世界銀行-菲律賓經(jīng)濟(jì)更新2023年12月：人人享有安全飲水和衛(wèi)生設(shè)施（英）

PHILIPPINESECONOMICUPDATESafe

Water

And

Sanitation

For

AllDECEMBER

2023PREFACEThePhilippinesEconomicUpdate(PEU)summarizeskeyeconomicandsocialdevelopments,importantpolicychanges,andtheevolutionofexternalconditionsoverthepastsixmonths.ItalsopresentsfindingsfromrecentWorld

Bankanalyses,situatingtheminthecontextofthecountry’slong-termdevelopmenttrendsandassessingtheirimplicationsforthecountry’smedium-termeconomicoutlook.Theupdatecoversissuesrangingfrommacroeconomicmanagementandfinancial-marketdynamicstothecomplexchallengesofpoverty

reductionandsocialdevelopment.Itisintendedtoservetheneedsofawideaudience,includingpolicymakers,businessleaders,privatefirmsandinvestors,andanalystsandprofessionalsengagedinthesocialandeconomicdevelopmentofthePhilippines.ThePEUisabiannualpublicationoftheWorld

Bank’sMacroeconomics,Trade

andInvestment(MTI)GlobalPractice(GP),preparedinpartnershipwiththeFinance,CompetitivenessandInnovation(FCI);PovertyandEquity;SocialProtectionandJobs(SPJ).

LarsChristianMoller(PracticeManagerfortheMTIGP),GonzaloVarela

(LeadEconomistandProgramLeader),andRalphvanDoorn(SeniorEconomist)guidedthepreparationofthisedition.TheteamconsistedofKevinCruz(EconomistandTask

Team

Leader),KarenLazaro(ResearchAnalyst),LudigilGarcesandPatriziaBenedicto(Consultants)fromtheMTIGP;RaduTatucu

(SeniorFinancialSectorSpecialist)andOuNie(FinancialSectorEconomist)fromtheFCIGP;NadiaBelghith(SeniorEconomist)andSharonPiza(Economist)fromthePoverty&EquityGP;Paula

Cerutti(SeniorEconomist),RuthRodriguez(SeniorSocialProtectionSpecialist),Yoonyoung

Cho(SeniorEconomist)andMa.

LaarniRevilla(Consultant)fromtheSPJ

G

P.

AWorld

BankteamfromtheWater

G

P,

consistingofMa.

FiorellaDelosReyesFabella(SeniorEconomist),Aude-SophieRodella(LeadWater

Economist),GeorgesComair(SeniorEconomist),andAnnabellaSimbulan(Consultant)preparedtheSpecialFocusNoteonEnsuringSustainableWater

SupplyandSanitation,undertheguidanceofMariaAngelicaSotomayor(PracticeManager)andLarsMoller.

Thereportwas

editedbyOscarParlback(Consultant),andthegraphicdesignerwas

Pol

Villanueva(Consultant).PeerreviewerswereAliefAuliaRezza(SeniorEconomist),IndiraMaulaniHapsari(SeniorEconomist)andFan

Zhang,LeadEconomist,SWADR.

LogisticsandpublicationsupportwereprovidedbyGeraldineAsi(

Team

Assistant).TheExternalCommunicationsTeam,

consistingofClarissaDavid,DavidLlorito,StephanieMargallo,andMoiraEnerva(Consultant)preparedthemediarelease,disseminationplan,andweb-basedmultimediapresentation.IITheteamwouldliketothankNdiameDiop(CountryDirectorforBrunei,Malaysia,Philippines,andThailand)forhisadviceandsupport.ThereportbenefitedfromtherecommendationsandfeedbackofvariousstakeholdersintheWorld

Bankaswellasfromthegovernment,thebusinesscommunity,laborassociations,academicinstitutions,andcivilsociety.Theteamisgratefulfortheircontributionsandperspectives.Thefindings,interpretations,andconclusionsexpressedinthePEUarethoseoftheauthorsanddonotnecessarilyreflecttheviewsoftheWorld

