Stronger LGU coordination needed for recovery - ADB

MANILA, Philippines — The government will need to strengthen interagency coordination and local government units (LGU) capacity on social assistance programs, beef up its healthcare system, and expand support for micro, small and medium enterprises (MSMEs) to sustain economic recovery from the pandemic, the Asian Development Bank (ADB) said.

The multilateral lender’s recommendations are provided in its third and final monitoring report on the COVID-19 Active Response and Expenditure Support Program for the Philippines.

In April 2020, the ADB approved a $1.5 billion financing to support the Philippine government’s efforts to alleviate the socioeconomic impact of COVID-19.

Among ADB’s key recommendations is for the Philippines to “strengthen interagency coordination and accelerate measures to harmonize assistance programs.”

It said Executive Order 137, issued in May last year, which mandates the immediate harmonization of ongoing measures such as the aid and humanitarian operations Nationwide, should be prioritized to enhance efficiency of public services.

It cited the National Employment Recovery Strategy, which involves agencies including the Department of Trade and Industry, Department of Labor and Employment and the Technical Education and Skills Development Authority in the implementation of the government’s employment recovery plan, as instrumental in coordinating social protection, employment, and livelihood programs, along with support to businesses.

ADB said there is also a need to strengthen LGU capacity, which is crucial in implementing programs on social assistance, health services, and vaccination.

“As the economy further reopens, the government should continue to reinforce the PDITR (Prevent, Detect, Isolate,Treat and Reintegrate) plus programs,  strengthen healthcare facilities and emergency preparedness,” ADB said.

It said digitization would help facilitate exchange and integration of data across health information systems.

“Stronger collaboration among national and local governments, and the private sector will be important in delivering equitable access to quality healthcare in line with the universal health care program,” it said.

The multilateral lender also cited the need to increase vaccination coverage in the regions.

Apart from strengthening the
healthcare system, ADB recommended more targeted efforts to enhance social protection by examining gaps in social insurance and identifying barriers and opportunities in expanding coverage given rising informal employment.

While the government implemented financial support measures for MSMEs, including loan payment deferrals, credit guarantees, and wage subsidies to help businesses address liquidity challenges amid the pandemic, ADB recommended expanding the support being provided.

In particular, it said lending programs can be integrated with other assistance being provided like digitalization and technology adoption, supply chains access, business innovation, and skills development.

ADB also pushed for expanding livelihood, reskilling and upskilling programs as the pandemic has created a large sectoral reallocation of employment and skills mismatches.

To do this, it said there should be stronger engagement with the industry and private sector.

“The government should provide support to workers and enterprises to manage this transition and expand employment opportunities by upskilling and reskilling workers toward skills-growth areas,” the ADB said.

In addition, unemployment benefits will need to be enhanced.

“Active labor market policies can be integrated in the design of unemployment insurance schemes so the income support is conditional on participation in labor market programs,” ADB said.

With the pandemic exacerbating the inequalities in access to digital technologies and highlighting the gaps  in access to education and training, ADB said innovative solutions would have to be adopted to enable greater access to education and training programs.

“Online learning or training platforms risk leaving the disadvantaged population, particularly those from low-income households without access to digital technologies. Targeted and flexible modalities will be important to reach the disadvantaged,” ADB said.

It also recommended having a stronger monitoring and evaluation of the country’s COVID-19 response and recovery programs through an independent think tank or research institutions to determine if certain programs will have to be continued and to serve as guide for future initiatives.

“As economic recovery gathers pace and as the government moves toward fiscal consolidation, sustainability of programs and timeframes need to be assessed,” it added.