PIDS in the News Archived (January 2014)

Statistics or surveys provided by pollsters regarding self-rated poverty always vary and this is not what the government is basing its anti-poverty alleviation efforts on, President Aquino said yesterday. Please bear with me, but I dont govern on surveys. I govern based on facts, he told reporters who covered the groundbreaking for the 414-megawatt power plant of the Lopez-owned First Gen Co. in Barangay Sta. Rita here. Aquino pointed out the flaws in the latest Social Weather Stations survey, where most of the respondents were victims of man-made and natural calamities in the Visayas and Mindanao, who would logically say that life did not turn out well for them in 2013. He said that results on self-rated hunger are not a constant figure. The President vowed to continue the conditional cash transfer (CCT) program for the poor in order to keep their children in school and making sure that the family members remain in good health. Perhaps what I want to highlight here is that the intervention we are making is not just for the short term but for the long term, Aquino said, adding that the program will not just be limited to grade school but will be extended to high school.
We are helping them improve their lot by making sure that they will be covered by the inclusive growth that we want to achieve. We want to give them skills so that they can actively participate in the growth of our economy, he said. The Aquino administrations 2014 budget for the CCT program has tripled to P62.6 billion, from a low of P29.2 billion in 2011. Presidential Communications Operations Office Secretary Herminio Coloma Jr. told a news briefing last November that allocations for the CCT and 4Ps (Pantawid Pamilyang Pilipino Program) programs have increased every year, and an additional P10 billion was allotted for this years budget. Coloma said the latest augmentation in the budget of the Department of Social Welfare and Development (DSWD) was based on the recommendation of the Philippine Institute for Development Studies. Budget records showed that when Aquino took over in mid-2010, the government sought " and obtained " Congress approval of its P29.2 billion in 2011 that gradually rose to P39.4 billion in 2012 and P44.3 billion in 2013. This is a far cry from the P10 billion former President Gloria Macapagal-Arroyo had allocated for DSWD in 2010, P5 billion in 2009 and P299 million in 2008.


Author: Delon Porcalla
Date: January 15, 2014
Source: Philippine Star

The importance of widening our industrial base and expanding our manufacturing sector cannot be overemphasized. Many of my regular readers know that I have been an advocate of this cause since day one and have written about it on several occasions. I have become a staunch supporter of the Department of Science and Technology (DOST) and Sec. Mario Montejo, precisely because of his strong belief that industrialization is the only means by which we can bridge the employment gap and narrow the chasm between the rich and the poor. To this end, the DOST has been channeling resources towards giving the manufacturing sector the technological inputs it needs to become truly competitive. The mining, electronics, agriculture and ICT industries have been great beneficiaries of DOSTs work. Last week, I came across an avalanche of data that suggests Secretary Greg Domingo of the Department of Trade and Industry (DTI), along with a host of industry groups, have seriously taken up the advocacy as well. Dialogues have been ongoing as to how the country can revive the manufacturing sector. Secretary Domingo has asked the Philippine Institute of Development Studies (PIDS), an agency chaired by NEDA Chief Sec. Arsenio Balisacan, to take the lead in the planning. PIDS has since initiated talks with 30 industry organizations to ascertain how government can help fully realize their potentials. Each industry was asked to draft their own development roadmap, one that would take them from where they are today to a position of regional competitiveness. So far, the roadmaps of the chemical, pulp and paper, copper and rubber industries have already been submitted. PIDS expects 26 other industries to complete their respective roadmaps this year. This is an incredible development. This proves that the executive branch fully appreciates how the economy will never be able to make the great leap forward unless it goes through industrialization. I can only hope that this movement snowballs to affect both the legislature and general public. Painful reforms need to be rolled out to realize our industrial revolution and would require nothing less than a broad-based buy-in on the concept.

Author: Andrew James Masigan
Date: January 26, 2014
Source: Manila Bulletin

THE DEPARTMENT of Trade and Industry will start reviewing the Japan-Philippines Economic Partnership Agreement (JPEPA) by next month, with a DTI official saying the country will push for more benefits for agricultural products. We will be convening the Philippine panel by February to make an assessment of our interests in the review, DTI Undersecretary Adrian S. Cristobal, Jr. told reporters on the sidelines of the ASEAN Comprehensive Investment Agreement: Challenges and Opportunities for Philippine Business forum last Friday. The review is to determine how the Philippines can increase the utilization of its only bilateral free trade agreement (FTA). Mr. Cristobal said the Philippines will pitch for improved access to agricultural products. On the Japanese side, I think industrial goods such as automotives and steel will be on top of their list, he added. Asked for his individual assessment of the JPEPA, Mr. Cristobal said: Positive. The gains [since JPEPAs implementation] are significant. Japan has become a top market for exports and source of investments. JPEPA was signed by the Philippines and Japan in September 2006. It was immediately ratified by Japan in December that year, but it took the Philippines two more years to do the same due to strong opposition from lobby groups. Concerns were raised about the potential serious negative impacts of opening up the economy as a result of the trade agreement, such as significant dislocation in the sensitive automotive sector and dumping of toxic waste. A policy note issued last month by state-run Philippine Institute for Development Studies, however, said these concerns failed to materialize and described the overall implementation of JPEPA since it began as positive as well. Although there is some natural leveling off in succeeding years, the average yearly trade volume and value from 2009 to 2012 are significantly higher than in the four years immediately before the JPEPA, read the policy note, written by Veredigna M. Ledda and Erlinda M. Medalla. In addition, the countrys exports to Japan, such as bananas, pineapples, and tuna, which had already been making inroads into the Japanese market prior to JPEPA, increased even more after the agreements implementation. Skills training and transfer of technology were also said to have secured a more sustainable basis for development for the Philippines.
Japan was the countrys top trading partner in 2012, with exports to Japan reaching $9.88 billion and imports amounting to $6.47 billion.