Bank’sexecutiveboardoranynationalgovernment.IfyouwishtobeincludedintheemaildistributionlistforthePEUandrelatedpublications,pleasecontactGeraldineAsi(gasi@).Forquestionsandcommentsregardingthecontentofthispublication,pleasecontactKevinCruz(kcruz@).QuestionsfromthemediashouldbeaddressedtoDavidLlorito(dllorito@).FormoreinformationabouttheWorld

BankanditsactivitiesinthePhilippines,pleasevisit/ph.anddonotnecessarilyreflecttheviewsoftheWorld

Bank’sexecutiveboardoranynationalgovernment.TABLE

OFCONTENTSPrefaceTable

of

ContentsListof

FiguresiiiiiivvListof

TablesListof

BoxesvAbbreviationsandAcronymsExecutive

SummaryviviiPartI.RecentEconomicandPolicyDevelopments11111.1RecentGlobalDevelopments:SubduedGlobalActivity1.21.31.41.51.6OutputandDemand:OutperformingPeersDespiteSlowerGrowthMomentumInflationandMonetaryPolicy:SustainedPricePressuresExternalSector:RecoveringTourism

andNarrowingTrade

DeficitFiscalSector:PerforminginLinewithConsolidationTargetsEmploymentandPoverty:Slowingjobcreation141719222528283839PartII.OutlookandRisks2

.1

GrowthOutlook2.2

PovertyandSharedProsperity2.3

RiskandPolicyChallengesPartIII.Water

Security

forResilientandInclusiveGrowth:SecuringtheBasics,RisingtotheChallenges44III3.1Water

SecurityastheCornerstoneofResilientandInclusiveDevelopmentandClimateAdaptation44535557593.2

UnderstandingtheWSSGaps:Institutions,Incentives,andinvestments3.2.1

Institutions:NeedforGreaterIntegrationandEfficiency3.2.2

Incentives:NeedforBetterValuing

Water

andRegulationofWSSServices3.2.3

Investments:NeedforBetter-LeveragedFinancingandFunding,Targeting

PriorityAreas3.3

TheWay

ForwardScalingUp

andSpeedingUp

Effortsoninstitutions,Incentives,andInvestmentsforUniversalAccesstoWSS3.3.1

Institutions:StrengtheningPoliciesandGovernance3.3.2

Incentives:FocusonService

Providers6161633.3.3

Investments:FocusonPrioriyareas,Ta

pthePrivatesector,andImplementaProgrammedApproachReferences6468List

of

figuresFigure1.

Globalindustrialproductiondampenedin2023H1.Figure2.

Restrictivetrademeasuresweighedontrade.Figure3.

CommoditypriceshavereturnedtolevelsbeforeRussia’s

invasionofUkrainebutremainelevated.1212131516Figure4.

Theunexpected2023Q2slowdownweighedonthePhilippines’economicrecoverymomentum.Figure5.

Servicescontinuedtoprimarilydrivegrowth,supportedbyindustryalthoughtoalesserextent,inQ1-Q32023.Figure6.Weak

domesticactivitypressedonprivateconsumptionandinvestmentassubduedglobaldemandweighedontradeperformanceinQ1-Q32023.16Figure7.

Inflationremainedelevatedinthefirsttenmonthsof2023duetopersistentlyhighfoodcosts.1818Figure8.Forward-lookingindicatorsofthebankingsystem’shealthindicateresilience.Figure9.

Importsdeclinedamidtheslowdownindomesticgrowth.Figure10.

TheBOPsurpluswas

drivenbythenarrowerCAdeficitandhigherfinancialinflows.2020Figure11.

ThePhilippinepeso,alongwiththecurrenciesofregionalpeers,hasdepreciatedsincethebeginningof2023.21Figure12.

Lowerrevenuesandexpendituresnarrowedthefiscaldeficit.Figure13.Publicdebtslightlyeasedwhilethefiscaldeficitnarrowed.Figure14.Femalelaborforceparticipationexhibitedadownward

trendinthelastfewmonthsFigure15.…whiletheunemploymentrate

graduallydecreased.Figure16.Households’perceptionoftheirwelfarecontinuestoimprove.Figure17.Growthprospectsremainpositiveoverthemediumterm.232326262731IVFigure

18.Despite

consolidation,

public

investment

is

projectedto

remain

above

5.0

percentofGDP.

