SD Mainstreaming Handbook

Overview

This Handbook for Mainstreaming Sustainable Development in Public Sector Decision Making or SD Handbook explores how development decisions and actions can be implemented in a sustainable way to achieve intergenerational wellbeing or the wellbeing of all present and future Filipinos. It looks into the social, economic and environmental effects of development decisions and actions that lead to the attainment of intergenerational wellbeing.A better understanding and knowledge of these interactions will help us examine the sustainability of different patterns of resource allocation. Policymakers and planners need to be aware of the long term consequences of their policies and plans on social and environmental objectives. Those who set environmental standards need to be conscious of the effects of these standards on human development as well as on the economy. Finally, policymakers and planners who deal with social development issues must be aware of the long-term implications of human development on the economy and the
environment.

Objective of the SD Handbook

The handbook will enhance the understanding and capability of policymakers and planners in mainstreaming sustainable development (SD) in public sector decision making, specifically in planning, programming and budgeting. Through a modular approach of lectures and workshops, it will give policymakers and planners a hands-on experience in improving their development plans and making them sustainable. The guide consists of four modules:

  • Module I : The Concept and Principles of Sustainable Development and Some Related Issues
  • Module II : SD-Enhanced Situational Analysis
  • Module III : SD-Enhanced Development Plan
  • Module IV : SD-Enhanced Investment Plan

The handbook provides guide questions that will help mainstream or integrate the intergenerational and interdependence SD principles into existing manuals, guides or handbooks of agencies or institutions. The
handbook is not intended to replace these materials. Policymakers and planners may use these questions, processes, activities or tools [e.g., the SD Analyzer which will be discussed in Module III] to integrate the SD principles into their existing manuals, guides or handbooks to make them more responsive to the goals and objectives of SD.

This handbook may also be used as is or as a template on how to incorporate SD principles into training activities in order to ensure that our present needs are met without compromising the ability of our
children and their children’s children to meet their own needs.

Linkage of the Modules

Module I presents SD concepts, principles, issues and tools needed for mainstreaming SD in the development
planning, programming and budgeting processes. A better understanding of these concepts and issues would
enable the policy makers and planners to incorporate more effectively the SD principles in the development processes. Using existing development plans, Module II then assists policymakers and planners in systematically analyzing the situation of their locality based on correct and relevant data and indicators from their socioeconomic profile (SEP); and in improving their situational analysis by integrating the SD principles.

The outputs of Module II then become inputs to Module III. Module III discusses the various components of a development plan and shows how to mainstream or integrate the SD principles to arrive at a SD-Enhanced Development Plan (SDDP). It introduces a way to assess the sustainability of plan interventions – policies/strategies, programs and projects – through the use of the SD Analyzer. The SD Analyzer looks at the resource build-up or drawdown, and hence, the sustainability of a development intervention to assist
policymakers and planners decide on whether or not to implement such an intervention.

Module IV helps local planners develop an SD-Enhanced Investment Plan (SDIP). The module discusses ways of screening, assessing and prioritizing programs and projects to be included in the SDIP. It also shows local policymakers and planners how to identify and mobilize local financial resources, both internal and external. In addition, Module IV assists in identifying structures and mechanisms needed to implement the SDIP. It explains the importance of monitoring and evaluation to make sure that the SDIP is carried out on
time, within budget and more importantly, that it reaches and positively affects the lives of the target population of women and men.
SD Mainstreaming Handbook

Module I: The Concept and Principles of Sustainable Development and Some Related Issues

Module I has three lessons. Lesson 1 discusses the concept and principles of sustainable development. It helps policymakers and planners understand what sustainable development is and appreciate the issues related to it. Lesson 2 explains the process of mainstreaming or integrating sustainable development into existing and future development activities to help policymakers and planners make informed decisions. Lesson 3 introduces some tools and indicators of how sustainability may be measured.

LESSON 1: The Concept of Sustainable Development

Since 1987 when the World Commission on Environment and Development (WCED) first introduced the concept of sustainable development, people have been talking about it but were not clear as to what it meant. They seem to have different meanings. Looking at the literature and talking to people, we came up with several definitions that people have attached to “sustainable development.” Many of these are not exactly what is meant by sustainable development in the context of the Philippines. These are the following:

Sustainable Development is not only…

1. Environmental protection

Central to this ecological view of sustainable development is that economic and social systems are sub-systems of the environment. Therefore, sustainability in these spheres is subordinate to the sustainability of the environment. Development from this perspective refers to the maintenance of the ecosystems’ capacity to respond adaptively to change and opportunity (Golley, 1990). Thus, the “health” of ecosystems must be protected and enhanced.

Many developed and industrialized countries champion this view. Thus, many of their sustainable development policies and strategies are primarily “green plans” that focus on the protection of the environment. This is understandable since these countries have achieved the level of economic and social progress that allows most of their people to enjoy a good life. Therefore, sustainable development to them is merely a matter of protecting the environment and managing natural resources to enable their future generations to enjoy the same quality of life.

However, for developing countries like the Philippines still concerned with providing people with basic needs and reducing poverty, equating sustainable development with just environmental protection may not be appropriate. Thus, this is not what we mean by sustainable development although it is an important part of it. For instance, the implementation of the Philippine Mining Act of 1995 (Republic Act 7942) may at first seem contrary to the protection of the environment, yet ecologically-friendly mining projects may generate investment and hence, generate employment and income needed to help meet the basics needs of people, and reduce poverty.

2. Non-declining income or wealth

Many economists see sustainable development as closely related to the long-standing economic concept of
income. Hicks (1946) defines income as “the maximum amount an individual can consume during a period and remain as well-off at the end of the period as at the beginning.” To illustrate: if an individual’s only source of income is, say, an inheritance of Php 1 million at the beginning of a year and he/she manages and invests it well at 10 percent annually,his/her annual income is Php 100,000.00 and this is the maximum amount that he/she can consume in a year without depleting his/her capital investment.

Although there are obvious and important differences between the economic affairs of an individual and those of the entire country, the above definition of income applies equally well to both. The country’s income can, therefore, be defined as the amount that it can collectively spend during a period without depleting the capital base (or wealth) on which it relies to generate this income. This economic approach to sustainable development defines sustainable development as the development that ensures non-declining per capita national wealth.

However, for a country that has a huge budget deficit and a lot of foreign debts, this definition of sustainable development is not quite appropriate. We cannot simply equate sustainable development with economic wellbeing. Thus, this is not what we mean by sustainable development although it is a significant
component of it.

3. A new program or project

In the advent of devolution through the passage and implementation of the 1991 Local Government Code, all development initiatives have been localized, usually in the form of programs or projects. This practice may have misled people into believing that sustainable development is just another program or project.

Furthermore, the use of the phrase “implementing sustainable development” may have also contributed to this misconception. It gives the impression that sustainable development is a program that is implemented” as part of a wider development effort. This concept of sustainable development is not what we mean because sustainable development is neither a program nor a project.

4. Fulfillment of international commitments

Sustainable development has been placed at the forefront of development discussions in the Philippines since the 1992 United Nations Conference on Environment and Development (UNCED). Unfortunately, the advocacy strategies conducted to promote sustainable development may have inadvertently given the impression that it is being pursued merely to meet international commitments. And since international
commitments are perceived as far removed from people’s daily struggles, many stakeholders find it difficult to relate with sustainable development.

Again, though we are committed to its promotion as a way of life in the country, this is not what we mean by sustainable development.

What it is

To get at the real meaning of sustainable development, it is important to understand what development is.

The Concept of Development

It is useful to adopt a simple but comprehensive concept of development — development is the sustained capacity to achieve a better life. Better life, the object of development, is one that is long and of higher quality. The quality of life, in turn, involves the capacity “to be” (e.g., to be educated, to be healthy and well-nourished, to be secure from harm) and the capacity “to do” (e.g., to do productive and creative work, to participate in community affairs, to bear and rear the desired number of children, to travel in search of economic and social opportunities). Underlying these capacities is the freedom of choice. Hence, development is also about expanding the range of choices for people (Sen, 1988).

How is better life achieved?

The means of development includes:

  1. Consumption of basic goods and services – consumption of basic goods and services helps achieve better health, better nutrition, and better education that help achieve certain types of being.
  2. Generation of more productive employment – more employment opportunities provide greater choices on how and where to earn a living, and to be able to do productive and satisfying work.
  3. Reduction of inequalities in income and access – when inequalities are reduced, more people have opportunities to take advantage of certain things – opportunities to acquire education, better health, better food, better surroundings; opportunities to participate in community activities; opportunities to enjoy leisure, etc.

In the context of this definition of development, we now understand the importance of the many interrelated factors — social, economic and environment — necessary in the attainment of development or a better life. For example, economic growth (or sustained increases in GNP or GNP per capita) is not development but is an important means of achieving that better life. GNP is nothing more than a bundle of goods and services. If this is what people consume, it helps them achieve all those abilities and capacities they are seeking. The higher the rate of economic growth, the higher the rate of per capita income increases, and the more goods and services are available for consumption.

Therefore, stable economic growth, income equality, employment, reduction of poverty, access to services such as health, nutrition and education are means to help achieve the end or object of development – a better life or wellbeing. However, these processes involve major changes in social structures, institutions and attitudes and are facilitated or constrained by certain givens such as religion, culture and tradition, politics, etc. But these givens could change over time in the process of achieving a better life. Who then determines what better life is? The person herself/himself, depending on her/his needs and wants, within the context of societal norms. Since there may be a wide range of needs/wants, there is a hierarchy of values related to how we define better life. For example, some people or countries might have reached a stage in their development process where certain values are no longer as important as others. For instance, for some developed countries that have already reached high levels of incomes, the question of consumption of goods and services is no longer a critical problem. So now, they are more concerned with the environment, the conservation of certain species of plants and animals and other finer things in life. Whereas, for developing countries still grappling with some of the basic necessities of life, the concern for economic growth, and the production and consumption of more goods and services, especially social services, are still important.

The Concept of Sustainable Development (Herrin, 2003)

The World Commission on Environment and Development (WCED, 1987) defined sustainable development as “…the
development that meets the needs of the present without compromising the ability of future generations to meet their own needs.” In line with this definition, the Philippine Agenda states that the ultimate aim of development is human development now and through future generations through the harmonious integration of a sound and viable economy, responsible governance, social cohesion and ecological integrity.

In both conceptualizations, the key idea is intergenerational wellbeing. While the basic idea of development is sustained capacity to achieve a better life, the time dimension is not made explicit but merely implied in the term “sustained”. The concept of sustainable development explicitly stresses the time dimension – the idea of intergenerational wellbeing. In the WCED concept of sustainable development, it is important that it is not only this generation that will achieve a better life but also those of future generations. However, we can extend this original concept by taking time dimension to refer not only to generations but also to life cycles. Thus, in sustainable development, it is also important that wellbeing achieved in one stage of the life cycle (e.g., in childhood) is not compromised in the next cycle (in adulthood), and that disadvantages in one stage of the life cycle are compensated in subsequent cycles.

The definition of sustainable development implies two principles: (1) interdependence principle — for development to be sustainable, we must consider the interdependence of economic, social and environmental dimensions; and (2) intergenerational principle — for development to be sustainable, we must consider time dimension so that better life or improved well-being is enjoyed by both present and future generations.

Understanding the Interdependence Principle of SD

A widely held view of sustainable development is that it refers at once to economic, social and environmental dimensions. Therefore, all systems – economic, social and environmental – must be simultaneously sustainable. Satisfying one of these systems without satisfying the others is not enough because:

a) each system is independently crucial;
b) each need is urgent; and
c) the three systems are interconnected.

Thus, there is a risk of unintentionally causing or worsening problems in one system while trying to correct problems in another. Therefore, the only way to avoid this is to integrate decisions such that effects in all three systems are considered before any action is taken (Robinson and Tinker, 1998).

To understand the interconnectedness of social, economic and environmental systems, we use a simple framework (Figure 1) to illustrate the roles of these systems in the development process or how “better life” or improved wellbeing is achieved. It highlights some sustainable development issues.

  1. Well-being. Consistent with our concept of development as “better life” or improved well-being, the outcomes of the development process are improvements in indicators of wellbeing. These indicators of abilities (“to be”) or capabilities (“to do”) include, among others, health (to be healthy); nutrition (to be well-nourished); education (to be educated or to be knowledgeable and skillful); fertility (to bear and rear the desired number of children); and migration (to travel in search of economic and social opportunities).
  2. Consumption of Goods and Services. The indicators of wellbeing are partly determined by the consumption of goods and services. Thus, better health is partly determined by the consumption of various types of preventive and curative health services; educational attainment is partly determined by the consumption of education services; and fertility is partly determined by the use of contraceptive services, etc.
  3. Income and Expenditures on Goods and Services. The consumption of goods and services, in turn, is partly determined by the availability of such goods and services. And this availability is in turn determined by (a) the household’s level of income, which determines how much goods and services it can purchase and make available to members of the household, and (b) the amount of goods and services made available by the public or private sectors. Thus, poor households with low purchasing power in the market due to low income can still increase their consumption of goods and services if they can access subsidized goods and services made available by the public or private sectors.
  4. Production and Employment. Household income is derived either from production in the case of householdoperated enterprises or from employment in the wage sector.
  5. Productive Resources. Earnings or profits from own-production depend on the one hand, the household’s or individual’s access to productive inputs such as natural capital, economic or manufactured capital, and human capital, and on the other hand, on household’s or individual’s access to markets for its outputs. Earnings from employment depend on the quality of human capital of workers as well as the strength of labor demand from firms.
  6. Population. The demographic processes of fertility, mortality and migration affect the size, age-sex structure and distribution of the population. These in turn affect the formation and use of productive resources, and therefore, production and employment, and hence incomes and consumption.
    • Population pressure on the land if not countered adequately with productivity-enhancing innovations and technology, contributes to declining productivity per worker. Population pressure on natural resources contributes to deforestation, erosion and degradation of the environment, which again contributes to declining productivity per worker.
    • Rapid growth of labor supply relative to demand, tend to depress the real wage, thus adversely affecting incomes, especially of the poor who depend mainly on labor income. Rapid growth of labor supply relative to demand also contributes to greater inequality in incomes as labor income declines relative to income from capital.
  7. Markets and Government Action. The entire process operates through markets, which may be modified by government action. Government actions include protection of human rights, ensuring peace and order, and implementation of various economic, social and environmental policies to correct “market failures”, including the direct provision of specific goods and services, and to correct “institutional failures”.

