PIDS in the News

The countrys economic managers argued against a proposed policy to provide free tuition to all undergraduates enrolled in state universities and colleges (SUCs).

In a position paper submitted to Executive Secretary Salvador Medialdea, Secretaries Ernesto Pernia, Carlos Dominguez and Benjamin Diokno noted that a wiser approach would be to fully finance the Unified Student Financial Assistance System for Tertiary Education (UNIFAST) law.

This alternative, they emphasized, is aligned with the position of senior researchers of state think tank Philippine Institute for Development Studies (PIDS).

In a recent policy note released by PIDS, Aniceto Orbeta and Vicente Paqueo outlined the disadvantages of supporting the free tuition fee policy.

Established in 2014, the UNIFAST is designed to unify and harmonize all modalities of publicly-funded student financial assistance programs such as scholarships, grants-in-aid, and student loans for tertiary education.

Consistent with the views of Orbeta and Paqueo, the economic managers all agreed that the UNIFASTs design provides a more comprehensive alternative for enabling poor households to access higher education in SUCs.

UNIFAST provides full financing through the three types of financial assistance, which are applicable to both SUCs and private higher education Institutions.

Entry would be determined by student test scores, assuring taxpayers that grants are only given to hardworking students who deserve it, and compliance with acceptable standards defined by the Commission on Higher Education.

In contrast, the free tuition policy fails to capture the complexity of higher education, and may result in unintended consequences.

While we commit to the constitutional provision mandating the State to protect and promote the right of all citizens to quality education and to make such education available to all, we do not agree that providing an across-the-board free tuition for all undergraduate students in all SUCs is the best way to achieve this mandate, said Pernia, Dominguez, and Diokno in their statement.

Iterating points from the PIDS study, they pointed out several weaknesses of the free tuition scheme.
First, the cost of tuition covers only a third of what an average student needs to get through college each year. This will likely result in the unintended consequence of benefiting the non-poor students attending SUCs.

Only 12 percent of the students attending SUCs belong to the bottom 20 percent of the family income classification based on the Annual Poverty Indicators Survey, said the managers.
Orbeta and Pacqueo said this measly share of poor students in the SUC population has not changed, despite the expansion of enrollment in public HEIs from 35 percent in 19990 to 52 percent in 2014.
In other words, the free tuition scheme is only going to benefit the children who already have access to SUCs.

Those who do not have access will have to shoulder the bigger chunk of the costs of higher education, including living expenses and instructional materials.

Another unintended consequence would be the flight of richer students from HEIs to SUCs, which is bound to trigger a domino effect on faculty retrenchment, threaten the existence of HEIs, and ultimately result in the decline in overall quality of graduates.

The managers pointed out: Using government funds for tuition subsidy will effectively transfer the financial burden of free college education to the poor, given the regressive nature of the countrys overall tax incidence.

Lastly, the scheme is unsustainable. For 2017, the General Appropriations Act allocated P8 billion for SUCs undergraduate enrollees. There are 1.4 million students enrolled in SUCs.

The country would have to spend P28 billion to cover the P20,000 budget per head per annum.
In conclusion, the economic managers deemed the full financing of UNIFAST as a more targeted, more comprehensive alternative to the free tuition scheme.//


Author: Ed Velasco
Date: February 21, 2017
Source: The Daily Tribune

MANILA, Philippines - State-run think tank Philippine Institute for Development Studies (PIDS) is urging the creation of an enabling environment for social enterprises as such businesses, although small, can contribute to the attainment of inclusive growth in the country.

In a discussion paper PIDS president Gilberto Llanto, PIDS researcher Marife Ballesteros said social enterprises are now promoted globally as major agents for inclusive growth and sustainable development because of its greater attention on the well-being of the community.

In the country, however, much has to be done to enable such enterprises to flourish.

In the Philippines, a resurgence of social enterprises has also been observed. However, the current policy environment in the country is yet unresponsive to the growth of social enterprises, they said.

They noted unlike traditional enterprises, social enterprises engage in for-profit activities with more active and deliberate action towards raising the quality of life of the vulnerable and marginalized communities.

PIDS said the Philippines stands to benefit from the development of social enterprises because despite robust economic growth in recent years, it still struggles with high levels of poverty.

There is also a widening trade gap among income classes and a marginalization of vulnerable population. Economic growth and the expanded spending on social protection have not translated to a significant decline in poverty as income inequality and social exclusion remained at high levels, said the paper.