Author: Daryll Edisonn D. Saclag
Date: January 26, 2014
Source: BusinessWorld

IN the likelihood of a free-trade agreement (FTA) between the Philippines and European Union (EU), big processors, exporters of fish and the fish consumers in general will be the gainers, according to a recent study by the Philippine Institute for Development Studies (PIDS). Potential losers are the small-scale fishermen who will face lower prices for their catch due to increased competition from imported fish and small-scale fish processors and marketing agents, including women, who will also face lower prices for their products, PIDS said in a report issued recently. The governments economic research arm, however, said the overall economy will experience increased fish production and improved balance of trade.
Nonetheless, the report cited the trade-off for this is that fish stocks and fish resources will be abused even further if the increased fisheries trade brought about by the FTA results to unsustainably managed exploitation. The potential Philippine-EU FTA would include a mutual elimination of tariffs between the country and EU to increase the quantity and exports of fisheries products, according to the report. The mutual elimination in tariffs will have mixed results, the study said, in terms of fisheries imports. Imports of aquaculture, pearl culture and pearl-gathering products will decrease and will improve the balance of trade, while imports of processed fish products and seaweeds will increase which will lower the balance of trade, said the PIDS study, adding that in percentage terms, the fall in imports of fisheries products is highest among aquaculture while the increase in imports is highest for processed products. Thus, processed products will benefit most from the FTA while aquaculture products will be disadvantaged the most, the paper explained. The paper argues that the negative effect of freer trade on fisheries to the small fishermen is due to the structure of the chain of custody of procurement particularly for tuna exports. Also, very few of the commercial fishers who were the primary suppliers of tuna for export processing, are owner-operators. The rest, the study said, got merely the crew share or wages that failed to see an increase because some of their catch was exported. The importation of fish will also further affect group of women fish workers, or those selling locally caught fish in the wet markets, because the imported fish may compete with the local fish sold by them so as a result the women may have to bear the loss from unsold fish as a consequence.


Author: Alladin S. Diega
Date: January 26, 2014
Source: BusinessMirror

Senator Loren Legarda today renewed her call for greater climate change action, particularly through significant reductions in greenhouse gas emissions and promotion of renewable energy development. Legarda, the United Nations Champion for Disaster Risk Reduction and Climate Change Adaptation for Asia-Pacific, made the call in her keynote speech at the ThomasLloyd Cleantech Forum 2014 today in Frankfurt, Germany. "Findings of the Intergovernmental Panel on Climate Change (IPCC) show that there is 95 percent likelihood that human activity is the cause of global warming. Unless drastic cuts are introduced, global temperatures are projected to increase by 0.3 to 4.8 degrees Celsius by the end of this century. The IPCC warns that a 1.5 to 2.5 degrees Celsius increase in global mean temperatures from pre-industrial levels threatens extinction of 30 percent of all species," she explained. According to the 5th IPCC Report, human activity released 545 gigatons of carbon dioxide--the main greenhouse gas from 1750 to 2011. It is projected that if 1,000 gigatons of carbon dioxide is emitted, which at current rates will likely occur between 2040 and 2050, there is a one-in-three possibility that the 2 degrees Celsius limit above the pre-industrial level will be exceeded. Of the carbon dioxide emitted, 2/3 was due to the burning of fossil fuels with 1/3 caused by deforestation and land-use change. In the last decade however, 90 percent of rise in carbon dioxide levels was due to burning of fossil fuels. Recent events, however, have shown that conventional energy, which traditional views seem to favor, does not and cannot guarantee low electricity prices. "A study by the Philippine Institute of Development Studies reports that one out of five people or 130 million in ASEAN lack access to electricity. The same study said that 16 million Filipinos remain to have no access to electricity. This is a market that can very well benefit from renewable energy development in the region," she added. "Renewable energy and energy efficiency technologies are valuable components of low carbon emissions development strategy. They need to be embraced by everyone. Our search for responses to climate change realities requires the climate proofing of our energy sector," said Legarda.

