PIDS in the News Archived (August 2014)

TO BOOST the countrys footing in the medical tourism industry and stay competitive among Asean peers, a top medical professional said the government should fasttrack the development of better airport facilities and other tourism support infrastructure as well as maintain the countrys peace and order.

Dr. Victoria Belo, medical director of the Belo Medical Group, said the Philippines has the best qualified medical professionals who can perform various procedures.

What we lack, though, is nice and better airport that welcomes these foreign clients, said Belo.

The Belo Medical Group is the countrys first ambulatory surgical center outside hospitals that is certified by the Department of Health and the Department of Tourism.

Although the Filipinos brand of hospitality has been the countrys competitive edge in attracting foreign tourists, the country should go beyond that.

We need to fix our airports so tourists would feel the warmth of Filipinos hospitality the moment they land in our country. (We should) also maintain the countrys peace and order so they will feel they are in a safe place, said Belo.

Belo has been operating her clinic for 24 years.

She said past kidnapping and hostage-taking crises have negatively affected the countrys medical tourism industry. She cited her business as example, saying her foreign clients have gone down from 30 percent of total client base to 25 percent.

Her clinics top markets are Middle East, USA and Australia.

State-run think thank Philippine Institute for Development Studies (PIDS) underscored in a policy note that the Philippine medical tourism continues to get a miniscule share of the medical tourism market even if it offers better prices in surgical procedures than its Asian competitors.

According to the PIDS study, Philippines is among the top 15 medical tourism destinations in 2010. The country is ranked 11th on medical tourism, attractin 80,000 medical tourists but tailing behind Thailand (1st), Singapore (2nd) and Malaysia (5th).


Thailand has the top position among medical tourism destinations, with a total of 1.2 million medical tourists in 2010. Other Asean countries have shown strong performances, with Singapore having 600,000 and Malaysia with 350,000 medical tourists in the same year.
To improve the countrys status, PIDS recommends the establishment of a coordinating body among offices and agencies involved in the medical tourism industry. A marketing campaign for the 21 premier hospitals included under the Philippine Medical Tourism Program (PMTP) must also be crafted and implemented.

Although the Long Stay Visitor Visa Extension (good for 36 months) has been introduced, PIDS urges local carriers to develop medical airline packages so that more tourists will be enticed to visit the country. Strong ties between hospitals and international health insurance companies will also build a responsive and transparent pricing of medical services.

Attractive websites should also be developed to promote medical tourism instead of relying on less enticing news items and blogs, according to the report. Medical facilities should also work toward international affiliations for quality assurance and vibrant medical campaign.

Belo said competition is tough and the country should upgrade its products and services, especially with the coming Asean integration next year.

The integration should not be seen as a threat but opportunity, she said. In our case, we remain confident and excited because Asean integration will open more market opportunities such as making the entire Asean Belo-fied.

Belo was in Cebu last Friday as one of the speakers during the 23rd Visayas Area Business Council held at the Oakridge Pavilion.
She announced that the Belo Medical Group will be expanding in Singapore and Jakarta, Indonesia. KOC

Date: August 25, 2014
Source: Sun Star Cebu

TWO prominent economists urged business players in the Visayas to support the passage of a competition bill, which remains pending in the 16th Congress.

Of the 10 member-countries of the Association of Southeast Asian Nations (Asean), the Philippines still lacks specific competition legislation, just like Brunei Darussalam, Cambodia, Laos and Myanmar.

We are lagging behind top Asean countries in terms of having a good and strong competition law. This law is important because it levels the playing field, protect consumers and eliminates monopolies and cartels, said Gilberto Llanto, president of the Philippine Institute of Development Studies (PIDS).

Although the country has constitutional provisions on competition policy, it needs a more specific competition law, Llanto said, to ensure market contestability and regulate anti-competitive practices.

He said that such a policy will lead to large price reductions, innovations and product development. It will also create a fair business environment that will attract more foreign investments, as well as help micro, small and medium enterprises (MSMEs) compete with large enterprises and with their peers in Asean.

Among the problems MSMEs face are the regulatory frameworks, entry barriers and cost of doing business. Anti-competitive actions, like preventing access to inputs on fair terms, also block the entry or expansion of competitors.

Proposed by House Speaker Feliciano Belmonte Jr., House Bill (HB) 1133 or the Philippine Fair Competition Act of 2013 aims to regulate unfair competition, monopolies and cartels, which will ultimately protect consumers.

This bill is an updated version of HB 4835, filed during the 15th Congress.

House Bill 1133 aims to encourage fair and free economic competition by prohibiting the abuse of market dominant positions and the excessive concentration of economic power, said Belmonte in a statement.

He said the lack of genuine competition in certain industries impairs public welfare and undermines the countrys credibility to provide a business climate conducive to investment.

He also said a comprehensive competition policy will further boost the gross domestic product and real wages, while bringing down prices.

Llanto urged business leaders in the Visayas to support the bill and ask lawmakers for its speedy enactment.

Economist Cielito Habito also stressed the importance of having a competition law to attain more inclusive growth.

This law is important for a country that lacks inclusive growth because it will level the playing field, thus, allowing small players to attain business growth, said Habito during the 23rd Visayas-Area Business Conference yesterday.

Llanto added there is a need to establish a competition culture by educating consumers, private business, and civil society. We need to spread the good news that a competition policy works for the consumers and producers, that leads to an increase in general welfare, he said.

Aside from the speedy enactment of the bill, Llanto added the country should also pursue further reforms such as the removal of regulatory barriers to entry in services; allow more foreign participation be relaxing the 60-40 percent rule; and remove non-tariff barriers to trade and restrictions on ownership and investment.

House Bill 1133 provides for the creation of a Philippine Fair Trade Commission under the Office of the President. It will be tasked to investigate and start the prosecution of those engaged in unfair trade practices. The measure also proposes to prohibit anti-competitive mergers.//

Author: Katlene O. Cacho
Date: August 22, 2014
Source: Sun Star Cebu

Less than 500 days until the deadline, the Philippines is still far from achieving its Millennium Development Goal (MDG) commitments, according to the latest report released by the National Economic and Development Authority (Neda) and the United Nations Development Programme.

Based on the countrys fifth progress report on the MDGs, the Philippines only has a high probability to achieve two out of the seven MDGs that were included in the report. The eighth MDG pertains to Global Partnership and the indicators were not included in the report.

The two goals are Goal 4, to reduce child mortality; and Goal 8, to ensure environmental sustainability.

Further, the report showed that of the 35 indicators under the seven MDGs included in the progress report, the Philippines only has a high probability of achieving 14, or less than half, of the indicators.

With only less than 500 days to the MDG deadline, business as usual is no longer the practice. What we need is a strong and unified determination from all sectors, at the national and local levels, for our country to make good on our Millennium promise, Socioeconomic Planning Secretary and Neda Director General Arsenio M. Balisacan said in the report.

Data also showed that while the Philippines has a high probability of attaining the six indicators under Goal 3, on empowering women, the country has a low probability of achieving the indicator on the proportion of elective seats held by women.

Further, on Goal 6 on combating HIV/AIDS, malaria and other communicable diseases, where the Philippines used to be regarded as an early achiever, progress has not been sustained and even reversed, particularly in the six HIV/AIDS-related indicators.

In terms of Goal 6, the country only has a high probability of achieving the malaria morbidity rate, malaria mortality rate, and the tuberculosis treatment success rate.

The report also showed that in Goal 2 on achieving universal primary education, the country only has a high probability of meeting the elementary education net enrollment rate.

The goals where the Philippines has a consistent low probability in all indicators are Goal 3, on promoting gender equality, which aims to eliminate gender disparity in primary and secondary school; and Goal 5, on reducing maternal mortality, by three quarters and increasing contraceptive prevalence rate.

On Goal 1, on eradicating extreme poverty and hunger, the Philippines only has a medium probability. The country has a medium probability of reducing poverty and hunger, as well as the prevalence of underweight children and increasing the proportion of households with per-capita intake of below 100 percent.

The report stated that the slow progress of the country in meeting the MDGs could be traced to the Philippines long struggle against income inequality.

The study pointed out that while the Philippiness economic growth has been decent at an average of 5.2 percent over the last 10 years and remarkable in the past few years with the 7.2- percent growth in 2013, there was a lack of a trickle-down effect of the growth.

Based on the official poverty thresholds, poverty has declined from 34.4 percent in 1991 to 25.2 percent in 2012, this is still far from the MDG target of 17.2 percent by 2015.

The report stated that while the Gini coefficient, a measure of inequality, went down to 0.47 in 2012 from 0.48 in 1991, the decline in inequality has not been equal between rural and urban areas.

Inequality went down to 0.45 in 2012 from 0.47 1991, but inequality rose in rural areas to 0.45 in 2012 from 0.39 in 1991.

Further, the report stated that the growth has also not translated into enough decent jobs. The 7.1 percent unemployment rate in 2013 translates to 2.9 million unemployed persons, while about 22 percent of those employed are living below the national poverty threshold in 2009.

