PIDS in the News Archived (April 2013)

After "more than two decades" of trade liberalization, rapid industrial growth continues to elude the Philippines, according to state think tank Philippine Institute for Development Studies (PIDS). The institution is now urging the government to implement reforms that will enhance the country`s productivity, promote relationships between small and medium enterprises (SMEs) and large domestic and multinational companies, and generate more investments. The reforms will enable the country to capitalize on the rapidly changing global conditions where emerging economies like the Philippines are becoming key players, as the United States, the European Union, and Japan continue to face slower growth, said PIDS senior research fellow Rafaelita Aldaba.

Author: Riza T. Olchondra
Date: April 30, 2013
Source: Philippine Daily Inquirer

The private sector has already started implementing such a job strategy. The private sector effort is spearheaded by the Management Association of the Philippines, through the National Competitiveness Council, and supported by the economic cluster of the Cabinet led by the secretaries of the Departments and Trade and Industry, Finance and Budget, and the director general of the National Economic and Development Authority. It is expected that private sector will create the vast majority of jobs in the economy as a result of increased competitiveness and clear focus on certain key sectors. The government's role is to listen to the teams for their most urgent tailwinds policies as keys to success and to jointly address these needs. Mel Salazar, the president of MAP, explained the theme's main objective which was inclusive growth via competitiveness with integrity during his inaugural speech. The proposed strategy for robust economic growth is focused on the potential winning sectors in agriculture, industry and services which will transform the Philippines into a global player both economically and socially. Never before has such a strategic development strategy been adopted by our government although it has proven to be an important element in the success of the tiger economies in Asia and other regions. The resulting legacy from the significant upgrades that will be felt by the Filipinos after three years will make President Aquino the renaissance president--the one who led his country out of poverty to a quality life of values and patriotism. That will be the time when there will be less Filipinos forced to work beyond our shores to keep the body and soul of his family together since there will be local options for livelihood and available employment even for the poor. How can we achieve all of these changes when there are so many pending matters that still need to be resolved, such as infrastructure, electricity costs/availability, environmental issues, strong peso and many others. The secret is to prioritize, prioritize, prioritize and push for execution, execution, execution. If we focus initially on no more than eight key winning sectors--the challenges will become manageable, simpler to tackle. At the same time, the goals of generating millions of jobs/livelihood and getting the $75 billion in foreign direct investments on the ground will be achievable. This is because investors will be assured of tailwinds in these sectors of high potentials. The strategic importance of specific sectors can be measured and prioritized by the PIDS (Philippine Institute for Development Studies) economic model known as the Aldaba framework. We do not have to depend on business titans, monopolists, political lords and carpetbaggers to dictate their terms on us.

Author: Cesar B. Bautista
Date: April 29, 2013
Source: Philippine Daily Inquirer

Investors, both foreign and domestic, have been quick to point out that the investment climate leaves much to be desired. While our global competitiveness rankings could certainly use some improvement, it should be noted that imperfect investment climates in countries like India did not prevent NRIs and the Indian business elite in general from investing in their own country: with greater amounts of revenue coming into the country, improvements in India's investment climate took place as a matter of course. Others complain that a smaller arena for private investment -- Public-Private Partnerships (PPPs) with the government -- have been slow and cumbersome, shot through with bureaucratic demands and inconveniences. But it is important to keep in mind recent history, where PPPs were abused and corrupted into venues for the illicit accumulation of wealth by politicians and their cronies. This is why it has been necessary to subject all PPPs to closer scrutiny to ensure transparency and a level playing field, allowing a larger swathe of the business community to take part. The renewed vigilance over PPPs, the government hopes, will inspire confidence among private investors to invest more in the Philippines.

Author: Lila Ramos Shahani
Date: April 26, 2013
Source: GMA News

According to data provided by the Department of Health, 25 percent of Filipino adults, or about 14 million of the current adult population, have high blood pressure. "Unfortunately, many who are diagnosed often do not have access to treatment and their conditions are not adequately controlled," said Bellosillo. Uncontrolled high blood pressure can lead to the hardening and thickening of the arteries, which increase one's chance to suffer from heart attack, stroke or other complications; aneurysm; thickening of heart muscles, which can lead to heart failure; weakening and narrowing of blood vessels in the kidneys, which can prevent these organs from functioning normally. High blood pressure, if left untreated, could also cause the thickening, narrowing or tearing of the blood vessels in the eyes, which can result in vision loss; or clustering of disorders of the body's metabolism--including increased waist circumference, high triglycerides, low high-density lipoprotein, or "good" cholesterol, high blood pressure and high insulin levels. The most recent Philippine health statistics data show that in 2009, about 167,000 Filipinos died from heart disease and stroke. Half of these tragic deaths are likely related to high blood pressure. An analysis done by the Philippine Institute for Development Studies further revealed that 34 percent of all cardiovascular deaths are happening prematurely or at age below 60 years, ending the life of many Filipinos during their supposedly most productive years.

