Planning and Review Group Meeting 2018 of GIZ Philippines and Pacific
Philippine Perspective on German Development Cooperation
By Undersecretary Rolando G. Tungpalan
Deputy Head of Mission Dr. Roland Schissau,
To the GIZ Officials, Mrs. Petra Mutlu and Mrs. Irina Scheffmann, Ladies and Gentlemen,
Let me start my presentation by showing you what we now call the vision and ambition of Filipinos for the next 25 years.
What is AmBisyon Natin 2040? The name is actually a play on words – “the vision” and “ambition”. It is a 25-year vision for Filipinos and the Philippines, a guide for engaging with international development partners, and is envisioned to be a basis of unity among Filipinos. It tells us what kind of life Filipinos want to live in the next 25 years, and how we see the country and ourselves in the year 2040.
Now that we know where we would like to be, we have crafted the plans to show the ways to get there, taking into consideration where we are now and how the landscape looks like going there. And so for our journey to 2040, we can think of the Philippine Development Plans as our GPS or navigator. The PDP 2017-2022 is anchored on the Duterte Administration’s 0-10 point socioeconomic agenda and is geared towards AmBisyon Natin 2040. Also note that the 2030 Sustainable Development Goals were also factored in the PDP.
Our overarching objective remains to be poverty reduction. The strategic framework of the PDP 2017-2022 aims to lay down a solid foundation for more inclusive growth, a high-trust and resilient society, and a globally competitive knowledge economy. The strategies to achieve the targets by 2022 will fall under the three major pillars of “Malasakit” or Enhancing the Social Fabric, “Pagbabago” or Inequality-Reducing Transformation, and “Patuloy na Pag-unlad” or Increasing Growth Potential. There are also cross-cutting strategies to support the other interventions and to provide a solid bedrock for all strategies to work.
The implementation of these strategies will be guided by the principles of the National Spatial Strategy. We want to decongest the National Capital Region and direct growth to key urban centers throughout the country, while improving linkages among settlements and key production areas by connecting rural areas to urban centers. We also aim to reduce vulnerability and the risks of communities exposed to the impact of natural disasters, and to make communities more resilient.
Our recent economic performance can be summarized into three points. First, the Philippine economy’s GDP growth has been on a sharp monotonic uptrend over the last three and a half decades. With a 6.7 percent GDP growth in 2017, which was within the government’s target of 6.5 to 7.5 percent, the Philippines is poised to be one of the fastest rising emerging economies in Asia over the medium-term. The current economic growth outturn maintains the Philippines’ standing as one of the best performing economies in the region. The country ranked 3rd fastest growing major Asian emerging economy in the fourth quarter after Vietnam and China. For full year 2017, the Philippines’ 6.7 percent growth also came in 3rd after China and Vietnam. Second, the economy is also undergoing structural transformation. This means that growth is increasingly driven by investments vis-à-vis consumption from the demand side, and by the industry sector relative to the service sector from the supply side. In other words, the sources of economic growth have broadened. Such qualitative change of the economy is crucial to sustaining growth and generating more stable quality jobs. Third, total factor productivity (TFP) growth of the economy in recent years has been the fastest in ASEAN, at 2.3 percent. This implies that capital efficiency (incremental capital output ratio or ICOR) has been improving. These three points suggest that economic growth is sustainable, thereby capable of generating more stable and gainful jobs.
The higher pace and improved quality of economic growth has created more and better jobs. Unemployment registered the lowest at 5.5 percent in 2016 but inched up a bit at 5.7 percent in 2017. Underemployment registered the lowest rates over the past decade at 16.1 percent in 2017, which signals that the quality of work being generated is improving. As the labor market adjusts to current policy shifts, net employment losses are expected in the short-term. However, the quality of jobs continues to improve with the share of wage and salaried workers rising to 62.5 percent in the same period.
To support the achievement of the PDP targets, and in order to close the infrastructure gap with our neighbors, the government will pursue an aggressive infrastructure investment program over the medium-term, reaching up to 7.3 percent of GDP by 2022, or a total of PhP8.1 trillion. Thus, making this Administration’s term the “golden age of infrastructure” in the Philippines.
Also, national government spending on social services per capita continues to increase over time. On the disaggregated level, per capita investments in education, health, and social security are constantly on the uptrend. Meanwhile, there might be a need for the government to look into the housing and introduce policies or intervention to facilitate more investments in the sector.
Moving forward to our development cooperation.
It was 1971 when our two countries started working together in ensuring that our common development goals are met. Forty-seven years on, we continue to advance our relations and see great gains. The numbers speak louder. Germany is one of the largest bilateral donors to the Philippines, extending a total of roughly US$404 million or €326 million in ODA from 2000 to 2017. Of the said amount, total loan assistance is US$195 million or €157 million, while total grant assistance amounts to US$209 million or €168 million. These include money coming from the BMZ or the German Federal Ministry of Economic Cooperation and Development as well as BMU funds under the International Climate Initiative.
Indeed, our long journey has several chapters now, but for this event, let me present a view of our cooperation and its continued relevance to the Philippine Development Plan for 2017-2022, along the Paris Declaration on Aid Effectiveness principles: Mutual Accountability, Ownership, and Managing for Results.
