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Philippines

ACTIVITY DATA SHEET

PROGRAM: Philippines
TITLE AND NUMBER: Prospects for Peace in Mindanao Strengthened, 492-010
STATUS: New
PLANNED FY 2001 OBLIGATION AND FUNDING SOURCE: $4,983,000 ESF; $1,800,000 DA
PROPOSED FY 2002 OBLIGATION AND FUNDING SOURCE: $5,000,000 ESF; $3,000,000 DA
INITIAL OBLIGATION: FY 2001     COMPLETION DATE: FY 2003

Summary: The objective of this activity is to strengthen prospects for a lasting peace on the southern Philippines island of Mindanao. Achievement of this objective will contribute, in turn, to the broader USAID objective of improving the climate for investment in the Philippines. USAID will strengthen the prospects for peace in Mindanao by reintegrating more former rebels and bringing additional members of rebel communities into the productive economy, in part by expanding microenterprise banking on Mindanao, in order to increase the opportunities for all of Mindanao's citizens to pursue peaceful, sustainable economic activities. USAID will build upon past successes to impart agriculture and fishery skills and provide initial inputs to former rebels and members of rebel communities, and encourage financial institutions to provide services to microenterprises throughout Mindanao, particularly in Muslim areas.

The security situation in Mindanao remains precarious. Although fighting between the Government of the Philippines (GOP) and the Moro Islamic Liberation Front (MILF) has declined from its height in April-August 2000. Between 100 and 200 people still are being killed each month in the ongoing conflict, which could easily escalate again. To strengthen prospects for peace, an earlier peace agreement signed in 1996 between the GOP and another rebel group, the Moro National Liberation Front (MNLF), must hold. For this to occur, more former MNLF combatants (and prospective combatants) must be integrated into the economy. USAID estimates that 13,000 former combatants and several hundred MNLF communities still need this type of assistance.

Key Results: This activity will begin in 2001. Projected key results include: (a) the number of reported incidents of armed conflict in Mindanao will decline by 20% in 2002 (from 2000 levels); (b) the number of former combatants who become successful farmers and/or fishermen increases by at least 2,000 in 2002; (c) members of at least 50 communities of former combatants will be trained in community project management techniques by 2002 and for at least 100 communities by 2002; and (d) at least 10,000 microentrepreneurs in Mindanao, including in Muslim areas, will have acquired bank loans by 2001, and at least 20,000 by 2002.

Performance and Prospects: The island of Mindanao contains more than a third of the landmass of the Philippines, and is home to one-fourth of the country's population. Although the quality of life of the people of Mindanao has historically been well below national levels, Mindanao clearly has potential for substantial and accelerated economic growth. For nearly three decades, Muslim rebel groups in Mindanao battled the Armed Forces of the Philippines to attain independence. In September 1996, the MNLF, the largest Muslim separatist group, signed a peace agreement with the GOP. The MILF, a group that splintered from the MNLF, did not sign the peace agreement, and has continued its armed conflict with the GOP. Through other, previous USAID activities, USAID has made a special effort to assist the estimated 45,000 former MNLF combatants to transition from being guerrilla fighters to being productive participants in the mainstream economy. Recent evaluations confirm that USAID programs for ex-combatants have significantly improved the lives of the participants and their families, and thus have been instrumental in keeping the peace in many parts of Muslim Mindanao. More than 13,000 former combatants already are profitably producing corn, rice, or seaweed on a continuing basis. In addition, some 378 communities where former combatants live have received production or post-harvest facilities or community infrastructure facilities. These facilities have reduced the cost of producing and marketing commodities and have increased the availability of basic amenities, benefiting an estimated 10,000 families in those communities. USAID's program to encourage Mindanao's private banks to lend to microenterprises has been so successful that banks in the rest of the country are clamoring for access to USAID technical assistance. The total number of microenterprises that gained access to financial services from banks under that program exceeded 14,000 during 2000, more than seven times the 1995 level.

The planned FY 2001 obligation is $4.983 million ESF and $1.8 million DA. The ESF will fund the assistance to ex-combatants and affected communities. The DA will fund the microenterprise program.