Author: Charles E. Buban
Date: April 26, 2013
Source: Philippine Daily Inquirer

Already wrestling with the public relations fallout of the latest poverty statistics, the Aquino administration apparently was too busy last week to notice the press release from the Philippine Institute for Development Studies (PIDS) announcing the results of a study that raises serious concerns about the preparedness of the Philippines` small- and medium-enterprise (SME) sector for regional economic integration in 2015.

Author: Ben D. Kritz
Date: April 30, 2013
Source: Manila Times

The government should collaborate with disabled person's organizations (DPOs) in providing more income-generating activities and employment opportunities for persons with disabilities (PWDs) to increase the access to employment of the country's PWDs, the Philippine Institute for Development Studies (PIDS) said. In a discussion paper he penned, PIDS research associate Christian Mina said that while the institutional and legal environment have been made favorable for PWDs, being among the vulnerable groups in the country, the quality of employment of these special peope still needs improvement.

Author:
Date: April 24, 2013
Source: Malaya

A large number of barriers have been the main reasons why the growth of small and medium enterprises (SMEs) has not been vigorous enough to propel the Philippine economy, according to the state think-tank Philippine Institute for Development Studies (PIDS). "Two years from now, the Philippines and other Asean [Association of Southeast Asian Nations] members will be moved toward a single market and production base under the Asean Economic Community (AEC) by 2015.

Author: Mayvelin U. Caraballo
Date: April 24, 2013
Source: Manila Times

When it rains, it pours.

Coming on the heels of a report from the National Statistical Coordination Board that poverty alleviation in the country remains a pipe dream is an observation--from a government think tank no less--that job-creation facilitation programs are not enough to prop up employment in the Philippines. In a quarterly report, the Philippine Institute for Development Studies (PIDS) said rapid and constructive productivity improvements in job-creating sectors should be pursued. It noted that whenever the challenge of a poor track record in reducing unemployment is raised, the government cites job-creation programs. These creators include the Special Program for the Employment of Students, which provides short-term employment to poor but deserving students and out-of-school youth, and the Community-Based Employment Program that gives short-term employment for workers who are in distress and displaced by calamities and natural disasters.

Author: Jennifer A. Ng
Date: April 24, 2013
Source: BusinessMirror

In a study authored by Philippine Institute for Development Studies (PIDS) vice president Rafaelita Aldaba, the country`s SMEs fare poorly in terms of access to credit, technology and skills compared with peers in other Asean member-states. This is despite the implementation of the Asean Strategic Action Plan for SME Development 2010-2015 (ASAPSD) and the Asean Policy Blueprint for SME Development 2004-2009 (APBSD). A perception survey was conducted to evaluate the impact of these plans. Four SMEs and one government-member of the SME Working Group were surveyed to evaluate the Philippine implementation. Both groups scored low in average effectiveness. Majority of the respondents said the APBSD had limited impact on facilitating SMEs` access to information, markets, human resource development and skills, finance, and technology. Likewise, the ASAPSD was perceived as having little concrete impact in terms of enhancing competitiveness and flexibility of SMEs in moving toward a single market and production base.

Author: Darwin G. Amojelar
Date: April 23, 2013
Source: Philippine Daily Inquirer

Despite the implementation of regional measures for the development of small and medium enterprises (SMEs) in the ASEAN region, SMEs in the Philippines have remained weak and have not generated sufficient value added and employment over the past decade, according to a Philippine Institute for Development Studies (PIDS) analysis.

Author: Angela Celis
Date: April 23, 2013
Source: Malaya

The country's weak investment climate, the IMF official said, could be strengthened by improving health and education outcomes and labor market efficiency, and creating strong institutions. Singh also mentioned that government revenue in the Philippines is low compared to other Asian countries. "There is a need for higher government revenue to raise public investment," he said. He also recommended raising revenue by increasing the country`s tax base. "Get rid of exemptions that restrict the tax base by increasing and improving tax administration," he said.

