Philippines

FY 2001 Program Description and Activity Data Sheets

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FY 2001 Program USAID intends to maintain its core institutional capacities in economic growth, environment, population and health, and democracy while focusing this capacity more narrowly on the obstacles to sustainable growth identified above. In particular, the Mission intends to end its stand-alone democracy programs and instead, integrate efforts to strengthen democracy and governance into all of its economic growth, health and environment activities. The Philippines has already achieved a greater degree of democratization than many other developing countries, and USAID democracy professionals consider the Philippines one of the Agency's success stories. The Mission intends to capitalize on its long experience and expertise in local governance and citizen participation in the Philippines by integrating best practices in these areas into the entire Mission program portfolio. In addition, the Mission will phase out programs specifically targeted at the island of Mindanao and instead focus on programs capable of producing national-level impacts. USAID's economic development program in Mindanao has been a model of success and achievement in an area beset with poverty and civil strife. The Growth with Equity in Mindanao (GEM) activity in particular has received worldwide attention. As a result of the success of GEM and other USAID programs, the gap between living standards on Mindanao and other areas of the Philippines has been significantly narrowed, and the prospects of a return to past inequities have been minimized. USAID now intends to focus its programming on activities that are national in scope, confident in the knowledge that the partnerships that it has established with the GOP, other donors and civil society organizations in Mindanao will continue to improve living standards on the island. Furthermore, USAID will extend initiatives pioneered by USAID in Mindanao, especially in microfinance, into other regions, creating a sustained legacy of our Mindanao program. The Mission will continue to implement its high priority economic policy assistance activities, focusing on the areas of infrastructure privatization and regulatory policy, international trade and investment policy, and competition legislation and policy. Learning from the Asian financial crisis, USAID will strengthen and deepen economic governance activities that promote transparency and combat corruption. Program activities will seek to help the Philippines keep pace and surpass its neighbors as more and more of them adopt reforms that promise to make them more competitive in the world marketplace. Mission activities will help the Philippines to implement rules-based trading associated with the World Trade Organization (WTO), better exploit the potentials of trading networks in supply chains, foster the more productive use of information technology, and overcome problems associated with trade-related human development issues (such as labor and environmental standards) which promise to complicate relationships between trading partners. Since experience has shown the delivery of health services by the central government has not produced adequate results, the Mission has shifted the focus of its population program to strengthening the capacity of the private sector and local governments to deliver family health and reproductive health services. USAID will foster the development and sustainability of the Friendly Care Foundation Inc. (FCFI), a private-sector non-profit foundation. FCFI will provide financially sustainable, demand-driven family planning, family health, and reproductive health services to lower-middle and middle-income groups. USAID has redirected its public-sector population and health activities toward the poorest sector of the population and is concentrating on improving the quality of service delivery at the local level. The program will promote health sector reform by focusing on the improvement of district health administration, local procurement, drug distribution, and hospital management. In addition, the program will address issues related to fiscal autonomy, and the expansion and augmentation of the social insurance system. The program to combat HIV/AIDS and infectious diseases will focus on surveillance and education activities at the local level. In environment, USAID will build on its accumulated knowledge and experience to develop policies and tools needed for integrated watershed management. This represents a natural and incremental evolution of existing programs in coastal resources management, forest management, and industrial pollution, and is a carefully targeted response that will permit USAID to continue to promote the development of technical skills and political will to protect the natural environment in the face of reduced funding levels. USAID will continue efforts to mitigate greenhouse gases by promoting the use of cleaner fuels, energy efficiency, and encouraging the adoption of improved policies, in particular, legislation to restructure the power sector and privatize the National Power Corporation (NPC). Given that recent analyses indicate the Philippine transportation sector now produces as much atmospheric carbon as the power sector, USAID intends to initiate work to mitigate mobile emissions in FY 2001 if funding becomes available. In addition to the above program, USAID/Philippines provides technical, financial, contracting, administrative, and legal support services to various USAID presence and non-presence programs in the East and Southeast Asia region, including Mongolia, Vietnam, Thailand, Cambodia, Laos, and Japan. The Mission also supports the regional offices of the Regional Inspector General, the Office of Foreign Disaster Assistance, and the U.S.-Asia Environmental Partnership, which are located in Manila and the Office of Transition Initiative office in southern Philippines. ACTIVITY DATA SHEET PROGRAM: Philippines TITLE AND NUMBER: Accelerate the Economic Transformation of Mindanao, 492-001 STATUS: Continuing PLANNED FY 2000 OBLIGATION AND FUNDING SOURCE: $2,500,000 DA PROPOSED FY 2001 OBLIGATION AND FUNDING SOURCE: -0- INITIAL OBLIGATION: FY 1995 ESTIMATED COMPLETION DATE: FY 2001 Summary: Mindanao Island has more than a third of the landmass of the Philippines and is home to one-fourth of the country's population. Indicators show the quality of life in Mindanao is well below the national average. Nevertheless, Mindanao has the potential for substantial and accelerated economic growth. To expand participation of lower-income groups in productive enterprises, USAID is implementing an aggressive, broad-ranging enterprise development program to facilitate maximum participation of small farmers, fishers, and small and microentrepreneurs in the economy. This economic transformation requires an improved trade and investment environment. Thus, USAID is helping Mindanao's leaders identify and modify governmental policies to increase prospects for the island's continued economic progress. The program helps leaders assure appropriate levels of public infrastructure funding and facilitate private investment. USAID also helps banks and credit unions to develop their capacity to profitably provide banking services to small and microenterprises. To promote equity and solidify the recently concluded peace agreement between the government and the Muslim community, USAID is intensifying assistance to Mindanao's Muslims with transition programs for ex-combatants. The program contributes directly to the agency's economic growth objectives. The program helps implement directly the following FY 1999-2001 U.S. Mission Performance Plan goals: (a) promote Philippine economic development that facilitates equitable growth and increased economic opportunity; (b) reflect humanitarian values by alleviating suffering during crises and by assisting those afflicted by social marginalization; and (c) foster ties to Philippine institutions to promote U.S. interests. Key Results: Due to the Asian financial crisis and adverse weather conditions (i.e., El Niņo), progress was mixed during 1998. The total value of higher value products (i.e., all manufactured goods, all processed agricultural goods, all agricultural products except rice, corn, and fresh coconut) shipped from Mindanao to either foreign or domestic markets reached only 70% of the target of $4.4 billion. Investments generated (from USAID-supported investment promotion/acquisition efforts) were only some 30% of target. The number of marginal farm and fishing families initiating commercial-level production of more lucrative products as a result of USAID-supported activities exceeded target by a substantial margin. While 10,600 families were targeted, more than 13,000 initiated production, including 2,200 former Moro National Liberation Front (MNLF) combatants through the Emergency Livelihood Assistance Program (ELAP). The number of microenterprises gaining access to bank financial services exceeded the target. While it had been hoped that a total of nine banks would have added 5,000 microenterprise clients in 1998, the number of new microenterprise clients of these banks grew by 5,400, more than half of which are women. Performance and Prospects: Good progress has been made toward the activity objective since USAID began focusing economic growth