Author: Loren Legarda
Date: January 24, 2014
Source: Senate Press Releases

SUN.STAR Media Group in partnership with professional services firm SyCip Gorres Velayo and Co. (SGV and Co.) will hold an Economic Forum on the 2015 Asean Economic Community (AEC) on Feb. 19 at the Marco Polo Plaza Cebu. The forum will look into opportunities and challenges the AEC will bring to the Philippines at a macro and micro-level perspective. With the AEC, we are blurring the national borders. Of course, with this, there will be obstacles and we will discuss this in the forum, said Sun.Star economic forum lead Caesar Atienza.` AEC is the goal of the regional economic integration of the 10 country-members by 2015, which will pave the way for a free movement of goods, services, investment, skilled labor and a freer flow of capital. It sees a single market and production base, a highly competitive economic region, a region of equitable economic development, and a region fully integrated into the global economy. Atienza said the forum will discuss how the different industries can map out an effective strategy so that they can take advantage of the AEC. Keynote speaker will be Department of Trade and Industry Secretary Gregory L. Domingo. Other speakers include Dr. Cielito F. Habito, chief of party of the USAID Trade-Related Assistance for Development and the former secretary for economic planning; Ceferino S. Rodolfo, DTI-International Trade Group assistant secretary; and Dr. Josef T. Yap, former president of the Philippine Institute for Development Studies among others.



Author: Jeandie O. Galolo
Date: January 23, 2014
Source: Sun Star Cebu

For years, the agricultural sector has been the unheralded hero of the economy, often operating under the radar compared to the more celebrated services and industry sectors. Meanwhile, the rural banking industry has consistently been supportive of agriculture, also in consonance with its mandate to allocate a portion of their loanable funds to the sector.
Under Republic Act 10000, or the Agri-Agra Reform Credit Act, local banks are required to allot 15 percent of their portfolios for agriculture, and 10 percent to agrarian reform beneficiaries. This time, rural banks must up the ante insofar as its commitment to agriculture development is concerned. Agricultures progress will prove instrumental in helping the country achieve financial inclusion. Based on the Policy Notes publication of government think-tank Philippine Institute for Development Studies (PIDS), agricultural development is key to inclusive growth. The accelerating pace of economic growth in the Philippines will not translate into inclusive, sustainable growth if agricultural development is neglected, PIDS said. The government research institution explained that agricultural development in the Philippine context involves a transition from farming to agribusiness. With agribusiness, agri-related activities put farmers, processors, distributors and consumers within a system that aims to produce, handle, process, transport, market and distribute agricultural products. This will entail a structural transformation in agriculture itself, from traditional to high-value crops, as well as product upgrading. The question is, where will farmers source funds to enable such transformation? This is where rural banks come in. Accredited rural financial institutions such as rural banks act as direct conduits to the agriculture sector and agrarian reform beneficiaries, by channeling the funds specifically allotted by other banks for the program, thus giving rural banks an important role in the funding chain. By enhancing access of the agricultural sector to financial services and programs that increase its market efficiency and promote modernization in the sector, rural banks serve as a crucial catalyst in rural development. PIDS noted that one of the primary reasons for the non-inclusivity of economic growth and persistence of poverty in the Philippines is the lack of productive employment. With the development of agribusiness anchored on the aggressive involvement of rural banks, the agriculture sector will not only be responsible for putting food on the table, but also for creating jobs and livelihood for the poor.


Author:
Date: January 15, 2014
Source: Manila Times

The Philippine Stock Exchange (PSE) will undertake a more aggressive drive in pushing for amendments to the real estate investment trust (REIT). Hans B. Sicat, PSE president and chief executive officer, said there is a need to change the "difficult" implementing rules and regulations of the REIT Act to encourage issuers to finally come forward with their respective offerings. "We'll make a fresh push this coming year...We will lobby hard," Sicat told reporters last week.
REITs are companies that own and operate income-generating real estate assets that include offices, apartment buildings, hotels, warehouses, shopping centers and highways. The REIT Act lapsed into law in December 2009, but none of the major developers have come forward with their respective offerings because of the contentious issues on ownership and taxation on asset transfers. "It [REIT] becomes more important now because our colleagues at the Stock Exchange of Thailand are launching their REIT product soon. Global investors who like the REIT product are going to look at that. There is competition for capital and they might be ahead of us," Sicat said. The Bureau of Internal Revenue (BIR) had refused to lower the public float and remove the tax on the investment vehicle that is seen to erode as much as P10 billion in state revenues every year. However, a study conducted by the Philippine Institute for Development Studies show the tax bureau can more than recover in the first year the potential or perceived losses not through taxation but through activities generated by the PSE, Sicat said. "The focus, from a policy perspective, should be supportive of an end-result where we have a deep capital market. If you have a reasonable or low taxation for these products, the BIR will benefit because as volumes go, you will benefit from it," Sicat said.---Restate investment trust (REIT)