MDG threats

Natural and man-made shocks could make the road to achieving all the MDGs a long and difficult one.

The fifth progress report on the MDGs stated that strong typhoons and other natural disasters could reverse the MDG gains of the country and make it doubly difficult to work on other goals where the country may still be lagging behind.

The devastation caused by Typhoon Yolanda is seen to negate the progress for the MDGs, particularly in poverty reduction. The report stresses that natural disasters and man-made shocks impede the sustainability of poverty-reduction efforts and consequently increase poverty incidence, if no appropriate social safety nets are established to empower and protect the most disadvantaged and vulnerable sectors from further risks. With extreme changes in weather patterns becoming the new norm, we need to intensify the institutionalization of climate- change adaptation and mitigation measures, particularly at the local levels, Balisacan said.

The report stated that the physical damage of these disasters could result in a shortage of housing, schools and health facilities, which are all vital in the efforts geared toward achieving the MDGs.

These disasters and other external shocks also have the capability to move the non-poor into poverty and the poor into deeper poverty.

This has been the case in the study of Philippine Institute of Development Studies senior research fellow Celia Reyes, who said there was no significant change in the proportion of the population who are poor between 2003 and 2009, which covered shocks such as the global economic crisis.

Based on a panel dataset, 23.4 percent of the families in 2009 are classified as poor. Of these families, 47 percent are chronically poor or consistently poor all throughout 2003 to 2009. The rest were previously non-poor.

The disasters would affect the pace of progress toward the achievement of the MDGs and may even push back progress in some target areas. For instance, damages to crops and assets may lead people to lesser income and consequently, move them into poverty, the report stated.

Aside from bringing about hunger and malnutrition, disasters interrupt childrens schooling, especially when schools are used as evacuation centers. Moreover, families whose houses are damaged may lose access to safe water and sanitation, and may force them to live in informal settlements, it added.

Most MDG to be met post 2021

These natural disasters and the slow progress of the Philippines in meeting the goals can push back the countrys achievement of most goal indicators to after 2021.

In another report, titled Key Indicators for Asia and the Pacific 2014, the Asian Development Bank said that while some goals will be achieved in time for the 2015 deadline, most can be achieved between 2021 and 2030, or after 2030.

Data showed that around four indicators that are key to achieving several goals would be achieved between 2021 and 2030, while three indicators will be achieved post 2030.

The four indicators are achieving $1.25 in purchasing power parity (PPP) terms per day and hunger, which are under MDG 1; under-five mortality rate under MDG 4; and Antenatal care coverage under MDG 5.

The three indicators include the completion of last grade in primary school under MDG 2; infant mortality rate under MDG 4; and birth attendance by a skilled health personnel under MDG 5.

Further, data showed that there are indicators where the country is regressing and the year or date of achieving the indicators are unknown.

These indicators are the increase in primary school enrollment under MDG 2 and reduction of maternal mortality rate under MDG 5.

On a more positive note, the Philippines is an early achiever, on track, or could achieve an indicator earlier or between 2016 and 2020.

The indicator that can be achieved between 2016 and 2020 is the proportion of population using improved sanitation facilities, while the indicator where the Philippines is on track to 2015 is the one on HIV prevalence.

The indicators where the country is an early achiever includes gender and equality in secondary and tertiary education; tuberculosis incidence and prevalence; land area covered by forests; and access to water.

Author: Cai U. Ordinario
Date: August 20, 2014
Source: BusinessMirror

I doubt I am the only person who noticed the incongruity of the two banner headlines in Tuesdays edition of this paper. On the front page, this: 300,000 more Pinoys jobless " SWS survey. Right next to it was a teaser about the surprising news that ran in full on the inside business page: GDP likely bounced back to 7 percent in Q2.
The accuracy of those two figures may be debatable, but the basic circumstances are not: The economy is, indeed, expanding, as is unemployment and poverty.
The Aquino Administration has been harshly criticized for most of the last four years for doing absolutely nothing about it, and that criticism is certainly warranted in view of the oft-repeated and utterly empty assurances that the regime is pursuing inclusive growth (Interesting fact: No, its not.), but by the same token, the situation is nothing new.
Unemployment, poverty, and income inequality have persisted at remarkably stable levels for decades, because the economic policy approach has not significantly changed since at least the Marcos era.
That observation is a key point of a discussion paper published last month by the Philippine Institute of Development Studies (PIDS) entitled Labor Policy Analysis for Jobs Expansion and Development, and authored by Vicente B. Paqueo, Aniceto C. Orbeta Jr., Leonardo A. Lanzona Jr. and Dean Gerard C. Dulay.
PIDS, for those who may be unfamiliar with the agency, is the governments economic think tank and is actually part of the National Economic Development Authority (NEDA). Being a think tank, it seems to be generally ignored by government policymakers as a matter of routine and attracts very little attention from the media or the public, which is unfortunate because PIDS regularly produces excellent research that could serve as effective policy guidance. Not every discussion paper written by PIDS analysts is a gem of economic thought (thats why theyre called discussion papers, after all) but, as is the case with the paper by Paqueo, et al., is probably at least a pearl or a really nice piece of quartz.
The paper tags the current approach of the government"which again has been fairly consistent through several administrations"as unrealistic and actually detrimental to the poor despite its good intentions. One surprising example is the effect of mandated minimum wages; the authors demonstrate that since about 2007 at least, the minimum wage has directly caused a reduction in per capita incomes of the working poor by roughly P1,400 to P1,700; not an enormous amount to many working families, but to those whose monthly incomes might not be much more than that in the first place, it is a formidable penalty.
It makes the rather unsurprising conclusion that the problem is not the overall jobless rate, but the quality of work; among the poor, the unemployment rate "if employment is taken to mean activity to support ones survival"is actually quite low, but a huge proportion of the total labor force, nearly half of it, is actually underemployed.
While focusing on labor policies and the minimum wage puzzle as the primary culprits, the study also points out that there are issues beyond that, such as infrastructure underdevelopment, elevated costs of subsistence, high costs of doing business, high energy costs, weak enforcement of contracts and property rights, and an overabundance of contradictory and confusing laws, all of which is also stating the obvious.
The solution, which is offered in a 12-point agenda, is somewhat lacking in specifics (its a discussion paper, remember), and generally proposes a loosening of existing labor policies, including essentially eliminating the minimum wage. The thrust of the recommendations is to improve the quality of human capital while at the same time improving the ability of the employment sector, particularly among the small and medium enterprises that make up the vast majority of the Philippines employers, to absorb an expanding labor force, while largely letting natural market forces moderate wages.
To critics among labor advocates, the entire presentation is likely, however, to come across as a nicely packaged call to dump labor protections, including the sacrosanct minimum wage. Empirically, the study makes sense; politically, its a live grenade. The best counter-argument to the position that minimum wages and strong labor regulation are a necessity is, naturally, the status quo: It doesnt work, and has never really worked; wages improve at a glacial pace if at all, and any progress in reducing joblessness and poverty is incremental at best and more often than not, achieved through statistical juggling (such as when the Aquino Administration recently redefined the poverty threshold to a per capita income of P52 per day, which is slightly below the international abject poverty baseline of $1.25 per day).
On the other hand, the observation of the PIDS authors that the overall problem cannot be effectively addressed without a holistic approach is correct, too, and in the sense that the current labor regulatory regime might be necessary to provide at least some cover against government shortchanging of human capital development and cost of living management, the view opposed to a more market-oriented approach cannot be completely dismissed. It is hard not to assume that somewhere there is a middle ground that works; hopefully, bright minds on both sides of the issue will continue the conversation in the absence of the governments continuing lack of interest in doing so.

Author: Ben D. Kritz
Date: August 20, 2014
Source: Manila Times

As shown by its organizational chart, the DOEs multisectoral task force will be headed by Dr. Adoracion Navarro, a senior fellow at the Philippine Institute for Development Studies (PIDS), and will be represented in this study group by PIDS president Gilberto Llanto.

The task force will include over 30 representatives from government, academe, business sectors and labor and consumer groups.

Task force members include Secretary Petilla and businessman Raul Concepcion of GovtWatch; plus representatives from the Joint Foreign Chambers (JFC), Philippine Chamber of Commerce and Industry (PCCI), Federation of Filipino Chinese Chamber of Commerce and Industry (FFCCCI), PIPPA, Meralco, National Consumers Affairs Council (NCAC), National Federation of Womens Club of the Philippines (NFWCP), Coalition for Consumer Protection and Welfare Inc. (CCPW), Matuwid na Singil sa Kuryente Consumer Alliance Inc. (MSK), Alliance of Progressive Labor (APL) and NAGKAISA (United).

Why MSK is one of five consumer groups in this task force, given its questionable status as a non- functioning non-stock NGO, and why is Tan a task force member in his capacity as MSK chief, considering his unsavory background and his string of court cases in Manila and in the US ?

On its website, MSK describes its founders as electricity consumers who have deep knowledge of the industrys privatization and deregulation, and whose goal is to enlighten the public and policy makers on the specific rules and practices that have been causing the abusive power costs.

