PIDS in the News Archived (August 2015)

THERE is no doubt that the countrys economic growth and inclusiveness are hinged largely on the development of the micro, small and medium enterprises (MSME) sector, which comprises 99.6% of the total registered enterprises, provide 65% of the local labor force, and contribute 35% to the GDP.
It is, however, lamentable the countrys MSMEs fare poorly in terms of access to credit, technology and skills compared with peers in other ASEAN member-states, based on a recent study authored by Philippine Institute for Development Studies (PIDS). Moreover, MSMEs, to stay competitive, require other skills and resources such as accounting and finance, marketing, and legal and contract assistance.

Thats why it was opportune time for the Financial Executives Institute of the Philippines (FINEX), through the FINEX Foundation for Entrepreneurs, Inc., to hold the 3rd FINEX SME Forum Series with the launching of an SME Portal. Partnered with LoanPinas, the platform provides entrepreneurs with access to capital as well as access to education and other resources.

A key feature of the portal is that it provides legal assistance to entrepreneurs through the services of MyLegalWhiz (MLW). FINEX partnered with MLW to provide legal assistance to entrepreneurs to help and guide them in dealing with the regulatory and legal framework of the locality and the country as a whole.

Entrepreneurs need legal help and advice when starting a business and running it. Many depend on self-taught insights when the situation involves simple legal matters such as registering a proprietorship or renewing a business registration.

However, as the business grows, more complex legal requirements start to crop up such as those involving contracts, taxation, wages, and conducting business. Some inexperienced entrepreneurs, lacking legal knowledge and assistance, stumble upon costly mistakes and may face lawsuits. Others err on dealing with others which costs them their hard-earned profit. On the other hand, entrepreneurs with enough resources can afford a lawyer on a retained basis and pay a hefty sum of P8,000 to P20,000, which covers contract review and simple legal advice.

Undoubtedly, entrepreneurs need to protect and guide themselves on legal matters. Fortunately, advances in technology, such as cloud computing, have helped make legal services more cost-effective for entrepreneurs and even consumers.

MLW is a cloud and web-based app that processes available legal resources and removes the intimidating legalese to make it understandable in laymans terms. Its simplest offering is a do-it-for-me legal document which has a catalogue of various commonly used legal forms, from deed of sale to affidavits, which are also useful to ordinary people. Its more comprehensive offering allows an entrepreneur to ask legal questions and the answers are posted within 24 hours.

Interestingly, this legal assistance service is not only helping MSMEs, but also students, human resources practitioners, and even lawyers and the general public in their legal research. It is not intended to replace lawyers services but to augment it through fast and up-to-date legal knowledge and information.

Its only a matter of time before we truly see the full democratization of legal services across MSMEs and the general public.

REYNALDO C. LUGTU, Jr. is a senior executive in an information and communications technology firm. He also teaches strategy, management and marketing courses in the MBA Program of the Ramon V. del Rosario College of Business,
De La Salle University.
reylugtu@gmail.com.

Author: FINEX FOLIO REYNALDO C. LUGTU
Date: August 13, 2015
Source: Business World

THERE is a vast potential for growth of economic ties between the Philippines and India in the services sector, particularly in the areas of information technology and business process outsourcing (IT-BPO).
"This partnership will serve well the forthcoming Asean Economic Community and the larger Asean-India markets for services," said a policy notes published by the Philippine Institute for Development Studies (Pids).
The paper noted that both countries can use the putative Asean-India Trade in Services and Investment Agreement to exploit greater synergies in their respective IT-BPO services where they have developed world-class capabilities.
"Both countries can exploit their demographic advantages, high proficiency in English, expertise in IT-BPO services, and their relative cost competitiveness vis-a-vis other countries in Asia to create economies of scale and scope in the services sector," it said.
The paper considered the agreement timely as it will position both Asean and India to take advantage of global value chains (GVCs) in which high quality services such as banking, telecommunication and logistics serve as critical infrastructure for regional trading and regional production networks (RPNs).
The anticipated signing of the agreement can be a second pathway for stronger economic relations and cooperation after negotiations were completed two years ago.
It said the Philippines is a viable investment destination for growing operations such as IT-BPO business services.
"In particular, India can tap the Philippines as a hub for expanding toward the Asean IT-BPO services chains. Meanwhile, the Philippines may benefit from the transfer of technology and expertise from higher-end Indian services," it added.
Further, the paper underscored the rationale for increased cooperation between India and the Philippines in the IT-BPO services sector, noting the two countries are the most cost-competitive destinations for IT-BPO services.
"Both countries also have the technical and managerial expertise for providing IT-BPO services. They are both lower-cost and competitive destinations for such services," it added.//

