Philippines: Urban Sector Assessment, Strategy, and Road Map

This publication documents the current assessment and strategic investment priorities of the Government of the Philippines and the Asian Development Bank (ADB) in the country’s urban sector. It highlights sector performance, priority development constraints, government plans and strategies, past ADB support and experience, support of other development partners, and future ADB support strategy.

The road map covers four main support areas: (i) preparation of a loan for the Philippine Solid Waste Management Sector Project in 2012 or 2013; (ii) future technical assistance (TA) and lending activities—to be discussed with the government—that may include a sector project for markets and transport terminals, which could further include land and sea transport facilities; (iii) projects of the Urban Development and Water Division of ADB’s Southeast Asia Department, which may suppo rt flood control and the efforts of communities to mitigate the effects of climate change; and further (iv) stand-alone policy and advisory TA or capacity development TA, to promote performance-oriented governance and overall strengthening of urban sector agencies, depending on requests from the government.

About the Asian Development Bank

ADB’s vision is an Asia and Pacific region free of poverty. Its mission is to help its developing member countries reduce poverty and improve the quality of life of their people. Despite the region’s many successes, it remains home to two-thirds of the world’s poor: 1.8 billion people who live on less than $2 a day, with 903 million struggling on less than $1.25 a day. ADB is committed to reducing poverty through inclusive economic growth, environmentally sustainable growth, and regional integration.

Based in Manila, ADB is owned by 67 members, including 48 from the region. Its main instruments for helping its developing member countries are policy dialogue, loans, equity investments, guarantees, grants, and technical assistance.

Printed in the Philippines

Urban Sector Assessment, Strategy, and Road Map

Philippines

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Urban Sector Assessment, Strategy, and Road Map

Philippines

May 2012

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© 2012 Asian Development Bank

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Asian Development Bank. Philippines: Urban sector assessment, strategy, and road map.Mandaluyong City, Philippines: Asian Development Bank, 2012.

1. Urban sector. 2. Philippines. I. Asian Development Bank.

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iii

Contents

List of Figures v

Acknowledgments vi

Currency Equivalents vii

Abbreviations vii

I. Introduction 1

II. Sector Assessment 2A. The Urban Context 2B. Urban Challenges 3C. Subsector Issues 4 1. Acute Shortage of Potable Water 4 2. Inadequate Sanitation Coverage and Poor Services 4 3. Frequent Flooding and Rising Flood Damage 5 4. Poor Solid Waste Disposal 5 5. Inefficient Urban Transport 5

III. Sector Strategy 6A. Government Strategy, Policy, and Plans 6 1. National Urban Development and Housing Framework, 2009–2016 6 2. Medium-Term Philippine Development Plan, 2004–2010 7B. Development Partner Support and Lessons Learned 7 1. Asian Development Bank 7 2. Other Development Partners 10C. The Way Forward: ADB’s Operational Strategy 10

IV. Sector Road Map 13A. Core Thematic Areas 13 1. Urban Competitiveness 14 2. Sustainable Communities 14 3. Performance-Oriented Governance 14B. Planned and Proposed Operations 15 1. Near-Term Operations 15 2. Medium-Term Operations 16

iv Contents

Appendixes 1 Projected Population, by Region 17 2 Urban Settlements in the Philippines, 2010 18 3 Changes in Economic Structure, by Region, 1980 and 2005 19 4 Incidence of Poverty, 2000, 2003, and 2006 20 5 Indicative Investment Requirements of the Basic Urban Services Sector in the Philippines 21 6 Institutional Framework for Urban Development 22 7 Philippine Urban Sector Problem Tree 23 8 SWOT Analysis of the Urban Sector 24 Figure A8.1: Problem Tree for Water Supply 25 Figure A8.2: Problem Tree for Drainage 26 Figure A8.3: Problem Tree for Solid Waste Management 27 Figure A8.4: Problem Tree for Transport 28 Figure A8.5: Problem Tree for Urban Social Development 29 Figure A8.6: Problem Tree for Shelter 30 Figure A8.7: Problem Tree for the Financing of Basic UrbanServices 31 Figure A8.8: Problem Tree for Urban Development Institutions 32 Figure A8.9: Problem Tree for Local Governance 33 Figure A8.10: Problem Tree for Public–Private Partnerships in Basic Urban Services 34 9 Existing Donor Support for the Urban Sector 3510 The National Spatial Strategy 3711 Future Donor Support Required for the Urban Sector 3812 ADB Assistance to the Philippine Urban Sector, July 1993–June 2008 4613 Urban Development Program Interventions: International Financial Institutions 47

v

Figures

1 ADB’s Operational Strategy for the Urban Sector in the Philippines 11 2 Principal Approaches to Structuring Urban Sector Projects 11 3 Road Map for ADB’s Urban Sector Operations 13 4 ADB’s Urban Sector Work 15

vi

Acknowledgments

This report was prepared by a team led by Florian Steinberg (senior urban development specialist, Urban Development and Water Division [SEUW] of the Southeast Asia Department [SERD]); with team members, Neeraj Jain (country director, Philippine Country Office), R. Brockman (consultant), and R. Bernardo (consultant). Guidance and support was provided by Kunio Senga (director general, SERD), Amy S. P. Leung (director, SEUW/SERD), James Lynch (director, Transport and Communications Division [SETC]/SERD), and Richard Bolt (advisor, Office of the Director General, SERD). The team wishes to thank the Department of External Relations and the following staff for their support in preparing and editing the report—Elizabeth Alimurung (project analyst, SETC/SERD), Pinky Villanueva (operations assistant, SETC/SERD), and Mary France Creus (operations assistant, SEUW/SERD).

The team wishes to thank agencies and colleagues in the Government of the Philippines for discussions held during the preparation of the report.

vii

Currency Equivalents(as of 30 March 2012)

Currency Unit – Philippine peso (P)P1.00 = $0.0232$1.00 = P43.00

AbbreviationsADB – Asian Development BankASR – assessment, strategy, and road mapBRT – bus rapid transitGDP – gross domestic productHUDCC – Housing and Urban Development Coordinating CouncilJFPR – Japan Fund for Poverty ReductionLGU – local government unitMBUSSP – Mindanao Basic Urban Services Sector ProjectMTPDP – Medium-Term Philippine Development PlanNUDHF – National Urban Development and Housing FrameworkSETC – Southeast Asia Department Transport and Communications DivisionSEUW – Southeast Asia Department Urban Development and Water DivisionSTEP-UP – Strategic Private Sector Partnerships for Urban Poverty ReductionSWM – solid waste managementTA – technical assistance

1

I Introduction

1. This report outlines the Philippine urban sector assessment, strategy, and road map as the basis for a future partnership between the Government of the Philippines and the Asian Development Bank (ADB). The paper starts by assessing the urban sector in the Philippines, and the needs and challenges cities face in their efforts to achieve sustainable economic growth and development. It then describes the urban development strategies and priorities of the Government of the Philippines and ADB, which build on experiences and lessons learned in the sector. Drawing on the sector assessment and development strategies, the paper presents a road map for possible ADB support over the medium term (2010–2015), which centers on the three core themes of urban competitiveness, sustainable communities, and performance-oriented governance. Besides providing sector-level input into ADB’s country partnership strategy for the Philippines, this document serves as a basis for further dialogue and cooperative action by ADB and the government to tackle the complex challenge of managing rapid urban growth and development in the coming years.

2

II Sector Assessment

A. The Urban Context

2. Rapid urban growth. The Philippine population grew in excess of 2% in 2001–2010 and reached 94 million in 2010. The urban population has been growing at an even faster rate as people migrate from rural to urban areas in search of better employment opportunities (Appendix 1). It is estimated that more than 60% of the total population of the Philippines is now urban. As a result of this rapid urbanization, urban sprawl and extensive peri-urban development is evident in virtually all cities across the country.

3. Proliferation of urban settlements. Greater Metro Manila, the largest metropolitan region in the country, contains 33 million people; other large urban areas include Metro Cebu and Davao City (Appendix 2). Overall, there are about 326 cities and urban municipalities. Because the country is an archipelago, nearly all of these urban centers are along or near the coast and a huge segment of the population (as well as much of the country’s economic infrastructure) is therefore exposed to risks associated with climate change.

4. City‑driven economic growth. Urban areas are centers of economic growth, accounting for 75%–80% of the country’s gross domestic product (GDP) since 2000, with Metro  Manila alone contributing nearly a third of total GDP. Until the financial crisis that began in 2008, the Philippine economy was growing at 5% yearly, with the service sector making up over half of GDP. Services, trade, and communications have been the fastest-growing subsectors in the urban areas (Appendix 3).

5. Vulnerability of the urban poor. The incidence of poverty in urban areas has been decreasing and is estimated to be below 10% in Metro Manila. However, a very large segment of the urban population is just above the poverty line and extremely vulnerable to slipping back into poverty because of loss of employment, prolonged illness, natural disasters, and other factors (Appendix 4). According to the Housing and Urban Development Coordinating Council (HUDCC), urban households with limited or no access to basic services, security of tenure, and affordable housing have reached 3.6 million. Informal settlements are a growing problem in larger urban areas, with many families residing in dangerous locations such as along railroad tracks and riverbanks.

6. Widening demand–supply gap in urban infrastructure services. Expenditures for urban infrastructure and the delivery of municipal services have not kept pace with urbanization. Such  expenditures are estimated to be 3% of GDP yearly, compared with estimated needs of at least 5%–10% of GDP per year in Southeast Asian cities. Consequently, the urban environment in most cities is deteriorating rapidly. The urban services sector will require a total investment of $42 billion (in constant 2008 prices) over the next 18 years to address deficiencies in the delivery of basic services and to expand facilities (Appendix 5). Of this total, some $14 billion will be required to satisfy the shortfall in the delivery of basic urban services. Another $27.9 billion will be required to construct new infrastructure facilities and to expand networks.1

1 ADB. 2008. Technical Assistance to the Republic of the Philippines for Basic Urban Services Sector Project of the Government of the Philippines. Manila (TA 7062-PHI).

Sector Assessment 3

7. Limited sources of local government financing. As noted, public financing of urban infrastructure is limited. While there is an official national government–local government cost-sharing policy for the financing of development subprojects, the availability of national and local government funds is often unpredictable. Capital investment planning is therefore difficult and the backlog of projects continues to grow. Furthermore, resources for the operation and maintenance of infrastructure are woefully inadequate in most cities.

8. Government financing institutions, principally the Land Bank of the Philippines and the Development Bank of the Philippines,2 are the major source of medium-term loans for local government units (LGUs). They have maintained a competitive advantage over the private sector in lending rates mainly because of their access to concessional official development assistance funds. Private financial institutions are hesitant to lend to LGUs because of their poor creditworthiness, which stems from (i)  their unsecured and unpredictable asset and revenue base, (ii)  insufficient information about their own financial operations, (iii) weak resource mobilization capacity, (iv) poor cost recovery record due to political intervention and poor collection procedures and systems, and (v)  lack of capacity to plan, package, and implement projects.

9. Growing responsibilities, but inadequate resources and capacities. The role of LGUs has been increasing since the 1991 Local Government Code was first implemented. Some 1,700 LGUs are mandated to plan, manage, and implement local development. However, many do not have the resources to carry out these responsibilities. Also, full decentralization of functions of LGUs has not yet taken place and many national agencies are still engaged in what should be local concerns (shelter is one example). Decentralization and coordination are further complicated by the presence of ad hoc regional bodies and development agencies, such the Bases Conversion Development Authority and the Export Processing Zone Authority. Given the similar and often-overlapping issues, there is much scope for LGUs to cooperate, but cooperation is often hampered by political considerations; further, many LGUs have not yet developed effective policies and guidelines and reliable data for strategic urban planning; and some do not have a clear, long-term vision for growth.

10. Fragmented and incomplete institutional framework. At the macro level, urban development in the Philippines has been hampered by the absence of a strong national agency to assume the urban mandate. Many institutions are involved in urban management and development, resulting in lack of coordination and focus, and overlapping roles, responsibilities, and programs.3 The political cycle, with national elections every 6 years and local government elections every 3 years, also complicates the development of a long-term vision or strategies for urban development. There is a need to move away from the prevailing tendency to plan for short-term development projects and ensure that the necessary policies, institutions, and capacities are in place to support a more focused and strategic approach toward sustainable urban growth and development (Appendix 6).

B. Urban Challenges

11. Limits to economic growth in the urban sector are seen as the key constraint and the core problem, as described in the problem-tree diagram for the sector (Appendix 7). Inadequate infrastructure to attract investment, lack of incentives to promote growth in regional centers, weak capacity for local

2 The Municipal Development Fund Office of the Department of Finance maintains a small portfolio of lending operations as well, and is channeling government subsidies to local government units (LGUs) through a mix of loan and grant assistance.

3 ADB. 2000. Technical Assistance to the Republic of the Philippines for Institutional Strengthening of Housing and Urban Development Sector of the Government of the Philippines. Manila (TA 3475-PHI). This technical assistance (TA) project recommended the strengthening of the Housing and Urban Development Coordinating Council (HUDCC), and its ultimate conversion into a full-fledged department.

4 Philippines: Urban Sector Assessment, Strategy, and Road Map

development planning and implementation, uncoordinated government response, and unpreparedness of LGUs for natural disasters and climate change are the main contributors. In turn, the effects of this problem are inadequate employment opportunities for urban residents and poorly competitive urban areas because of underinvestment in urban infrastructure and services. In the overall policy, regulatory, and institutional context of urban development in the Philippines (Appendixes 11 and 12), some key subsector issues are:

(i) Weak capacity for local economic development planning and implementation. There is insufficient knowledge and tools at the local level to formulate and implement strategic and local economic development plans.

(ii) Lack of incentives to promote growth in regional centers. Public investments outside the greater Metro Manila area have been insufficient to stimulate an increase or expansion in the economic activities of other regions.

(iii) Inadequate physical, economic, and social infrastructure to attract investments. Water supply, energy, and transport systems are inadequate compared with demand, and relatively inefficient.

(iv) Rising risks from natural disasters and climate change due to inadequate central and local disaster risk management. This inadequacy has resulted in frequent disruptions and chaos from natural disasters, which will undoubtedly increase as climate change intensifies.

C. Subsector Issues

12. Key subsector issues relate to economic and environmental infrastructure—water, sanitation, drainage, solid waste management, urban transport, and growth of informal settlements and the need for urban redevelopment. The performance of these subsectors and related investment needs is affected by remaining and unaddressed policy issues; institutional coordination, management, and technical  capacity; and public and private financing needs and arrangements. Subsector issues and problem trees related to urban development are in Appendix 8. Appendixes 9 and 10 contain a summary of the issues; government’s response, as well as its policy, institutional, and investment actions; and resource gaps.

1. Acute Shortage of Potable Water

13. Local water resources are dwindling in the face of a massive increase in demand.4 In many urban areas, water quality is poor, supply is often interrupted, and access is limited. Less than 50% of the urban population and only 20% of the rural population have access to piped water or individual household connections. Many water supply systems are inefficient because of obsolescence, poor maintenance, and water theft. Contaminated drinking water and waterborne diseases remain a major public health concern.

2. Inadequate Sanitation Coverage and Poor Services

14. The absence of communal sewer systems in urban areas means that storm-water drains are often also used for wastewater disposal. Seldom is there any treatment of wastewater. Septic tanks are widely used, but rarely de-sludged until they overflow. Although septage is collected, generally by private

4 World Bank. 2005. Philippines: Meeting Infrastructure Challenges. Manila. Chapter 7 (Water Supply and Sanitation); CONCEP. 2005. Metro Iloilo–Guimaras Integrated Urban and Regional Infrastructure Plan (MIG-02). Water Resources Profile for Metro Iloilo and Guimaras. Australian Agency for International Development, Canadian International Development Agency, and World Bank. Manila. December.

Sector Assessment 5

collectors, there is little or no treatment in the absence of appropriate facilities, and septage is dumped in an uncontrolled manner. Service providers are responsible by law for wastewater treatment, but regulation and monitoring are inefficient; thus, investment is seldom undertaken and proper treatment is rare. There are clear health implications, especially in the incidence of waterborne diseases: the poor generally live in the most polluted situations and lack access to sanitation and water supply, worsening already unhealthy conditions.

3. Frequent Flooding and Rising Flood Damage

15. Recurrent urban flooding stems from the poor management of storm and surface water runoff, which increases in volume as urbanization intensifies. Flooding continues to be aggravated by uncontrolled building, informal settlements, and lack of appropriate building codes and enforcement of regulations. Encroachments onto river rights-of-way, indiscriminate dumping of solid waste, sedimentation, and the lack of maintenance of watercourses have reduced the capacity of natural drainage systems. Most towns have poor drainage networks and inadequate coverage, and many do not have drainage or flood control master plans. Problems include undersized drains, clogged waterways, deteriorating networks, and lack of integration of subdivision or local drainage with main drainage channels. Related issues are the need for improved competencies and practices in disaster risk management and land-use planning.

4. Poor Solid Waste Disposal

16. The core problem where solid waste management is concerned is poor disposal of collected and uncollected waste. Indiscriminate dumping of solid waste onto open areas and watercourses, and the unsanitary method of final disposal are the major factors behind the deterioration of the urban environment. Two-thirds of disposal sites are open dumps. LGUs generally have little capacity to plan, develop, operate, and maintain sanitary landfills and have difficulty complying with the Ecological Solid Waste Management Act of 2000. LGUs do not prioritize investments in disposal facilities because such facilities are not perceived to be revenue generating. Recovery and recycling of solid waste through formal and informal materials recovery operations have become a popular alternative to the more expensive sanitary landfills, but some informal recovery activities, such as burning to retrieve copper from electric cables, contribute to air pollution and endanger waste pickers.

5. Inefficient Urban Transport

17. Insufficient and ineffective transport planning and traffic management is evident in most Philippine towns and cities. Traffic control devices, such as traffic signs, signals, and road markings, often do not conform to official standards or meet needs. Road networks are poor and inadequate as a result of underinvestment and lack of attention to proper road maintenance. Road traffic accidents are increasing and are among the leading causes of death, with children the most at risk.5 In large urban areas, air pollution has become a serious concern. Nationwide, urban public transport is dominated by jeepneys, motorbike taxis (with side cars), and tricycles providing door-to-door service. Unfortunately, they contribute to severe traffic congestion, particularly around transit terminals and public markets, because of ineffective franchising and enforcement practices. Buses are common in Metro Manila but not in smaller urban centers. Urban light rail transit is confined to Metro Manila and is heavily subsidized. New public transport terminals that integrate different modes of public transport are in great demand and could help reduce the high logistic costs, and thereby improve the economic productivity and competitiveness of urban areas.

5 Explanatory Note, Senate Bill 1688, 4th Congress of the Republic of the Philippines: An Act to Make Road Traffic Safety Rules and Signs a Separate Subject and Compulsory at Grade 6 and 4th Year High School Level.

6

III Sector Strategy

A. Government Strategy, Policy, and Plans

1. National Urban Development and Housing Framework, 2009–2016

18. The government’s urban development policy is set out in its National Urban Development and Housing Framework (NUDHF), 2009–2016,6 which describes its vision of urban development as a system that facilitates economic growth, develops and strengthens local competitive advantage, and significantly improves the quality of life of residents (Appendix 11). The approach recognizes urban competitiveness and the need to build on strengths, identify strategic priorities, and emphasize short-term actions in the context of strategic objectives. It recognizes the need to work with a decentralized bureaucracy and local autonomy to enhance coordination and encourage participatory governance. It sees the need to reorient political leaders.