The framework shows us the interrelationships of social, economic and environmental resources and their
roles in attaining a better life or improved wellbeing. If we understand and appreciate how these interactions can be used to improve the way we think and do things, we can begin to do things consistent with the intergenerational principle of SD.

Understanding the Intergenerational Principle of SD (Herrin, 2003)

The intergenerational principle of sustainable development is evident in development issues related to environment and natural resources. As shown in Figure 1, these resources are inputs of the production of goods and services that are, in turn, inputs of the production of “better life” or well-being in this generation. But if the use of these resources is such that they are rapidly depleted or their regenerative capacities are irreparably damaged by inappropriate and excessive use, then the ability of future generations to produce goods and services from such resources are compromised. This is how the current excessive and inappropriate use of natural resources and the environment has led to unsustainable development and has compromised the better life or wellbeing of future generations.

The time dimension of sustainable development can also be seen in the development issues related to human
capital formation where both the intergenerational and life cycle aspects are important. Human capital, among the young, needs to be expanded and upgraded to provide the necessary human capital inputs for future production. But such expansion and upgrading to increase future productivity might be hindered by
the lack of investments in human capital in the present (e.g., lack or poor quality health, education and nutrition services, especially early in life) or when future human capital is currently consumed in the form, for example, of early labor force participation of children at the expense of their schooling and health.

Sustainable development also requires non-decreasing levels of capital stock over time as indicated by either the value of total assets every period or by the change of wealth in the national accounts. Unless
the country’s wealth is non-declining, the wellbeing of future generations is not assured. In short, for a proper measure of sustainability, all assets – manufactured capital (economic), natural capital and human capital — should be included in such an indicator of non-declining capital stock.

From the above discussion, we see that sustainable development is keeping in mind the time dimension or the implications on intergenerational wellbeing of what and how we do things. It starts with our own thinking — how we think about relationships of various factors (social, economic and environment, etc.); how we think in terms of cause and effect; how we think about the impacts and consequences of our decisions and actions and of various policies, programs and projects not only on the wellbeing of the present but also that of future generations. Failure to take into account these relationships in making
decisions at the micro or macro level could lead to disastrous and unsustainable consequences.

By understanding and taking into account all these interrelationships as well as the time dimension of development, we can begin to do things in ways that would lead to a better life for us, for our children and for their children’s children.

Some Sustainable Development Issues

The WCED definition of sustainable development puts emphasis on the two key principles elaborated above, leaving countries to determine for themselves how these principles can be redefined to suit individual country concerns and situations. For example, the common concern for the conservation and protection of natural capital is only one of the many development issues that can be viewed from the sustainable development perspective. The other development issues include human capital formation, stable
economic growth and poverty reduction.

Natural capital conservation and protection

Natural capital is generally considered to comprise three principal categories: natural resource stocks, land and ecosystems (UN, 1997). All are considered essential to the intergenerational sustainability of development for their provision of “functions” to the economy, as well as to man and other living beings
outside the economy. These functions fall in three groups:

  1. Resource functions cover natural resources drawn into the economy to be converted into goods and services for the benefit of man (e.g., mineral deposits, timber from natural forests, and deep-sea fishes).
  2. Sink functions absorb the unwanted byproducts of production and consumption (e.g., exhaust gases from combustion or chemical processing, water used to clean products or people, discarded packaging and goods no longer wanted). These waste products are vented into the air, water (including the sea) and buried in landfill sites. These three destinations are often referred to as “sinks”.
  3. Service functions provide the habitat for all living beings including man. Some aspects of the habitat are essential, such as air to breathe and water to drink. These are called survival functions. If the quantity and quality of survival functions are diminished, biodiversity of species is threatened, including human species. Some service functions are not essential in the same way but improve the quality of life, for example, by providing a pleasing landscape for recreation and leisure. These are called amenity functions and affect only humans.

Intergenerational sustainability of development is seen as depending on the maintenance of natural capital (in addition to other forms of capital – e.g., manufactured/ produced or economic capital and human capital). If the stocks of natural capital decline to the point where they are no longer able to adequately provide the functions listed above, any pattern of development that relies on these functions is not sustainable. Of course other patterns of development may still be possible but may require changes in order to: (1) eliminate the need for a particular natural capital service (e.g., technology — replacing soil with hydroponics); or (2) find a means of replacing the natural capital service with a service of manufactured or produced capital (e.g., chemical fertilizer as substitute for natural fertility of soil).

Many believe that technological advancement that has allowed substituting scarce resources will continue, even at increased rates, in the future. Others think that the possibilities for substitution are more limited, even completely absent in some cases because many forms of capital are of value only when combined with another form. For example, a fishing fleet (manufactured capital) is worthless unless combined with adequate fish stocks (natural capital) to be harvested by healthy and skilled fisherfolk (human capital). Here, fishing fleet and fish stocks are said to be complementary and fisherfolk, unsubstitutable.

The effect of an increasing population also plays a critical role. Not only must capital stocks be non-diminishing, they must also grow at the same rate as the population if per capita income is to remain constant. While technological change may allow the population to grow faster than the natural stock, this could be detrimental if left unchecked.

Moreover, development must be compatible with long-term maintenance of all assets (human, natural and economic) because sustainability is more a longrun consideration than a problem of the present. Thus, renewable resources should not be used beyond their natural regeneration rates. Nonrenewable resources should be used prudently and efficiently to ensure that the same resource functions are available to future generations, either by technological development or shift to the use of renewable resources. Sink functions (e.g., of forests) should not be used beyond their assimilative capacities. Activities (e.g. polluting the air, soil or water), which cause deterioration in service functions should be avoided or at least minimized.

Human capital formation

Viewed from a sustainable development perspective, the development issues related to human capital formation focus on the effects of the interaction of health, nutrition and education on human productivity, capabilities and wellbeing. Poor health, nutrition and educational performance especially of children have implications for future productivity, and by extension, the health, nutrition and education of future generations. Many studies show that poor nutrition in early childhood, which is reflected in stunting in adults, affects future productivity of these adults. The study of Herrin (1997) explains
that the mutually reinforcing effects of malnutrition and poor health among infants and young children reduce the survival chances of these children. These also adversely affect the mental and physical development of these children. These mental and physical handicaps are carried forward to the time when these children are of school age, contributing significantly to low levels of achievement and early
dropping out of school. Upon entering the labor force, these children who are now young adults are doubly handicapped, first by the effects of poor mental and physical development during early childhood, and second, by less schooling and poor achievement in school. As a consequence, these young adults will become the less productive members of the labor force, thus significantly reducing the overall productive potential of the economy as well as their own well-being. Thus, since poor health and nutrition of children (female and male) affect their future productivity as adults, improvements in their nutritional status can have substantial long-term pay-offs in terms of productivity and earnings when they become adults. Moreover, investments in quality basic education increase productivity of investments in health and employment generation in the future.

Herrin’s (1997) study also shows that: (a) environmental health hazards, such as lead pollution, increase incidence of mental retardation among children, with implication for future productivity; (b) high fertility reduces survival chances of infants and young children and reduces opportunities for households to invest more per child in health, nutrition and education; and (c) child labor, in response to a household’s need to augment its income to meet pressing needs, may reduce children’s schooling participation and performance. This has a substantial impact on the child’s future productivity and chances for escaping poverty. Child labor also exposes children to various health hazards and injuries that might have long-term effects.

Herrin adds that this set of relationships is reinforced by two other important factors, namely: poverty and high fertility. Poverty for the households involved, means less capacity to obtain adequate nutrition and health care, and to provide better education for its members. The role of fertility is more complex. High fertility adversely affects infant and child health and survival, child nutritional status and childcare, and schooling performance of children. At the aggregate level, continued high fertility and rapid population growth increase the pressure on government resources to provide basic health, nutrition and education services to the rapidly growing population. Such added pressure could compromise the quality of such services.

The availability of goods and services for consumption partly depends on the amount of goods and services made available by the public sector, as we saw in Figure 1. These include social services such as health and education. People (especially women) with low purchasing power may still increase their consumption of these services, and thereby improve their well-being, if they can access publicly subsidized services. However, access to services of high quality may not be sustainable over time. For example, the government program to provide free health services for all regardless of income might result in everybody getting equal access to health services. However, in time, as population grows relative to government resources, continuing to give free services to all could result in providing good quality services to some and poor quality services to others. In other words, high quality service may not be sustainable due to rapid population growth. The government spends its limited resources on expanding instead of improving the quality of services.

Stable economic growth

According to the Human Development Report (UNDP, 2003) poor countries face structural barriers that make it difficult for them to achieve stable economic growth. Stable growth requires that these countries attain “thresholds” on: sound economic governance, basic health care and education, core infrastructure and access to foreign markets. If one of these thresholds is not met because of structural conditions (e.g., rampant disease, location far from world market, poor soil and poor food production, or high susceptibility to natural disasters), the country tends to fall into a poverty trap, making stable economic growth unlikely. Economic growth is necessary because: (a) it directly reduces poverty for many households, increasing their savings and investments in human development; and (b) it increases government revenue. This is significant because most investments in human development – health, nutrition, education, infrastructure – come from the public sector. Of course, this depends on whether the government focuses policies and investments on noneconomic outcomes (e.g., substantial improvements in education, health and nutrition, especially of the poor) as well as on growth. It was discussed earlier that good education, health and nutrition have intrinsic values on people’s wellbeing. In fact, they are closely linked as education helps improve health and nutrition and good health and nutrition contribute to better education. In addition, education contributes to economic growth and raises people’s incomes. Improvements in health and nutrition also contribute to higher productivity; and improvements in the health and nutrition of children which ensure their higher productivity in the future.

Poverty reduction

The conditions for unsustainable development all converge on the poor. Low income means less capacity to
obtain goods and services particularly those that enhance current and future capacities, such as health and educational services for children. The poor (especially women) lack ownership or control over productive assets such as land as well as access to modern technology. The poor also have very limited resource base since they have access only to marginal lands characterized by low productivity and high susceptibility to environmental degradation, as in the case of the uplands or densely populated coastal areas.

Given such unfavorable initial characteristics, the poor (female and male) must nevertheless cope as best
they can. But the coping mechanisms they employ often lead to further deterioration of the natural and human resource base. For example, the pressure to produce for current consumption contributes to excessive or inappropriate use of the natural resource base upon which they earn their livelihood (e.g., dynamite fishing, kaingin or cutting trees for firewood), leading to degradation and reduced future productivity. In other words, poverty contributes to environmental degradation and environmental degradation, in turn, hurts the poor. Most poverty is still rural and most rural people are directly dependent on the use of natural resources to secure a livelihood. The linkage between poverty and the quality of soils, vegetation and water resources is critical. In addition, indoor and outdoor pollution, as well as provision of water supply and sanitation are linked to health outcomes (especially of children) which, as mentioned earlier, affect present and future productivity.

The other coping mechanism of the poor is related to their need to supplement meager household incomes, which often results in the use of child labor at the expense of children’s schooling and other human capital investment, leading to low productivity of these children when they become adults. Thus, addressing these problems of the poor (especially those of poor women) can go a long way towards addressing the issue of sustainability. To paraphrase the 1987 WCED, “meeting the needs of the poor in this generation is an essential aspect of sustainably meeting the needs of subsequent generations”.

LESSON 2: Mainstreaming Sustainable Development

Mainstreaming sustainable development is the advocacy, integration, and harmonization of the SD concept to
emphasize the value of considering intergenerational equity and the interdependence of social, economic
and social dimensions into development thinking through the formulation of development plans, policies and programs. In mainstreaming SD, we: (a) describe the development issues and concerns; (b) analyze their interacting economic, social and environmental causes and effects or consequences; (c) identify policy/strategy and program/project responses to these challenges considering their costs and benefits (resource drawdown and resource buildup) as well as their effects/impacts on other new and/or existing policies, programs and projects and their overall effects/impacts on intergenerational wellbeing; and (d) ensure that a participatory, stakeholder process underpinning the strategies takes place to ensure that multi-disciplinary concerns are considered, and more importantly, that commitment is forthcoming.

The experience of the Governance for Philippine Agenda 21 (GOPA 21) piloted in nine local government units (LGU) showed the importance of a participatory, stakeholder process in successfully mainstreaming SD.

The Elements and Challenges of the Mainstreaming Process

The process of mainstreaming SD in public sector decision-making is shown in Figure 2.