32Figure19.NationalGovernmentExpenditurebySector,2022–2024(ObligationBasis).Figure20.TheBSP’sliquidityfacilityremainselevated,albeitdeclining.Figure21.LendingtotheprivatesectorcontinuestofallasashareofGDP.Figure22.

Actualandprojectedpoverty

rates($3.65-a-daypoverty

line).Figure23.CurrentHealthExpenditurebySource,2000–2022.Figure24.Total

HealthExpenditurebyCountry,2020.34373738434346474748Figure25.FourPillarsforWater

SecurityandClimateAdaptation.Figure26.QualityofWater

AccessacrossWealth

Quintiles(2000-2020).Figure27.SafelymanagedwatersupplyinEasternandSoutheasternAsia.Figure28.

LevelsofWater

SupplyServiceperRegion(2021).Figure29.

PovertyandSafeWater

SupplyAccessinthePhilippinesattheLocalGovernmentUnitlevel.4950Figure30.QualityofSanitationAccessbasedonWealth

Quintiles(2000-2020).Figure31.ImpactsofWater

PollutionacrossSectors.5153565860626566Figure32.

TheExtent

andCompositionofHowWater

isConsumedvariesperRegion.Figure33.

TheFragmentedNatureofthePhilippines’Water

Sector.Figure34.Water

ManagementtowardsAchievingWater

Security.Figure35.SimulationofLGU

InvestmentstoAchieveUniversalAccesstoWSSservices.Figure36.Water

ServiceProvidersbyManagementType

perMunicipality.Figure37.

RateofUrbanizationinNCRandCALABARZON.Figure38.ScalingupFinanceforWater:TheRolesofthePublicandPrivateSector.List

of

tablesTable

1.

FiscalPerformance,Q1-Q32023.24293667Table

2.

EconomicIndicatorsforBaselineProjections.Table

3.

TheMedium-Term

FiscalFramework.Table

4.

ThreeKey

PriorityAreastoReachUniversalAccesstoWSS.List

of

boxesBox1.

TheProposed2024BudgetforthePhilippineNationalGovernment33Box2.TheCapacityofthePhilippines’FinancialMarketstoFinanceGovernmentFiscalNeeds354151546064Box

3.PrioritizingInvestmentsinPrimaryHealthCareforUniversalHealthCoverageBox

4.Seeing(andMeasuring)theUnseen:Water

QualityBox

5.Water

StressinMetroManilaandMetroCebuBox

6.LGU

InvestmentSimulationtoMeetUniversalAccesstoWSS.Box

7.

FinancialViabilityfromE?iciencyGainsVABBRE

VIATIONS

ANDACRONYMSASEANAssociationofSoutheastAsianNationsBangsamoroAutonomousRegioninMuslimMindanaoOnestocktankbarrelBureauofInternalRevenueBalanceofpaymentsBasispointsBangkoSentralngPilipinasBureauofTreasuryCurrentaccountCountryClimateDevelopmentReportDepartmentofBudgetandManagementDepartmentoftheEnvironmentandNaturalResourcesDemographicHouseholdSurveyDepartmentofFinanceDepartmentofWater

ResourcesEastAsiaPacificLICsLow-incomecountriesLocalWater

UtilitiesLWUABARMMAdministrationMCMMICSMLGUMTFFNCDsNCRMillioncubicmetersbblBIRBOPBPSBSPBTrMultipleIndicatorsClusterSurveyMunicipallocalgovernmentunitMedium-termFiscalFrameworkNoncommunicablediseasesNationalCapitalRegionNationalgovernmentagencyNationalNutritionSurveyNon-operationalwaterdistrictsNon-performingloanNGANNSCACCDRNOWDNPLDBMODAOutput-basedaidOtherdepositorycorporationsOverseasFilipinosPhilippineDevelopmentPlanPrimaryhealthcarePhilippineHealthInsuranceCorporationPhilippinePesoPurchasingpowerparityPercentagepointsPhilippineStatisticsAuthorityPhilippineWater