However, two of MSKs key officers"corporate secretary Lorna Asilo and treasurer Videt Ursula Cusi"certified under oath that this NGO has not been in operation since its incorporation up to the present. SEC records show that Asilo
issued this Affidavit of Non-Operation on April 8, 2013, in lieu of an Auditors Report. She submitted this document to report that the NGO had total assets below P500,000 and annual gross receipts of less than P100,000.

Cusi issued her own Affidavit of Non-Operation attesting to this organizations true status on May 23, 2013.

So why has Tan been blessed enough to be in the company of distinguished industry leaders in the task force as representative of a fledgling consumer group that is actually dormant, as attested to by its own key officers?//

Author: Ducky Paredes
Date: August 20, 2014
Source: Malaya

Here are a couple of interesting business issues I gathered in the past week which I wish to share with you.
One is the 4th Thought Leadership Forum that the Association of Vehicle Importers and Distributors (AVID) held recently at the AIM Conference Center. The speakers in the said forum, a brainchild of its president Ms. Fe Perez-Agudo who sits at the helm of Hyundai Asia Resources Inc. (HARI), spoke of the urgency of having a competitive Philippine automotive industry NOW before the ASEAN Free Trade Agreement catches us flatfooted again.
The two top officers of AVID, Albert Arcilla who is also President of The Covenant Car Co. Inc. (Chevrolet Philippines) and Viking Cars (Volvo Philippines), and Fe Agudo urge tndustry players to be competitive as the Philippines would have a much larger field to move around in with the forthcoming trade liberalization agreement between the 10-member ASEAN block. The shared responsibility of the private and public sectors is to encourage business sustainability, which is why Ms. Agudo urged the government to re-think the industry roadmap.
Dr. Cielito H. Habito, one of the countrys most eminent economists (Bachelor of Science in Agricultural Economics, Summa Cum Laude, University of the Phil., Master of Arts In Eco, PhD, Harvard University, Master of Economics, University of New England in Australia) spoke about the role of the USAID Trade-Related Assistance for Development Project and how this could be pivotal in the forthcoming ASEAN economic integration.
Dr. Federico Macaranas, another Economics graduate of the University of the Philippines and a holder of a doctorate degree in Economics from Purdue University and now a full professor at the Asian Institute of Management, spoke of how, 15 years ago, he cited in a speech that China would be the No. 1 car producer in the world. That was met with a lot of skepticism back then as China was over-populated with very little resources to feed its people.
Well, its happening now " China has leap-frogged over other developed nations in terms of manufacturing and technology, while another backward and over-populated country back then, India, is now a major player in the automotive industry. The eminent economist stressed how important it is to invest in parts and components technology lest the Philippines be left out. He mentioned, and I agree, that we must not always insist on local content if this does not represent the best and most efficient.
Dr. Macaranas also proudly mentioned that Philippine Intellectual Property Rights laws are among the best, if not the best, in the region. We are still among the poorest in science, technology and engineering, however, and this is crucial to economic growth for any developing nation.
The last speaker was Dr. Rafaelita Aldaba, newly-appointed assistant secretary of the Dept. of Trade and Industry, another proud graduate of the University of the Philippines, having earned her Masters and Doctorate degrees there, with further studies on Intl. Economic Policy at the Kiel Institute of World Economy in Germany. Dr. Aldaba is an eloquent speaker, but the lady could only do so much to defend the government she serves when asked by a member of the audience: whatever happened to the industry roadmap that was promised to us a long time ago?
The Thought Leadership Forum was one good exchange of valuable inputs for the automotive industry, and though I believe that change will not happen overnight just because AFTA is finally here, the longer we take to attain competitiveness in the region, the less likely it will become a reality for us.
The second is this: SL Agritech Corporation, the countrys leading hybrid seed producer, is now exporting not just the hybrid seeds, but also the hybrid technology as well.
S L Agritech is a division of the Sterling Group of companies and is one of the pioneers of the hybrid rice technology, which according to Dr. Frisco Malabanan, consultant for the company, is excellent for countries with a long stretch of wet season like the Philippines.
SL Agritech has already shipped the seeds to Papua New Guinea and intend to plant as much as 30 hectares of land to hybrid rice.
Papua New Guinea is not a rice-producing country, yet the government there is interested in cultivating their large unplanted fields to hybrid rice. SSL Agritech produces the hybrid seeds here and exports these to other tropical Asian countries.
It is a pity that not too many of our rice farmers here have adopted hybrid rice when it is much more cost-effective than the traditional rice seeds. According to Dr. Malabanan, for the traditional rice seeds or inbred rice, cost of production which includes the last stage of threshing is between P35,000 " 40,000/hectare while the cost of hybrid rice seeds is somewhere between P30,000"P50,000/hectare. Income for inbred rice seeds is anywhere between P50,000"P60,000/hectare, while for hybrid, it is anywhere from P70,000"P150,000/hectare. InNueva Ecija, according to the SL Agritech consultant, which is an area where the hybrid technology has been embraced by many of its rice farmers, income has been reported to be as high as P200,000/hectare.
That hybrid rice definitely gives a much better yield has been over-emphasized by the technology developers, yet our rice farmers are still very reluctant to go into it. SL Agritech is already into commercial scale production of its hybrid rice seeds and is set to conquer many foreign lands. It is now the No. 1 hybrid seed company in tropical Asia. Yet, our very own farmers have yet to get their feet wet in this technology. Why is that?
The key still lies in info technology, and the burden here lies with the government. With a yield that translates to almost triple that of the traditional rice seeds, the small farmers can indeed realize bigger profits from their land and on a bigger scale, the country can attain rice sufficiency in just a few years. We are a rice-producing and rice-eating land, and we should be able to do much more than aim for the smaller niche in the global market where red, brown and black rice belong. Our premium white rice like the Jasponica and Miponica, the more popular varieties of the local Dona Maria brand, is just as white, just as fragrant and just as fluffy as the much-touted Japanese and Jasmine rice of Thailand. We already have the rice technology " why have we not reached their stature in the global market?

Mabuhay!!! Be proud to be a Filipino.??

Author: Ray Butch Gamboa
Date: August 16, 2014
Source: Philippine Star

Investing in human capital is key to sustain high growth rate " PIDS
by Edu Lopez
August 16, 2014
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The Philippine Institute of Development Studies (PIDS) has stressed that investing in human capital is a key factor that can sustain the high growth rate the Philippines has been experiencing in the past years.

PIDS consultant Dr. Jose Albert said that education and health are crucial in achieving labor effectiveness and productivity. The poor, however, are confronted by the high rate of unemployment, underemployment, and low incomes.

Albert noted that people with access to education and health have better chances of getting well-paying jobs. Education is a fundamental long-term solution to the Philippines development challenge. It is a way to escape poverty and achieve better future and higher incomes, said Albert.

Albert stressed the need to improve the quality of education aside from attaining universal primary education. It is crucial to keep children in school, maximize their learning, and ensure that they complete their schooling.

He noted that despite the growth of the Philippine economy in the past years, the gap between the richest and the poorest Filipino households in terms of health financing, access to services, and health status has not significantly improved.

A policy note titled The Puzzle of Economic Growth and Stalled Health Improvement in the Philippines, by PIDS consultant Oscar Picazo and co-authors stressed that while macroeconomic growth and financial stability are important, the goal of a countrys growth efforts should be human development in a sustainable environment.

On top of these is the pressing need for job creation. In 2013, the unemployment rate was 7.3 percent while underemployment stood at 19.8 percent. Given this backdrop, Drs. Aniceto Orbeta, Vicente Paqueo, and Leonardo Lanzona, in a PIDS study titled Labor Policy Analysis for Job Expansion and Development underscored the importance of addressing the jobs challenge through the massive expansion of poverty-reducing jobs and sustained human capital development through education and training.

