Philippines: Financing Reform Addresses Funding Gaps in Water, Sanitation, and Hygiene
The Government of the Philippines has renewed its initiative to advance the Unified Financing Framework (UFF) for Water Supply and Sanitation. The UFF is a financing policy aimed at increasing investments to enable the country to reach its target of universal coverage for water supply and sanitation services by 2030.
Since 2018, USAID’s Water, Sanitation, and Hygiene Finance (WASH-FIN) project has supported the Philippines’ National Economic Development Authority—the oversight agency for planning economic development in the country—on operationalizing the UFF.
To achieve universal coverage, the Philippines will need $1.8 billion annually from 2019 to 2030—an amount 22 times more than the historical investments of about $80 million per year.
The UFF takes a holistic approach by enabling the allocation of public grants and subsidies for underserved areas and providing technical assistance to increase utility governance, operations, and capacity. It promotes public-private partnerships and market-based financing for creditworthy utilities to support expansion of WASH services. The UFF’s key strategy is to segment the market, steer the utilities to the most appropriate financing source, and allocate scarce public grants to the most in need while leveraging private-sector resources.
Building on USAID’s past successes and support from the Japan International Cooperation Agency and the World Bank, WASH-FIN worked with national government institutions to develop an implementation plan and a roadmap to guide capacity and institutional development needs. The project also helped develop operational guidelines and a standard financial model to appraise projects and determine the appropriate level of subsidy and/or financing.
USAID also co-designed a grant-microloan program with the Philippine Department of Health, UNICEF, and Water.org to enable low-income households to construct sanitary toilet facilities. While the UFF has yet to be fully operationalized, with sustained leadership from the Government of the Philippines and strong sector buy-in of this reform, its impact can be transformative—granting utilities the much-needed resources to give each home access to clean drinking water and better sanitation services.