Findings

Component 1 seeks to strengthen the capacity of target CDI cities for inclusive and resilient urban development through the implementation of three sub-components: Sub-component 1.1 – Strengthening local capacity in urban development, including the promotion of disaster risk reduction and preparedness and improving climate-resilient land-use planning and development following international best practices; Sub-component 1.2 – Improving local climate resilient infrastructure planning, financing and implementation; and Sub-component 1.3 – Increasing access to sustainable water supply and sanitation services.

For the most part, SURGE surpassed all its life-of-project extension indicator targets identified in SURGE’s AMELP, revised in 2020. SURGE support to enhance the skills of local planners in mainstreaming climate resilience and disaster risk reduction led to the following results for this component: 1) adoption of risk-sensitive, socially inclusive, and gender-responsive local development plans in compliance with national laws; 2) integration of CCA and DRR in WASH infrastructure planning and implementation; and 3) promotion of low emission development strategies in local development planning and investment programming.

Subcomponent 1.1 – Strengthening local capacity in urban development, including the promotion of disaster risk reduction and preparedness and improving climate-resilient land-use planning and development following international best practices.

This sub-component focused on strengthening the capacity of target CDI cities to identify, assess, plan, and implement activities for low-emission economic growth, and to mainstream climate change adaptation, disaster risk reduction, and low-emission economic development (LED) strategies into all aspects of city governance.

Finding 1:

SURGE assisted seven CDI cities (Batangas, Cagayan de Oro, General Santos, Iloilo, Puerto Princesa, Tagbilaran, and Zamboanga) in updating their Comprehensive Land Use Plans (CLUPs) with an emphasis on mainstreaming climate change adaptation and disaster risk reduction (a requirement for approval by the DHSUD of updated CLUPs).

Under Philippine law, LGUs must prepare and update their CLUPs on a 10-year cycle. Upon approval of the DHSUD, City Legislative Councils enact the CLUPs in a Zoning Ordinance, which then serve as the primary basis for regulating the use of land resources within the city jurisdiction. CLUPs also serve as the framework for the different development plans required of LGUs under national laws and policies such as the Comprehensive Development Plan under the Local Government Code of 1992, Local Climate Change Adaptation Plan under the Climate Change Act of 2009, and the Local Disaster Risk Reduction and Management (DRRM) Plan under the DRRM Act of 2010.

Based on the urban development planning capacity assessments in 2016, SURGE provided training and mentoring sessions to enhance the skills of key LGU personnel on Vulnerability Assessment (VA), DRRM Planning, Climate and Disaster Risk Assessment (CDRA), Local Climate Change Adaptation Planning (LCCAP) and to update mandated local development plans. Overall, LGU stakeholders found SURGE interventions to be very effective in enhancing their knowledge and skills (mean rating was 4.2 for planning-related training where 1 is not effective at all and 5 is extremely effective). Interviews with LGU planning personnel confirmed the effectiveness of SURGE interventions in increasing their knowledge and skills, particularly in mainstreaming CCA and DRR in local development plans. SURGE also conducted a Geographic Information System (GIS) capacity needs assessment and an orientation workshop on the use of GIS-generated maps in local development planning. SURGE conducted a pilot of a web-based geo-portal for storing and sharing urban planning and management information in Zamboanga City. Competing LGU priorities hampered replication of this activity in other cities.

With guidance from SURGE technical experts and using the findings from the VA, CDRA, and LCCAP activities implemented by technical working groups (TWGs) composed of key LGU planning officers, the seven CDI cities were able to update and mainstream CCA and DRR into local development plans (see Table 4). SURGE conducted a technical review of the updated CLUPs in 2021 and found that the plans are risk-sensitive, socially inclusive, gender-responsive, and compliant with basic DHSUD standards.

As of September 2021, City Councils in seven out of eight CDI cities (Batangas, Cagayan de Oro, Gen Santos, Iloilo, Puerto Princesa, Tagbilaran, Zamboanga) have approved the updated CLUPs for adoption. The integration of CCA and DRR in the updated CLUPs allows CDI cities to identify appropriate risk reduction and climate change adaptation and mitigation options as inputs to comprehensive development plans and local investment programs. This improves urban resilience and helps to ensure more sustainable economic growth.

Finding 2:

SURGE supported the DHSUD in developing an enhanced Climate Disaster Risk Assessment (CDRA) Training Module by expanding the scope of risk assessment and adopting a user-friendly Compiled Hypertext Markup (CHM) format.

Starting in 2017, the SURGE project provided technical assistance to DHSUD’s Policy Development Group in the development of an enhanced CDRA training module called CDRA CHM to help ensure the continuity of DRR-CCA mainstreaming in local development plans. Developed with the participation of key DHSUD staff from PDG and regional offices, the CDRA CHM is an integrated platform that guides trainers and LGUs in facilitating risk assessments, and eventually mainstreaming DRR-CCA in development planning.

The intended users of CDRA CHM are the CDRA participants and personnel of DHSUD and other mandated government agencies such as DILG, OCD-NDRRMC, and the Climate Change Commission (CCC). Technical personnel and officers from the City/Municipal Planning and Development Office and the Disaster Risk Reduction Management Office of the LGUs can also use this training module as their reference guide in facilitating risk assessment. CDRA CHM contains the latest practical instructions, references, and templates for CDRA. This should facilitate the risk assessment process, especially for LGUs which do not have technical expertise on DRR-CCA methodology. On June 28, 2021, the Management Committee of DHSUD approved the nationwide adoption of CDRA CHM.