19. The five elements of the framework and the recommendations for each element are as follows.

(i) Urban competitiveness. Increase the productivity and efficiency of urban industrial regions, build on existing strengths of manufacturing and producer services, and focus on export-oriented activities in globally competitive, core export areas (e.g., greater Metro Manila, Cebu, and Davao City).

(ii) Poverty reduction. Enhance rural–urban linkages to improve labor mobility and connectivity among rural producers and urban consumers; manage population growth by encouraging smaller families; and implement livelihood, entrepreneurial, and human resource programs aimed at poverty alleviation.

(iii) Housing affordability and delivery. Link development plans with local economic investment programs, unlock land for affordable housing, increase funding of proven programs and institutions, and streamline housing development transaction processes.

(iv) Sustainable communities. Use market-based incentives and disincentives to ensure that public amenities support urban land-use objectives, encourage sustainable planning and green building, and integrate climate change adaptation and disaster risk management into community and regional development.

(v) Performance‑oriented governance. Provide incentives for LGUs to become less dependent on the internal revenue allotment; strengthen their capacity for strategic planning, investment programming, budgeting, and implementation; improve vertical coordination; increase transparency and accountability; support public–private partnerships; encourage performance-based local governance; and support metro (interlocal) jurisdictional cooperation.

6 HUDCC and Philippine Institute for Development Studies. 2009. National Urban Development and Housing Framework, 2009–2016. Manila.

Sector Strategy 7 Sector Strategy 7

20. The framework is intended to guide the government’s efforts to improve the performance and efficiency of the country’s urban system. It addresses key sector issues and recognizes the role of the private sector and the need to improve the capacity of government. Resource requirements are not included and the inherent institutional challenges that could affect its full adoption are not addressed. However, the framework’s recommendations provide a solid basis for further dialogue on the policy reforms, institutions, capacity building, and investments that are needed to support sustainable urban growth and development.

2. Medium-Term Philippine Development Plan, 2004–2010

21. The Medium-Term Philippine Development Plan (MTPDP), 2004–2010, prepared by the National Economic and Development Authority, was largely sector based. It had little direct focus on the urban sector but cited and discussed policies for basic urban services and local governments. The MTPDP promoted economic growth and, by implication, urban development. An MTPDP for 2011–2016 was released in 2011. Approaches to urban development in the new MTPDP reflect the main features of the NUDHF.

B. Development Partner Support and Lessons Learned

1. Asian Development Bank

22. ADB has provided $828.73 million in assistance to the Philippine urban sector since 1995, with 12 loans totaling $808.47 million, 23 advisory and project preparatory technical assistance (TA) projects worth $13.66  million, and four Japan Fund for Poverty Reduction (JFPR) projects totaling $6.6 million (Appendix 12). Several ADB urban infrastructure projects7 have contributed significantly to the institutional strengthening and capacity development of the participating agencies, although not all have been rated successful.8 Specific lessons are presented below:

(i) LGU willingness and ability to borrow requires careful assessment. A review of ADB’s urban projects9 provides several lessons regarding the willingness and ability of LGUs to borrow for development projects.10 The demand for subprojects and loan funds has often been overestimated, with many local governments unwilling to borrow, especially for non-revenue-generating projects. More rigorous assessment of subproject demand and risks is essential. Because there are competing sources of funds available to LGUs, the demand for funds from institutions such as ADB is often unclear and unpredictable. LGU

7 The Metropolitan Cebu Water Supply Project, the Municipal Water Supply Project, the Manila South Water Distribution Project, the Angat Water Supply Optimization Project, and the Subic Bay Municipal Development Project.

8 ADB. 2006. Special Evaluation Study: Urban Sector Strategy and Operations. Manila. 9 ADB. 2006. Completion Report: Regional Municipal Development Project in the Philippines. Manila (Loan 1367-PHI); ADB.

2004. Completion Report: Subic Bay Area Municipal Development Project. Manila (Loan 1599-PHI); and ADB. 1998. Report and Recommendation of the President to the Board of Directors: Proposed Loan to the Republic of the Philippines for the Clark Area Municipal Development Project. Manila (Loan 1658-PHI).

10 ADB. 2009. Report and Recommendation of the President to the Board of Directors: Proposed Loan to the Republic of the Philippines for the Subprogram 2: Local Government Financing and Budget Reform Program. Manila (Loan 2387-PHI). It focused on fiscal aspects of LGU reform, targeting (i) improved shares, timeliness, and transparency in the release of local government revenues and grants; (ii) deepened reforms in fiscal management, planning, and public expenditure management by enhancing efficiency and accountability; (iii) enhanced effectiveness and transparency in the delivery of critical public services at the local level through performance measurement. The Local Government Financing and Budget Reform Program supported policy reforms to help overcome binding constraints on revenue mobilization, improve intergovernmental fiscal relationships and the regulatory framework for access to private sources of financing, and stimulate own-source revenue generation. This reform agenda was intended to provide the framework for supporting public infrastructure investments at the LGU level.

8

8 Philippines: Urban Sector Assessment, Strategy, and Road Map

borrowing capacity needs proper assessment and should take into account project-related revenues and enhanced creditworthiness. Many LGUs are unwilling to finance feasibility studies because costs are difficult to recover. Securing strong support from local mayors is essential and designs must take into account the 3-year terms of locally elected officials and encourage longer-term commitments through investment strategies that have the support of future leaders.

(ii) Interagency issues impede implementation. The 2005–2009 country partnership strategy indicated mixed results for ongoing urban development and environment projects. The development impact of the Clark Area Municipal Development Project, originally designed to reduce poverty in eight LGUs by providing basic urban services, was at best marginal because of a large reduction in scope following the withdrawal of more than half of the original participating LGUs. ADB’s most recent urban development projects in Metro Manila included two sector development project loans—the Pasig River Environment Management and Rehabilitation Project, and the Metro Manila Air Quality Improvement Project. Under both projects, the policy components were satisfactory but the investment components suffered implementation delays because of shifting priorities, changes in scope, slow recruitment of consultants, disagreements on relending policies, and slow release of funds or insufficient budget cover. Under the Pasig River project, the large-scale resettlement of 6,500 families proved difficult but was ultimately successful. Urban redevelopment activities in prime locations, such as Makati, were hindered by interagency disagreements, and demonstrated that scaled-up urban redevelopment requires consensus on the use of prime land.

(iii) Sector loans outperformed project loans. For other projects, including water supply and sanitation, achieving the expected development impact has been hampered by a low level of budget provision for both loan proceeds and counterpart financing.11 The design of the more recent Mindanao Basic Urban Services Sector Project (MBUSSP)12 incorporated some of the lessons learned from the Philippine Regional Municipal Development Project,13 the Subic Bay Area Municipal Management Project,14 and the Clark Area Municipal Development Project.15 The MBUSSP, as a sector loan, allowed more flexibility in the selection of participating LGUs than previous project loans. It financed the construction not only of basic urban infrastructure and services, including public markets, transport terminals, and water supply infrastructure, but also of less critical facilities, such as gymnasiums and town halls. Many were one-off interventions that had too little development impact, and the absence of multiyear investment planning has been detrimental and could diminish the effectiveness of the investments.16

11 There were problems with rights-of-way and involuntary resettlement, prolonged process and time-consuming procedures for procurement, inexperienced executing agencies, and serious lack of project preparation and implementation facilities and capacity at both national and LGU levels.

12 ADB. 2001. Report and Recommendation of the President to the Board of Directors: Proposed Loan to the Republic of the Philippines for the Mindanao Basic Urban Services Sector Project. Manila. Loan 1843-PHI for $33.4 million, approved on 27 September 2001.

13 ADB. 1995. Report and Recommendation of the President to the Board of Directors: Proposed Loan to the Republic of the Philippines for the Regional Municipal Development Project. Manila.

14 ADB. 1997. Report and Recommendation of the President to the Board of Directors: Proposed Loan to the Republic of the Philippines for the Subic Bay Area Municipal Development Project. Manila.

15 ADB. 1998. Report and Recommendation of the President to the Board of Directors: Proposed Loan to the Republic of the Philippines for the Clark Area Municipal Development Project. Manila.

16 Serious conflicts between the Land Bank of the Philippines and the Department of the Interior and Local Government under the MBUSSP were not conducive to project implementation.

Sector Strategy 9

(iv) Meeting the needs of the urban poor is not easy. The Development of Poor Urban Communities Sector Project17 set out to provide shelter financing and microcredit facilities for urban poor families. It was marked by low overall take-up of development loans by LGUs and slow microcredit operation for home improvement because microfinance institutions hesitated to participate. Work with the private sector on the implementation of the socialized housing program was more successful, though it did not target the urban  poor working and living in the informal sector, and instead benefited salaried employees who were members of the Home Development Mutual Fund. From 2003 to 2007, ADB  supported the Strategic Private Sector Partnerships for Urban Poverty Reduction (STEP-UP)18 through a JFPR grant of $3.6 million. The goal was to reduce urban poverty in 23 post-Community Mortgage Program areas using an integrated development approach driven by strategic public–private partnerships. The STEP-UP project promoted public–private partnerships in providing housing, livelihood, and basic services to 9,126 urban poor households in eight selected cities in Metro Manila. Lessons indicated the strong capacity of organized communities and their home-owners’ associations, working jointly with LGUs and local neighborhood (barangay) offices, to supervise and implement their own settlement development and upgrading projects.

(v) Few loans are available to the urban poor. Since the early 2000s, ADB, with the HUDCC and local governments, has been engaged in the preparation of the Metro Manila Urban Services for the Poor19 program of slum rehabilitation or redevelopment. None of these efforts has resulted in a loan project, mainly because the Department of Finance, fearing payment defaults and insufficient capacity of Social Housing Finance Corporation—the borrower—to collect loan arrears, withdrew its support in June 2009. The Department of Finance indicated its preference for direct loans to LGUs for slum rehabilitation.

(vi) Multiple executing agencies complicate implementation. Project implementation experience shows that appointing only one executing agency is best.20 Where the mode is direct subsovereign lending, the local borrowing entity must be in charge. It is probably better to have two loans if two distinct financing facilities or components are proposed.

(vii) Many loans have been canceled. Almost all ADB-funded urban projects have had loan cancellations largely because of inability to disburse funds according to schedules. Weak project design, inflexibility during implementation, and incorrect targeting appear to explain

17 ADB. 2003. Report and Recommendation of the President to the Board of Directors: Proposed Loan to the Development Bank of the Philippines and Technical Assistance Grant to the Philippines for the Development of Poor Urban Communities Sector Project. Manila. Loan 2063-PHI for $30.2 million, approved on 18 December 2003.

18 ADB. 2002. Proposed Grant Assistance to the Republic of the Philippines for Strategic Private Sector Partnerships for Urban Poverty Reduction in Metro Manila Project. Manila.

The STEP-UP project had three components: (i) strategic partnership building to promote corporate involvement and public–private partnerships for site-specific urban poverty reduction initiatives; (ii) funds for housing improvement, livelihood, and community infrastructure; and (iii) risk reduction and management including physical design of houses, small infrastructure projects to protect communities from floods and typhoons, and education activities. The project was implemented by Philippine Business for Social Progress, a nongovernment organization representing a conglomerate of corporate social responsibility programs of 158 Filipino corporations supporting business sector involvement in social development. STEP-UP was preceded by two other JFPR-assisted projects: On-Site Urban Upgrading for Vulnerable Slum Communities in Payatas (2000); and Off-Site and Off-City Relocation for Vulnerable Slum Communities of Muntinlupa City (2001).

19 ADB. 2005. Technical Assistance to the Republic of the Philippines for Preparing the Metro Manila Urban Services for the Poor Project. Manila.

20 ADB. 2008. Rapid Sector Assistance Program Evaluation: Urban Sector in the Philippines. Manila. March (p. 9); and ADB. 2008. Rapid Sector Assistance Program Evaluation: Water Supply and Sanitation Sector in the Philippines. Manila. April.

10 Philippines: Urban Sector Assessment, Strategy, and Road Map

why many previous ADB-funded urban projects could not be completed on time. Local project ownership was weak, participating governments had low capacity, and there was little continuity or follow-through. Experience with government financing institutions has been mixed, with delays experienced in disbursement by the Development Bank of the Philippines and its unwillingness to borrow for TA. However, the Land Bank of the Philippines is willing to borrow to fund the TA and institutional-strengthening needs of its LGU customers.

2. Other Development Partners

23. The World Bank has been involved in the urban sector much longer than ADB. From 1961 to 2007, World Bank lending to the sector totaled $2.6 billion, including $878 million in loans to Metro Manila. World Bank experience indicates that an appropriate level of cost-sharing incentives can encourage LGU investments in critical sectors, such as solid waste management, environmental protection, and revenue generation as well as support for informal communities affected by proposed subprojects. However, a corresponding level of TA needs to be extended to increase the capacity of the LGUs to operate and sustain the infrastructure built. Financial assistance to private sector proponents for subprojects that support local development has brought in private capital and management experience to enhance the delivery of services that have traditionally been undertaken by LGUs.

24. Other multilateral agencies involved in the urban sector are the European Commission (through the European Investment Bank), the Cities Alliance, the United Nations Agency for Human Settlements (UN-HABITAT), and the United Nations Children’s Fund (UNICEF). Bilateral contributions have come from Australia, Japan, and the United States. Appendixes 12 and 13 summarize the major interventions of these aid agencies in the Philippine urban sector.

C. The Way Forward: ADB’s Operational Strategy

25 The strategic purpose of ADB’s urban operations in the Philippines will be to support sustainable urban economic growth and development. This operational strategy is consistent with and supportive of Strategy 2020, ADB’s long-term strategic framework.21 Of the five core areas of ADB operations identified in Strategy 2020, infrastructure and environment are the two areas that are directly relevant to the urban challenges facing the Philippines.22 To support sustainable urban economic growth and development, ADB will align its future operations with three of the five elements of the NUDHF: urban competitiveness, sustainable communities, and performance-oriented governance.

26. To support urban competitiveness, ADB will focus on economic infrastructure.23 To promote sustainable communities, its emphasis will be on environmental infrastructure.24 Performance-oriented governance will be a crosscutting theme in all ADB operations in the sector, an integral part of loan projects, and a central element of stand-alone TA projects. The core elements of ADB’s operational strategy for the urban sector in the Philippines are illustrated in Figure 1.

21 ADB. 2008. Strategy 2020: The Long-Term Strategic Framework of the Asian Development Bank, 2008–2020. Manila.22 In line with Strategy 2020, ADB will employ its financial and institutional resources in the five core areas: infrastructure,

environment, regional cooperation and integration, financial sector development, and education.23 Economic infrastructure, broadly defined, comprises investments that are revenue generating, such as transport terminals,

municipal markets, and public transit systems.24 Environmental infrastructure comprises infrastructure and services that have a positive impact on the environment and human

health and welfare, such as water supply and sanitation, solid waste management, and flood control and drainage.

Sector Strategy 11

Figure 1 ADB’s Operational Strategy for the Urban Sector in the Philippines

Support for Sustainable Urban Economic Growth and Development

Consistent with three StrategicRecommendations of NUDHF 2009–2016

Strategic Purpose

Performance-OrientedGovernance

UrbanCompetitiveness

SustainableCommunities

NUDHF = National Urban Development and Housing Framework.Source: Housing and Urban Development Coordinating Council and Philippine Institute for Development Studies. 2009. National Urban Development and Housing Framework, 2009–2016. Manila.

Figure 2 Principal Approaches to Structuring Urban Sector Projects

Subsector Approach

Support single subsector interventions in multiple cities or local government units

Single-Agency Approach

Support multiple subsector interventions in a single city or local government unit

CommonObjective

Support sustainableurban economicgrowth and development  •  Urban competitiveness  •  Sustainable communities  •   Performance-oriented 

governance

Source: Asian Development Bank.

12 Philippines: Urban Sector Assessment, Strategy, and Road Map

27. In structuring future investment projects in the urban sector, ADB will adopt two principal approaches: the subsector approach, and the single-agency approach (Figure 2). In the subsector approach, ADB will support single subsector interventions in multiple cities or LGUs.25 In other words, projects will be designed to support investments and capacity building involving a single subsector, such as solid waste management, in more than one city. This approach seeks to avoid the problems of earlier integrated urban development projects involving multiple executing agencies, subsectors, and cities. Concentrating on the investment needs and associated policy, institutional, and regulatory reforms in a single subsector will allow cumulative local development impact to contribute to long-term and sustainable results at the national level.

28. In the single-agency approach, ADB will seek partnerships with large cities and develop long-term investment and capacity-building programs in multiple subsectors. This approach will be driven by subsovereign lending, whereby ADB will lend directly to cities or urban development authorities. Both approaches will be linked to the common strategic objective of supporting sustainable urban economic growth and development through the three core themes of urban competitiveness, sustainable communities, and performance-oriented governance.

29. In addition to ADB’s strategic purpose, the three core themes of support, and the two principal approaches to structuring projects, five main principles will underlie the identification and prioritization of ADB’s activities in the urban sector:

(i) Selectivity and focus. Interventions should be limited to one subsector with several participating LGUs, or to a single LGU.

(ii) Ownership and commitment. Cost-sharing principles—proportions of grants, loans, and equity—should promote local ownership, with commitment demonstrated through well-defined strategic development plans and with clear investment priorities.

(iii) Interagency coordination. Projects should be managed by a single coordinating agency and carried out by the the smallest possible number of implementing agencies.

(iv) Sustainable development impact. The single-subsector and single-agency approaches, in combination with capacity-building support, should be used to promote sustainable development impact.

(v) Demand‑driven projects. Investment projects and capacity-building initiatives must be  demand driven and must represent priorities defined by the LGUs and their respective communities.

25 While a single subsector focus is intended, there may be scope to design projects that include interrelated subsectors, such as water supply and sanitation, or municipal markets and public transport terminals.

13

IV Sector Road Map

A. Core Thematic Areas

30. ADB’s road map for urban sector operations in the Philippines is based on the provision of TA and financing for projects that support the three core themes of urban competitiveness, sustainable communities, and performance-oriented governance. In accordance with the NUDHF, these core themes are also national priority sector outcomes. This close alignment between ADB’s operational focus and the government’s prioritized outcomes in the urban sector provides the necessary foundation for a medium-term results framework. Potential activities in each of the three core thematic areas are described below and illustrated in Figure 3.

Figure 3 Road Map for ADB’s Urban Sector Operations

Support for Sustainable Urban Economic Growth and Development

Urban Competitiveness

Performance-Oriented Governance

Sustainable Communities

Economic Infrastructure Projects  •  Municipal Markets  •  Public Transport Terminals  •  Public Transport

Environmental Infrastructure Projects  •  Solid Waste Management  •  Water Supply and Sanitation  •  Flood Control

Capacity-Building Support for Local Government Units  •  Economic Development Planning  •  Investment Programming  •  Interagency Coordination  •  Infrastructure Operation and Maintenance  •  Cost Recovery and Revenue Generation  •  Promotion of Private Sector Investment

ADB = Asian Development Bank.Source: ADB.