Author:
Date: August 16, 2015
Source: Sun Star Cebu

We Filipinos pride in our cultural hospitality, but we also like our economy closed; and protectionist tendencies still run below our surface show of welcome for most everyone and everything exotic. In an East Asia that achieved a veritable miracle of growth through export promotion, we have plodded along, during these last six decades, on the opposing strategy of import-substituting industrialization (ISI).

Import substitution is a common strategy for industrializing less-developed economies. At its best, it grows home markets"nurtures infant industries"and educates workpeople in the disciplines of industrialism.

Ideally, ISI even sets off the obligatory social revolution that eventually shifts the effective location of internal political authority from the factional bosses and oligarchic landowners"the old-order caciques"to a new class of modernizing entrepreneurs and industrialists.

But, in the weak Philippine state, import-substitution"which the government took up in the post-Independence period"gave rise only to industrial-scale smuggling, corruption of the civil service"and crony capitalism.

Weak Philippine state unequal to challenges of ISI strategy
Historically, our self-seeking elite has used the rhetoric of economic nationalism to justify monopoly profits for its import-substituting industries under a regime of controls that penalized peasant agriculture, kept down workers wages and condemned the entire economy to near-stagnation.

In our country, protectionism has been what John Stuart Mill said it would be: an organized pillage of the many by the few. Until now, protectionism chokes the flow of foreign capital, technology and managerial skills into the economy.

Infant industries that never grew up
ISI produced only a few new industrialists who defined their political interests as separate and distinct from those of the landowning families. For the most part, it produced landlord-capitalists whose profits continued to depend on political connections, protected markets and state subsidies.

Infant industries"fattened by import controls on most consumer goods"never matured. Retail prices at their peak rose four times above global averages"making smuggling irresistible.

Worst of all, import substitution lacking strong central authority preserved the dominance of the politically powerful landowning families"who used their political capital to transfer their assets from landowning to industry.

In the World Banks view, these powerful vested interests came eventually to capture policymaking and to shape economic policy"to protect and enhance their privileged position, often to the detriment of national well-being.

This view sums up pithily our national situation until now.

Protectionism going against world trend
Unusual for elites in the new countries, it is well-off urban Filipino men who tend to oppose open trade. The higher his economic class, the more protectionist the Filipino male apparently tends to be. It is Filipino women who are more likely to support open trade policies. So are rural Filipinos in general.

Two analysts of the NEDA think tank, PIDS, using data from the 2003 International Social Survey Program, correlated individual responses to a question about limiting foreign imports. They found the replies from the Philippines going against the world norm.

The more protectionist the Filipino male tends to be the higher his economic class because, the PIDS scholars suggest, as the owners of businesses, they have been the prime beneficiaries of protectionist policies.

Managers of national businesses and high professionals too tend to be protectionist. So do public officials as a class, since the regulated economy enhances their influence, as well as facilitates rent seeking.

Filipino women are more agreeable to open trade. The PIDS analysts suggest this may result from greater job opportunities in export industries (such as call centers and electronics assembly) that globalization is opening up to them. As the managers of family finances, Filipinas may also appreciate the lower costs and greater variety of imported goods offered by the open economy.

Protectionism started out by being anti-Chinese
Protectionist sentiment may be only one expression of our inward-looking nationalism. Resentment of American bullying in our bilateral relations"coupled with a recognition of our utter dependence on them"had produced self-doubt and turned nationalism inward, to cultural authenticity and economic preferences for nationals.

Like the Central Americans, middle-class Filipinos are intensely nationalistic, particularly in relation to the United States, as a consequence of their vulnerability to its interventions and influence.