Finding 3:

In partnership with Golden Gate University (GGU) in the United States, SURGE facilitated the institutionalization of the Urban Development Learning Program (UDLP) in local universities in three CDI cities (Cagayan de Oro, Iloilo, and Tagbilaran) and replication of UDLP in three other cities (General Santos, Puerto Princesa, and Zamboanga).

SURGE helped launch the first UDLP in the University of the Philippines Visayas (UPV) in Iloilo City with a short course on sustainable urban development in September 2018. Planning practitioners and faculty members from Iloilo and other CDI cities participated in the short course wherein international experts from GGU and local experts discussed strategies and applications of urban planning in land use, transportation, and socialized housing. The short course laid the groundwork for an academic partnership between UPV and GGU.

In June 2020, Holy Name University in Tagbilaran City launched the Executive Diploma on Urban and Regional Development, a new course developed in partnership with GGU. The program is a 21-unit graduate diploma course to strengthen comprehensive integrated planning and mainstream disaster resilience in development planning.

The University of Science and Technology of Southern Philippines in Cagayan de Oro launched a master’s program in Public Sector Innovations, developed in partnership with GGU, in June 2021. Designed as a two-year program, this new program has four specializations relevant to emerging local and global themes in the public sector such as Public Policy Studies, Sustainable Development, Digital Platforms, e-Governance Solutions, and Environment and Climate Solutions.

In partnership with GGU, SURGE replicated the UDLP in three additional partner universities in CDI cities: Palawan State University in Puerto Princesa, Mindanao State University in General Santos City, and Ateneo de Zamboanga in Zamboanga City.

University and city officials view the UDLP as an effective mechanism to address the need for continuous upgrading of planning skills at the LGU level and the need to develop a pool of planning professionals who can be tapped by LGUs in the preparation of risk-sensitive and socially inclusive local development plans.

Finding 4:

In partnership with the Philippine Institute of Volcanology and Seismology (PHIVOLCS) under the Department of Science and Technology (DOST), SURGE helped CDI cities build their online hazard and risk database for climate and disaster resilience through GeoRiskPH.

GeoRiskPH is a multi-agency initiative led by DOST-PHIVOLCS which aims to provide planners and policy makers a central source of information for accurate and efficient hazard and risk assessment. Following the signing of a memorandum of agreement (MOA) between DOST-PHIVOLCS and DOST in March 2021, SURGE held a virtual training series on building an online hazard and risk database through GeoRiskPH for 99 officials from CDI cities. With access to GeoRiskPH, disaster and climate change managers from the CDI cities will be able to compile hazard and risk information that is useful in updating local development plans.

City officials cited the following key contributing factors to SURGE achievements:

1. cities are mandated by law to prepare and update local development plans
2. the SURGE project provided technical expertise on climate resilience and disaster risk management, which most CDI cities needed
3. the city leadership has strong buy-in, resulting in the designation of key personnel to the TWGs
4. city stakeholders actively participate in project activities including training, workshops, and study tours designed to enhance their capacity for local development planning
5. partnerships have been built by SURGE with key government agencies such as DHSUD and DOST-PHIVOLCS

Finding 5:

SURGE conducted a GIS capacity needs assessment and an orientation workshop on the use of GIS-generated maps in local development planning for all CDI cities. In 2018, SURGE piloted a web-based geo-portal for storing and sharing urban planning and management information in Zamboanga City. However, project stakeholders explained that despite the positive results from the pilot, SURGE did not expand the geo-portal to other cities due to competing priorities of both SURGE and CDI cities arising from the COVID-19 pandemic.

Sub-component 1.2 – Improving local climate resilient infrastructure planning, financing, and implementation

Finding 1:

SURGE helped CDI cities enhance their climate change mitigation strategies by providing technical guidance on conducting GHG inventories and preparing GHG management plans.

LGUs are required by the Climate Change Act of 2009 (RA 9729) to prepare a Local Climate Change Adaptation Plan (LCCAP) that is consistent with local and national policy frameworks. LCCAP preparation is guided by DILG Memo Circular 2014, which enjoins LGUs to identify mitigation options to help reduce their carbon footprints and contribute to efforts to address climate change.

In collaboration with ICLEI-Local Governments for Sustainability, an international non-governmental organization that promotes sustainable development, SURGE assisted four CDI cities to prepare GHG management plans in compliance with national policies. In Legazpi and General Santos, local stakeholders were trained on clean energy and low emissions development strategies. To facilitate the GHG inventory, ICLEI held orientation workshops for external data providers and survey enumerators hired by the city government on the basics of GHG inventory and survey instruments used in data gathering. Stakeholders were also introduced to the CCC’s spreadsheet GHG quantification tool, a practical tool for processing the collected data during the GHG emission survey.

Through ICLEI-Local Governments for Sustainability, SURGE also supported Tagbilaran and Zamboanga by conducting workshops to orient key city stakeholders on GHG management planning, including the setting of GHG emission reduction targets, identifying existing and targeted low emission development strategies based on local development plans, and the utilization of USAID’s Clean Energy Emissions Reduction (CLEER) tool.

As of September 2021, the city councils of four CDI cities (General Santos, Legazpi, Tagbilaran, and Zamboanga) have approved the GHG management plans including their PPAs. For PPAs that LGUs have funded and implemented, the SURGE project team reported that an estimated 1,803 metric tons (tCO2) of GHG emissions were reduced, sequestered, or avoided across these cities (Table 5). It should be noted, however, that the evaluation team did not validate the GHG emission reduction estimates as this was not within the scope of the evaluation.