Dr. Rafaelita Aldaba, in The Philippine Manufacturing Industry Roadmap: Agenda for A New Industrial Policy, High Productivity Jobs, and Inclusive Growth, stressed that the manufacturing sector can provide higher wage and higher productivity jobs than the services sector.//

Author: Edu Lopez
Date: August 17, 2014
Source: Manila Bulletin

MANILA - The changeover to the K to 12 Program need not dislodge some university instructors and non-academic support staff -- not even temporarily, House Deputy Majority Leader and Makati City Rep. Mar-Len Abigail Binay said Sunday.
We are encouraging higher education institutions to run their own senior high school programs. This way, they can keep their potentially affected instructors, mostly of GE or general education subjects, gainfully employed throughout the two-year transition phase, Binay said in a news release.
Universities and colleges nationwide are anticipated to face a big and sudden decline in freshman enrollees between 2016 to 2018, as 1.1 million students originally set to graduate from secondary schools are kept for another two years in senior high on account of the switch to K to 12.
A preliminary study by the Philippine Institute for Development Studies indicated that between 12,000 to 33,000 college instructors, mostly of GE subjects, may be temporarily idled over the two-year shift to K to 12.
But this does not have to be the case, according to Binay.
Colleges may decide to put up their own two-year senior high schools. They may then laterally harness their affected college instructors to teach senior high school subjects during the transition, without diminution of benefits, including tenure, Binay said.
This is one practical approach to address concerns that some college instructors and non-teaching auxiliary personnel might be rendered temporarily unoccupied, she said.
K to 12 adds two years of senior high school to basic education in order to allow students to fully master concepts and skills, develop lifelong learners, and prepare graduates for tertiary education, middle-level skills development, employment, and entrepreneurship.
The program covers Kindergarten and 12 years of basic education -- six years of elementary (Grades 1-6), four years of junior high (Grades 7-10), plus two years of senior high (Grades 11-12).
Running their own senior high school programs will also enable universities to keep on generating tuition income despite the temporary drop in (college) freshman enrollees, Binay pointed out.
This is a viable remedy, especially for colleges that currently do not have any high school divisions, she said.
Of the 1,652 private higher education institutions in the country, at least 830 currently do not have their own high schools.
Colleges without high schools and with student populations of less than 1,000 will likely be most affected by the abrupt slump in freshman enrollees and potential loss of tuition income between 2016 to 2018, according to the Commission on Higher Education.
Binay said she does not expect the K to 12 shift to affect state-run universities and colleges in a big way since they enjoy (government) subsidy and are less dependent on tuition income.
The lawmaker previously said Congress is expected to create thousands of new teaching posts for the public school system to realize K to 12 under the Enhanced Basic Education Act of 2014.
Citing a Department of Education (DepEd) preliminary report, Binay said up to 81,637 new senior high school teachers may be required upon the rollout of K to 12 between 2016 and 2017.
The report assumes that some 1.1 million Grade 10 finishers of public junior high school will enroll in public senior high school by then, according to Binay.
Binay identified the senior high school subjects that are anticipated to entail additional instructors as follows: English; Filipino; Social Science; Humanities; Math/Statistics; Advance Math; Physical Science; Life Science; Information and Communications Technology; Accountancy, Business and Management (ABM)/Economics/Entrepreneurship; Philosophy; Technical Vocational Education and Training; and Physical Education.//

Date: August 17, 2014
Source: Interksyon TV5

CEBU, Philippines - A study conducted by the Philippine Institute for Development Studies recommended that the country should implement reforms to facilitate the expansion specifically of labor-intensive foreign manufacturing companies that can create job opportunities for a greater number of Filipinos.
The study, entitled Labor Policy Analysis For Jobs Expansion and Development authored by Vicente Paqueo, Aniceto Orbeta Jr., Leonardo Lanzona Jr. and Dean Gerard Dulay, emphasized that the Philippines will benefit from looking at those industries that China is becoming less competitive in.
These are labor-intensive industries that employ millions of workers. The Philippines can choose those industries that are suitable to its super abundant labor endowments and in which China and other more advanced countries do not have a leg up over the Philippines, it added.
Results showed that there is an immediate need for the Philippines to accelerate labor-intensive production, particularly the manufacturing of tradable commodities.
Facilitation means not just moderating minimum wage mandates and other restrictive labor regulations, but also pushing reforms that go beyond the responsibility of the Department of Labor and Employment, it said.
The authors highly recommended that reforms should effectively deal with critical binding constraints and counterproductive policies, including infrastructure underdevelopment, elevated cost of subsistence due to rice import policy, high cost of doing business, high energy cost, weak enforcement of contracts and protection of property rights, and confusing laws.
They reasoned that relative food price is one of the key drivers of minimum wages. This could be reduced by reforming regulations on the importation of rice.
Apart from increased labor-intensive manufacturing, the PIDS study also cited the need to improve investments in education and other human capital development and sustain total factor productivity gains.
These objectives require, inter alia, minimum wage reform which should be undertaken immediately while investors are looking for new places to locate labor-intensive production and the Philippine economy is getting another look as a potential destination, it said.
Meanwhile, even if the government has yet to magnify its clear blueprint in advancing the policies and programs to encourage more manufacturing companies to set up plants in the Philippines, the Cebu Chamber of Commerce and Industry will put its hands on this concern, initially by partnering with the Department of Science and Technology and other government agencies, and make possible programs that will fuel interests of both local and foreign manufacturing companies to set up plant or expand here.
In an interview, CCCI president Ma. Teresa Chan expressed belief that there are several programs in the government that are designed to further develop the manufacturing sector, but most of them are under used.
While the country needs to entice big foreign manufacturing investors, she said there is also an equal need to bring forth aggressive support for the local manufacturing sector in order to grow the other side of the economy.
In his recent visit to Cebu, National Economic and Development Authority director general Arseo M. Balicasan said that the Philippines government is now on its serious bid to attract more manufacturing investors to stir a stronger demand for blue-collar jobs.
Balicasan admitted that amid the good credit ratings of the Philippines, and rising Gross Domestic Product, poverty is still not properly addressed because of imbalance economic opportunity distribution.
Last year, the countrys GDP was at 7.2 percent and is targeted to reach within the 7 to 10 percent in the next two years.
We are a developed country in terms of structure, but poor in terms of people (standard of living), the secretary for socioeconomic planning said.
While the Philippines had been successful in providing job opportunities for white-collar jobs via the upbeat services sector, it was not able to strengthen the manufacturing side, in fact it lost its attractiveness to multinational manufacturing companies over the past few years due to sweetheart deals offered by neighboring countries including China.
The revival of manufacturing is vital, said Balicasan adding the government is now updating the Philippines Economic Development Program to prioritize six blue-collar generating industries such as agri-business, manufacturing, tourism, construction, logistics, as well as Information Technology.
The revival of attracting manufacturing investments to the Philippines is deemed crucial in order to balance the economic expansion, enabling the poor to participate the growth process, the secretary said. (FREEMAN)

Author: Ehda M. Dagooc
Date: August 09, 2014
Source: Freeman

TO further sustain its earlier gains in corn self-sufficiency for animal feedlot, the Department of Agriculture (DA) is now eyeing a more vigorous production for cassava by optimizing the potential harvest through clustering.

A cassava cluster is defined as having all actors in a particular geographic area, collaborating to build profitable value chains, which actually are producers and their organization, together with the input suppliers, processors, Antonio G. Gerundio explained in a document given to reporters over the weekend.

According to Gerundio, DAs special technical adviser for the Cassava Cluster Development Program, a cluster also includes the warehousing sector and those engaged in value-adding elements, such as traders, buyers and those in the business development services.

With the cassava now substituting a certain percentage of corn in animal feeds, the DAs corn and cassava program intervention includes assistance to farmers in the form of start-up planting materials, subsidy on farm machineries and post-harvest facilities for the organized producer groups.

Under the governments Food Staple Sufficiency Program, root crops are seen as alternative to rice as household food staple.

In the case of cassava, another major use is for livestock feed, Gerundio said.

The cassava sector has formulated a road map for 2011-2016, with a target of increasing cassava production from 2.1 million tons to 8.3 million tons based on yield improvement, to 20 tons per hectare, from the current 9.6 tons per hectare.

Part of the increase would go to increased food consumption, with a target of 5 kilos per year of cassava consumption per capita, up from the current estimates of about 3 kilogram per year, based on documents from the Bureau of Agricultural Statistics (BAS).

In a comprehensive value-chain study for agricultural produce that the Philippine Institute for Development Studies recently published, cassava production can net P21,000 per hectare annually, while processing the root crop into dried granules would net another P2,800 for every 5 tons of raw material.

Gerundio also explained that each cassava cluster would include a technical working group that will draft the strategic plan for the cluster. He said this group would be composed of representatives of the DA, local government units (LGUs) concerned, non-governmental and peoples organizations, and the private sector.

Gerundio said the output of this group would then be presented in a forum participated mostly by farmer-leaders from different production units of the cluster. A production unit will have an area of 10 to 25 hectares.

According to the BAS, production of cassava in the first quarter of 2014 was 494,860 metric tons (MT), which is 11.3 percent higher than the 444,660 MT produced in the same period last year.

The BAS said that production growth was due to an expansion of harvest areas in Isabela after the farmers there received financial assistance from some private companies. The BAS said assistance also included the active participation of LGUs to the DAs Cassava program in Zamboanga Peninsula.

There is also an increase of contract growing schemes from San Miguel Corp. and Phil-Agro in Bukidnon due to increasing demand for commercial purposes, the BAS added, noting high demand for industrial use that encouraged farmers to expand areas for cassava growing in South Cotabato, Lanao Sur, Maguindanao and Sulu.

The bulk of production for the period came from Northern Mindanao with 35 percent, followed by the Autonomous Region in Muslim Mindanao at 20 percent and Soccsksargen with 11 percent.

Production in the first quarter was equivalent to 22.7 percent of the five-year annual average cassava production of the country, the BAS said.//

Author: Alladin S. Diega
Date: August 11, 2014
Source: BusinessMirror

MANILA, Philippines " Opposition Senator JV Ejercito sought to verify the claims of President Benigno Aquino III but the Presidents allies came prepared with their own facts to show gains under his leadership.

