SELECTION OF CONSULTANTS BY THE WORLD BANK

REQUEST FOR EXPRESSIONS OF INTEREST

Electronic Submissions through World Bank Group eConsultant http://www.worldbank.org/wbgeconsultant

Assignment Overview

Assignment Title: Credit Ratings for Philippines LGUs

Assignment Country: Philippines

Assignment Description

The devolution of infrastructure development to the Local Government Units (LGUs) and the rapidly increasing demand for infrastructure in the Philippines is putting significant pressure on traditional sources of current LGU financing. The LGU financing framework in the Philippines remains by and large skewed towards traditional financing sources, such as the Internal Revenue Allotment (IRA) and tax revenues which are typically not sufficient to finance the necessary capital expenditure that is critically needed in the LGUs. As a result, the capital outlays in LGUs have been relatively small, typically at less than 8% of budget. The only avenues available to LGUs for financing capital expenditures are the Government Financial Institutions (GFIs), which pass on their own funds and donor funds to a limited number (around 500) of LGUs for infrastructure development, the Municipal Development Fund Office, which on-lends and on-grants funds to LGUs in the lower income tiers. In the past a small number (around 15) of credit worthy LGUs have issued bonds, but a variety of legal, policy and operational factors have made private financing (capital markets and banks) inaccessible to most LGUs. Current regulations require that LGU deposits, including IRA transfers and trust accounts, can only be kept with GFIs. This limits the interaction between LGUs and private banks, and compels the LGUs to borrow from GFIs, using their deposits as security, even though these collateral arrangement offer critically limited leverage and tie up large amounts of LGU cash. Of course, with no banking relationships, and no revenues earned from LGU deposits and cash management, private banks also have little interest in incentives to lend to/develop business with LGUs, or buying LGU bonds. The Government of Philippines (GOP) recognizes that the lack, and/or poor quality, of infrastructure in LGUs is quickly becoming a bottleneck to economic growth. The Philippine Development Forum (a forum for donor, national and local governments to engage in dialogue on critical reforms) has identified the need to accelerate implementation of the LGU financing framework, by taking actions to improve LGU capacity to plan and manage development plans, implement sound financial management practices, and access private capital. The PDF recognizes improved access to financing as one of the most critical factors for the development of LGUs. As a result, the GOP as well as the leading LGUs, especially the tier 1 cities in the urban areas, have taken steps to reform the LGU financing framework. The development of LGU capacity, legal and institutional ability and the framework for raising capital from the local financial market are a key part of this GOP strategy. The GOP initiative has the full support of the Philippines League of Cities (LCP).

Funding Source:

The World Bank intends to finance the assignment/services described below under a trust fund from the PPIAF-SND: NON-CORE ACTIVITIES.

Eligibility:
Eligibility Restrictions apply [Please type list of restrictions]

Individual/Firm Profile:
The consultant will be a firm or consortium.

Submission Requirements:
The World Bank now invites eligible consultants to indicate their interest in providing the services. Interested consultants must provide information indicating that they are qualified to perform the services (brochures, description of similar assignments, experience in similar conditions, availability of appropriate skills among staff, etc.).
Consultants may associate to enhance their qualifications.

Interested consultants are hereby invited to submit expressions of interest.

Expressions of Interest should be submitted, in English, electronically through World Bank Group eConsultant http://www.worldbank.org/wbgeconsultant.

Notes:
Consultants will be selected in accordance with the procedures set out in the current edition of the World Bank's Guidelines: Selection and Employment of Consultants by World Bank Borrowers.

Following this invitation for Expression of Interest, a shortlist of qualified firms will be formally invited to submit proposals. Shortlisting and selection will be subject to the availability of funding.

Contact Information:

Kamran M. Khan

kmkhan@Worldbank.org

Inneke Herawati Ross

 iherawati@worldbank.org