Urban Sector Strategy and Operations in the Philippines

This case study on the Philippine urban sector, together with country case studies for India and China, serves as basis for the Special Evaluation Study on ADB’s (1999) Urban Sector Strategy (USS) and Operations. The Philippine case study examines the relevance, appropriateness and effectiveness of ADB’s Urban Strategy implementation in the country in light of rapidly increasing urbanization.

This study analyzed findings from reviews of Project Completion Reports and Project Performance Reports of Philippine urban projects, interviews of ADB staff and Philippine urban sector experts, selected visits of ongoing and completed projects, a Roundtable Discussion on Urban Development in the Philippines, and standardized questionnaire survey for executing/implementing agencies of ADB-supported projects on needs, constraints, opportunities and potential solutions to problems in the Philippine urban sector.

Urban development in the Philippines is guided by an extensive policy and legislative framework but the corresponding institutional framework is fragmented. The institutional environment for the urban sector is highly complex. Urban development is not widely recognized as a major priority of the government. Capacity at the national and local levels in various aspects of urban development is largely inadequate.

The USS was translated into a Philippine Urban Strategy embodied in the 1999 Philippine Urban Sector Profile which identified 4 areas for ADB intervention: (I) policy, institutional and financial reform; (II) poverty alleviation, environmental upgrading and basic urban service provision; (III) integrated urban area development and (IV) urban planning and management particularly in Metro Manila. The Philippine Urban Strategy is widely acknowledged as appropriate, relevant and responsive to the urban sector in the country. However, there are aspects of the USS which have not been operationalized in the Philippine Urban Strategy, pertaining to the conduct of urban research, the promotion of urban sector work and the need for greater diligence in preparing projects.

ADB’s assessment of project implementation issues raised concerns on Project Management Office institutional restructuring and staffing, with emphasis on quality at entry for new and on-going projects. An important aspect of this pertains to readiness filters, e.g. timely budget provision, ROW/land acquisition, which impact on the elimination of project start-up delays.

Survey and interview results revealed that infrastructure creation and expansion is the main value added of ADB; steady supply of funds and good procurement processes are the top advantages of ADB involvement; delays in government responses and decisions are the biggest problems faced by projects in the Philippines; projects were driven primarily by ADB agenda; and limited capacity at local government level and weak coordination mechanism which cannot complement innovative and cutting edge project concepts and development approaches developed by ADB. Experience with 5 completed projects support the finding on the issue with government delays, institutional strengthening and other findings. Land acquisition/right-of-way problems also caused delays. Overall, 1 project was rated as successful, 2 partly successful and 2 unsuccessful. Performance of on-going projects has been inconsistent (as of April 2005). Some of these are considered innovative and first of its kind in the Philippines.