Ejercito delivered on Monday, August 11, a privilege speech known as contra-SONA or a response to Aquinos State of the Nation Address (SONA) last July 28. It turned out to be Ejercito's own address, not the stand of the Senate minority as initially planned.

In the senators own words, the speech was constructive and non-combative but highlighted the need for inclusive growth, and pointed to problems in sectors like power and agriculture, and what he called a lack of a master plan and long-term vision. (READ the full speech here: Ang Makatotohanang State of the Nation ng mga Pilipino.)

Yet in their interpellation of Ejercito, administration allies Senators Juan Edgardo Sonny Angara and Cynthia Villar sought to show that Aquino is making efforts to improve economy and governance. The 3 are all neophyte senators.

The speech and the interpellation were done in a sober manner, without the usual name-calling and catfight that marked many previous Senate speeches.

Unemployment and poverty are severe, Ejercito said in his speech. Our unemployment at 7.25% is the highest in Southeast Asia. We also have the lowest foreign direct investments (FDIs) in the ASEAN region.

Angara though chose to compare the data with the numbers from past administrations. He said he just wanted to put on record that under the Aquino administration, FDI reached $3.9 billion in 2013, and $3.2 billion in 2012.

The former Aurora representative said the Philippines only reached $2 billion in FDI thrice in the past years and "never close to almost $4 billion now."

On unemployment, Angara again compared this to figures from past administrations, noting that it reached 10% in 1998, 11.8% in 2004 and 7.4% in 2010. Under Aquino, the senator said the figure was lower at 7% to 7.2%.

Would the gentleman agree that there is at least some effort on the part of the government?

Ejercito answered in the affirmative but reiterated that the Philippines lagged behind other Southeast Asian nations. He added that countries like Indonesia and Thailand were able to significantly bring down unemployment in the past 4 years.

Ejercito also expressed concern that companies such as Intel and Colgate moved their manufacturing operations to other countries in Southeast Asia, calling it an exodus.

Angara again had numbers ready on manufacturing, this time citing the United Nations Industrial Development Organization or UNIDO, which Aquino also mentioned in his SONA.

The growth in manufacturing between 2010 and 2013 was more than the average growth rate in ASEAN and almost doubled the growth in the global manufacturing sector, Angara said. The 200 countries in the world grew in the same period by 2.17%. The 10 ASEAN countries grew 4.97% and the Philippines grew 5.77%.

While we are far from China, Malaysia and Thailand with their established sectors, I think under President Noynoy Aquino, weve done the initial steps to improve the manufacturing sector, he added.

Ejercito commended the growth in manufacturing but said this will be undermined if the government fails to find a solution to the power crisis, a point Angara did not contest.

Yolanda claim huge insult

In his speech, Ejercito criticized Aquinos claim of a speedy government response to Super Typhoon Yolanda (Haiyan), a topic aid groups also questioned. (READ: Sona Fact Check: Half-truths about Yolanda)

Ejercito said a check on Yolanda-devastated areas shows that the pace of rehabilitation remains slow 9 months later, with almost 2,000 families still living in tent cities in Tacloban and over 5,000 who need to be relocated from so-called no build zones.

Im sorry, Mr President, but it seems [what the President said] is far from the truth, and its a big insult for those who died in the disaster!

The chairperson of the Senate agriculture committee, Villar later pointed out that she was with the Department of Agriculture in visiting the typhoon-hit provinces.

We went to 41 towns. I saw that they gave livestock, fishing and crop aid. I saw it with my own eyes and I also brought aid for the farmers.

Villar also responded to Ejercitos criticism of the governments lack of urgency in preparing for the Association of Southeast Asian Nations Free Trade Agreement (AFTA) and regional integration in 2015.

We have a sugar industry fund protecting the farmers. It will be brought to the [Senate] plenary to help them. We are trying to solve the high cost of capital. Were calling on the Land Bank to explain what it can do to bring down the cost of capital so our farmers will be competitive in 2015, Villar said.

No gains from CCT, anti-corruption?

In resuming his interprellation, Angara questioned Ejercitos statements on the effectiveness of the Conditional Cash Transfer (CCT) program, the governments flagship anti-poverty program.

The CCT involves giving poor families cash in exchange for the commitment of parents to ensure that their children attend school and get access to medical services.

This should also be complemented by cash-for-work and job generation programs. From whatever angle you look at it, CCT is a dole-out program, a temporary solution in the widening spread of poverty, Ejercito said in his speech.

In response, Angara cited studies from the World Bank and the Philippine Institute for Development Studies (PIDS) showing that CCT led to higher enrollment in schools and the use of preventive services like pre-natal care and immunization for children.

On Aquinos anti-corruption campaign, Ejercito criticized the supposed selective justice in the investigation into the pork barrel corruption scandal and Aquinos alleged refusal to heed a Supreme Court ruling on the Disbursement Acceleration Program (DAP).

Angara though pointed out that compared to former President Gloria Macapagal-Arroyo, Aquino does not invoke an executive order barring his Cabinet secretaries from attending congressional investigations like that on DAP last month.

The senator also noted the very underrated legacy of Aquino of giving more than double the budget for social services like education and health.

Angara closed his interpellation by echoing the President, and by raising a question.

Hindi aksidente ito. Ito ay dulot, bunga ng mabuting pamamahala. Ang tanong na lang siguro na madalas marinig natin: paano ito ipagpapatuloy ng mga susunod na pangulo? But that debate is beyond us.

(This is not an accident. This is a result of good governance. The question we often hear now is: how will the next presidents continue this?) "

Author: Ayee Macaraig
Date: August 11, 2014

Engineer Florencio Padernal was appointed administrator of the problematic National Irrigation Authority just last month but his office's P1-billion 2014 budget can already expect a whopping P28 billion budgetary boost from Malacanang by next year.

Out of that P28 billion, a total of P9.8 billion in irrigation funds have been allocated - this is not a misprint - for Metro Manila.

The allocation for the National Capital Region, according to the 2015 budget submitted to Congress by Secretary Florencio Abad, is even bigger by a billion than the proposed P8.8 billion irrigation funding for the rice granary that is Central Luzon.

Before NIA's budgetary pole-vault, no less than PNoy had publicly expressed his displeasure over the agency's performance, replacing its director Claro Maranan and directing Presidential Assistant for Food Security and Agricultural Modernization Francis Pangilinan to "clean up" the agency.

Not content, PNoy also had the NIA removed from the Department of Agriculture and attached the agency under the Office of the President, under Pangilinan's supervision, along with the National Food Authority, Philippine Coconut Authority, and Fertilizer and Pesticide Authority.

The new NIA administrator will even have greater flexibility in running his office since the agency's general administration and support fund will be increased to P1.6 billion from this year's P54.4 million, even though the NIA has not been authorized to hire any new personnel for next year.

Another agency transferred to Pangilinan, the Philippine Coconut Authority, will see its 2015 budget grow to over P4 billion from this year's P2.3 billion.

On the mass transport front, there are a couple of good tidings for as well.The capital-short Light Rail Transit Authority, in a welcome change, will get an additional P1.5 billion funding from the P1.3 billion the transit operator received in 2013.

And the Philippine National Railways management will have an extra room to maneuver with its 2015 budget being increased to P546 million from P344 million this year.

Other government corporations that have managed to win additional funding from Malacanang include the People's Television Network and Aurora Pacific Economic Zone and Freeport Authority.

The ailing Channel 4 will receive a P133-million infusion in its 2015 budget from the current P759 million just to achieve a target 5 percent audience share ratings a year before the 2016 elections.

The Aurora free port zone, on the other hand, will see its 2015 budget jump to P251 million from this year's P48.5 million. It has also obtained approval to hire 13 more personnel.

Over at the medical front, Malacanang has stepped up its pressure for the specialized hospitals to increase self-sufficiency and make money like the private sector by further reducing budgetary support to the medical centers.

The Lung Center of the Philippines, for instance, will see its current support reduced from P203 million to P186.7 million by next year.

And National Kidney and Transplant Institute, which received a substantial P1.27 billion outlay in 2013, already saw its budget allocation reduced this year to P229 million, before the Abad department decided to increase its lifeline to P429 million by 2015.

With the rank-and-file going out to the streets to protest, the Philippine Childrens' Medical Center will see next year a P21 million increase in its budget that has been frozen for two years. Rather than finance capital outlay, the modest hike with go to fund the additional hiring of 82 hospital workers.

Meanwhile, the Philippine Heart Center's budget, like an irregular heart beat, will see its proposed 2015 budgetary allocation going down to P346 million from P402 million this year, after increasing from P246.6 million in 2013.

And probably because of the increased acceptance of alternative medicine, the Philippine Institute of Traditional and Alternative Health Care will see its budgetary support gain by a minimal P200,000 next year to P50 million.

The PNoy administration also can not expect to win brownie points from the two other vocal sectors in this town, economists and performing artists.