Finding 2:

SURGE helped build a partnership between CDI cities and the CCC, thereby providing continuity to building capacities of CDI cities in formulating local climate change adaptation and mitigation strategies.

LGU stakeholders said that their participation in SURGE activities increased their awareness, knowledge, and skills on GHG inventory and management planning, including the use of the GHG Inventory Toolkit (developed by CCC with the help of USAID) and other internationally accepted tools and templates on GHG accounting and monitoring (such as the CLEER tool). Several key informants pointed out that their participation in SURGE activities helped them to appreciate the potential contribution of their cities’ programs, projects, and activities (PPAs) to the Nationally Determined Contributions commitments of the Philippines under the Paris Agreement.

Finding 3:

SURGE helped CDI cities improve water supply and sanitation services by mainstreaming CCA and DRR in water safety planning.

With SURGE assistance, water service providers in three CDI cities (Batangas, General Santos, and Legazpi) and adjacent areas were able to integrate CCA and DRR in their Water Safety Plans (WSPs). Through a series of CDRA workshops facilitated by SURGE technical specialists, water districts and rural water and sanitation associations were able to assess hydrometeorological and geophysical hazards and risks that threaten their water supply systems. The integration of CCA and DRR in WSPs will guide the WSPs in determining and addressing the potential impact of disaster/risk to the quality of water that they supply to their customers.

Finding 4:

CDI cities implemented PPAs to help communities adapt to climate change. Data gathered from the SURGE activity show that the total investments in climate change adaptation actions by the eight CDI cities investments amounted to USD583,331 as of June 2021. Including leveraged investments, the total amount mobilized for climate change adaptation PPAs is estimated at USD10.8 million (see the distribution of investments by CDI city in Table 6).

A key contributing factor to the project achievements that the SURGE team and city stakeholders noted is the need for cities to comply with national policies. LGUs in the Philippines are required by law to allot at least 5 percent of their annual budgets for DRRM actions, which largely comprise climate adaptation PPAs.

Key LGU informants added that their participation in the project activities enhanced their appreciation of the benefits of climate-resilient planning and motivated them to increase allocations of financial resources to PPAs that contribute to climate change adaptation and mitigation.

Conclusions:

SURGE-supported CDI cities successfully integrated climate adaptation and mitigation actions in urban infrastructure planning, financing, and implementation. Related to climate mitigation, SURGE assisted four CDI cities (Legazpi, General Santos, Tagbilaran, and Zamboanga) to comply with national policies that enable them to contribute to GHG emission reduction such as in preparing GHG management plans. These plans, together with their PPAs, have been approved by the city councils. Some PPAs have been implemented and are fully operational, such as streetlights projects in Tagbilaran and Zamboanga. When fully implemented, the aggregate amount of GHG reduced, sequestered, or avoided as a result of these PPAs is estimated at 1,803 metric tons (tCO2). The evaluation team, however, did not verify the GHG reduction estimates as this was not within the scope of the evaluation.

Concerning climate adaptation, SURGE assisted planners in CDI cities and adjacent areas in mainstreaming CCA and DRR into their WSPs. The integration of CCA and DRR in WSPs will guide them in determining and addressing the potential impact of disaster risk on the quality of water that they supply to their customers.

Sub-component 1.3 – Increasing access to sustainable water supply and sanitation services.

Under Sub-component 1.3, SURGE extended technical assistance to improve the provision of water supply and sanitation service quality in CDI cities, along with building strong linkages with various LGUs and relevant national government agencies. SURGE helped strengthen the institutional capacity of CDI cities’ water service providers in the following areas:

• 
  Mainstreaming climate-disaster resilience in water and sanitation planning
• 
  Improving water and sanitation operations and management
• 
  Accelerating water service expansion to underserved populations
• 
  Improving access to sanitation through septage management.

SURGE’s achievements included strengthening the capacities of WASH service providers’ soft components, including providing 134 trainings, workshops, and coaching and mentoring sessions from 2016 to 2020 on water and sanitation system operations and management. Likewise, SURGE assisted WASH hard components, including water resources surveys, district area formation, and water production and service metering systems. SURGE also assisted in organizing WASH-related TWGs and city water and sanitation councils, and passing WASH-related city ordinances.

As of September 2021, SURGE reporting showed that the project had surpassed its targets in all four of its performance indicators for this sub-component. SURGE reported that the SURGE-assisted capacity building activities benefited 83 WSPs in terms of increased capacity for water service delivery and 9 WSPs in the field of sanitation service delivery (Indicators 1.8 and 1.9 of Indicator Achievement as of March 2020 & August 2021 Report).

SURGE also reported that an estimated 516,339 people benefited from improved service quality from an existing basic or safely managed water service (Indicator 1.10).

Other key accomplishments include a SURGE-facilitated review and finalization of Cagayan de Oro City’s (CDO) septage and sewerage ordinances, which were approved in February 2020. Tagbilaran City also approved the same ordinances. The city ordinances will help convene the members of the organized Councils together with the service providers to discuss and formulate actions during irregular incidents, such as inadequate supply due to El Niño events, prolonged periods of inadequate rainfall, or due to disasters.

The Local Water Utilities Administration approved the SURGE-supported WSP for Puerto Princesa City Water District. Also, with SURGE’s support, the Puerto Princesa City government entered into a joint venture agreement with the private sector for the construction, operation, and management of sanitation facilities in the city. SURGE assisted Tagbilaran City and CDO City to prepare septage/sewerage feasibility studies and terms of reference for the selection of interested private sector partners. The procurement of a private sector partner is still pending.

