Poverty fighting in the Philippines a daunting task

from the Manila Times

This article shows the results of an ADB report that measures assistance programs in the Philippines. - Kale

By, Darwin G. Amojelar

The Asian Development Bank (ADB) said the Philippines' next assistance program remains "daunting" owing to high poverty levels and weak investments.

In its Country Assistance Program Evaluation Report, the Manila-based lender said its assistance program over the past five years, or from 2003 to 2007, has been successful in meeting its more selective objectives, despite the need for improvements.

"However, the larger context for the next country strategy continues to be daunting. Poverty is high. Progress toward Millennium Development Goals is slow and lagging in key areas, and government expenditures for related social and economic services are still low compared to needs," the ADB said.

"Private capital formation is low compared to neighbors," it added.

The regional lender said the country's export base is narrow and its value-added low. Furthermore, the private sector perceives the need to control corruption, raise infrastructure spending, and education outcomes to improve the country's competitiveness, the ADB said, adding this should be financed by a strengthened revenue effort.

The reforming energy sector has yet to achieve wider competition and lower electricity rates, while investment rates are low and governance concerns continue to influence investor confidence.

Adding to these constraints are global factors such as slowing growth, a credit squeeze, high oil and food prices, and rising inflation. Hence, in the coming years, the Philippines will face significant development challenges, the ADB said.

"To address the constraints to growth and poverty reduction, the Philippines will need to continue to exercise fiscal discipline and further expand its fiscal space; more widely institute good governance; accelerate infrastructure, education, and other social service development; support expansion and diversification of the economic base; and make access to development opportunities more equitable," the lender said.