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Targeted Interventions in Economic Reform and Governance (TIERG) Programs
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Economic Modernization through Efficient Reforms and Governance Enhancement (EMERGE)
Institutional Grant for Policy Development (IGPD) Grantees
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BACKGROUND
USAID has been supporting the efforts of the Government of the Republic of the Philippines (GRP) in achieving economic growth and reduced poverty through various economic governance Programs under Strategic Objective 2 (SO2): Performance of selected government institutions improved. SO2 assists Philippine partners in job creation and poverty reduction, by reducing the constraints on investment caused by Corruption and poor governance, including the barriers to competition that inhibit domestic and foreign investment. SO2 aims to increase incentives for expansion of critical infrastructure services, and increase the country's competitiveness in international trade.
In response to the need to accelerate fiscal, trade, investment, and governance reforms, the Targeted Intervention in Economic Reform and Governance (TIERG) Project is designed to maintain the momentum already generated for economic reform and assist the GRP in its intensified efforts to strengthen the rule of law and reduce Corruption.
In implementing the economic policy reform component, two separate but closely related mechanisms are being used. The first is through a contract with a U.S. based contractor named as Economic Modernization through Efficient Reforms and Governance Enhancement (EMERGE) contractor. The second is through cooperative agreements with NGO think tanks or a non-governmental research institutions and universities, named as the Institutional Grant for Policy Development (IGPD) Grantees. Both the EMERGE and IGPD will address policy issues that impede liberation, initiate measures to support continuing economic liberalization, and influence policy to increase competition
.THE Programs
Since 1998, the Philippine economy has been performing below the growth target projected by the Medium Term Philippine Development Plan (MTPDP). Economic growth has averaged 2.5 percent per year and poverty reduction has stagnated to 26 percent. Since 2000, exports have remained flat, and investment has fallen to between 17 and 18 percent of GNP. Tax revenue fell from 17 percent of gross domestic product (GDP) in 1997 to 12.4 percent in 2002. The deficit of the consolidated public sector is projected to increase to 6.5 percent of GDP in 2003, and public debt has expanded to levels that pose significant risks to macroeconomic stability. In addition, the banking sector is under stress with non-performing loans in excess of 15 percent of the banks' aggregate loan portfolios.
Despite its disappointing performance, the government should be credited with reigning in inflation and maintaining a stable market-determined exchange rate and structural reforms such as tariff reductions, privatization of state-owned-enterprises, and facilitation of private investment in BOT infrastructure projects. Renewed rapid sustainable growth and significant reduction in poverty are possible if the key policy reforms and favorable economic environment will be pursued, such as:
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sustainable fiscal management,
trade reforms and deregulations,
improving the investment climate, and
improving public sector governance,
The Economic Policy Reform Component of the TIERG Project will address issues that continue to impede liberalization, initiate measures to support continuing economic liberalization, and influence policy to increase competition. Both the EMERGE contractor and the IGPD grantees will focus much of its technical assistance on policy analysis, formulation and implementation related to trade, investment and fiscal reforms essential for accelerated and sustainable growth.
Some illustrative issues and areas that EMERGE and the IGPD may address are the following:
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Trade, Investment, and Competitive Structure
Domestic and International Trade
Investment and Private Sector Development
Sustainable Fiscal Management
Other Policy Areas
IMPLEMENTING PARTNERS
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EMERGE General Contractor
- Carana-Nathan
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ATENEO SCHOOL OF GOVERNMENT
, in collaboration with
Ateneo Center for Social Policy and Public Affairs;
Ateneo Center for Economic Research and Development;
Alternative Law Group, Inc.;
caucus of Development NGOs;
Consortium of Centers for Local Governance;
Evelio B. Javier Foundation;
Partnership of Philippine Support Service Agencies;
Philippine Center for Policy Studies;
Transparency and Accountability Network;
Galing Pook Foundation;
and Public Finance Institute. DE LASALLE UNIVERSITY