Key stakeholders cited the following contributing factors to the above achievements:

1. a need for increasing access to improved water and sanitation services by unserved and underserved city population
2. strong buy-in from the LGU and active participation of stakeholders in SURGE activities

The key hindering factor affecting the expansion of services to unserved water consumers is the lack of adequate financial resources of most CDI city water services providers to invest in service improvement and expansion (see Box 1).

BOX 1

SURGE adopted a private sector-led approach to help eight second-tier CDI cities improve their local economies. For the private sector to survive, the business environment must be conducive to private investment. Low-emission private sector investment and job growth in second-tier cities can be facilitated by offering the same kinds of investor services that first-tier cities provide. Therefore, SURGE’s Component 2 activities focused on government efficiency in service delivery.

In particular, Component 2 focused on improving the environment for the local economic development of target CDI cities through four sub-components: Sub-component 2.1: Improving local revenue generation and expenditure management; Sub-component 2.2: Streamlining and automating of the construction permitting processes; Sub-component 2.3: Improving local land tenure security and land information management; and Sub-component 2.4: Building the competencies of local economic and investment promotion offices and business support organizations.

As of September 2021, the project had surpassed the life-of-project indicator targets for four of five performance indicators identified in its Activity Monitoring, Evaluation, and Learning Plan (AMELP). The primary indicator that SURGE used to assess the competitiveness of a city was its CMCI rank.

The CMCI summarizes 40 sub-indicators that contribute to four pillar scores: economic dynamism, government efficiency, infrastructure, and resiliency. SURGE addressed five of ten indicators under the government efficiency pillar to achieve the Component 2 goal. These indicators relate to the Business Permitting Licensing System (BPLS) standards, business registration efficiency, compliance with national directives, the presence of an investment promotion unit, and capacity to generate local resources. Figure 3 shows that all except Tagbilaran City sustained their positions within the CMCI top 15 for 2021. Tagbilaran City, which previously ranked eighth among component cities in 2018, slid to 26th in 2019. It improved to 19 in 2021 but did not reach the top 15 target.

Subcomponent 2.1: Improving local revenue generation and expenditures management

Finding 1:

SURGE assisted the eight CDI cities in crafting their Strategic Asset Management Plan (SAMP) and Strategic Financial Management Plan (SFMP). Due to a late start for activities in this subcomponent, coupled with adjustments in the plans following the Mandanas ruling, the SAMPs have not yet been finalized. Only Zamboanga was able to adopt their SFMP.

Finding 2:

SURGE’s technical assistance contributed to all eight CDI cities increasing the level of their locally sourced revenues from the baseline in 2015 to 2020 (see Figure 4). Reports of the Bureau of Local Government Finance of the Department of Finance show that business tax collection grew. This could be a result of improvements in the business registration process which, in turn, was responsible for much of the growth in locally sourced revenues. The eight cities’ cumulative average growth rate in business tax collection was higher during SURGE (13 percent) than in a comparative number of years before the start of the interventions (10 percent). Real property tax collections improved, as did receipts from local economic enterprises such as waterworks and public markets. From 2015 to 2020, receipts grew by 78 percent. SURGE’s assistance in preparing business plans is partly responsible for the improvement in the tax receipts from economic enterprises.

Finding 3:

While locally generated funds are meant to reduce dependence on the national government for funding, the data show that target CDI cities did not show significant improvements or deterioration in internal revenue allotments, except for Puerto Princesa (80 percent to 74 percent) and Legazpi (56 percent to 49 percent). Puerto Princesa (74 percent) and Zamboanga (72 percent) remained highly dependent on national funds. On the other hand, Iloilo and Batangas, two original CDI cities, had a dependency rate of 33 percent and 34 percent, respectively. This means Iloilo and Batangas were more financially self-reliant than Puerto Princesa and Zamboanga.

Most of the locally sourced revenue growth is attributed to the growth in business tax collection. The rate of growth in business tax collection was higher during SURGE’s period of performance than during a comparative number of years before SURGE. The same growth pace cannot be said for real property tax collections that did not show any pattern. Notwithstanding, gaps in property tax collection were partly covered by improved receipts from local economic enterprises.

SURGE placed a greater emphasis on revenue generation than on expenditure management, and more attention to the latter could further improve CMCI rankings. In this way, the cities can learn how to maximize their resources. SURGE developed manuals on BPLS, Real Property Tax, and Revenue Management, which were useful for the expansion cities and based on the strategy of learning from the original CDI cities.

Subcomponent 2.2: Streamlining and automating business and construction permitting processes

Finding 1:

In its initial years of implementation, SURGE helped all eight CDI cities streamline their business registration process from as high as 20-22 steps to two to three steps. Almost all cities have completed the automation of their BPLS and have begun accepting online payments for registration, particularly during the pandemic. Further streamlining BPLS processes, the cities have begun signing MOAs with the Bureau of Fire Protection (BFP) to include BFP certifications and payments upon registration. The cities were in the process of integrating barangay (village) clearance payments in their process, following the release of JMC 1, s. 2018.

Finding 2:

The CDI cities were able to streamline their construction permitting process and establish either a one-stop shop for construction permitting or a business one-stop-shop.

Finding 3:

Streamlining processes contributed to the increase in business registration. Using data from the Bureau of Local Government Finance, the cumulative number of new business registrations for the eight cities for the duration of the project reached the target of 60,000. However, the net increase in registered businesses from base year to 2020 was only about 35,000. The difference refers to businesses that did not renew their licenses during the same period.