Possible Adjustments to Plans: As a result of the installation of a new President, Gloria Macapagal-Arroyo, in January 2001, cease-fire agreements with various rebel groups are expected in the next several months, especially with the MILF. Depending on the level of resources made available, USAID also may include some members of these subgroups in its livelihood and microfinance programs. USAID may also assist in exploring alternative local government systems and alternative conflict resolution approaches in support of the Mindanao peace process. In the latter case, it is anticipated that these activities would be funded from ESF.

Other Donor Programs: Major donors, including the World Bank, the Asian Development Bank, and Japan, all have increased their focus on Mindanao and, along with USAID, have attempted to accelerate development of infrastructure such as roads, irrigation, and ports, in Muslim areas. Australia, Canada, the United Kingdom, the United Nations Development Program and other donors have mounted programs to improve health care, local governance, and community organization. The GOP and several donors and non-governmental organizations are providing relief for people displaced by fighting. As of December 2000, about 80,000 of the 120,000 families displaced by fighting in the spring of 2000 still could not return to their homes because of the insecure situations in their areas.

Principal Contractors, Grantees, or Agencies: Contractors have not yet been determined. Philippine counterparts include the Presidential Advisor for National Development, the Southern Philippines Council for Peace and Development, and the Rural Bankers' Association of the Philippines.

U.S. Financing

(In thousands of dollars)

FY 2002 Performance Table

Philippines: 492-010

Performance Measures:

Indicator FY97 (Actual) FY98 (Actual) FY99 (Actual) FY00 (Actual) FY00 (Plan) FY01 (Plan) FY02 (Plan)
Indicator 1: 240 kms. of coastline brought under improved management NA NA NA NA NA NA 50
Indicator 2: Tons of CO2 emissions reduced per year from the power and transport sectors through the adoption of cleaner technologies NA NA NA NA NA NA TBD
Indicator 3: 300,000 hectares of forest cover maintained with 75% of this placed under community-based forest management NA NA NA NA NA NA 25,000

Indicator Information:

Indicator Level (S) or (IR) Unit of Measure Source Indicator Description
Indicator 1: IR NA NA NA
Indicator 2: IR NA NA NA
Indicator 3: IR NA NA NA

U.S. Financing

(In thousands of dollars)

  Obligations   Expenditures   Unliquidated  
Through September 30, 1999    0 DA 0 DA 0 DA
0 CSD 0 CSD 0 CSD
0 ESF 0 ESF 0 ESF
0 SEED 0 SEED 0 SEED
0 FSA 0 FSA 0 FSA
0 DFA 0 DFA 0 DFA
0 MAI 0 MAI 0 MAI
0 DCA 0 DCA 0 DCA
Fiscal Year 2000 0 DA 0 DA  
0 CSD 0 CSD
0 ESF 0 ESF
0 SEED 0 SEED
0 FSA 0 FSA
0 DFA 0 DFA
0 MAI 0 MAI
0 DCA 0 DCA
Through September 30, 2000 0 DA 0 DA 0 DA
0 CSD 0 CSD 0 CSD
0 ESF 0 ESF 0 ESF
0 SEED 0 SEED 0 SEED
0 FSA 0 FSA 0 FSA
0 DFA 0 DFA 0 DFA
0 MAI 0 MAI 0 MAI
0 DCA 0 DCA 0 DCA
Prior Year Unobligated Funds 0 DA  
0 CSD
0 ESF
0 SEED
0 FSA
0 DFA
0 MAI
0 DCA
Planned Fiscal Year 2001 NOA 1,800 DA  
0 CSD
4,983 ESF
0 SEED
0 FSA
0 DFA
0 MAI
0 DCA
Total Planned Fiscal Year 2001 1,800 DA  
0 CSD
4,983 ESF
0 SEED
0 FSA
0 DFA
0 MAI
0 DCA
      Future Obligations  Est. Total Cost 
Proposed Fiscal Year 2002 NOA 3,000 DA 0 DA 4,800 DA
0 CSD 0 CSD 0 CSD
5,000 ESF 0 ESF 9,983 ESF
0 SEED 0 SEED 0 SEED
0 FSA 0 FSA 0 FSA
0 DFA 0 DFA 0 DFA
0 MAI 0 MAI 0 MAI
0 DCA 0 DCA 0 DCA

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Last Updated on: May 29, 2002