DAVAO CITY (Mitch Confesor / 02 Apr) The private investment arm of the World Bank Group (WBG) and the governments of Australia and Canada have “an enduring commitment” to address Mindanao’s development needs with the formal launching of a four-year, multi-donor initiative and technical assistance program this month.
With a new office to be formally set up in Davao City, the International Finance Corp. (IFC) will soon activate its Private Enterprise Partnership (PEP) Philippines (formerly dubbed Asenso) about nine months after President Gloria Arroyo witnessed the July 2005 signing in Malacañang of a Memorandum of Understanding on the program.
The PEP-Philippines program “aims to increase the contribution of small and medium enterprises to the economy by expanding the range of opportunities and capabilities available to them,” said Vipul Bhagat, IFC Country Manager for the Philippines and Thailand.
“From a new IFC office in Davao, PEP-Philippines will focus its attention on addressing the development needs in Mindanao,” he said. “Its programs range from increasing small businesses’ access to financing, enhancing the business climate at the sub-national level, and fostering agribusiness linkages between small and large businesses.”
One of the first projects that the IFC has implemented in Mindanao is the Cagayan de Oro City-based Cagayan Electric Power and Light Company (CEPALCO), which since 2004 is capable of running on solar-powered photovoltaic cells under the IFC’s Global Environment Facility (GEF) in partnership with the international Sustainable Energy and Economy Network.
Aside from private electricity distribution, the IFC has related advisory services and activities focusing on energy and rural electrification, rail transport, and water in the countryside, comprising of private transport work with the North Luzon expressway as well as water and sanitation work with the Manila Water Corp. and the Metro Cebu Water District.
It has worked with the Department of Energy (DoE), “through the Small Power Utilities Group, as the transaction advisor to bring in the private sector to provide electricity in off-grid and primarily rural areas, helping reduce the national government subsidy and increase the supply and reliability of power in these areas,” Bhagat said.
Together with the Light Rail Transit Authority (LRTA) of the Department of Transportation and Communication (DoTC), the IFC has worked for the extension of the LRT-1 rail line from southern Metro Manila into Cavite province.
Secretary Jesus Dureza, Presidential Adviser on the Peace Process, lead convenor of the 2006 Philippines Development Forum Consultative Group and Stakeholders Meeting in the recently concluded meeting in Tagaytay City, welcomed the commitments of the IFC and other donor agencies and foreign governments in financing development efforts particularly in Mindanao.
“We continue to note the encouraging level of development efforts being directed to and carried out in Mindanao today by various players, notably the donor community,” Dureza told the Zamboanga Journal.
“The dynamic collaboration in Mindanao has enabled the establishment of a sustained networking among all stakeholders and development players,” he said.
Bhagat said his office will celebrate this year a half century of working in the country at “a vital and historic time for IFC globally and locally,” as the corporation “has an enduring commitment” not only to Mindanao but to the rest of the nation’s impoverished areas.
“This year (the) IFC celebrates 50 years of supporting the private sector in emerging markets, helping reduce poverty and improve people’s lives through sustainable investments,” Bhagat said.
He added: “This April, we will introduce new environmental and social standards that will move beyond compliance which will help our partner companies develop processes and systems that ensure the highest levels of environmental sustainability and social responsibility in their operations.”
According to Bhagat, the IFC “has been stimulating” the country’s business growth since its first investment more than 40 years ago, “by investing in projects” that have been consistent with the government’s priorities.
“These include deepening and diversifying the financial sector, promoting infrastructure, and assisting the growth of small and medium enterprises,” Bhagat added. “We will invest in sectors that harness the country’s competitive human capital advantages, including agribusiness, education, health care, and information technology.”
The IFC Country Manager said his corporation “has steadily increased its investment commitment over the past several years, from U.S.$67 million in fiscal year 2003 to an expected U.S.$120 million for fiscal year 2006,” ending this June 30.
In fact, the Philippines is ranked 9th among the IFC’s top country exposures worldwide as of June 2005, and with an estimated total of about U.S.$500 million in 35 projects as of January 2006.
“While (the) Philippines remains among the Top Ten country portfolios for (the) IFC, given continued improvements in the overall macroeconomic environment and an increase in investor sentiment for the Philippines, this commitment level could increase in the coming years,” Bhagat said.
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