SupplyandSanitationMasterplanSustainableDevelopmentGoalsUnifiedResourceAllocationFrameworkUnitedNationsInternationalChildren’sEmergencyFundValue-addedtaxWater,

sanitation,andhandwashingWater

districtWorld

HealthOrganizationWater

RegulatoryCommissionWater

ResourcesManagementO?iceWater

serviceproviderWater

supplyandsanitationODCDENROFsPDPDHSDOFDWREAPEEDEMDEsPHCPhilHealthPHPEnvironmentalentericdysfunctionEmergingMarketsandDevelopingEconomiesFragility,conflict,andviolenceForeignDirectInvestmentFieldHealthServicesInformationSystemPPPpptsPSAFCVFDIFHSISPWSSMPVISDGURAFFOBFreeonboardGDPGrossDomesticProductHouseholdWater

InsecurityExperiencesUNICEFHWISEVATWASHIWMPIWRMIT-BPOIntegratedWater

ResourcesManagementPlanIntegratedWater

ResourceManagementInformationtechnology-businessprocessoutsourcingLaborForceParticipationRateLaborForceSurveyWDWHOWRCWRMOLFPRLFSLGCLGUWSPWSSLocalGovernmentCodeLocalgovernmentunitEXECUTIVE

SUMMARYRecent

Economic

Developmentstradedeficit.Goodsexportsdeclinedamidweakerglobaldemandwhilegoodsimportsshrankatafasterpaceduetolowerglobaloilpricesandtheslowdownindomesticdemand.In

addition,thenarrowercurrentaccountdeficitwas

supportedbythemovementofglobalconsumptiontowardsservices.In

particular,therecoveryoftourismactivitiesandrobustgrowthoftheInformationTechnology

–BusinessProcessOutsourcingsectorcontributedtothelowertradedeficit.Thecurrentaccountdeficitwas

financedbyexternalborrowingbythenationalgovernmentandlocalbanks.GrossinternationalreservesrosetoUS$98.7billion(

7.3

monthsofimports).Economicrecovery

slowedinthefirstthreequarters

of

2023

asdomesticactivitymoderated,andweakexternaldemandpersisted.GDPgrowthdecreasedfrom7.

7percentinQ1-Q32022

to5.5percentinQ1-Q32023,mirroringthegrowthslowdownintheregion.Serviceswas

themaingrowthengine,ledbytherecoveryoftourismactivities.Thegrowthcontributionofindustrydeclined,asweakexternaldemandweighedontradeandmanufacturingactivities.Meanwhile,agriculture’sgrowthcontributionremainedmarginalduetotheimpactofweather-relateddisturbances,highinputcosts,andstructuralissuessuchastheunderinvestmentinirrigationandwatersecuritythathavelimitedproductivitygrowthinthesector.

Onthedemandside,householdconsumptioncontinuedtofuelgrowth,althoughweighedbyhighinflationandweakeningpent-updemand.Thecontributionof

investmenttogrowthdeclinedduetohighinterestrates.Inlinewithitsfiscalconsolidationagenda,thegovernmentreduced

publicspending,narrowingthefiscaldeficit.Publicrevenuesremainedabovethegovernmenttargetat16.5percentofGDPinQ1-Q32023despiteareductionintaxcollection.Publicspendingtotaled22.2

percentofGDPinQ1-Q32023(belowplannedexpenditure),owingtolowersubnationaltransfers,anddelaysinbudgetexecutioninrecurrentspending.Whilespendingonsectorssuchaswaterresourcesdevelopmentweremaintainedin2023,itsbudgetfor2024isestimatedtodeclineby0.1

percentofGDPduetoongoingfiscalconsolidation.Thefiscaldeficitnarrowedfrom6.5percentofGDPinQ1-Q32022to5.7percentofGDPinQ1-Q32023.Meanwhile,thenationalgovernmentdebtslightlyeasedto60.2percentofGDPasofend-September2023.HeadlineinflationhasremainedabovetheBSP2–4percenttarget,averaging6.4percentinthefirsttenmonthsof