14 Philippines: Urban Sector Assessment, Strategy, and Road Map

1. Urban Competitiveness

31. Economic activity in urban areas contributes 75%–80% of the country’s GDP; however, the ability to sustain or even increase this contribution requires that cities remain productive, efficient, and attractive to investors. Promoting the competitiveness of urban areas requires a multifaceted approach that helps to create an environment that is conducive to private investment and sustainable economic growth. ADB’s support for urban competitiveness in the Philippines will concentrate on economic infrastructure, primarily through investments in municipal markets and public transport terminals (for both land and sea transport) in secondary cities.26 With the fiscal autonomy provided to LGUs under the Local Government Code of 1991, the concept of economic infrastructure has evolved to become more a means of increasing employment opportunities and promoting local economic growth than simply a source of direct revenue for LGUs. The focus on municipal markets and public transport terminals stems mainly from their importance in supporting and sustaining economic activity in secondary cities as well as neighboring rural communities. Furthermore, ADB’s experience with urban sector projects in the Philippines has shown strong demand from secondary cities for the construction, improvement, or expansion of municipal markets and public transport terminals.

2. Sustainable Communities

32. ADB will promote the development of sustainable communities through environmental infrastructure projects in secondary cities that encompass solid waste management, water supply and sanitation, and flood control.27 In solid waste management, the central issue is improving disposal practices and ensuring compliance. In this subsector, ADB will consider providing financing to LGUs for sanitary landfills and related infrastructure, materials recovery facilities, solid waste transport equipment, and better management systems. In water supply and sanitation, the focus on secondary cities suggests relatively moderate interventions to assist local governments in (i) improving and expanding water supply systems, (ii)  enhancing the financial and operational performance of water utilities, (iii)  expanding coverage, (iv)  improving service quality, and (v)  supporting the financial and managerial autonomy of water utilities. ADB will also consider flood control projects aimed at improving drainage systems, widening rivers and canals, and strengthening embankments in secondary cities. These projects will be selected and prioritized on the basis of their ability to mitigate future large-scale flooding and consequent critical infrastructure damage and socioeconomic dislocation.

3. Performance-Oriented Governance

33. The crosscutting core theme of performance-oriented governance will be fully integrated into projects that address urban competitiveness and sustainable communities, and will be supported with stand-alone TA and capacity-building efforts. In the context of both urban competitiveness and sustainable communities, the capacity building of LGUs will center on the preparation of strategic local economic development plans, investment programming, and the improvement of interagency coordination. The design of ADB investment projects will also explore innovative and sustainable financing channels. For non-revenue-generating projects, there remains a need to determine the appropriate loan–grant mix for different subsectors. In addition to strategic development planning and infrastructure investment programming, capacity building to strengthen performance-oriented governance will include operating and maintaining new urban infrastructure and municipal services, maximizing cost recovery and revenue generation, and marketing potential investment opportunities to the private sector.

26 This document defines ADB support for urban competitiveness as consisting of investments in economic infrastructure. However, ADB will also support urban competitiveness through economic infrastructure investments in roads, bus rapid transit systems, and energy. ADB’s interventions in these subsectors are described more fully in the assessment, strategy, and road map (ASR) for the transport and energy sectors.

27 ADB’s support for sustainable communities, as described in this document, concentrates on solid waste management, water supply and sanitation, and flood control, primarily in secondary cities. ADB’s operational strategy for large-scale water supply, sanitation, and flood control projects is described in the ASR for the water sector.

Sector Road Map 15

B. Planned and Proposed Operations

34. Two operational divisions in ADB’s Southeast Asia Department are responsible for the urban sector: the Urban Development and Water Division (SEUW)28 and the Transport and Communications Division (SETC). These two divisions have prepared a separate assessment, strategy, and road map (ASR) for each of the following sectors: (i) urban development, (ii) water supply, and (iii) transport (including urban transport).

35. The full scope of ADB’s operations in the urban sector, broadly defined, is captured in the country partnership strategy. This ASR focuses on operations in the urban subsectors (described in Sections III and IV above), which will be managed and implemented by SEUW. An indicative road map of SEUW’s urban sector operations is outlined below. The full scope of the proposed interventions is summarized in Figure 4.

Figure 4 ADB’s Urban Sector Work

Southeast Asia Regional Department

ADB Country Partnership Strategy: Philippines

Urban Development and Water Division (SEUW)

Assessment, Strategies, and Road Map

WATER SUPPLY AND  SANITATION

WATER SUPPLY AND SANITATION

Solving shortages and improving service

delivery

FLOOD CONTROL

Adapting to climate change

SOLID WASTE MANAGEMENT

Improving disposal and compliance

LGU ECONOMIC INFRASTRUCTURE

Building and improving markets

and transport terminals

TRANSPORTMoving people, not just private vehicles

Assessment, Strategies, and Road Map

URBAN DEVELOPMENT

Assessment, Strategies, and Road MapTRANSPORT

Transport and Communications  Division (SETC)

ADB = Asian Development Bank, LGU = local government unit.Source: ADB.

1. Near-Term Operations

36. In the coming years, SEUW’s support under the strategic theme of sustainable communities will focus primarily on solid waste management (SWM).

(i) Under RETA 7450: Support for Livable Cities in Asia Project,29 SETC assisted the Subic Bay Metropolitan Authority in 2010 in formulating a comprehensive solid waste management plan dealing with the closure of a sanitary landfill, the creation of a new materials recovery facility, and the eventual establishment of a new sanitary landfill that might be shared with other LGUs.

28 The Transport and Urban Development Division (SETU) handled this ASR in 2009–2010. SETU was restructured in 2011 and renamed the Transport and Communications Division (SETC). Since then, the urban development and water supply and sanitation portfolio has been handled by the Urban Development and Water Division (SEUW).

29 ADB. 2009. Technical Assistance for Project Preparation Support for Livable Cities in Asia. Manila.

16 Philippines: Urban Sector Assessment, Strategy, and Road Map

(ii) Subsequently, SEUW started to work with the Department of Environment and Natural Resources and the Municipal Development Fund Office in pilot-testing innovative SWM by developing materials recovery facilities in highly urbanized areas of Luzon. This will be financially supported through ADB’s Urban Financing Partnership Facility (UFPF).

(iii) The two foregoing activities is expected to lead to a project preparatory TA for the Philippine Solid Waste Management Sector Project and a loan. The approximate loan amount is $40 million.

37. Consistent with the strategic theme of urban competitiveness, ADB’s support for economic infrastructure projects over the near term will include TA and possible lending for bus rapid transit (BRT) projects.

(i) SETC and the Regional and Sustainable Development Department have started work on an urban transport project in Davao, which aims to improve public transport services and coverage area through a BRT system. A small project preparatory TA is being provided under the Preparing the Implementation of Asian City Transport Project. The expected loan amount is $20 million.

(ii) Future TA and lending activities, yet to be determined in conversations with the government, may include a sector project for markets and transport terminals, which could include land as well as sea transport facilities.

38. Support for performance-oriented governance will be fully integrated into SETC’s and SEUW’s operations involving SWM, BRT, and local government economic infrastructure investments. Performance-oriented capacity development is intended to cover economic development planning, investment programming, interagency coordination, infrastructure operation and maintenance, cost recovery and revenue generation, promotion of private sector investment, and local asset management.

2. Medium-Term Operations

39. In the medium term, SEUW may also engage in the development of other environmental infrastructure and in capacity development:

(i) SEUW support may cover flood control and support for the efforts of communities to mitigate the effects of climate change.

(ii) On the capacity-development side, some stand-alone policy and advisory TA or capacity development TA to promote performance-oriented governance and overall strengthening of urban sector agencies, may also be considered, depending on requests from the government.

40. Also over the medium term, ADB will explore the possibility of working directly with a single agency (for instance, the Metro Manila Development Authority or the Subic Bay Metropolitan Authority) to prepare a multiyear development program of TA and infrastructure investments. Such a long-range program could encompass multiple subsectors and possibly provide sovereign financing to a single borrower.

17

Proj

ecte

d Po

pula

tion,

by

Regi

on

Regi

on20

0020

0520

0720

1020

1520

2020

25

PHIL

IPPI

NES

76,9

46,5

00

85,2

61,0

00

88,7

06,3

00

94,0

13,2

00

102,

985,

300

111,

843,

200

120,

339,

000

Natio

nal C

apita

l Reg

ion

9,96

8,60

0 10

,787

,300

11

,099

,800

11

,552

,100

12

,220

,600

12

,776

,100

13

,217

,100

Cord

illera

Adm

inis

trativ

e Re

gion

1,37

2,60

0 1,

526,

800

1,59

2,40

0 1,

694,

400

1,86

8,70

0 2,

045,

500

2,21

5,40

0

Region I (Ilocos Region)

4,22

0,90

0 4,

682,

700

4,87

5,20

0 5,

172,

900

5,67

4,30

0 6,

163,

200

6,63

4,20

0

Region II (Cagayan Valley)

2,82

7,90

0 3,

086,

000

3,19

4,40

0 3,

365,

400

3,65

1,40

0 3,

923,

200

4,17

5,20

0

Region III (Central Luzon)

8,25

8,40

0 9,

195,

600

9,57

6,90

0 10

,159

,300

11

,129

,600

12

,075

,500

12

,974

,000

Region IVA (CALABARZO

N)9,

422,

900

10,6

55,5

00

11,1

52,8

00

11,9

04,1

00

13,1

51,6

00

14,3

92,1

00

15,5

97,7

00

Region IVB (MIMAROPA)

2,31

5,00

0 2,

649,

400

2,79

2,50

0 3,

018,

000

3,41

7,60

0 3,

832,

000

4,26

3,50

0

Region V (Bicol Region)

4,71

2,00

0 5,

189,

900

5,39

2,30

0 5,

711,

500

6,27

8,20

0 6,

864,

000

7,44

8,40

0

Region VI (Western Visayas)

6,23

8,20

0 6,

876,

100

7,14

9,70

0 7,

578,

000

8,31

7,80

0 9,

055,

400

9,76

6,30

0

Region VII (Central Visayas)

5,73

9,60

0 6,

357,

900

6,61

9,80

0 7,

029,

300

7,74

2,10

0 8,

459,

500

9,15

1,40

0

Region VIII (Eastern Visayas)

3,62

9,40

0 4,

020,

900

4,18

7,00

0 4,

447,

500

4,91

1,50

0 5,

406,

700

5,91

6,30

0

Region IX (Zam

boanga Peninsula)

2,84

8,20

0 3,

154,

700

3,28

4,60

0 3,

487,

400

3,84

2,70

0 4,

205,

300

4,55

6,40

0

Region X (Northern Mindanao)

3,52

5,90

0 3,

920,

600

4,08

7,70

0 4,

349,

300

4,80

1,00

0 5,

252,

400

5,68

7,30

0

Region XI (Davao Region)

3,69

8,10

0 4,

020,

000

4,15

4,30

0 4,

362,

400

4,70

9,00

0 5,

042,

800

5,33

7,50

0

Region XII (SoCCSKSargen)

3,24

5,80

0 3,

648,

300

3,81

7,90

0 4,

080,

400

4,52

4,50

0 4,

963,

200

5,38

5,30

0

Auto

nom

ous

Regi

on o

f Mus

lim

Min

dana

o2,

816,

200

3,17

1,10

0 3,

320,

600

3,55

1,80

0 3,

944,

800

4,33

6,20

0 4,

727,

400

CARA

GA2,

106,

800

2,31

8,20

0 2,

408,

400

2,54

9,40

0 2,

799,

900

3,05

0,10

0 3,

285,

600

CALABARZON

 = Cavite, Laguna, Batangas, Rizal, Quezon; CARAG

A = Agusan del Norte, Agusan del Sur, Surigao del Norte, Surigao del Sur; M

IMAROPA = Mindoro, M

arinduque, Rom

blon, Palaw

an; SoCCSKSarGen = South 

Cotabato, North Cotabato, Sultan Kudarat, Sarangani, General Santos. 

Sources: National Statistics Office; and ADB

. 2008. Technical Assistance to the Republic of the Philippines for the Basic Urban Services Sector Project of the Governm

ent of the Philippines. Manila (TA 7062-PHI).

Appe

ndix

1

18

Urban Settlements in the Philippines, 2010

Virac

Legaspi

Daet

MANILA

Davao CityCotabato City

Zamboanga

Isabela

Jolo

Panglima Sugala

Puerto Princesa

CalapanMamburao

Baguio

Laoag

Tuguegarao

IloiloSan Jose

Cagayan de Oro

Romblon

RoxasKalibo

BacolodCebu

Masbate

Boac

Vigan

Lingayen

Tarlac

San Fernando

Batangas

Ilagan

Baler

Lucena

Sta. Cruz

Tacloban

Surigao

Butuan Tandag

Catbalogan

BoronganNaval

TagbilaranDumaguete

Siquijor

Dipolog

Mati

Gen. Santos

International, Primary

International, Secondary

Domestic, Major

Domestic, Minor

Major Port

Airports

Urban Population Distribution 2010 (projected)

City, regardless of share of urban population

Capital municipality, regardless of urban population

Municipality with 100% urban population

Municipality with >50% <100% urban population

Roll-On/Roll-Off route

Central Nautical Highway

Eastern Nautical Highway

Western Nautical Highway

National Roads

Major Roads Connecting >50% Urban area

Pan-Philippine HighwayPHILIPPINES

N

12-0949a AV

Kilometers

0 50 100 150

125 00'Eo

125 00'Eo

119 00'Eo

119 00'Eo

8 00'No 8 00'No

16 00'No16 00'No

122 00'Eo

122 00'Eo

21 00'No

21 00'No

This map was produced by the cartography unit of the Asian Development Bank. The boundaries, colors, denominations, and any other information shown on this map do not imply, on the part of the Asian Development Bank, any judgment on the legal status of any territory, or any endorsement or acceptance of such boundaries, colors, denominations, or information.

Appendix 2

19

Changes in Economic Structure, by Region, 1980 and 2005

RegionGRDP–

GDP Ratio

Percentage Share of GRDPAgriculture Industry Services

1980 2005 1980 2005 1980 2005

National Capital Region 32.0 0.0 0.0 55.5 35.0 44.5 65.0

Cordillera Administrative Regiona 2.3 22.5 12.5 53.9 63.5 23.6 24.0

Region I (Ilocos Region) 3.0 38.1 43.0 26.7 13.6 35.2 43.4

Region II (Cagayan Valley)  2.0 40.1 50.4 29.6 14.2 30.4 35.4

Region III (Central Luzon) 8.5 21.4 24.4 42.9 36.6 35.8 38.9

Region IVA (CALABARZON)b 12.4 20.4 18.8 42.1 41.8 37.5 39.4

Region IVB (MIMAROPA)b 2.8 40.3 39.4 38.7 41.5 21.0 19.1

Region V (Bicol Region)  2.8 44.3 34.0 19.4 22.4 36.3 43.6

Region VI (Western Visayas) 7.2 34.1 27.1 28.3 25.3 37.6 47.6

Region VII (Central Visayas) 7.1 15.0 11.7 37.8 29.4 47.2 58.9

Region VIII (Eastern Visayas) 2.2 42.5 33.3 23.7 30.4 33.8 36.3

Region IX (Zamboanga Peninsula) 2.6 50.0 51.0 17.9 15.1 32.1 33.9

Region X (Northern Mindanao) 4.8 37.1 30.4 33.6 30.3 29.3 39.2

Region XI (Davao Region) 4.6 47.6 27.5 24.6 31.5 27.8 41.0

Region XII (SoCCSKSarGen) 3.5 45.1 41.7 32.8 30.9 22.1 27.5

Region XIII (CARAGA)c 1.3 34.1 39.6 39.3 23.4 26.5 37.0

Autonomous Region in Muslim Mindanao3/ 0.9 34.1 56.8 39.3 11.9 26.5 31.2

CALABARZON = Cavite,  Laguna,  Batangas,  Rizal,  Quezon;  CARAGA = Agusan  del  Norte, Agusan  del  Sur,  Surigao  del  Norte,  Surigao  del  Sur;  GDP  =  gross  domestic  product;  GRDP  =  gross  regional  domestic  product;  MIMAROPA  =  Mindoro,  Marinduque,  Romblon,  Palawan;  SoCCSKSarGen = South Cotabato, North Cotabato, Sultan Kudarat, Sarangani, General Santos.a For 1987 and 2005 only.b For 2002 and 2005 only.c For 1995 and 2005 only.Source: National Statistics Coordination Board.

Appendix 3

20

Inci

denc

e of

Pov

erty

, 200

0, 2

003,

and

200

6

Regi

on/

Prov

ince

Annu

al P

er C

apita

Pov

erty

Th

resh

old (P)

Estim

ated

Pov

erty

In

cide

nce

amon

g Po

pula

tion (%)

Estim

ated

Num

ber

of P

oor P

opul

atio

n

Estim

ated

Pov

erty

In

cide

nce

amon

g Fa

mili

es (%

)Es

timat

ed N

umbe

r of P

oor F

amili

es

2000

2003

2006

2000

2003

2006

2000

2003

2006

2000

2003

2006

2000

2003

2006

PHIL

IPPI

NES

11,4

5812

,309

15,0

5733

.030

.032

.925

,472

,782

23,8

36,1

0427

,616

,888

27.5

24.4

26.9

4,14

6,66

34,

022,

695

4,67

7,30

5

NCR

15,7

2216

,737

20,5

667.

86.

910

.486

0,93

474

2,54

91,

156,

313

5.8

4.8

7.1

127,

655

110,

864

167,

316

Regi

on I

12,6

8713

,281

15,9

5635

.330

.232

.71,

452,

222

1,26

2,79

91,

464,

245

29.5

24.4

26.2

237,

910

213,

846

248,

443

Regi

on II

11,1

2811

,417

13,7

9130

.424

.525

.582

1,29

465

9,66

672

1,03

625

.319

.320

.514

3,42

111

3,29

812

6,72

6

Regi

on II

I13

,760

14,3

7817

,298

21.4

17.5

20.7

1,69

5,22

71,

535,

784

1,91

4,59

017

.313

.416

.826

8,55

824

2,82

032

0,10

9

Regi

on IV

A13

,670

14,7

2017

,761

19.1

18.4

20.9

1,69

7,03

31,

899,

827

2,21

0,75

615

.214

.516

.727

2,48

431

6,91

137

4,95

2

Regi

on IV

B12

,013

12,4

0214

,800

45.3

48.1

52.7

1,03

2,12

31,

163,

867

1,40

0,41

736

.439

.943

.716

2,66

819

9,48

523

8,48

9

Regi

on V

11,3

7512

,379

15,0

1552

.648

.551

.12,

540,

660

2,33

2,71

92,

643,

799

45.3

40.6

41.8

407,

176

383,

625

422,

278

Regi

on V

I11

,314

12,2

9114

,405

44.5

39.2

38.6

2,77

3,35

22,

374,

772

2,49

1,53

536

.731

.431

.144

4,17

239

7,07

342

5,57

1

Regi

on V

II9,

659

9,80

513

,390

36.2

28.3

35.4

2,01

6,91

01,

652,

316

2,21

3,16

731

.523

.630

.334

8,15

428

6,47

839

1,48

4

Regi

on V

III9,

530

10,8

0413

,974

45.1

43.0

48.5

1,64

9,58

21,

619,

731

1,94

7,32

337

.635

.340

.727

6,87

826

6,42

333

1,42

6

Regi

on IX

9,12

810

,407

13,2

1944

.849

.245

.31,

257,

210

1,42

7,72

21,

404,

098

38.6

44.0

40.2

209,

842

258,

497

250,

696

Regi

on X

10,5

0911

,605

14,1

9943

.844

.043

.11,

582,

225

1,56

7,96

31,

663,

283

38.0

37.7

36.1

261,

501

278,

538

285,

054

Regi

on X

I10

,278

11,3

9914

,942

33.3

34.7

36.6

1,23

1,27

71,

346,

269

1,45

0,54

227

.928

.530

.620

2,12

123

1,06

825

7,55

4

Regi

on X

II10

,458

11,3

2814

,225

46.8

38.4

40.8

1,59

5,47

41,

319,

563

1,48

2,13

040

.732

.133

.826

4,30

122

7,09

325

3,00

9

CAR

13,0

7114

,033

16,8

1037

.732

.234

.553

7,97

544

5,03

650

6,82

330

.825

.828

.884

,717

72,0

8487

,050

ARM

M12

,199

12,7

3315

,533

60.0

52.8

61.8

1,65

2,89

01,

373,

620

1,77

8,26

253

.845

.455

.325

5,87

922

8,97

029

5,22

0

CARA

GA10

,903

11,9

9615

,249

51.2

54.0

52.6

1,07

6,39

51,

111,

901

1,16

8,56

943

.847

.145

.517

9,22

619

5,62

220

1,92

9

ARMM = Autonom

ous Region of M

uslim

 Mindanao; CAR

 = Cordillera Autonom

ous Region; CARAG

A = Agusan del Norte, Agusan del Sur, Surigao del Norte, Surigao del Sur; N

CR = National Capital Region.