Beginning in 1914, an ephemeral third party to the perennial Quezon-Osmena rivalry inserted the issue of economic nationalism into the political debate. The teaching caught on: to Filipinize the economy, generations of policymakers have risked even economic setbacks.

The Commonwealth government chartered banks, textile and flour mills; utilities, railroads, and even factories making shoes, iron and cement"to keep them in Filipino hands.

Anti-Chinese economic measures starting in the 1930s (they included retail-trade nationalization in 1955) put many Filipinos out of work. But [i]t is useless to amass wealth which is not ours to dispose of, reasoned the industrialist Salvador Araneta in justifying the law.

Economic provisions in the 1935 Constitution and retained in the 1987 Charter binds the Philippine state to a protectionist policy"uniquely in the region. The economist Gerardo P. Sicat notes that, in our neighbor-states, all economic legislation is ordinary law"allowing governments the utmost flexibility.

In public investment were 20 years behind our near-neighbors
Right now, our country has the lowest level of foreign direct investment among comparative Southeast Asian economies. Were some 20 years behind Indonesia, and even more years behind Thailand and Malaysia in infrastructure level.

During the decade 2000-2009, Singapore received $177 billion in foreign direct investment; Thailand $65B; Malaysia $43 B; Vietnam $35B; Indonesia $28 B; and the Philippines $16 billion.

The arithmetic tells us why foreign investment is so crucial to the home economy. If we are to begin reducing our poverty, we must grow continuously"at least over these next 10-12 years"by a minimum 7%. And if we are to grow by 7%, we need to invest at least 30% of our gross domestic product (GDP), as our neighbors do. But we save on the average only 19% of GDP"the lowest rate among comparative Asean economies.

In 2000, that financing gap was equivalent to about US$ 8.4 billion. Usually, countries could bridge this gap by public and private borrowing"but, in our case, the gap was too great"since foreign direct investment (FDI) in that year was only $1.3 billion. In 2005, we attracted barely 1 percent of the net FDI that entered emerging Asia.

We must redefine our nationalism
Until now, the stereotypes of an era long gone influence our intellectual approach to foreign investment and economic liberalization; to opening our economy to the opportunities"and risks"of globalization.

Our economy still is heavily regulated and inward-looking (that is why were forced to export people instead of products); at every level of government, public authority still is much used for private benefit.

If our country is to catch the new wave of growth building up in East Asia, we must speed up market-opening and reduce the costs of doing business.

To blame all our ills on outside forces"on the CIA, on multinational industry, on the international lending institutions"rather than on the defects of our own political and social structures"is to yield to impotence.

The best reply to the impositions of the International Monetary Fund and the World Bank"against which our intellectuals rail endlessly"is for us to so strengthen our economy such that it need not submit to their strictures.

We must redefine our nationalism to make it responsive to the new ideologies and technologies reshaping the world.

We need leadership: we as a people need to be convinced to alter a basic national policy: to take up a positive view of our relationship with a globalizing world"we cannot stop the world because we want to get off.

We need to create for ourselves a more rounded kind of nationalism"a forward-looking nationalism focused on the effort to account for ourselves as a people"and to claim our place of dignity in the global community.//

