Decentralized Loan Management Improves Infrastructure for Rural Productivity

The majority of the poor in the Philippines are in rural areas. Many of them are hand to mouth, or subsistence farmers. They are beset with limited water sources and lack of access roads.

The Philippine Government responded to this problem by pursuing an access infrastructure project through the assistance of the Asian Development Bank (ADB). The project aimed to increase rural productivity by developing farm to market roads, communal irrigation systems and potable water sources in four scattered rural areas in the Philippines, namely Bicol, Eastern Visayas, Mindanao and island provinces of Region IV. Its specific targets were to increase household incomes and reduce transportation costs of farmers in these four sites. 

This publication illustrates how a decentralized approach to project management enabled stakeholders to achieve more than its targets. It provides an overview of how decentralization facilitated the resolution of administrative and collaboration issues that come with a project such as this, which covers separate geographical sites. Through ADB’s support, local governments were given the freedom to manage their respective locales, in close collaboration with technical experts who were deployed on-field, and with local agriculture officials guiding them.

Thus as a result, when the project ended in 2012, average farm household incomes in the project sites reached Php 37,000, way above the target Php 28,000, and farm transportation cost was reduced by 78%, exceeding its 40% target.