Sour

ce: N

atio

nal S

tatis

tical

Coo

rdin

atio

n Bo

ard,

200

6.

Appe

ndix

4

21

Indi

cativ

e In

vest

men

t Req

uire

men

ts o

f the

Bas

ic U

rban

Ser

vice

s Se

ctor

in th

e Ph

ilipp

ines

(In

con

stan

t 200

8 pr

ices

)

Sect

or

2008

–201

020

11–2

015

2016

–202

020

21–2

025

Tota

l

P m

illion

$ m

illion

P m

illion

$ m

illion

P m

illion

$ m

illion

P m

illion

$ m

illion

P m

illion

$ m

illion

Water Supply

22,2

56

445

33,6

74

673

36,7

70

735

37,8

15

756

130,

516

2,61

0

Sani

tatio

n75

,375

1,

507

114,

021

2,28

0 12

4,50

3 2,

490

128,

042

2,56

1 44

1,94

1 8,

839

Sept

age

Man

agem

ent

38,8

46

777

58,7

63

1,17

5 64

,166

1,

283

65,9

90

1,32

0 22

7,76

4 4,

555

Urba

n Dr

aina

ge69

,724

1,

394

105,

472

2,10

9 11

5,16

9 2,

303

118,

443

2,36

9 40

8,80

8 8,

176

Publ

ic M

arke

t5,

801

116

8,77

5 17

5 9,

582

192

9,85

4 19

7 34

,011

68

0

Trading Post

392

8 59

3 12

64

8 13

66

6 13

2,

300

46

Urba

n Ro

ad76

,152

1,

523

115,

196

2,30

4 12

5,78

7 2,

516

129,

362

2,58

7 44

6,49

6 8,

930

Slau

ghte

rhou

se1,

107

22

1,67

4 33

1,

828

37

1,88

0 38

6,

489

130

Bus / Jeepney Terminal

1,37

6 28

2,

082

42

2,27

3 45

2,

338

47

8,06

8 16

1

Solid Waste Collection Equipm

ent

1,99

2 40

3,

013

60

3,29

1 66

3,

384

68

11,6

80

234

Sani

tary

Lan

dfill

53,9

53

1,07

9 81

,615

1,

632

89,1

19

1,78

2 91

,652

1,

833

316,

340

6,32

7

Heavy Equipm

ent

9,05

2 18

1 13

,693

27

4 14

,952

29

9 15

,377

30

8 53

,076

1,

062

Heal

th C

are

Cent

er66

6 13

1,

007

20

1,10

0 22

1,

131

23

3,90

5 78

Scho

ol B

uild

ing

1,27

0 25

1,

922

38

2,09

8 42

2,

158

43

7,44

9 14

9

Tota

l Inv

estm

ents

Req

uire

d35

7,96

2 7,

159

541,

502

10,8

30

591,

286

11,8

26

608,

093

12,1

62

2,09

8,84

4 41

,977

Sources: National Statistics Office; and ADB

. 2008. Technical Assistance to the Republic of the Philippines for the Basic Urban Services Sector Project of the Governm

ent of the Philippines. Manila (TA 7062-PHI).

Appe

ndix

5

22

Inst

itutio

nal F

ram

ewor

k fo

r Urb

an D

evel

opm

ent

Key Shelter Agencies

Sect

oral

Pla

nnin

g,

Polic

y, an

d Ov

ersi

ght

Depa

rtmen

ts

Regu

lato

ry A

genc

ies

of

Natio

nal G

over

nmen

t

Urba

n Ut

ility

Agen

cies

of N

atio

nal

Gove

rnm

ent

Specialized Land 

Deve

lopm

ent U

rban

M

anag

emen

t Age

ncie

s

Lege

nd:

Technical supervision

Pol

icy

and

prog

ram

coo

rdin

atio

n an

d ov

ersi

ght

Loca

l Gov

ernm

ents

NEDA

Pres

iden

t

HUDC

C

HDM

F

DOTC

MAR

INA

LWUA

Loca

l Water 

Dist

ricts

DPWH

NWRB

DOH

NTC

DSWD

ERB

HGC

DA

LTFRB

MWSS

MWC

MWSC

DAR

LTO

NEA

MER

ALCO

Loca

l Ele

ctric

Co

oper

ative

s

DENR

LRA

NAPO

COR

DILG

NSWMC

NHM

FCNH

AHL

URB

MM

DA

Prov

ince

s/In

depe

nden

t Citi

es

Mun

icip

aliti

es/C

ompo

nent

Citi

es

BCDA

PEZA

PEA

CDC

SBM

APC

UPPP

ALL

DAPR

RC

BCDA

= B

ases

Con

vers

ion

Deve

lopm

ent A

utho

rity,

CDC

= C

lark

Dev

elop

men

t Cor

pora

tion,

DA

= D

epar

tmen

t of A

gric

ultu

re, D

AR =

Dep

artm

ent o

f Agr

aria

n Re

form

, DEN

R =

Dep

artm

ent o

f Env

ironm

ent a

nd N

atur

al R

esou

rces

, DILG = Department of the Interior and Local Governm

ent, DO

H = Department of H

ealth, DOTC = Department of Transportation and Communications, DPW

H = Department of Public Works and Highw

ays, DSW

D = Department 

of Social W

elfare and Development, ERB = Energy Regulatory Board, HDM

F = Hom

e Developm

ent M

utual Fund, HGC

 = Hom

e Guaranty Corporation, HLURB = Housing and Land Use Regulatory Board, HUD

CC = Housing and 

Urban Developm

ent C

oordinating Council, LLDA

 = Laguna Lake Development Authority, LRA = Land Registration Authority, LTFRB = Land Transportation Franchising and Regulatory Board, LTO = Land Transportation Office, 

LWUA = Local Water Utilities Authority, MARINA = Maritime Regulatory Adm

inistration, MERALCO

 = Manila Electric Com

pany, M

WC = Manila Water Com

pany, M

WSC = Maynilad Waster S

ervices Com

pany, M

MDA

 = Metro 

Manila Development Authority, MWSS = Manila Waterworks and Sew

erage System

, NAPOC

OR = National Pow

er Corporation, NEA = National Electrification Administration, NEDA = National Economic and Development Authority, 

NHA = National H

ousing Authority, NH

MFC = National H

ome Mortgage Finance Corporation, NSW

MC = National Solid Waste Managem

ent C

ommission, N

TC = National Telecom

munications Com

mission, N

WRB = National 

Water Resources Board, PCU

P = Presidential Com

mission for the Urban Poor, PEA = Public Estates Authority, PEZA = Philippine Economic Zone Authority, PPA = Philippine Ports Authority, PRRC

 = Pasig River R

ehabilitation 

Com

mis

sion

, SBM

A =

Sub

ic B

ay M

etro

polit

an A

utho

rity.

Sour

ce: A

sian

Dev

elop

men

t Ban

k.

Appe

ndix

6

23

Phili

ppin

e Ur

ban

Sect

or P

robl

em T

ree

EFFE

CTS

CORE

PRO

BLEM

S

CAUS

ES

Lack

of r

esou

rces

to

fund

infra

stru

ctur

e pr

ojec

ts

Weak capacity of LGU

s to

pla

n an

d im

plem

ent

infra

stru

ctur

e pr

ojec

ts

Rapid urbanization, 

caus

ing

dem

and

to

outp

ace

supp

ly

Inef

fect

ive re

gion

al

and

loca

l eco

nom

ic

deve

lopm

ent p

lann

ing

High

er tr

ansa

ctio

n co

sts

of d

oing

bus

ines

s ou

tsid

e th

e ex

tend

ed

Met

ro M

anila

urb

an

regi

on

Inadequate data and 

reso

urce

s to

pro

perly

as

sess

LGU

com

petit

ive

advantage(s)

Lack

of p

oliti

cal

com

mitm

ent o

r a

cham

pion

at t

he lo

cal

leve

l

Abse

nce

of a

cle

ar

urba

n se

ctor

lead

er

Poor

enf

orce

men

t of

regu

latio

ns a

nd p

oliti

cal

patro

nage

Uncle

ar g

over

nmen

t ch

ampi

on a

nd p

olicie

s fo

r com

preh

ensiv

e an

d st

rate

gic

disa

ster

pr

epar

edne

ss a

nd

clim

ate

chan

ge

Abse

nce

of d

isas

ter

prep

ared

ness

and

cl

imat

e ch

ange

st

rate

gies

in L

GU

deve

lopm

ent p

lans

Lack

of i

nves

tmen

ts

in id

entif

ied

regi

onal

gr

owth

pol

es

Lack

of k

now

ledg

e

and

tool

s fo

r effe

ctive

lo

cal e

cono

mic

de

velo

pmen

t pla

nnin

g

Over

lapp

ing

func

tions

of

con

cern

ed a

genc

ies

Lim

ited

LGU

know

ledg

e of

disa

ster

pre

pare

dnes

s an

d cli

mat

e

chan

ge a

dapt

atio

n

Inad

equa

te

infr

astr

uctu

re to

at

trac

t inv

estm

ents

Lack

of i

ncen

tives

to

prom

ote

grow

th in

re

gion

al c

ente

rs

Wea

k ca

paci

ty fo

r lo

cal e

cono

mic

de

velo

pmen

t pla

nnin

g an

d im

plem

enta

tion

Unco

ordi

nate

d go

vern

men

t res

pons

e

Unpr

epar

edne

ss

of L

GUs

for n

atur

al

disa

ster

s an

d

clim

ate

chan

ge

Inad

equa

te e

mpl

oym

ent

oppo

rtun

ities

for u

rban

resi

dent

s

CONS

TRAI

NED

ECON

OMIC

GRO

WTH

IN T

HE U

RBAN

SEC

TOR

Lim

ited

com

petit

iven

ess

of u

rban

are

as

beca

use

of u

nder

inve

stm

ent i

n ur

ban

infr

astr

uctu

re a

nd s

ervi

ces

Lim

ited

priv

ate

sect

or in

vest

men

ts

LG

U =

loca

l gov

ernm

ent u

nit.

Sour

ce: A

sian

Dev

elop

men

t Ban

k.

Appe

ndix

7

24

SWOT Analysis of the Urban Sector

Strengths Weaknesses•  Urban sector driving national economic growth•  Metro Manila influence expanding to other regions in Luzon•  Abundant freshwater resources in the country•  Superior taxing powers of cities•   Existing rationalized framework for local government financing•  Basic coordination and management framework in place•  Framework for devolved governance in place•  Available and well-tested enabling framework for PPPs •   IRA-intercept mechanism guaranteeing high repayment of 

LGU loans to GFIs•   Creditworthy LGUs authorized to fund revenue-generating 

projects through GFIs, PFIs, the bond market, or PPP arrangements

•   Marginally or less creditworthy LGUs have access to loans from GFIs or the MDFO with matching grants from the national government

•   Variety of contractual arrangements allowed by PPP enabling framework and local government code

•   Lessons learned from urban infrastructure programs and projects can be used to design new programs and projects

•   LGUs allowed to consolidate resources and pursue joint undertakings, programs, and projects

•   Serious underinvestment in urban infrastructure•   Pervasiveness and multidimensionality of urban poverty•   Insufficient knowledge and tools to foster inclusiveness 

and competitiveness•   Improper disposal and treatment of wastewater•   Jeepney- and tricycle-based public transportation •   Insufficient road space•   Use of open dumping to dispose of collected municipal 

solid waste•   High dependency of local governments on central transfers•   Underutilization of local governments’ revenue-raising 

powers•   Poorly designed property taxation and land valuation systems•   Low levels of local government borrowing•   Significant national government involvement in local 

and urban governance •   Multiple agencies and overlapping functions•   Weak capacity for program and project planning, 

implementation, and management•   Lack of knowledge of and appreciation for PPPs•   Lengthy and highly bureaucratic program and project 

development, approval, and implementation processes•   Lack of interagency coordination and inter-LGU cooperation•   Limited number of qualified and technically skilled 

urban professionals Opportunities Threats

•   Further urbanization•   Urbanization driven by the service sector•   Opportunities to build on the world city status of the Metro 

Manila extended urban region•   Urban regeneration of run-down areas•   Peri-urbanization, stimulating economic growth in smaller 

towns and cities near major growth centers•   Continuing access of GFIs to cheaper official development 

assistance funds•   Willingness of PFIs and international financial institutions to 

provide urban infrastructure finance to LGUs •   Multilateral and bilateral donor support for improved 

urban governance•   Developments in information and communication 

technology, promoting more cost-effective program and project design, management, and implementation

•   Global recession and fluctuating oil and increasing  food prices

•   Uncontrolled rate of growth of urban population•   Political uncertainties and risks at national and 

local levels•   Growing urban poverty and income inequality •   Deteriorating urban environment•   Increasing domestic and international interest rates to 

counter inflation increases•   Insufficient public fiscal resources to answer the 

growing demand for investment, including matching grants, in urban infrastructure programs and projects

•   Lack of transparency and difficulties in dealing  with LGUs

GFI = government financial institution, IRA = internal revenue allotment, LGU = local government unit, MDFO = Municipal Development Finance Office, PFI = private finance initiative, PPP = public–private partnership.Source: Asian Development Bank.

Appendix 8

SWOT Analysis of the Urban Sector 25

Figure A8.1 Problem Tree for Water Supply

EFFECTS

CORE PROBLEM

CAUSES

Contamination of leaking pipes

Ineffective wastewater treatment

High levels of nonrevenue water

Power outages

Power outages

Nonoptimized systems operations

Rapid urban growth

Lack of capital funding

Lack of capital funding

Poor cost recovery

Lack of operation and management capacity

Lack of developed water sources

Deteriorating Water Quality Ineffective Systems Inadequate Supply

and Coverage

Deteriorating Health Conditions

SHORTAGE OF POTABLE WATER

Increased Costs to Consumers

Source: Asian Development Bank.

26 Appendix 8

Figure A8.2 Problem Tree for Drainage

EFFECTS

CORE PROBLEM

CAUSES

High water levels at outfalls

Poorly designed systems

Removal of vegetation

Encroachment onto riverbanks and drainage canals

Weak enforcement against indiscriminate

dumping

Poor maintenance

Fragmented systems

Erosion within watersheds

Lack of resources

Roads built without proper drainage

Undersized drains Weak planning

Significant Backflow Ineffective Systems Inadequate Coverage

Deteriorating Health Conditions

INAPPROPRIATE DRAINAGE

Poor Living Conditions

Deteriorating Environment

Source: Asian Development Bank.

SWOT Analysis of the Urban Sector 27

Figure A8.3 Problem Tree for Solid Waste Management

EFFECTS

CORE PROBLEM

CAUSES

Lack of LGU planning to comply with ESW Act

Low priority given by LGUs to improving method of disposal

Weak capacity to plan, design, operate, and maintain disposal facilities

Low acceptance by communities of locations of disposal facilities

Inefficient or irregular collection

Weak enforcement of ordinances prohibiting illegal dumping

Insufficient waste segregation at source

Poorly managed or absent transfer stations

Inadequate collection

Unsanitary Method of Disposal Indiscriminate Dumping

Deteriorating Health Conditions

POOR DISPOSAL OF SOLID WASTE

Poor Living Conditions

Deteriorating Environment

ESW = ecological solid waste, LGU = local government unit.Source: Asian Development Bank.

28 Appendix 8

Figu

re A

8.4

Problem Tree for Transport

EFFE

CTS

CORE

PR

OBLE

M

CAUS

ES

Weak enforcem

ent 

of tr

affic

and

par

king

ru

les

and

regu

latio

ns

Undi

scip

lined

driv

ers

and

pede

stria

ns

Inef

fect

ive p

lann

ing

and

impl

emen

tatio

n of

traf

fic m

anag

emen

t sc

hem

es

Lack

of o

ff-st

reet

pa

rkin

g fa

cilit

ies

Inadequate facilities 

fo

r ped

estri

ans

Lack

of i

nves

tmen

t in

stra

tegi

c ro

ads

Lack

of i

nves

tmen

t in

pub

lic tr

ansp

ort

syst

ems

Poor

mai

nten

ance

of

road

s

Poor quality of 

road

con

stru

ctio

n

and

desi

gn

Encr

oach

men

ts o

n ro

ad ri

ght-

of-w

ay

Poor

ly m

aint

aine

d ve

hicl

es

Unco

ntro

lled

vehi

cle

regi

stra

tion

Inadequate licensing

Inadequate street 

light

ing

Poor

ly di

scip

lined

dr

ivers

and

ped

estri

ans

Lack

of a

ltern

ative

pub

lic

trans

port

mod

alitie

s

Unre

gula

ted

franc

hisi

ng o

f pub

lic

utilit

y ve

hicl

es a

nd

rout

es

Lack

of p

lann

ing

for

publ

ic tr

ansp

ort

Poor

inte

grat

ion

of

land

use

and

tra

nspo

rt pl

anni

ng

Unco

ntro

lled

urba

n sp

raw

lPo

orly

train

ed d

river

sJe

epne

y- a

nd tr

icyc

le-

base

d pu

blic

tra

nspo

rt sy

stem

Inef

fect

ive

Traf

fic

Man

agem

ent

Inad

equa

te a

nd P

oor

Road

Net

wor

ksIn

crea

sing

Tra

ffic

Volu

me

High

Inci

denc

e

of T

raffi

c

Not E

noug

h Go

od-Q

ualit

y

Publ

ic Tr

ansp

ort

Vehi

cle

Over

load

ing

Weak enforcem

ent of 

regu

latio

ns

Lack

of f

unct

ioni

ng

wei

ghbr

idge

s

High

Eco

nom

ic C

osts

, Re

duce

d Pr

oduc

tivity

INEF

FECT

IVE

CONT

ROL

OF T

RAFF

IC

Incr

ease

d Ai

r an

d No

ise

Pollu

tion

High

er V

ehic

le

Oper

atin

g Co

sts

Trav

el D

elay

sHi

gher

Lev

els

of A

nger

an

d Fr

ustr

atio

n

Sour

ce: A

sian

Dev

elop

men

t Ban

k.