resources on Mindanao in the early 1990s, and especially since the GEM program was initiated in 1995. GEM has promoted and facilitated trade and investment with significant results. The period has seen sustained increases in annual investment levels, number of jobs, value of exports, and production of higher value products. The percentage of people living below the poverty line dropped from 56% in the early 1990s to 50% in 1997. There has been a major expansion of public infrastructure. A peace agreement reached with the principal Muslim separatist organization on the island has improved economic prospects. USAID has taken the lead in devising new programs to help former combatants learn to make a living. USAID, in partnership with the GOP and other major donors, has contributed to all those developments. However, two critical assumptions made with respect to the achievement of performance targets in 1995 have not been borne out: 1) that there would be sustained economic growth at the national level; and 2) that there would not be any more than the "normal" level of natural disasters. The impact of the Asian financial crisis and El Niņo, both of which hit Mindanao in 1997 and lasted into 1999, invalidated these assumptions. Performance was mixed in 1998, and the economy so far has not recovered fully from the financial crisis. However, estimates for 1999 for the four indicators show this year's targets are being met. The total value of higher value products (i.e., all manufactured goods, all processed agricultural goods, all agricultural products except rice, corn, and fresh coconut) shipped from Mindanao to either foreign or domestic markets is estimated to amount to $3.1 billion, approximating the revised target of $3.2 billion. Investments generated (from USAID-supported investment promotion/acquisition efforts) are estimated to amount to $100-$150 million as compared with the target of $150 million. The number of marginal farm and fishing families initiating commercial-level production of more lucrative products as a result of USAID-supported activities is estimated to amount to 10,000-12,000, compared with the target of 10,600. The number of microenterprises gaining access to bank financial services estimated at 9,000 exceeds the target. The economic rebound expected in 2000 will enable Mindanaons to benefit from the human and financial capacity USAID is helping them to develop. USAID training and market linkages have given farmers' groups (including former combatants) and microentrepreneurs the skills to seek out market opportunities. USAID has also assisted in bringing critical policy reforms, such as consolidation and market-determined pricing of government credit programs, increased access of microentrepreneurs to the formal financial sector, and lower tariff levels for essential agricultural inputs. In FY 1998, USAID initiated an innovative institutional development program for microfinance activities in the formal financial sector. USAID is expanding its transition assistance programs to Muslim ex-combatants (which were initiated in FY 1997 with funding from the Office of Transition Initiatives). More than 4,000 former combatants of the Moro MNLF have received substantial assistance in initiating and expanding agriculture or aquaculture production activities. In FY 1999, USAID/Philippines funding expanded the program with the goal of helping an additional 7,000 unemployed MNLF ex-combatants to become peaceful, productive farmers able to contribute significantly to sustaining peace in Mindanao. During FY 2000 and FY 2001, USAID expects a significant expansion of trade and investment transactions; a major increase in the number of microenterprises accessing formal sector financial services; an additional 7000 former combatants "graduating" from the ELAP program with the skills needed to make a living from agriculture; and some 25-30 key business support organizations in Mindanao effectively providing a full range of needed services for their members and clients. Possible Adjustment To Plans: All USAID field activities will be completed by FY 2001, but the Mission will begin to integrate the policy component of the GEM program into its economic growth strategic objective, "A More Stable and Competitive Economy (492-002)," at the end of FY 2001. The Mission will also strengthen the capability of business support organizations to enable them to continue activities after completion of the USAID program. Other Donor Programs: Following USAID's lead, major donors all now make Mindanao a major focus. The WB has placed $30 million for the Mindanao Rural Development Program, and together with the Organization of Petroleum Exporting Countries, contributed $10 million each to the Social Fund for Mindanao. The United Nations Industrial Development Organization contributed $8.6 million for income and employment generation of small and medium enterprises and Italy has a similar activity amounting to $8 million. Japan, the WB, and the ADB focus most of their assistance on infrastructure and all coordinate with USAID in selecting projects. In the case of the WB's small infrastructure fund focused on the Muslim community, USAID collaboration is much greater. In that program, USAID supplies much of the needed engineering design work. USAID also has joined with the principal donors in a Mindanao Working Group, chaired by the United Nations Development Program (UNDP), through which donor activities are discussed and opportunities for cooperation identified. Principal Contractors, Grantees, or Agencies: Louis Berger International Inc. is the principal contractor for the major program in Mindanao, the GEM Program, and the major GEM subprograms - ELAP, and the Special Zone of Peace and Development Accelerated Enterprise Development Program. Chemonics Inc. is the contractor for the Microenterprise Access to Banking Services - Mindanao Program. The World Council of Credit Unions supports the Credit Union Empowerment and Support Program. Selected Performance Measures: Baseline Target (1998) Actual (1998) Target* (1999) Target (2000) Target (2001) Value of high value products shipped from Mindanao (US$ Billion) 2.8 (1995) 4.4 3.1 3.2** 5.2 5.4 Families initiating commercial production of more lucrative products 9,300 (1996) 10,600 13,472 10,600 10,600 10,600 Level of USAID-facilitated private investment (US$ Million) 30 (1995) 300 88 150** 150 150 Number of microenterprises and small producers receiving financial services from formal institutions 2,000 (1995) 5,000 5,400 8,000 12,000 16,000 * Preliminary estimate for 1999 data follow: Value of high value products shipped from Mindanao (US$ Billion) $3.1 ** Targets for 1999 were revised in the last Results Review & Resource Request (R4) due to effects of the Asian financial crisis. U.S. Finance Table (Microsoft Excel) ACTIVITY DATA SHEET PROGRAM: Philippines TITLE AND NUMBER: A More Stable and Competitive Economy, 492-002 STATUS: Continuing PLANNED FY 2000 OBLIGATION AND FUNDING SOURCE: $200,000 DA PROPOSED FY 2001 OBLIGATION AND FUNDING SOURCE: $5,600,000 DA; $5,000,000 ESF INITIAL OBLIGATION: FY 1995 ESTIMATED COMPLETION DATE: FY 2004 Summary: USAID's goal for this program is to create jobs and reduce poverty in the Philippines through a more stable, competitive economy, and to contribute to more open trade and greater financial stability in East Asia. The strategy focuses on reforms that increase openness and competition in the economy, stabilize and deepen the financial and fiscal sectors, and improve transparency and probity in economic governance. To increase openness and competition, USAID is promoting reduction of tariffs and other barriers to international trade, and increased competition in domestic industries, such as transportation and communications. To stabilize and deepen the financial and fiscal sector markets, a key priority in the wake of the financial crisis, USAID is strengthening prudential oversight in the banking sector and capital markets, and promoting institutional development in the securities markets. To improve mobilization and allocation of fiscal resources, USAID is supporting improvement of tax policy and tax administration, and rationalization of intergovernmental finance. To improve economic governance, USAID is helping to enhance transparency of economic institutions and reform commercial law, and is pursuing an anticorruption program in tax administration, customs, and procurement reform. The program contributes directly to the agency's economic growth objectives. The program helps implement directly the following FY 1999-2001 U.S. Mission Performance Plan goals: (a) maintain Philippine support for an open trade and investment regime despite the financial crisis and promoting market reforms that strengthen economic growth and provide opportunities for American businesses and workers; (b) promote Philippine economic development that facilitates equitable growth and increased economic opportunity; and (c) foster ties to Philippine institutions to promote U.S. interests. Key Results: Overall performance in 1998 was on track, as two of the four key indicators exceeded targets, while the other two fell below target mainly as a result of the Asian financial crisis. Due to a doubling of interest rates and drastic reductions in international loans, the volatile ratio of Gross Domestic Capital Formation to Gross Domestic Product (GDP) fell from 26.6 % in 