  1. Leadership– probably the most critical aspect of the process. Through consultation and participation, leadership provides the vision for development activities. Its role involves determining the overall type of strategy approach; demonstrating commitment and focus; and ensuring the incorporation of the intergenerational SD and interdependence SD principles. Thus, leadership must be grounded in the fundamental principles of sustainable development, i.e., it must represent both present and future generations and understand the interdependence of economic, social and environmental systems.In addition, leadership must have good governance, strong political commitment, and consensual decision and long-term vision; take a people-centered approach; and use effective participation.
  2. Planning – Stems from the strategy approach identified by the leadership. It involves providing an enabling environment for achieving objectives; identifying the means of achieving these objectives through appropriate legal and institutional bases, necessary management instruments and policy assessment that take into consideration their interlinking economic, social and environmental consequences; and identifying programmatic structures and specific policy initiatives.
  3. Implementation – The plans are developed, employing and financing a mix of policy and program initiatives. These plans are then implemented, building on existing capacity; providing cohesion between budget, capacity and priorities; building partnerships; ensuring accountability and establishing clear and coordinated responsibility; and linking efforts to the private sector.
  4. Monitoring, learning and adapting – Plan implementation is monitored and evaluated. These processes constitute a critical feedback that closes the cycle. Monitoring and evaluation should be based on SMART (specific, measurable, achievable, relevant/realistic and time-bound) indicators and built into strategies to steer the process, track progress, cull and capture lessons and signal when change of direction is necessary. This also includes formal and informal feedback mechanisms to ensure that monitoring results continually inform the adaptation of leadership, planning and implementation.
  5. Coordination and stakeholder participation – Coordination is a cross-cutting aspect of the process. There are many dimensions to coordination in mainstreaming SD:
    • Linking national, regional and local priorities and actions, making sure they are sustainable and not at cross-purposes with each other;
    • Linking national, regional and local levels;
    • Linking different sectors;
    • Coherence between budgets and priority initiatives; and
    • Linking the short-term to the medium- and the long-term visions/goals/objectives/plans.

The first two refers to vertical coordination, the next two to horizontal coordination and the last to intergenerational coordination.

In short, mainstreaming SD into existing government development undertakings is a cyclical and continuous process. It is an adaptive process that requires putting in place mechanisms, policies, legal and institutional frameworks for coordinating and integrating economic, social and environmental aspects of development while considering their impacts on intergenerational well-being. It involves the following key considerations:

Key considerations in mainstreaming SD:

  • Creating a sustainable development culture – SD should be a way of thinking and a way of life. The integration of economic, social and environmental aspects of development and inter-generational well-being should be pursued as a routine undertaking.
  • Institutionalizing sustainable development – SD efforts should be fully institutionalized and not seen as ad hoc or a one time undertaking. It should be fully mainstreamed in development policy and in the day-today functioning of government and other stakeholders.
  • Putting in place appropriate legal and enforcement mechanisms – legal and enforcement mechanisms are indispensable for making SD a way of life.
  • Coordinating effectively – because SD is a multisectoral and multilevel undertaking, effective coordination is essential for its success. Coordination ensures incorporating SD in the government decision making process and in the annual budget at the national, regional and local levels.
  • Creating effective public communication and participation – there should be regular public consultation at the national, regional and local levels to reach consensus on the development objectives for the country and also for the implementation of specific programs and projects.
  • Mobilizing, engaging and strengthening national capacity for continuous SD efforts – it is important to identify on a regular basis what skills and capacities exist and what are needed for various mechanisms. Local capacities (human, organizational and financial resources) should be built or strengthened through formal and informal training.

By making SD a way of life in planning and action, policies, programs and activities become more effective in achieving intergenerational wellbeing; greater efficiency in the use of limited resources; and greater equity impact of policies and programs that would contribute to the achievement of SD goals.

LESSON 3: Measuring Sustainability: Some Tools and Indicators

Consistent with our concept of development as “better life” or improved wellbeing, the outcome of the development process are improvements in the indicators of wellbeing. SD requires that total assets (human capital, natural capital and manufactured capital) are not declining over time. To properly measure sustainability, all assets — manufactured capital, natural capital and human capital — must be included in the indicators. In the past, only manufactured capital was recorded in the System of National Accounts (SNA), but the recognition of the importance of natural capital has led to the inclusion of this asset in some countries. However, human capital is not yet included because there is no agreement on how to measure it. Ideally, though, since economic, social and environmental processes are interrelated and affect sustainable development, economic, social and environmental indicators must be considered in monitoring and assessing the sustainability of development paths towards intergenerational wellbeing of the individual as well as the wellbeing of the country as a whole.

Indicators of a Country’s Wellbeing

A fundamental indicator of a country’s wellbeing is the value of its wealth over time. While nondeclining national wealth does not guarantee sustainable development, declining national wealth is a cause for concern.

Many researchers and practitioners have searched for a way to measure sustainability either by revising
conventional macroeconomic indicators or by coming up with new ones in physical units used in conjunction with conventional economic indicators. At this time there is no consensus as to which indicators to use since each indicator serves a different purpose, but some indicators are discussed below. The choice of indicator depends on the policy question that policy-makers may pose. For example: (a) Is the current level of national income sustainable? (b) What level of income would be sustainable?

Physical Indicators of Macro-level Performance

Macroeconomic indicators measured in physical units have been proposed to be used either as alternative to monetary indicators or in conjunction with monetary aggregates in assessing economic performance. The use of physical indicators reflects a strong sustainability approach. The two major sources of physical macroeconomic indicators are the National Accounting Matrix including Environmental Accounts (NAMEA) and the Material Flow Accounts (MFA), which are closely related to environmental accounts.

The NAMEA provides physical macroeconomic indicators for major environmental policy themes: climate change, acidification of the atmosphere, eutrophication of water bodies and solid wastes. The indicators are then compared to a national standard (e.g., target level of greenhouse gas emission) to assess
sustainability. The MFA, on the other hand, provide several macro indicators, the most widely known of which is total materials requirements (TMR). The TMR adds up all the materials used in the economy
by weight, including “hidden flows” or materials excavated and disturbed along with the desired material, but do not themselves enter the economy. Unlike the NAMEA theme indicators, TMR provides a single-valued indicator of all materials used. Sustainability is assessed in terms of “dematerialization” as in Factor (halving resource use while doubling wealth), (von Weisacker, et al, 1997). However, TMR does not differentiate materials by environmental impact – highly toxic materials are simply added to materials
that are much less environmentally damaging. Thus, the sustainability goals set under this framework appear rather vague as guides to policy. Hence, TMR requires further disaggregation by material and by industry for better interpretation. Other physical indicators derived from MFA include (SEEA, 2003):

  • Direct Material Input (DMI)
  • Net Addition to Stock (NAS)
  • Total Domestic Output (TDO)
  • Domestic Processed Output (DPO)

Monetary Environmental Indicators

The purpose of most monetary environmental macroeconomic aggregates has been to more accurately measure
sustainable income. The first approach revised conventional macroeconomic indicators by adding and subtracting the relevant environmental components of the System of Integrated Environmental and Economic Accounting (SEEA) – the depletion of natural capital and environmental degradation. An environmentally adjusted product and income is obtained by subtracting depletion of natural capital and environmental degradation based on maintenance cost from macroeconomic aggregates. Most economists and statisticians accept this adjustment of NDP for asset depletion, even though there is still no consensus over the correct way of measuring it. Environmentallyadjusted NDP (eaNDP) has been criticized for combining actual transactions (conventional NDP) with hypothetical monetary values of environmental degradation. If the costs of environmental mitigation had actually been paid, relative prices throughout the economy would
have changed, thereby affecting economic behavior and, ultimately, the level and structure of GDP and NDP (Lange, 2003).

A macro indicator related to eaNDP is Genuine Savings (gY). It attempts to measure changes in asset values rather than income. According to economic theory, sustainability requires that wealth is non-declining over time. But many countries do not have comprehensive balance sheets, so it is not feasible for them to monitor wealth. But it is possible to measure savings, that in turn, shows how wealth is changing, and whether the trend is sustainable or not. Genuine Savings adjusts gross domestic savings for consumption of fixed capital, investment in human capital, changes in natural capital, and environmental damage. The following list summarizes measures that revise existing macroeconomic indicators (SEEA, 2003):

  • daGDP, daNDP, daGNI, daNNI (depletion adjusted product and income measures) — depletion of natural capital assets is subtracted from macroeconomic aggregates.
  • eaNDP, eaNNI (environmentally adjusted product and income measures) – depletion of natural capital and environmental degradation based on maintenance cost are subtracted from macroeconomic aggregates. In some cases, part of environmental protection expenditures (EPE) are subtracted
  • Genuine Savings (gY) — (NNI less damage costs; it is related to genuine savings, goods and services) – depletion of natural capital and environmental degradation based on damage cost are subtracted from macroeconomic aggregates.

Other measures that estimate new hypothetical macroeconomic aggregates include (SEEA, 2003):

  • Hueting’s (2003) Sustainable National Income (SNI) (sustainable income measure preserving environmental service) – based on modeling hypothetical GDP, GNI if economy was forced to meet environmental standards using currently available technology.
  • geGDP, geNDP, geGNI, geNNI (“greened economy” product and income measures) — based on modeling of hypothetical GDP if hypothetical environmental protection costs were required.
  • Other forms of sustainable GDP, NDP, GNI, NNI (no technical term) – based on modeling of hypothetical GDP from a range of either short- and medium-term options (e.g. carbon tax) or long-term strategic analysis of alternatives for sustainable development.

We have seen that better and more comprehensive accounts of national wealth would definitely contribute to
more effective monitoring of sustainable national wealth and improve the ability of policy-makers to make informed decisions. Unfortunately, many developing countries, including the Philippines, do not have data for many of these indicators. We hope that because of their importance in monitoring and measuring sustainability of development policies, programs and projects, developing countries will begin to gather the needed data so that they can use these indicators.

Indicators of Individual Well-being

So far, we have looked at total wealth/income. But in most countries, population is still increasing rapidly. Therefore, a constant level of wealth and income would result in a declining per capita level of wealth and income for future generations. Inter-generational equity requires that not just total wealth, but per capita national wealth is nondeclining over time and this is why a population growing faster than economic growth is a concern. Sustainable development also requires that the indicators of wellbeing are nondeclining over time. The following sets of indicators provide an idea of whether people’s wellbeing are improving or declining over time.

Human Development Index (HDI)

The United Nations Development Program (UNDP) uses the Human Development Index to monitor various countries’ achievement of the goals of eradicating poverty, promoting human dignity and equality and achieving peace, democracy and environmental sustainability (i.e., the various means of achieving better life or wellbeing), using three composite indicators, namely: life expectancy, educational attainment and adjusted real income.

Population and Development (POPDEV) Indicators

A total of 539 population-denominated indicators of development are grouped into: population processes, population outcomes, development processes and development outcomes based on the framework for integrating population and development in planning (Herrin, 1990). This list of POPDEV indicators was developed under the POPDEV Planning at the Local Level Project of the Commission on Population in 1999. The indicators, expressed as number, percentage, ratio, rate, average, mean or median, measure various means and levels of well-being.

Minimum Basic Need (MBN) Indicators and Poverty Indicators

The 33 indicators were established through the Integrated Approach to Local Development Management. These MBN indicators were intended to regularly monitor, at the barangay level, the situation of families in terms of the attainment of their minimum basic needs of food and nutrition, health, water and sanitation, clothing, shelter, peace and order/public safety, income and employment, basic education and literacy, people’s participation and family care/psychological needs, to identify families that need poverty reduction interventions. These indicators can also show how many families are moving in or out of poverty.

The Presidential Commission to Fight Poverty adopted 19 of these MBN indicators for its use in identifying the poor. However, these indicators were trimmed down to 16 indicators because of the difficulty of getting information on the other indicators from the community-based monitoring systems.

Balisacan’s (1997) study on correlates of poverty in the Philippines provides such indicators such as location, dwelling, family characteristics and ownership of durable goods to predict household welfare
levels.

Again, since economic, social and environmental processes are interrelated, it is important to have economic, social and environmental indicators or indices in monitoring and assessing the sustainability of development processes and interventions – policies, strategies, programs and projects — so that we have an idea of whether we are accomplishing intergenerational wellbeing of individuals and of the country as a whole.
SD Mainstreaming Handbook

Module II: SD-Enhanced Situational Analysis

Module II is designed to enhance the knowledge and skills of policymakers and planners in analyzing the situation of their locality. This is an important skill because a good situational analysis (SA) is an important component of plan formulation and the basis of all the succeeding steps in the development planning process. One of the bases of a good SA for planning is a good socio-economic profile (SEP), which provides planners with needed data and indicators.

This module consists of four lessons and two workshops. Lesson 1 discusses the concept of SA and its importance in the development planning process. Lesson 2 illustrates how the SA might be improved by integrating the interdependence and intergenerational principles of sustainable development into a locality with an already existing SA and involving the participation of stakeholders and experts in the process. After the lesson, a workshop on improving SA is conducted to apply the concepts in their own situations. Lesson 3 introduces the concept of prioritizing problem situations besetting the locality as identified in the SA. It explains the importance of focusing on priority problems since the SA might come up with a host of development problems and concerns that the locality may not be able to address effectively with limited resources and within a specified plan period. After Lesson 3, a workshop allows the planners to have a hands-on experience in prioritizing the problems of their locality.

