DOT Receives $7.1M Grant from ADB, CIDA

The Republic of the Philippines has made progress in meeting the Millennium Development Goals. It has achieved gender equality in education, reduced the mortality rate among children aged five and under, reduced the incidence of tuberculosis cases, and increased access to water and sanitation services. The country has strong potential for development because of its natural and human resources.

Nevertheless, the Philippines still ranks 112 out of 187 countries on the United Nations Development Programme's 2011 human development index. Progress is threatened by economic and social inequality, as well as by regional disparities, especially in the conflict-affected provinces of the island of Mindanao. Ensuring that social services reach the poor remains a major challenge. Women in the labour force are confined largely to low-wage, low-productivity jobs and have limited access to land ownership, credit, and training. Natural disasters such as hurricanes and floods have resulted in severe losses of life and property and have constrained efforts to reduce poverty. Almost one out of four Filipinos lives on less than US$1.25/day.

Although economic growth in the last five years has averaged around 5.1 percent, it is vulnerable, relying heavily on remittances from millions of overseas Filipino workers. These remittances fluctuated with job losses during the recent global financial crisis. At the same time, there was a reduced demand for the country's exports. The investment climate suffers from low competitiveness and a high cost of doing business.

Weak governance is recognized as a key constraint to sustained economic growth and poverty reduction in the country. However, as a strong democratic republic, the government has been able to initiate a number of governance reforms. The Philippines has a vibrant private sector and an active civil society, both important partners in development.

The Department of Tourism (DOT) is set to receive a $7.1 million technical assistance grant intended to help boost industry competitiveness from 2013 to 2016 from the Government of Canada, through the Canadian International Development Agency (CIDA), with the Asian Development Bank (ADB) as the administering agency. The launch of the ABD-CIDA Technical Assistance on Improving Competitiveness in Tourism was formalized in a Memorandum of Agreement (MOA) signing ceremony held on 10 April 2013 at the Bayleaf Hotel in Intramuros, Manila.

The goal of CIDA's program in the Philippines is to support sustainable economic growth by improving the climate for investment and protecting the economic interests of the poor.

CIDA helps the Philippines strengthen the investment climate by working with national and local governments to:

1. Simplify business regulations and processes
2. Improve sector-specific value chains, that is the full range of activities to bring a product from an idea to production, to delivery, to consumers, to disposal after use
3. Help selected local government agencies implement their economic development plans

In order to protect the economic interests of the poor, CIDA is working to increase the capacity of government and non-government organizations to deliver programs and services that help poor women and men entrepreneurs:

1. Develop business skills
2. Increase productivity
3. Improve access to financing and markets

Among the projects proposed under the grant are skills training programs for the private sector, local government units, civil society, and DOT agencies. Also included is the pilot implementation of the new system of accreditation and the development of standards for service quality. The technical assistance will be piloted in Cebu, Bohol, Palawan, and Davao.

The ADB-CIDA program is envisioned to create more employment opportunities and advancement for the local workforce, as well as provide local government units with better capacity to improve their regulations in attracting more investments and tourism activities.

The technical assistance comes on the heels of the World Economic Forum recognizing the Philippines as the “most improved country” in its 2013 Travel and Tourism Competitiveness Index. The Philippines is up 12 spots from 94th in 2011 to 82nd in 2012 out of 139 countries. The index measures the factors and policies that contribute to the attractiveness to develop the travel and tourism sector in different countries.

“While we continue to receive recognitions from global organizations and publications, the challenge for all of us in the tourism sector is to ensure that the promise of FUN is complemented on the ground with competitive physical and social infrastructure: from our products to the cost of doing business and human resources. This gesture of the Government of Canada and the ADB is a recognition of the role of tourism as a key driver of economic development in the country.” Tourism Secretary Ramon R. Jimenez Jr. said.

Secretary Jimenez added that the ADB-CIDA technical assistance is in line with the strategic directions of the National Tourism Development Plan to improve tourism institutional governance and human resource capacities. The technical assistance will result in three key outputs over a four-year period: a) regulatory review b) service standards improvement c) skills development.

“This comes at an opportune time when we need to scale up the development of tourism towards our bid of 10 million international visitor arrivals and 56.1 million domestic travellers by 2016. We should be ready to improve the tourism plant and enhance the quality of our services to ensure higher visitor satisfaction levels, which will trigger word-of-mouth marketing. Through this undertaking, the Philippines will be more competitive with the rest of the destinations in the Asia-Pacific,” Secretary Jimenez concluded.

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