PIDS said while there is growing interest for the development of social enterprises in the country, they do not flourish because current policies do not provide for the proper classification and provision of incentives for this type of business.

At present, the government categorized enterprises in terms of size of assets and employment. It differentiates micro, small and medium sized companies (MSMEs) from big businesses for specific policies and programs. Social enterprises as profit organizations are similarly classified and so, programs and incentives enjoyed by MSMEs apply to social enterprises.//


Author: Czeriza Valencia
Date: February 15, 2017
Source: Philippine Star

MANILA, Philippines - State-run think tank Philippine Institute for Development Studies (PIDS) is urging the creation of an enabling environment for social enterprises as such businesses, although small, can contribute to the attainment of inclusive growth in the country.

In a discussion paper PIDS president Gilberto Llanto, PIDS researcher Marife Ballesteros said social enterprises are now promoted globally as major agents for inclusive growth and sustainable development because of its greater attention on the well-being of the community.

In the country, however, much has to be done to enable such enterprises to flourish.

In the Philippines, a resurgence of social enterprises has also been observed. However, the current policy environment in the country is yet unresponsive to the growth of social enterprises, they said.

They noted unlike traditional enterprises, social enterprises engage in for-profit activities with more active and deliberate action towards raising the quality of life of the vulnerable and marginalized communities.

PIDS said the Philippines stands to benefit from the development of social enterprises because despite robust economic growth in recent years, it still struggles with high levels of poverty.

There is also a widening trade gap among income classes and a marginalization of vulnerable population. Economic growth and the expanded spending on social protection have not translated to a significant decline in poverty as income inequality and social exclusion remained at high levels, said the paper.

PIDS said while there is growing interest for the development of social enterprises in the country, they do not flourish because current policies do not provide for the proper classification and provision of incentives for this type of business.

At present, the government categorized enterprises in terms of size of assets and employment. It differentiates micro, small and medium sized companies (MSMEs) from big businesses for specific policies and programs. Social enterprises as profit organizations are similarly classified and so, programs and incentives enjoyed by MSMEs apply to social enterprises.//


Author: Czeriza Valencia
Date: February 15, 2017
Source: Philippine Star

SEVERAL groups will fete innovators as it leads in the celebration of the Philippine Innovation Week from February 20 to 24.

Several organizations, such as the Benito and Catalina Yap Foundation (BCYF), have organized their own activities to promote and develop the culture of innovation in the country.

To kick off the celebration, the BCYF will hold on February 20 the first annual awarding ceremony of the groups Innovation Awards at the Kalayaan Hall, Malacaang Palace. BCYF Chairman Antonio Yap said the awards are aimed to encourage Filipinos to create innovative solutions to the countrys problems. Yap has emphasized that innovation is the key to achieve significant change in Philippines. The BIA, hence, is a good start as we search for people who inspire innovation in agri-business, government services and small, medium business, he said.

State think tank Philippine Institute for Development Studies (PIDS) has said that innovation improves firm competitiveness, enables access to global markets, expands job opportunities and introduces new industries to the economy.

Although the Philippines has recorded a high-growth path in the past years, many analysts contend that the country could achieve more if it can improve its innovation capacity, which, inarguably, remains wanting, the PIDS said in a statement.

Yap said they chose government services, education, small medium enterprise and agri-business because they have seen successful efforts by innovators in these sectors.

The finalists in the BIA are OneLab of the Department of Science and Technology, e-commerce platform oneStore, Bote Central, KKK Enterprise, Sunlight Foods Corp., Trophy Farms, Governor Jayvee Tyron Uy of the Compostela Valley and the Department of Science and Technology Mimaropa Region 4B.

Author: Rizal Raoul Reyes
Date: February 19, 2017
Source: Business Mirror

THE government must insulate the country insulated from risks arising from the US turn to greater protectionism as well as rising tension between the US and China, a global advisory firm said.
According to Difference Group, policy makers must focus on insulating the Philippines from the effects of geopolitical shifts as well as improving the countrys capacity to deal with economic and political shocks.

Difference Group Chief Executive Officer Dan Steinbock said the Philippines must be mindful of protectionist policies which would impact remittances and offshore industries as volatility is expected to afflict economies worldwide in 2017.

Catch-up growth is slowing down, said Mr. Steinbock during a Philippine Institute for Development Studies (PIDS) forum held at PIDS headquarters on last week.

It is slowing down in the Tiger economies -- it is slowing down in China. When that happens and the countries outside the region have less money to give, will the Philippines be able to grow? he added.

