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  Tuesday, 03 September 2013  

IN FOCUS: Making health more inclusive in a growing economy

The latest GDP figure reported by the National Statistical Coordination Board places the Philippines as the fastest growing economy in the ASEAN region. It posted a growth rate of 7.5 percent in the second quarter, surpassing its neighbors. Having the same pace, the Philippines and China are now the fastest growing in Asia.  Yet the question remains: Is this growth inclusive? This is a critical issue that the Philippine Institute for Development Studies (PIDS) has continued to probe and shed light on. Thus, in celebration of the Development Policy Research Month this September, the Institute has chosen the theme “Making Health More Inclusive in a Growing Economy”. This is to highlight the pressing need to address a glaring socioeconomic inequity in the Philippines—the lack of inclusiveness of our economic growth in the aspect of health.  

Providing affordable and quality health care to all Filipinos remains an elusive goal. Government hospitals bear the brunt of health care delivery, requiring more and more financial resources every year to deal with the ballooning population and the need to upgrade facilities.  Benefits from the Philippine Health Insurance Corporation (PhilHealth) are insufficient to cover all medical and hospital expenses, and as a result, patients resort to borrowing money to pay for curative care. Access to health plans through health maintenance organizations or HMOs remains low as these are offered mainly by private health insurers that largely operate in the formal sector.

Research by PIDS has explored many of these issues, pointing the way forward for policymakers. A team of PIDS researchers, for instance, has found inefficient allocation of funds in health facilities nationwide, pointing to political maneuvering as one of the culprits.  Results show that allocation of funds has been influenced by requests from politicians during budget deliberations, and House and Senate initiatives also tend to divert resources away from provinces that need upgrading of health facilities the most.

Meanwhile, a review of the government’s cheaper medicines program by Research Consultant Oscar Picazo has found that programs such as the Botika ng Barangay (BnBs) and the Botika ng Bayan have contributed to making the retail drug market more competitive. However, with increasing competition from private retailers of generic drugs, their sustainability is a key issue that must be addressed.  In particular, the insufficient financial and management support to the BnBs should be looked into. Continuous supply of drugs has been a major problem as well, which directly affects poor people’s access to affordable and quality drugs in the rural areas. Supply replenishment has been found to be rooted in poor financing of drugs by the government and its fragmented drug procurement system (arising from the devolution of health services) that need to be pooled through some mechanism.

Policy research is crucial to pushing much-needed reforms in the health care sector. Know more about the issues such as the performance of public and private hospitals, compensation for public health workers, and government health programs for vulnerable sectors. Check out the following PIDS studies which you can access through the PIDS publications homepage or the SocioEconomic Research Portal for the Philippines (simply type ‘health sector’ in the Search box).




PN No. 2013-09: Opportunities for Making Health Financing and Services More Inclusive in the Philippines
by Oscar F. Picazo, Valerie Gilbert T. Ulep, Danica Aisa P. Ortiz, Melanie P. Aldeon, and Nina O. Ashley dela Cruz

Many opportunities exist today to make growth more inclusive through improved health financing, regulation and planning, and service delivery. The key is to capitalize on these opportunities while addressing attendant challenges and issues. Economic growth makes it possible for the health budget to increase. The Department of Health (DOH) is keen on expanding health services to address the significant deficits in the number of health facilities and reach of health programs. The Aquino II administration’s health financing reforms (such as the Universal Health Care program) is deliberately designed to focus on the poorest of the poor. There are also promising health market innovations that can significantly improve supply-side response. Lastly, performance benchmarking has been accepted as a norm in the health sector, and several initiatives have been undertaken, including accreditation, seal of good housekeeping, DOH’s balanced score cards, and dashboards. Click here for the full article.