The economics profession's funding agency, Philippine Institute for Development Studies, will see a figurative arm cut with its next year's budget slashed to P33 million, coming from a black swan-windfall of P346-million that PIDS received this year.

The dismal profession will all the more be unhappy since the 2015 budget proposal, not factoring inflation and the additional 19 staff, is P4 million less than what PIDS actually received in 2013.

Even their regulatory colleagues at the Philippine Deposit Insurance Corp. will have to endure a fair amount of budgetary discipline, with PDIC's 2015 budgetary support drastically going down to P116 million by next year from this year's P2.7 billion.

Over at the performing arts front, the already cash-starved Cultural Center of the Philippines will see its 2015 funding shrivel by P51 million from this year's P244 million.

For its last full-year in office, the PNoy administration is proposing to extend the premiere cultural agency a P193-million budgetary assistance, a figure much lower than what the CCP received in 2009, the last full year of the GMA administration, when the anti-GMA cultural board obtained P241.79 million allocation from the reviled president.

Even CCP's neighbor, the Center for International Trade Expositions and Missions will see its 2015 budget cut by P4 million to P186 million, despite gaining approval to hire 27 new personnel.//

Author: Vic Agustin
Date: August 11, 2014
Source: Interksyon TV5

IF the Philippines abandons its aim to achieve rice self-sufficiency, the government can have more financial room to strengthen other commodities where the country has a clear competitive advantage.

Leonardo A. Lanzona Jr., former chairman of the Economics Department of the Ateneo de Manila University (ADMU), said commodities where the country has a competitive advantage include mangoes, bananas and coconuts.

The government has this policy to be self-sufficient in rice. That may not necessarily be a good idea. Maybe we can focus more on the trading, on the tradable agricultural consumables instead of going into goods that we consume in the local [market], Lanzona said during the Eagle Watch briefing organized by the ADMU.

Lanzona, Eagle Watch Senior Fellow, said strengthening the countrys competitive advantage in other commodities will also help maintain the strong growth of the manufacturing sector. He noted that food manufactures make up a significant part of the countrys manufacturing output and growth.

In the first quarter this year, food manufactures accounted for over a third or around 38.8 percent of the output of the entire manufacturing sector in the January to March period, Lanzona said.

This is why Socioeconomic Planning Secretary Arsenio M. Balisacan said the decline in the performance of the industry sector was largely due to the decline in food manufactures.

Balisacan noted that Supertyphoon Yolanda disrupted manufacturing supply chains for food manufactures after it damaged billions-worth of crops and fisheries.

Government statistics show food manufacture growth declined 0.3 percent, the lowest in 10 quarters. The last time the food manufacturing sector posted a decline was in the third quarter of 2011 at -9.1 percent.

In June the government-owned think tank Philippine Institute for Development Studies (PIDS) said the Aquino governments rice self-sufficiency policy is obsolete and costly for taxpayers.

In its Policy Note, PIDS Senior Research Fellow Roehlano M. Briones and Research Analyst II Danileen Kristel C. Parel said that, while the Department of Agricultures (DA) plan to be rice self-sufficient by 2013 was implemented, this plan has failed and even caused the ballooning of government debt.

The authors said this obsolete policy has cost taxpayers a debt worth P156 billion as of 2009, courtesy of the National Food Authority whose buy high, sell low policy is draining government coffers.

To remedy the situation, the authors said that, with the Quantitative Restrictions (QR) on rice expiring by 2012, the government is faced with a unique opportunity that could allow the Philippines to attain food self-sufficiency through regional and multilateral negotiations via the World Trade Organization.

The study recommends that after 2012, the rice QR should be terrified, which will make importation liberalized and subject to payment of custom duties. This will help ensure enough supply in rice in the country, given that the Philippines no longer has a competitive advantage in rice production.//

Author: Cai U. Ordinario
Date: August 08, 2014
Source: BusinessMirror

It was supposed to speed up the disbursement of state monies for high-impact projects that have been badly needed by the people. Yet while there are government agencies that offer glowing reports on the status of the projects assigned to them with funding from the controversial Disbursement Acceleration Program (DAP), several admit to pale to poor performance when it comes to implementing DAP projects.

In a number of cases, the quick-disbursing projects approved from October 2011 to July 2013 are now locked in delays, had been realigned or covered by continuing appropriation orders from the Department of Budget and Management (DBM), or are scheduled for completion by end of 2014 yet.

In still a few cases, agencies say they received and spent only portions and not the total amounts of DAP funds that DBM had reportedly released to them. Other agencies meanwhile say they have yet to receive balances of their DAP funds from the DBM as of July 2014.
Over the last fortnight, PCIJ sent separate letters of inquiry about the status of project implementation to 55 national agencies and agency units that received DAP funds.

As of this writing, the top and senior officials of at least 25 agencies have responded and shared supporting reports and documentation. A few others told PCIJ that they would soon send in their replies. DBM has named about 50 agencies as recipients of DAP funds for a cluster of 116 projects.

Interestingly, however, the officers of three uniformed agencies"Armed Forces of the Philippines, Philippine Air Force, and Presidential Security Group"were stingy with data. They said that the Department of National Defense (DND) had issued guidelines saying that all queries about DAP projects should be referred to DND, and that DND itself would be the one to furnish PCIJ copies of DAP-related documents.

As of this writing, neither comments nor documents have been given by the DND and the three agencies to PCIJ.

The other agencies that responded, though, revealed a program that was oftentimes short on speed and long on confusion.

Then again, the Commission on Audit (COA) had earlier said that many DAP-funded projects" particularly those in the Autonomous Region in Muslim Mindanao (ARMM)"had been implemented through a circuitous transfer of project funds that employed webs of memoranda of agreement between and among national and local government agencies.

Not all funds out

The ARMM regional government itself said that as of July 22, 2014, or nearly 30 months after it received a mammoth infusion of P8.6 billion in funds from DAPs Tranche 1, at least P379.034 million had not yet been downloaded to ARMM line agencies.

In addition, P200 million of the bulk of the P8.6 billion that was downloaded straight to five national departments was not covered by a Special Allotment Release Order or SARO, and hence, not used at all. The P200 million was supposed to have been released to the Department of Health (DOH)s central office. (See Sidebar)

In reply to PCIJs queries, ARMM had forwarded the 70-page Transition Investment Support Plan that was published just last month.

ARMM was supposed to have received funding for TISP under the DAP-funded project called Comprehensive Peace and Development Intervention."

In total, the project"which was supposed to be carried out through multi-layered memoranda of agreement using four implementation schemes among five executive departments and their regional offices, six ARMM line agencies, local government units, and others"is a massive mix of development interventions in the five provinces of ARMM. As of the 2010 national census, ARMMs total population is 3,256,140.

While ARMMs own 70-page report said that in 30 months, TISPs composite accomplishment rate is a modest 82 percent, it also said that some projects had yet to even start for a variety of reasons.

Done by end-2014

For sure, DAP projects under the Laguna Lake Development Authority (LLDA) would be simpler than those in ARMM. Yet as of July 23, 2014, only one of LLDAs 10 DAP projects had been completed, six have yet to be started in August 2014, or are due for completion by December 2014, and three had been reprioritized and are no longer covered under its P270-million DAP funding.

LLDA received P270 million from DAPs Tranche 2 sourced from savings generated in the 2010 GAA for 10 various infrastructure upgrades and development projects. It sent PCIJ documents on "status of implementation" and "status of fund transfer to LLDA of projects funded by DAP, along with a letter signed by J.R. Nereus Acosta, Secretary/Presidential Adviser on Environmental Protection and LLDA general manager.

Among other things, the documents showed that three projects were eventually taken out of the DAP program.

The first two"the procurement of motor vehicles for the LLDA and the LLDA Project Feasibility Team. had been reprioritized based on DBMs approval letter dated June 22, 2012. The third, the Laguna de Bay Water Quality Management Restoration Parks had been reprioritized per DBM approval dated Feb. 26, 2013.

These projects are no longer part of the P270.0M funds from DAP, LLDA said.

In contrast to LLDAs admission that only one of its 10 DAP projects had been completed, DBM last July 14 reported 100 percent completion of two LLDA projects"the LLDA office building and laboratory and the concreting of road in Teresa, Rizal.

DBM said it had disbursed P153 million for the LLDA building and P43.9 million for the road project. Different figures came form the LLDA report, however.

For the construction of its building, LLDA said it incurred project cost of P190 million (or P37 million more than what DBM had disbursed) but only P7 million for the road project (or P36.9 million less than what DBM had disbursed).

PCIJs queries also prompted clarifications from several agencies on the amounts involved for their own supposed DAP projects and the sources of the monies.

Extended negotiations

Among these was the National Food Authority (NFA), which reportedly received P121 million under the Department of Agriculture-NFA Mechanical Grains Dryer program. The amount was listed in DBMs list of projects covered by DAP Tranche 1 in October 2011. Among these was a P2.7-million project sub-component on the retrofitting of six mechanical dryers in Regions 8 and 10 already covered by a European Union grant.