SWOT Analysis of the Urban Sector 29 Fi

gure

A8.

5 Problem Tree for U

rban Social Development

EFFE

CTS

CORE

PRO

BLEM

CAUS

ES

Skills

–job

s m

ism

atch

Lack

of i

nves

tmen

t in

job

crea

tion

for t

he p

oor

Gend

er im

bala

nce

in

em

ploy

men

t

Inadequate infrastructure, 

high

tran

sact

ion

cost

s

Mis

guid

ed s

ubpr

ojec

t prioritization

Poor

targ

etin

g

of in

vest

men

t tow

ard

pr

ogra

ms

for u

rban

poo

r

Infle

xible

and

com

plex

pr

oced

ures

for l

oans

Lim

ited

avai

labi

lity

of

mic

rofin

ance

Low

fina

ncia

l lite

racy

am

ong

the

urba

n po

or

Insu

fficie

nt in

volve

men

t of

priv

ate

sect

or in

low-

inco

me

hous

ing

deve

lopm

ent

Lim

ited

gove

rnm

ent p

rodu

ctio

n of

low

-inco

me

hous

ing

Lim

ited

finan

cial

reso

urce

sRi

goro

us c

olla

tera

l requirements of the formal 

bank

ing

sect

or

Inadequate end-buyer 

finan

ce a

vaila

ble

Lack

of E

mpl

oym

ent

Oppo

rtun

ities

Inad

equa

te A

cces

s

to B

asic

Ser

vice

sLa

ck o

f Acc

ess

to

Fin

anci

al S

ervi

ces

Lack

of A

cces

s

to A

fford

able

She

lter

Grow

ing

Num

ber

of In

form

al S

ettle

men

ts

URBA

N PO

PULA

TION

GRO

WTH

IN E

XCES

S OF

RES

OURC

ES A

VAIL

ABLE

FOR

URB

AN S

ERVI

CES

Incr

easi

ng U

nem

ploy

men

tLi

mite

d In

com

e Gr

owth

Sour

ce: A

sian

Dev

elop

men

t Ban

k.

30 Appendix 8

Figu

re A

8.6

Problem Tree for S

helter

EFFE

CTS

CORE

PRO

BLEM

S

CAUS

ES

Inef

fect

ive la

nd

valu

atio

n an

d

taxa

tion

syst

ems

Land

hel

d as

long

-ter

m

inve

stm

ent b

y m

any

Com

plex

and

in

effe

ctive

land

de

liver

y m

echa

nism

s

Publ

ic in

tere

st ra

te

subs

idie

s di

stor

ting

the

mor

tgag

e m

arke

t

Insu

ffici

ent h

ome

impr

ovem

ent

mic

rofin

ance

Min

imal

par

ticip

atio

n of

pr

ivate

dev

elop

ers

Hous

ing

stan

dard

s ar

e to

o hi

gh, h

ousi

ng

prod

ucts

too

expe

nsive

Lack

of e

mpl

oym

ent

oppo

rtuni

ties

Weak capacity 

of s

ecto

r ins

titut

ions

Inap

prop

riate

sub

sidy

sy

stem

and

poo

r co

st re

cove

ry

Low

retu

rns

on

low

-inco

me

mor

tgag

e in

stru

men

ts

Weak capacity of public 

hous

ing

inst

itutio

nsRa

pid

grow

th

in u

rban

pop

ulat

ion

Lack

of p

olitic

al

will

to e

ncou

rage

slu

m u

pgra

ding

Scar

city

of L

and

for

Low

- an

d M

iddl

e-In

com

e Ho

usin

g

Insu

ffici

ent

End-

Buye

r Fin

ance

Av

aila

ble

Inad

equa

te S

uppl

y of

Ap

prop

riate

Hou

sing

Low

Inco

mes

of

Man

y Pe

ople

Inad

equa

te P

olic

y an

d In

stitu

tiona

l Sup

port

Man

y Va

cant

and

Un

prod

uctiv

e Lo

ts

LACK

OF

AFFO

RDAB

LE S

HELT

ER F

OR L

OW- A

ND L

OWER

-MID

DLE-

INCO

ME

HOUS

EHOL

DS

Over

crow

ding

of

Hous

ing

Stoc

kIn

crea

sing

Num

ber

of In

form

al A

reas

Poor

Qua

lity

of

Low

-Inco

me

Hous

ing

Sour

ce: A

sian

Dev

elop

men

t Ban

k.

SWOT Analysis of the Urban Sector 31

Figure A8.7 Problem Tree for the Financing of Basic Urban Services

EFFECTS

CORE PROBLEM

CAUSES

Underutilization of local revenue-raising powers

Overreliance on central transfers

Weak tax  administration capacity

Unwillingness to borrow

Poor information on the financial

operations of LGUs

Inadequacy of credit enhancements for

LGU financing

Weak capacity of LGUs for project planning and

implementation

Inability of private banks to become depository banks

of LGUs

Lack of capacity for bond flotation

and PPP processes

Perceived political risks of lending to LGUs

Limited borrowing capacity of LGUs

Insufficient incentives for private sector

participation

Poor Resource Mobilization

Difficulties in Gaining Access to Long-

Term Development Financing

Failure to Gain Access to Private Resources

Inability of Many LGUs to Deliver Basic

Infrastructure

LIMITED FINANCING AT THE LOCAL LEVEL

Inadequate Economic Infrastructure and

Social Services at the Local Level

Insufficient Operation and Maintenance Expenditures on

Basic Infrastructure

LGU = local government unit, PPP = public–private partnership.Source: Asian Development Bank.

32 Appendix 8Fi

gure

A8.

8 Problem Tree for U

rban Development Institutions

EFFE

CTS

CORE

PR

OBLE

M

CAUS

ES

Inca

paci

ty o

f HUD

CC

to d

rive

urba

n

polic

y an

d ur

ban

deve

lopm

ent p

rogr

ams

Uncl

ear n

atio

nal u

rban

de

velo

pmen

t pla

n

and

polic

y

Littl

e su

ppor

ting

urba

n le

gisl

atio

n

Ad h

oc u

rban

pol

icy

mak

ing

and

plan

ning

Weak links between land 

use

and

trans

port

plan

ning

No e

ffect

ive p

erfo

rman

ce

mon

itorin

g of

the

urba

n se

ctor

Com

plex

pro

cess

of v

ertic

al

and horizontal coordination 

and

appr

oval

of p

lans

Poor

coo

rdin

atio

n be

twee

n lo

cal g

over

nmen

ts in

urb

an

deve

lopm

ent,

plan

ning

, and

m

anag

emen

t

Weak coordinating role of 

prov

inci

al g

over

nmen

ts in

ur

ban

deve

lopm

ent a

nd

man

agem

ent

Disp

arity

bet

wee

n LG

U bo

unda

ries

and

func

tiona

l ur

ban

area

s

Vario

us s

ecto

r pla

ns a

nd

agen

cies

Prop

erty

taxa

tion

syst

em

disc

oura

ging

dev

elop

men

t

Weak enforcem

ent and 

regu

lato

ry c

apac

ity o

f LGU

s an

d NG

As

Relu

ctan

ce to

out

sour

ce

expe

rtise

and

ser

vices

not

fo

und

in-h

ouse

Invo

lvem

ent o

f nat

iona

l ag

enci

es in

loca

l con

cern

s

Pres

ence

of a

d ho

c re

gion

al

bodi

es

Unre

spon

sive

land

cl

assi

ficat

ion

and

conv

ersi

on

syst

em

Poor

pla

nnin

g, d

esig

n, a

nd

impl

emen

tatio

n of

urb

an

rege

nera

tion

prog

ram

s an

d pr

ojec

ts

Uncl

ear d

efin

ition

of

resp

onsi

bilit

ies

betw

een

natio

nal a

nd lo

cal

gove

rnm

ents

Mul

tiple

sys

tem

s of

land

va

luat

ion

in u

se

Weak coordinative mandate 

of H

UDCC

out

side

she

lter

subs

ecto

r

Weak strategic and regional 

plan

ning

cap

acity

Urba

n po

licy

mak

ing

and

urba

n pl

anni

ng a

nd

man

agem

ent d

iffus

ed

amon

g na

tiona

l and

lo

cal a

genc

ies

Uncl

ear U

rban

Pla

nnin

g an

d Po

licy

Man

date

Unco

ordi

nate

d M

anag

emen

t of U

rban

In

fras

truc

ture

and

Se

rvic

e Pr

ovis

ion

Inad

equa

te C

apac

ity

of N

atio

nal a

nd L

ocal

Go

vern

men

ts

Prol

ifera

tion,

Dup

licat

ion,

an

d Ov

erla

ppin

g Fu

nctio

ns

of A

genc

ies

Inef

ficie

nt M

anag

emen

t of

Urb

an L

and

Lack

of a

n ov

eral

l urb

an la

nd

man

agem

ent p

olic

y

Frag

men

ted

resp

onsib

ilitie

s in

land

man

agem

ent a

nd

adm

inist

ratio

n

Low

Eco

nom

ic G

row

th a

nd

Incr

easi

ng U

rban

Pov

erty

INEF

FECT

IVE

URBA

N PL

ANIN

G AN

D LA

ND M

ANAG

EMEN

T

Dete

riora

ting

Urba

n En

viro

nmen

tUr

ban

Spra

wl,

Unpl

anne

d Gr

owth

, an

d Pr

olife

ratio

n of

Blig

hted

Are

asUn

built

Str

ateg

ic

Infr

astr

uctu

re

HUDC

C =

Hou

sing

and

Urb

an D

evel

opm

ent C

oord

inat

ing

Coun

cil,

LGU

= lo

cal g

over

nmen

t uni

t, NG

A =

nat

iona

l gov

ernm

ent a

genc

y.So

urce

: Asi

an D

evel

opm

ent B

ank.

SWOT Analysis of the Urban Sector 33

Figu

re A

8.9

Problem Tree for Local Governance

EFFE

CTS

CORE

PR

OBLE

M

CAUS

ES

Inef

fect

ive u

rban

pl

anni

ng

Too-short terms 

for e

lect

ed o

ffici

als

(3 years)

Inef

fect

ive d

isas

ter

prep

ared

ness

and

cr

isis

man

agem

ent

Noni

nclu

sive

de

velo

pmen

t pr

ogra

ms

Poor

ly in

form

ed

elec

tora

te

Over

due

revie

w a

nd

revis

ion

of L

GC

Inap

prop

riate

organizational 

stru

ctur

e fo

r urb

an

man

agem

ent

No fu

nctio

ning

in

depe

nden

t loc

al

institutions (local 

housing boards) in 

shel

ter s

ubse

ctor

Inac

tion

on fi

ndin

gs

of ir

regu

larit

ies

Weak performance 

man

agem

ent

Lack

of e

-gov

erna

nce

and IT skills

Weak enforcem

ent 

of ru

les

and

regu

latio

ns

Lack

of t

rans

pare

ncy

and

acco

unta

bility

in

pro

cure

men

t and

fin

ancia

l man

agem

ent

Weak links between 

loca

l gov

ernm

ents

Lack

of c

oord

inat

ion

of n

ation

al

gove

rnm

ent p

rogr

ams

with

thos

e of

loca

l go

vern

men

t

Lim

ited

know

ledg

e of

goo

d pr

actic

e in

ur

ban

man

agem

ent

and

gove

rnan

ce

Lack

of e

ngag

emen

t of

civi

l soc

iety i

n de

velop

men

t act

ivitie

s

Too few PPPs

Lim

ited

know

ledg

e of

loca

l eco

nom

ic

deve

lopm

ent

Low

col

lect

ion

rate

s

Lack

of i

nfor

mat

ion

avail

able

to th

e pu

blic

Poor

ass

et

man

agem

ent s

kills

Weak understanding, 

inte

rpre

tatio

n, a

nalys

is of

info

rmat

ion

Relu

ctan

ce

to b

orro

w fo

r de

velo

pmen

t

Cent

ral t

rans

fer

system

 (IRA) 

not c

ondu

cive

to

loca

l rev

enue

ge

nera

tion

Stro

ng d

epen

denc

e on

per

form

ance

and

dy

nam

ism

of m

ayor

Highly centralized 

deci

sion

mak

ing

Weak internal 

coor

dina

tion

betw

een

offic

es a

nd

depa

rtmen

ts

Lim

ited

parti

cipa

tion

of re

side

nts

and

busi

ness

in p

lann

ing

and

budg

etin

g

Lack

of V

isio

n (F

ailu

re to

Loo

k Be

yond

Tom

orro

w)

Syst

em a

nd

Man

date

not

Co

nduc

ive

to

Chan

ge

Poor

Val

ues

and

Stan

dard

s of

Be

havi

or a

nd L

ack

of T

rans

pare

ncy

Insu

ffici

ent

Coor

dina

tion

and

Know

ledg

e Di

ssem

inat

ion

Lim

ited

Enga

gem

ent w

ith

Stak

ehol

ders

Inad

equa

te M

ix o

f Sk

ills

and

Use

of

Avai

labl

e To

ols

Lim

ited

Loca

l Re

venu

es

Inco

mpl

ete

inve

ntor

y fo

r ta

xatio

n an

d co

st re

cove

ry

purp

oses

Unce

rtain

ty b

etw

een

in-h

ouse

and

ou

tsou

rced

tech

nica

l an

d m

anag

eria

l fu

nctio

ns

Lack

of s

kills

in

stra

tegi

c pl

anni

ng,

project prioritization, 

iden

tific

atio

n,

prep

arat

ion.

and

pa

ckag

ing

Relu

ctan

ce to

in

crea

se ta

xes

and

char

ges

Slow

er E

cono

mic

Gr

owth

WEA

K PL

ANNI

NG, M

ANAG

EMEN

T, AN

D EN

FORC

EMEN

T

Corr

uptio

nCi

tizen

s Fe

elin

g Di

senf

ranc

hise

dPo

or P

ublic

Se

rvic

esIn

adeq

uate

and

Po

or- Q

ualit

y In

frast

ruct

ure

Unpr

epar

edne

ss

for E

mer

genc

ies

IRA = internal revenue allotment, IT = information technology, LGC

 = local governm

ent code, PPP = public–private partnership.

Sour

ce: A

sian

Dev

elop

men

t Ban

k.

34 Appendix 8Fi

gure

A8.

10 Problem Tree for P

ublic–Private Partnerships in Basic Urban Services

EFFE

CTS

CORE

PR

OBLE

M

CAUS

ES

Lack

of n

atio

nal

urba

n se

ctor

de

velo

pmen

t, st

rate

gy,

polic

y, in

vest

men

t

Strin

gent

nat

iona

l go

vern

men

t app

rova

l requirements for 

loca

l PPP

pro

ject

s co

stin

g m

ore

than

P2 billion

Lack

of i

ncen

tives

for

LGUs

and

priv

ate

sect

or

Lack

of p

erfo

rman

ce a

nd

serv

ice

leve

l sta

ndar

d

Regu

lator

s’ u

naw

aren

ess

of re

gulat

ory,

mon

itorin

g,

and

cons

umer

pro

tect

ion

resp

onsib

ilities

Lack

of i

ndep

ende

nce

of re

gula

tors

, reg

ulat

ory

capt

ure

Perc

eive

d la

ck o

f tra

nspa

renc

y an

d di

fficu

lty in

dea

ling

with

lo

cal g

over

nmen

t

Uncl

ear b

usin

ess

mod

el

of L

GUs

for P

PPs

Unce

rtain

ty re

gard

ing

infra

stru

ctur

e an

d se

rvic

e us

e

Unce

rtain

eco

nom

ic

retu

rns

and

co

mm

erci

al ri

sks

Uncl

ear P

PP s

trate

gy

for u

rban

ser

vices

in

inve

stm

ent p

lann

ing

Lack

of t

echn

ical

ca

paci

ty fo

r pro

ject

id

entif

icat

ion,

de

velo

pmen

t, an

d as

sess

men

t

Inab

ility

to a

ccur

atel

y as

sess

nee

d fo

r in

frast

ruct

ure

and

serv

ices

, res

ultin

g in

lack

of

pub

lic s

uppo

rt

for p

roje

ct

Poor

pro

ject

quality at entry

Low

cost

reco

very

due

to

poor

coll

ectio

n pr

oced

ures

an

d sy

stem

s

Frag

men

ted

regu

lato

ry

syst

ems

for

key

serv

ices

at t

he

natio

nal l

evel

Unm

itiga

ted

loca

l pol

itica

l risks (shorter term 

of lo

cal o

ffici

als,

loca

l ch

ief e

xecu

tives

, local  legislative)

LGU

pref

eren

ce fo

r fa

st-t

rack

pro

ject

s co

inci

ding

with

term

s of

lo

cal o

ffici

als

Inadequate asset and 

reve

nue

base

, poo

r resource mobilization

Natio

nal:

Lack

of

Polic

y Su

ppor

tNa

tiona

l: In

effe

ctiv

e Se

ctor

Reg

ulat

ion

Priv

ate

Sect

or:

Relu

ctan

ce to

Em

bark

on

PPP

s at

the

Lo

cal L

evel

Loca

l: Sh

ort P

ipel

ine

of

Viab

le a

nd G

ood-

Qual

ity

PPP

Proj

ects

Loca

l: Un

cred

itwor

thy

LGUs

as

Off-

Take

rs

Loca

l: Un

econ

omic

al

Size

of I

nfra

stru

ctur

e Sy

stem

s an

d

End -

User

Mar

kets

No in

ter-

LGU

coop

erat

ion

and

ther

efor

e no

ec

onom

ies

of s

cale

Low

hou

seho

ld

inco

mes

lim

ited

Inadequate project 

cash

flow

s ad

vers

ely

affe

ctin

g co

st re

cove

ry

and

inve

stm

ent r

etur

ns

Poor

and

Inef

ficie

nt

Serv

ice

LIM

ITED

PRI

VATE

SEC

TOR

PART

ICIP

ATIO

N IN

THE

PRO

VISI

ON O

FBA

SIC

MUN

ICIP

AL IN

FRAS

TRUC

TURE

AND

URB

AN S

ERVI

CES

Unm

et D

eman

d du

e to

Un

derin

vest

men

tDe

terio

ratin

g In

fras

truc

ture

Poor

Liv

ing

Cond

ition

s

LGU

= lo

cal g

over

nmen

t uni

t, P

= p

eso,

PPP

= p

ublic

–priv

ate

partn

ersh

ip.

Sour

ce: A

sian

Dev

elop

men

t Ban

k.

SWOT Analysis of the Urban Sector 35 Ex

istin

g Do

nor S

uppo

rt fo

r the

Urb

an S

ecto

r

Core

Issu

eGo

vern

men

t Act

ion

Othe

r Dev

elop

men

t Pa

rtne

r Sup

port

aAD

B Su

ppor

tM

ain

Less

ons

1. U

ncoo

rdin

ated

go

vern

men

t res

pons

eThe Philippine Development Forum

, w

hich

pro

vides

the

venu

e fo

r dis

cuss

ing

issu

es a

nd id

entif

ying

polic

ies

rela

ted

to

deve

lopm

ent,

serv

es a

s th

e ve

nue

for

coor

dina

ting

the

effo

rts o

f NGA

s, L

GUs,

and

de

velo

pmen

t par

tner

s, c

ivil s

ocie

ty, a

nd th

e pr

ivate

sec

tor.