Author: Juan T. Gatbonton
Date: August 15, 2015
Source: Manila Bulletin

There was a time when traffic was bad because it was nearing Christmas. Or there was road work. Or there was an accident. A sudden downpour, perhaps, that triggered flash floods on many streets.
Perhaps it was payday, and the big malls were having their respective midnight sales.
These days, traffic is bad, period. At any time of the day, and practically at every corner of the metropolis, major and minor thoroughfares alike.
No explanation is in order. The volume of vehicles is just too overwhelming, the ineptitude of traffic managers even more so.
And the administration says, be thankful! This is progress. Look, the average wage-earner is able to take out a loan to purchase his own car!
Easy for those in power to say. After all, they do not have to go through hell every day.
The alternative looks grim. Try hopping out of your bus or car to take the train to work because youre running late"and the so-called pass you can show your boss is too laughable a concept to be taken seriously, anyway. You will soon regret it because then you will find yourself in a sea of human bodies, exhausted and drained even before they log into their offices.
And do not discount the possibility of the train breaking down in the middle of your journey, and you having to walk on the railway, in between stations.
If you can think ahead and tap away to find a ride through your application-based transport provider, hurry up. The government is clamping down on it soon, because, it turns out, it wants to launch its own version of the network. Thats assuming it can perform as efficiently as those already in the market"something we seriously doubt.
Through all these daily difficulties, the ordinary Filipino worker who simply wants to earn a living and attain some measure of comfort and optimism finds himself wondering if this is the straight path promised by the administration when it first took office five years ago.
The exhausted, underpaid, oft-inconvenienced middle-class worker"which according to a study by the Philippine Institute of Development Studies carries a disproportionate portion of the tax burden"deserves so much more from a government that prides itself in treading a straight path, supposedly of righteousness and honesty.
But whats the use of a straight path when you dont know where its leading?
Whats to be treasured about traversing a straight line when you cant even move forward because of numerous obstacles that constrain you from taking the next step?
And yet, as he endorsed his anointed one for next years elections, the President promises it will be more of the same, a continuation of what we enjoy right now"really, doublespeak, hypocrisy, self-righteousness and self-congratulation, and gaping inequality for the rest of us.
The thought of getting stuck some more is too repulsive for those who simply want to work hard and do little things here and there to contribute to society. No, thanks"we dont want more of the same.
If all else fails, were getting out of the vehicle, and were walking to our individual destinations.//


Author:
Date: August 15, 2015
Source: The Standard

MANILA " A new study from state-run Philippine Institute for Development Studies (PIDS) said the government should help not only the poor, but also the middle class, which carries a disproportionate share of the tax burden.
According to a study titled Why we should pay attention to the middle class, there is a need for government to support the middle class in order to sustain Philippine economic growth.
Authors PIDS senior research fellow Jose Ramon Albert and researchers Raymond Gaspar and Martin Joseph Raymundo said government programs that target the poor should be expanded to include the middle class, who are at risk of falling into poverty by reason of illness, death of the provider, natural hazards, among others.
The study defined the middle class as those with per capita incomes between four and 10 times the poverty line, or those families of five with incomes of between P31,560 and P78,900 a month.
This places the number of middle-income households at 3.6 million, based on the 2012 Family Income and Expenditure Survey.
According to the study, a big number of middle-class households can be found in Metro Manila, Central Luzon and the CALABARZON.
Middle-class families have smaller households " averaging four to a family " as against the average of six for the poor.
Also, while the poor spend a bigger portion of their incomes on food, the middle-class spends bulk of its earnings on education and health. The study said middle-income families spend more on education than do high-income households.
The middle class, particularly the lower middle class, also counts among its ranks the majority of households with overseas Filipino workers. As such, joblessness ranks as a top concern among the middle class.
Given this, the study said the government should look for ways of attracting job-intensive investments.
"Although the private sector is responsible for job creation and income-generating activities, the government sets the investment climate," which includes infrastructure, the authors said.
Moreover, middle-income households rely more on salaried jobs, which explains why they contribute the biggest share to income tax payments, as well as to governments total tax collections.
In this regard, legislation aimed at lower income tax rates would boost middle-class take-home pay, in turn spurring domestic consumption, which comprises two-thirds of the Philippine economy.
Fiscal redistribution, therefore, could be an important tool to raise the income share of the poor and middle class and, in turn, support growth, the authors said.
"It will be important to examine the effects of removing income tax altogether, and instead only collecting consumption taxes (as the wealthy find too many income tax loopholes) with heavy consumption taxes on luxury items, and minimal consumption taxes on basic items (especially those consumed by the poor)," the authors said.//

