AusAID-Philippines Partnership

The Philippines is experiencing an economic resurgence the country has not seen in decades. In the last quarter of 2012, it posted gross domestic product growth rate of 7.1 percent, making it one of the best performing economies in East Asia according to the World Bank. With consumer confidence at an all-time high and government spending in full throttle, the Washington-based lender sees the Philippine economy expanding by 6 percent in 2013, up from a respectable 3.9 percent in 2012. Despite the Southeast Asian archipelago’s rising profile, poverty is still rampant, and physical and social infrastructure remains inadequate, suggesting that the country is still far from a more inclusive form of development. More than 42 million Filipinos live on less than $2 a day, maternal mortality is high and formal education is inaccessible to a large segment of the population. The administration of President Benigno Aquino III — whose anticorruption stance and promises of reform won him the presidency in 2010 — has made inclusive growth one of the pillars of the Philippine development agenda. The government’s focus on good governance as well as support for measures that promote poverty reduction — the recently signed reproductive health law is an example — have received positive attention from donors, who pledged continued or increased long-term funding. Australia is one of these donors and, with the March 2012 signing of the Australia-Philippines Development Cooperation Program Statement of Commitment 2012–2017, the donor is expected to remain committed to the Philippines. Funding levels and strategic goals Australia is one of the top three bilateral donors to the Philippines. While Canberra has indicated that the Asian country will be one of the main recipients of Australian foreign assistance in the next five years, reprioritization of Australian aid resulted in reduced funding to the Philippines for fiscal 2012-2013. In its Australia-Philippines Aid Program Strategy 2012-2017, the Australian Agency for International Development enumerates the following strategic goals for Philippine assistance: - Promoting opportunities for all — by giving more children access to school by addressing classroom overcrowding and poor completion rates. - Building sustainable economic development — by reducing the negative impact of climate change through the construction of safe and resilient housing for informal settlers living in dangerous flood zones in Metro Manila. - Building and supporting effective governance — by helping the Philippine government implement governance reforms so resources are better used for reducing corruption and providing basic services. - Responding effectively to humanitarian crises and natural disasters — by helping the Philippine government develop effective responses. Priority sectors Education — The flagship sector of Australian aid in the Philippines, contributing about 30 million Australian dollars ($30.3 million) annually. In its 2012-2017 strategy, AusAID aims to increase access, participation and completion rates for elementary and secondary education and builds on long-term education programs. Australia will continue to assist the Philippines in increasing learning outcomes in math and the sciences, as well as in the realization of planned education reforms, including the transition from the 10-year school cycle to 12 years which adheres to international standards and opens up more opportunities for Filipino graduates. Capacity building — Australian foreign assistance also focuses on the improved delivery of basic services — including health, water and sanitation — to vulnerable populations. As resources for these services are channeled through local government units, Australian aid aims to strengthen capacity on a subnational level through transparency in budgets, public financial management, human resource development and service delivery. Climate change adaptation and disaster risk management — The Philippines is one of the world’s most vulnerable countries to natural disasters and the impact of climate change. Australia plans to support national government agencies in increasing the number of informal settler households with disaster-resilient housing, providing vulnerable populations with life-saving assistance in crisis situations, and launching AusAID disaster response within 48 hours of a request for assistance for a determined number of humanitarian crises — all by 2017. Peace and security — Special focus will be given to conflict-affected areas in Mindanao as Australia aims to “strengthen governance, build human capital and establish economic links between these areas and more developed parts of the region.” Canberra’s programming for peace and security in the Philippines is concentrated on the expansion of economic opportunities, reduction of the vulnerability among communities in conflict areas, and support for the foundations laid out in the peace pact between the Philippine government and the Moro Islamic Liberation Front. Devex analysis Australia’s aid program in the Philippines is expected to still focus on capacity building and the delivery of basic services to the poor. However, climate change and disaster management finance could see a significant boost in the next five years given the country’s vulnerability to natural disasters. The Philippines’ history of corruption and political instability had a serious impact on the country’s aid prospects, but the current Philippine government’s moves toward tackling corruption and instituting major reforms have significantly improved the Philippines’ standing as an aid recipient. The Philippines’ bilateral relationship with Australia is expected to strengthen as the Gillard government’s approach to aid is geared towards funneling more assistance through country systems. The renewed confidence in the Aquino administration’s ability to manage and absorb aid could make funding from Australia more accessible and continuous, barring any major shocks in the global economy that could force Canberra to reassess its aid levels and disbursements. Engagement with the Philippines is also bolstered by the donor country’s efforts to strengthen ties with East Asia and its pledges to boost aid to the region. Contact: AusAID Manila Level 23-Tower 2 RCBC Plaza, 6819 Ayala Avenue, Makati City, 1200 Phiippines Email: infophilippines@ausaid.gov.au Tel.: (63-2) 757-8100 Fax: (63-2) 757-8268