2023

from5.4

percentayearago.Highfoodinflationcontributedtonearlyhalfofheadlineinflation,whiletransportationinflationhasdeclinedsteadilysincepeakinginJuly2022

duetolowerglobalcrudeoilprices.However,

theincreaseinglobalcommoditypricessuchasfuelandricesinceJulyandAugusthasputadditionalpressureonheadlineinflation,promptingtheBangkoSentralngPilipinas(BSP)toraiseitskeypolicyrate

byanadditional25basispointsinOctober.To

mitigatetheimpactofhighinflationonvulnerablesectors,thegovernmentapprovedtargetedassistancetransferprogramssuchasthedigitalfoodstampprogramto‘foodpoor’

families,cashsubsidiestofarmers,andfuelsubsidiestopublicutilityvehicleoperators.7Labor

marketoutcomeswereunevenasunemploymentfell,but

low-qualityjobsandunderemploymentareontherise.Thelaborforceparticipationrate

(LFPR)decreasedfrom66percentinMarch2023to64.7

percentinAugust2023,drivenbyfewerwomenparticipatinginthelabormarket.Meanwhiletheunemploymentrate

declinedfrom4.7percentinMarchto4.4percentinAugust2023,ledbyjobcreationintheagriculture,manufacturing,andconstructionsectors.However,

low-qualityjobscontinuetodominatethelabormarket.Theshareofelementaryoccupationsassociatedwithlowandirregularpayremainedhighat30.1

percentoftotalemploymentinAugust2023,relativelyThereboundintourismandweakermerchandiseimports

narrowedthecurrentaccountdeficit

from6.1

percentof

GDPin2022H1

to4.0percentof

GDPin2023H1.Thiswas

driveninpart

bythedeclineinthegoodsunchangedfrom29.9percentinMarch2023.The

commodityprices.In

majoradvancedeconomies,shareofwageandsalaryworkersamongtheemployedslippedbackto62.6percentinAugustaftertemporarilyreachinganannualpeakof67.2percentinJuly2023.Theshareofself-employed(own

account)andunpaidworkersremainedataround27

percentand8percent,respectively,stillelevatedcoreinflationcouldpromptcentralbankstokeepinterestrateshigherforlongerthanexpected.Onthedomesticfront,thethreatofweather-relatedshocksincludingtheongoingepisodeofEl

Ni?omayimpactthedomesticfoodsupplyandplaceupwardpressureonfoodprices.duringthesameperiod,indicatingthecontinuous

Thesuccessofthegovernment’smedium-dependenceofworkersoninformalandlow-productivityjobs.termfiscalconsolidationagendahingesonitsabilitytopasskeytaxpolicyandadministrationreforms.Whilethegovernmentiscurrentlyontracktomeetitsfiscalconsolidationtargetfor2023,challengesremaintoensureitcanalsomeettargetsoverthemediumterm.Whiletheinitialsuccessinreachingitsfiscaltargetsreliedprimarilyonreducingpublicspending,thegovernmentwillhavetogenerateadditionaltaxrevenuesfromnewtaxpolicyandadministrationmeasuresbeginningin2024toremainontrack.Thetimelypassageoftheserevenuemeasuresiscrucialtoensurethattheauthoritiescanprotectinvestmentspendingoninfrastructure,humancapital,andsocialprotection—keydriversoflong-termgrowth.Outlook

and

RisksThegrowthprojectionforthePhilippinesremainsunchangedfromtheOctober2023EastAsiaPacific(EAP)

EconomicUpdate.Theeconomyisprojectedtogrowby5.6percentin2023,followingthegrowthreboundin2023Q3andapickupingovernmentspending.Overthemediumterm,animprovementindomesticdemandisexpectedtodriveamodestincreaseingrowthtoanaverageof5.8percentin2024-25.ServicesareexpectedtodrivegrowthduetotheongoingrecoveryofthetourismsectorandtheconsistentperformanceoftheIT-BPOindustry,whichislikelytospurjobcreation,increasehouseholdincomes,andbenefitconsumptionandtourism-adjacentindustries.Amodestincreaseinglobaltradegrowth,alongwithincreasedgrowthintheEAPregion,wouldcontributetostrongertradeandmanufacturinggrowthin2024-25.Ontheexpenditureside,privateconsumptionisexpectedtoremainthemaingrowthengine,supportedbyarobustlabormarket,steadyremittancegrowth,andlowerinflation.Investmentgrowthisexpectedtoslowin2023,beforepickingupin2024-25,inpart