Author: Rain Castro
Date: August 12, 2015
Source: Interksyon TV5

Tax reforms and redoubled efforts to ramp up investments should help maximize the contribution of the countrys middle class to economic development, according to a study released by the Philippine Institute for Development Studies (PIDS).
These were among the findings indicated in a policy note, titled Why we should pay attention to the middle class authored by PIDS research fellow Jose Ramon G. Albert, research specialist Raymond E. Gaspar, and research analyst Martin Joseph M. Raymundo.
While poverty reduction should be the main focus of development policy, there is a growing need for policy attention to boost the participation of the middle class in growth and development. It is important to make the middle class a stable force to sustain the growth of the Philippine economy, the authors said.
The authors believe that tax reforms such as the removal of income tax and replacing it with a consumption tax. This will prevent Filipinos, including the rich, from finding loopholes in the system and not pay tax.
These consumption taxes, the authors said, must be heavy on luxury items, and minimal on basic items.
Further, implementing labor sector reforms, such as addressing unemployment, would improve the chances of the middle class to get jobs.
The authors said unemployment is largely a middle-class issue since the poor cannot afford to not be employed because of the immediacy of their basic needs.
To address this, the authors urged the government to find more avenues to attract local and foreign investments.
Better investment climates [including having better infrastructure, cheaper electricity, cheaper and faster Wi-Fi] are helpful in attracting new investments. Although the private sector is responsible for job creation and income-generating activities, the government sets the investment climate, the authors said.
Based on the policy note, the countrys middle class consists of those with annual per capita incomes in 2012, ranging from about P64,317 to P787,572. These comprise some 42.19 million households.
The authors divided the middle class into seven income classes. Those earning less than P7,890 per month are considered poor middle class members and they comprise 4.2 million households.
The authors said those earning between P7,890 and P15,780 per month are considered low income (but not poor) middle-class members, while those earnings P15,780 to P31,560 a month comprise the lower middle income class.
There are about 7.1 million households that are considered low income and 5.8 million are considered lower middle income.
The middle-income class earns between P31,560 to P78,900 per month, while the upper middle income earns P78,900 to P118,350 per month.
There are around 3.6 million households considered middle-income class and 470,000 households classified as
upper middle income.
The upper crust of the Philippine middle class is composed of the upper income (but not rich) and the rich which earn P118,350 to P157,800 and at least P157,800 a month, respectively.
There are around 170,000 households classified as upper income (but not rich) and 150,000 households considered rich middle-class members.
Geographically, a large number of the middle-class families can be found in the National Capital Region, Calabarzon, and Central Luzon, the authors said.
Expectedly, the middle class is concentrated in urban areas, while the poor and low-income families are more concentrated in rural areas, they added.
The authors also said that middle-class household heads have higher educational attainment, and that in terms of spending the middle class have a higher percentage of their income in human capital investments, such as education and health, than the poor.//


Author: Cai Ordinario
Date: August 12, 2015
Source: Business Mirror

What would be crucial is for government to adopt long-term targets, so that empirical performance of governments may be compared across time in relation to these long term targets
Last July 27, PNoy delivered his final and longest State of the Nation Address (SONA).
Consistent with his previous SONAs, he reviewed the starting conditions of his administration. He gave a long list of governments accomplishments in socio-economic conditions, aside from thanks to a long list of people, from most of his past and present cabinet secretaries, to his security group, all the way to his helper, stylist and hairdresser.
He also took the occasion to highlight the governments investments in social programs (increasing coverage for Philhealth, and beneficiaries of the conditional cash transfer program which considerably reduced the proportion and number of Out-of-School Children aged 5 to 15 years old), among others.
As in previous SONAs not only of the current President but also of previous presidents, allies of the current administration would generally sing praises about the speech, but questions are always brought up, even about the accuracy of statistics mentioned.
For instance, while Pnoy cited the rising statistics on foreign investments in the country but others pointed out that these investments still look pale compared to those in other neighboring countries. But why would a foreign investor come to a country in this day and age, if wifi in the country is expensive and second slowest in Asia (next only to Afghanistan), if airports and other infrastructure are poorly maintained?
However, that investments are still rising suggest that we may be offering something that others may not be offering. That we can speak English quite well may be part of that advantage, yet can we sustain this competitiveness when neighbors are also making investments to learn English? The VP, who now is the de facto opposition leader, delivered belatedly his own True SONA, with its own litany but of failures of government. What was a bit surprising was one of those allied with the administration gave a critical assessment of the governments performance after Pnoys SONA.
Isnt it possible though for future presidents to provide a more comprehensive picture of both successes and challenges based on what government aimed for, with statistics that describe our performance in meeting or missing specific targets?
In the international arena, the UN secretary-general has since 2001 been giving an annual synthesis report on how the world fares in the Millennium Development Goals (MDGs) and its targets, guided by statistics, with the last report defining the post 2015 development agenda.