Author: Krista Angela M. Montealegre
Date: January 02, 2014
Source: InterAksyon.com

If Health Secretary Enrique Ona would have his way, the University of the Philippines-Philippine General Hospital (UP-PGH) will not get special treatment under the Sin Tax Law. In his comments to the draft implementing rules and regulations (IRR) for the law, Ona does not want UP-PGH, which was among those who actively participated in the congressional deliberation, to have special mention in the implementation of the measure. Revenues collected from the Sin Tax Law will directly go to the Department of Health. The proposed IRR specifies that DOH give UP-PGH some of the funds as a research center and by participating in decisions on human resources issues among health personnel. But in his letter to Finance Secretary Cesar Purisima dated 26 December 2013, Ona asked to "delete the last sentence of the Rule III of Sec. 5 of the IRR which specifies UP-PGH as the premiere national university hospital that DOH should primarily engage for research to support universal health care." Ona said that "even before the passage of Republic Act 10532, the DOH had already established a 'research reference hub' under Department Order No. 2012-0197." "The said DO itself does not prescribe a sole supplier to conduct health research, rather, it recognizes [a] network of research institutions such as the Philippine Institute for Development Studies (PIDS), Philippine Council for Health Research and Development (PCHRD), National Institute of Health of UP, and other institutes (NIH-UP), including the UP School System of Economics through the Health Policy Development Program (HPDP)," he noted. The letter came at a time when the Department of Health, Department of Finance, Department of Budget, and some health advocacy groups are set to have a final meeting to discuss the IRR today (January 13).

Author: Jet Villa
Date: January 13, 2014
Source: InterAksyon.com

The government disbursed a total of P3.168 billion in subsidies to state firms in November, 48.82% less than the P6.19 billion recorded in the same month in 2012. From January to November 2013, subsidies rose by 46.51% to P39.074 billion from the P26.669 billion given to government-owned and -controlled corporations (GOCCs) in the same 11-month period the year previous. The National Electrification Administration received the largest share of the subsidies given in the month, getting a total of P1.6 billion in November, followed by Philippine Crop Insurance Corp., which received P390 million. The National Irrigation Administration was also given P289 million while the Social Security System received P279 million. Rounding out the top five recipients of subsidies last November was the Philippine Rice Research Institute, which received P222 million. Other state firms that got sizable subsidies were the Philippine National Railways (P120 million), the Philippine Coconut Authority (P53 million), and the National Dairy Authority (P44 million). Several health institutions likewise received assistance during the month: the Philippine Children's Medical Center (P37 million), the National Kidney and Transplant Institute (P25 million), the Lung Center of the Philippines (P22 million), and the Philippine Heart Center (P16 million). The Philippine Institute of Traditional and Alternative Health Care was also given P5 million, and the Philippine Health Insurance Corp., P1 million.


Author: Bettina Faye V. Roc
Date: January 12, 2014
Source: Business World

Since a Philippine shelter-standard does exist, it is valid to expect the government to be curious about how many Filipino homes are substandard. The 18 sqm standard should be taken seriously not only by the HLURB, but by the government in general as well. Common sense calls for having official statistics on homes of substandard size. My quickie search for housing statistics this week turned up figures on housing units classified only by the quality of the materials of the outer walls and roof, and not by the size of their living area. Instead of size of living area, the government is focused on building material quality and on ownership of the lots on which dwellings stand. The number of informal settlers in the National Capital Region alone, in 2007, is put at 544,609 by the National Housing Authority, but only at 199,398 by the National Statistics Office (source: Jeanette E. Cruz, "Estimating informal settlers in the Philippines," National Convention on Statistics, 2010). Sadly, shelter is not a separate component in the Philippine poverty line. This ensures that official poverty statistics cannot be disturbed by any change in shelter-conditions--or, for that matter, disturbed by anything other than a change in the price of food. I have said that: "[N]o matter by how much the prices change of consumer items like water, electricity, LPG, transportation, clothing, house-rent, school supplies, medicine, or any other basic item aside from food, there can be no corresponding changes in the official poverty line. This is due to the neglect of the National Statistical Coordination Board (NSCB), the official poverty-measurement agency, to do research on any individual nonfood component as part of minimum basic needs." ("The poor don't live by bread alone," Inquirer, 3/5/2011). The NSCB's poverty research is fixated on food. Other agencies with research capacity, such as the National Economic and Development Authority and the Philippine Institute for Development Studies, do not help out in studying the full needs of the poor, including shelter. The National Anti-Poverty Commission is a mere coordinating group and does not have its own research staff. This merely reflects the general bias in favor of how to promote economic growth rather than of how to fight poverty. For forthcoming official poverty statistics to realistically account for the effects of Yolanda, the NSCB should generate data on the survivors' recovery from their injuries and the destruction of their homes and other assets. It should survey the people's living conditions as soon as possible.

