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Economic Development and Governance

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This woman obtains her land title after living on her property for more than 40 years.
USAID/Philippines

The U.S. government partners with the government of the Philippines to address constraints to growth in the Philippines, largely by enhancing the country’s economic competitiveness. USAID facilitates trade and investment by reducing regulatory bottlenecks, entry barriers and discriminatory provisions to investment; improving the environment for competition; enhancing Philippine participation in regional and international trade agreements; and enabling financial inclusion. USAID works with cities outside Metro Manila to bring about broad-based development by advancing appropriate policies and incentives, greater transparency and accountability and increased competitiveness. USAID also supports the Philippine government to strengthen the rule of law by improving court efficiency and increasing access to justice and by reducing corruption through the promotion of the enforcement of anti-corruption laws. USAID engages key stakeholders to increase community cohesion, reduce conflict and strengthen government capacity in Mindanao to collaboratively address grievances and deliver services. USAID also enhances the capacity of local organizations to provide assistance in the critical areas of trafficking in persons, disaster relief and environmental protection.

PROJECTS

Access to Justice and Support for Rule of Law in the Philippines (ACCESS)

ACCESS partners with civil society organizations to raise public awareness on human rights and provide legal services to vulnerable populations. In partnership with the Integrated Bar of the Philippines, the project expands access of vulnerable populations to the judicial processes, including the Community Legal Aid Service Rule, which requires new lawyers to render 120 hours of free legal aid services to the poor and most vulnerable. ACCESS also strengthens alternative dispute resolution mechanisms and supports judicial reforms, including automation of trial courts, capacity-building activities for law practitioners and use of digital technology to raise awareness on basic rights and availability of free legal services.

Applying Binding, Bonding and Bridging for Peace Program (A3B)

Inter-group tensions and divisions can weaken the influence of communities against violent conflict. The A3B project works in 25 barangays (villages) to foster greater cooperation and respect among groups of religious and ethnic identities, and mitigate the risk of violent conflict. The project trains religious and traditional leaders to prepare them to participate in a three-phased social cohesion process. Under the binding stage, A3B assist key actors to address biases and facilitate self-transformation. This is followed by the bonding stage, which strengthens relations of peace actors within the same identity groups and prepares them for inter-group dialogues. The third phase, or the bridging stage, brings together key actors from different religious and ethnic identity groups to explore common objectives. A3B also trains community leaders to manage and mitigate disputes and prevent them from escalating into violence. In response to the Marawi siege, A3B has extended psychosocial and trauma healing counseling to displaced families in Iligan, Baloi and Saguiaran.

Development Credit Authority Loan Portfolio Guarantee I (DCA LPG I) and II (DCA LPG II)

Supporting small- and medium-sized enterprises is crucial to achieving inclusive economic growth in the Philippines. In 2016, microenterprises comprised almost 90 percent of business establishments and generated 30 percent of jobs in that year, according to the Department of Trade and Industry. These enterprises generate wealth, business opportunities and employment in rural and urban areas. The Development Credit Authority Loan Portfolio Guarantee encourages lending to businesses – predominantly small- and medium-sized enterprises – for qualified projects throughout the Philippines. The guarantee stimulates targeted domestic commercial investment in cities outside Metro Manila and their surrounding regions. Priority sectors include: manufacturing, healthcare, energy, construction, tourism, postharvest agricultural processing/agribusiness. As of July 2018, partnering financial institutions reported a utilization of $48 million worth of loans to 134 small and medium enterprises enrolled in the loan guarantee facility.

Development Credit Authority Loan Portfolio Guarantee for 1st Valley Bank

The Development Credit Authority Loan Portfolio Guarantee for 1VB is structured to encourage lending to domestic, commercial businesses, predominantly small- and medium-sized enterprises (SME), in Mindanao, including Marawi and surrounding areas. This DCA LPG will support inclusive growth and employment across the priority sectors of agribusiness, including agricultural supply chains, and rural SMEs and at the same time, promoting peace and stability in conflict- affected areas in Mindanao.

Under this activity, DCA funds are used to provide up to 50 percent guarantee cover to potential net principal loss on qualified loans while 1VB uses its own funds to finance loans to qualifying borrowers in the target regions.

E-PESO

In the Philippines, about 98 percent of payments take place through cash. Electronic payments (e- payments) promote efficiency in financial transactions and boost transparency and accountability in government finance and operations. E-PESO works with the government and private sector accelerate the adoption of e-payments in the Philippines. It supports the development of economic infrastructure that enables Filipinos to access new financial products and services, further contributing to inclusive economic development. E-PESO assisted the Philippine government, through the Bangko Sentral ng Pilipinas, in building a more competitive payments environment by opening it up to more players, domestic and foreign investors alike. Through E-PESO assistance, the Philippine government launched the National Retail Payment System in 2015, a policy and regulatory framework to establish a safe, efficient, reliable and affordable retail payment system in the country. The government also established automated clearing houses that will enable more efficient movement of money from one account to another. E-PESO also assisted the Bureau of Internal Revenue to develop additional options for tax payment, including debit, credit, prepaid card and mobile payments.

