PUBLIC-PRIVATE PARTNERSHIPS ENHANCE DEVELOPMENT EFFORTS IN

UNCLAS SECTION 01 OF 02 MANILA 000099

SIPDIS

C O R R E C T E D C O P Y//ADD SLUG LINES//

SIPDIS

STATE FOR EAP/MTS
STATE PASS USAID FOR AA/ANE AND AA/G
USDOC FOR 4430/ITA/MAC/SBERLINGUETTE

E.O. 12958: N/A
TAGS: EFIN ELAB EINV EAID PGOV RP
SUBJECT: PUBLIC-PRIVATE PARTNERSHIPS ENHANCE DEVELOPMENT EFFORTS IN
MINDANAO

MANILA 00000099 001.2 OF 002



1. Summary: USG agencies have been establishing partnerships
between public and private organizations to maximize the reach of
development programs in Mindanao. Such collaborations have proven
very successful and serve as a means to enhance capital, creativity,
and technical expertise. Public-private partnerships in Mindanao
are designed to improve the economy and infrastructure, particularly
in conflicted-affected areas, and address education, energy, health,
micro-enterprise, agriculture, and trade development. End summary.


2. Mindanao, the southernmost region of the Philippines which is
blessed with abundant natural resources but includes some of the
poorest provinces in the country, presents great potential for
private investment to support sustainable development. To encourage
private sector investment, the USG is providing support to Mindanao
through public-private partnerships. These partnerships are
arrangements in which the USG and/or the Philippine government
collaborate with the private sector on projects to achieve
development goals. Such collaboration brings to the table private
sector capital, creativity and technical expertise, enabling
initiatives that may be otherwise be impossible given limited USG
resources. The USG, Philippine government, and private sector
organizations can pool resources and share risks and responsibility.
An added benefit, of particular importance in Mindanao, is the
encouragement of investment in the area as private sector
involvement and comfort level increases.

Education Projects Benefit from Private Sector
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3. Public-private partnerships in education in Mindanao are focused
on two USAID-administered programs. The Computer Literacy and
Internet Connection (CLIC) program is providing Mindanao schools
with computer equipment, internet connections, and training. To
date, partners' contributions have totaled over $1 million,
benefiting over 400,000 students and nearly 12,000 teachers. In
2004 USAID launched the Education Quality and Access for Learning
and Livelihood Skills project to improve access to quality education
and livelihood skills in Mindanao. From FY 2004 to 2006, USAID
provided $12.4 million to six private sector alliances led by
international and domestic NGOs and local foundations. These
institutions have brought an additional $23.3 million to the
project. In one case, an alliance that received a $500,000 grant
from USAID will have provided $24 million in new supplementary
educational materials and texts by the end of FY 2007.

Partnerships Enhance Health Initiatives
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4. USAID currently partners with private firms to provide
tuberculosis control and family planning services in Mindanao. In
the past four years the Philippine Tuberculosis Initiatives for the
Private Sector (PhilTIPS) project established 20 private TB clinics
throughout the country, including Mindanao, with support from
private businesses and the Philippine government. Initiated in
2004, USAID's Private Sector Mobilization for Family Health (PRISM)
Project supports partnerships between the private sector and the
Philippine government to improve maternal and child health and
family planning in Mindanao and other urban centers. One such
public-private partnership is between Bukidnon's provincial
government and Unifrutti, a private company that is establishing an
employee referral system for family planning services. To enhance
market development, PRISM has awarded a grant to a private company
to expand sales of contraceptives to public health facilities in
Mindanao. PRISM is also working with private practice midwives in
Mindanao to expand their practices and work with the public health
sector. This improves the quality of public services and makes
midwives' practices more profitable. This helps alleviate the
stress on the healthcare system due to outflow of personnel.

Private Sector Finances Renewable Energy Systems
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5. The USG is supporting the Alliance for Mindanao Off-Grid
Renewable Energy (AMORE),a public-private partnership enabling
remote Mindanao communities to install, operate, and maintain
renewable energy systems. AMORE programs build community capacity
to operate and maintain solar and micro-hydro systems, manage
natural resources, and expand access to water and basic services.
AMORE's public-private partnerships have proven quite successful,
resulting in over 7,000 households in over 225 communities receiving
electricity. Mirant Foundation, AMORE's principal private partner,
has contributed over $4 million in cash to procure solar energy
systems. A second U.S. company, Sunpower, has contributed over
$500,000 to solar market development and school electrification.

Micro-enterprises Benefit from Private Sector Financing
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6. Small businesses comprise 91% of the businesses operating in the
Philippines, and 40% of all households depend on income from
micro-enterprises. Microfinance programs utilizing public-private
partnerships are assisting local banks in providing loans to
micro-enterprises so they can expand and enter the formal sector.
Through the Micro-enterprise Access to Banking Services program,
USAID, in conjunction with the Rural Bankers Association of the
Philippines, is assisting privately-owned rural banks in providing
loan and deposit services to micro-enterprises in Mindanao.
Affiliated banks have provided loans to over 318,000
micro-enterprises in Mindanao. In partnership with the World
Council of Credit Unions, USAID is supporting efforts to bolster
small credit unions through the Credit Union Empowerment and
Strengthening Philippines program. This program has increased
access to credit on the part of the poor by helping restructure 40
credit cooperatives in Mindanao and teaching them to engage in
strategic planning and focus on key indicators needed to maintain
financial stability.

Private Companies Support Agricultural Initiatives
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7. With funding from the U.S. Department of Agriculture (USDA),
several U.S. NGOs are supporting agricultural development in
Mindanao, promoting poverty alleviation. USDA has awarded a
three-year, $2.4 million Food for Progress award to Agricultural
Cooperative Development International and Volunteers in Overseas
Cooperative Assistance (ACDI/VOCA),a private nonprofit organization
working with local NGOs to help small farmers establish and expand
cocoa production in Davao. ACDI/VOCA is partnering with the USG,
Philippine government, and private sector to improve cocoa
production through training, fermentation and drying centers,
enhanced seedling production and international quality standards.


8. USDA also provides support for the Cold Chain Association of the
Philippines, which provides education, training, and technical
assistance to the Philippine food industry. Through this program,
Philippine companies specializing in perishable foods are improving
the importation, storage, handling and distribution of their
products in order to meet new and evolving world food standards. In
2004, Catholic Relief Services received a three-year Food for
Progress grant for $3.3 million to improve existing production
practices for high-value crops, develop product markets, and ensure
basic infrastructure exists for agricultural production in the
targeted communities in Mindanao through local NGO partners. In
2006, USDA approved a Food for Progress grant of $4.0 million to
Land O'Lakes Inc. to expand its dairy development and school milk
feeding program to 3 new dairy zones, including one in Mindanao.

USG Partners with Mindanao Chambers
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8. The U.S. and Foreign Commercial Service in Manila (FCS Manila)
is working to expand Mindanao private business development and
enhance U.S. trade links in Mindanao. To this end, FCS Manila has
established Memoranda of Understanding (MOUs) with 16 Mindanao-based
Chambers of Commerce to help partner U.S. companies with
Mindanao-based firms. The MOUs are informal agreements to develop
trade opportunities, share business contacts, and engage in joint
business promotion activities. The USAID GEM Program also partially
supports 15 Chambers of Commerce and other business support
organizations in Mindanao.

KENNEY