UNCLASSIFIED Philippines PHOTO CAPTION GOES HERE COUNTRY DEVELOPMENT COOPERATION STRATEGY (CDCS) November 25, 2019 – November 25, 2024 COUNTRY DEVELOPME APPROVED FOR PUBLIC RELEASE Figure 1. Map of the Philippines USAID PHILIPPINES CDCS 2020 – 2024 Draft September 18, 2019 – revised October 28, 2019 i Table of Contents ACRONYMS................................................................................................................. iii I. Executive Summary .............................................................................................. 1 USAID Philippines 2020 – 2024 Results Framework ....................................................... 3 II. Country Context .................................................................................................... 4 Salient Factors in Country Context, Challenges, and Opportunities ........................................ 4 The Philippines’ National Development Vision .............................................................................. 6 Country Roadmap, Self-Reliance, and Future Trajectory ............................................................. 7 Mission Vision for Country Transition ............................................................................................. 9 III. Strategic Approach ............................................................................................... 9 Efforts of other USG Actors ............................................................................................................. 14 IV. Results Framework .............................................................................................. 14 Development Objective 1: Democratic Governance Strengthened ........................................ 15 Development Objective 2: Inclusive, Market-Driven Growth Expanded ............................... 20 Development Objective 3: Environmental and Community Resilience Enhanced ............... 24 V. Monitoring, Evaluation, and Learning ............................................................... 29 VI. Annexes ................................................................................................................ 30 USAID PHILIPPINES CDCS 2020 – 2024 ii ACRONYMS ALS Alternative Learning System ASEAN Association of Southeast Asian Nations CDCS Country Development Cooperation Strategy C-TIP Countering Trafficking in Persons CLA Collaborating, Learning and Adapting CSO Civil Society Organization DO Development Objective DOH Department of Health EDGE Enhancing Development and Growth through Energy EITI Extractive Industry Transparency Imitative ELMIS Electronic Logistics Management Information System FDI Foreign Direct Investment GDP Gross Domestic Product GPH Government of the Philippines GNP Gross National Product HCI Human Capacity Index HIV Human Immunodeficiency Virus IPS Indo-Pacific Strategy IPTI Indo-Pacific Transparency Initiative IR Intermediate Result ISIS Islamic State of Iraq and Syria J2SR Journey to Self-Reliance K-12 Kindergarten through 12th grade LGBTIQ Lesbian, Gay, Bisexual, Transgender/transsexual, Intersex and Queer/questioning LGU Local Government Unit MEL Monitoring, Evaluation and Learning MPA Marine Protected Areas MW Megawatts NRM Natural Resources Management NATO The North Atlantic Treaty Organization OFDA Office of U.S. Foreign Disaster Assistance OH Office of Health PDP Philippine Development Plan PFG Partnership for Growth PhilHealth Philippine Health Insurance Corporation RA Republic Act SME Small and Medium-Sized Enterprise Sub-IR Sub-Intermediate Result TB Tuberculosis UN United Nations USAID United States Agency for International Development UHC Universal Health Care USG United States Government USAID PHILIPPINES CDCS 2020 – 2024 iii I. EXECUTIVE SUMMARY CDCS Goal USAID is prioritizing the Philippines’ journey to self-reliance and key pillars in the United States’ Indo-Pacific vision over the 2020 – 2024 strategic period. This country development cooperation strategy for the Philippines responds to multiple challenges that may impede that journey and negatively impact sustainable national development. Foremost is the changing geopolitical situation in Southeast Asia and how this impacts the Philippines. Regional powers are increasing their strategic interest and influence in the Philippines and have made significant investments in the infrastructure (digital and energy) and services sectors. As regional influence grows, USAID is concerned that resource concessions made outside of accepted market mechanisms that enable transparent procurement processes could harm long-term development in the Philippines if they bypass and subvert governance practices that would otherwise ensure transparency and accountability. Priority concessions include development of the energy and information communications infrastructure, the extraction of natural resources, particularly in areas under the control of indigenous peoples, and high value public infrastructure development. Concessions for these public resources made in the absence of adequate governance mechanisms potentially hinder the participation of other international investors, national businesses, and labor and may constrain future self-reliance.1 The U.S. government’s vision for the Indo-Pacific strongly resonates in the Philippines and guides this five-year development plan. Signature U.S. initiatives implemented in the Philippines, including the Indo-Pacific Transparency Initiative, Infrastructure Transaction Advisory Network, Digital Connectivity and Cybersecurity Partnership and Asia Enhancing Development and Growth through Energy, will advance the U.S.-Philippines Indo-Pacific partnership. This new, five-year development strategy also responds to long-standing structural challenges and current developments in the country’s political economy. These strategic priorities inform the Mission’s five-year goal that will help ensure that the Philippines is a well-governed and more self-reliant Indo-Pacific partner. Commitment and Capacity Successive government administrations have prioritized social inclusion and the protection of the rights of vulnerable peoples. Commitment to social group equality, however, remains among the lowest Roadmap indicators for the Philippines. This reflects challenges faced by many Filipinos, including activists, to safeguard their interests. Adherence to the norms of liberal democracy appears to be declining as well. Despite a high capacity civil society and media, as reflected in USAID’s Journey to Self-Reliance (J2SR) Roadmap metrics, these institutions are less resilient than expected and subject to political pressure. The Mission’s concern that counter-vailing institutions of democratic governance is weakening undergirds the first development objective in this strategy: Democratic Governance Strengthened. Inclusive economic growth is another government priority, yet a higher percent of Filipino families live below established poverty lines than found in other leading economies in Southeast Asia. The country’s low Roadmap indicators for poverty rate and gross domestic product (GDP) per capita reflect this finding. The Philippines has one of the highest rates of income inequality in the Southeast Asian and Pacific region. Educational quality is also low. The World Bank recommended in 2013 that the Philippines prioritize inclusive growth for future national development. In 2017, the World Bank recommended that the Philippines increase its investment in human capital to achieve critical health and education outcomes. Further, they argued, doing so is critical to compete against other dynamic USAID PHILIPPINES CDCS 2020 – 2024 Draft September 18, 2019 – revised October 28, 2019 1 economies in an advancing technological future.2 The GPH faces challenges to fully implement its inclusive growth development agenda. Policy reforms are vulnerable to challenges from vested interests that dominate local and national politics. Social programs to build human capital and deliver better services require sufficient fiscal space to fund government priorities. Improvements in tax policy and tax administration have generated more revenues; however, the tax-to-GDP ratio in the Philippines remains among the lowest in the region. A larger concern is that government agencies often fail to successfully develop and execute their budgets. The Mission will prioritize effective domestic resource mobilization to advance self-reliance. The Mission will strengthen local systems to counter these obstacles in the Philippines’ Journey to Self-Reliance. The Philippines has sufficient resources at hand to fund its own ambitious development agenda; however, it lacks efficient systems to mobilize national resources to implement actions necessary to realize its national agenda. USAID is working through each of its technical offices to move forward needed policy reforms and to strengthen government processes at the line level to implement the necessary investments. The Mission is supporting the private sector to leverage USAID’s work and take this further. Civil Society has a key role, and is supported by USAID, to ensure development priorities are inclusive of the greater population and are carried forward in a transparent and accountable manner. Assisting host country institutions to redefine their relationships with the government will strengthen national self-reliance and contribute to redefining the current relationship between the USG and the GPH. These concerns motivate the Mission’s second development objective: