The program aims to improve the efficiency and sustainability in the management, organization and financing of the road sector, as well as improve the conditions and standards of the national road system.

About 700 kms of national highways will be rehabilitated and upgraded.

Preventive maintenance will be undertaken for about 2,000 kms.

Service delivery will be improved by implementing and extending the business processes initiated under the first phase of the program.

Road management will be restructured through the establishment of an organization that will manage the country’s national roads. The first phase will be completed in June 2006.

World Bank Philippine country director Joachim von Amsberg said the grant supports the preparation of a loan that represents the shift of the WB assistance toward more programmatic investment lending that finances priority programs within the Philippine national budget.

The second phase will allow for an efficient and professionally-managed road system that will help reduce transport costs and cost of products, increase access to social services, and make commercialization easier, said Von Amsberg.

"This grant is a clear manifestation of the continued efforts of the governments of the Philippines and Japan, together with the World Bank, to further strengthen the development partnership for economic growth and better living standards of Filipinos," said Secretary Margarito Teves.

The grant will be used to fund the project design and reparation, enhancing environmental and social safeguards, design of road maintenance, and enhancing technical capability in project and risk management.