Statistical Indicators on development
A decade ago, the then National Statistical Coordination Board (NSCB), which was consolidated with other statistics agencies into the Philippine Statistics Authority (PSA) last 2013, started a statistical indicator system to monitor the results matrix, i.e., targeted outcomes for attaining economic and social development goals in the Philippine Development Plan (PDP).
The indicator system is called the Statistical Indicators of Philippine Development, otherwise known as StatDev. The first edition of StatDev, i.e. 2004 StatDev, was released in July 2005.
The StatDev framework is congruent with the current PDP, and is revised each time a new PDP is formulated. The StatDev owes its roots to work by NSCB Technical Staff in the then Statistical Coordination Office (SCO) of the National Economic and Development Agency (NEDA), which established a statistical monitoring system through the Economic and Social Impact Analysis Women in Development (ESIAlWID) Project- Macro Component. The objective of this project component was to develop, maintain, and institutionalize the operation of a system of macro-level indicators for measuring and monitoring the degree of achievement of the economic and social development goals set forth in the then Long-Term and Medium-Term Development Plans of the country.
The StatDev, continued by the PSA, serves as a briefer on the actual State of the Nation, based on indicators set forth in the PDP results matrix, assuming that these indicators are genuinely reflective of the current conditions of the country. In consequence, StatDev could be used as an effective evaluation instrument of the performance of the government in relation to its socio-economic plans, developed at the onset of the government. The palace is actually aware of the StatDev as this is traditionally released at the first week of July to provide inputs for the SONA.
The grading system of indicators in StatDev is categorized into three levels of performance according to the estimated probability of meeting the PDP target " good (high probability), average (medium probability) and poor (low probability).
Among the 151 indicators of StatDev 2014, 63 of which are in good standing, 32 show middling performance and 56 show poor (see Table 1). This shows that government has had a mix of successes and challenges in their targets.

The StatDev indicators, however, cannot be considered equal in relevance.
For instance, the indicators for agriculture and fisheries on subsistence incidence among population, yield of palay, and yield of tomatoes are not of the same importance to national development.
An indicator for the macroeconomy, inflation rate, is also surely viewed by everyone to have a larger impact than TVET certification rate, an indicatoridentifiedfor social development. Hence, one has to go beyond the summary statistics in Table 1 and look through the indicators and sectoral chapters of the PDP to carefully arrive at a deeper examination of the countrys conditions relative to development goals and targets.

