Access to basic services dramatically affects the living conditions, health, and economic wellbeing of the Philippine people. However, infrastructure in the Philippines to support basic services is lacking, leaving many of the country’s poor without access. Funds required for infrastructure improvements and expansion far outstrip current financing sources including external donor resources. Promotion of private financing of local public infrastructure is one approach USAID/Philippines has taken to span the breach between those that have access to essential services and those that do not. In the Philippines much of the responsibility for local infrastructure rests with local government units (LGUs). Although local governments have the authority to borrow private capital, they have almost exclusively borrowed from government financial institutions (GFIs). Private financial institutions have been reluctant to lend to LGUs due to a lack of information, skepticism about the creditworthiness of local governments, and a tradition of conservative lending practices.
Last updated: August 12, 2013