The introduction of streamlined processes benefited the CDI cities in increasing the number of businesses registered, more specifically the new businesses. However, the increased number of new business registrations was offset by the non-renewal of some existing businesses. For instance, in Puerto Princesa, 25 percent of registered businesses did not renew their licenses the following year. Linking information on data closure can help the city as it enforces its BPLS regulations.

SURGE-developed manuals, updated to account for the changes in JMC 2018, are useful not only for the eight CDI cities but also for all other LGUs as well.

Subcomponent 2.3: Improving local land tenure security and land information management

Finding 1:

As early as 2017, SURGE provided technical assistance for the ULIS in Cagayan de Oro. Nonetheless, SURGE extended this technical assistance to other cities only in Year 6. At that time, SURGE was supposed to have helped only four CDI cities (General Santos, Legazpi, Puerto Princesa, and Tagbilaran) with their ULIS. Subsequently, the project aimed to have all eight CDI cities using ULIS and digital cadastral databases, with relevant data for a total of 200,000 parcels of land. By the project’s end, the system had about 376,000 parcels, mostly from Cagayan de Oro. Because Cagayan de Oro was the first city to benefit from SURGE’s technical assistance for ULIS, they were able to launch their web-based ULIS by September 2017.

ULIS aids in land tenure issues: Over the project life, Cagayan de Oro was able to release titles and land rights to farmers and informal settlers. In support of ULIS and for sustainability purposes, SURGE assisted the CDI cities to prepare legislation. Table 7 summarizes the status of ULIS and its legislation among the eight CDI cities.

Finding 2:

The interventions related to the development of the ULIS began a little belatedly. CDO was able to establish its online kiosk in 2017 and was, therefore, able to address some issues on land tenure security. Assistance for the four other cities was included in the work plans only in Year 6. Therefore, there was insufficient time during the project to update the Land Information System (LIS) and link this LIS to the other systems.

Subcomponent 2.4 – Building Competencies of Local Economic and Investment Promotion Office and Business Support Organizations

Finding 1:

SURGE assisted Cagayan de Oro, Puerto Princesa, and Tagbilaran to create permanent LEIPOs, structures with permanent staff who had the necessary competencies. Specific SURGE assistance included crafting the organizational setup, defining skills and competencies required, and delineating functions among staff members. SURGE also provided hands-on capacity building support to LEIPO staff members in mounting investment forums. LEIPOs are the focal unit within the city that facilitates investment. SURGE reported that the cities it assisted generated PhP140 billion (net of Investment Enabling Environment [INVEST¹] commitments) in investment commitments. SURGE also assisted Cagayan de Oro, Legazpi, and Puerto Princesa in creating their investment promotions committees or boards.

When SURGE began, only one city had a distinct LEIPO with staff members deemed as not being competent in investment promotion. Initially, the project assisted Puerto Princesa and Tagbilaran, and later expanded to General Santos and Legazpi when they were added as target CDI cities in Year 4. SURGE subsequently added Iloilo City, Batangas, Cagayan de Oro, and Zamboanga in Year 5.

Finding 2:

SURGE records indicate that seven CDI cities were able to generate PhP313 billion in private sector investment commitments and PhP13 billion in public monies to pay for the construction of the Zamboanga Airport Development. There was no report for Batangas. An examination of the breakdown of investment commitments reveals that PhP187 billion referred to commitments generated during INVEST. Puerto Princesa had commitments from developers and tourism-related businesses, including medical tourism.

Finding 3:

In Year 5, as a pivot due to COVID-19, the indicator to measure the effectiveness of this sub-component, particularly for business support organizations, became the number of firms and producer groups that received USG assistance to improve their business performance. SURGE support was in the form of direct capacity-building programs. The project extended this assistance to MSMEs, which are the dominant segment of the business environment in the eight CDI cities, and to producer associations.

Finding 4:

The project reported that it surpassed its adjusted firm assistance target by nine percent. As of September 2021, SURGE reported that it had directly or indirectly assisted 375,575 firms. SURGE linked the results to the overall package of assistance to business support offices, including the facilitation in streamlining reforms, policies, and regulations, the promotion of urban-rural linkages, the activities for investment promotion, and the provision of business development services for select industries/sectors. There were no supporting documents presented to ascertain whether the reported numbers are accurate.

Finding 5:

The establishment of a LEIPO with competent staff is necessary to support continuing gains from improved levels of competitiveness. However, project interventions were provided to different cities at different periods in the project. As a result, only some cities were able to establish their LEIPO. Nonetheless, it was reported that PhP140 billion (net of INVEST commitments) were generated as investment commitments to the SURGE cities.

Component 3 seeks to help the local government and local stakeholders create conditions that will reduce connectivity costs and improve economic access between cities and neighboring rural areas. To this end, SURGE implemented activities under the following sub-components: Sub-component 3.1 – Reducing policy and regulatory barriers to productive rural-urban linkages; Sub-component 3.2 – Reducing connectivity and information costs that inhibit the flows of goods and services; Sub-component 3.3 – Strengthening supply chain linkages between urban and rural areas; and Sub-component 3.4 – Developing metropolitan arrangements that improve coordination and exchanges between cities and adjacent rural areas.

As of September 2021, SURGE had exceeded its targets in two of four Component 3 indicators. Achievements included simplifying municipal administrative procedures (much of which happened under Component 2) and increasing transport linkages. SURGE did not achieve its targets for preparing mobility plans and organizing investment in CDI cities and peri-urban areas (Indicators 3.1 and 3.4) due to competing priorities in target LGUs and adverse effects of the COVID-19 crisis on economic activities.