PN No. 2013-08: Explaining the Large Disparities in Health in the Philippines
by Oscar F. Picazo, Valerie Gilbert T. Ulep, Danica Aisa P. Ortiz, Melanie P. Aldeon, and Nina Ashley O. dela Cruz

The large disparities in health status between the poor and the nonpoor in the Philippines may be explained by several factors, such as: (1) the persistently large social inequity and chronic poverty; (2) severe underinvestment of the government in health facilities, services, and manpower since the 1970s despite the ballooning population; (3) political instability due to the insurgency problem which has further reduced access to care among households in areas of civil unrest; (4) the character of jobless growth of Philippine development; (5) the archipelagic nature of the country which impinges adversely on the delivery of health resources and households’ access to health care; and (6) the frequent disasters in the country and environmental risks, heightened by climate change, which further contribute to health inequity. These challenges are aggravated by long-term perceptible changes in the country’s demography and epidemiology, which often escape officials’ focus on the short-term, immediate, and emergency concerns of governing and management. Inefficiency and governance problems exacerbate the situation. Click here for the full article.



PN No. 2013-07: The Puzzle of Economic Growth and Stalled Health Improvement in the Philippines
by Oscar F. Picazo, Valerie Gilbert T. Ulep, Danica Ortiz, Melanie Aldeon, and Nina Ashley de la Cruz

The Philippine economy has grown respectably in the past few years, but the overall health status indicators have not markedly improved commensurate with that growth. The gap between the richest and the poorest Filipino households in terms of health financing, access to services, and health status has not markedly improved. It is important to mull over the puzzle of economic growth and health inequity for several reasons. First, macroeconomic growth, international competitiveness, and financial stability are necessary conditions for development but they are not sufficient. The goal of a country’s growth efforts should be human development in a sustainable environment. Second, persistent social inequity within an improving economic environment breeds political instability, exclusion, and disenchantment among the poor, as well as crime and other social pathologies. Third, the lynchpin to any vibrant economy and polity is social participation, and more active social participation can only be achieved under a regime of more inclusive growth and reduced social inequity. And fourth, equity has also become a global benchmark, especially in health. Click here for the full article.



PN No. 2013-06: Urgent: A Road Map for Agro-Industrial Development in the Philippines
by Roehlano M. Briones and Ivory Myka R. Galang

This Policy Notes argues that agricultural development is key to inclusive growth. The accelerating pace of economic growth in the Philippines will not translate into inclusive, sustainable growth if agricultural development is neglected. Agricultural development involves accelerating productivity growth in major commodities. It also requires structural transformation in agriculture itself, from traditional to high-value crops, as well as product upgrading. Such transformation entails increasing linkages between farm production, agricultural services, industrial inputs, and agroprocessing. In short, agricultural transformation must encompass the entire agro-industrial complex. Click here for the full article.

DP No. 2013-43: Feasibility of Mortgage-Backed Securitization for the Underserved Housing Market in the Philippines
Marife M. Ballesteros and Daisy Dulay

This paper draws lessons from international best practices to determine the feasibility of developing mortgage-backed securitization (MBS) to expand housing finance to the underserved market in the country. Despite the risks of securitization, as evidenced by the recent US subprime crisis, the huge beneficial effects of opening up the capital market to individual investors and to borrowers that were previously out of reach is well-acknowledged in the literature. Several countries have developed MBS to facilitate and promote housing finance. The international best practices show that efficient securitization can be established based on: (1) a clear regulatory framework; (2) prudent underwriting and valuation process; (3) reliable credit rating companies to mitigate moral hazards and adverse selection risks; and (4) the need for originators to have adequate capital so that warranties and representations can be taken seriously. In particular, the US subprime crisis highlights a major lesson that needs to be avoided, that is, the use of securitization as a tool for balance sheet arbitrage instead of funding and investments in the real economy. Click here for the full article


DP No. 2013-42: Buying or Leasing of Election Machines by COMELEC
by Francis Mark A. Quimba

