Bert Hofman Funders Panel


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Bert Hofman Funders Panel

  1. 1. Association of Development Financing Institutions in Asia and the Pacific (ADFIAP) CEO Forum VI Funders Panel: Funding Sources for Financing Development Dusit Thani Hotel Makati City, Philippines October 29, 2009 Bert Hofman Country Director World Bank Philippines
  2. 2. Outline of Presentation Overview of the World Bank Group WBG’s Strategy in the Philippines Main Development Challenge CAS Framework WBG’s Programs in the Philippines Current Portfolio Financing and AAA Programs IFC-IBRD Integrated Programs Partnerships Flexibility and Innovations Responding to Crises Opportunities for Innovative Approaches
  3. 3. The World Bank Group Provides financial and technical assistance to developing countries around the world. Owned by 186 member countries, including the Philippines. The IBRD focuses on middle income and creditworthy poor countries. IFC financing private sector investment, and provides advisory services to businesses and governments. Overall goal of WBG: Reduce global poverty.
  4. 4. Philippines’ Main Development Challenge Philippine economic growth averaged 5.1% during 2000-2008, yet poverty drifted upwards in times of highest economic growth. Poverty Reduction in the Philippines versus East Asian Neighbor
  5. 5. Philippines’ Main Development Challenge While poverty incidence declined from 1985 to 2006, the absolute number of poor increased. Poverty Incidence versus Magnitude of Poverty, 1985 and 2006
  6. 6. The WBG’s Country Assistance Strategy Basis: Medium-Term Philippines Development Plan Theme: “Making Growth Work for the Poor” Overall goal: Inclusive Growth Four strategic objectives: Stable macro economy Improved investment climate Better public service delivery Reduced vulnerabilities One cross-cutting theme: Good governance
  7. 7. The WBG’s Country Assistance Strategy Strategic Emphasis: Intensify poverty focus Operationalize governance Include emerging global challenges (disaster risk management and climate change) Emphasize knowledge agenda Lending Envelope: US$.7-US$1.0 billion per year Partners: NG, LG, Private Sector Development Partners, Civil Society
  8. 8. Philippines FY10-12 CAS Civil Society Engagements: National and Local Levels Private Sector
  9. 9. Current Portfolio As of end Sept. 2009, there were 24 active projects (18 loans and 6 large trust funds), for a total net loan amount of $1.41 billion Indicative breakdown of the portfolio by sector Human Development: 26% Rural and Environment: 21% Transport & Energy: 24% Urban and Local Government: 17% Social Development: 10% Economic Management/Governance- 2% In addition, there were 81 active country-specific trust funds with total net grant amount of $136.7 million.
  10. 10. IBRD-IFC Integrated Programs Infrastructure – Support reforms in electricity sector, private participation in water service delivery, and PPP in transport Agribusiness – Support activities to increase rural and farmer access to credit and to improve market access for agriculture and agribusiness development Financial Sector – Support increased access to financial services, banking sector competitiveness and reach, and financial literacy
  11. 11. Partnerships Policy level Philippines Development Forum (government and development partners) Harmonization program (ADB) Operational Level Parallel/co-financing (DPL1) Multi-donor Trust Funds (e.g., Mindanao) Jumbo Trust Funds (Japan, Australia, European Commission) Portfolio monitoring (ADB, Japan) Global programs (GEF, PPIAF, CTF, others) Special programs (KDC, Panibagong Paraan)
  12. 12. WBG Response Options to the Global Crisis IBRD Scale-up support to CCT program Accelerate disbursements under Health and Education programs Provide additional financing for CDD project (KALAHI) Budget support Acted: Food Crisis Response Development Policy Operation ($200 million), FY09 IFC Bank Recapitalization Fund Expanded Trade Finance Program Infrastructure Crisis Facility Global Microfinance Funding Initiative MIGA Political Risk Insurance Products Small Investment Program
  13. 13. WBG Response to Recent Disasters Ongoing: Post Disaster Needs Assessment Portfolio restructuring/project reallocations (under discussions) Other Response Options: New operations (Emergency Recovery Loan, Additional Financing, Supplemental Development Policy Operation) Projects on recovery and rehabilitation of critical infrastructure (e. g., water supply and drainage) Urban renewal initiative Scaling up of community-driven approaches for urban development Illustration: Bicol Power Restoration ($13 million), FY08, in response to damage caused by typhoon Reming in December 2006.
  14. 14. Opportunities for Innovative Approaches Extending DFI capacity to borrow WB to provide funding to DFIs WB to help develop a secondary market to increase LT resources Increasing sources of funding for LGUs WB/IFC to develop direct lending to creditworthy LGUs, e.g. Marikina Easier access to private funding for revenue- generating investments DFIs as wholesale lenders Working with DFIs on specific emergency situation More flexible lending instruments in case of crisis response, with lower interest rates and longer maturity Government to adapt lending guarantee fees
  15. 15. Summary: Priorities for Development Financing Address overriding concern: Poverty, both at global and country levels. Allow flexibility: WBG is prepared to support a country’s changing priorities. Innovate: In the Philippines, WBG is exploring creative approaches through DFIs and LGUs.
  16. 16. Thank you!