Sub-component 3.1 Reducing policy and regulatory barriers to productive rural-urban linkages

Project performance for this sub-component is measured by the number of city regulations and administrative procedures that have been simplified because of USG assistance.

Finding 1:

SURGE helped the local governments in the eight CDI cities reform their policies and regulations to attract investments and reduce the cost of doing business in their jurisdictions.

As of September 2021, the SURGE project team reported that a total of 153 policies and regulations had been simplified and approved for adoption by the local governments in CDI cities, with Tagbilaran City accounting for about one-fifth of the total (see Annex 3 for the list of regulations and processes simplified with SURGE assistance). Most of these simplified policies and regulations pertaining to streamlining and automating local business permitting and construction permitting processes, which led to increased efficiency of the delivery of local regulatory functions of CDI cities.

Key LGU officials and city stakeholders stated that key factors that facilitated the streamlining of local regulations and administrative procedures include: 1) the need for local governments to comply with the Ease of Doing Business Law of 2018 (RA 11032); 2) technical guidance and training provided by SURGE, and 3) strong buy-in from the local government and local business groups.

Finding 2:

When the project began in 2015, SURGE focused on identifying policy and regulatory constraints to trade and investment through discussions with LGU stakeholders, business support organizations, and other relevant entities at the national level. This activity produced an assessment report identifying city-specific policy barriers and suggested SURGE assistance activities, particularly in the air transportation, sea transportation, land transport, communications, and the agriculture/mariculture sectors.

Due to project funding constraints during Years 2 and 3, SURGE put several planned activities related to this sub-component on hold. It was only in the sixth year that SURGE revived activities under this sub-component, but with a focus on upgrading food safety, product quality, and biosecurity standards for sustainable market access for livestock and poultry producers in Batangas, Cagayan de Oro, General Santos City, and Iloilo.

With the absence of sub-component activities in the approved project work plans from the second until the fifth year, there is little verifiable evidence to support project narrative claims that this sub-component benefited from the outputs generated by Component 2 activities, particularly those related to streamlining business registration and building permitting processes.

Finding 3:

The seaweed industry stakeholders reported to the evaluation team that SURGE facilitated the enactment of vital ordinances to support the local seaweed industry.

With the help of SURGE, the city government of Puerto Princesa enacted important local legislation expanding the production area for seaweed farming, streamlining the process, reducing fees for seaweed farming activities in mariculture zones, and banning the use of any type of fertilizer in seaweed farming. According to the city agriculturist, these local laws promoted seaweed production and enhanced the competitiveness of the local seaweed industry.

Sub-component 3.2: Reducing connectivity and information costs that inhibit the flow of goods and services

The SURGE AMELP has two indicators for this sub-component. The first is the number of mobility plans and policies in select CDI cities prepared (Indicator 3.1), and the second is the number of beneficiaries receiving improved transport services due to USG assistance (Indicator 3.3). SURGE replaced the original AMELP Indicator 3.1 (time and cost of transporting goods between CDI city and peri-urban areas reduced) with the current indicator given the nature of SURGE’s transportation planning and logistics assistance to CDI cities. SURGE did not set targets for these indicators until the sixth year of the project.

Finding 1:

SURGE facilitated the expansion of air connectivity and air freight services for General Santos City. To increase passenger traffic, the project worked closely with domestic airline companies to add new flight services from Manila and Cebu to General Santos. The project also promoted the introduction of regular all-cargo air services to General Santos City to address the limited air cargo capacity at the General Santos Airport, which had been a widely reported need by local businesses engaged in trading of high-value agri-fishery commodities (e.g., fresh tuna) to lucrative markets in Manila.

The SURGE project team reported that the new flight services resulted in improved access to air transportation to some 296,000 travelers from February 2020 to September 2021, which is especially notable given pandemic-related restrictions on domestic travel. In addition, the introduction of all-cargo air services to General Santos has increased air cargo being moved from General Santos Airport by 17.8 million tons, the bulk of which is fresh tuna and other marine products. However, the evaluation team was unable to independently verify the reported increase in passengers and cargo.

Finding 2:

SURGE provided technical support to develop a conceptual master plan for a mixed-use aviation, logistics, and commercial hub within the General Santos City Airport complex, which the Civil Aviation Authority of the Philippines (CAAP) has adopted for implementation via a public-private partnership (PPP).

In 2018, SURGE facilitated a study visit of key local government and private sector representatives to the Clark International Airport and Clark Freeport Zone in Pampanga. This led to the development of the conceptual master plan for the 200-hectare aviation-related complex within the General Santos International Airport in 2019. CAAP’s subsequent adoption of the conceptual master plan in July 2020, including the proposed PPP implementation plan, is expected to enhance connectivity and catalyze the development of the provinces surrounding General Santos City.

Finding 3:

SURGE supported Cagayan de Oro in preparing its Local Public Transportation Route Plan (LPTRP), which the city council subsequently adopted for full implementation in April 2021. This plan serves as the basis for the issuance of Public Utility Vehicle franchises and forms part of the Local Transport Master Plan.

Local governments are required by the Land Transportation Franchising and Regulatory Board, a regulatory agency under the Department of Transportation, to prepare LPTRP for the issuance of Public Utility Vehicle franchises and the preparation of a comprehensive local transport plan.

An Interview with the SURGE project Component 3 lead revealed that the intention to assist other CDI cities on mobility planning was never realized due to competing priorities of stakeholders at the local level due to the pandemic.