LESSON 1: Situational Analysis

Lesson introduces the concepts and processes of SA. It discusses why we conduct an SA and the importance of a good SA in the entire sustainable development planning process. Lesson covers the following topics:

  • What is situational analysis?
  • Why conduct a situational analysis?
  • What is a good situational analysis?

Where are we in the development planning process?

To place SA in context, let us first review the development planning process. The planning process consists of several stages: plan formulation, investment programming and resource allocation or budgeting, plan implementation and plan monitoring and evaluation (Figure ). Plan formulation involves several activities: situational analysis and problem identification; development of a vision; setting of goals, objectives and targets; formulation of policies and strategies; and identification of programs and projects.

We see in Figure 3 that SA is the first step in the planning process. As such, SA provides inputs into the succeeding steps of the planning process and at the same time draws inputs from the evaluation of the previous planning cycle. It is important to note that in SA, the involvement of planners as well as stakeholders and experts is important to make the process correct and effective.

What is situational analysis?

SA is an assessment of the conditions of a locality and the social, economic, environmental, physical, political, cultural and institutional factors affecting these conditions. When doing an SA, we look into a locality’s past and present situations and ask the question: How are we doing? What are the impacts of past policies/strategies, programs/projects on sustainable development in the current situation in terms of total assets – human, natural and manufactured or economic capital? Are the conditions existing in the locality desirable or not? If not, why is it so? What factors brought about these undesirable situations On the other hand, if the situations are desirable, how can we make them even more desirable or at least maintain the same level of desirability? What factors brought about these desirable conditions as opposed to the undesirable ones?

SA is primarily undertaken to determine the key development issues and concerns of an area – its strengths, weaknesses, opportunities and threats – and the factors that brought about these issues and concerns. In other words, what factors made a particular situation a strength, a weakness, an opportunity or a threat? A thorough and correct understanding of the situation is important in the formulation of an SD-enhanced development plan. A plan is a look at where we are, where we hope to go and how to get there. So unless we know exactly where we are, we would not know where to go or how to get there. We would be like a ship without a rudder, drifting around without a port, which is not exactly the image of effectiveness and efficiency.

Determining the impacts of past policies, programs and projects on sustainable development in the current situation in terms of the following:

  • Human capital — Were there improvements in the target population’s access to basic services — health, nutrition, education — due to past plan interventions? Were the correct target beneficiaries (disaggregated by age and sex), reached by these interventions?
  • Natural capital — What is the state of our natural capital in terms of land use, quality and quantity of water, air, soil, biodiversity, reserves, etc.? Are these resources declining? If so, at what rate?
  • Manufactured or economic capital — What is the country’s situation in terms of technology, infrastructure, savings/investments, employment generation, production of goods and services, etc.? To what extent have they contributed to increasing the income/wealth of the nation or at least reducing budget deficit? How far is the country from achieving non-declining income/wealth?

Why conduct a situational analysis?

We need to understand the different factors that influence a particular situation in a locality. These factors determine a locality’s comparative advantages. Comparative advantages are those features or characteristics of a locality that make it more competitive compared with other localities.

Since a good SA is based on a reliable and updated set of data, it provides an objective basis for mapping out specific courses of action and identifying appropriate interventions, either to address identified problems or develop potentials for sustainable development of the area. Thus, a thorough and correct
understanding of the situation is important in the formulation of a good sustainable development plan (SDP). That is why SA is the first step in the planning process and the basis of all the succeeding steps in planning. This is also why a plan is only as good as its SA. A poor SA could result in a poor or ineffective plan.

What is a good situational analysis?

A good SA is one that provides an accurate and comprehensive view of the conditions and dynamics of a locality and its people. An accurate and comprehensive view: (a) allows us to see clearly the sustainable development vision, goals, objectives and targets of the locality; (b) provides us with a wide range of options for identifying and choosing appropriate interventions to address its problems, develop its potentials and attain its stated sustainable development vision, goals, objectives and targets; and (c) helps us identify correctly the population groups or areas affected by specific situations. Unless we target the correct population groups or areas, the planned interventions may not be effective and may not
make a difference in the lives of people now and in the future. To be able to accomplish these tasks objectively, a good SA must be based on accurate, relevant, timely, reliable and accurate data and information. The primary source of data for the SA is a complete, reliable, up-to-date socio-economic profile (SEP) of a locality. A good SEP guides and facilitates the preparation of a good SA.

LESSON 2: SD-Enhanced Situational Analysis

We already know the importance of a good SA in the development of a good sustainable development plan. In this lesson, we will look into how to enhance an existing SA by integrating the intergenerational and interdependence principles of sustainable development. In short, we will look at: (a) ways to explicitly consider the interrelationships among social, environment and economic development factors and (b) intergenerational development impacts of our decisions and actions.

How do we prepare a SD-Enhanced SA?

There are several approaches in preparing an acceptable situational analysis, such as the problem tree analysis, the SWOT analysis, fishbone diagram (Annexes A, B and C, respectively) and the determinants-outcome approach. In this module, we use the determinants-outcome approach. This approach tells us that a situation is likely to be the result or outcome of many interacting factors — social, economic, environmental, institutional and other factors. It is a useful method of analyzing the determinants of an
outcome or the result of interventions of the previous planning period.

A determinant is a factor influencing or causing an outcome. There are two types of determinants – proximate and underlying. A proximate determinant affects an outcome directly. An underlying determinant affects an outcome indirectly by directly affecting the proximate determinant (Figure 4).

Let us look at how the analysis of determinants-outcome relationships might help us develop a SD-enhanced SA. To do this, it might be easier to work by sector (since the current development planning process uses a sectoral approach), although the analysis of interrelationships is intersectoral. The following steps may be followed:

  1. Identify a sector or sub-sector desired outcome or result 
    Development outcomes of a sector are the end-results or goals, objectives or targets that we expect the sector to accomplish to improve the wellbeing of present and future generations. These outcomes or results usually characterize a sector. For example, in the health sector, we usually look at what is happening to the health status of the community in terms of mortality, morbidity, nutritional status and disability. In infrastructure, we are concerned with adequacy and quality of transportation (e.g., roads, seaports, airports and various transport facilities), adequacy and quality of communication (e.g., various communication media, telephone system, TV, radio and newspapers), adequacy and quality of water supply, electrification coverage, and other social services facilities. In tourism, we want to know the sector ’s contribution to revenue generation and environmental preservation and protection. Under the macroeconomic sector, the outcomes include standard of living, level of prices, employment situation, etc. In agriculture, outcomes might include farm productivity, farmer income, and so on. In environment, we are concerned with the quality and quantity of the environment and natural resources. In industry, the relevant outcomes might be investment generation and export promotion. These are just a few development outcomes of different sectors that we are concerned about to ensure that people now and in the future achieve a better life.It is useful to remember that the desired development outcomes of a sector can be gleaned from the goals, objectives and targets of the previous planning period.
  2. Identify indicators of each sector/sub-sector outcome 
    Indicators measure and describe the prevailing reality of each development outcome. Various indicators may be identified for each of the different sectoral outcomes. For example, in the industry sector, employment generation may be measured by such indicators as employment rate, unemployment rate, underemployment rate, number of new jobs created, labor force participation rate, type of investment, type of technology and others. The health outcomes of mortality may be indicated by infant mortality rate (IMR), crude death rate (CDR), child mortality rate (CMR), maternal mortality rate (MMR), etc. An environment sector outcome of quantity of natural resources may be indicated by rate of utilization or regeneration of specific resources (e.g., forest, marine resources, etc.).
  3. Obtain data of each indicator
    Data quantify or show the magnitude of the outcome being described by the indicator (e.g., 10% unemployment rate, 10,000 hectares of denuded forests, 5 IMR, etc.). The primary source of data is the socio-economic profile.
  4. Determine whether the outcome is desirable or not

Using the data for the indicators, we compare the current outcome with:

    • Past outcome
    • A planning standard
    • The outcome of a similar planning unit
    • The outcome of a higher planning unit (province, region or country in the case of a municipality)
    • Other reference/comparison points

From this comparison, we determine whether we are better off or worse off than the past outcome and/or other reference data. If our situation is worse off, then we have a problem. For instance, if our IMR was 50 in the preceding planning period (past outcome) and our current IMR is 45, our situation has worsened. On the other hand, if our current IMR is 35, our situation has improved. However, knowing whether our situation has improved or worsened is not enough. We need to know how well or how badly we have performed compared with the planning standard or with other planning units. For example, if our IMR is 45 and the country’s or region’s is 50, then we are better than the regional or national average. If we are better off, this situation is a strength of the locality or agency.

The more reference points we compare our locality’s data with, the more confident we are to conclude that the situation is either a problem or a strength. Simply comparing the locality’s situation with that of another locality, region or country may not show that a problem situation exists since it is possible that the situation of the other locality, region or country might be below standard. It is important, therefore, that we know the planning standards for different sectors so that the conduct of SA will be more comprehensive and correct. These planning standards may be requested from different sector agencies.

A comparison with either the region’s or the country’s data situates the condition of the locality or agency within a larger development picture. Comparing the locality with planning standards tells us how it fares against a prescribed “ideal” level. For example, the standard for teacher-student ratio is 1:45. If the locality’s figure is 1:35, then it is above standard. If, however, it is 1:50, then it is doing poorly in this sector and that something must be done to improve class size.

  1. Find out what factors caused the situation to be the way it is We want to understand why a situation is the way it is. 
    What factors caused the situation to be a problem or strength? What social, economic, environmental, political and institutional factors influenced it? We want to know these factors so that we would know how to correct problem situations or enhance desirable ones. These factors are potential areas for identifying interventions– policies, strategies, programs and projects – needed to solve a problem or enhance a strength.For this purpose, we use different sectoral determinant-outcome frameworks. These frameworks help us understand a situation and its determinants. Earlier, we saw in Figure 4 the relationship between outcomes and determinants. Figure 5 illustrates the relationship with examples in the health sector. It enumerates
    the different health outcomes and their corresponding proximate or sectoral determinants and underlying or intersectoral determinants. The health outcomes are mortality, morbidity, nutritional status and disability. The proximate or sectoral determinants that directly affect these health outcomes include: (a) utilization of health care service, whether preventive or curative, affects health status; (b) environmental factors such as contamination of air, soil or water increase risk of infection; (c) nutrients or dietary intakes directly affect nutritional status as well as risk of illness; (d) fertility, proxied by age of mother, number of children and birth spacing is related to infant and maternal mortality; and (e) injury may cause disability or death.All these proximate determinants have to be understood in terms of the underlying or intersectoral factors. Let us take income as an example. Income affects health outcomes by affecting one’s ability to afford health care services or the right nutrients and so on. Education indirectly affects health outcomes by directly affecting the proximate determinants. Education is related to a person’s beliefs and attitudes toward health practices – whether one prefers to go to a medical practitioner or consult a hilot; how
    he disposes of his/her garbage and cleans his/her surroundings as well as what food he/she eats. All these then, indirectly affect health outcomes.

    This framework for analyzing interrelationships of various factors affecting the health sector provides us with an example of how to identify the factors directly affecting an outcome (proximate determinants) and the factors indirectly affecting an outcome (underlying determinants).

    Any situation in any sector can be analyzed using a similar determinants-outcome framework (Annex D) for other sectoral determinants-outcome frameworks. These frameworks are effective tools in analyzing a situation and looking at what causes (determines) the situation to be the way it is. They help us look at the different factors that brought about such a situation in a more systematic and comprehensive way. Knowing why a situation is the way it is makes it easier for us to see what needs to be done about that situation to make it desirable and sustainable and how to go about it.

  2. Identify the population affected by the situation.
    For each problem situation, we identify the specific population group (women and men of various groups) or areas affected by the problem. This group of people or area is the target population or target area which we intend to reach with our programs or projects.It is important to clearly identify the target population or area because everything else follows. If we have not specified the target population or area we will not be able to determine later the extent to which the program or project is reaching them because they were not properly identified in the first place. And at the end of the program or project, when we assess its impact, we will not be able to determine if, and to what extent, the program or project has affected or will affect the people’s lives now and in the future, because we did not define who these people are or what areas – the target beneficiaries – were supposed to be.Choosing a target population depends on the problem and its implications on resources and impact on present and future wellbeing. The criteria for choosing the target population or area should be well defined. Unless one has clearly specified the criteria – as to who should belong or who should not – then there is a danger that everyone is included or that those who should belong will not be included. This has implications on impact and resources. Knowing the extent of the target population’s or target area’s problem is also important for us to appreciate the urgency of addressing a problem.

    A useful tool in summarizing the situation of the locality for each sector is shown on Table 1. We use a health outcome to illustrate how it may be done.

  3. Use projections (population or area)
    Knowing how many will be in need of specific interventions or services until the end of the plan period gives us an idea of the magnitude of the problem. This will also provide some basis for determining the funding requirements of a program or project later on.
  4. Validate SA with local community
    Consultation with and participation of credible stakeholders and experts in SA ensures that the findings are correct and that the felt needs and concerns of the community’s women and men are taken into account. This step is important partly because the available data for analysis may be incomplete or inaccurate; or
    information from different sectors of the community may further enrich or verify the accuracy of the analysis. Usually, consultation is done through interviews or community meetings (e.g., pulongpulong), focus group discussions (FGDs)and others. Decisions should be based on consensus.

It is also important to consult local officials, both executive and legislative, to make sure that their perceived priority concerns coincide with the priorities identified in the SA or that they are at least considered. Participation of officials in every step of the planning process ensures their support and commitment to the plan, especially during its implementation.

