrico Alfiler, Philippine representative to the World Bank's Board of Executive Directors, joins the CAS feedback Corp focuses on the workshop in La Union. Bhargava and the other participants of ia r at te Cebu worksnhe P listen.  David H-owarth, Manager for Operational Core Services discusses the Bank's strategy to improve financial manage- ment of projects during the Davao workshop. participants expressed the view that the eonomist, eOXpll pital Regi0/ new CAS failed to consider the recom- specifically in poverty rducTo osa mendation from last year's consultation providing access to low-income trategy to go slow on the privatization of govern- housing. The consultation participants ment-owned and controlled corporations called on greater involvement by civil of the GAS were divorced from a providing basic services. society on infrastructure projects and in complementary initiative on sustainable Likewise, while the CAS outlined the implementation of the (,AS in the development. efforts to enhance the social services for context of corruption in government and Aside from new and ongoing con- the poor, a number of participants argued the perceived resurgence of cronyism. cerns, the participants offered various that these provisions remained wanting Some participants to the new round suggestions on how civil society can particularly in addressing the needs of of consultations commented that the CAS participate meaningfully in the imple- people with disabilities and the elderly. has not made an assessment of the root mentation, monitoring and evaluation Many participants voiced their concern causes of poverty and the interventions of the CAS and Bank-assisted projects. over the limited attention given to needed to respond to it. Questions were Their proposals ranged from utilizing indigenous people in the CAS' rural again raised regarding the CAS framework existing channels, structures or networks development thrust and inadequate and a number of participants reiterated to monitoring mechanisms j ointly intervention on urban development, that the poverty-reduction objectives organized by the Bank, civil society and NGOs. There were resounding endorse- ments to hold regular dialogues between the Bank and civil society, and to continue information dissemination on the Bank and its projects. Although some major points of t disagreements remained, all feedback consultationls ended in commitments from both the Bank and civil society to keep communications lines open through regular interactions. Copies of the Philippine Country Assistance Strategy are available <7. ~~upon request from the PIC Philippines. Interested parties may get in touch with Ms. Charito Sanalila The first feedback session on GAS in Mindanao gets going in at Tel. 637-5855. Zamboanga City. Lead discussant is Ma.Theresa Quiihones, operations officer for rural development. l: x ~~~~5q"Z>w_dfn5n^f I~~~~~~~~  Joint Japan/World Bank 7 NGOs Receive Grants for FY 1999 Graduate Scholarship Program for Year 2000 The Small Grants Program has awarded (SGP) since 1998. Past grantees have T over $50,000 to seven non-government contributed to promoting dialogue and The World Bank in cooperation with the organizations for 1999. They were chosen disseminating information about develop- Government of Japan announces that from a field of 109 applicants. ment in various fora outside of the Bank's applications for the 2000 selection cycle of The grantees are: Agri-Aqua Mindanao operation. the joint Japan/World Bank Graduate for its coalition building program; Caucus The SGP program supports activities Scholarship Program (JJ/WBGSP) is now of Development NGO Networks for the that promote networking, dialogue and open. The program awards scholarships to publication of a monograph on NGO funding dissemination of information about local, individuals from World Bank member facilities; Coconut Industry Reform Move- regional and international development countries to undertake graduate studies at ment, Inc. for its planning activities for among various stakeholders. These may renowned universities throughout member small-scale coconut farmers; CO-Train include conferences, seminars, special countries of the Bank. Multiversity for a national workshop for editions or start-up costs for publications, To be eligible, an applicant must be a community organizers; Kaisahan Tungo sa audio-video materials and other innovative national of a World Bank member country, Kaunlaran ng Kaugnavan at Repormang netvorking efforts that non-profit organiza- under the age of 45, in good health and Pansakahan for its organizational training tions find difficult to fund through their of good character. He/she must have a for agrarian reform beneficiaries; Philippine regular program budgets. The focus can be bachelor's degree in a development-related Eagle Foundation for its conference on on development issues such as poverty field and a superior record in a previous natural resources protection; and Visayas reduction and private sector development. academic course. The applicant must also Cooperative Development Center for its coop Any