There  are also several councils that have 

been

est

ablis

hed

to fa

cilit

ate

coor

dina

tion

and

deve

lopm

ent o

f a c

omm

on a

gend

a su

ch a

s th

e re

gion

al d

evel

opm

ent c

ounc

ils,

the

Natio

nal D

isas

ter C

oord

inat

ing

Coun

cil,

the

Natio

nal C

ompe

titive

ness

Cou

ncil,

an

d th

e Ho

usin

g an

d Ur

ban

Deve

lopm

ent

Coor

dina

ting

Coun

cil.

Government  of Australia–W

B as

sist

ance

for t

he o

pera

tion

of th

e Ph

ilippi

ne U

rban

Con

sorti

um

•  MWSS Operational Strengthening

• MWSS Privatization Support

•  National Urban Policy Fram

ework

•  Institutional Strengthening of Housing 

and

Urba

n De

velo

pmen

t Sec

tor

•  Capacity Building for R

egulatory 

Office of MWSS

•  Metro Manila Solid Waste 

Managem

ent Project

•  Capacity Building for H

ousing 

Mic

rofin

ance

Pro

ject

•   Capacity Building for H

ousing 

Microfinance Project (Supplem

entary)

•   Capacity Building,  eASiA 

(Supplem

entary)

Coor

dina

ting

coun

cils

sho

uld

have

te

chni

cal e

xper

tise

in th

e se

ctor

they

ar

e ch

arge

d w

ith.

The lim

ited resources allocated to 

coor

dina

ting

coun

cils

affe

ct th

eir

perfo

rman

ce a

nd c

apac

ity to

add

ress

th

e ne

eds

of th

e co

ncer

ned

sect

ors.

Give

n th

eir l

imite

d re

sour

ces,

the

crea

tion

of c

oord

inat

ing

coun

cils

ne

eds

to b

e m

ore

stra

tegi

c so

that

th

ese

are

just

key

cou

ncils

.

Poss

ible

func

tiona

l ove

rlaps

between councils and regular 

agen

cies

sho

uld

be a

ddre

ssed

. 2.  Inadequate physical, 

econ

omic

and

soc

ial

infra

stru

ctur

e to

at

tract

inve

stm

ents

The  national governm

ent continues to 

finan

ce n

atio

nal i

nfra

stru

ctur

e.

LGUs

, on

the

othe

r han

d, u

nder

take

the

finan

cing

and

con

stru

ctio

n of

faci

litie

s th

at

have

bee

n de

volve

d ba

sed

on th

e Lo

cal

Gove

rnm

ent C

ode.

•   Local Governm

ent 

Finance and Developm

ent 

Project (WB)

•  Support for Strategic Local 

Deve

lopm

ent I

nves

tmen

ts

Project (WB)

•   North Rail and South Rail 

Projects (Governm

ent of PRC

) • 

 LGU Urban Water and 

Sanitation  Project (WB)

•  Cordillera Road Improvem

ent 

Project (JICA

)• 

 Mindanao Sustainable 

Settl

emen

t Are

a De

velo

pmen

t Project (JICA

)• 

 Laguna de Bay Institutional 

Stre

ngth

enin

g an

d Co

mm

unity

Par

ticip

atio

n Project  (WB) 

•   Municipal Water Supply Project

•  Sm

all Tow

ns Water Supply 

Sector Project

•  Subic Bay Area Municipal 

Developm

ent Project

•   Clark Area Municipal 

Developm

ent Project

•  Metro Manila Air Quality Im

provem

ent 

Sect

or D

evel

opm

ent P

rogr

am•  

 Pasig  River Environm

ental 

Man

agem

ent a

nd R

ehab

ilitat

ion

Sect

or

Developm

ent Program

•   Mindanao  Basic Urban Services 

Sector Project

•   MWSS New

 Water Source 

Developm

ent Project

•   Developm

ent  of Poor U

rban 

•   Communities Sector Project

•   SM

E Developm

ent Support

The  identification of infrastructure 

inve

stm

ents

sho

uld

be s

trate

gic

and

shou

ld re

spon

d to

bot

h ne

eds

and

deve

lopm

ent d

irect

ion.

Plan

ning

and

pro

visio

n of

LGU

in

frast

ruct

ure

inve

stm

ents

sho

uld

cons

ider

the

deve

lopm

ent t

rend

s in

its

wid

er lo

calit

y an

d be

yond

its

polit

ical

juris

dict

ion.

Link

s be

twee

n na

tiona

l pro

ject

s an

d LG

U pr

ojec

ts s

houl

d be

cl

early

est

ablis

hed

to e

nsur

e fu

ll fu

nctio

nalit

y an

d co

mpl

emen

tatio

n.

The  involvement and com

mitm

ent 

of L

GUs

in th

e pl

anni

ng s

tage

of

natio

nal p

roje

cts

is c

ritic

al.

•   Microfinance Development Program

•  Private Sector Participation in Urban 

Developm

ent  (AD

TA)

•  On-Site Urban Upgrading for Vulnerable 

Slum

 Com

munities of Payatas (JFPR)

•  Off-Site and Off-City Relocation of 

Vuln

erab

le S

lum

Com

mun

ities

of

Muntinlupa (JFPR)

•  Strategic Private Sector Partnerships 

for U

rban

Pov

erty

Red

uctio

n in

Met

ro

Manila (JFPR)

cont

inue

d on

nex

t pag

e

Appe

ndix

9

36 Appendix 9

Core

Issu

eGo

vern

men

t Act

ion

Othe

r Dev

elop

men

t Pa

rtne

r Sup

port

aAD

B Su

ppor

tM

ain

Less

ons

3. L

ack

of in

cent

ives

to

prom

ote

grow

th in

re

gion

al c

ente

rs

The  DILG has been prom

oting the 

One

Clus

ter,

One

Visi

on fo

r Loc

al

Developm

ent Project.

LGUs

hav

e al

so e

stab

lishe

d de

velo

pmen

t cl

uste

rs s

uch

as th

e M

etro

Iloi

lo–G

uim

aras

Ec

onom

ic D

evel

opm

ent C

ounc

il.

Loca

l Gov

erna

nce

Supp

ort

Prog

ram

for L

ocal

Eco

nom

ic

Developm

ent  (CIDA

)

Acce

lera

ting

Econ

omic

De

velo

pmen

t thr

ough

LGU

Clusters (GTZ)

Philip

pine

s: R

egio

nal M

unic

ipal

De

velo

pmen

t Pro

ject

The RD

Cs need to be strengthened. 

There should an enhanced 

mec

hani

sm fo

r int

erac

tion

betw

een

the

RDC,

LGU

s, a

nd N

GAs.

4.   W

eak capacity for 

loca

l eco

nom

ic

deve

lopm

ent p

lann

ing

and

impl

emen

tatio

n

DILG

, Dep

artm

ent o

f Fin

ance

, Dep

artm

ent

of B

udge

t and

Man

agem

ent,

and

Natio

nal

Econ

omic

and

Dev

elop

men

t Aut

horit

y ha

ve

issu

ed J

oint

Mem

oran

dum

Circ

ular

No.

1 Se

ries

of 2

007

to a

ll LG

Us p

rovid

ing

for t

he

harmonization  of local planning, investment 

prog

ram

min

g, re

venu

e ad

min

istra

tion,

bu

dget

ing,

and

exp

endi

ture

man

agem

ent.

Stre

ngth

enin

g Pr

ovin

cial

and

Loc

al P

lann

ing

and

Expe

nditu

re M

anag

emen

tThe  consolidation and integration 

of L

GU d

evel

opm

ent p

lans

into

a

regi

onal

dev

elop

men

t pla

n sh

ould

be

enh

ance

d su

ch th

at s

trate

gic

inve

stm

ents

are

focu

sed

on re

gion

al

grow

th c

ente

rs, w

hich

cou

ld

spur

hig

her g

row

th a

nd p

rom

ote

econ

omie

s of

sca

le, c

ompa

red

with

th

e tra

ditio

nal a

ppro

ach

of d

ispe

rsin

g in

vest

men

ts a

cros

s al

l LGU

s.

5. L

ocal

gov

ernm

ents

un

prep

ared

for

natu

ral d

isas

ters

and climate  change 

Gove

rnm

ent h

as p

asse

d th

e Cl

imat

e Ch

ange

Act

, cre

atin

g th

e Cl

imat

e Ch

ange

Co

mm

issi

on, a

pol

icy-

mak

ing

body

at

tach

ed to

the

Offic

e of

the

Pres

iden

t th

at w

ill co

ordi

nate

, mon

itor,

and

eval

uate

pr

ogra

ms

and

actio

n pl

ans

rela

ting

to

clim

ate

chan

ge.

•   Disaster Preparedness and 

Response Facility (AusAID) 

•  Philippines: Strengthening Climate 

Chan

ge R

esilie

nce

in th

e In

tegr

ated

Na

tura

l Res

ourc

es a

nd E

nviro

nmen

tal

Man

agem

ent S

ecto

r Dev

elop

men

t Pr

ogra

m

The  capacity of LGU

s to plan for 

and

addr

ess

natu

ral d

isas

ters

and

cl

imat

e ch

ange

sho

uld

be e

nhan

ced.

Traditionally, NGA

s and LGUs have 

take

n a

reac

tive

stan

ce to

cal

amiti

es.

A m

ore

proa

ctive

and

ant

icip

ator

y ap

proa

ch n

eeds

to b

e pu

rsue

d.

The use of the LGU calamity fund 

for d

isas

ter p

repa

redn

ess

shou

ld

be explored. 

Loca

l dev

elop

men

t pla

nnin

g sh

ould

con

side

r ide

ntifi

catio

n an

d m

appi

ng o

f inv

estm

ents

for

disaster preparedness and climate 

chan

ge a

dapt

atio

n.

a Lis

t is

not e

xhau

stive

bec

ause

of t

he li

mite

d in

form

atio

n av

aila

ble.

ADB = Asian Development Bank, ADTA = advisory technical assistance, AusAID = Australian Agency for International Development, CIDA

 = Canadian International Development Agency, DILG = Department of the Interior and 

Local Governm

ent, GTZ = German Technical Cooperation Agency, HUD

CC = Housing and Urban Development Coordinating Council, JFPR = Japan Fund for Poverty Reduction, JICA = Japan International Cooperation Agency, 

LGU = local governm

ent unit, MWSS = Metropolitan Waterworks and Sew

erage System

, NGA

 = national governm

ent agency, PD

F = Philippine Development Forum

, PRC

 = People’s Republic of China, PUC

 = Philippine Urban 

Consortium, RDC

 = regional development council, SME = small and medium-sized enterprise, WB = World Bank.

Sour

ce: A

DB.

Appe

ndix

9 c

ontin

ued

37

The National Spatial Strategy

Virac

Legaspi

Daet

MANILA

Davao CityCotabato City

Zamboanga

Isabela

Jolo

Panglima Sugala

Puerto Princesa

CalapanMamburao

Baguio

Laoag

Tuguegarao

IloiloSan Jose

Cagayan de Oro

Romblon

RoxasKalibo

BacolodCebu

Masbate

Boac

Vigan

Lingayen

Tarlac

San Fernando

Batangas

Ilagan

Baler

Lucena

Sta. Cruz

Tacloban

Surigao

Butuan Tandag

Catbalogan

BoronganNaval

TagbilaranDumaguete

Siquijor

Dipolog

Mati

Gen. Santos

Mega ManilaUrban Region

Davao Urban andAgri-Industrial Center

Urban Industrial BeltwayCentral Luzon CALABARZON Growth Corridor

Batangas as International PortSouth of Metro Manila

Metro Iloilo–GuimarasExtended Urban Areas

Metro Cebu

Northern Mindanao Corridor

Metro Davao

International, Primary

International, Secondary

Domestic, Major

Domestic, Minor

Major Port

Airports

Urban Population Distribution 2010 (projected)

City, regardless of share of urban population

Capital municipality, regardless of urban population

Municipality with 100% urban population

Municipality with >50% <100% urban population

Roll-On/Roll-Off route

Central Nautical Highway

Eastern Nautical Highway

Western Nautical Highway

National Roads

Major Roads Connecting >50% Urban area

Pan-Philippine Highway

PHILIPPINES

Kilometers

0 50 100 150

N

12-0949b AV

125 00'Eo

125 00'Eo

119 00'Eo

119 00'Eo

8 00'No 8 00'No

16 00'No16 00'No

122 00'Eo

122 00'Eo

21 00'No

21 00'No

This map was produced by the cartography unit of the Asian Development Bank. The boundaries, colors, denominations, and any other information shown on this map do not imply, on the part of the Asian Development Bank, any judgment on the legal status of any territory, or any endorsement or acceptance of such boundaries, colors, denominations, or information.

Appendix 10

38

Futu

re D

onor

Sup

port

Requ

ired

for t

he U

rban

Sec

tor

Subs

ecto

r Iss

ues

Gove

rnm

ent P

lans

Polic

y, In

stitu

tiona

l, In

vest

men

t Act

ion,

an

d Re

sour

ce G

aps

Rem

arks

NUDH

F St

rate

gic

Reco

mm

enda

tions

MTP

DP S

trat

egic

Re

com

men

datio

nsa

1. W

ater

: Acu

te s

horta

ge

of potable water in 

urban areas

Assure supply of water; jum

pstart the 

Laib

an D

am P

roje

ct.

Expa

nd a

nd s

uppo

rt th

e pr

ovis

ion

of e

ssen

tial s

ervic

es b

y pr

ovid

ing

pota

ble

wat

er to

the

entir

e co

untry

(among others).

Inte

grat

ed a

nd c

ompr

ehen

sive

app

roac

h to

w

ater

shed

man

agem

ent i

s ne

cess

ary

to re

char

ge

water aquifers. 

LGU-

run

wat

er s

uppl

y sy

stem

s of

ten

oper

ate

at

a subsidy; hence, systems upgrades suffer from 

lack

of f

inan

cial

reso

urce

s.

There are some initiatives to encourage private 

sect

or in

vest

men

ts in

the

wat

er s

ecto

r, su

ch a

s the Philippine Water Revolving Fund, but progress 

is m

inim

al.

LGUs

hav

e lim

ited

tech

nica

l and

fina

ncia

l ca

pabi

lity

to u

nder

take

regu

lar m

aint

enan

ce a

nd

upgr

adin

g of

wat

er s

yste

ms

to e

nsur

e ef

ficie

ncy.

Will  require significant 

inve

stm

ents

and

cap

acity

bu

ildin

g

Mon

itorin

g an

d ev

alua

tion

syst

em n

eeds

to b

e de

velo

ped,

toge

ther

with

de

sign

ated

dat

a ca

ptur

e po

ints

2. S

anita

tion:

Poo

r sa

nita

tion

serv

ices

, de

terio

ratin

g w

ater

quality,  and poor health

Addr

ess

solid

was

te a

nd s

ewer

age

prob

lem

s.Prom

ote pollution and hazard 

cont

rol t

o m

itiga

te h

ealth

and

en

viron

men

tal p

robl

ems

brou

ght

about  by urbanization and 

incr

ease

d hu

man

act

ivitie

s.

Mor

e ef

fect

ive c

oord

inat

ion

amon

g NG

As w

ith

resp

onsi

bilit

y fo

r san

itatio

n is

nee

ded.

LGU

s al

so h

ave

resp

onsi

bilit

y fo

r san

itatio

n pl

anni

ng,

impl

emen

tatio

n, a

nd m

onito

ring.

A na

tiona

l san

itatio

n po

licy

that

pro

vides

for

effe

ctive

enf

orce

men

t, re

gula

tion,

and

mon

itorin

g sh

ould

be

purs

ued.

The Clean Water  Act gives responsibility for 

was

tew

ater

trea

tmen

t to

wat

er s

ervic

e pr

ovid

ers,

bu

t com

plia

nce

is lo

w.

Inno

vativ

e fin

anci

ng s

chem

es to

enc

oura

ge

inve

stm

ents

in s

anita

tion

shou

ld b

e de

velo

ped.

Will  require significant 

inve

stm

ents

, cap

acity

bui

ldin

g,

advo

cacy

, and

enf

orce

men

t of

law

Exec

utive

ord

er m

ay

be required to address 

over

lapp

ing

agen

cy m

anda

tes

cont

inue

d on

nex

t pag

e

Appe

ndix

11

Future Donor Support Required for the Urban Sector 39

Subs

ecto

r Iss

ues

Gove

rnm

ent P

lans

Polic

y, In

stitu

tiona

l, In

vest

men

t Act

ion,

an

d Re

sour

ce G

aps

Rem

arks

NUDH

F St

rate

gic

Reco

mm

enda

tions

MTP

DP S

trat

egic

Re

com

men

datio

nsa

3. D

rain

age:

Frequent 

flood

ing

Review and revise traditional zoning 

and

enco

urag

e su

stai

nabl

e pr

ivate

se

ctor

initi

ative

s th

roug

h pe

rform

ance

an

d se

rvic

e st

anda

rds.

Use

mar

ket-b

ased

ince

ntive

s an

d di

since

ntive

s to

pro

vide

publ

ic am

enitie

s an

d to

sup

port

urba

n lan

d us

e ob

jectiv

es.

Antic

ipat

e an

d en

cour

age

sust

aina

ble

deve

lopm

ent a

nd b

uild

ing

prac

tices

in

loca

l and

met

ropo

litan

dev

elop

men

t plans and zoning ordinances.

Inte

grat

e di

sast

er ri

sk m

anag

emen

t int

o co

mm

unity

and

regi

onal

deve

lopm

ent.

Prom

ote  pollution and hazard 

cont

rol t

o m

itiga

te h

ealth

and

en

viron

men

tal p

robl

ems

brou

ght

about by urbanization and 

incr

ease

d hu

man

act

ivitie

s.

Supp

ort c

once

rted

effo

rts to

ad

dres

s po

llutio

n an

d di

sast

er in

major cities and industrial zones 

acro

ss th

e re

gion

s, p

artic

ular

ly th

e Luzon Urban Beltw

ay.b

Natio

nal g

over

nmen

t age

ncie

s an

d LG

Us h

ave

over

lapp

ing

man

date

s an

d un

clea

r jur

isdi

ctio

n.

Resi

dent

ial a

nd s

ubdi

visio

n dr

aina

ge s

yste

ms

are inadequately integrated with LGU

 drainage 

syst

ems

beca

use

of th

e ab

senc

e of

dra

inag

e m

aste

r pla

ns.

LGUs

hav

e lim

ited

tech

nica

l and

fina

ncia

l cap

acity

to

mai

ntai

n ex

istin

g dr

aina

ge s

yste

ms

and

cons

truct

new

one

s.

Will require significant 

inve

stm

ents

, cap

acity

bui

ldin

g,

advo

cacy

, and

enf

orce

men

t of

law

Exec

utive

ord

er m

ay

be required to address 

over

lapp

ing

agen

cy m

anda

tes

The recently created Climate 

Chan

ge C

omm

issi

on is

like

ly to

be

invo

lved

and

coul

d be

a

subs

ecto

r cha

mpi

on

4 . S

olid

was

te

man

agem

ent:

Poor

di

spos

al

Addr

ess

solid

was

te a

nd

sewerage problems.