LESSON 3:Prioritizing Problem Situations

The previous lessons introduced us to the processes involved in identifying development problems and concerns. Given a wider view of the situation of a locality and provided with a good, comprehensive and SD-enhanced situational analysis, we can expect to identify a host of problem situations. In this lesson, we look at the many identified problems and concerns so that we can initially prioritize them. An initial prioritization is important for us to know the value the community attaches to these problems. These values enable us to decide which problems must be attended to first, and which ones should follow. In addition, these values will be useful later on in identifying the criteria for prioritizing programs and projects in Module III.

How do we prioritize problem situations?

Since resources are scarce and implementation capabilities are limited, we need to prioritize or rank the long list of identified problems to find out which among them ought to be dealt with during the plan period. To do this, the following steps may be followed:

  1. Make sure the problems are the locality’s concerns 
    We review the problems to make sure that all of them are the locality’s concerns. If a problem has spillover or cross-border effects, then it is a common concern of the locality and the other affected areas or sectoral agencies. Spillover or cross-border effects are those not confined to only one locality but extend to neighboring areas. It is important to know these types of problems since their solutions will have to be coordinated with the other affected areas. Otherwise, the solution might not work and the
    problem may persist or even worsen.We also want to know whether a problem is appropriately the concern of the government or of the private sector. Again, this is important so that we know who to coordinate with to address a specific situation. If it is a government concern, we also need to know whether it is a local, regional or national concern so that it can be addressed by the appropriate level of government.
  2. Set criteria for prioritization
    We subject each of the locality’s problems and concerns against a set of simple, common sense criteria as part of the initial prioritization process. The more rigid prioritization is done with programs and projects in Module III. The locality or agency chooses a set of criteria such as:

    • Urgency of the problem or concern
    • Seriousness of the problem or concern
    • Extent of the problem or concern
      • Magnitude of directly affected human resources (women and men of various ages), natural resources or manufactured or economic resources,
      • Magnitude of indirectly affected human resources (women and men of various ages), natural resources or manufactured or economic resources
  3. Consequences of the problem/concern
    • Impact on intergenerational wellbeing (present and future generations of women and men of various ages)
    • Impact on the solution of other problems/concerns
    • Impact on sustainability of strengths, potentials and opportunities of the area
    • Impact on other localities and other planning levels
  4. Others

Urgency indicates the time response needed to solve a problem or alleviate negative effects of a problem situation. One example is a life or death situation such as the occurrence of a calamity or an epidemic.
Such a situation is given high priority.

Seriousness suggests the gravity of the problem even if it is not a life or death situation. For example, third degree malnutrition is more serious than first- or seconddegree malnutrition or mercury pollution of
water bodies.

Extent implies the size or magnitude of the people or area directly or indirectly affected by the problem. The more people or the greater the area affected, the higher the priority. For example, epidemic affects
a lot of people; or a situation of 500,000 third degree malnourished children in Barangay A is worse than 10,000 third degree malnourished children in another barangay.

Obviously, these criteria are not mutually exclusive. In fact, they overlap with one another. The general rule is the more criteria a particular problem or concern meets, the higher the priority of that articular
problem or concern.

This exercise may also be applied to the locality’s strengths and potentials, because there are strengths and potentials that can be harnessed in the long run. However, given limited available resources, priority
may have to be given to the problem situations; otherwise they might fester and worsen. There are also potentials that could have spillover effects (e.g., the presence of geothermal reserves in one locality; a tertiary hospital; or a college).

In this case, doing something about a potential might have to wait for higherlevel pronouncements before it can benefit a particular locality. While this type of potentials offer bright hope for a locality,
their actual development is not decided locally as external factors (e.g., policies at the national level) dictate or affect the pace of development in a particular locality or community

  1. Rank the problems
    Ranking problems is intended to guide decisions on which problems to address immediately and which ones to put on hold. How do we rank problems? One way is to assign weights to the chosen set of criteria. These weights represent the value a locality places on a particular problem situation and may differ from locality to locality. The involvement of stakeholders and experts may help in assigning the weights. Some localities or agencies might give higher priority to human resource development while others would prioritize environmental protection or physical/structural development. This implies that weights for prioritizing criteria cannot be prescribed for adoption by all localities because only the community can put a value to a problem that besets it.Another way is to use uniform or equal weights to all criteria but realistically, different weights are assigned to reflect the different values of the criteria. Regardless of the method used, the sum of all the weights should not exceed 00 percent. Sometimes it is useful to breakdown a criterion into sub-criteria and assign them weights as well. This is done to further reduce the element of subjectivity in the ranking process.For example:
    This can be done for the other criteria. For instance: seriousness of the problem (very serious, serious, less serious, and not serious); extent of problem (very large, large, small, very small population or area affected); consequence of problem (very great, great, not so great, small impact on the community, etc.).

    The relative rank of the list of problems is determined from the total score of each problem, using a 1-to-n ranking. From the ranking, a decision is made either to assign a cut-off point to short-list the problems for inclusion in the plan or to include all identified problems.

    Another approach to ranking problems is non-quantitative in nature. Prioritization is done through consultation with key informants – officials, leaders and concerned groups and experts in the community or sector — or through an official pronouncement of the leadership.

SD Mainstreaming Handbook

Module III: SD-Enhanced Development Plan

This module takes off from the situational analysis discussed in Module II. It takes us through the rest of the plan formulation stage of the planning process – setting of vision, goals, objectives and targets; formulation of policies and strategies, and identification of programs and projects.The module aims to deepen understanding of the planning process from the sustainable development perspective. It also allows gaining of experience in the formulation of an SD-enhanced Development Plan (SDDP) by assessing the sustainability of its vision, goals, objectives and targets, and various interventions (policies,strategies, programs and projects) that address development concerns in the SA.

LESSON 1: Guiding Plan Formulation: Vision, Goal, Objective, Target

Lesson 1 discusses the concepts, processes and rationale for developing the instruments that guide the plan—vision, goals, objectives and targets. We start Lesson 1 with a brief discussion on sustainable development planning.

What is sustainable development planning? It is the conscious effort of the community to guide the locality’s economy towards a steady sustainable long-term growth for an improved quality of life for its people and future generations. To be effective, sustainable development planning must meet two social preconditions. First, all groups that exercise political or economic power must agree on the planning framework (vision, goals or objectives of the plan) and on the methods to be used. Second, the stakeholders especially the locality’s officials, policymakers and the women and men who will implement the plan must be seriously committed to it.

In sustainable development planning, we review the current state of the locality (SA), determine where it hopes to go (vision, goals or objectives) and the steps needed to get there (policies, strategies, programs and projects). As we establish the locality’s immediate and long-term goals and generate sustainable ways of meeting these goals, we keep in mind the probable impact on the intergenerational wellbeing as well as changes in the locality’s situation and environment. In brief, a plan tells us: (1) where we want to go in the short, medium or long run; and (2) how to get there effectively, efficiently, equitably and sustainably so that the pursuit of a better life by the present populace does not compromise the wellbeing of future generations.

The planning process is an unending, repetitive and iterative cycle. Should the planning steps be done in sequence? Does it matter whether planning is done systematically or not? It matters as much as in any process. Consider for example, if a doctor treats a patient first and only diagnoses afterwards. It may not matter if a patient is given cough syrup when he has a broken leg. Not much harm is done as long as this is eventually discovered. However, there are cases when treating a patient before diagnosing his/her illness has disastrous results. It certainly matters if a patient is given a pain reliever for a stomachache when actually his/her appendix has already burst and is spreading poison in his/her body. This is also true in planning. It may not be that harmful to build a bridge where there is no river, but it would be a waste of resources. It can be disastrous if money is used to cement the road to the municipal hall instead of repairing an old rundown bridge over a river that rises with floodwater.
Surely, there are instances when coming up with the solution before identifying the problem would not only be financially costly but could result in lives lost.

Planning therefore requires a disciplined approach and follows a systematic sequence of logical steps to yield better outcomes that are effective, efficient, equitable and sustainable. A planner does not come up with the solution (policy/strategy or program/project) before the problem or concern is identified. Otherwise there is no assurance that the intervention will effectively, efficiently, equitably and sustainably solve the problem. For example, building a hospital may be a more costly solution to the problem of high infant mortality rate (IMR) when immunization is simply what is needed. The hospital may not even serve infants of poor families such that it will have little bearing on the problem of high IMR.

Why do we plan?

We plan to set a clear direction. We plan to know how to reach a goal or an objective with better results. Planning guides us in clarifying our goals/objectives and in formulating ways of accomplishing them. Because society has many wants and needs, we plan to find appropriate ways to optimize the use of limited resources. This will help us achieve the greatest good for all people, both present and future generations. It is important that we know the different players of development, considering their gender, age as well as other factors. We should also understand their roles in the sustainable development efforts of a locality. Moreover, we should consider the roles of the different levels of government and that of the private sector. This is crucial because in local sustainable development planning, for example, the local government should concern itself only with actions that are clearly within its mandate and jurisdiction. Beyond this, the private sector or higher government levels may be the proper group to address the concern. Thus, we must recognize that a comprehensive situational analysis is needed to come up with a good sustainable plan. Only when we understand the situation correctly and have a holistic view of it can we decide who does what.

How do we set a vision, goal, objective or target?

First, let us see where we are in the planning process (Figure 6). We see that the SA helps us set our vision, goal, objective and target from which we base the succeeding steps in the planning process.

What is a vision?

A vision is a desired future state of a locality and its people. It describes what a locality or community wants to become or where it wants to go in the long run, say 20 to 30 years. In developing a vision statement, the local officials in consultation with the community decide on what they would like their locality to be in the future based on an analysis of their past, present and likely future scenarios. This is why a comprehensive SA is critical.

A good vision statement captures the aspirations of all sectors of the community. It maximizes the strengths, opportunities and comparative advantages of a locality or agency. Comparative advantages are the characteristics of a locality or agency that makes it unique and competitive compared with other localities in the province, region or country. However, although the vision considers the locality’s uniqueness, it must be consistent with visions of the province, region and country. This is to ensure that development efforts complement each other and move in tandem toward the attainment of the country’s sustainable vision, goals and objectives.

To correctly capture people’s aspirations, the formulation of a vision statement must be participatory and consultative. Different groups of women and men of all ages in the community may have divergent needs, interests and aspirations. By generating, discussing and harmonizing these differences, a participatory process arrives at a shared vision that promotes community unity and commitment. When everyone shares a vision, it ceases to be just an idea. It becomes the driving force that moves the entire community toward a common sustainable development direction and outcome. A widely shared vision is a powerful force which ensures that all present and future members of the community progress and attain a better life. An example of a vision statement is:

By 2030, (our community) will be a city of God-loving, highly educated, technologically competent and ecology-friendly people. The city will be the center of technological and academic endeavors and the international gateway of northwestern Luzon for export of finished agricultural goods, trade, commerce, and eco-friendly tourism.

Since a vision statement is broad and long-term, its core message does not change every planning period. Thus, visioning is not conducted every time a plan is prepared or updated but the vision statement is reviewed to make sure that the plan is consistent with it. The vision statement in also revisited to ensure that it is still relevant with the times and matched with the resources and capabilities of the locality.

What is a goal, objective or target?

In most literature, the terms goal, objective and target are used interchangeably. All of them imply a desired outcome or result but are distinguished from inputs or activities. Goals, objectives and targets tell us where we want to go or what we want to achieve. They address identified problems or concerns. In this module, however, we differentiate between goal, objective and target.

We define a goal as a broad statement of a medium to long-range desired outcome or result. Usually intersectoral in nature, it addresses a general or overarching problem situation of a locality. An objective, on the other hand, is a more specific statement of a short-range desired outcome or result. It may be viewed as a subset of a goal and therefore, contributes to the attainment of a stated goal. A target is an even more particular statement of a desired outcome or result that is specific, measurable,
attainable, realistic and relevant, and time-bound (SMART). It is a subset of an objective and as such, contributes to the attainment of a stated objective.

The relationship between goals, objectives and targets is shown in Figure 7. The goal statement encompasses an intersectoral problem situation. The objectives, usually sectoral in nature, respond to specific problem situations while the targets state the desired outcome or result in SMART terms.

In our example in the previous page—poor health status in Barangay A—the desired outcome is reduction in infant and maternal mortality rate in that place. Our goal statement of “improved quality of life of the community” is broad, encompassing the specific objective—reduced infant and maternal deaths—which is an aspect of better quality of life. The other problems in our example—high incidence of poverty and unemployment—also fall under the broad goal statement. Thus, the objectives of improved income and generation of employment also fall under the goal statement since we know that improved income and employment are means to a better life.

From our analysis, we see that some situations are not good enough, problematic or unsustainable. We then set our goals, objectives and targets depending on what we think we can do to improve these situations during the planning period even as we factor in the impact of our actions on intergenerational wellbeing.
In determining goals, objectives and targets (or the desired outcomes of problem situations), we need to identify specific population groups of women and men or specific areas (our target population or intended beneficiaries) affected by particular problems.

This is because we want to make sure that these people or areas are actually reached by the programs and projects that we put in our plan. Otherwise, our plan may not address the problem or worse, it may even worsen. In earlier modules, we underscored the importance of clearly identifying the target population or area because everything else follows from that. If we have not done this, then when we monitor the programs or projects intended to solve the problem, we will be unable to know who have been reached and to what extent have they been reached. Consequently, when we evaluate the impact of the program or project upon completion, we will not know whether it has made a difference in the lives of the people simply because we did not identify the target population whose lives the program or project was supposed to change.