non-profit, non-governmental, propose a program of study related to conference workshop. non-academic organizations concerned with development at the masteral level and The Philippine Country Office has been development can apply for a grant. However, submit evidence of admission or application administering the Small Grants Program the SGP gives priority to institutions. to two universities in any World Bank member countrv. Small Grants Recipients for FY 1999 Application forms for the program's 41P1rop,ctTii1e Dae of ~~~~~2000 cycle are available at the JJIWBGSP Grantee Project Title Amount |ate of Secretariat at World Bank Headquarters in Washington DC from September 15 to Agri-Aqua Mindanao Coalition Building Program US$7,895 July 1999 January 15, 2000. Forms are also available for Agri-Aqua 1999 at the World Bank Country Office and can Caucus of Development Monograph Publications: $5,263 April 1999 be downloaded at the program home page NGO Networks Workshops of NGO- Managed Fund Mechanisms on the internet: http://www.worldbank.orgl and Donor-Managed NGO html/edi/jjwbgsp.html. Fund Facility The Government of Japan provides Coconut Industry Small Coconut Farmers and $6,842 July-December funding for this scholarship program while Reform Movement, Inc Farm Workers Participation 1999 the World Bank administers the program in Industry Development through the World Bank Institute. CO-TRAIN National Reflection $9,210 May 1999 Completed applications and correspon- Multiversity Workshop for Community dence in hard copies must be sent directly Organizers to: Kaisahan Tungo sa Institutional Development for $5,263 Aug-Sept 1999 The World Bank Kaunlaran ng Kaugnayan Agrarian Reform and Rural at Repormang Development NGOs Joint Japan/World Bank Graduate Pansakahan Scholarship Program Philippine Eagle Conference on LGUs and $6,842 Aug-Sept 1999 18181H StreetNW Foundation NGOs/POs Partnership for Washington DC 20433 USA Natural Resource Conser- t vation/Protection Note: Applications sent byfax or e-mail are not accepted. All applications should be sent Visayas Cooperative Coop Conference Workshop $9,211 May 1999 diretedadeiicatedbeplct Development Center directly to the address indicated. Applicatlons TOTAL US$50,256 are notprocessed at the Country Office in Manila. 6  WBNews The Bank, in cooperation with the Asian Institute of Management, trained 34 regional managers and staff of the Depart- Bank, AIM Enhance DSWD Capability ment of Social Welfare and Development (DSWD) on Procurement Management for il Procurement Management Foreign-Assisted Projects. Training parti- cipants came from DSWD offices in the 'i National Capital Region, Cordillera Region, Region 7 and Region 11. The training course was identified from a training needs assessment survey on the managerial and procedural competence of DSWD personnel to handle the procure- ment processes in accordance with the Bank's guidelines. At the project management level, the survey respondents expressed needs to develop skills in planning, monitoring and evaluation of local government projects; the Commission on Audit (COA) procedures; anid handling multiple systems for different funding agencies. In procurement, the group acknowledged the common problems in the Participants, resource persons and staff of the Procurement Management Training following areas: preparation of reports and Program for DSWD pose for the class picture. documents, conformance with the guide- rocurement manual for the Department lines of COA and donor agencies, monitor- and its flagship projects; ing of workflow and control of funds. a i . lagship projects; 3) Idenitification of non-training needs A curriculum tailor-fit to the particular to henclu n tnk'stechnl needs of the Department was developed. to be tcluded m the Bankr s techn; caln The training program focused on project 4) Collection of baseline data on the management and integrated procurement impact of the training. d _ The Center for Development Manage- The Training Program on Procurement The Cnter or Deelopmnt Maage- lanagement for Foreign-Assisted Projects ment at the Asian Institute of Management was organized as part of the World Bank's conducted the training program from Integrated Program to Improve Procure- August 2 to 14, 1999. ment and Financial Management of Prof.Victor Tan, AIM Associate Dean, Kev results of the training include: B . t addresses participants to the Procurement Bank-assisted projects. It envisions ManagementTraining Course. t) Savings on staff training in the prepara- improved project implementation through tion of the Annual Procurement Plan; efficilent disbursement and management of 2) Savings on the development of a fund releases. Prior to the training, a training needs assessment was conducted based on the Transparency and Internal Control Studies (TRICs) conducted by the Bank with World Bank Country Director funding from the Philippine government. Vinay Bhargava participated in TRICs assessed such critical aspects of the national opening forum of Bank-assisted projects as procurement, the Citizens Assessment for project execution, loan availability, dis- Structural Adustent (CASA) ursementandfinancialreporting Philippines. CASA is a participa: usmn n innilrprig tory review process on the RII.1..,IaA number of government agencies structural adjustmnent program participated in the training needs survey. sponsored by the Freedom From CASA - PtIPPNES DSWD is a pilot recipient of the procure- Debt Coalition. NATIM OPEN FOR ment training that followed the training needs assessment. 