The European Unions immigration troubles and future viability, Beijings preparations for the next Politburo, the Indian demonetization, and US President Donald J. Trumps moves to reverse policies enacted by the Obama administration make it hard to tell what the future holds, according to Mr. Steinbock.

In addition, the withdrawal of the US from the TPP and the countrys moves to renegotiate the North American Free Trade Act (NAFTA) has placed regional and global trade partnerships at risk.

He added that shifts in defense policies in the South China Sea and currency valuations in China will contribute to the friction between the US and Beijing, potentially placing the Philippines in a difficult situation.

According to Mr. Steinbock, the development of the manufacturing sector is expected to sustain, if not improve, the countrys growth rate amid global uncertainties.

Author: Danica M. Uy
Date: February 17, 2017
Source: Business World

The world faces great uncertainties ahead, with global trends in leadership shifting away from cooperation to protectionism. Despite the dubious times, global analyst, and CEO of Difference Group, Dr. Dan Steinbock, believes the Philippines is on the right path to continue and capitalize on its positive growth.

At a seminar organized by state think tank Philippine Institute for Development Studies (PIDS), Steinbock detailed a foreboding outlook of the future. The radical polarization in the European Union over issues of immigration and unity, Beijing getting ready for the next Politburo, the impact of demonetization in India, and US President Donald Trump recalling policies and plans rolled out during the Obama administration, including the Trans-Pacific Partnership (TPP), have made it difficult to predict economic outcomes.

Under Trump, the US's withdrawal from the TPP and forcible renegotiation of the North American Free Trade Act (NAFTA) has put regional and global trade partnerships at an unease. Steinbock says the Philippines has to be mindful of the risks of new protectionist policies that can hit remittances and its offshore industries.

According to Steinbock, policymakers and leaders should strive to develop the country's manufacturing sector. A strong manufacturing sector will be able to not only sustain the country's consistently positive growth on average, it will also take the economy to the next level, and help the country reduce its exposure to external risks.

"Catch-up growth is slowing down," said Steinbock, "It is slowing down in the Tiger economies--it is slowing down in China. When that happens and the countries outside the region have less money to give, will the Philippines be able to grow"

Politically, Steinbock opined that President Rodrigo Duterte's foreign policy has been pragmatic.

He added that changes concerning defense policies in the South China Sea and currency valuations in China will contribute to the drastic deterioration of US-China relations, placing the Philippines in a difficult situation in the middle.

Policymakers must pay attention not only to insulating the Philippines from the effects of geopolitical shifts but also to upgrading the country's capacity to deal with such economic and political shocks. (PIDS)

Author:
Date: February 16, 2017
Source: Malaysia Sun



QUEZON CITY, Feb. 16 - Long-term national development relies on innovation. Progress in science and technology (S and T) infused with innovation is necessary to achieve sustained economic growth. Innovation improves firm competitiveness and enables access to global markets. Simultaneously, innovation helps expand job opportunities and introduce new industries to the economy.

Although the Philippines has recorded a high-growth path in the past years, many analysts contend that the country could achieve more if it can improve its innovation capacity, which, inarguably, remains wanting. In the 2016 Global Innovation Index (GII) Report, co-published by Cornell University, INSEAD, and the World Intellectual Property Organization, the Philippines ranked 74th among 128 countries. Compared with its Southeast Asian neighbors, it is trailing behind Singapore (6th), Malaysia (35th), Thailand (52nd), and Viet Nam (59th). Indonesia and Cambodia ranked 88th and 95th, respectively.

Amid its growing potentials, the Philippine innovation sector continues to lag behind due to poor investment in research and development (R and D). Philippine investment in R and D hovers at a level of 0.12 to 0.14 of the gross domestic product (GDP), which is one of the lowest in Asia. In contrast, other developing countries (e.g., Japan, United States, Republic of Korea, and Germany) invest more than 2 percent of their GDP in R and D activities. A pressing concern is also increasing the countrys S and T human resource pool to offset the continuing migration of S and T graduates abroad, owing to more lucrative economic and professional opportunities.

State think tank Philippine Institute for Development Studies (PIDS) has conducted numerous studies on the close link between innovation and productivity. According to Gilberto Llanto and Fatima Lourdes del Prado, PIDS president, and former research specialist, respectively, aside from physical and human capital, firms need to invest in innovation. They also argue that in designing development agendas, policymakers, donors, and the stakeholder community usually consider the promotion of innovations as a tool to develop the capacity of small and medium enterprises to generate higher value addition and greater job opportunities. Their research also shows that firm size, age, and foreign equity are important factors leading firms to innovate.

