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. 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. 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. 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. 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. 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. 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
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. 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. 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. 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. 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. 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. 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.