duetorecentinvestmentreformsandacommitmenttopublicinvestmentdespiteongoingfiscalconsolidation.To

improvethelong-termgrowthpotential,itisimperativetoaddresslowproductivityandstructuralchallenges,includingunderinvestmentinphysicalandhumancapital.E?ectiveimplementationofpro-investmentreformsinrenewableenergy8andsectorsliketrade,transport,andtelecommunicationswouldgenerateeconomy-wideproductivitygains,estimatedat3.2

percentonaverage.Implementingreformsthatencourageprivatesectorparticipationininvestmentscouldenhancethegrowthpotential,evenwithintheconstraintsoflimitedfiscalspace.E?ectivepublicspendinginagriculturecouldalsoboostproductivityandenhancethelocalfoodsupply,

therebyreducingtheimpactoffoodpriceshocksthatdisproportionatelya?ectthepoor.

Finally,implementingreformsthatstrengthentheresilienceofwatersupplyandsanitation,education,humansettlements,andhealthcaresystemscouldmitigatethee?ectsofclimatechange,publichealthcrises,andnaturaldisastersinboththeshortandlongterm.PartIIIofthePEUexaminesthePhilippines’watersupplyandsanitationsector,o?eringpolicyrecommendationsforuniversalaccesstosafe,su?icient,a?ordable,andsustainableservices.Thegrowthoutlookissubjecttodownsiderisks.

Thethreatofhigher-than-expectedglobalinflation,escalatinggeopoliticaltensions,andtighterglobalfinancingconditionscoulddampenglobalactivityandincreaserisksoffinancialstress.Ontheexternalfront,theescalationofgeopoliticaltensionscouldleadtoadditionalfoodandenergysupplyshocks,placingadditionalpressureoninflation.Moreover,traderestrictionsonagriculturalproductscouldcausesupplydisruptionsandleadtoincreasedvolatilityinSpecial

Focus–

Water

Security

forResilientand

InclusiveGrowthWhileallpillarsareneeded,thefirstisabuildingblockforhumancapital,publichealth,andpoverty

reduction.An

integratedapproachto

watersecurity

isneeded

toadapttoclimatechangesustainablyandinclusively.Andsecuringadequatewaterandsanitationisitsprerequisite.Recognizingthecriticalimportanceforitspopulationanddevelopment,thegovernmenthasprioritizeduniversalaccesstowaterandsanitation.As

of2022,

only48

percentofthepopulationreceivessafelymanagedwaterservicesandaround63percenthaveaccesstosafelymanagedsanitationservices.By2030,existingservicegapswillgrowonabusiness-as-usualscenario:closeto32millionpeoplewillneedsafeaccesstowaterand35millionwillneedsafesanitationinurbanareas.Theimpactsof

climatechangearemostlyfeltthroughwater:toomuch,toolittle,ortoopolluted.ThePhilippinesalreadyconfrontsthesethreechallengesindi?erentspatialcombinations–floods,droughts,andheighteningpovertyandinequalitydynamics,notablythroughinfrastructureandqualityofserviceaccessgapsinthewatersupplyandsanitation(WSS)sector.Duetoitscross-sectoralimpacts,watersecurity

isasocio-economic

priorityinthePhilippines.Climatechangemakesiturgent.Bysomeestimates,thePhilippineswillexperienceanaverageannualeconomicdeclineof0.7

percentinannualGDPintheyearsupto2050becauseofwaterrisks.Water

risksfromflooding,droughts,andpoorwaterqualityalsorepresentathreattofoodsecurity.Itwillcompoundexistingmalnutritionandspatialinequitiesinthecountry.Water,

sanitation,andhygieneservicesareessentialtohouseholds,industries,andthemaintenanceanddevelopmentofurbanareas.Morethan47percentofthepopulationlivesinrapidlygrowingurbanareas.ThePhilippineswillneed