An NFA engineer told PCIJ that he had found out only recently that the P121-million fund came from DAP. None of the office documents covering the project, in fact, made any reference at all to DAP as fund source.

In any case, a memorandum dated April 12, 2014 signed by NFA administrator Orlan Calayag and approved by DA Secretary Proceso Alcala showed that two years after the agency was supposed to have received DAP funds, NFA had had to review where exactly it must locate the dryers.

This is in connection with the ongoing implementation of the DA-funded improvement of NFA existing mechanical grain dryers and acquisition of new units including the retrofitting of biomass furnace for existing mechanical grain dryers nationwide, Calayag wrote. May we request your approval that the NFA be authorized to amend the original listing of mechanical dryer and its sites for repair, rehabilitation, upgrading to suit with the actual situation in the field?

As we implement the project, Calayag said, it is expected that there will be changes in the original listings, considering that it was prepared after the signing of Memorandum of Agreement (MOA) in 2012 and the implementation started in 2013.

But based on a memo dated Aug. 24, 2012 and signed by Jose D. Cordero, NFA assistant administrator for marketing operations, it appears that up until mid-August 2012 there had been no decision yet on the approval or disapproval of the P121 M funds from the Department of Budget and Management.

On Aug, 29, 2012, Alcala himself had written DBM Secretary Florencio Abad to request the issuance of the Special Allotment Release order (SARO) and corresponding Notice of Cash Allocation for the subsidy for dryers in the amount of one hundred twenty one million pesos (P121,000,000.00).

The release of the said fund is urgently needed for the implementation of the rehabilitation, upgrading, and/or acquisition of mechanical dryers in support of the Food Staple Sufficiency program of the DA, wrote Alcala.

Delayed by a year

A DBM budget specialist then responded that, per information from the Office of the Secretary, the said amount is included in the FY 2012 Disbursement Acceleration Program, now awaiting approval from the Office of the President.

Finally, on Dec. 28, 2012, the DBM wrote the NFA to say that the SARO and NCA for the project had been approved by the President on Dec. 21, 2012, chargeable against the 2012 General Appropriations Act in accordance with the FY 2012 Disbursement Acceleration Program.

By May 10, 2014, NFAs Calayag was still writing Abad to report that the project had yet to be completed. Calayag requested the cash release of P56.83 million to cover P25.38 million in ongoing/completed projects without release, P22.28 million projects with notice of award, P106,321 for actual MOOE (maintenance and other operating expenses), and P9.06 million balance of cash release.

From Calayags memo thus, it appears that as of May 2014"nearly 30 months after the DA-NFA project to acquire and retrofit mechanical dryers was enrolled under DAPs first tranche on Oct. 12, 2011"NFA had actually received only P23.6 million in actual cash release. Notably, too, the memo made no mention of DAP.

Palace offered it

In the case of the Philippine Childrens Medical Center (PCMC), it was apparently the Office of the President that offered the public hospital a P280-million windfall. As PCMC Deputy Director for Hospital Support Services Jara Corazon O. Ehera recalls it, it was sometime in late 2011, during an off-budget season, that PCMC Director Julius Lecciones received a call from the Office of the President asking him to submit a list of the hospitals needs within the day. The call came at 10 a.m.; according to the caller, PCMC should turn in its list by 3 p.m.

Ehera said PCMC complied with the request, submitting a list of projects worth a total of around P280 million. By December 2011, the projects were approved and PCMC received its P280 million.

Ehera said the PCMC was told that monies came from the Presidents Fund, which was supposedly pooled from national savings. It was reportedly designed to support agencies that got less in the 2011 General Appropriations Act. She said that it was only after DAP hit the headlines and struck controversy that PCMC officials learned that their P280 million was part of DAP.

PCMC spent most of 2012 bidding out the projects and even created a special Bids and Awards Committee (BAC) because the fund had to be obligated within the year.

In 2013, PCMC asked DBM, through Undersecretary for Operations Mario Relampagos, for authority to realign some of the DAP funds for retrofitting following a structural investigation of their facilities.

PCMC conducted the investigation in compliance with an order from the Department of Health (DOH) for public hospitals to check their capacity to withstand earthquakes in light of the occurrence of such incidents at that time.

Most of the PCMC projects involving the acquisition or purchase of equipment had been completed. The infrastructure projects have been put on hold, however, after the Supreme Court on July 1, 2014 voted 13-0 to declare DAP unconstitutional in part.

Aside from the P280 million that PCMC received for Capital and Equipment Renovation, the hospital also got P12 million for Financial Assistance for Indigent Patients under DAP.

An Indigency Fund had long been provided to PCMC by DOH. But a PCMC official told PCIJ they were not aware that in 2011, the fund was sourced from DAP.

Not all for stem cell

The Lung Center of the Philippines (LCP), meantime, said it received P105 million in DAP funds, broken down into P70 million for its Stem Cell Program and P35 million for its Pediatric Pulmonary Program.

But contrary to DBM reports, an official of LCP said that only P35 million was actually used for the Stem Cell Program. The balance of P35 million was shared on equipment and supplies common to the stem cell lab and the other departments of the LCP.

The hospital also said it got the funds only in 2012, and not in October 2011 when DBM reported it as having been approved for release.

On October 12, 2011, under DAPs first tranche, DBM said two LCP projects were approved for funding"P35 million for its Pediatric Pulmonary Program and P70 million for its Bio-Regenerative Technology Program (Stem Cell Research). DBM reported that the two amounts had all been entirely released to LCP.

Dr. Jose Luis Danguilan, LCP executive director, said that the hospital used DAP funds it received in 2012 to acquire equipment for its Bioregenerative or Stem Cell Program and Pediatric Unit.

Danguilan added that in order to spend the money wisely, LCP decided that the equipment needed for the Stem Cell Program could also be used by other units of the hospital, including the Pathology and Laboratory, Thoracic Surgery, Surgery, Pulmonary Medicine, and Radiology departments.

Thus, he explained, out of the P70 million allotted to the Stem Cell Program, only P35 million was used exclusively for the purpose.

LCP shared with PCIJ copies of the Special Allotment Release Orders (SAROs) covering the hospitals DAP shares. LCP also provided PCIJ a summary of the number of patients for year 2012 to July 2014 in the Molecular Diagnostics and Cellular Therapeutics Laboratory, and list of equipment/supplies acquired through DAP.

Not DAP at all

The Home Guaranty Corporation (HGC), for its part, insisted that it had no project under DAP and did not receive DAP monies at all.

Corazon G. Corpuz, acting executive vice president of HGC, in a letter to PCIJ said it is not correct to enroll a P400-million equity infusion for HGC as a DAP project.

The amount, she wrote, was the unreleased P400-million balance of the P600 million in HGC equity that had been actually appropriated in the 2009 General Appropriations Act (GAA). In other words, she said the supposed DAP project was money that HGC should have actually been given earlier but had been withheld for still unknown reasons.

By comparison, the National Economic and Development Authority (NEDA) did not deny that it received DAP funds, although it said it got less than what was proposed. In a reply letter to PCIJ that was signed "For the Director-General" by Kenneth V. Tanate, Assistant Director-General and Chief of Staff, NEDA said the proposed total funding requirement for Various Infrastructure Improvement Projects (VIIP) was P207.04 million. But NEDA said it received only P206,896,432 under DAP for VIIP, which included the construction of new NEDA Regional Office buildings and the renovation or improvement of existing NEDA buildings.

Other agencies also acknowledged receiving DAP funds, although their responses varied in terms of details about how the monies were spent.

Subsidy for LGUs

The Department of Agrarian Reform (DAR), for one, explained that its DAP money went to the "Agrarian Reform Communities Project 2 or ARCP2.

In its reply letter to PCIJ that was signed by Justin Vicente La Chica, head executive assistant at the office of Secretary Virgilio de los Reyes, DAR described ARCP2 as a DAR poverty-reduction project funded by the Asian Development Bank (ADB) in support of the Medium-Term Philippine Development Plan.

(The) ARCP2 project requires LGUs to put up, as equity counterpart, 27% of total project cost or US$56 million, it added. But because LGUs were unable to put up the equity requirements, DAR said that it requested the Office of the President and the DBM to subsidize the LGUs equity requirements.

Of its P1.29-billion allocation from DAP, DAR said P891.97 million was released in six installments to the ARCP2 project from January 2012 to August 2013.

There was also the Commission on Higher Education (CHED), which sent PCIJ a press statement saying DAP funded, among others, the modernization and upgrading of infrastructure and facilities; supported research, development, and extension (RDE) activities to benefit communities; and strengthened the executive development program.

40 research projects

According to CHED, for RDE, a total of 40 projects from 21 SUCs (state universities and colleges) were approved for funding in the amount of PhP482.11 million.

The projects focused on priority themes such as climate change impact and mitigation, disaster science, biodiversity, agriculture and food security, health, alternative sources of energy, education, and other societal concerns at the regional and national levels.

