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PIA Press Release
2008/07/01

Mindanao's rural program to adopt 50:50 cost-sharing

Davao City (1 July) -- More rural infrastructure can now be put up Mindanao.

Recognizing the need to fast track rural development projects in island-region, the Investment Coordination Committee (ICC), has finally approved the proposed 50:50 cost sharing arrangement for the Phase 2 of the Mindanao Rural Development Program (MRDP).

MRDP is a program implemented under the Department of Agriculture (DA) geared towards alleviation of the poor communities in Mindanao through implementation of rural infrastructure, livelihood enterprise, and biodiversity conservation projects. The funding of the program was provided through a loan portfolio from the World Bank.

The ICC approval concurs with the agreement reached during the inter-agency meeting of the senior officials of the Department of Finance (DOF), Department of Agriculture (DA), and the National Economic and Development Authority (DA) held April this year. During the meeting, officials agreed to adopt the proposed 50:50 cost sharing arrangement for MRDP rural infrastructure (RI) component. These include construction and rehabilitation of communal irrigation projects, farm-to-market roads, potable water supply, and single lane bridges.

With the 50:50 cost sharing scheme, the national government (NG) through MRDP will cover fifty percent of project cost while the local government unit (LGU) particularly the recipient municipality will shoulder the remaining fifty percent as their corresponding cash equity.

In contrast to the 2003 NEDA Board Policy which enforces the cost sharing mix based on LGUs' income class (and only the fifth to sixth class LGUs will enjoy the 50:50 cost sharing), MRDP's will be implemented regardless of LGUs' income class.

"Of all the official development assistance this rare privilege is given only to MRDP and we attribute this to the strong support of the local chief executives in Mindanao," said MRDP Program Director Roger Chio.

"We are glad that finally this issue has been addressed now we can fully implement the multimillion infrastructure projects critical in increasing agriculture production here in Mindanao," said Chio.

Chio said that this approval of NEDA allows the full implementation of the Program since it has slowed for one year due to the unresolved cost sharing policy of the projects.

Meanwhile, MRDP Deputy Program Director Arnel de Mesa in a meeting with the program's regional focal persons clarified that the ICC approved 50:50 cost sharing with a condition that the program must obtain a "Very Satisfactory" rating from the World Bank during its two consecutive periodic supervisory mission. If not, the Program will have to follow the 2003 NEDA Board Policy.

He further added that the funds for the performance-based grants will no longer be implemented as the funds which totalled US$15.752 is already reallocated to rural infrastructure and will be spent mostly for water and irrigation subprojects.

Although obtaining a "Very Satisfactory" rating is a tall order, Chio however expressed his confidence that the program with the strong support of its LGU partners can now mobilize resources and start in putting in place rural infrastructure critical in addressing the food security and poverty alleviation in Mindanao. (NTP/SBM - MRDP) [top]

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