Sub-component 3.3: Strengthening supply chain linkages between urban and rural areas

Sub-component 3.3 aimed to increase private investments and strengthen market linkages between producers and buyers in CDI cities and neighboring areas through partnerships among city governments and the private sector. In pursuit of this objective, the project focused on the following key activities: 1) establishing market linkages between local producers and major markets of seaweed, vegetables, and cassava in Cagayan de Oro, Puerto Princesa, and Zamboanga; and 2) developing tourism development plans in Legazpi, Puerto Princesa, and Tagbilaran.

Finding 1:

SURGE helped LGU and seaweed industry stakeholders organize the Puerto Princesa Seaweed Network and improve the access of seaweed farmers from rural areas in Puerto Princesa City and Palawan Province to new markets, technologies, and other services from government and private sector partners.

Following a series of SURGE-organized meetings and workshops for seaweed industry players—including growers, buyers, traders, and support agencies (e.g., DTI, DOST, Bureau of Fisheries and Aquatic Resources [BFAR], and academic institutions)—the Puerto Princesa-Palawan Seaweed Network was formally established in May 2017. To link the network with the major markets, SURGE facilitated an institutional partnership agreement between the Puerto Princesa-Palawan Seaweed Network and the Seaweed Industry Association of the Philippines (SIAP) in January 2018. SIAP is a national federation of major seaweed producers, processors, and exporters in the country, accounting for more than 70 percent of all carrageenan and dried seaweed exports to various foreign markets.

As a result of SURGE’s intervention, seaweed farmers in Puerto Princesa and nearby municipalities were able to expand their market to seaweed exporters based in Cebu City, bypassing consolidators and traders for better returns for their produce. With the help of SURGE, four-member associations of the seaweed network were able to obtain PhP3.4 million worth of loans from the Land Bank of the Philippines for seaweed production expansion.

Finding 2:

SURGE tried to replicate the Puerto Princesa experience in Bohol Province by organizing the 17 seaweed producers’ associations based in Tagbilaran City and the province into the Bohol Seaweed Network (BoSNet) through Memorandum of Understanding (MoU) in December 2019. This initiative was intended to unite and strengthen fragmented seaweed producers and collectively address issues confronting them such as declining productivity, poor quality of production, and erratic farmgate prices. However, subsequent project efforts to strengthen BoSNet were interrupted by the COVID-19 pandemic. Interviews with two key officers of BoSNet revealed that after the signing of the MoU, there was no organizational meeting held by BoSNet. They added that poor Internet connectivity hindered coordination with most members who were based in remote areas of the province.

Finding 3:

In collaboration with the city government, SURGE assisted smallholder cassava growers in Zamboanga in diversifying their production and accessing lucrative markets through partnerships with major buyers and processors.

In partnership with the local government, SURGE assisted cassava growers in Zamboanga to forge a market linkage with a major agribusiness firm, San Miguel Foods, Inc. (SMFI). Based on project reports, the growers delivered more than 240 metric tons of cassava chips to the SMFI feed mill through the firm’s accredited local assembler. With the help of DOST, the project assisted Zamboanga cassava growers to diversify their production by training them on value-added processing of cassava into food-grade cassava chips and other cassava-based delicacies.

Finding 4:

LGU and tourism industry stakeholders from Legazpi, Puerto Princesa, and Tagbilaran valued technical support provided by SURGE in formulating tourism development plans and building their capacity to promote tourism activities such as community-based tourism (Puerto Princesa), heritage tour packages (Tagbilaran), and nature adventure/culinary tourism (Legazpi) through the various trainings, workshops, and mentoring sessions.

Capitalizing on the potential of the existing tourism industry in the CDI cities of Legazpi, Puerto Princesa, and Tagbilaran, SURGE supported the stakeholder-led formulation of tourism development plans. As of September 2021, the LGUs had adopted these plans through local legislation, with key tourism activities already being implemented in CDI cities, such as heritage tours in Tagbilaran City and nature/culinary adventure tours in Legazpi City.

Finding 5:

Interviews with industry stakeholders revealed their high appreciation for the tourism and value chain-related training, workshops, summits, and study tours organized by SURGE. Likewise, tourism and seaweed industry stakeholders valued SURGE’s capacity building activities, which enhanced their knowledge and skills in running their businesses (Table 8).

Finding 6:

The SURGE project team reported a USD1.4 billion, or 88 percent increase in private investment in CDI cities and peri-urban areas between 2016 and September 2021. However, it is unclear how the activities under Sub-component 3.3 contributed to the reported increase because the reported investments included all investments from new businesses, with no disaggregation of new investments in local industries assisted by SURGE.

Conclusion:

Through SURGE assistance, supply chain linkages between urban and rural areas were strengthened, especially in CDI cities where most of the key sub-component activities were implemented. The project helped establish market linkages for seaweed producers in Puerto Princesa and cassava growers in Zamboanga, thereby contributing to increased farmer income. Through a participatory multi-stakeholder approach, SURGE assisted the local tourism industry stakeholders in Legazpi, Puerto Princesa, and Tagbilaran to formulate strategic tourism development plans aimed at strengthening the tourism industry value chain, including promotion of community and farm-based tourism destinations.

The project’s multi-stakeholder approach and SURGE’s prioritizing of local industries with strong growth potential in strengthening supply chain linkages achieved good results that benefited CDI cities and the targeted industry as well as the economies of nearby municipalities where some of the industry players operate. An increase in private investments in CDI cities arising from the strengthening of supply chain linkages could not be ascertained, as SURGE did not track new investments in the industries assisted by the project.

