Thursday, March 7, 2013

Pushing cities for rural development?

(Originally published in the Philippine Daily Inquirer on Feb. 18, 2013 by Cielito F. Habito)

Have our rural development efforts through the years been a massive failure? Why is it that only around 12 percent of urban families are poor, but 40 percent of rural families are? Why is it that urban poverty incidence has actually dropped from 15 to 12 percent since 1997, but rural poverty has been stuck at 40 percent over the same period?

For many years, government and international development partners have sought to address rural poverty and skewed development by pouring massive resources in direct assistance to our rural areas. Interventions have included a mix of rural infrastructure facilities, input assistance to farmers, and improved health and education services, among others. No doubt, these have been helpful and have uplifted numerous lives. Still, they seem not to have made a real dent, evidenced by the lack of improvement in rural poverty incidence over time. Micro improvements have somehow failed to translate into macro improvements that show up in the aggregate data. Where have we gone wrong?

Most of us have our favorite theories to explain this historical conundrum. Many point to how promised farm-to-market roads turned out to be “farm to pocket” roads, just one example of the corruption that has undermined otherwise sound solutions. Others blame the disparate and fragmented nature of our rural development interventions. The late Agriculture Secretary Roberto (Bobot) Sebastian used to lament government’s penchant to provide for farm-to-market roads here, irrigation facilities there, and postharvest facilities still elsewhere—never all together in the same area so they could complement one another and effectively improve the livelihoods of the farm families therein.

After pouring into our rural areas, especially in Mindanao, millions of dollars in various interventions over decades, the United States Agency for International Development (USAID), among others, now believes it is time to change tack. Gloria Steele, USAID’s Philippine-born mission director in Manila, asserts that secondary cities—the so-called “Tier 2 and 3” cities—may hold the key to uplifting socio-economic conditions in the surrounding rural areas that are inextricably linked to them economically. The first-tier cities of Metro Manila, Cebu and Davao, can already stand well on their own, and ample (and in the view of some, too much) resources have already been poured into the development of these cities and their environs. But a more geographically inclusive growth would entail supporting the ability of cities like Cagayan de Oro, Iloilo City, Batangas City and others around the country to expand the scope of economic activities therein. This is because by doing so, the cities could actually “pull up” the rural local economies inextricably linked to them through existing, emergent and potential product value chains.

I have written before on how such value chain orientation has become another important “new wisdom” characterizing current approaches to promoting economic development in the countryside. The problem of low rural incomes cannot be solved simply by raising the productivity of farmers and fishers via input and technology assistance; it must be viewed in the context of the entire value chains linking them to the final consumers. Strengthening the primary producers’ access to and control over their value chains would ensure that growth in the regional cities would pull up, rather than isolate, the rural areas where such primary producers are. Measures to achieve this include facilitation of clustering among producers, access to value-adding activities like primary processing (e.g., drying of grains or fruits, coffee roasting, etc.), improved access to credit, and others.

A secondary city-based approach also finds basis in the reality that growth trajectories of nations have historically been linked closely to urban environments, with cities serving as engines of growth. Furthermore, secondary cities (rather than megacities like Metro Manila) have tended to be the locus of urban growth and urban population concentration in more recent times. As important contributors to national wealth and productivity, the growth of secondary cities needs to be planned and managed well so that they can truly become engines for growth and innovation, as well as improved quality of life.

To this end, USAID’s new Cities Development Initiative seeks to facilitate the proper planning and management of the growth of selected secondary cities, beginning with the three mentioned above. Every province, municipality, city and barangay is in fact mandated by the Local Government Code to formulate a comprehensive development plan with accompanying executive-legislative agenda and comprehensive land use plan. From what I have seen, these local plans vary widely on quality, timeliness, completeness, people’s awareness, and manner of preparation. It is crucial that such planning exercise finds wide participation, and not just embody the ideas of a small group of experts and politicians “playing God” for the locality. The buy-in, ownership and support of the private sector, civil society and communities who will be affected by the plan must be secured if they are to help make the plan a reality. And for the regional cities that are critical growth poles to pull up their surrounding rural economies, city planning cannot be done in isolation, as the vibrancy of the city economy hinges on its links with the wider provincial and regional economy.

Rural development through better cities development? Contradictory as it may sound, this may yet prove to be the approach that finally works.- See more at:

Wednesday, February 27, 2013

U.S. Government, AmCham to Launch New Partnership to Enhance Philippines Business Climate