Prom

ote  pollution and hazard 

cont

rol t

o m

itiga

te h

ealth

and

en

viron

men

tal p

robl

ems

brou

ght

about  by urbanization and 

incr

ease

d hu

man

act

ivitie

s.

There  is low com

pliance with the Ecological Solid 

Waste Managem

ent Act among LGUs because of 

limite

d te

chni

cal a

nd fi

nanc

ial c

apac

ity.

There is a need for stronger regulation and 

enfo

rcem

ent b

y NG

As a

nd L

GUs.

The  NG

A-LGU cost-sharing arrangem

ent for 

solid

was

te m

anag

emen

t pro

ject

s pr

ovid

es

larg

er g

rant

s fo

r hig

her-

inco

me-

clas

s LG

Us to

en

cour

age

this

type

of i

nves

tmen

ts, b

ut th

e so

urce

of t

he g

rant

s ha

s no

t yet

bee

n de

term

ined

. The  grants are likely to com

e from an OD

A loan.

The  National Solid Waste Managem

ent 

Com

mis

sion

has

lim

ited

capa

city

to p

rovid

e te

chni

cal a

ssis

tanc

e an

d re

view

the

solid

was

te

man

agem

ent p

lans

sub

mitt

ed b

y LG

Us a

s a

prerequisite for the closure of open dumpsites.

A m

echa

nism

for t

he e

stab

lishm

ent o

f a c

omm

on

sani

tary

land

fill s

ervin

g se

vera

l LGU

s ha

s ye

t to

be e

stab

lishe

d.

Will  require significant 

inve

stm

ents

, cap

acity

bui

ldin

g,

and

enfo

rcem

ent o

f law

Appe

ndix

11

cont

inue

d

cont

inue

d on

nex

t pag

e

40 Appendix 11

Subs

ecto

r Iss

ues

Gove

rnm

ent P

lans

Polic

y, In

stitu

tiona

l, In

vest

men

t Act

ion,

an

d Re

sour

ce G

aps

Rem

arks

NUDH

F St

rate

gic

Reco

mm

enda

tions

MTP

DP S

trat

egic

Re

com

men

datio

nsa

5. U

rban

tran

spor

t: In

effe

ctive

mov

emen

t of

peop

le a

nd g

oods

Extend the NLEX to La Union, STAR 

tollw

ay to

Bat

anga

s Ci

ty , a

nd S

LEX

to

Quezon; rehabilitate and maintain the 

Mah

arlik

a Hi

ghw

ay.

Prot

ect i

nfra

stru

ctur

e rig

hts-

of-w

ay.

Impr

ove

effic

ienc

y an

d re

duce

cos

t of

naut

ical

tran

spor

t.

Impr

ove

trans

port

and

traffi

c be

twee

n air

ports

and

por

ts, o

n th

e on

e ha

nd, a

nd

service and industrial zones, on the other.

Ensu

re s

ecur

ity to

and

from

industrial zones.

Esta

blis

h sc

ient

ific

traffi

c an

d tra

nspo

rt planning systems; formulate and 

diss

emin

ate

a m

ediu

m-

to lo

ng-t

erm

tra

nspo

rt de

velo

pmen

t pla

n ba

sed

on

inte

rnat

iona

l sta

ndar

ds.

Assure the completion of the LRT 

Line 1 extension to com

plete the EDSA 

loop with MRT 3 and support the 

grow

th o

f a c

entra

l bus

ines

s di

stric

t at

the North  Triangle in Quezon City.

Build more cost-efficient BRT lines 

alon

g m

ajor

cor

ridor

s to

repl

ace

proposed LRT lines 6 and 7.

Supp

ort l

ocal

initi

ative

s to

dev

elop

BRTs and other dedicated transit lines 

with

prio

rity

give

n to

inte

grat

ion

and

conn

ectio

n of

cen

tral b

usin

ess

dist

ricts

.

Cont

inue

to d

evel

op a

“use

r-pa

ys”

cultu

re to

cov

er, a

t the

ver

y le

ast,

the

mai

nten

ance

cos

t of r

elat

ed

publ

ic fa

cilit

ies.

Natio

nal g

over

nmen

t to

cont

inue

to

pave

and

asp

halt

all n

atio

nal r

oads

.

Enco

urag

e LG

Us to

allo

cate

fund

s fo

r loc

al ro

ad im

prov

emen

t and

m

aint

enan

ce a

nd in

stitu

te s

yste

ms

for l

ocal

road

man

agem

ent.

Impl

emen

t a ro

ad s

afet

y ac

tion

plan and harmonize motor vehicle 

stan

dard

s.

Tap the private sector to provide 

inve

stm

ents

in la

nd tr

ansp

ort

sector modernization.

Esta

blis

h a

natio

nal r

ailw

ay s

yste

m

and

an in

tegr

ated

urb

an ra

il-ba

sed

mas

s tra

nspo

rt sy

stem

thro

ugh

the

Met

ro M

anila

urb

an ra

il ne

twor

k.

Pres

ent i

nitia

tives

to e

ncou

rage

the

role

of L

GUs

and

the

priva

te s

ecto

r in

dev

elop

ing

and

impl

emen

ting

railw

ays

in p

artn

ersh

ip w

ith th

e na

tiona

l gov

ernm

ent.

Pursue a prioritized program of airport 

deve

lopm

ent a

nd d

ereg

ulat

e an

d liberalize civil aviation.

There is a need to develop integrated transport 

and

traffi

c pl

anni

ng a

nd m

anag

emen

t for

LGU

cl

uste

rs a

nd to

mak

e th

is a

prim

ary

feat

ure

of

loca

l dev

elop

men

t pla

ns.

NGAs

and

LGU

s ha

ve o

verla

ppin

g m

anda

tes,

un

clea

r jur

isdi

ctio

n, a

nd u

ncoo

rdin

ated

pro

gram

s.

Transport and traffic planning standards are 

outd

ated

.

Transport and traffic regulations are ineffective 

and

wea

kly

enfo

rced

.

Fina

ncin

g an

d in

vest

men

t pro

gram

min

g sh

ould

be

pro

vided

for s

trate

gic

trans

port

inve

stm

ents

, to

geth

er w

ith m

echa

nism

s fo

r ope

ratio

n an

d m

aint

enan

ce.

Will  require significant 

inve

stm

ents

, cap

acity

bui

ldin

g,

advo

cacy

, and

enf

orce

men

t of

law

Exec

utive

ord

er m

ay

be required to address 

over

lapp

ing

agen

cy m

anda

tes

A ppe

ndix

11

cont

inue

d

cont

inue

d on

nex

t pag

e

Future Donor Support Required for the Urban Sector 41

Subs

ecto

r Iss

ues

Gove

rnm

ent P

lans

Polic

y, In

stitu

tiona

l, In

vest

men

t Act

ion,

an

d Re

sour

ce G

aps

Rem

arks

NUDH

F St

rate

gic

Reco

mm

enda

tions

MTP

DP S

trat

egic

Re

com

men

datio

nsa

Enco

urag

e pe

dest

riani

sm, a

nd

trans

it an

d m

ixed-

use

com

mun

ity

deve

lopm

ent

Enco

urag

e in

tegr

atio

n of

urb

an

perip

herie

s in

to m

etro

regi

ons

thro

ugh

loca

l pla

nnin

g an

d in

ter-

loca

l tra

nspo

rt

Deve

lop th

e Na

utica

l Hig

hway

usin

g the roll-on, roll-off (ROR

O) system

c to

link the Luzon Urban Beltway, Central 

Philip

pine

s re

gion

,d and

Min

dana

o su

per r

egion

.e

Esta

blish

new

gov

ernm

ent c

ente

rs to

de

cong

est M

etro

Man

ila a

nd fa

cilita

te

the

entry

of n

ew in

vest

men

ts a

nd

othe

r eco

nom

ic ac

tivitie

s.

Redu

ce th

e co

st o

f tra

nspo

rting

go

ods

and

addr

ess

soci

al

deve

lopm

ent c

once

rns

in th

e No

rth

Luzon  Agribusiness  Quadrangle

f th

roug

h th

e de

velo

pmen

t of r

oads

, ai

rpor

ts, a

nd s

eapo

rts.

Deve

lop

the

Clar

k-Su

bic

Corri

dor,g

the Southern Luzon Corridor,g

and

Met

ro M

anila

by

addr

essi

ng

criti

cal i

nfra

stru

ctur

e bo

ttlen

ecks

along  national roads and bridges; 

deve

lop

rail

syst

ems

and

airp

orts

to

spee

d tra

ffic

out o

f Met

ro M

anila

.

Deve

lop ro

ads,

airpo

rts, a

nd s

eapo

rts

in C

entra

l Phi

lippi

nes

to s

uppo

rt its

de

velop

men

t as

a to

urism

cen

ter.

Esta

blis

h ro

ads,

airp

orts

, and

se

apor

ts to

est

ablis

h an

effi

cien

t fo

od lo

gist

ics

syst

em th

at li

nks

Min

dana

o su

per r

egio

n to

M

etro

Man

ila.

Build

road

s, air

ports

, sea

ports

, and

re

lated

infra

stru

ctur

e to

sup

port

MSM

Es a

nd s

pur c

ount

rysid

e de

velop

men

t.

Appe

ndix

11

cont

inue

d

cont

inue

d on

nex

t pag

e

42 Appendix 11

Subs

ecto

r Iss

ues

Gove

rnm

ent P

lans

Polic

y, In

stitu

tiona

l, In

vest

men

t Act

ion,

an

d Re

sour

ce G

aps

Rem

arks

NUDH

F St

rate

gic

Reco

mm

enda

tions

MTP

DP S

trat

egic

Re

com

men

datio

nsa

6. F

inan

cing

: Lim

ited

finan

ce a

t the

loca

l lev

elPr

ovid

e in

cent

ives

for L

GUs

to b

e less IRA dependent and to mobilize 

own-source revenues; encourage 

LGUs

to ta

p in

nova

tive

finan

cing

sc

hem

es.

Pres

ent i

nitia

tives

to e

ncou

rage

the

role

of L

GUs

and

the

priva

te s

ecto

r in

dev

elop

ing

and

impl

emen

ting

railw

ays

in p

artn

ersh

ip w

ith th

e na

tiona

l gov

ernm

ent.

LGUs

hav

e lim

ited

finan

cial

cap

acity

bec

ause

of their underutilized local revenue generation 

pow

ers

and

subs

tant

ial I

RA d

epen

denc

e.

LGU

acce

ss to

ext

erna

l fin

anci

ng is

lim

ited

by

thei

r bor

row

ing

capa

city.

There are lim

ited models and unproven 

mec

hani

sms

and

arra

ngem

ents

for p

rivat

e se

ctor

pa

rtner

ship

s w

ith L

GUs.

Optio

ns fo

r est

ablis

hing

sha

red

and

com

mon

fa

cilit

ies

to s

erve

LGU

clu

ster

s ar

e no

t yet

fully

de

velo

ped

and

are

ofte

n su

bjec

t to

loca

l pol

itics

.

LGUs

hav

e co

mpe

ting

finan

cing

win

dow

s.

Optio

n of

def

inin

g a

sect

or

focu

s fo

r eac

h fin

anci

ng

win

dow

cou

ld b

e ex

plor

ed

to minimize com

petition 

and

addr

ess

the

need

s of

un

serv

ed s

ecto

rs

Harmonization of financing 

windows for LGU

s will require 

an e

xecu

tive

orde

r

7. M

anag

emen

t, co

ordi

natio

n, a

nd

capa

city

dev

elop

men

t: In

effe

ctive

urb

an

plan

ning

and

land

m

anag

emen

t, an

d w

eak

loca

l gov

ernm

ents

Inte

grat

e lo

cal e

cono

mic

dev

elop

men

t (city development) strategy and other 

mea

ns o

f enh

anci

ng c

ompe

titive

ness

in

to lo

cal p

lann

ing.

Stre

ngth

en L

GU c

apac

ity b

uild

ing

for s

trate

gic

plan

ning

, inv

estm

ent

prog

ram

min

g, b

udge

ting,

and

im

plem

enta

tion.

Impr

ove

verti

cal c

oord

inat

ion.

Enco

urag

e an

d cr

eate

per

form

ance

-ba

sed

loca

l gov

erna

nce.

Supp

ort t

he d

evel

opm

ent o

f Meg

a M

anila

h by

crea

ting

effe

ctive

m

etro

polit

an-r

egio

n-sc

ale

man

agem

ent f

or p

lann

ing,

inve

stm

ent

prog

ram

min

g, b

udge

ting,

and

im

plem

enta

tion

of k

ey p

roje

cts.

Urba

n de

velo

pmen

t man

date

s ar

e al

loca

ted

to

diffe

rent

NGA

s an

d LG

Us, b

ut th

e ur

ban

plan

ning

an

d m

anag

emen

t cap

abilit

y of

HUD

CC n

eeds

to

be strengthened. There are overlaps and unclear 

func

tions

.

A na

tiona

l age

ncy

for u

rban

dev

elop

men

t, w

ith

an e

nhan

ced

polic

y, te

chni

cal,

coor

dina

tion,

and

en

forc

emen

t man

date

, mus

t be

esta

blis

hed

or

desi

gnat

ed.

Capa

city

for s

trate

gic

deve

lopm

ent p

lann

ing

and

mor

e ef

fect

ive m

echa

nism

s fo

r mon

itorin

g of

LGU

dev

elop

men

t pla

ns a

nd th

eir i

nteg

ratio

n w

ith p

rovin

cial

dev

elop

men

t pla

ns a

nd re

gion

al

deve

lopm

ent p

lans

mus

t be

enha

nced

and

up

date

d to

pro

vide

a ba

sis

for f

inan

cial

and

ph

ysic

al re

sour

ce a

lloca

tion

and

prog

ram

min

g.

Technical  capacity of LGU

 technical staff for 

urba

n pl

anni

ng a

nd m

anag

emen

t sho

uld

be

Will require significant 

inve

stm

ents

, cap

acity

bui

ldin

g,

and

advo

cacy

An in

cent

ive s

yste

m fo

r goo

d pe

rform

ance

in id

entif

ied

area

s sh

ould

be

deve

lope

d and  institutionalized, possibly 

thro

ugh

an e

xecu

tive

orde

r

A ppe

ndix

11

cont

inue

d

cont

inue

d on

nex

t pag

e

Future Donor Support Required for the Urban Sector 43

Subs

ecto

r Iss

ues

Gove

rnm

ent P

lans

Polic

y, In

stitu

tiona

l, In

vest

men

t Act

ion,

an

d Re

sour

ce G

aps

Rem

arks

NUDH

F St

rate

gic

Reco

mm

enda

tions

MTP

DP S

trat

egic

Re

com

men

datio

nsa

Supp

ort n

atio

nal c

ompe

titive

ness

at

the

LGU

leve

l thr

ough

loca

l de

velo

pmen

t pla

nnin

g, in

vest

men

t in

cata

lytic

infra

stru

ctur

e de

velo

pmen

t, an

d in

vest

men

t sup

port

prog

ram

s.

Supp

ort t

he d

evelo

pmen

t of s

trate

gic

clusters to diversify the econom

ic base; 

enha

nce

valu

e ad

ditio

n w

ithin

exis

ting

clusters; orient developm

ental planning, 

rese

arch

, and

dat

a co

llect

ion to

clu

ster

s.

Cont

inue

to b

uild

LGU

cap

acity

for

deve

lopm

ent a

nd la

nd-u

se p

lann

ing.

Support  m

etro (inter-local) 

juris

dict

iona

l coo

pera

tion

and

prov

ide

real incentives; harmonize legal and 

ser v

ice

man

agem

ent m

echa

nism

s of

m

etro

polit

an L

GUs.

enha

nced

thro

ugh

a m

ore

stru

ctur

ed a

nd

curri

culu

m-b

ased

lear

ning

pro

gram

rath

er th

an

thro

ugh

ad h

oc tr

aini

ng.

Institutionalizing the technical capacity of both the 

tech

nica

l sta

ff an

d th

e LG

U is

nec

essa

ry, g

iven

the

likel

y ch

ange

in L

GU p

erso

nnel

with

eac

h ne

w

adm

inis

tratio

n.

8. U

rban

reno

vatio

n:

Grow

th o

f dep

rived

are

asSu

ppor

t hum

an re

sour

ce a

nd li

velih

ood

prog

ram

s ai

med

at r

educ

ing

pove

rty.

Recognize and enhance rural–urban 

pove

rty re

duct

ion

links

to im

prov

e la

bor m

obilit

y an

d in

crea

se th

e sh

arin

g of

mar

ket i

nfor

mat

ion

amon

g ru

ral

prod

ucer

s an

d ur

ban

cons

umer

s.

Incr

ease

ent

repr

eneu

rial o

ppor

tuni

ties

for t

he p

oor .

Enco

urag

e sm

alle

r fam

ilies.

Impr

ove

coor

dina

tion

amon

g ag

enci

es

invo

lved

in th

e pr

ovis

ion

of s

helte

r se

rvic

es.

Sust

ain

effo

rts to

mee

t the

hou

sing

requirements of the formal and 

info

rmal

sec

tors

, par

ticul

arly

socialized  and low-cost housing.

Expand PPPs in socialized housing 

finan

ce a

nd c

onst

ruct

ion

effo

rts.

Cont

inue

to s

treng

then

the

hous

ing

polic

y , fin

ance

, pro

duct

ion,

and

re

gula

tion

capa

city

of k

ey s

helte

r ag

enci

es.

Enha

nce

the

capa

city

of L

GUs

and

com

mun

ity a

ssoc

iatio

ns fo

r ho

usin

g an

d ur

ban

deve

lopm

ent.

Deve

lopm

ent p

lanni

ng in

urb

an a

reas

nee

ds to

be

mor

e st

rate

gic,

give

n th

e ex

tend

ed a

rea

of

socio

econ

omic

influ

ence

and

dem

and

for s

ervic

es

from both internal and external (transit) constituents. 

Rapid urbanization requires addressing the basic 

need

s of

the

urba

n po

or w

hile

at t

he s

ame

time

prov

idin

g op

portu

nitie

s fo

r pov

erty

redu

ctio

n an

d gr

adua

tion

to c

onst

ituen

ts.

There is a need to provide more affordable 

shel

ter p

rogr

ams

and

inst

rum

ents

, pos

sibl

y in

pa

rtner

ship

with

the

priva

te s

ecto

r.

Mor

e re

spon

sive

rese

ttlem

ent p

olic

ies

invo

lving

th

e re

loca

tion

of re

side

nts

of c

alam

ity-p

rone

ur

ban

area

s ne

ed to

be

deve

lope

d an

d en

forc

ed.

Stre

ngth

enin

g of

HUD

CC w

ill require an executive order.  