Author: Mahar Mangahas
Date: January 10, 2014
Source: Philippine Daily Inquirer

New ways of leveling up the advantages of export processing zones (EPZs), such as by transforming them into trade facilitation centers, can raise their relevance in an increasingly integrated regional market, according to a recent study of the Philippine Institute of Development Studies (PIDS) submitted to various government and private entities. EPZs and special economic zones (SEZs) in the Philippines mainly serve to improve the competitiveness of industries by reducing locators' operating costs.vThey offer fiscal incentives, provide better infrastructure and facilities, streamline customs and business registration procedures and liberalize foreign exchange policies. Zones specifically administered by the Philippine Economic Zone Authority (PEZA) managed to attract foreign direct investments (FDIs), boost export activity and create employment opportunities. FDIs approved by PEZA grew by 23 percent yearly on average from 2006 to 2010. This contrasts with a 13 percent decline on average in yearly FDIs approved by the Board of Investments in the same period. Manufactured exports of PEZA-administered SEZs grew from $19.5 billion from 2001 to $28.9 billion in 2009, growing by five percent yearly on average during the period. In contrast, manufactured exports from outside the PEZA's SEZs went down by nine percent yearly on average during the same period, from $9.1 billion to $4.3 billion. Workers at PEZA-supervised SEZs increased in number by 10 percent yearly on average from 2001 to 2010. The share of PEZA ecozones in total employment nationwide doubled from one percent in 2001 to two percent in 2010. PEZA manages the public SEZs of Baguio City Economic Zone, Cavite Economic Zone, Mactan Economic Zone and Pampanga Economic Zone. It also oversees 304 privately operated ecozones. But the overall performance of SEZs can still be improved, according to a new study released by the P IDS.
"Dynamic economic benefits in terms of domestic investment in ecozones and forward and backward linkages are lacking," according to study author Rosario Manasan. She also observed a shift in ecozone investments from garments and textiles to electronics and electrical machinery over the last 30 years. This concentration on the capital-intensive and imported input-dependent electrical and electrical machinery sector increases the country's vulnerability to external shocks, she added. Moreover, some ecozones have investment costs that outweigh their benefits. Infrastructure development costs at the Bataan Export Processing Zone have exceeded the benefits derived in terms of workers' wages, export and foreign exchange earnings, and government revenues. The Aurora Pacific Economic Zone and Freeport Authority has cost the government some P2.9 billion to invest in an airstrip, port improvements, paving, rehabilitation of the Baler-Casiguran Highway, flood control and other on-site improvements.


Author: Ed Velasco
Date: January 10, 2014
Source: Daily Tribune

According to the Institute for Development and Econometric Analysis, Inc. (IDEA) latest Industry Trends, a large portion of the Philippines' local agriculture industry is focused on rice as it is the staple cereal crop. National Food Authority (NFA) Administrator Lito Banayo has noted, however, that given the country's topography, we cannot realistically hope to be asefficient as other countries such as Vietnam or Cambodia in terms of rice production. Competitors possess an abundance of flat land, which is not the case locally as a large part of the country's300,000+ km sq/m area is mountainous. Furthermore per IDEA, despite our lack of a comparative advantage in the staplecereal, a significant proportion of our local farmers and agricultural producers are still in the business of palay planting and are in need of income. In the face of these challenges the local sector faces, Mr. Banayo raised the idea of a switch from the staple cereal crop to high-value crops, which offer a higher amount of income per kilogram of yield or hectare of farmland. As the Philippines enters a phase of consistently above-par growth, new markets open up and local producers must adapt to changing circumstances. In a policy note released by the Philippine Institute for Development Studies (PIDS) entitled Urgent: A Road Map for Agro-Industrial Development in the Philippines, it was observed that as the country develops, it will almost inevitably move from simply producing its sustenance and staple crops, such as rice andcorn in our case, to a more diversified, market-oriented production system. In addition, even "cheaper" crops which can be classified as "high-value" for farmers, such as camote and cassava, may see less consumption as development leads to consumers seeking more expensive vegetables. Development leads to demand for more expensive, higher-valued vegetables and other agricultural products, as local demand picks up and capacity to fillexport demand for these increases.