Manila, February 26, 2013 — The United States Government and the American Chamber of Commerce of the Philippines (AmCham) launched a new partnership today to further enhance the country’s business climate and sustain the economic gains achieved by the Aquino administration.  Funded by the U.S. Agency for International Development (USAID)The Arangkada Philippines Project (TAPP) implements the Joint Foreign Chambers of the Philippines’ recommendations to enhance the growth of key economic reform sectors and reforms under the U.S.-Philippines Partnership for Growth.
 The launch took place on February 26, 2013 at the Makati Shangri-La Hotel during AmCham’s Arangkada Philippines Second Anniversary Forum, which serves as one of TAPP’s annual highlights.
 Speaking at the event, U.S. Ambassador Harry K. Thomas Jr. said, “This partnership pursues the goal of the U.S.-Philippines Partnership for Growth to sustain broad-based and inclusive economic growth in the country.”
 TAPP advocates the implementation of nearly 500 recommendations to create $75 billion in foreign direct investments, 10 million new jobs, and $1 trillion in new tax revenues through rapid development of priority growth sectors — Agribusiness, Creative Industries, Manufacturing and Logistics, Infrastructure, Mining, and Tourism.
 AmCham President Rhicke Jennings welcomes this partnership as an opportunity to engage with the government and partners in the private sector to institute critical business and economic reform measures that will lead to greater investments and inclusive economic growth. “While we recognize the ongoing and considerable gains in terms of economic growth and reforms in governance, many challenges remain for the Philippines to realize its potential to become a middle income economy. Through The Arangkada Philippines Project, USAID and AmCham will work with government, private sector, and other stakeholders to accomplish the goal of high and inclusive growth,” Jennings said.
 U.S. Embassy Manila's USAID/Philippines Mission Director Gloria D. Steele explained, “We aim to enhance the growth of key economic reform sectors and further improve the investment climate in the Philippines."
 For more information, please visit

Thursday, February 14, 2013

Partnership for Growth – Philippines An Enhanced Engagement

The Philippine government and the United States government launched the Partnership for Growth (PFG) in 2011. This partnership mobilizes the resources of both governments to address the most serious constraints to economic growth and development in the Philippines. Through enhanced bilateral engagement, the PFG will assist the Philippines achieve the goal of moving from a low growth path to a higher, sustained and more inclusive growth trajectory in line with other high-performing emerging economies. Both governments plan to work together to accomplish this goal through the following objectives:
  • Create a more transparent, predictable and consistent legal and regulatory regime in the Philippines, one that is less encumbered by corruption; 
  • Foster a more open and competitive business environment with lower barriers to entry; 
  • Strengthen the rule of law that is grounded on an efficient court system capable of delivering timely justice; and 
  • Support fiscal stability through better revenue administration and expenditure management. 

In November 2011, U.S. Secretary of State Clinton (left) signed the Partnership for Growth compact with her Filipino counterpart, Foreign Affairs Secretary Alberto Del Rosario (right), and President Aquino (center).
This enhanced bilateral engagement involves 15 U.S. government agencies working with their Philippine counterparts to achieve the PFG objectives. The Philippines is one of only four countries chosen to participate in the PFG.

In Profile: Philippines Secretary of Finance, Cesar V. Purisima

Secretary Cesar V. Purisima of the Department of Finance (DOF) chairs the Cabinet Economic Clusters. The DOF is the lead Philippine government agency for the PFG. Previously, he served as Philippine Secretary of the Department of Trade and Industry in 2004. He also served as Chair and Member of the Board of many government companies including National Power Corporation, Land Bank of the Philippines, and Monetary Board of the Philippine Central Bank. 
Cesar V. Purisima, Secretary, Philippine Department of Finance
He has extensive work experience in public accounting in the Philippines and abroad. He was Chairman and Managing Partner of SGV & Co. until January 2004. He also has various memberships in several business organizations including the Management Association of the Philippines, Philippine Institute of Certified Public Accountants, Philippine-France Business Council, Philippine-Thailand Business Council and the Makati Business Club, among others.

PFG Technical Working Groups and Outreach Team Convene

The Fiscal Management Technical Working Group (TWG), co-chaired by the Philippine Department of Finance and the Millennium Challenge Corporation, met on June 21 to discuss ongoing and planned programs. The Regulatory Quality TWG, co-chaired by the Department of Trade and Industry and USAID, and the Rule of Law and Anti-Corruption TWG, co-chaired by the Philippine Department of Justice and USAID, also convened respectively on July 5. The Partnership For Growth Outreach Team, co-chaired by the Investor Relations Office of the Bangko Sentral ng Pilipinas and the U.S. Embassy Public Affairs Section, met on July 12 and focused on developing PFG local messaging, structuring the local communications strategy and forming a permanent team.

Sunday, July 29, 2012

Tourism Key Players Pilot Test Tourism Loop

Key players in the tourism industry are test-piloting the Cebu-Bohol-Camiguin-Cagayan de Oro Tourism Loop, all of which benefit from access to the Mactan International Airport in Cebu. The Tourism Loop is part of the Bohol Tourism Action Plan, which includes such partners as USAID and the German development agency, GIZ. Tourism is a high-growth priority under the Partnership For Growth, and through this initiative communities can see significant local economic impact through higher spending and longer length of stay by visitors.

USAID/Philippines Mission Director Gloria D. Steele (center, first row) with Bohol government officials and stakeholders led by Bohol Representative Rene L. Relampagos (First District) and Bohol Governor Edgar M. Chatto during the launch of the Bohol Tourism Action Plan on July 26, 2012.

Thursday, July 26, 2012

President Aquino’s State of the Nation Address Highlights Development Achievements

On July 23, 2012, President Benigno Aquino III delivered his third State of the Nation Address (SONA)
at a joint session of the Philippine Congress, reporting on his administration’s achievements on the
economy, education, land reform and defense, and citing the success of his crusade against corruption.
The Philippines’ GDP grew by 6.4 per cent in the first quarter of 2012 – the highest growth in the
Southeast Asian region, and second only to China in all of Asia. The 2012 SONA Technical Report
makes reference to accomplishments in PFG-related areas.

The goal of the PFG is to assist the Philippines achieve higher, sustained and more inclusive growth.