Author: Donnabelle L. Gatdula
Date: April 22, 2013
Source: Philippine Daily Inquirer

The Ayala Group is eyeing to participate in power projects in Mindanao to help the Aquino administration address the ongoing power supply crunch in the island, a ranking official said. Ayala Corp. managing director and head of the conglomerate`s energy investments Eric Francia said AC Energy Holdings Inc., the group`s holding company for its investments in the power sector, is in talks with potential partners for power projects in Mindanao.

Author: Iris C. Gonzales
Date: April 22, 2013
Source: Philippine Star

The Philippines' population growth rate must be reduced by at least 0.24 percentage point while the economy must expand at an average of 6.3 to 6.6 percent annually, for the country to become a high middle economy by 2030, the Philippine Institute for Development Studies (PIDS) said. In a discussion paper titled `Aspirations and Challenges for Economic and Social Development in the Philippines Toward 2030,` Josef Yap and Ruperto Majuca said that one of the challenges which slows down the country`s ability to have a sustained economic growth is the relatively high population growth rate. The paper cited data from the World Bank, which showed that in 2009, the country`s population growth rate was 1.79 percent.

Author: Angela Celis
Date: April 21, 2013
Source: Philippine Daily Inquirer

The Department of Social Welfare and Development (DSWD) should consider an extended period of assistance to current beneficiaries of the Conditional Cash-Transfer Program instead of increasing the number of its beneficiaries, according to a study undertaken by researchers from government think tank Philippine Institute for Development Studies (PIDS).

Author: Jennifer A. Ng
Date: April 10, 2013
Source: BusinessMirror

The government will get higher returns for its educational investments if the Conditional Cash Transfer (CCT) program also covered older children, a study released by state-owned think tank Philippine Institute for Development Studies (PIDS) showed.

Author: Cai Ordinario
Date: April 10, 2013
Source: Rappler.com

The Philippines is asked to allow full foreign ownership in restricted industries to attract billions of dollars of investments at the same time bring down costs. `The best is a lot of playing field and up to 100 percent (foreign ownership),` said John Forbes, senior adviser of the American Chamber of Commerce and Industry.

Author:
Date: April 10, 2013
Source: The Visayan Daily Star

The Department of Social Welfare and Development (DSWD) should extend the period of assistance given to current beneficiaries of its conditional cash transfer program instead of adding more families to the program, the Philippine Institute for Development Studies (PIDS) said in a statement.

Author:
Date: April 10, 2013
Source: GMA News

The Securities and Exchange Commission (SEC) has drafted new guidelines that considered voting shares in determining compliance with the 30- to 40-percent limit on foreign ownership in utilities, media, advertising, and natural resources. A study by state-run Philippine Institute of Development Studies (PIDS) underscored the need for the country to pursue a comprehensive review of the constitutional limitations on foreign equity particularly the 60-40 equity ruling. "The Philippines is already considered relatively open vis-a-vis its ASEAN (Association of Southeast Asian Nations) neighbors. Foreign entry remains restricted in a substantial number of important economic sectors," said PIDS research fellow Rafaelita Aldaba. While limitations on foreign equity in these sectors cannot still be directly addressed, Aldaba said the government needs to continue implementing measures to promote competition and strength institutional and regulatory framework particularly in public utilities.

Author: Leslie D. Venzon
Date: April 10, 2013
Source: Philippine Information Agency

The Philippine government cannot rely on public-private partnerships (PPP) alone to untangle the country`s infrastructure bottlenecks, the Asian Development Bank (ADB) said on Tuesday.

Author: Darwin G. Amojelar
Date: April 09, 2013
Source: Interksyon TV5

The Securities and Exchange Commission (SEC) has drafted new guidelines that considered voting shares in determining compliance with the 30 to 40-percent limit on foreign ownership in utilities, media, advertising and natural resources. A study by state-run Philippine Institute of Development Studies (PIDS) underscored the need for the country to pursue a comprehensive review of the constitutional limitations on foreign equity particularly the 60-40 equity ruling. "The Philippines is already considered relatively open vis-a-vis its ASEAN (Association of Southeast Asian Nations) neighbors. Foreign entry remains restricted in a substantial number of important economic sectors," said PIDS research fellow Rafaelita Aldaba. While limitations on foreign equity in these sectors cannot still be directly addressed, Aldaba said the government needs to continue implementing measures to promote competition and strength institutional and regulatory framework particularly in public utilities. She said undertaking market reforms, setting up good infrastructure and efficient institutions will enable the local companies take advantage of the opportunities offered by the regional economic integration by 2015.