tospeed

upandscaleupitse?orts

aroundthe“three

Is”–Institutions,IncentivesandInvestments.Theseshouldhelpclosetheexistingwaterandsanitationservicegaps,addressfutureaccessdemand,andadapttoclimateshocks.Oninstitutions:Itisimportanttohaveclearpoliciesandinstitutionalarrangementswithe?ectivecoordination,planningandmanagementacrosssectorsandlevelsofgovernment,development,andenforcementofregulation.Giventhecurrentoperatingenvironment,policiesandregulationsforbothwaterresourcemanagement(WRM)andWSSneedtobereviewedinordertoimprovesectorcoordinationandaddressitsfragmentedinstitutions.Thegoalistoimprovethesector’sperformanceanditsreadinesstoadapttoclimatechangeandanyWater

security

andclimateadaptationdependonfourpillars:Achievinguniversalaccesstosafewatersupplyandsanitation(pillar1);improvingirrigationmodelsandproductivity(pillar2);reducingfloodanddroughtrisksthroughsustainablewaterresourcemanagement(pillar3);

andenhancingwatersecurityinfragility,conflict,andviolence(FCV)

areasthroughaholisticdevelopmentapproachforpeace(pillar4).9FourPillarsforWater

Security

andClimateAdaptationStrengtheningwatersecurity

andclimateadaptationthroughsystemschangeandinvestmentinwateranddisasterriskreductionPillar1Pillar2Pillar3Pillar4ReducingfloodanddroughtrisksthourghsustainablewaterresourcesEnhanceWater

SecurityinFCV:AholisticdevelopementApplyingaprivatesectorlensAchievinguniversalaccesstosafewatersupplyandsanitationImprovedirrigationmodelsandwaterproductivityapproachforpeacemanagementSource:GlobalChallengeProgram,approachpaperforwatersecurity(2023)–forthcoming.futurelarge-scalepublichealthemergency.These

(LGUs)needtosupportWSPsontheroadtopoliciescouldincludeadoptionofintegratedwaterresourcemanagement(IWRM)fore?icientandsustainableplanninganduseofwaterresourcesandaclearfundingpolicyforthesector,amongothers.Institutionalandpolicycreditworthiness.Oninvestments:Substantialinvestments,sectorfunding,andfinancingareneededtoclosethecurrentgaps.Itwillalsopreparethesectorforreformsshouldalsomakethesectorattractivefor

climatechangeandincreaseddemand.Publicmuchneededprivatesectorinvestment.resourcesalonecannotmeetthoseneeds.Thoseresourcesneedtobebetterleveragedwithamoresystematicapproachtoscalingupthewaterandsanitationsectorfinancing.Thegovernmentneedstofocuson:(1)workingonpriorityareassuchascitieswherealmost50percentofthepopulationlives,aswellaspoorandlaggingareas;(2)usingscarcepublicfundsmoree?iciently;(3)

tappingtheprivatesector;(3)adoptingaprogrammedapproachtoinvestmentrollout;and(5)

increasingwaterstoragecapacityforwatersourcemanagement.Onincentives:Policyreformsneedtobecombinedwithapushintermsofregulationtobettervalueandpricewater.

Thefollowingmaybeconsidered:(1)pricesthataccuratelyreflectthetruecostsofserviceprovision,operationsandmaintenance(O&M)andcapitalcosts,aswellastheenvironmentalcostsandsubsidiesthatprotectthepoor;

(2)setclearstandardsandmonitorcomplianceofservicelevelsforwaterserviceproviders(WSPs);and(3)

thenationalgovernmentandlocalgovernmentunits10Photoby:MDVEdwardsRECENTECONOMICANDPOLICYDEVELOPMENTS1.1

Recent

Global

Developments:Subdued

Global

ActivityPART1Subduedglobaldemandandashiftinconsumptiontowardservicesweighedonglobaltrade.Commoditypriceshaveeasedconsiderablybutremainabovepre-pandemiclevels,contributingto

elevatedglobalinflation.Theresultingrestrictivefinancialconditionsinadditionto

aweakexternale