This research paper looks into the automated election experiences of different countries and compares them with the Philippine case. It also attempts to provide an economic basis for the Philippines' choice between purchasing precinct count optical scan (PCOS) machines or leasing them from the service provider, SMARTMATIC-TIM. Leasing the PCOS machines is a more viable option considering the fast turnover of technology resulting in a high possibility of obsolescence. This passes the burden of obsolescence to the leasing company and reduces the risk of owning electoral machines that do not work as anticipated or expected. Calculations using data from the 2010 elections show that leasing voting technology for four lease payments or less makes leasing more economical than the outright purchase of the equipment. Click here for the full article


DP No. 2013-41: After Five Years of Pantawid, What Next?
by Vicente Paqueo, Aniceto Orbeta, Jr., Tarsicio Castaneda, and Chris Spohr

When the Pantawid Pamilyang Pilipino Program was designed, the government publicly promised to limit to five years the giving of education and health grants. This five-year limit is almost over for the first set of beneficiaries. The natural policy question then is: Would it be wise to keep the promise or would an extension be better? This paper presents five arguments and evidence why the extension of the program is better than keeping the promise to limit it to five years. It ends with cautionary notes, including articulating that Pantawid remains a bridging program; the need for a careful study to ensure affordability and maximize cost-effectiveness; the need to continue to generate better estimates of key parameters such as income elasticities; and possible phasing for affordability and recognition of possible supply-side constraints. Click here for the full article.



More inclusive health sector in a growing economy pushed

Leading state think tank Philippine Institute for Development Studies (PIDS) is conducting a series of forums and seminars for the month of September to tackle the state of the country’s health sector and how to make it more inclusive as the economy grows. These activities are in line with the observance of the Development Policy Research Month (DPRM).

“We need to address the urgent need of narrowing the gap between the richest and the poorest Filipino households in terms of health status,” said PIDS president, Dr. Gilberto M. Llanto. “Despite the country’s significantly growing economy, the Philippines’s overall health indicators have not commensurately improved with that growth,” he added. Read more


Study launch highlights convergence of efforts in building resilience to disasters and economic crises

Manila—The Economic and Social Commission for Asia and the Pacific (ESCAP) launched its 2013 theme study "Building Resilience to Natural Disasters and Major Economic Crises" in Manila on August 14, with think tank Philippine Institute for Development Studies (PIDS) co-organizing the event. The launch of the study, part of ongoing efforts by ESCAP to raise awareness on the importance of resilience-building, featured prominent experts from the Philippines and international organizations. Policymakers discussed strategies on how organizations and policymakers can address the twin threats of natural disasters and economic crises in an increasingly interconnected world. Read more







Gross Regional Domestic Product 2010-2012

The National Statistical Coordination Board (NSCB) reports that out of the country’s 17 regions, 14 regions posted accelerated growth rates from 2011 to 2012. Zambonga Peninsula posted the fastest pace among the 17 regions with robust growth of 12.4 percent in 2012 from a modest growth of 0.1 percent in 2011. It was followed by Caraga with 10.6 percent; Central Visayas, 9.3 percent; Cagayan Valley, 8.2 percent; and SOCCSKSARGEN, 8.1 percent. Meanwhile, Eastern Visayas contracted by (6.2 percent) in 2012 from 2.1 percent growth in 2011. Regions that decelerated were Cordillera Administrative Region (CAR), at 1.0 percent from 1.3 percent; and Central Luzon, at 6.3 percent from 7.1 percent.

For the latest Gross Regional Domestic Product by sector, please refer to this link: http://econdb.pids.gov.ph/tablecategories/index/101

Source: NIA, NSCB


Year-on-Year Inflation Rate

The country's year-on-year headline inflation rate declined to 2.5 percent in July from 2.7 percent in June. According to the National Statistics Office (NSO), the indices of alcoholic beverages and tobacco; clothing and footwear; housing, water, electricity, gas and other fuels; furnishing, household equipment, and routine maintenance of the house; recreation and culture; and restaurant and miscellaneous goods and services recorded slower annual increases during the month.

For the latest year-on-year inflation rate, please refer to this link: http://econdb.pids.gov.ph/tablelists/table/568

Source: National Statistics Office (NSO)




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