CHED said these projects are expected to produce research and development technologies to benefit more than 400 poor barangays. Among these, it said, were:

Bicol Universitys research on the nutritional and microbiological analyses of smoked fish, pinangat and pili to lengthen their shelf-life and produce green packaging for these export-potential products.

Don Mariano Marcos Memorial State Universitys climate-resistant dragon fruit and other tropical fruits to increase food production and income.

Mindanao University of Science and Technology developed a remote and early warning system for flood and Geomorphological Risk Alleviation Measures for watersheds in Cagayan de Oro.

In addition, the executive development program for SUCs presidents, vice presidents, other academic and administrative officials has provided short term training courses to 1,300 participants with a funding of PhP165 million, CHED reported.

These courses were supposed to enhance competencies in strategic planning, quality assurance, research, development and extension management, performance-based budgeting, asset development for resource generation, among others.

4,041 grantees

DAP funds channeled through CHED also reportedly extended grants-in-aid for poor but deserving students. According to CHED, P500 million of DAP monies went to Student Grants-in-Aid for Poverty Alleviation (SGP-PA) that benefitted 4,041 grantees.

The program, CHED said, is the governments innovative and generous scheme that intends to address poverty by increasing the number of college graduates among the poorest of the poor households.

The grantees are identified by the Department of Social Welfare and Development from the conditional cash transfer beneficiary families and are encouraged to enroll in priority courses such as science and technology, agriculture/fisheries and entrepreneurship, said the agency. It added that the grantees received full support for tuition, monthly living stipend, and other allowances.

SGP-PA graduates are expected to acquire high value jobs that will lift their families out of poverty and generate employment/entrepreneurship within their families and communities, CHED added. It was mum though on whether or not the beneficiaries had actually graduated from their courses.

Global PR blitz

The Department of Tourism (DOT) was more generous in sharing details on where its DAP funds went. In an eight-page reply to PCIJ, Atty. Eugene T. Kaw, Assistant Secretary and Chief of Staff of Secretary Ramon B. Jimenez, detailed out the budget it received for several projects and their respective results.

DOT has received four tranches of DAP for various projects, aside from the P5 billion that went to the Tourism Road Project that the Department of Public Works and Highways (DPWH) was tasked to implement.

DOTs DAP monies covered such projects as the transfer of offices of the DOT and its attached agencies for P200.26 million; implementation of the Philippines global tourism campaign for P500 million; the Roxas Boulevard redevelopment project for P250 million; the structural retrofitting of Cine Corregidor for P25 million; and emergency repairs for the Corregidor North Dock for P46.7 million.

Of the P200.28 million that went to the transfer of DOT offices, Kaw reported that P5.6 million went to consultancy services, P67.8 million to interior fit-out, P73 million to furnitures (sic) and fixtures, P44.52 million to rental expenses, P5.3 million to network and wi-fi services, P2 million to audio-visual system, and P2.04 million to CCTV network.

This project covered the renovation and eventual transfer in November 2012 of the DOT main office to its new building at No. 351 Senator Gil Puyat Street in Makati City, from its former offices at the National Museum complex in Manila.

The new DOT building also houses, according to Kaw, a new Tourism Information Center, a new Investment Lounge, the improved DOT Resource Center, as well as the offices of DOT-NCR and DOT-Region IV, and the Philippine Commission on Sports Scuba Diving.

More fun in PH

In January 2012, DOT launched its Its More Fun in the Philippines campaign that Kaw said was the trigger for DOTs P500-million global tourism campaign project.

The project involved media advertising in key markets such as Korea, United States, China, Japan, Taiwan, Singapore, Malaysia, Hong Kong, the Middle East, Australia, India, and Europe, DOT said. The campaign was aimed at achieving DOTs goal of 10 million tourist arrivals by 2016.

The P500-million project was awarded to Dentsu Philippines, after a successful bidding, said DOT. Dentsu Philippines was established in 2001. Its president and executive director is Nonna Nanagas.

Kaw said that, the digital campaign delivered more than 950 million impressions, 514 million more than what was planned. In addition, he said, the print campaign delivered 63 million copies worldwide, the TV campaign involved 4,900 (TV ad) spots globally, reaching more than 300 million households.

Films and film fests

As for the Film Development Council of the Philippines (FDCP), the reply sent by FDCP-PBAC Chairman and FDCP Executive Director Teodoro C. Granados noted that all the information regarding its DAP-funded projects is available on the Councils website.

Nevertheless, FDCP furnished PCIJ documents on the rationale, status of implementation, copies of SAROs and list of its projects funded by P20 million from DAP through its continuing appropriation from the 2010 GAA.

Granados also said the Councils DAP monies covered five projects, although he did not say just how much each received. The projects involved the establishment of the National Film Archive (with 14,900 film elements from only 13,000 target film elements); the establishment of four local cinematheques in Baguio, Davao, Iloilo, and Marawi; the holding of five local film festivals (in Davao, Cotabato, Zamboanga, Tawi-Tawi, and Iloilio); participation in two international film markets (Cannes and Hong Kong); and grants to film-makers for quality films and film organizations.

The last item supported the production of 28 films, including Ang Babae sa Septic Tank, Ang Mga Kidnapper ni Ronnie Lazaro, and Duwaya: Polygamy.

Granados in his letter to PCIJ also pointed out that since he assumed office in 2010, FDCP has received two Most Outstanding Accounting Office awards from the Association of Government Accountants of the Philippines. FDCP would like to get a third such award, he said, as it exemplifies our efforts in supporting the aspiration of the President (Benigno S. Aquino III) for clean and honest governance through the Daang Matuwid concept.

Like FDCP, the Development Academy of the Philippines (DAP) sent PCIJ documents along with a reply signed by Imelda C. Caluen, vice president and managing director of DAPs Center for Governance.

In the letter, Caluen said the Academy had received P5 million in DAP funding because it serves as the Technical Secretariat and Resource Institution of an inter-agency task force created under Administrative Order No. 25 and Executive Order No. 80 (performance-based incentive system for government employees and performance-based bonus) of the Aquino administration.

She also said the fund was used to defray the Technical Secretariats operating costs.

See posts, photos

Other agencies had less to say in response to PCIJs queries.

The National Archives of the Philippines did not provide information about its P50-million DAP funding. Instead, it referred PCIJ to the documents uploaded on the DBMs website.

The Philippine Heart Center gave no comments but provided copies of its letter to Abad, signed by executive director Manuel T. Chua Chiaco Jr., M.D., and photographs of equipment it acquired using its P357-million DAP share.

More data to gather

The Philippine Institute for Development Studies (PIDS) furnished PCIJ a one-page document stating the rationale behind its DAP project, its implementation status, and details on how it spent its P100-million DAP money.

Then there was the Bangko Sentral ng Pilipinas (BSP), which sent an email reply signed by BSP Public Affairs Director Fe de la Cruz. Attached to the reply were excerpts from the July 24, 2014 Senate hearing on DAP. The excerpts focused on the remarks made by Finance Secretary Cesar Purisima and Socio-economic Planning Secretary Arsenio Balisacan on the P30-billion equity infusion that BSP secured from DAP.

Of course, there was also the Department of Budget and Management that, in reply to PCIJs queries, sent copies of the documents that it had also uploaded on its website. Unfortunately, the documents lack data on the current status of the projects and their actual outputs. DBM said, however, that it is coordinating with all implementing agencies for the latest updates on the status of the projects. It said it would consolidate all information and send PCIJ a copy of this report as soon as it is finalized. "With reporting and research by Rowena F. Caronan, PCIJ, August 2014//

Author: Malou Mangahas
Date: August 07, 2014
Source: GMA News

The Philippine Institute Development Studies (PIDS) has urged the government to implement reforms to facilitate the expansion of labor-intensive manufacturing that can increase gainful jobs. A study entitled Labor Policy Analysis For Jobs Expansion and Development, underscored the need to accelerate labor-intensive production, particularly the manufacturing of tradable commodities. Facilitation means not just moderating minimum wage mandates and other restrictive labor regulations, but also pushing reforms that go beyond the responsibility of the Department of Labor and Employment, the study said. These reforms should effectively deal with critical binding constraints and counterproductive policies, including infrastructure Underdevelopment, elevated cost of subsistence due to rice import policy, high cost of doing business, high energy cost, weak enforcement of contracts and protection of property rights, and confusing laws.
The study noted that relative food price is one of the key drivers of minimum wages. This could be reduced by reforming regulations on the importation of rice. It stressed that the Philippines will benefit from looking at those industries that China is becoming less competitive in.
These are labor-intensive industries that employ millions of workers. The Philippines can choose those industries that are suitable to its superabundant labor endowments and in which China and other more advanced countries do not have a leg up over the Philippines, it added.
Apart from increased labor-intensive manufacturing, the PIDS study also cited the need to improve investments in education and other human capital development and sustain total factor productivity gains.
These objectives require inter alia minimum wage reform, which should be undertaken immediately, while investors are looking for new places to locate labor-intensive production and the Philippine economy is getting another look as a potential destination, it said.//

Author: Edu Lopez
Date: August 06, 2014
Source: Manila Bulletin