Mutual accountability for our development cooperation is manifested in mechanisms like bilateral negotiations, dialogues and political consultations of our two Governments. We have had several and fruitful ones for the past two decades. Actually, a total of seven biennial dialogues and lately political consultations – in 2005, 2007, 2009, 2011, 2013, 2015, and 2017, where we solidified agreements on development cooperation matters, as well as the programs and projects that we are to implement in the field.
And then we see to it that we follow through our agreements during our annual meetings and program or project progress reviews. These enabled the GIZ and KfW country office, the Philippine line agencies, and NEDA to flag and work on matters to help move our programs and projects through implementation and completion.
On Ownership, our development cooperation projects and interventions are country-led, and that Philippine agencies tasked to implement them ensure that projects are supportive of the Plan strategies and will contribute to the target indicators of the Plan’s Results Matrices. Our development cooperation is also focused on the regions, for which we have the Regional Development Councils tasked to ensure the ownership of programs and projects in their regions and that these contribute to the regional Plan targets.
The current focus of our cooperation is peace and security, climate change and biodiversity, and economic and human development, mainly in the Visayas and Mindanao, particularly the Caraga Region. Germany-funded projects under these focus areas, contribute to Enhancing the Social Fabric (or Malasakit) to build the foundations for a high-trust society, and to Inequality-Reducing Transformation (or Pagbabago).
Lastly, we have managing for results. Evaluation is important in relation to the assessment of the results and outputs of development cooperation projects. Through the evaluation of programs and projects we can draw out sustainability mechanisms for replication and up-scaling by considering successful outputs that made real impact. We can also create good models, methods, and tools and make them available for reference in the development of future projects and also in policy formulation.
One of our most notable project in the sector of peace and security is the Conflict-Sensitive Resource and Asset Management or COSERAM Program and its component measure on biodiversity conservation. We have achieved a handful of results from the first phase by providing access to legal services in addressing resource-use conflicts, capacitating stakeholders in developing land use plans guided by a conflict-sensitive approach. In the Program’s second phase, we are planning to produce a road map for peaceful development in relation to the management of overlapping claims on ancestral domains and protected areas. Other past projects in governance that are worth mentioning include the Decentralization Program, which was instrumental in capacitating local government units on the provisions of the Philippine Local Government Code, as well as the Poverty-Reduction and Conflict Transformation (PRCT) Project in Mindanao, which contributed to the development of the COSERAM Program.
On climate change and biodiversity, we have quite a number of grant-funded projects under this sector – a total of 19, and much of these are supported by the BMU’s International Climate Initiative. Being one of the countries severely affected by the negative effects of climate change and extreme weather events – I know the world knows of Typhoon Haiyan locally known as Yolanda – these projects are instrumental in helping our communities and institutions cope with more extreme weather events. Some of the key results arising from these German grants portfolio include partnership with local communities giving way to the establishment of dedicated environment offices, creation of consensus to establish new environmentally protected areas, and adoption by LGUs of Forest Land Use Plans.
Notable projects under BMU-funding include the Support to the Climate Change Commission, which supports the implementation of the Philippine Climate Change Action Plan. We also had the Forest and Climate Protection in Panay, the Reducing Emissions from Deforestation and Forest Degradation or REDD Project, and the Protected Area Management Enhancement or PAME, as well as a regional project implemented with Indonesia and Malaysia, the Implementation of the Tri- National Sulu-Sulawesi Marine Ecoregion Plan. Some of these projects actually benefited from the outputs and lessons learned from our past BMZ-funded project, the Environment and Rural Development or the EnRD Program, which we implemented in 2005-2015. The EnRD has served to test several approaches towards sustainable management of natural resources, community-based forest management, coastal fisheries resource management, and disaster risk management. These approaches, in one way or another, have been integrated into existing systems and processes of the Philippine Government, and have been the base of policies and the development of new projects.
Going back to the Filipino’s collective long-term vision, AmBisyon Natin 2040 has to be the anchor for development planning across political administrations. The PDP 2017-2022 is the first of the four Plans to be adopted and implemented until 2040. Beyond the term of the current administration, we need to ensure that the next plan builds on the gains of the 2017-2022 plan. We need to have a progression of plans, instead of changing plans each time.
By 2040, we envision the Philippines to be a “prosperous middle-class society where no one is poor. People enjoy long and healthy lives and are smart and innovative. The country is a high-trust society where families thrive in vibrant, culturally diverse, and resilient communities”.
If we sustain the gains through the next medium term plans, we expect to become an upper middle income economy by 2040. But sustaining the gains would require us to continue the various reforms we are pursuing, and continue to enhance our capacities to deal with both the challenges and opportunities we face in this fast changing world. In turn, the focus of our development partnership and modalities for managing the partnership for results would change. Our mechanisms for engagement with our development partners like you would remain important and the principles for effective development such as country ownership, focus on results and mutual accountability will remain relevant.
I do believe that German contribution to our development will continue to be relevant, but we may have to look into other areas as well where your experience, knowledge and technology could further boost our capacity and drive towards achieving not only the goals of the current plan but also of those of our long term vision.
Thank you for inviting me to your annual planning and review.