1997 to 22.1 % in 1998. The slowdown in growth and a 17% decline in imports reduced tax revenues from 16.8% of GDP to 15.6%. However, exports continued to rise and Philippine banks and firms continued to service debts normally. Thus the trade openness indicator continued to be substantially better than targeted. Despite some upward adjustments in tariffs, the GOP simplified the tariff schedule and reduced the estimated effective protection rate from 21.3% to 19%, also bettering the target for 1998. In 1999, performance vis-ā-vis the indicators is expected to continue the pattern of 1998: trade protection will continue to shrink while investment will recover only slightly from Asian financial crisis lows, and tax effort will continue to reflect lack of progress in reforming tax administration. Performance and Prospects: After a generation of lagging behind its newly industrializing neighbors, the Philippines achieved political and economic stability in the early 1990s. Policy makers, businessmen, and ordinary citizens began to see clear demonstrations of the benefits of openness to international trade and increased domestic competition. Evidence may be found in the phenomenal export growth of assembled electronics products; the opening to private investment of electrical power generation; the opening of telephone service to competition; and reduction in poverty incidence by approximately 1% of the population per year between 1991 and 1997. The 1997-99 Asian financial crisis and El Niņo, however, brought a pause in Philippine growth. The transition to a new GOP administration that occurred during this pause led to re-examining the benefits of liberalization. Fortunately, the Philippines has not reversed its steady course toward trade and investment liberalization. While economic progress has slackened, the Philippines has not reversed its course. First semester performance for 1999 continued to show the pattern seen in 1998: (1) trade protection continued to shrink as hoped, while (2) volatile investment recovered only slightly from Asian financial crisis lows, and (3) tax effort continued to reflect lack of progress in reforming tax administration. To further increase openness and competition, USAID continues to support compliance with WTO commitments. Our assistance helped improve anti-dumping and countervailing duty laws in 1999 and will support the GOP's regular, triennial revision of its tariff-reduction program in 2000. Policy advocacy supported by USAID contributed to the partially opening of the retail-services sector to foreign investment in late 1999. In telecommunications, USAID is helping develop regulations for interconnection, which should be adopted in 2000. Assistance to open aviation and port services to greater competition should bear fruit in 2000 and 2001. USAID will help expand the use of competitive tendering for infrastructure projects through the revolving loan facility established in 1999. Legislation for intellectual property rights will continue to advance, and USAID will support analysis and advocacy for overall competition policy and external competitiveness. Liberalization of grain marketing is another target for 2000 or 2001. In financial and fiscal sector strengthening, USAID's support for reform of the Securities Act should succeed in the Philippine Congress in 2000, and further direct assistance to the SEC, stock exchange, and clearing corporation will build on this success. A Presidential Order crowned USAID's assistance to National Credit Council in restructuring GOP microfinance programs in 1999. USAID will follow this policy measure with assistance to ensure sustainable and increased microenterprise access to the formal financial sector, including assistance to formulate a supervisory framework for deposit-taking cooperatives. USAID in 2000 is expanding its assistance the Central Bank for strengthening banking supervision, and will add assistance for foreign-exchange risk management. In 1999, USAID helped the Department of Finance (DOF) develop policies to create a secondary market in securitized mortgages. Assistance for redesigning financial-sector taxation will be sustained through the legislation of these reforms, expected in 2000. Adoption of a road users charge to finance private road maintenance is also expected in 2000. To improve economic governance, USAID provided the analytical basis for reforms in inter-governmental fiscal allocations to local governments, and supported the design of a total overhaul of public procurement legislation, which will be followed up by advocacy and legislative assistance in 2000. USAID is playing a central role in mobilizing a multi-donor effort to renovate the problem-plagued Bureau of Internal Revenue. USAID also assisted in computerization of Value Added Tax (VAT) returns and in implementation of an import valuation system based on WTO-standard methods. USAID will continue to support training and reform in Customs administration in 2000 and 2001. New rules for adjudicating corporate recovery were adopted thanks to USAID's support in 1999, and assistance on implementation will continue in 2000. Despite its high rate of poverty, the Philippines stands as a positive example of the benefits of liberalization amid the doubts and problems generated by the Asian Financial Crisis. Further, the Philippines is poised to resume growth through increased liberalization and improved economic governance. Possible Adjustment to Plans: In response to the lessons of the Asian financial crisis, the Mission will strengthen and deepen USAID activities to improve economic governance, promote transparency, and combat corruption. By the end of FY 2001, activities that directly support institutional strengthening in support of policy implementation will be ended. This change of approach will save sufficient resources to permit USAID to continue to assist the Philippines in such areas as policy and regulatory design, legislative drafting and advocacy. Other Donor Programs: USAID's ongoing economic policy program is closely integrated into the multi-agency effort within the U.S. Embassy, furthering objectives jointly identified with State, the U.S. Trade Representative, the Export Import Bank, the Foreign Commercial Service, the U.S. Department of Agriculture, the U.S. Treasury, the Internal Revenue Service, and the U.S. Customs Service. Core U.S. interests in the Philippines and in the East Asia region grow out of strong trade and historical ties and are central to USAID's policy program. These interests include an open environment for trade and investment, financial stability, and poverty reduction. As both a U.S. Government (USG) agency and a donor, USAID plays a unique role in supporting the structural adjustment framework of the GOP and the multilateral donors. In response to the Asian financial crisis, the Government of Japan, the International Monetary Fund (IMF), the WB and the ADB have provided a large package of balance-of-payments financing of over $2 billion which supports the Philippines' macroeconomic and sectoral adjustment program. While these donors also supply a small amount of technical assistance, USAID is the principal single source of technical assistance for advocacy and implementation of economic policy reform financed by other donors' balance of payments assistance. Resident advisors assist the central bank and the DOF in managing funds provided by the WB for technical assistance on retirement pensions and bank supervision. USAID also financed a workshop on tax administration for the IMF and the Bureau of Internal Revenue. USAID's technical assistance is also helping the ADB design proposed grains-markets reform. In this way, USG resources provided to these multilateral facilities are also being used with greater effect. Grants from USAID also support private business and trade groups' contributions to the reform effort. Principal Contractors, Grantees, or Agencies: USAID's activities are being implemented through contracts with the U.S. Customs Service, the U.S. Bureau of Census; Development Alternatives, Inc.; the Harvard Institute for International Development; PricewaterhouseCoopers; The Asia Foundation (TAF); the Inter-American Management Consultancy Corporation; and the Barents Group; as well as through grants to local non-government organizations (NGOs). Selected Performance Measures: Baseline Target (1998) Actual (1998) Target* (1999) Target (2000) Target (2001) Ratio of Gross Domestic Capital Formation to Gross Domestic Product (%) 24.1 (1994) 27.0 22.1 28.0 28.0 30.0 Ratio of total exports plus imports to Gross Domestic Product (%) 74.0 (1994) 86.0 104 88.0 90.0 92.0 Ratio of tax revenues to Gross Domestic Product (%) 16.0 (1994) 19.0 15.6 20.0 22.0 23.0 Effective Protection Rate 31.0 (1994) 21.0 19.0 18.0 15.0 14.0 * Preliminary estimates for 1999 data follow (first semester only): Ratio of Domestic Capital Formation to GDP (%) 22.4 Ratio of total exports plus imports to GDP (%) 90.9 Ratio of tax revenues to GDP (%) 15.4 Effective Rate of Protection (%) 16.8 U.S. Finance Table (Microsoft Excel) ACTIVITY DATA SHEET PROGRAM: Philippines TITLE AND NUMBER: Reduced Fertility Rate and Improved Maternal and Child Health, 492-003 STATUS: Continuing PLANNED FY 2000 OBLIGATION AND FUNDING SOURCE: $14,000,000 DA; $3,700,000 CSD PROPOSED FY 2001 OBLIGATION AND FUNDING SOURCE: $17,000,000 DA; $4,000,000 CSD INITIAL OBLIGATION: FY 1995 