The PRMF was announced by Australian Foreign Minister Stephen Smith in Manila in October 2008.
Aside from the five Mindanao provinces, two other provinces that will initially benefit from out of 10 target beneficiaries are Bohol and Guimaras in the Visayas. The three other province-beneficiaries have not been named.
The PMRF “seeks to stimulate economic growth in partner provinces in Mindanao and the Visayas and is not a “roads program’ but also “a governance and capacity building program,” Rod Smith, Australia’s ambassador to the Philippines, said.
“Although a large portion of the $100 million will be spent on road rehabilitation and maintenance in partner provinces, a key emphasis will be to support institutional and governance reforms that will strengthen the service delivery capabilities of provincial governments,” he said.
A joint press statement from the Australian Embassy and the Department of Interior and Local Government said Australia has been a development partner of the Philippines for more than 50 years and has more than doubled its aid from “just under $70 million in 2006-07 to an estimated $109 million – around PHP4 billion – in 2008-09.”
“Good roads are crucial to economic development: They improve access to markets by significantly reducing travel times and costs, link producers to markets and connect rural to urban centres; And they improve access to jobs, health services and essential social and educational facilities in rural and regional areas,” Smith said.
“ Provincial roads are a crucial element in the overall road network. They provide key linkages between rural areas and national highways,” he added.
The press statement noted that the Philippines has more than 31,000km of provincial roads and the percentage defined as being in “good” condition is “far too low.”
In five years, Smith said, the PRMF is expected to have rehabilitated at least 1,000 km of provincial roads in up to 10 provinces in Mindanao and the Visayas; improved access for over four million citizens to schools and health centers; generated employment and income for local communities; and improved the investment climate through the provision of a reliable road network and reduced transport costs to business.”
PRMF, he stressed, “is not simply a mechanism to provide road rehabilitation. More important than the provision of funding for physical works, PRMF will assist Provincial Governments overcome some of the severe constraints that currently restrict ongoing service delivery.”
Cited as a key constraint is “provincial government access to sufficient resources to provide a good quality provincial road network (as well as other services such as health).”
PRMF seeks to assist provincial governments reduce this constraint by “both raising additional revenue and by improving the efficiency of current expenditures.”
Improving efficiency includes “significant capacity building assistance with a focus on: improving the efficiency of, and the links between, planning and budgeting; improving transparency through internal control mechanisms, including internal audit; improving human resource management and capabilities” and enabling more efficient delivery mechanisms such as contracting out to the private sector.
An innovative element of the
PRMF is that “it provides a number of explicit incentives to encourage provincial governments to undertake the reforms that will underpin PRMF and other service delivery: the size of the program in each province will depend on the province meeting agreed annual reform targets in the areas of expenditure management, planning, contracting out of road service delivery, internal controls (internal audit), and human resource management and Development; a further incentive will be provided to encourage provincial governments to raise additional local revenue. An untied grant will be made to a province’s development fund based on the additional local revenue a province raises each year – on a peso for peso basis up to a cap.”
“The use of performance-based resource allocations is an important development in encouraging the efficient allocation of resources (both donor resources and the governments own resources). The PRMF incentive model may become a model for other projects and other donors,” Smith added.
The MSA was signed by Smith and Local Governments Secretary Ronaldo Puno, in the presence of Governors Robert Barbers of Surigao del Norte, Loreto Leo Ocampos of Misamis Occidental, Maria Valentina Plaza of Agusan del Sur, Jose Ma. Zubiri of Bukidnon and Erico Aumentado of Bohol, and Vice Governors Norris Babiera of Misamis Oriental and Aurelio Tionado of Guimaras. (MindaNews)