Australian Government - assistance to the Philippines

Economy
The Philippines economy is unique in East Asia for having a large service sector and private consumption comprising around three quarters of the economy. The manufacturing sector is comparatively small and public and private investment is very low. Unemployment and underemployment continue to remain high. The prospect of securing a well-paying job is beyond the reach of many, especially young adults under the age of 25 that comprise about half of the unemployed. Under these conditions many Filipinos migrate overseas to secure better paying jobs. With a good command of the English language they are an attractive option in the global labour market. It is estimated that between 9 and 11 million Filipinos are working overseas. Remittances from these overseas workers help drive the consumption-fuelled Philippines economy and account for at least 10 per cent of the country's GDP. While remittances play an important macro-economy stabilising role, their pro-poor dimensions are questionable. Overseas remittances are disproportionately important components of middle- and high-income households; poorer households, it has been shown, have less access to them.
In response to the global recession, the Government implemented an Economic Resiliency Package in 2009 to stimulate the economy. The ensuing fiscal deficits in 2009 and 2010, when combined, were the largest fiscal easing in over two decades. This contributed to the country's economic recovery in 2010 and the Government is now focused on restoring the budget to a more sustainable footing. A development-oriented 2011 budget, combined with renewed efforts to boost the Government's low revenue base so that it can fund priority development programs and a clear strategy to attract private investment in vital public infrastructure, will help the Philippines' economy to continue to grow.
Long-standing binding constraints remain, however. A historically inward-looking economy, low levels of investment and an eroding human capital base need to be addressed; together, they suggest a more moderate growth outlook for the Philippines compared to its East Asian neighbours.
Australian assistance to the Philippines
Country program estimate 2011–12: $105 million
Total Official Development Assistance (ODA) estimate for 2011–12: $123.1 million
Australia is one of the three largest bilateral grant aid donors to the Philippines, along with the United States and Japan. The Philippines is among Australia's largest development partners after Indonesia, Papua New Guinea, Solomon Islands and Vietnam.
In 2007, Australia revised its approach to development in the Philippines and began implementing a new, five-year country program strategy. The Australia–Philippines Development Assistance Strategy 2007–2011 has an overarching objective to assist the Philippines to meet its development goals, especially in reducing poverty, increasing economic growth and maintaining national stability.
Australia's aid program in the Philippines has three focus areas: economic growth, basic education and national stability and human security.
Under these themes, Australian assistance to the Philippines in 2010–11 will:
•   Improve basic education, through support for programs under the Philippine Government's Basic Education Reform Agenda to assist the Philippines to achieve its MDG target for universal primary education. This includes support for school based management, rationalisation of teacher deployments to ensure coverage of remote schools, and school classroom construction. More support will be provided to continue improvements in basic education delivery and increased access to quality education for Filipino girls and boys with disabilities, Muslim and indigenous children and children in disadvantaged and conflict-affected areas.
•   Support economic growth and infrastructure, through programs that focus on increasing the quality and level of government expenditure on social services and infrastructure, enhancing the efficiency and transparency of national level budgeting and public financial management, and improving the management of roads at the provincial level.
•   Promote national stability and human security, through support for peace building programs focussed at the community level, provision of economic opportunities through small scale infrastructure development, and improved delivery of health services. Increased funding will be provided to support efforts to reduce the high maternal mortality rate in the Philippines, and improve disaster preparedness and response capability.
Australia is helping the poorest and most vulnerable Filipinos by assisting the Philippines Government to strengthen the management of its Conditional Cash Transfer program, through which the Government provides the poorest families with a cash payment if they keep their children in school and ensure that they receive regular health checks.
•   Enhance disaster response capabilities by working with the Government of the Philippines and the public to provide better protection from natural disasters, climate change and emergencies. Australia supports reconstruction efforts, early warning systems and disaster preparedness.