ESTIMATED COMPLETION DATE: FY 2004 Summary: Should the current 2.3% annual population growth rate continue into the future, the Philippines' population will double by 2030. Under this scenario, the equivalent of 58% of the current population of the United States will live on 3% of its land area. This demographic situation will have grave consequences for economic growth, social welfare, and the environment. Because the population growth rate is largely fueled by high fertility, the Mission will continue its focus on the current strategic objective to reduce the fertility rate and improve maternal and child health. Recent experience has shown that the central government health service delivery model has not reduced the annual population growth rate as desired. The 1998 Demographic and Health Survey and independent assessments of USAID's program confirmed a lack of progress and limited effectiveness. The focus of USAID's population program over the next five years will be on building the capacity of the private sector and local governments to deliver family planning and health services. In mid-1999, USAID helped establish the Friendly Care Foundation (FCFI), a private sector foundation that will provide financially sustainable, demand-driven family health and reproductive health services to lower-middle and middle-income groups, estimated at over two-thirds of the total population. USAID's public sector population and health activities, mainly implemented through its Local Government Performance Program (LPP), have been redirected toward the poorest sector of the population and concentrates on improving the quality of service delivery at the local level. Building on a Department of Health (DOH) reform initiative, USAID focuses on improving district health administration; local procurement and distribution of drugs; hospital management and fiscal autonomy; and an expanded and strengthened social insurance system. Both the public and private sector programs will provide accessible, high quality, affordable, and sustainable services to their clients. These activities directly support the Agency's goal of stabilizing population growth and protecting human health as well as the FY 1999-2001 U.S. Embassy's Mission Performance Plan goal of reducing the fertility rate from 4.1 in 1993 to 3.0 in 2004. Approximately 10.9 million women and two million children under age one are the direct beneficiaries of programs supported under this strategic objective. Key Results: During 1998, while slightly exceeding its target on high-risk births, USAID did not meet its targets for total fertility rate, infant mortality rate, and contraceptive prevalence rates (all methods and modern methods). Consequently, the program was drastically restructured in 1999. Data collected in April 1999, however, shows that there has been a significant increase in contraceptive use due to a rapid rise in the use of modern methods, mainly pills. The contraceptive prevalence rate of all methods is at 49.3% and the contraceptive prevalence rate of modern methods is at 32.4%. Both are better than the expected levels. If this rate of increase continues, replacement level fertility may be achieved within five to seven years. The percentage of high-risk births decreased in 1998 and continues to do so in 1999. Performance and Prospects: The Mission's population and health strategic objective continues to make progress in increasing public sector provision of family planning and maternal and child health (FP/MCH) services targeted at the poor. The LPP's Matching Grants Program was started early in 1999 and has already recruited 40 of 67 municipalities with a population of 100,000 or over to implement FP/MCH interventions. Under this program, LPP will offer a package of technical assistance activities to municipalities and communities through regional and local teams. These activities will include family planning and MCH components. Population and Child Survival and Diseases Program (CSD) funds will be used to strengthen local government capability to deliver FP/MCH services and improve their quality of care. CSD funds will be used to implement activities in four key child survival areas: acute respiratory infection, child immunization, oral rehydration therapy, and micronutrients (including Vitamin A) supplementation and fortification. LPP will also support public/private sector partnerships in selected local governments, leading to an increasing share of DOH and local government funding as the share of USAID drops. The Mission also supports the Sentrong Sigla (Centers of Wellness) Program, a quality assurance program to improve health services at local health facilities. This program will ensure that the country's public facilities meet quality standards. The DOH recognized and awarded the first batch of 45 health facilities meeting quality standards in December 1999. By 2001, child survival interventions are projected to lower infant mortality rates as well as lower the percentage of births in high-risk groups. USAID provides technical assistance to the GOP to support implementation of health reforms needed for improved public sector provision of services for the poor. The focus of this assistance is to develop outpatient benefit packages, expand coverage, and increase the share of social health insurance as a percentage of total health spending. Because the poor shoulder most of their health costs out-of-pocket, this initiative will be of great benefit to them. USAID also assists the GOP in strengthening district hospital administration, in improving the management and fiscal autonomy of public hospitals; in introducing management reforms in logistics and budgeting; and in improving drug procurement and distribution through decentralized ordering and payment. USAID made an initial grant in August 1999 to FCFI to initiate activities. Friendly Care has hired its core personnel, developed a business plan, identified five health facilities in major metropolitan areas, and started operations in a test-marketing site. As currently planned, 190 midwife clinics now supported by USAID in the Well-Family Midwife Program and 14 private sector hospitals delivering voluntary surgical contraception services will be incorporated into the Friendly Care system. By 2001, USAID expects the number of large municipalities (at least 100,000 population) enrolled in the LPP to reach the targeted number of 67. USAID also expects FCFI to be fully operational with 154 service centers (including affiliates) providing family health and reproductive health services. Based on the 1999 Family Planning Survey, USAID is projecting an increase in the modern contraceptive prevalence rate to 34% in 2001. Possible Adjustments to Plans: None. Other Donor Programs: While USAID remains the largest donor to the National FP Program, other donors also made significant contributions. In 2000-2004, the United Nations Fund for Population Assistance (UNFPA) will contribute about $30 million to strengthen public and private sector reproductive health at national and local government levels and through selected NGOs. A combined WB and bilateral donor loan/grant program supports a five-year, $120 million Women's Health and Safe Motherhood. The DOH, clearly signaling its support for family planning, increased the Family Planning Service budget by 50% in 1998 over the 1997 allocation, and has committed to 50% annual increases up to year 2000. Principal Contractors, Grantees, or Agencies: USAID implements activities through the DOH, the Commission on Population, local governments, and nongovernment organizations (local and U.S. PVOs and private commercial sector entities) involved in the Philippine National Family Planning Program. Major contractors include Management Sciences for Health, John Snow Inc., the Futures Group, the Population Council, Association for Voluntary Surgical Contraception, John Hopkins University, Macro International, Deloitte Touche, and FCFI. Selected Performance Measures: Baseline* Target (1998) Actual (1998) Target** (1999) Target (2000) Target (2001) Total Fertility Rate (TFR) 4.1 (1991) 3.5 3.7 3.6 3.5 3.4 Infant Mortality Rate (IMR) 35.0 (1990) 33.0 35.0 34.0 33.0 33.0 Contraceptive Prevalence Rate (all methods) 40.0% (1993) 50.0% 47.0% 48.0% 50.0% 51.0% Contraceptive Prevalence Rate (modern methods) 25.2% (1993) 32.7% 28.0% 29.0% 33.0% 34.0% Percent of births in high-risk groups 62.4% (1993) 58.0% 57.0% 56.0% 55.0% 54.0% * Baseline data from the Demographic and Health Survey ** April 1999 survey data follow: Contraceptive Prevalence Rate (all methods) 49.3% Contraceptive Prevalence Rate (modern methods) 32.4% Percent of Births in High-Risk Groups 55.7% Targets for 2000-2001 were revised based on results of the 1999 Family Planning Survey. U.S. Finance Table (Microsoft Excel) ACTIVITY DATA SHEET PROGRAM: Philippines TITLE AND NUMBER: Threat of HIV/AIDS and Selected Infectious Diseases Reduced, 492-007 STATUS: Continuing PLANNED FY 2000 OBLIGATION AND FUNDING SOURCE: $3,500,000 CSD PROPOSED FY 2001 OBLIGATION AND FUNDING SOURCE: $5,900,000 CSD INITIAL OBLIGATION: FY 1995 ESTIMATED COMPLETION DATE: FY 2004 Summary: The Acquired Immunodeficiency Disease Syndrome (AIDS) has become a major problem in many parts of Southeast Asia. Fortunately, the Philippines has been spared an epidemic until now, despite an active sex industry and a sizable population of injecting drug users. The country can still prevent an extensive spread of Human Immunodeficiency Virus (HIV) and sexually transmitted infections in the general population if individuals engaging in high-risk behaviors adopt risk-reducing practices. To that end, the Government of the Philippines (GOP) and USAID have designed a program to control HIV/AIDS transmission by institutionalizing public and private sector mechanisms to monitor HIV prevalence and, through education programs, encouraging behaviors among target groups that reduce individual risk of becoming infected with or transmitting sexually transmitted disease (STDs) and HIV. The HIV/AIDS program will primarily benefit individuals who engage in high-risk behaviors that significantly increase their chance of HIV/AIDS infection. The general population will also benefit from the program since increased public awareness about HIV/AIDS will prevent a rapid increase in HIV/AIDS infections, thereby protecting the health of the general public. Infectious diseases continue to be the leading cause of morbidity and mortality in the Philippines. Prevention and control of infectious diseases of major public health importance (tuberculosis, malaria, and dengue) have become key goals for the Department of Health (DOH). In 1999, the GOP and USAID, working closely with the U.S. Centers for Disease Control (US-CDC), developed a new activity to respond to a dengue epidemic and the emergence of resistant varieties of tuberculosis and malaria in epidemic proportions. This activity complements USAID's Global Infectious Diseases Strategy and the Mission's ongoing HIV/AIDS surveillance activities. USAID's beneficiaries under this activity are the general population of the Philippines. Activities under this special objective directly support the FY 1999-2001 U.S. Mission Performance Plan goal of reducing the threat of HIV/AIDS and other selected infectious diseases. Key Results: HIV prevalence rates among the target population of sex workers and drug users have remained below 3% in all of the 8 HIV sentinel surveillance sites, indicating that for now there is little threat of a major epidemic among the general population. The 3% level is critical because international experience shows that rates higher than 3% among high-risk population indicate that a more rapid spread of HIV into the general population might be occurring. Performance and Prospects: Using funds from the Child Survival and Diseases Program Fund (CSD), USAID assists the DOH, NGOs, and other government organizations to implement a national sentinel surveillance system to monitor transmission of the disease and incidence of risk behaviors among target groups; develop and implement effective communication and behavioral change programs about AIDS prevention for target groups; and establish model sites for STD care and management. USAID also supports analysis, dissemination of survey results, and advocacy for policy and community interventions to promote STD/HIV prevention. Survey results in April 1999 show that HIV seroprevalence rates among the sentinel groups of registered female commercial sex workers have remained below 3% in all eight surveillance sites. Survey results also show an increase in condom usage rates for both men and women in the target groups, as well as an increase in knowledge about behaviors that reduce HIV transmissions, although high levels of risk behavior continue among the injecting drug users and give cause for concern. Government-NGO educational activities on HIV/AIDS/STD have been established, including public service announcements, support for 100% condom use in entertainment establishments, and completion of a feasibility study to promote social marketing of STD drug kits. Implementing Rules and Regulations for the AIDS Law that provides for an "AIDS Watch" to carry out surveillance are in place. Efforts to address sustainability issues, especially with respect to local governments raising revenues for STD/AIDS programs and establishing benchmarks to measure progress toward institutionalization, are also being put in place. Prospects are good that HIV prevalence rates for target groups will remain well below 3% through the year 2001. Infectious diseases are the focus of a new initiative. The DOH and the US-CDC are planning joint efforts to strengthen government capacity to identify and reduce the threat of leading infectious diseases, including multi-drug resistant strains. As with the prevention and control of HIV/AIDS, funds from the CSD account will be used to support activities to strengthen the surveillance capacity of all levels of the health system and to strengthen the capacity of local governments to prevent and control tuberculosis, dengue and malaria. Information generated by epidemiological surveillance will provide a basis for decision-making by local government officials as they allocate funds, manage and implement activities to combat tuberculosis, malaria and dengue. By 2001, USAID expects a functioning epidemiological surveillance system in selected sites, as well as a strengthened capacity of health workers to manage and prevent selected infectious diseases. The impact of these activities will be measured by the reductions in the number of cases and deaths resulting from these diseases among the target population. Possible Adjustments to Plans: None. Other Donor Programs: USAID continues to be the largest contributor to the Philippine National AIDS/STD Prevention and Control Program, although other donors are now showing a high level of interest in the program. Under the US-Japan Common Agenda, USAID provides technical assistance to the HIV sentinel surveillance system, while Japan provides laboratory, office, and communications equipment. Both Japan and the Netherlands contribute STD drugs that complement USAID-supported training activities on STD syndromic case management. USAID's focus on HIV/AIDS education for high-risk groups is complemented by other donors' educational activities aimed at the general population. Both AusAID and the European Union (EU) support NGO projects to strengthen community-based responses to AIDS. The WB and UNFPA are supporting programs to diagnose and treat STDs. Various United Nations and multilateral agencies (with UNAIDS as a coordinating body) support national government activities on HIV/AIDS prevention. Principal Contractors, Grantees, or Agencies: USAID implements the program through the Department of Health, selected local government units, local NGOs, the US-CDC, the World Health Organization, and the Program for Appropriate Technology in Health. Selected Performance Measures: Baseline* Target (1998) Actual (1998) Target* (1999) Target (2000) Percent HIV seroprevalence rate among the sentinel target risk group - registered female commercial sex workers <1.0% (1993) <3.0% <3.0% <3.0% <3.0% *Source: Field Epidemiology Training Program - Department of Health National HIV Sentinel Surveillance Surveys. ** Actual FY 1999 data follow: Percent HIV seroprevalence rate among the sentinel target risk group - registered female commercial sex workers <3.0% U.S. Finance Table (Microsoft Excel) ACTIVITY DATA SHEET PROGRAM: Philippines TITLE: Environmental Resource Management Improved, 492-004 STATUS: Continuing PLANNED FY 2000 OBLIGATION AND FUNDING SOURCE: -0- PROPOSED FY 2001 OBLIGATION AND FUNDING SOURCE: $2,500,000 DA INITIAL OBLIGATION: FY 1995 ESTIMATED COMPLETION DATE: FY 2001 Summary: The Philippines is probably the richest country in the world in terms of biodiversity and unique plant and animal species per unit area. Nearly one-third of the country's 12,000 plant species are endemic (found nowhere else on earth), and its coastal waters host more than 500 of the world's 700 known corals. This wealth is under grave threat; only 30% of coral reefs, 50% of mangrove forests and 10% of old growth forests remain intact. Nowhere else on earth is habitat conservation more urgent. Managing these natural resources is even more critical now because they provide for the food security of the Filipino people. The Asian financial crisis has highlighted the fact that USAID's coastal/marine and forestry resource management activities play a key role in poverty alleviation as well as biodiversity conservation. The new environment strategy, recently approved by USAID/Washington, calls for an integrated resource management approach to watersheds and biodiversity conservation. Major features include the wise use of biodiversity as a foundation for rural economic stability, sustaining the momentum for more effective environmental governance, brokering solutions that alleviate resource management conflicts, and greater use of market-based instruments as an analytical and implementation tool to refine institutionalized policies. In addition, the new strategy will build on accomplishments and lessons learned from past and ongoing programs in forestry, coastal and industrial management. The program directly supports the Agency goal of "protecting the environment" and the 1999-2001 Mission Performance Plan goal of "reducing Philippine environmental degradation and promoting conservation of its natural resources and biodiversity." Key Results: Three key intermediate results were identified to achieve USAID's environment objective: improved coastal resources management, cleaner industrial production in coastal areas and improved forest resources management. Indicators to measure progress include: (1) kilometers of shoreline and hectares of forest where improved management is being implemented; (2) percentage change of fish abundance and coral reef cover inside and adjacent to marine sanctuaries (biophysical indicators); and (3) percent reduction of pollutants in exposure pathways. With respect to the first indicator, in 1998, 170 kilometers of coastlines (compared to a target of 40) were counted when the following criteria for improved coastal resources management were locally implemented: (a) annual local government budget for coastal resources management (CRM) was allocated; (b) resources management organizations were formed and active; and (c) best CRM practices were being implemented. A total of 535,000 hectares of forest (compared to a target of 375,000 hectares) were counted when the following criteria were met: (a) forest lands were no longer open access areas, with clearly defined boundaries under community management and control; (b) forest area and total tenured area under forest cover have expanded; (c) little or no destructive practices, such as illegal logging were taking place; (d) a management plan affirmed by the Department of Environment and Natural Resources (DENR) was being implemented; and (e) an environmental monitoring plan using environmental indicators (i.e. incidence of fire, illegal logging) was being implemented by communities, with DENR and local government counterparts. Performance and Prospects: Overall, USAID's performance exceeded targets for 1998, with national level impact in several areas. Targets are expected to also be exceeded in 1999. Forestry Resources Management (FRM). At the end of September 1999, USAID graduated its extremely successful activity aimed at reducing deforestation and soil erosion, and improving forest management for the benefit of rural people through promotion of community-based forest management. The FRM program reported that 587,000 hectares of forestlands are under better management by communities, exceeding the target by 87,000 hectares. Overall, through USAID's leadership, about 3.8 million hectares of forestland, or 50% of the country's remaining forest cover, are under community management. Peoples' organizations representing these communities have federated into a 2-million strong organization that will help sustain this initiative. Local government investments in community forestry have also increased, and for the first quarter of 1999, 8 million pesos were earmarked by local governments for FRM activities. This effort has been institutionalized in the DENR. Last year the government placed more than 1 million hectares of forest land under community based forest management agreements on its own, without USAID assistance, but according to standards FRM program had helped put in place. Coastal Resources Management (CRM): USAID is at the mid-point of this extremely influential effort to promote community-based, integrated coastal/marine resource management. Through its mix of successful "best practices" in the field, policy support, and awareness campaigns, LGUs, community groups and President Estrada has made CRM a national priority and the President proclaimed May as Month of the Ocean. The GOP also decided to institutionalize CRM efforts within the DENR and to merge its own program with USAID's Coastal Resources Management Project (CRMP), thereby virtually assuring sustainability of successful USAID efforts. The CRMP has achieved "best practices in CRM" along 719 kilometers of shoreline, exceeding its target of 670 kilometers at the end of 1999. Coral cover inside marine sanctuaries improved with a 6% change compared to the baseline despite the La Niņa. Fish abundance inside sanctuaries established under CRMP also improved very significantly at an average of 858% change, while in areas adjacent to sanctuaries, an increase of 785% in fish abundance was noted. This clearly indicates that degradation of coral cover and depletion of marine resources are being reversed. Twenty-nine LGUs are now implementing CRM best practices, a result of USAID's leveraging efforts with the League of Municipalities of the Philippines (LMP), which is helping to facilitate the spread of CRM best practices in other coastal areas in the country. There is also a 350% increase in local government investments in CRM, not only in CRMP's learning sites but also in other coastal areas. A more vigorous information campaign is underway and is expected to expand CRMP's spread effect. Furthermore, CRMP technical lessons learned will be spread to other municipalities. Industrial Initiatives for Sustainable Environment (IISE): Though similar impact and sustainability are foreseen for this initiative, implementation has just begun. This activity will take the lead in the Philippines in reducing industrial pollution in sensitive marine environments. IISE will work with 400 industries in selected sectors located in four CRM coastal areas, which are expected to benefit from clean technology/environmental management (CT/EM), while protecting fragile marine resources. It is expected that private industries will participate heavily in this program, mainly because of the cost-savings resulting from CT/EM practices. Environmental Natural Resources Accounting Program (ENRAP). This highly successful campaign to promote use of market-based instruments (MBIs) in managing natural resources will end in 2000. DENR has adopted this practice, and is using it to exact sustainability-enhancing user fees, calculate penalties, prioritize investments and harness the private sector to better manage natural resource-based economic activities. Understanding of the importance of pricing natural resources is now growing, and government agencies are using MBI tools to harness private capital to insure sustainable natural resource management. Recent policy actions using environmental resource accounting (ENRA) methodology include: revision of fees for access to all natural resources in protected areas; proposed new wastewater discharge permit fees; and classification and determination of pasture fees. The Philippine government has put in place enabling policies to sustain the process, and is financing an ENRA unit in DENR with its own resources. In FY 2000-2002, USAID will bring to a close its remaining sectoral activities (coastal and industrial) and focus solely on integrated watershed management. This new activity will bring together a variety of lessons learned from other successful USAID activities, including the need to pursue support from local government units (LGUs) and other local players, opportunities to leverage resources from other donors for sustainability, and the potential for mediating resource use conflicts. Key watershed management areas are being selected to support conservation and promote food security. Design and setting of targets for this activity will be done in FY 2000, and implementation will begin in FY 2001. Possible Adjustment to Plans: USAID will combine its natural resource management and energy programs into one strategic objective in 2000. This makes sense both operationally and substantively, as global climate change is directly affected by management of the country's forests, coastal areas, and industrial sector. Global climate change is also believed to increase the frequency of weather extremes (El Niņo/La Niņa) and coral die-off (through coral bleaching), and its links to food security are therefore of real concern in the Philippines. Other Donor Programs: Natural resource management activities are being closely coordinated with initiatives of the WB, Japan, ADB, Canada, the UNDP, and Sweden. USAID will collaborate with Japan and the WB on accessing soft loan funds for coastal management activities of local governments. Many of its best practices are being adopted by two large ADB projects. The IISE Project collaborates with UNDP and US-Asia Environmental Partnership on clean production and environmental management policy initiatives. Principal Contractor, Grantees or Agencies: USAID implements activities through GOP agencies, U.S. contractors, and U.S. and local NGOs including Development Alternatives, Inc., Tetratech, Inc., Chemonics, International Resources Group, U.S. Peace Corps, and International Marinelife Alliance. Selected Performance Measures: Baseline Target (1998) Actual (1998) Target* (1999) Target (2000) Target (2001) Kilometers of shoreline where improved management of coastal resources is being implemented 0 (1996) 40 170 670 1,200 2,100 Hectares of forest where improved management of forest resources is being implemented 19,600 (1994) 375,000 535,000 500,000 Ends   Average percent change (in comparison to base years) in fish abundance inside and adjacent (x/x) to six marine sanctuaries 0/0 (1998) 0/0 0/0 10/5 20/5 30/10 Percent living coral cover inside and adjacent (x/x) to six marine sanctuaries 0/0 (1998) 0/0 0/0 5/0 10/2 40/15 Percent reduction of pollutants within exposure pathways (%) 0 (1998) 0 0 0 5 10 * Preliminary estimates of actual 1999 data follow: Kilometers of shoreline where improved management of coastal resources is being implemented: 719 Average percent change in fish abundance inside and adjacent (x/x) to six marine sanctuaries: 858/785 (see note) Note: Percentage change is very high due to the extremely low (but accurate) baseline figures for fish population inside/adjacent to the highly degraded sanctuaries. After the initial period