Moreover, a case study on the automotive manufacturing industry by Francis Quimba and Maureen Ane Rosellon, PIDS research associates, reveals that the difficulty lies in translating the awareness of the importance of knowledge and technology into actual firm innovation. Meanwhile, a volume of work by Epictetus Patalinghug, Jose Ramon Albert, Rafaelita Aldaba, and Fatima del Prado shows a range of factors that determine or impede decisions to innovate. These factors include incentives, firm capabilities and resources, market factors, and the investment environment. Patalinghug, a PIDS consultant, notes that policymakers must create incentives like a stronger intellectual property rights law, standardized quality system, and the availability of technology transfer programs. Meanwhile, Albert, Aldaba, and del Prado emphasize the need to ease barriers to trade. According to them, the government has to be vigilant about stamping out anticompetitive practices. At the same time, it needs to address issues of inadequate physical and institutional infrastructure.

Currently, R and D investments are shouldered by a large margin by the Filipino taxpayers. Troublingly, despite government efforts to encourage firm innovation through initiatives like the Small Enterprises Technology Upgrading Program, Albert and his co-researchers note that the influence of government R and D and technology resource centers is still very weak.

The case for building an innovation-centered mindset does not rest alone on the cooperation between the private and public sectors. Strong linkages and coordination among research institutions, universities, and industry associations should be established, and collaborations to share knowledge and translate that knowledge into useful technologies should be encouraged. These should be complemented by well-crafted and implemented technology promotion and utilization programs that facilitate easy access to technology for the majority of the population.


Author:
Date: February 16, 2017
Source: PIA

The governments national greening program (NGP) can help reduce poverty and preserve the environment if properly implemented, a private think tank said in its position paper.

Philippine Institute for Development Studies (PIDS) senior research fellow Danilo Israel said there is high probability the expected outcomes of the NGP will be attained, if it is implemented efficiently and effectively and as planned.

The NGP was a priority program of the Aquino administration aimed at poverty reduction, food security, environmental stability and biodiversity conservation and enhancement of climate change mitigation and adaptation.

It had a total budget of P31 billion for five years and aimed at planting 1.5 billion seedlings in 1.5 million hectares of land nationwide from 2011 to 2016.

As of June 2016, over 1.3 billion seedlings of various tree species have been planted in more than 1.6 hectares of open, denuded and degraded forest lands.

The PIDS study noted that the program exceeded its target area at 113 percent but fell short in its target seedling planted at 90 percent.

These figures, according to the study, already equaled or even surpassed what the Philippine government had accomplished in reforestation in the past 50 years.

Considering the governments decision to extend the program to 2028, Israel said it is worthwhile to evaluate the NGPs performance and look at the issues and problems encountered during its implementation.

Taking effective steps to improve its implementation will go a long way to ensure its success, he said in the paper he sent to select organizations, including the Daily Tribune.

The impact evaluation of the NGP conducted by PIDS estimated that the implementation of the program will result in a 0.3-percent increase in the total output of the economy in 2020, one percent in 2030 and 2.5 percent in 2050.

The forestry sector is expected to post the highest output growth effect, which is estimated to reach to as high as 5.5 percent in 2050.

According to Israel, the NGP also has the potential to increase household income and decrease poverty.
Almost three-fourths of households in NGP sites claimed there had been significant increases in their incomes. This was likewise confirmed by simulations done by PIDS, comparing business-as-usual scenario versus having the NGP.

In terms of employment generation, the NGP has provided 3.3 million jobs, around half a million of which are in upland and rural communities.

It also contributed in recovering forest areas. Using 2010 to 2015 figures, the Food and Agriculture Organization ranked the Philippines fifth among countries with most annual forest gain, with 240,000 hectares or 3.5-percent annual increase.

However, the study noted that while the NGP has been successful in planting seedlings, issues like low survival rate of trees planted and poor program monitoring have persisted.

There have also been allegations of corruption among the Department of Environment and Natural Resources (DENR) and peoples organization (PO) leaders, which created conflict within the community organizations in NGP sites.

Thus, Israel recommended a review of the design of the NGP, in terms of individual species and mix of tree species planted, tree spacing, and other important technical parameters.

He contended that the design and tree species planted by the NGP are not always appropriate to the sites.//

Author: Ed Velasco
Date: February 16, 2017
Source: The Daily Tribune