Author: C and C Views by Ed Limtingco
Date: January 08, 2014
Source: The Freeman

Earning a high-school diploma and a college degree are key factors in preventing Filipinos from entering poverty or experiencing intergenerational poverty in both rural and urban areas, according to a study released by state-owned think tank Philippine Institute for Development Studies (PIDS). In a study, titled "Growth and Redistribution: Is there 'Trickle Down' Effect in the Philippines?", PIDS Supervising Research Specialist Danileen Kristel C. Parel said obtaining a secondary education reduces the probability of a person to experience chronic poverty in rural and urban areas. Parel added that tertiary education, on the other hand, has a more encompassing impact as it decreases the probability of experiencing chronic poverty. "Government investment on providing secondary education, especially in rural areas, is crucial in preventing households from falling into poverty. However, to be able to improve the overall poverty situation, investment on tertiary-level education is extremely critical," Parel said. Data showed that secondary education increases the probability of escaping poverty by 70 percent relative to being chronically poor, compared to only 20 percent in urban areas. Parel said this means the impact of secondary education on transient poverty is more pronounced in rural than urban areas. It also decreases the likelihood of entering into poverty in rural areas, while it is not significant in urban areas. Tertiary-level education, meanwhile, increases the probability of escaping poverty relative to being chronically poor by 272 percent in rural areas and 720 percent in urban areas. Parel said this means the impact of tertiary education is more significant in urban than in rural areas. "By improving infrastructure services and providing basic education to poor communities, poverty reduction can be better achieved. Providing basic education has been the top priority of the current administration of President Benigno Simeon Aquino III, which is a step in the right direction," Parel said.

Author: Cai U. Ordinario
Date: January 08, 2014
Source: Business Mirror

The inclusive growth mantra of the Philippines has to be further asserted in the Asean Economic Community (AEC).
Otherwise, the Philippines will be at the losing end, a former director general of the National Economic Development Authority (Neda) said. In his report to various government and private entities, Dr. Cielito Habito, former Neda chief during president Fidel Ramos time, said if this is done, it will mean that AEC is on the road to being competitive than complementary. The Philippines has a predominantly intra-industry trade with the rest of the Association of Southeast Asian Nations (Asean) countries, especially with its major trading partners in the region, meaning we trade in products within the same industries. The Philippines top exports to its major Association of Southeast Asian Nations trading partners are petroleum products, electronics, and chemicals, the same products that we import in the region, Habito, now chief of party of the USAid Trade Related Assistance for Development, said in his report. Habito also commented on the budget misallocation in the agricultural sector, where 70 percent of the commodity budget goes to rice yet it is only responsible for only about 16 percent of the value adding in agriculture. He considers the growth potentials of the services sector as very crucial for the AEC. The Philippines has much more growth in the services sector because there are lots of value adding within this sector such as in design and software, he said. Meanwhile, UP professor emeritus and first Neda director general Dr. Gerardo Sicat accentuated the negative impacts of the countrys governance and political issues on its investment performance. The changes of government have caused reversals of economic policies and the effects of these reversals were very costly, Sicat said. Sicat explained that the Philippines is the only country in the Asean that has complex constitutional provisions on economic issues. We have restrictions on capital, landownership, public utilities and operation of land mineral resources, which not all foreign investors could deal with, he said. PIDS senior research fellow and its acting vice president Rafaelita Aldaba stressed that the Philippines should not rely on the services sector alone if we want economic growth to be inclusive. Aldaba noted the urgent need for the revival of the manufacturing sector to increase the countrys competitiveness in the region. A more vibrant manufacturing sector also means more jobs available for Filipinos.
There has been very little movement of resources in the Philippine manufacturing sector. Its share of value added to GDP declined to 23.7 percent in the 2000s from 26.3 percent in the 1980s, she said.


Author: Ed Velasco
Date: January 03, 2014
Source: The Daily Tribune

TRANSFORMING the countrys economic zones into trade facilitation hubs can boost the countrys competitiveness amid an increasingly integrated Southeast Asia, Philippine Exporters Confederation, Inc. (Philexport) said in a recent statement. Quoting a study by the Philippine Institute for Development Studies (PIDS), Philexport said: "[T]he overall performance of SEZs (special economic zones) can still be improved." The group said that through lowering operating costs, SEZs and export processing zones in the Philippines serve mainly to improve the competitiveness of businesses that locate in these areas. "They (economic zones) offer fiscal incentives, provide better infrastructure and facilities, streamline customs and business registration procedures, and liberalize foreign exchange policies," read the statement. The country has over 300 economic zones, all of which are administered by the Philippine Economic Zone Authority. Citing the study, which was authored by PIDS Senior Research Fellow Rosario G. Manasan, Philexport said: "SEZs can be reinvented into efficient distribution, production, and trade facilitation hubs to help firms reduce logistics cost and become more internationally competitive." "Ecozones can be used to expand market access by linking up regional suppliers and leveraging economies of scale in production," read the statement. Ms. Manasan recommended in her study that rules in SEZs be made "flexible enough to accommodate both exporters and non-exporters." She added that SEZs should also allow a wide range of commercial and manufacturing activities within their premises.