of sanctuary protection, however, it is expected that the percentage increase will level off as fish population begins to approach the natural carrying capacity of the rehabilitating sanctuaries. Targets for future years will be revisited during the next annual Results Review & Resource Request (R4) exercise in March 2000. U.S. Finance Table (Microsoft Excel) ACTIVITY DATA SHEET PROGRAM: Philippines TITLE AND NUMBER: Reduced Emissions of Greenhouse Gases, 492-005 STATUS: Continuing PLANNED FY 2000 OBLIGATION AND FUNDING SOURCE: $5,000,000 DA PROPOSED FY 2001 OBLIGATION AND FUNDING SOURCE: $5,000,000 DA INITIAL OBLIGATION: FY 1995 ESTIMATED COMPLETION DATE: FY 2004 Summary: Unmitigated global climate change patterns have the potential to affect global ecosystems adversely, increase the severity of weather extremes (e.g., typhoons, droughts and floods) and increase associated losses in life, infrastructure, and food supplies. They also may create new ecological niches for deadly diseases. Power industry emissions are expected to double in the next 10 years as a result of the Philippines' economic and population growth. USAID's global climate change strategy in the Philippines is to mitigate greenhouse gas (GHG) emissions from the power sector by expanding the use of clean fuels and promoting more efficient generation, distribution, and consumption of electricity. These activities are facilitated through building public and private sector capacity for improved energy sector development and management. With new opportunities created by legislation that will restructure the power industry, the Global Climate Change Mitigation Program is increasing its emphasis on privatization of the National Power Corporation (NPC) and corresponding policy changes. Effective restructuring will mean increased competition and efficiency, in turn bringing lower electricity rates for consumers and reduced GHGs. The program directly supports the Agency goal of "protecting the environment" and the FY 1999-2001 U.S. Mission Performance Plan goal to "increase Philippine support for U.S. environmental objectives in international fora, and reduce Philippine environmental degradation and promote energy efficiency and conservation of its natural resources and biodiversity. " Key Results: The life-of-project (LOP) target for this program is to avoid the release of some 20 million metric tons of carbon dioxide (CO2)-equivalents into the atmosphere through use of cleaner fuels (such as natural gas, small-scale hydro, wind, solar and geothermal), and by increased efficiencies in power generation, transmission, distribution and end use. In 1998, all key results met or exceeded targets. USAID-supported activities in clean fuel resulted in 3,300 MegaWatt-hour of energy saved. Likewise, through energy efficiency measures, such as demand side management activities, USAID activities reduced the need for 412 MegaWatt-hour of fossil fuel-based energy. Capacity building tools, such as training, computer software and databases to track energy performance, and the development of information centers also contributed significantly to improved energy sector development and management. (Note: The broader measure of metric tons of CO2)-equivalents avoided through improvements in the energy sector is calculated by USAID/Washington, based on the above information.) Performance and Prospects: The performance of the energy strategic objective in 1998 was on track. Important progress was also made in 1999, particularly in restructuring and privatizing the energy sector and supporting the use of renewable energy. Policy work, supported by USAID, focused on expert technical assistance to the Government of the Philippines (GOP) in formulation of the Electricity Industry Reform Act (EIRA) to revitalize the country's power sector and attract outside investment. This legislation is now being refined in both houses of Congress and passage is anticipated this year. To support these efforts, an information, education, and communication (IEC) program was initiated through collaboration between the Mission's environment, democracy, and economic development offices. This is providing accurate and objective information to stakeholder groups on the positive impacts of restructuring and increased competition with privatization to encourage broad-based support for passage of good legislation. Similarly, a layman's primer on the energy bill was produced in partnership with the Philippines' Department of Energy and distributed to NPC employees, legislators in both houses of Congress, other agencies and numerous stakeholder groups. USAID also sponsored internationally acclaimed experts to conduct workshops with legislators to share other countries' experiences in energy sector restructuring and privatization. These workshops facilitated creation of a decision model that will help the country legislators, policy makers and regulators make more informed decisions and move good legislation forward. Once the EIRA is passed, USAID will provide technical assistance to support the successful adoption and implementation of these important reforms. This will include assisting the GOP in drafting the Implementing Rules and Regulations of the Act and strengthening the Energy Regulatory Board (ERB) as an independent and competent regulator that will implement policies to ensure a competitive and investor-friendly environment. USAID is also supporting the development of a more informed civil society (including consumer groups) in the public policy process. This will help to increase transparency in the formulation and implementation of energy policies. These activities are critical to the success of the program and will continue throughout the Strategy period. In the area of energy efficiency, USAID supported a Heat Rate Improvement Study on six power plants. It identified no cost and low cost solutions to improving efficiency. Once these recommendations are implemented, these plants can expect combined savings of US$14.5 million annually on fuel, while reducing emissions by about 600,000 metric tons of carbon dioxide (CO2)-equivalents. USAID has also convinced the ERB to mandate Demand-Side Management plans at all utilities they oversee. The Green Malls and Buildings program is helping to create awareness and disseminate information on energy efficiency, and the Malacaņang Presidential Palace is a candidate "showcase" building. USAID is also taking the lead in organizing a "Green Establishments Association" to promote use of energy efficient designs in commercial and public buildings. These will provide models for use nationwide, thus improving economic performance while reducing GHGs. It is expected that the Green Establishment Association will be fully operational by FY 2002 when USAID assistance in this area will end. With the advent of President Estrada's campaign for barangay (village) electrification, USAID's assistance in clean fuels and renewables is indeed timely since renewable energy sources, such as wind and solar, are a practical approach to off-grid rural electrification. Thanks to USAID technical assistance, the Energy Secretary has approved changes that will remove important barriers to development of renewable energy and encourage private sector investments in off-grid renewable energy. In FY 2000 and 2001, USAID will continue to work closely with other donors to help the Philippines develop the right policy context to encourage increased development and use of renewable energy. USAID also supports capacity building of partner agencies, including through the Climate Change Information Center (CCIC) at the Manila Observatory, launched at the Presidential Palace by top government officials and executives from the private sector. The CCIC is the first data hub in Asia that provides advanced electronic public access to important energy and climate change information. Possible Adjustments to Plans: If USAID continues to receive funds for greenhouse gas reduction, it will take on the challenge of reducing the Philippine transportation sector's contribution to global climate change, starting in FY 2001. Recent analysis indicates that the Philippine transportation sector now produces as much atmospheric carbon as the power sector. This issue is also directly associated with deteriorating quality of life in urban areas. Other Donor Programs: USAID technical assistance to improve energy sector policies helps provide a basis for multilateral donors to extend major energy loans to the Philippines. For example, USAID-funded technical assistance is helping the GOP meet conditionalities (in particular development of new legislation) associated with a major $300 million ADB loan program to support power sector restructuring and privatization. USAID also provided experts to a WB team exploring opportunities for expanded use of renewable energies, and USAID's current program efforts in this area are expected to contribute importantly to development of a sector loan. Similarly, USAID is coordinating with the UNDP in its assistance to Land Bank of the Philippines to encourage additional lending for renewable energy investments. Principal Contractors, Grantees or Agencies: USAID implements its activities in this area through GOP agencies, U.S. contractors, and NGOs. Major contractors include Hagler-Bailly Consulting, Inc., U.S. Department of Energy, National Renewable Energy Laboratory and the U.S. Energy