Status review of economic support fund projects as of September, 1984

AID/Government of the Philippines (GOP) review covers the period 1979-9/84 and is based on discussion with officials from USAID/P, the GOP"s Development Projects Fund Secretariat (DPFS), and local governments; review of DPFS reports and written operating procedures; and visits to Region III projects. GOP use of ESF peso resources has been overseen from the ministerial level by the DPFS. Dollars have been transferred to joint activities as agreed upon in 1979, but at a disbursement rate below target; delays in the flow of financial releases (especially at the cash disbursement certificate, or CDC, stage) resulting from GOP austerity measures and from special approval procedures for contracts over 2 million pesos have held up SP implementation for up to a year. The program requirement that pesos be used within one year is clearly too ambitious: many activities take two years, and some rural energy activities will take longer. Nevertheless, U.S. and GOP objectives have generally been achieved; valuable infrastructure is in place, under construction, or planned, and local communities have been involved in the development process to a greater extent than before. Most financial and administrative delays have been overcome and DPFS and USAID/P are seeking ways to further speed funds release and contract approval. The trend for most SP"s is to start slowly and later achieve a more rapid implementation pace; exceptions have problems not connected to general DPFS/USAID procedures. Lessons learned include: (1) planning should be based on 2-5 year projections, revised annually, rather than on a year-to-year basis; (2) the need for rapid disbursement remains, but can be tempered by concerns for development merit; (3) use of fixed amount reimbursement could avoid the problem experienced in Schools I requiring detailed accounting for close-out; (4) CDC-related delays achieve no apparent purpose - solutions should be urgently sought; (5) maintenance problems (evident on roads and possible in markets) cast doubt on the wisdom of further investment in SP"s subject to poor maintenance; (6) tensions between local and central governments are inevitable where SP"s balance their interests, and while overall a good balance has been struck, the benefits of greater local participation need continued emphasis; (7) the DPFS must be strengthened to handle the increased engineering workload to come; (8) evaluation and reporting of successful activities are inadequate. Unresolved issues concerning the focus of development (e.g., area vs. sectoral approaches) remain.