Author: Daryll Edisonn D. Saclag
Date: January 03, 2014
Source: BusinessWorld

The Philippine Stock Exchange (PSE) will undertake a more aggressive drive in pushing for amendments to the real estate investment trust (REIT). Hans B. Sicat, PSE president and chief executive officer, said there is a need to change the "difficult" implementing rules and regulations of the REIT Act to encourage issuers to finally come forward with their respective offerings. "We'll make a fresh push this coming year...We will lobby hard," Sicat told reporters last week.
REITs are companies that own and operate income-generating real estate assets that include offices, apartment buildings, hotels, warehouses, shopping centers and highways. The REIT Act lapsed into law in December 2009, but none of the major developers have come forward with their respective offerings because of the contentious issues on ownership and taxation on asset transfers. "It [REIT] becomes more important now because our colleagues at the Stock Exchange of Thailand are launching their REIT product soon. Global investors who like the REIT product are going to look at that. There is competition for capital and they might be ahead of us," Sicat said. The Bureau of Internal Revenue (BIR) had refused to lower the public float and remove the tax on the investment vehicle that is seen to erode as much as P10 billion in state revenues every year. However, a study conducted by the Philippine Institute for Development Studies show the tax bureau can more than recover in the first year the potential or perceived losses not through taxation but through activities generated by the PSE, Sicat said. "The focus, from a policy perspective, should be supportive of an end-result where we have a deep capital market. If you have a reasonable or low taxation for these products, the BIR will benefit because as volumes go, you will benefit from it," Sicat said

Author: Krista Angela M. Montealegre
Date: January 02, 2014
Source: Interksyon TV5

THE PHILIPPINES access to the Japanese market has improved since the implementation of the Japan-Philippines Economic Partnership Agreement (JPEPA) in 2008, state-run Philippine Institute for Development Studies (PIDS) said. In a policy note issued last month, Veredigna M. Ledda and Erlinda M. Medalla, supervising research specialist and senior research fellow at PIDS, respectively, said the overall impact of JPEPA -- referred to in the note as PJEPA -- after five years since its implement has been positive. Rather than the fulfillment of grim predictions and dislocations, there is some evidence of improved market access for some Philippine products, particularly in agriculture, that have seen a decrease in tariff rates as a result of the [JPEPA], they said in the policy note. JPEPA, the countrys sole bilateral trade agreement, was signed by the Philippines and Japan in September 2006. It was immediately ratified by Japan in December that year but took the Philippines two more years to do the same, due to strong opposition from lobby groups. Concerns were raised about the potential serious negative impacts of opening up the economy as a result of the JPEPA, such as significant dislocation in the sensitive automotive sector and dumping of toxic waste. These, however, according to Ms. Ledda and Ms. Estrella, failed to materialize. Instead, the countrys exports to Japan such as bananas, pineapples, and tuna, which had already been making inroads in the Japanese market prior to JPEPA, increased even further after the agreements implementation. Although there is some natural leveling off in succeeding years, the average yearly trade volume and value from 2009 to 2012 are significantly higher than in the four years immediately before the [JPEPA], they said. Skills training and transfer of technology have also secured a more sustainable basis for development for the Philippines. In addition, the researchers said JPEPA has provided an opportunity for institution building and domestic reforms in the country.

Author: Daryll Edisonn D. Saclag
Date: January 01, 2014
Source: BusinessWorld

The Pambansang Lakas ng Kilusang Mamamalakaya ng Pilipinas (Pamalakaya) on Wednesday warned the Aquino administration against entering into a bilateral free trade agreement (FTA) with the European Union (EU), saying the forging of such an agreement will lead to the flooding of imported fish from EU member-states.

This, the group said, will further worsen the situation of small fishermen across the country. Quoting a study made by Philippine Institute for Development Studies (PDIS), Pamalakaya Vice Chairman Salvador France said small fishermen in the Philippines will face increasing competition with highly subsidized and cheap fish imports from European countries.

According to PIDS: Potential losers are the small-scale fishermen who will face lower prices for their catch due to increased competition from imported fish and small-scale fish processors and marketing agents, including women, who will also face lower prices for their products. Pamalakayas France argued that the that upcoming Philippine-EU free-trade agreement would result to elimination of tariffs between the Philippines and EU and this increase the quantity and exports of fisheries products to the Philippines. This would result economic losses and destruction of livelihood to 1.8 million subsistence fishermen and the 8 million people dependent on local fishing industry, he added.

The PIDS study however, argues that imports of aquaculture, pearl culture and pearl-gathering products will decrease and will improve the balance of trade, while imports of processed fish products and seaweeds will increase, which will lower the balance of trade, asserting further that in percentage terms, the fall in imports of fisheries products is highest among aquaculture, while the increase in imports is highest for processed products.

The government should back off from entertaining a new free-trade deal with Europe. It is an invitation to catastrophe that would inflict pain and hardships to 1.8 million small fishermen and 8 million dependents to local fishing industry. We are talking here of more than 10 percent of the population relying mainly on the livelihood the local fishing industry provides, France said.