The option to pursue the 

crea

tion

of a

DHU

D w

ill require legislation and is not 

likel

y to

hap

pen

in th

e sh

ort

term

A ppe

ndix

11

cont

inue

d

cont

inue

d on

nex

t pag

e

44 Appendix 11

Subs

ecto

r Iss

ues

Gove

rnm

ent P

lans

Polic

y, In

stitu

tiona

l, In

vest

men

t Act

ion,

an

d Re

sour

ce G

aps

Rem

arks

NUDH

F St

rate

gic

Reco

mm

enda

tions

MTP

DP S

trat

egic

Re

com

men

datio

nsa

Incr

ease

fund

ing

and

othe

r res

ourc

es

for p

rove

n an

d ke

y ho

usin

g pr

ogra

ms

and

inst

itutio

ns.

Stre

amlin

e th

e ho

usin

g developm

ent transaction process; 

redu

ce tr

ansa

ctio

n co

sts

and

protect consumers.

Prov

ide

ince

ntive

s to

unl

ock

land

for

affo

rdab

le h

ousi

ng.

Prov

ide

and

prom

ote

acce

ss to

land

for

affo

rdab

le h

ousi

ng.

Link

loca

l lan

d -us

e, p

hysi

cal,

and

com

mun

ity d

evel

opm

ent

plan

s w

ith in

dust

ry a

nd lo

cal

empl

oym

ent -

gene

ratin

g in

vest

men

t pr

ogra

ms.

Expl

ore

prom

isin

g fin

anci

ng

sources and  schemes.

Prioritize the implem

entation of 

proj

ects

for l

ow-c

ost h

ousi

ng fo

r re

settl

ed fa

milie

s, c

ore

hous

ing,

m

ediu

m-r

ise

hous

ing,

and

resettlem

ent in the North Luzon 

Agribusiness  Quadrangle,  Luzon 

Urba

n Be

ltway

, Cen

tral P

hilip

pine

s,

and

Min

dana

o Ag

ribus

ines

s super regions.

Deve

lop

new

cen

ters

for

gove

rnm

ent,

busi

ness

and

hou

sing

in the Luzon Urban Beltw

ay to 

deco

nges

t Met

ro M

anila

.

Purs

ue im

plem

enta

tion

of h

ousi

ng

proj

ects

in C

entra

l Phi

lippi

nes

to s

uppo

rt its

dev

elop

men

t as

a to

uris

m h

ub.

Prot

ect a

nd e

mpo

wer

vul

nera

ble

mem

bers

of s

ocie

ty th

roug

h po

licy

and

prog

ram

refo

rms,

to im

prov

e ou

tcom

es o

f soc

ial w

elfa

re a

nd

deve

lopm

ent s

ervic

es, i

mpr

ove

gove

rnan

ce o

f ass

ista

nce

and

deliv

ery

thro

ugh

inte

grat

ed

natio

nal a

nd lo

cal g

over

nmen

t re

form

s, a

nd b

uild

cap

acity

of

DSWD  and associated agencies for 

perfo

rman

ce-o

rient

ed b

udge

ting

and

man

agem

ent.

Supp

ort a

sset

refo

rm b

y ac

cele

ratin

g th

e di

strib

utio

n of

land

an

d pu

rsui

ng s

trate

gies

to im

prov

e th

e te

nuria

l sta

tus

of a

grar

ian

refo

rm b

enef

icia

ries.

Expa

nd th

e re

ach

of m

icrof

inan

ce a

nd

liveli

hood

ser

vices

to b

enef

it th

e po

or

in u

nser

ved

and

far-f

lung

are

as.

Give

n th

e lim

ited

land

in u

rban

are

as, p

hysi

cal

reso

urce

s sh

ould

be

allo

cate

d an

d m

anag

ed

mor

e ef

fect

ively.

Pos

sibl

e ur

ban

clus

terin

g ar

rang

emen

ts c

ould

pav

e th

e w

ay fo

r citi

es to

ha

ve c

ompl

emen

tary

ser

vices

and

eco

nom

ies

(e.g.,  sub-urban arrangem

ents) to address this 

reso

urce

lim

itatio

n.

Pres

erva

tion

of c

ultu

ral a

nd h

isto

rical

in

frast

ruct

ure

and

herit

age

shou

ld b

e co

nsid

ered

pa

rt of

urb

an re

nova

tion

in in

ner-

city

are

as.

Appe

ndix

11

cont

inue

d

cont

inue

d on

nex

t pag

e

Future Donor Support Required for the Urban Sector 45

Subs

ecto

r Iss

ues

Gove

rnm

ent P

lans

Polic

y, In

stitu

tiona

l, In

vest

men

t Act

ion,

an

d Re

sour

ce G

aps

Rem

arks

NUDH

F St

rate

gic

Reco

mm

enda

tions

MTP

DP S

trat

egic

Re

com

men

datio

nsa

9. P

ublic

–priv

ate

part

ners

hips

: Li

mite

d pr

ivate

sec

tor

parti

cipa

tion

at th

e

loca

l lev

el

Incr

ease

acc

ount

abilit

y of

LGU

s an

d private sector; increase process 

transparency to minimize opportunities 

for corruption; support public–private 

partn

ersh

ips

in p

roje

ct im

plem

enta

tion.

Tap the private sector to provide 

investments to modernize the land 

trans

port

sect

or.

A na

tiona

l urb

an s

ecto

r dev

elop

men

t stra

tegy

, po

licy,

inve

stm

ent p

rogr

am a

nd ro

ad m

ap is

ne

eded

for p

rivat

e en

titie

s to

und

erst

and

the

pote

ntia

l gro

wth

and

dire

ctio

n of

the

urba

n se

ctor

an

d fo

r the

m to

par

ticip

ate.

Curre

nt P

PP g

uide

lines

nee

d to

be

furth

er

enhanced to address stringent requirements 

and

proc

edur

es, p

rovid

e m

odel

s fo

r PPP

at L

GU

leve

ls, a

nd e

nhan

ce g

aps

in re

gula

tion.

The  political risks associated with partnering with 

LGUs

and

the

perc

eptio

n of

cor

rupt

ion

disc

oura

ge

priva

te s

ecto

r inv

estm

ents

.

There is a need to pursue inter-LGU projects 

of sizable am

ount to encourage private 

sector interest. 

There is limited capacity for identifying and 

deve

lopi

ng p

oten

tial P

PP p

roje

cts

resp

ondi

ng to

an

d al

igne

d w

ith lo

cal d

evel

opm

ent p

riorit

ies.

Review of the BOT Law

 is 

nece

ssar

y. In

the

shor

t ter

m,

poss

ible

enh

ance

men

ts

coul

d be

intro

duce

d in

the

impl

emen

ting

rule

s an

d re

gula

tions

BOT = build–operate–transfer, BRT = bus rapid transit, DHU

D = Department of Housing and Urban Development, DS

WD = Department of Social W

elfare and Development, EDSA = Epifanio de los Santos Avenue, 

HUDC

C = Housing and Urban Development Coordinating Council, IRA = internal revenue allotment, LGU = local governm

ent unit, LRT = M

anila Light Rail Transit System

, MRT = M

anila M

etro Rail Transit System

,  MSM

E = micro, small, and medium enterprise, MTPDP

 = Medium-Term Philippine Development Plan, NGA

 = national governm

ent agency, NLEX = North Luzon Expressway, NUD

HF = National Urban Development and Housing 

Fram

ework, ODA

 = official development assistance, PPP = public–private partnership, SLEX = South Luzon Expressway, STAR = Southern Tagalog Arterial Road.

a  Based on the updated MTPDP, 2004–2010. The MTPDP, 2011–2017, reflects the priorities of the new governm

ent.

b   To be com

posed of the National Capital Region, (NCR

), Region IV-A, the provinces of Bulacan, Bataan, Pam

panga, Mindoro, M

arinduque, and the southern parts of the provinces of Tarlac, Zam

bales, Aurora and Nueva Ecija, 

is to

ser

ve a

s a

glob

ally

com

petit

ive in

dust

rial a

nd s

ervic

e ce

nter

as

man

date

d by

Exe

cutiv

e Or

der N

o. 5

61 o

f for

mer

Pre

side

nt G

loria

Mac

apag

al A

rroyo

.c E

ffici

ent a

nd s

horte

r way

to tr

avel

to th

e Vi

saya

s an

d M

inda

nao

regi

ons

plyin

g th

e w

este

rn s

eabo

ard.

d   Also know

n as Tourism Super Region. It includes M

IMAR

OPA or Region 4-B (IV-B) (excluding the provinces of Marinduque, Occidental and Oriental Mindoro), 

Rom

blon

, Pal

awan

, Bic

ol R

egio

n or Region 5 (V), Western Visayas

or Region 6 (VI), C

entra

l Vis

ayas or R

egion 7 (VII), E

aste

rn V

isay

as or R

egion 8 (VIII), C

amig

uin

of N

orth

ern

Min

dana

o or Region 10 (X), and 

Siar

gao

Isla

nd o

f Car

aga or Region 13 (XIII).

e Als

o kn

own

as “

Agrib

usin

ess

Min

dana

o” S

uper

Reg

ion.

It in

clud

es th

e Zamboanga Peninsula or R

egion 9 (IX), 

North

ern

Min

dana

o or Region 10 (X), except C

amig

uin,

Dav

ao R

egio

n or Region 11 (XI), SOC

CSKSARGEN

or

Region 12 (XII), C

arag

a or Region 13 (XIII), except Island of S

iarg

ao, a

nd A

uton

omou

s Re

gion

in M

uslim

Min

dana

o or

ARM

M.

f   To be com

posed of Regions I, II, Cordillera Adm

inistrative Region (CAR), and the northern part of the provinces of Aurora (north of baler), Tarlac (north of Tarlac City), Nueva Ecija (north of Cabanatuan City), and Zambales (north 

of Subic); as mandated by Executive Order N

o. 561 of former President Gloria Macapagal Arroyo.

g  Transport logistics system

 that will facilitate the decongestion of Metro Manila by ensuring efficient linkages between its business centers and nearby provinces.

h   Term used for the re

gion

s of

Central Luzon

, CALABARZO

N, M

IMAR

OPA

and

Met

ro M

anila

.Source: National Economic and Development Authority; and MTPDP, 2004–2010.

Appe

ndix

11

cont

inue

d

46

ADB Assistance to the Philippine Urban Sector, July 1993–June 2008

Title Date ApprovedAmount ($ million)

A. LoansMunicipal Water SupplySmall Towns Water Supply Sector ProjectRegional Municipal Development ProjectSubic Bay Area Municipal Development ProjectClark Area Municipal Development ProjectMetro Manila Air Quality Improvement Sector Development ProgramPasig River Environmental Management and Rehabilitation Sector Development ProgramMindanao Basic Urban Services SectorMWSS New Water Source DevelopmentDevelopment of Poor Urban CommunitiesSME Development SupportMicrofinance Development Program

Subtotal

B. Advisory Technical Assistance GrantsMWSS Operational StrengtheningMWSS Privatization SupportPrivate Sector Participation in Urban DevelopmentNational Urban Policy FrameworkInstitutional Strengthening Housing and Urban Development SectorCapacity Building for Regulatory Office of Metropolitan Waterworks and Sewerage SystemMetro Manila Solid Waste ManagementCapacity Building for Housing MicrofinanceCapacity Building for Housing Microfinance (Supplementary)Capacity Building, eASiA (Supplementary)

Subtotal

C. Project Preparatory Technical Assistance GrantsManila North-East Water Supply (Supplementary)MWSS Water Supply Improvement StudySmall Towns Water Supply and Sanitation SectorInfrastructure Improvement of Subic Bay Area MunicipalitiesPasig River Environmental Management and RehabilitationMetro Manila Air Quality ImprovementMindanao Urban Planning and Basic Services SectorDevelopment of Poor Urban CommunitiesMetro Manila Urban Services for the PoorDevelopment of Poor Urban Communities (Supplementary)Metro Manila Urban Services for the PoorMetro Manila Urban Services for the Poor/Cities AlliancePhilippine Basic Urban Services Sector Project

Subtotal

D. Japan Fund for Poverty Reduction GrantsOn-Site Urban Upgrading for Vulnerable Slum Communities of PayatasOff-Site and Off-City Relocation of Vulnerable Slum Communities of MuntinlupaStrategic Private Sector Partnerships for Urban Poverty Reduction in Metro ManilaSocial Protection for Poor Women Vendors in Mindanao Cities

SubtotalTotal

25 Nov 199330 Sep1996

30 Aug 199508 Dec 199715 Dec 19981 Mar 199820 Jul 2000

27 Sep 200114 Oct 200318 Dec 200329 Sep 200522 Nov 2005

199419951995199920002001

2002200220082008

1993199319941994199619971997199819992001200220052008

2000200020022002

72.0083.00

198.2037.0041.8071.0075.00

22.683.2630.5

24.03150.00808.47

0.600.580.500.150.150.80

1.251.500.100.506.13

0.050.580.100.800.800.151.000.851.000.150.700.500.857.53

1.001.003.601.006.60

828.73

ADB = Asian Development Bank, MWSS = Metropolitan Waterworks and Sewerage System, SME = small and medium-sized enterprise.Source: ADB.

Appendix 12

47

Urban Development Program Interventions: International Financial Institutions

World Bank Assists national and local governments in developing sustainable cities—cities that are livable, competitive, well governed and managed, and bankable. Four main activities in the urban sector: (i) formulation of national urban strategies, (ii) support for city development strategies, (iii) scaling-up of programs of services for the poor, and (iv) enhanced assistance for capacity building. The aim of its urban and local government strategy is to promote sustainable cities and towns by improving the lives of the poor and promoting equity, while contributing to the progress of the country as a whole. Urban development programs support four major themes: access to urban services for the poor, municipal finance, municipal governance and institution building, and other urban development.

International Finance Corporation

Supports the growth of infrastructure and the attraction of private investment by providing investment and advisory services to the private sector. Eligible for infrastructure financing are airlines, airports, buses, logistics, ports, port services, power, railways, shipping, toll services, water, and gas. Also helping local banks explore energy efficiency financing as part of its response to climate change. Through its small and medium enterprise (SME) banking initiative, developing strategic partnerships with local banks to give SMEs greater access to credit.

KfW German Development Bank

Financial cooperation focused on social and economic infrastructure, financial systems and resource protection. Three priority areas have been identified: (i) sustainable economic development, including the development of the financial sector, the private sector, and vocational training; (ii) environmental and resource protection, including forest development, sewage and waste disposal, and renewable energy; and (iii) health care, family planning, and HIV/AIDS prevention.

Australian Agency for International Development

Overall strategy is to improve prospects for economic growth, poverty reduction, and national stability. Support for infrastructure development is focused on (i) improving poor people’s access to essential infrastructure, such as water supply and sanitation, transport, and energy; (ii) assisting in the creation of enabling environments for private and public financing and management of infrastructure; and (iii) supporting human resources development, institutional strengthening, and capacity building in the infrastructure sector. Programs for infrastructure involve financing infrastructure maintenance and upgrading in poor areas; supporting communities’ effective participation in and monitoring of infrastructure investments; and providing technical and systems support to governments in planning, financing, building, and maintaining infrastructure.

United States Agency for International Development

Five main programs: (i) economic development and governance (improvements in judicial efficiency and in government policy and administration, and promotion of innovations in trade and investment); (ii) energy and environment (energy sector performance, environmental governance, and urban environmental management); (iii) family health (capacity of provinces, cities, municipalities, and the private sector to provide good-quality health services); (iv) conflict reduction (consolidation of peace in Mindanao through the development of needed economic infrastructure, expansion of economic opportunities in conflict-affected areas, and improvement of governance and social services); and (v) education (access to education and livelihood).

Canadian International Development Agency (CIDA)

Technical assistance to local governments to improve the delivery of services to the poor and enhance the participation of local communities in setting development plans in areas such as investment, taxation, and social services. The objectives of CIDA’s strategy are to (i) foster efficient, responsive, transparent, and accountable governance at all levels; and (ii) support the development of sustainable SMEs that create more, better, and decent jobs for both men and women. A major technical assistance initiative is the local government support program (local economic development component).

Swedish International Cooperation Agency

Development cooperation focused on democratic governance and greater respect for human rights, and natural resources and the environment. Support is provided mainly through major multilateral donors, including the World Bank and United Nations bodies, and through Swedish agencies and institutions in contract-financed technical cooperation. No infrastructure projects in the Philippines have been funded except for technical assistance and policy reforms relating to water and sanitation, and environmental management.

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Appendix 13

48 Appendix 13

European Union Development cooperation covers broad-based equitable growth, capacity and institution building, private sector development, social services, environment, good governance, and human rights. There is no specific strategy for urban development, and development cooperation policy. International action generally supports the attainment of the Millennium Development Goals.

Japan International Cooperation Agency

Official development assistance loans supporting economic growth focused on (i) strengthening economic structures and helping overcome bottlenecks to sustainable economic growth (transport projects, such as roads and bridges, railways, air transport, ports, maritime and shipping projects; energy sector projects; and development finance); (ii) reducing poverty and regional disparities (regional development activities, agriculture, irrigation, fishing industry, fishing ports, water supply and sewerage); (iii) environmental protection and disaster mitigation, including flood control; and (iv) human resource development (elementary and secondary education). Policy-based financing is provided in five thematic areas: environment, energy and natural resources, international business development, international finance, and education. Eligible sectors are roads and bridges, railways, ports and maritime shipping, air transport, power and energy, development finance, regional and industrial special economic zones, agriculture, water and sanitation, environment, flood control,  and education.

Korean Export-Import Bank

Targets projects to reduce poverty and promote economic development, specifically rural development, education, infrastructure (roads, bridges, power plants, airports, and railways), health, and environment projects.

Government of the People’s Repbublic of China (PRC)

Enhances cooperation. Projects funded included the North Rail and South Rail projects under Philippines–PRC bilateral agreements, 1975–2007.

Asian Development Bank

Improving the urban environment through capacity development and financing focused on water and sanitation, solid waste management, urban transport, urban renewal and basic services for the poor, and multisector interventions.

Source: Asian Development Bank.

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Philippines: Urban Sector Assessment, Strategy, and Road Map

This publication documents the current assessment and strategic investment priorities of the Government of the Philippines and the Asian Development Bank (ADB) in the country’s urban sector. It highlights sector performance, priority development constraints, government plans and strategies, past ADB support and experience, support of other development partners, and future ADB support strategy.

The road map covers four main support areas: (i) preparation of a loan for the Philippine Solid Waste Management Sector Project in 2012 or 2013; (ii) future technical assistance (TA) and lending activities—to be discussed with the government—that may include a sector project for markets and transport terminals, which could further include land and sea transport facilities; (iii) projects of the Urban Development and Water Division of ADB’s Southeast Asia Department, which may suppo rt flood control and the efforts of communities to mitigate the effects of climate change; and further (iv) stand-alone policy and advisory TA or capacity development TA, to promote performance-oriented governance and overall strengthening of urban sector agencies, depending on requests from the government.

About the Asian Development Bank

ADB’s vision is an Asia and Pacific region free of poverty. Its mission is to help its developing member countries reduce poverty and improve the quality of life of their people. Despite the region’s many successes, it remains home to two-thirds of the world’s poor: 1.8 billion people who live on less than $2 a day, with 903 million struggling on less than $1.25 a day. ADB is committed to reducing poverty through inclusive economic growth, environmentally sustainable growth, and regional integration.

Based in Manila, ADB is owned by 67 members, including 48 from the region. Its main instruments for helping its developing member countries are policy dialogue, loans, equity investments, guarantees, grants, and technical assistance.

Printed in the Philippines

Urban Sector Assessment, Strategy, and Road Map

Philippines

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