7  IU I natural disaster-even as it maintained its 3 I t IS _ _focus on poverty reduction. Commitments reached a record-high of US$29 billion and disbursements stood at Em 7 > such as biodiversity and climate change. The US$24 billion. The quality of lending has 2h t g,!< .....second half considers three key aspects of improved due largely to changes made as localization: decentralization, urbanization part of its Strategic Compact, the institu- World Development and making cities livable. tion's corporate renewal program which was Report 1999/2000: As globalization shrinks the world and introduced in 1997. The Bank also redou- Entering the 21st Century J localization expands policy options, the bled its efforts in all regions to be responsive The World Bank. 302 pp. t WDR proposes that successful development to client needs and ensure local ownership Globalization and localization are both strategies will achieve results more quickly. of development programs. inevitable. Whether a countrv will succeed To this end, the report identifies "four In FY99, the Bank launched several in the 21 st centurv depends on how well it critical lessons" from the World Bank's initiatives that should bear positive results manages these twin forces. development experience. These lessons well into the next millennium. It piloted the This is the main premise of the 22nd include the necessity of macroeconomic Comprehensive Development Framework edition of World Development Report stability to achieve growth and the need to which lays out an integrated approach to (WDR), the annual World Bank publication address human needs in development development focused on results and based that provides in-depth analvsis of evolving efforts. They will be central to the Bank's on a long-term vision. It has forged new development issues. The latest report vision of its work in the 21st century and to partnerships, most notablv a forestry focuses on the challenges and opportunities the way it proposes to tackle the principal alliance with the World Wide Fund for in the changing development landscape of challenges that lie ahead. Nature and a protection program for the next millennium. The report also contains a wealth of cultural heritage with the Getty Fund. Globalization refers to the increasing updated information on the state of the Likewise, the institution made significant integration of the world economy while world. An appendix entitled Selected progress in carrying out its anti-corruption localization involves the growing demand \Vorld Development Indicators covers such agenda inside and outside of the organiza- for local autonomy. Along with improved basic statistics as the size of the world ti. communication, better transportation and economy and economic growth, quality The Bank will build on these accomplish- falling trade barriers, globalization is of life, life expectancy and adult literacy, ments to sustain its drive against poverty transforming the world into a connected among others. worldwide. village and at the same time, fueling the desire for localization-the devolution of ,a To order World Bank Group the means for local communities to shape - . publications, contact: their own future. These emerging trends International Booksource Center Inc. II27-A Antipolo Street could revolutionize prospects for human Barangay Venezuela, Makati City development, or it could lead to chaos Annual Report 1999 Tel. (632) 896-650 I / 6505 / 6507 and suffering. The Wor~~Annuld Bank.t 352pp99t Fax (632) 896-1741 and suffering. The World Bank. 352 pp. n i t Or visit our 24-hour online website at WDR examines how globalization and www.worldbank.org/publications. localization are transforming many aspects For the Bank, rapid response was the To borrow, contact: of world development. The first part of the hallmark of its 1999 operations. The Bank The World Bank Country Office in the Philippines report dwells on three areas where global met urgent demands for assistance-from 23/F,The Taipan Place cooperation is becoming crucial: trade, support for reform programs in East Asia Emerald Ave., Ortigas Center financial flows and environmental concerns to aid for Central America in the wake of a Pasig City The World Bank Country Office in the Philippines Place' 23/F, The Taipan Place Stamp Emerald Ave., Ortigas Center 'Here, InTouch is a quarterly newsletter of the World Bank Country Office in the Philippines. All correspondence may be addressed to: The World Bank Country Office in the Philippines 23/F, The Taipan Place Emerald Ave., Ortigas Center, Pasig City Tel. 637-5855 to 64 EDITORIAL STAFF: Vinay K. Bhargava, editorial adviser Leonora A. Gonzales, editor Charito Sanalila, production assistant