What is the process of setting goals, objectives and targets?

The process of setting goals, objectives and targets starts with a review of the situational analysis. From the list of identified problem situations and concerns, we pinpoint the broad or intersectoral concerns that encompass the many specific or sectoral problems. Based on these intersectoral concerns, we formulate our goal statements. For each goal, we come up with our objectives based on the problem situations that might fall under a particular goal. In the same manner, we lay down our targets for each objective. As mentioned earlier, because of the intersectoral nature of the goal one or more objectives may fall under it. This also holds true for an objective. Several targets may be needed to incorporate all the concerns of one objective. Each target is stated in terms of the expected degree of improvement of a problem situation and the time frame this expected improvement might be realized. For each objective and target, we specify: who are affected by the problem; where they are, and the extent of their problem.

Next, we check the consistency of goals, objectives and targets with each other and with the vision. This means all goals must be consistent with the vision of the locality or agency; all objectives must be in line with the stated goals; and all targets must be compatible with the stated objectives. This is to ensure that each contributes to the attainment of higher level desired outcomes.

Finally, we check for consistency of the locality’s goals against higher and lower planning units’ visions and goals so that all planning units are in harmony and move together towards the attainment of the country’s sustainable vision, goals, objectives and targets. To check the appropriateness and consistency of our stated goals, objectives and targets, the following questions may be used as guide:

  • Are stated goals, objectives and targets responsive to the problems and concerns identified in the SA?
  • Are they consistent with the vision?
  • Will the stated objectives contribute to the attainment of the stated goals?
  • Will the stated targets contribute to the attainment of the stated objectives?
  • Are the stated goals, objectives and targets sustainable?
  • Are these goals, objectives and targets consistent with higher and lower level visions, goals, objectives and targets?
  • Are there existing goals, objectives and targets that might be in conflict with these goals, objectives and targets?

LESSON 2:Formulating Plan Interventions: Policy, Strategy, Program and Project

Where are we in the planning process?

We just discussed the development of a vision, goals, objectives and targets based on the problems and concerns identified in the SA. Lesson brings us to the formulation of policies/strategies and the identification of programs and projects needed to attain the stated vision, goals, objectives and targets (Figure 8).

What is a policy and what is a strategy?

In some literature, policy is differentiated from strategy. In this module, we use the two terms interchangeably. A policy or a strategy is a statement of principle, thrust or direction that guides the identification of different activities in a plan aimed at meeting the stated goals, objectives and targets, thus addressing the identified problems and concerns. In other words, a policy/strategy indicates how the goals, objectives and targets are to be achieved.

In formulating policies/strategies, we identify the interacting social, economic, environmental, political and institutional factors affecting or causing a problem situation. We did this in situational analysis. It is important to point out these factors because they are the areas where appropriate interventions are drawn. These determinants or causes of the problem provide a clue on how to solve a particular problem. In the case of poor health of infants and mothers (in our example), the provision of health care services is not the only intervention. We can also do something about nutrition, sanitation, better water supply, fertility, education of mothers, and increasing household incomes, to name a few. This is because we have learned in the previous lessons that health outcomes (Figure 5, p.) are affected directly not only by health care services utilization but also by such factors as environmental contamination, nutrient or dietary intake, fertility, and injury. These are called proximate determinants.

Health outcomes are also indirectly affected by factors such as age, sex, education (especially of mothers), health beliefs, household income, prices of commodities, social network and others. These are underlying determinants.

Unless we do something about the various determinants or causes of a problem, both proximate and underlying, we may not be able to effectively solve the problem. We need to look at as many determinants as possible so we can have a wider range of options for solving the problem.

How do we formulate policies/strategies?

First we go back to our SA to identify the determinants (proximate and underlying) of a problem situation. Next, we formulate policies/strategies that respond to the determinants of the problem and thus, contribute to meeting the goals, objectives and targets (the solutions of the problem). Then, we check if the chosen policies/strategies are consistent with other policies/strategies. The following steps may be used in formulating policies/strategies:

  1. Identify the problem or set of problems to be addressed (Review SA.).
  2. Identify the determinants (or causes) of each problem – social, economic, environmental, political, institutional, etc. (Review SA.).
  3. Analyze how these determinants or causes of the problem can be addressed (Formulate policy/strategy.)
  4. Determine which combination of policies/strategies will yield the best results, that is, contribute to the attainment of the stated sustainable goals, objectives or targets.
  5. Check whether there are existing policies/strategies that are already addressing the problem. If so, is there a need to revise existing or proposed policies/strategies?

Our policies/strategies should guide the activities that will lead to the attainment of the stated sustainable goals, objectives and targets. After formulating the policies/strategies, we check for their
consistency with the identified problems, goals, objectives and targets, and with each other using the following questions as guide:

  • Does each policy/strategy address determinants or causes of the problem identified in the SA?
  • Are the policies/strategies consistent with the stated sustainable goals, objectives and targets?
  • Are the policies/strategies consistent with each other and with other existing policies/strategies?
  • What action (e.g., legislative or executive) will these policies/strategies require to make it effective?

Subsequently, the formulated policies/strategies have to be translated into concrete programs and projects that directly affect the people (present and future) in the community. This brings us to the fourth step of the planning process – identification of programs and projects (Figure 9).

What is a program or a project?

A project is an activity or set of activities that put into action a chosen policy/strategy in order to achieve a stated sustainable goal, objective or target. A project may also be viewed as a subset of a program. A program, on the other hand, is a package of interrelated projects that follow the direction or thrust of a stated policy/strategy. A program translates the chosen policy/strategy into implementable activities to meet the stated sustainable goal, objective or target.

How are programs and projects identified and designed?

The project planning process includes the following steps:

  1. Problem identification and specification of objectivesLet us go back to the SA. We see that there is a problem which the project wants to address. This is our target problem. Based on this problem we formulate our project objectives. We also see that there are specific population groups of women and men of various ages or of specific areas affected by the problem. These are our target population or target area. We need to specify the population groups or areas that the project activities, services or resources intend to reach. It is important to point out clearly what the problem is and who it affects. We need to specify the target population or area so that when we monitor the project, we will know whom the project has reached. We will also be able to determine: (a) the extent to which the project is reaching the affected population or area; and (b) whether the project has made a difference in their lives. Otherwise it would be like a shooter who is not clear about his target. He does not know where to aim and does not know how close or how far he is to the target. If he hits the target, it would only be by chance and not by design. In the end, a shooter who is clueless about his target is likely to miss it.How then do we distinguish the target population? Some useful concepts in specifying the target population are: (a) population-at-risk, population-at-need, and populationat-demand; and (b) direct targets and indirect targets. [For a detailed discussion on how to specify the target population, please refer to NEDA-Integrated Population and Development Plan (1993)].
  2. Designing project activities and coordinating complementary projects
    After identifying the target problem, specifying the objectives and determining the target population or area, the next step in project planning is designing the project activities, pinpointing complementary projects and coordinating with other people for the conduct of these activities.

    1. Understanding the determinants of the problemWe refer to our SA and look at the factors or determinants influencing the target problem in order to come up with the types of activities that are appropriate and adequate to achieve the project objectives. For example, what are the determinants or causes of the problem of low agricultural outputs of small farmers? This has to be looked into logically and systematically because the determinants are interrelated in terms of cause and effect—some factors are causes of the problems while others are effects. Figure 10 is a useful tool of analysis (NEDA IPDP, 1993). Low agricultural output might be directly related to the factors of production: farmers have little access to productive assets, that is, they own only a very small parcel of land or none at all; they may not have appropriate farm equipment and no access to technology (e.g., fertilizers, irrigation, high-yield variety seeds); they may have little knowledge of modern farming practices; and their human capital is low (they have poor health and are malnourished and therefore cannot work hard). These are the proximate determinants.We then analyze why these factors of production are such. What are the underlying reasons? Some may be due to access to credit or access to various infrastructure which are related to household characteristics and resources. The other reasons are because of the community environment. Is there anything in the community’s social structure, organization or resource base that is directly or indirectly affecting low agricultural output? Perhaps land available to the community is no longer fertile or the river, the source of water for irrigation, is badly silted.

      In short, one factor is the problem, the rest are determinants. A thorough analysis of the determinants of the problem will tell us how we are going to solve lack of credit facilities or lack of access to technology, for example. We will also know that doing something with one determinant might impact on the others. So we need to find out which are critical determinants of the problem since not all have equal influence and importance. We also want to know which ones can we do something about.

      Some are easy to address while others are not and require a lot of things. Once we understand the determinants of the target problem, it is easier to identify what would be the most appropriate and adequate activities to implement to achieve the project objectives.

    2. Understanding the consequences of project activitiesAfter determining the project activities, we need to identify their likely effects, both direct and indirect (and often unintended). This will help us identify other projects that may be implemented or expanded to maximize the impact of the proposed project or minimize negative unintended effects that may arise (mitigating intervention). For example, if we put up an irrigation system to address low agricultural output, the direct effect could be increased production. But indirectly, the irrigation system might affect the health of farmers in places prone to schistomiasis. It might also have an indirect effect on income and income distribution because as more produce is generated, prices are pulled down given that demand remains constant. Thus, to minimize the negative effects of our project, we might have to think of other projects. We may also coordinate with other projects in the area. Complementary projects could be credit provision, access to inputs and technology (fertilizer, pesticides, high-yield variety seeds, etc) which would enable farmers to take advantage of the irrigation system. This is what we mean by looking at other project effects and complementary projects that maximize the effects or impact of the proposed project.
    3. Identifying causal links between project activities and outcomes
      In designing the project, another important step is to determine the causal links between activities and outcomes. We need to identify the intended (direct) and unintended (indirect) impact or outcomes of project activities. Knowing these, we can fine tune the project by adding or deleting some component
      activities. We can also coordinate with complementary projects that may yet be initiated or are already in place in the community. These other projects should address the potentially adverse consequences of our proposed project.
  3. Assessing the sustainability of projects (and other plan interventions)After identifying the proposed and complementary projects intended to address the problem situations identified in the SA, we assess each one to see whether they contribute to the locality and country’s sustainable development. A useful tool for screening the sustainability of interventions—policies/strategies, programs and projects—is the SD Analyzer (Table 2).The SD Analyzer qualitatively determines the resource build-up or “benefits” (potential positive consequences, both intended and unintended) and the resource drawdown or “costs” (potential negative consequences, both intended and unintended) of development interventions—policies, strategies, programs or projects. As yet, we do not have the necessary quantitative measures/indicators to analyze sustainability.
    The intervention is deemed sustainable if the net effect shows that its overall resource build-up is greater than its resource drawdown (i.e., resource build-up minus resource drawdown equals a positive net effect). To arrive at the net effect, assign weights or values to the indicators of resource build-up and resource drawdown. Localities have different short, medium and long-term visions Some localities might give higher value to human development, others to environmental preservation/restoration and other still, to economic growth. We cannot prescribe the weights for measuring the resource build-up or drawdown of proposed interventions. Only the community can put a value to a problem that besets it and similarly, on the solutions of that problem. Thus, it is important that credible officials and stakeholders of the locality assign the relative values (e.g., value of -0 with 0 being the highest or values measured in percentage, not exceeding 00%) to each indicator of every proposed intervention. These values are placed in the appropriate column of the SD Analyzer. Each proposed intervention is then rated according to how well it responds to the indicators.

    We do the same for the Social and Environment indicators as shown in Table 2 and sum up the values of all resource build-up and resource drawdown. If the net effect of an intervention is positive, it is deemed sustainable. However, if the net effect of any of the sectors (economic, social or environment) is negative, the intervention is considered non-sustainable and should be reconsidered. If the locality thinks that the program or project is important inspite of its non-sustainability, then planners should identify other interventions that could mitigate the proposed non-sustainable program or project. The mitigating intervention(s) should also be assessed to make sure that it is indeed sustainable. The program or project is then redesigned or repackaged to include mitigating projects or component activities. Annex E provides more examples of resource build-up and draw-down indicators.

    Any remaining unsustainable project should be taken off from the list. All those considered sustainable are then processed for investment programming and resource allocation and implementation. The examples (Table 2) illustrate the importance of a good development plan. If the plan does not clearly state the development priorities (goals and objectives) of the locality, it may be difficult to identify indicators of sustainability and their values.

  4. Implementation, monitoring and evaluation
    At this stage, we look at the proposed project in terms of inputs, outputs, effects and impact. We trace each step of implementation, monitoring and evaluation:

    1. Project inputs to outputs – The output is the project itself. The inputs are money, machine, manpower and management (usually called the M’s). We look at whether the inputs are used to implement the project according to schedule and within budget.
    2. Project outputs to effects – Once the project is in place, we want to see whether it is reaching the correct target population or area as planned. Is there over-coverage or under-coverage? Why? We need to know these things to fine tune the implementation of the project, that is, make sure the goods or services are actually delivered to the intended beneficiaries.
    3. Project effects to impact – Did the project make a difference in the lives of the intended beneficiaries or in the situation of target areas? What is the impact of the project? First, did it meet its stated objectives or targets? If it did not, should the project be modified to improve its impact or should it be discontinued altogether? Were there other projects that contributed to the observed impact of our project? We need to know this because only then can we say that our project really made a difference. It might be possible that an observed impact is not due to our project but rather to other projects in the community. We have to be careful about attributing success to a project when there might be other reasons for the observed impact.

