Philippines GFRP DPO

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The Global Food Crisis Response Program Development Policy Operation (DPO) Project will support the Government of the Philippines address the challenges of high food prices in the short and medium term, particularly by supporting measures to strengthen social protection and safety nets to protect poor and vulnerable households. The operation recognizes the efforts by the Government to stabilize the price of rice, the country's staple food, and to provide immediate assistance to the country's poor and vulnerable populations. It also supports intermediary steps to improve the efficacy of social safety net programs. The DPO is a stand-alone, single tranche operation that is being prepared under the World Bank's Global Food Response Program (GFRP) facility. It responds to the Government's request for quick disbursing budget support to help address unbudgeted expenditures stemming from rising food and fuel prices and the slowing economy. The fiscal impact of the food and fuel prices is estimated to be around 1 percent of gross domestic product (GDP) and it is on this basis that the government revised its plans mid-year from one of achieving a balanced budget position for 2008 to one of a fiscal deficit of that order. The DPO will be financing a portion of the higher financing deficit. Over the medium term, the Bank intends to continue the policy dialogue with Government to encourage a deliberate and coordinated approach to managing the on-going food price increase, to reduce the likelihood and impacts of future price spikes in particular by supporting the development of a social protection program and help to improve medium to long-term agricultural productivity. The Bank will deepen its support to the Government in this area with a future investment operation aimed at helping implement the Government's new Conditional Cash Transfer (CCT) program.