Author:
Date: April 09, 2013
Source: Global Post

"The power rates will go up in Mindanao because the choice is higher power or no power," the President told reporters last week. "And many of those we've spoken to understood the necessity of this, instead of no power at all." This statement was equivalent to telling the people of Mindanao to go hang vis--vis the power rates. It's like saying: Take it or leave it for all we care. There is no relief in sight from the imminent rate increases. Energy Secretary Jericho Petilla presented to the President this week a plan that entails the procurement of "modular" diesel-powered plants as a "stopgap" measure until 2015 when the coal-fired plants kick in, according to Mr. Aquino. "These diesel-powered plants are seen as the quickest--they can be set up in as early as six months and the maximum is one year," the President said. The idea is for the government to help the distribution utilities purchase the generating sets. "By 2015," he said, "we expect the problem to largely go away--by that time we'll have good surplus. That's the time the power plants go on line. About 300 megawatts of coal-fired power will come online by 2015. There will be more after that up to 2017." But promises are cheap. For about two months now, Misamis Occidental, Lanao del Norte, and Iligan City have been experiencing two power outages daily, with each round lasting two to six hours. The Misamis Occidental Electric Cooperative Inc. said the outages were caused by power supply deficiencies from the Agus and Pulangi hydroelectric plans operated by National Power Corp. At present, Mindanao has a power shortage of 294 megawatts. The demand is at 1,157 megawatts while the actual supply in only 863 megawatts. The government think tank Philippine Institute for Development Studies (PIDS) warned in a study late last year of a repeat of the April 2012 power crisis in Mindanao in the summer of this year, and very likely in 2014.

Author: Amando Doronila
Date: April 09, 2013
Source: Philippine Daily Inquirer

The government has found a solution to the problem of recurring power shortages in Mindanao. Arguing that it takes three to four years to build one power plant, the government will embark on an easier approach, one that will produce electricity in three to four months. The solution is to import and sell power machines to the power distributors and electric cooperatives in Mindanao. Endure the blackouts or pay more for electricity. It's an option, says Energy Secretary Carlos "Icot" Petilla. A one-megawatt or a 2-megawatts (MW) generating set will cost anywhere from $500 thousand to $1 million, he explained on national television. A 200-MW power plant will cost close to a billion dollar. Secretary Petilla said that the government will open up a loan facility from which any power distributor or electric cooperative can borrow. Payable in three years, he said. This is to make sure that anyone who borrows from the fund will be able to pay the government before it bows out in 2016. Factoring in the amortization and financing cost, this scheme would raise the price of electricity in Mindanao from P6-P8 to P10-P12 per kilowatt hour. The power machines will use diesel oil, an expensive fuel that would substantially add up to the total cost of electricity sold. This will make the cost of electricity in Mindanao one of the highest in the world. The people of Mindanao have no other choice: endure the rotating blackouts or pay more for electricity. The government cannot even complain because it would lose the opportunity to collect taxes from electric consumers.

Author: David L. Diwa
Date: April 02, 2013
Source: Manila Standard Today

Data from the National Statistics Office (NSO) show that exports in January 2013 declined by 2.7 percent to $4.01 billion from $4.12 billion in the same month last year. Exports of manufactured goods accounted for 81.8 percent of total export receipts, estimated at $3.28 billion, down 5.8 percent from $3.48 billion year-on-year. Exports of manufactured goods are dominated by electronics, which generated $1.50 billion in January 2013, down 31.9 percent from $1.57 billion in the same month last year. Point one: our exports are still not broad-based. Manufacturing, which grew by 5.4 percent last year, accounted for only 22 percent of our total GDP for 2012. I've seen articles saying that manufacturing accounted for as high as 40 percent of our GDP, but that, I believe, is a time long gone. That's point two. These two points highlight the need for us to really push through with the revival of our manufacturing sector. So I have decided to make an addendum to my earlier series on manufacturing. It is already an accepted fact that manufacturing will correct the lack of inclusiveness in our economic growth and help us alleviate poverty. The Asian Development Bank (ADB) laments that over the past decade, the industrial sector has grown at much slower rates than its peers in the region, inhibiting economic growth and slowing poverty reduction. However, the ADB recognizes that the Philippines has a big potential to become a key production hub in Southeast Asia, given the tightening labor markets in other countries and natural disasters in others, among other factors. The 2012 Economic Policy Monitor (EPM) of the Philippine Institute for Development Studies (PIDS), which was published recently on its web site, presents findings and recommendations that should strengthen the push for a revival in manufacturing to generate employment and reduce poverty.

Author: Manny B. Villar
Date: April 01, 2013
Source: BusinessMirror