Association. Selected Performance Measures: Baseline Target (1998) Actual (1998) Target (1999) Target (2000) Target (2001) Average percentage of all policy Goals in each year (%) 0 (1997) 35 35 87 93 99 Energy saved or generation avoided through clean fuels (Megawatt-hr) 0 (1997) 3,000 6,000 103,000 352,000 722,000 Energy saved through increased end-use efficiency (Megawatt-hr) 0 (1998) 400 412 1,400 4,750 5,050 No. of tools used for improved energy sector development and management 0 (1997) 140 146 240 370 400 *There are six policy goals that USAID/Philippines is trying to achieve in this program. For each there are four policy steps: policy preparation, consensus building, adoption, and implementation. Each year, progress on each policy is scored according to an index and the average percentage score is reported. U.S. Finance Table (Microsoft Excel) ACTIVITY DATA SHEET PROGRAM: Philippines TITLE: Sustainable, Self-correcting Democratic Governance Nationwide, 492-006 STATUS: Continuing PLANNED FY 2000 OBLIGATION AND FUNDING SOURCE: $800,000 DA PROPOSED FY 2001 OBLIGATION AND FUNDING SOURCE: -0- INITIAL OBLIGATION: FY 1995 ESTIMATED COMPLETION DATE: FY 2001 Summary: USAID's stand-alone democracy program will end in 2001. During the remaining period, it will continue a two-pronged strategy in local governance and civil society. The first prong strives for effective local government with broad-based participation by assisting progressive provinces, municipalities and cities. USAID assistance uses participatory mechanisms to improve local service delivery, tax collection, environmental management, and partnerships with business and national government, and helps local governments advocate for their interests through local government leagues. The second prong, the civil society strategy, focuses on effective participation of disadvantaged groups. USAID assistance to coalitions of the disadvantaged enables them to analyze and debate public policy issues and participate actively in the public policy arena. The program directly supports the Agency goal of "strengthening democracy and good governance" and the 1999-2001 U.S. Mission Performance Plan goal of "strengthening the Philippines constitutional democracy, observance of human rights and integrity of law enforcement. It also supports government and NGO efforts to strengthen the Philippines' role as the region's 'hub for the promotion of democracy and human rights', making it a model of civil society." Key Results: The performance of the Mission's democracy and governance strategic objective exceeded expectations in 1998. With the Government and Local Democracy (GOLD) project's support to local NGO coalitions, many more NGO representatives are actively participating in local government bodies and pursuing advocacy issues directly affecting their sectors. No less than 1,021 representatives were actively participating in boards and committees, exceeding the target of 750 representatives. With technical assistance provided by GOLD, the actual net amount of self-generated revenues collected by local governments in project areas amounted to 974 million pesos, far exceeding the year's target of 203 million pesos. Major policy gains of the civil society program were passage of the Anti Child Labor Act; filing of the Coconut Industry Reform Act that will convert the coconut levy fund (collected from farmers during the Marcos administration) from a private to a fully public trust fund; passage of the Comprehensive Juvenile Justice System Act; and inputs to other draft bills that will benefit the disadvantaged. Performance and Prospects: To ensure continuity of gains made under the GOLD project, specific sustainability initiatives such as support for establishment of new Centers of Local Governance (CLGs), for strengthening the secretariats of local government leagues, and strategies for collaboration with national government agencies, academe and the private sector are being adopted. For example, with GOLD assistance, six CLGs are actively providing training and other technical assistance services not only to sites previously sponsored under GOLD, but also to other local governments across the country. CLG services include training in participatory planning skills and technical assistance on opinion polling, local service delivery improvement, and investment planning. GOLD activities in support of new local governments, to be completed in six to ten months using standardized implementation strategies, are now in full swing with 34 plans for work on solid waste management, 24 for watershed management, 34 for coastal resource management, and 24 on investment planning. In local finance, there are encouraging signs of increasing revenue collections from real property taxes at six GOLD-assisted sites. The Province of Bulacan is computerizing records for real property tax assessments and collections, will make tax maps available to all citizens on the province's web page, and will share computer software for real property tax assessment and collections with other provinces. Advocacy activities for improving real property tax collections now involve schoolteachers and barangay leaders in several provinces. Five new provinces are currently being considered for GOLD support to improve real property tax collections. At the USAID-sponsored Annual Partners Conference in September 1999, NGO coalitions designed joint action plans aimed at: (1) protecting and promoting children's rights; (2) promoting transparency and accountability in governance; (3) advocating urban poor issues; (4) improving administration of justice; and (5) promoting the advancement of women. As USAID undertook efforts to increase central government transparency and accountability, a grant to The Asia Foundation (TAF) was crucial. This pioneering project will lay the groundwork for engaging private sector constituencies in the fight against corruption. Drawing on state-of-the-art research methods, progressive business networks, and a vibrant media, TAF and its partners will identify, analyze, document, and disseminate key information on corruption as it relates to doing business. USAID's three current grants on judicial reform are on track in terms of achieving an advocacy agenda through the coalition inputs to draft bills under review in the Philippines. With the integration of staff of the Office of Governance and Participation into other Mission offices and teams, best practices from democracy programs will be widely shared and adopted in activities of other strategic objectives. The GOLD Project field activities are being consolidated and will end in December 2000. Ongoing civil society grants and the GOLD activities will be managed until they are completed in 2001. Possible Adjustments to Plans: None. Other Donors' Programs: AusAID has established a funding mechanism (the Governance Facility) in their country assistance portfolio that will support local governance innovations. Likewise, multilateral donors including the WB and the ADB are initiating new programs to support good governance and introduce anti-corruption reforms. The EU is considering support for a local government disaster management activity initiated by USAID. The United Nations International Children's Emergency Fund and the International Labor Organization share USAID's interest in strengthening the local government leagues. Principal Contractors, Grantees and Agencies: The major contractor is Associates in Rural Development. Grantees include Agricultural Cooperative Development International, American Center for International Labor Solidarity, Volunteers in Overseas Cooperative Assistance, World Vision Relief and Development, CARE, TAF and several Philippine PVOs, including the Philippine Business for Social Progress, the Gerry Roxas Foundation and the Evelio B. Javier Foundation. Selected Performance Measures: Baseline Target (1998) Actual (1998) Target (1999) Target (2000) Target (2001) Number of NGO representatives actively participating in local special bodies 293 (1995) 750 1,021 1,000 1,200 See note Net amount of self generated revenues collected by target local governments 592 (1995) 203 974 254 1,400 See note Note: Activities measured by these indicators will end in December 2000. Therefore, no targets are set for 2001. Qualitative Performance Measures: Major issues addressed by NGO advocacy coalitions in 1998: Signing of Executive Order directing the liquefaction of assets acquired from the coconut levy funds & using proceeds for the coconut industry reform; Passage of law recognizing children as distinct basic sector in the GOP's social reform agenda; Appointment of coalition leaders as their sectoral representatives in key committees/special government bodies (urban poor, indigenous peoples, etc.); and Campaign for full & timely implementation of the law providing assistance to women workers in the micro and cottage industries. Preliminary estimates for 1999 data follow: Qualitative Performance Measures: Major issues addressed by NGO advocacy coalitions in 1999: Passage of the Anti Child Labor Act; Filing of the Coconut Industry Reform Act that will convert the coconut levy fund (collected from farmers during the Marcos administration) from a private to a fully public trust fund; and Passage of the Comprehensive Juvenile Justice System Act. U.S. Finance Table (Microsoft Excel)

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