Author: Jonathan L. Mayuga
Date: January 29, 2014
Source: All Voices

The Philippine Institute of Development Studies (PIDS) in collaboration with the Palawan State University (PSU) conducted yesterday a seminar-forum "The Philippine Mining and Minerals Industry: Development Issues and Recommendations for Research" at the PSU Hostel in this city. In his opening remarks, Dr. Gilberto M. Llanto, PIDS President, said that the objective of the seminar-forum is to share researches done on the Philippine mining sector and minerals industry to include its many issues and policy developments. "We present both sides of this emotive issue and stand neutral and also present what social scientists have studied and come up with regarding the sector," Llanto said. Referred to as the government's "policy think-tank", PIDS major intention is to provide recommendations related to future economic and policy studies that can be undertaken in the Philippine mining sector and minerals industry. The main presentor, Dr. Danilo C. Israel, PIDS Senior Research Fellow, briefly discussed the economic performance of mining sector and minerals; the many issues and existing policies; and his recommendations for the sector and for future studies. The reactors/discussants to Dr. Israel's research presentation were Dr. Patrick A. Regoniel of Palawan State University representing the academe; Jose Bayani Baylon, Vice President of Nickel Asia Corporation representing the business sector; Atty. Grizelda Mayo-Anda, Executive Director of Environmental Legal Assistance Network for the NGO; and John Francisco A. Pontillas, Policy and Research Division CHief of the Palawan Council for Sustainable Development Staff for the government sector. The forum was participate-in by a mix of officials from government agencies, local government units and the academe; mining stakeholders in Palawan; the NGOs; and students from the PSU.

Author: Victoria S. Mendoza
Date: January 28, 2014
Source: PIA

Although the Filipino-Chinese comprise a small portion of the population, under the Aquino administration, the Philippines began celebrating the Chinese New Year as a non-working holiday in 2012. In Proclamation No. 295 issued in November 2011, Aquino said the declaration of the Chinese New Year as a special non-working holiday would allow Filipinos and Filipino-Chinese to celebrate the holiday. It is said that Aquino's declaration is a nod to his ancestry as the Cojuangcos - his matriarch's clan - are themselves Filipino-Chinese. In his declaration, Aquino said the celebration of Chinese New Year "is a manifestation of our solidarity with our Chinese-Filipino brethren who have been part of our lives in many respects as a country and as a people." Presently, the Philippines and China are embroiled in a territorial row over the West Philippine Sea or the South China Sea. Yet, a look at the latest economic data would reveal the close ties between Manila and Beijing.
According to the National Statistics Office, China was the country's third largest export market behind Japan and the US, accounting for 12 percent of the total $4.3 billion export revenues in November. More significant is that China's share represents a 38.2-percent growth over the previous month, the fastest among the Philippines' trading partners. China's contribution to the economy does not end in trade. Chinese tourists are also among the country's top visitors. The Department of Tourism said Chinese tourists were the fourth largest group of visitors in the Philippines from January to September in 2013. A total of 327,054 tourists from China came to the country, increasing by 66.08 percent and the fastest growth among the country's top markets for tourists. A 2004 study of state think tank Philippine Institute for Development Studies said that with the accession of China to the World Trade Organization in 2001, Manila should take advantage of a number of business opportunities with Beijing. According to the study China's WTO Entry: Effects on its Economy and Implications for the Philippines by Ellen Palanca, the Philippines should engage in cooperation projects. "Through such cooperation, both countries will be able to maximize the benefit from China's further liberalization while minimizing the negative effects. Some broad areas of possible cooperation are: merchandise and service trade, tourism, and investment and development cooperation," Palanca said.


Author:
Date: January 27, 2014
Source: Philippine Star

Through research and analyses, state think-tank Philippine Institute for Development Studies (PIDS) will open its 23rd PIDS Corner at Palawan State Universitys Main Library in Puerto Princesa City. On January 27, PIDS President Gilberto Llanto and other notable researchers will lead the opening. Does the Conditional Cash Transfer make any sense? How about JPEPA? Is there still hope for the manufacturing sector or can local industries compete when ASEAN-wide tariffs go down come 2015? PIDS Corner aims to provide reading and research materials on development-oriented topics, to students, teachers, researchers, policymakers, and decision-makers in the provinces. PIDS Corners objective is to make the findings and outputs of PIDS research more visible and accessible at the local and community levels, especially in locations where there is a dearth of such materials. The Corner has shelves containing various studies and publications produced by the Institute and its research partners, such as books, discussion papers, policy notes, journals, research papers, and newsletters. There have been 22 PIDS Corners across the country since the institute started this initiative in 2006. Joining Llanto are PSU President Jeter Sespee, PSU Vice President for Research and Extension Mike Pido, PIDS Director for Research Information Sheila Siar, PSU Director for Research Daphne Mallari, and PSU Librarian Lourdes Salvador.

Author: Lyndon Plantilla
Date: January 25, 2014
Source: PIA