Local Works: Facilitating Local Access to Water (FLoW)

FLoW is an activity under the USAID/Philippines Local Works programming, which promotes and facilitates locally-led development. It also aims to provide models for collaborative implementation that can be replicated in sectors beyond water. Using locally-led community solutions, USAID and AKAP, with the support of the U.S.-based Local Systems Practice consortium, aim to improve water access for the residents of Tublay Municipality. FLoW facilitates systems analysis and stakeholder mapping, including the processes, relationships and dynamics of all actors. It capitalizes on the capacity of local partners to come up with solutions that address their development challenges. This way, sustainability is ensured as solutions emerge from collaborative engagements between and among communities, local officials, non- governmental organizations and the business sector.

Logistics Support for Mindanao Activity (LOGISTICS)

Logistics Support for Mindanao provides logistical and security coordination, information management services and monitoring assistance for USAID/Philippines and broader U.S. Embassy activities in Mindanao. Since 2014, LOGISTICS has facilitated 306 visits and has produced 528 Mindanao security advisories, including weather-related flash reports and road network accessibility information.

Marawi Response Project (MRP)

More than two years after the violent conflict in May 2017, thousands of Marawi's population are still displaced. Working with the government, private sector and civil society, USAID through MRP improves economic conditions and fosters social bonds of Lanao communities directly affected by the Marawi siege. Activities include non-cash micro-grants to groups of displaced families and their host communities and to small business owners previously trading in Marawi. The project will also support employment readiness training for the youth and value chain studies to help the growth of the local economy. Town halls will be organized to facilitate discussions with local governments on the situation of displaced families and local communities.

PeaceConnect

PeaceConnect engages religious leaders and youth organizations to stimulate social cohesion in select Mindanao sites that are vulnerable to violent conflict, including violent extremism. It fosters social cohesion by training and engaging religious and youth leaders to think and act politically and effectively represent their identity groups in support of peace. The project also creates safe spaces for intra- and inter-group dialogues to mitigate and address violent conflict and violent extremism. Social cohesion activities are implemented in Marawi IDP sites, such as Iligan, Marantao, Kapai and Piagapo.

Philippines Performance Audit Partnership (PPAP)

Performance audits are effective tools for assessing the achievement of intended development results of public investments. PPAP partnered with the U.S. Government Accountability Office (GAO), a world leader in performance audit, to bolster the capability of the Philippines Commission on Audit (COA) to evaluate large-value government programs with high public interest. The GAO, through its Center for Audit Excellence, advises COA leadership in implementing organizational changes to institutionalize performance audit, and upskill state auditors from the central office, sectoral units and regional offices. The partnership will also build strong ties between COA and GAO, two supreme audit institutions that have pioneered game changing reforms in external audit.

Strengthening Urban Resilience for Growth with Equity (SURGE)

With wealth concentrated in Metro Manila and a few other primary cities, secondary and tertiary cities must elevate their role in spreading economic development. As the flagship project of the Cities Development Initiative, SURGE helps develops conditions for inclusive and resilient economic growth for a critical mass of cities and surrounding areas outside Metro Manila, Cebu and Davao. SURGE provides technical assistance to help cities and adjacent areas plan effectively, guarantee basic public services particularly access to water and sanitation, enhance the investment climate, promote competitiveness, support sustainable development and reduce disaster risks. For example, the project has improved business permit licensing in the Cities Development Initiative partner cities of Puerto Princesa, Tagbilaran and Zamboanga. The project also provides technical assistance to improve water delivery services in Tagbilaran and General Santos cities. SURGE works to rehabilitate Marawi City and its environs. The project is providing technical assistance to restore safe and sanitary water services, as well as economic livelihood activities, and establishing permanent and temporary market or trading facilities.

Regulatory Reform Support Program for National Development (RESPOND)

Critical challenges to attracting and facilitating trade and investment exist, including the quality of utilities and infrastructure, high barriers to entry of new economic players, and complex processes to start and operate businesses. RESPOND seeks to improve regulatory quality to enhance competitiveness, and ultimately, contribute to higher levels of investment and trade, inclusive growth, and self-reliance. RESPOND pursues interventions that enhance market competition and strengthen regulatory capacity and governance. To advance market competition, RESPOND supports reforms that reduce barriers to entry and reduce regulatory burdens and transaction costs for business. To strengthen the capacity of public officials to develop and implement quality regulations, RESPOND extends technical assistance that strengthens regulatory oversight, as well as transparency and accountability mechanisms. As a cross-cutting objective, RESPOND seeks to expand citizen engagement and the participation of civil society organizations to advocate for fair and open regulations and a better business environment.

U.S. Federal Trade Commission Technical Assistance (Field Support)

In the Philippines, underdeveloped competition laws and economic policies hinder the nation’s ability to move from a low growth path to a higher, sustained and more inclusive growth trajectory in line with high-performing emerging economies. USAID and the U.S. Department of Justice are working with the Philippine government to address these challenges, facilitating the passage of the Anti-Trust Law; educating consumers, business and political bodies about the role of competition; and establishing systems for investigating potential law violations. The assistance helped draft the Philippine Competition Act, which regulates anti-competitive behavior and fosters a better environment for the entrance of new market players; it was later enacted into law. It also conducted training workshops for the Office of Competition under the Philippine Department of Justice.

Last updated: November 19, 2019

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