Let us summarize the program/project identification process by using our example of low agricultural output. The SA might show that this problem is directly related to the factors of production: farmers own little or no land; they do not have appropriate farm equipment; they have no access to technology (e.g., fertilizers, irrigation, high-yield variety seeds); they have little knowledge of modern farming practices; and their human capital is low (poor health and malnourished and therefore cannot work hard). These factors of production are such because of some underlying reasons related to: access to credit; access to various infrastructures such as post-harvest facilities, irrigation, farmto-market roads, etc.

SD Mainstreaming Handbook

Module IV: SD-Enhanced Investment Plan

Module IV is the final module of the handbook on mainstreaming sustainable development in public sector
decision making. It further enhances the planners’ skills in formulating a sustainable investment plan (SIP) since investment programming is an integral part of the development planning process.This module introduces the planners to various concepts, methods and tools of investment programming. Consisting of six lessons, it shows how these methods are applied. Lesson 1 deals with the basic concepts of investment programming. Lesson 2 discusses the various methods of assessing programs and projects and allows the planners to apply these to their own programs and projects. Lesson 3 teaches the process of prioritizing programs and projects.Lesson 4 is especially useful to local government units (LGUs). It addresses the issue of financing priority programs and projects and discusses the different financing options available to LGUs. Meanwhile, lessons 5 and 6 lay down the requirements for plan implementation (mechanisms and structures) as well as the importance of plan monitoring and evaluation.

LESSON 1: Basic Concepts of Investment Programming

Lesson 1 discusses the basic concepts, processes and tools of investment programming and presents the rationale for developing an SD-enhanced investment plan.

Where are we in the development planning process? A review of the development planning process puts investment programming in context (Figure ). In the previous modules, we saw how each step in the planning process inputs into the next step – SA is the basis of the setting of a vision, goal, objective and target. This step, in turn, becomes the basis of the formulation of various interventions – policies/strategies and programs/projects.

We also learned from Module III that available resources are limited. Therefore, we need to assess and prioritize the identified programs and projects. This is where investment programming comes in.

What is investment programming?

Investment programming is the process of screening, classifying and prioritizing programs and projects to ensure that there is sufficient available financing to implement effectively and efficiently the priority programs and projects. It also involves determining how the priority programs and projects will be funded — whether public or private funding will be used as well as whether internal or external funds will be used; and how available limited resources will be allocated among the competing programs and projects.

For investment programming to result in an effective, efficient, equitable and sustainable investment plan, it should be based on a SD-enhanced development plan. In other words, all the steps in plan formulation (i.e., drawing up a situational analysis, setting of goal, objective and target setting, and formulating a policy/strategy, program and project) are necessary inputs to come up with an SD-enhanced development plan.

What is an investment plan?

An investment plan is a mix of priority programs and projects that have been developed and selected from an initial list identified in the sustainable development plan as appropriate means of addressing problems and concerns of a locality and its people. The programs and projects in the investment plan are expected to contribute to the attainment of the locality’s sustainable development vision, goals, objectives and targets.

The implementation of these programs and projects may be financed for a period of one year or longer, i.e., up to 5-0 years.

An investment plan may be formulated at the national, regional or local level depending on the scope and jurisdiction of the proposed programs and projects. But regardless of level, all investment plans must be consistent with and supportive of the national sustainable development vision, goals, objectives and targets.

In developing a local investment plan, several factors influence and guide the process:

  • National vision and priorities which provide the broad shape of sustainable development;
  • Local sustainable development plan which shows the picture of the locality’s aspirations, conditions, priorities and realities,
  • Taxation and revenue generation which determine the level of available resources;
  • Policies, standards, regulations and enforcement which provide the environment conducive to sustainable development as well as influence private sector participation;
  • Private sector investment which contribute to sustainable development; and
  • Market environment which influences the mix of public and private investments that impact on the sustainable development of a locality.

How do we develop a local investment plan?

The investment programming process has several steps or stages. Figure 12 provides us with an overview:

Stage 1 involves the identification, preparation and development of program/project concepts and designs. These programs and projects are derived from the program/project ideas or concepts developed in the SD-enhanced development plan. At this stage, the program and projects are individually listed (e.g., farm-to-market road, feeding program, irrigation system, immunization, etc.).

The proposed programs and projects are consolidated in a master list showing costs, category and proposed schedule of implementation. The master list contains all programs and projects categorized by sector. These programs and projects are screened, prioritized or ranked according to importance.

In Stage 2, programs and projects are compared with each other to screen out unrealistic projects, consolidate or integrate similar or complementary ones, or redesign or repackage those with potential negative side effects to eliminate or minimize these repercussions.

In Stage 3, a set of criteria is chosen to prioritize and rank the screened programs and
projects in Stage 2. Each criterion is then assigned a weight corresponding to the value that the locality places on it. The weights provide a measure of the importance of the program or project to the community. These weights then become the basis for ranking the programs or projects. All these are subjected uniformly to the same set of criteria to avoid bias. The resulting ranking becomes the final investment program of the locality. Again, we cannot overemphasize the importance that credible officials and stakeholders identify the criteria and assign these weights.

In Stage 4, the prioritized programs and projects are matched with projected funds of the locality. If there is not enough money to finance the investment program, external funding is sought. The implementation of the priority programs and projects are then scheduled or phased over the planning period according to the expected cash flow of internal and external funds.

What are the characteristics of an SD-enhanced investment plan?

An SD-enhanced investment plan depends on how each stage is undertaken. After Stage 1, the investment plan should only include programs and projects that:

  1. Address a specific development problem or concern
    For example, an irrigation project addresses low agricultural productivity; a barangay health station answers the problem of inaccessible health services; and an income-generating project helps increase low family income.
  2. Address unsatisfied demands or needs of certain population groups or areas
    For instance, if there are certain economic, social or environmental needs that are not being met by existing programs or projects, new ones that fill in these unmet needs may be included in the investment plan. This is related to the above characteristic since the program or project addresses a development problem or concern.
  3. Harness the sustainable development potential of a locality
    This refers to existing and potential human, fiscal and environmental resources in the area (e.g. available skilled labor, major employment generating industries, water and power resources, transport facilities, health/education facilities, forests and marine resources, etc.) that can be tapped and made productive through the program or project under consideration.
  4. Complement other sustainable programs, projects and investments in the area
    There may be situations where the use of existing facilities or services could be beefed up by providing complementary investments. An example is the improvement of transportation and telecommunication to encourage major employment-generating industries to stay or come in. Likewise, better technology and credit facilities may be provided or inter-island transport improved for export of agricultural products to increase agricultural productivity.
  5. Sensitive to the initiatives of various sectors
    1. Private sector needs and concerns – programs or projects that will allow or encourage greater private sector participation in development (e.g., transportation and telecommunication projects to support commerce and industry, various build-operate-transfer [BOT], build-own-operate [BOO] schemes, etc.);
    2. Government leaders’ response to local or social pressures – programs or projects that address growing economic, social, gender or regional inequities, and environmental degradation; and
    3. Public opinion and aspirations – programs and projects that are not controversial to the community. If the SD-enhanced investment plan is based on an SD-enhanced development plan, the identified programs and projects should all have the above characteristics. In effect, the investment programming process serves to validate the appropriateness of the interventions identified in the SD-enhanced development plan.

After Stage 2, the investment plan should have the characteristics below:

  1. It is balanced and not biased in favor of one sector
    The development concerns of the various sectors should be considered since the problems in the locality should not be concentrated in only one sector.
  2. The programs and projects are realistic
    Programs and projects should be attuned to the capabilities and resources of the locality for them to be implementable.
  3. The programs and projects complement each other
    As mentioned earlier, programs and projects in the investment program and those already existing in a locality should complement each other to promote greater cohesiveness, effectiveness, efficiency and synergy. Duplication wastes limited resources.

After Stage 3, the following characteristics should be evident in the investment plan:

  1. Programs and projects are prioritized based on criteria that are uniformly applied to all programs and projects
    The chosen criteria and their weights should, among others, reflect the values of the locality and its people as reflected in the vision, goals, objectives, targets, policies/strategies stated in the SDDP. These criteria should have been applied uniformly in ranking all programs and projects.
  2. The investment plan is consistent with and supportive of national/regional vision, goals, objectives and policy initiatives
    The investment plan should not only consider the priorities of the locality but also those of the national sustainable development vision, goals, objectives, targets and policy initiatives.

LESSON 2: Assessment of Programs and Projects

Lesson deals with the screening and assessing of programs and projects to be included in the investment plan. Among the factors to consider in developing an investment plan is the impact of current policies and the role of government and the private sector in the sustainable development of a locality. In screening and assessing programs and projects, it is imperative to determine who should be responsible for each program or project so that even at the start of the process, we already eliminate those programs and projects that are not the responsibility of the locality. To do this, we answer the following questions:

  • Who should do it – government or the private sector?
  • If it is government, what level of government – national, regional or local?
  • What should that level of government do – produce, finance or regulate?

Government at each level should be concerned only with programs and projects that are clearly within its purview and leave the rest to the responsibility of higher or lower levels of government or the private sector. For the programs and projects that are the responsibility of government, it should decide whether or not to directly provide or produce the goods and services required by the program or project, just finance their production or provision, or merely regulate or come up with policies that will provide the
environment conducive to private sector implementation of the programs or projects.

The current policy of government is to encourage greater private sector participation in the delivery of programs and projects with government providing the development path and the climate that encourages private sector participation. The Matrix of Governance (Veloso and Lacsamana, 1999) (Table 4) distinguishes the roles of government and private sector in program and project delivery. The matrix shows that the nature of government intervention (national, regional or local) focuses on guiding a concerted
sustainable development effort towards a common goal. The primary role of government, therefore, is to set and ensure the implementation of appropriate laws and policies to guide private decisions, stimulate competition, equalize the playing field, correct inequity, ensure political stability, national security, peace and order, and protect individual rights. Where appropriate, the government may also produce and deliver goods and services or finance their production and delivery (see Mode of Intervention for areas where government may intervene in Table ). The private sector, on the other hand, is responsible for free enterprise through the market. It also shares in the responsibility and costs of providing public goods and services. The private sector may participate in government programs and projects through government and private sector collaborations, such as BOT schemes.

The difference between the responsibilities of national and local governments in the delivery of goods and services lies mainly in the specific location of the programs and projects. For example, as long as the projects are within the boundary of the LGU and they have no negative or positive spillover effects on neighboring localities, then these projects are clearly the responsibility of the LGU. The role of national government in this situation is to provide overall direction and standards and to monitor and evaluate performance. At the local level, the private sector may also participate in these programs
and projects through collaboration schemes with local government or through direct investments.

On the other hand, national or regional government is responsible for programs and projects that have cross-border effects (e.g., national highways and railways or geothermal projects), or those that offer the advantage of economies of scale when run by higher-level units. Again, at the national and regional levels, the private sector may also participate in these programs and projects through collaboration with government or through direct investments.

How do we assess programs and projects?

As mentioned earlier, we are concerned only with programs and projects that are clearly the responsibility of the locality. These programs and projects undergo Stage of the investment programming process.

Stage 1: Identification and preparation of program or project design or concept papers and initial screening of programs and projects.

In this stage, a concept paper or design is prepared for each program or project idea in the initial long list. The box below may be used for this purpose.

Each program and project is further screened using the following questions as guide:

  • Does the program or project address a specific development problem?
  • Is it clearly focused and targeted to population groups of women and men or areas exhibiting a problem situation?
  • Does it address the different unsatisfied demands or needs of these target populations or areas?
  • Was it identified and designed to harness the development potential of the locality?
  • Does it complement other investments?
  • Is it sensitive to the initiatives of various sectors – private sector, civil society, political leaders, public opinion and aspirations?
  • Is it sustainable?
  • Is it realistic?

We note again that if the programs and projects have been identified correctly in the plan formulation step of the planning process, all of them should pass this initial screening and generate a “yes” to all the above questions. However, if there are programs and projects that still fail Stage 1 screening, then they are scrapped. Those that pass this stage undergo Stage 2.

Stage 2: Comparing, consolidating, integrating and repackaging programs and projects

The programs and projects that pass Stage 1 are compared with each other to screen out those that are undesirable, consolidate or integrate those that are similar or complementary, and redesign or repackage conflicting those with potential negative side effects to eliminate or at least minimize these conflicts or adverse repercussions.

First, the programs and projects are checked for desirability, redundancy, practicality and efficiency. Those that are undesirable, inefficient, impractical or redundant are deleted from the master list. The projects that pass the criteria are further assessed to see whether they are compatible, conflicting or complementary.

  1. Redundant projects duplicate or overlap with existing, new or proposed projects. Examples are building a barangay road in the same alignment as a secondary road; or setting up an agricultural college or hospital in every municipality.
  2. Inefficient projects are costly to run and do not take advantage of economies of scale. Examples include implementing a house-to-house health or nutrition program instead of providing it at an accessible health center; or training all farmers on a type of technology rather than setting up a demo farm to promote this innovation.
  3. Conflicting projects have expected benefits that tend to nullify the gains of others or the implementation of which obstructs the execution of another. For example, an incineration project to solve a garbage disposal problem in an area conflicts with an environmental project that seeks to minimize air pollution to protect people’s health.
  4. Complementary projects are those whose activities, components or objectives mutually support each other. For instance, provision of post-harvest facilities, farm-to-market road, agricultural credit facilities complements an irrigation project.
  5. Compatible projects are neutral, neither conflicting with nor complementing each other. These can be implemented without affecting the costs or benefits of the other projects. An example would be the construction of classrooms which has no effect on the building of health centers, although they may compete for scarce resources.