Sub-component 3.4 Developing metropolitan arrangements that improve coordination and exchanges between cities and adjacent rural areas

Under this sub-component, the SURGE project engaged the local governments of Bohol Province, Tagbilaran City, the two municipalities in Panglao Island (Dauis and Panglao), and the private sector in establishing and convening the Panglao-Dauis-Tagbilaran Economic Council (PADTEC), formerly known as Panglao Island-Tagbilaran Economic Council (PITEC), as an inter-LGU mechanism to synchronize economic development planning among the participating LGUs.

Finding 1:

Key activities implemented by SURGE included:

1. technical assistance to the provincial government of Bohol and the local governments of Dauis, Panglao, and Tagbilaran in the formal organization of PITEC, resulting in the passage of Provincial Ordinance 2016-15 in November 2016
2. an institutional review and formulation of an action plan to fully operationalize and strengthen the PADTEC in January 2019.

The institutional review found PADTEC to be a useful vehicle to pursue common goals such as tourism marketing and to address common problems such as transportation, connectivity, and environmental management. To ensure the long-term sustainability of PADTEC, the review recommended:

1. designation of PADTEC staff
2. capacity building for PADTEC’s secretariat and technical working committees
3. formulation of implementing rules and regulations through an ordinance
4. stronger participation of the private sector
5. more proactive engagement with relevant government agencies such as Department of Tourism, Department of Transportation, Department of Environment and Natural Resources (DENR), and DTI

Interviews with the project team revealed that while SURGE succeeded in formally establishing PADTEC in 2016, the change in political leadership in Bohol Province in 2019 and the onset of the COVID-19 pandemic in early 2020 hindered the project from implementing activities to strengthen and fully operationalize PADTEC as recommended by the 2019 institutional review. Political dynamics in other metropolitan agglomerations (e.g., Cagayan de Oro and Iloilo City) hindered the project from expanding its assistance beyond PADTEC.

Conclusion:

Considering that PADTEC has yet to be fully operationalized, it remains to be seen if this inter-LGU arrangement that SURGE initiated will generate the intended result of improving coordination and exchanges among the participating LGUs. To ensure continuity of organizational strengthening activities, this SURGE initiative could have benefited from partnerships with government agencies mandated to assist regional agglomerations such as the National Economic and Development Authority (NEDA) and DILG.

It is also important to note that no indicator was identified to measure the contribution of the activities conducted under this sub-component to higher-level objectives of the project.

Performance indicators for the W-GDP Component focused on the number of women reached through various SURGE activities. As of September 2021, targets on all five indicators had been surpassed (see Annex 4).

Project performance reports indicated that 750 businesses and online platforms benefited from the various digital marketing activities. However, the reports did not present evidence that Facebook pages of the MSMEs improved because of the training, nor did they provide evidence of increased revenues.

An ideal outcome of an intervention on women in the informal sector is that they have been encouraged to register their economic activity with the city. A proxy indicator to measure the intervention’s effectiveness would be the number of new women-owned businesses registered. Unfortunately, the cities did not provide disaggregated data on new businesses.

The only basis for the numbers presented in this outcome was the count provided by Puerto Princesa. One of the key informants disclosed that the city’s chamber was able to request that the city provide free initial registration for participants in SURGE activities. From this initiative, the city was able to monitor how many trainees registered their businesses. As of September 2021, there were 334 new business registrations, 93 percent of which were women-owned.

Source: International City/County Management Association (2021). “Strengthening Urban Resilience for Growth with Equity (SURGE) Project: Quarterly Progress Report – January 1, 2021-March 31, 2021,” submitted to USAID.

As of the end of the project, about 5,000 women had participated in at least one of the 182 activities that the project organized or co-hosted. About 70 percent of these were first-time participants. Some were recipients of the Safe Store Kit provided by Coca-Cola in cooperation with the project, while others were recipients of a free business console software from LayerTech.

One of the other indicators for W-GDP was Indicator 3.5.4, the amount of non-USG funding mobilized for women’s entrepreneurial development. For this indicator, project performance reports revealed that 50 SURGE-related events received non-USG funding totaling USD758,000. The evaluation team was not able to verify this non-USG funding.

As further assistance to women entrepreneurs, the project helped establish local business service centers. The business centers were meant to assist women entrepreneurs, especially during the COVID-19 lockdowns. The project assisted in executing a Memorandum of Agreement between DTI Region 10 and Cagayan de Oro for the joint establishment of the Ginama One-Town-One-Product hub. During quarantine periods, the project helped Ginama pivot to become a women’s entrepreneurial development center called WOMEN. Partnerships were also established between the LGUs and other organizations such as Puerto Princesa Negosyo Center, GenSan SMED Council, Tagbilaran Livelihood Development Council Office, and the Food Innovation Center of the Western Mindanao State University in Zamboanga.

Overall, the project had a target of assisting CDI cities to draft, propose, or adopt laws, policies, or procedures that would promote gender equality in the cities. At the project’s end, there were 41 such documents. An examination of the records shows that 14 proposed procedures were reported as early as Year 3, Quarter 1, but these were not yet adopted by the end of the project. On the other hand, six proposed procedures reported in the Year 3, Quarter 1 report were eventually adopted in the subsequent two quarters. Two of these were from General Santos, three from Legazpi, and one from Puerto Princesa.

Further analysis of the listing shows no proposed or adopted legislation for CDO, and only one proposed procedure each for Batangas and Iloilo. Coincidentally, these three cities are original CDI cities. It is possible, though not certain, that gender-related policies and procedures existed before 2017 when gender legislation was first monitored by SURGE.