In the suggested Conflict-Compatibility-Complementation Matrix (Table 5), the projects that are conflicting are marked ‘X’. Complementary projects are marked ‘O’ while compatible projects are marked ‘N’. Projects that are not in harmony with many or most of the other projects are taken out of the master list. Those that clash with some projects but are compatible or complementary with others may be redesigned to remove conflicting project components. Complementary projects may be repackaged, if needed.
Repackaging projects means that two or more complementary projects may be integrated into one proposal.

This applies especially for multidisciplinary and multi-sectoral projects (e.g., projects on poverty alleviation, minimum basic needs, or ecological security). However, we should be aware that integrating many project proposals may result in one that might be too costly or too grand to be practical or efficient. In other words, they may fail the practicality or efficiency criterion.

How do we know that programs and projects are complementary, compatible or conflicting? We look at their objectives, activities, target beneficiaries and location. We need to identify which programs and projects in our original master list are more likely to complement others so that they reinforce rather than cancel out one another’s effects or impact. If they conflict, we need to redesign them to make them compatible and reinforce each other’s results or impact.

The projects that are undesirable and impractical are scrapped, those that are complementary are integrated and those that are conflicting or with potential negative side effects, redesigned.

The resulting sustainable programs and projects are written down in the suggested format on the next page (Table 6) under the appropriate sector category and distinguished as capital or non-capital projects.

In general, capital projects are those requiring relatively large, permanent and tangible investments. These are, for example, the construction or improvement of infrastructure (e.g., roads, buildings, bridges, ports, public markets, water supply systems, sewerage systems, housing, etc.); and the acquisition and replacement of equipment (e.g., tractors, CTscan, computers, vehicles, etc.). Non-capital projects are those related to the installation or improvement of services and systems.

These include the introduction or adoption of new methodologies, reorganization, staff training and development, research and development, various health care services (e.g., immunization, feeding program, and family planning) and other interventions that add to the efficiency of the locality and improve people’s welfare.

Capital projects are marked “C” while non-capital projects are marked “NC”. The distinction is useful in the latter stages of investment programming and financing, especially if national or foreign assistance (grant or loan) is availed of, since these funding sources require projects to be classified as capital or non-capital.

The new master list is now ready for Stage 3 of the investment programming process, i.e., prioritizing and ranking programs and projects, which will be discussed in Lesson 3.

LESSON 3: Prioritizing Programs and Projects

Lesson 3 discusses how programs and projects are prioritized. Why do we prioritize them? As we have learned in previous lessons, prioritization is necessary because available resources, especially capital resources, are scarce and limited and may not be enough to fund all programs and projects identified in the local sustainable development plan. By prioritizing and ranking programs and projects, it is easier for us to decide which should be funded first and how these should be scheduled for implementation so
that available resources can accommodate them.

Stage 3: Prioritizing and Ranking Programs and Projects

Among methods for prioritizing and ranking programs and projects are:

  • Cost-benefit analysis
  • weighted Goals Analysis Matrix
  • Problem structure approach
  • Supply and demand projection
  • Economic profitability indicators

The handbook suggests the use of the weighted Goals Analysis Matrix (GAM). It is a means of validating the development priorities (goals and objectives) of the development plan and the relative values the locality places on these goals and objectives. The GAM complements the assessment process used in Lesson 2.

How do we use the weighted Goals Analysis Matrix?

First, we get the social, economic and environment development goals/objectives of the locality and write them down in the suggested format (Table 7). These social, economic and environment goals/objectives become our prioritizing criteria or indicators.

Next, we determine the relative values (in percentage) of each goal/objective in consultation with local officials and other credible women and men stakeholders in the locality. Then, we place the corresponding values of the indicators (goals or objectives) in the appropriate column. The sum total of these values should not exceed 100 percent.

Each proposed project is then rated according to how well it responds to the indicators, as shown in the example in Table 7.

If the plan does not clearly state the development priorities (goals and objectives) of the locality, we may have difficulty in identifying a reliable set of prioritization criteria and in determining their relative values. This is why the previous modules kept underscoring the importance of a comprehensive SA to point out the development priorities of the locality’s SD-enhanced development plan.

It is also essential that different sector planners are involved in rating every project according to their perception of how well each one addresses the criteria. The projects are ranked according to their total scores. That which has the highest score is ranked number one, the next highest, number two and so on. This ranking represents the collective evaluation of the proposed project by the locality’s various sector planners.

The ranked list of projects is transferred to Table 8. This now becomes the final investment plan of the locality which will be programmed for budgeting.

There is, however, a note of caution. The GAM is limited since it does not have explicit cost considerations. Therefore, economically inefficient projects may get into the highpriority list. To avoid this predicament, economic criteria such as internal rate of return (IRR) should be used. If a project fails to meet a minimum requirement, say 10 percent IRR, then the project goes back to the drawing board or is scrapped all together.

LESSON 4: Identifying Internal and External Funds for LGUs

Lesson 4 teaches local planners how to estimate internal funds for funding the LIP. It also shows them the financing options available to them if internal funds are not sufficient to fund their investment plan.

How do we estimate LGU internal funds?

This section suggests a method of estimating the total internal revenue and fiscal balance of a locality to see whether there are sufficient local funds to finance the investment plan. First, we estimate the total LGU recurrent revenues for six years, using historical trends. We disregard unusually high or unusually low revenues since these may not represent the actual financial situation of the locality. Unusually high revenues in a particular year may be due to special grants from external sources such as calamity funds or special or foreign assistance. The suggested format for this activity is shown
in Table 9. Columns 1-6 are added to get column 7. However, column 5 reflects only 80 percent of the internal revenue allotment (IRA).

Next, we calculate for the projected future fiscal balance of the locality. This is done by deducting from the projected total revenues the regular operating expenses, capital outlay, non-office expenditures, and debt servicing. The projected fiscal balance is the projected amount available for funding programs and projects in the investment program. To this amount, 20 percent of the IRA and 5 percent for gender and development (GAD) are added to obtain the total amount available for programs and projects. Table 10 may
be used for this purpose.

Then, the cost of the final investment plan (Table 8) is matched with the projected fiscal balance to get an idea of how much the proposed programs and projects can be financed internally and how much additional funds are needed from external sources (national, private lending institutions, and foreign funding) to fully fund the entire investment plan. If demand for funds exceeds supply, trimming down the project list may be the only option.

How will the local investment plan be funded?

The investment plan may be funded with internally generated funds of a locality. However, if internal funds are inadequate to fully finance its investment plan, the LGU may augment their limited resources through various financing options/mixes. These options include funds from the national government, the private sector, official development assistance (ODA) and other sources.

The NEDA Board through its Investment Coordinating Committee (ICC) supports cost sharing for devolved activities with social and/or environmental objectives. However, the extent of grants to LGUs depends upon the nature of the activity and the classification status of the LGU.

What are the financing options for local investment plan?

Local financing
Local funds may be made up of the IRA, tax revenues, sale of assets, and bond floatation. As mentioned earlier, the LGU may augment these internally generated funds with those from the national government, private sector, ODA that are directly extended to the LGUs, credit windows of government and commercial
banks, countrywide development fund, the President’s Social Fund, and grants from philanthropic organizations.

National financing
Assistance from national government may be difficult to obtain because all LGUs in the country compete for the meager resources of the national coffers. Moreover, national government funds are usually allotted to national and regional priority programs and projects as well as the sectoral investment plans of various
line agencies.

In addition to funds of the Government of the Philippines (GOP), other national government financing may be ODA extended to LGUs as financial and/or technical assistance coursed through national agencies. This assistance is intended for activities implemented within the jurisdiction of the LGU or those of national importance that are to be accomplished by the LGU. National government financing may also take the form of credit from government banks such as the Land Bank of the Philippines and the Development Bank of the Philippines.

Private sector financing
The LGU also has the option to tap funds from the private sector through various collaborative schemes such as:

  • Build-own-operate (BOO) – projects wholly funded, owned and operated by the private sector;
  • Build-operate-transfer (BOT) – projects financed by the private sector from which it derives financial returns within a concessional period and after such time, the assets are transferred to the LGU; and
  • Joint ventures between the LGU and the private for sector commercial and business undertakings.

Build-Operate type projects may be solicited by government or initiated by the private sector. In considering any of the Build-Operate schemes, we have to take into account the financial viability and
security of the project and also ensure it is the only one serving that purpose in the area.

The LGU may also avail of credit from private commercial banks or apply a mixed financing scheme using funding options in the LGU.

LESSON 5: Plan Implementation

This lesson introduces the various mechanisms and structures needed to implement the plan. It explains the importance of these structures and identifies vital areas to consider for the effective and efficient implementation of planned activities.

Where are we now in the planning process? We are in the sixth box – plan (Figure 13).

Preparing for Plan Implementation

For the effective and efficient implementation of the plan, we need to put in place various mechanisms and structures. Plan implementation deals with the actual undertaking of the activities in order to achieve desired outcomes – goals, objectives and targets. Why do we need to prepare for plan implementation? The development plan is multisectoral in character. It contains priority programs and projects that respond to different sectoral and intersectoral concerns of the community. Hence, the attainment of the sustainable development plan’s goals, objectives and targets requires the joint and coordinated efforts of the different sectoral groups within and outside the locality.

Among the many implementation concerns, the major ones include:

  • Defining of roles and assigning of responsibility to the different implementing bodies;
  • Determining and establishing the mechanisms for coordinating the various activities of the implementers;
  • Identifying and putting in place the other implementation structures; and
  • Developing a monitoring and evaluation system to assess the effectiveness and efficiency of the implementers and the effectiveness, efficiency and
  • sustainability of the programs and projects that they implement.

At the local level, the Local Development Council (LDC), through its planning and development office, identifies structures and mechanisms to facilitate the start of the implementation process. These structures and mechanisms include:

  • structures and staffing patterns within the LGU for coordinating the efforts of the different implementing bodies;
  • various implementation concerns;
  • a system for monitoring and evaluation; and
  • specific government agencies and private institutions expected to implement the programs and projects.
  1. Institutionalizing public participation – The LDC could be the effective mechanism for institutionalizing the participation of the public to reflect people’s needs. This can be done, for example, by increasing the participation of nongovernment organizations (NGOs), people’s organizations (POs) and the private sector.
  2. Plan implementers – These are government agencies, NGOs and private sector entities that will play a role in implementing the various programs and projects of the LDP. The LDC defines the roles and responsibilities of these entities in plan implementation; gets their acceptance of their identified roles and responsibilities; and makes the appropriate arrangements with each of the participating groups.
  3. LGU organizational structures:
    • Planning and development office – This office is responsible for coordinating the different actors involved in plan implementation. This includes organizing and coordinating all groups involved to ensure that the plan is being implemented smoothly and in synergy. Sectoral assignments, however, are given to relevant departments and agencies in the LGU. These units develop the details of the sectoral programs and projects in accordance with the targets and schedules set in the LDP.
    • Fiscal planning and management unit – This unit is involved in the preparation of a financial plan to support implementation. The financial plan includes a thorough analysis of the LGU’s current and future incomes from all possible sources. It also indicates how and to what extent internally generated funds may be augmented to fully support the investment plan.
    • Project development and operations unit – This section comes up with project ideas, assesses and screens them, develops the project concepts, packages them into a program or project proposal, prioritizes programs and projects, conducts or hires experts to do feasibility studies, or phases programs. This unit also identifies sources of funds for their implementation. Actual implementation is done by the responsible sector, department or agency of the LGU.
    • Monitoring and evaluation unit or system – This unit or system keeps track of the progress of the implementation of the overall plan as well as specific programs and projects; and establishes a system of communicating with the implementers for periodic reporting and review of the status of the activities.
  4. Sustainable development regulation and control measures:
    • Zoning ordinance – This is a legal mechanism or tool to ensure that development projects are implemented according to the land use plan of the locality. The LGU is divided into zones or districts such as agricultural, residential, industrial, commercial, mixed use and other uses.
    • Taxation measures – Such measures are a mechanism for increasing the revenues of the LGU. It includes the provision of tax incentives to motivate the private sector to get involved in sustainable development activities that support the development thrust of the locality. This mechanism also takes care of imposing disincentives (e.g., higher taxes) to discourage activities not included in the plan or not compatible with the sustainable development path of the community.

LESSON 6: Plan Monitoring and Evaluation

This lesson explains the importance of monitoring and evaluation (M&E) in the entire development planning process. We are now in the last phase of the planning process as indicated in Figure 14.

During actual implementation, the programs and projects are closely monitored to ensure that they are carried out as scheduled and within the budget, and more importantly, that the intended beneficiaries are reached. If things are not running as planned, then corrective measures are instituted. At the end of the planning period or upon completion of a program or project, evaluation is undertaken.

In detail, we undertake monitoring and evaluation to:

  • ensure that activities are undertaken according to the planned schedule and budget;
  • correct deviations, if any;
  • find out if and to what extent the intended beneficiaries are reached;
  • determine whether and to what extent stated goals, objectives and targets have been achieved and if so, whether they were attained efficiently;
  • decide if the program or project should be continued, expanded, redesigned or scrapped altogether; and
  • determine what else needs to be done in the next planning period.

The results of past monitoring and evaluation activities serve as bases for updating the SDDP, especially in the light of changing conditions in the locality. At the end of the plan period, the evaluation results become inputs to the situational analysis of the next planning cycle.

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