Macroeconomy and social development

As regards the macroeconomy, the total number of STATDEV indicators that registered a good performance (6) outnumbers hose that had a poor performance (3). Similarly, for social development, good (7) indicators outnumber average (1) and poor (5). This seems consistent with what we observe on the ground.
In the 2010-2014 period, we have had economic growth averaging 6.3% (although historical trends suggest that government may not hit its 2016 PDP target), a low inflation rate, and a low unemployment rate. All of these outstanding economic indicators undoubtedly led to improved credit ratings for the country from Fitch, Moodys and S and P.
However, the lack of changes in poverty incidence (i.e. the proportion of poor Filipinos) shows that economic growth is far from being inclusive, and that much has to be done to improve income distribution, to bring the poor beyond the poverty line, and to make the middle class bigger and stronger.
The high levels of income inequality undoubtedly are barriers to shared prosperity, equality of opportunities, and sustained economic growth that will be necessary for future poverty reduction.
In the arena of social development, the net enrollment ratio in primary education, i.e. the proportion of primary age children in primary school, is regressing, but in fairness to the government, starting conditions were quite high in the baseline.
There are diminishing returns to improvements or to maintaining a good standing when one starts from a high base. In practice, trying to achieve universal primary education should only have a reasonable target of 95%, but the PDP target was extremely ambitious. The PDP target for this indicator also failed to recognize data issues, i.e. that this ratio is based on two indicators, the number of primary aged students in primary school (sourced from DepED), and the number of primary aged students (sourced from the PSAs projection of the school age population for primary education). There are likely inaccuracies in estimating both the numerator and the denominator for the net enrollment rate that explain why this indicator is regressing.
The number of poor household beneficiaries covered in the Conditional Cash Transfer (CCT) has significantly grown over the years, consistent with what the President mentioned in the SONA as this government considered the CCT as its flagship social protection program.
By 2012, the number of CCT beneficiaries has already exceeded the targeted 2.9 million poor households with the 3.12 million households covered. While there are clear costs to the CCT (a very huge budget), the CCT benefits outweigh the costs considerably, especially given their initial returns: a decrease in the proportion of children aged 5 to 15 who are out of school from 11.7 percent in 2008 to 5.21 percent in 2013.
Many social protection experts expect that the major impacts of CCT on poverty reduction are to be felt in years to come.
The increase in employment generated by the current administration has surpassed its PDP target even as early as 2011, with the industry and service sectors having contributed to employment growth. The countrys unemployment rate has been reduced to 6.4 percent in the first quarter of 2015 from 7% a year earlier, with underemployment also reducing to 17.8% from 18.2% in the same period in 2014. .
Infrastructure development
Of the 39 STATDEV indicators on infrastructure development, a quarter (10) are average, and nearly two fifths (15) are good, and the number of good indicators is practically as many as the number of poor indicators (14).
An issue that has hounded the government is the poor state of infrastructure in the country.
Aside from noticing slow increments in road density and unstable access to potable water, we can readily note that transportation in Metro Manila is a big headache, both the rail systems and traffic.
The Metro Rail Transit (MRT) and Light Rail Transit (LRT) have been heavily discussed in social media. Ironically, the President praised the Department of Transportation and Communications (DOTC), particularly its Secretary for valiantly doing his best given the main constraints. The President shifted responsibility to the MRT Corporation (MRTC) for the MRT woes. Ultimately, though the buck has to stop on the doors of government. The public demands a solution to the heightening cases of breakdowns, derailments, and train collisions.
Ironically, though, the StatDev indicators on rail transport development paint a rosy picture of rail transport (see Table 4). Here, we see that the choice of PDP indicators matters.
The rising annual ridership of train passengers is certainly important for revenue generation. But more ridership has not translated into better rail transport services through increased funds for operation and maintenance.
If we examine 2010-2013 data on actual costs for operation and maintenance, we see that these costs have actually shrunk relative to the gross revenue generated, thus yielding high ratios (see Table 4). Moreover, DOTC Sec. Abaya previously admitted that the further increases in income received from a recent fare hike merely serves as payment to MRTC under the build-lease-transfer agreement.

Senator Grace Poe, one of a few public officials who queued up to ride the MRT without fanfare and who got admiration from netizens for this act, said in an interview that mass transport issues need to be prioritized. She added that the numerous accomplishments of PNoy are being overshadowed by the problematic transportation system in Metro Manila.
For five years, the administration has been unable to fully execute improvements in the mass transit system, and in traffic conditions. The traffic congestion in the Metro has been taking its toll on workers and businesses.
The Japan International Cooperation Agency (JICA) already warned government about the daily cost of traffic in the amount of P2.4 billion in 2012, notwithstanding frustrations of people caught in traffic. Many people prefer using the MRT/LRT to escape traffic, but how many of the trains are working?
If there are too few, when will we get new trains? The President suggested during the SONA that new trains are on their way, but that assumes that the systems for the new trains are compatible, and this will still need testing. In the meantime, we wait. No wonder why the MRT/LRT has become an issue for 2016. Some have suggested that they will vote for someone, for anyone who will just make the MRT/LRT trains work.
Comparing current and past governments
The six previous SONAs were crawling with taunts against the former administration, especially former President Gloria Macapagal Arroyo (PGMA). Some suggest that this was necessary to reflect on starting conditions, but others opine that current government needs to take responsibility for its failures rather than harp on the past.
In lieu of this difference in opinions, one might ask whether there would be ways of making evidence-based comparisons. Unfortunately, if StatDev were to be used as a means of comparing the current and immediate past administration, the examination is rather limited to a few indicators, in large part because of different thrusts in the PDP of these governments.

Unfortunately, even this comparison of indicators may not be fair to either PGMA or Pnoy as starting conditions for both their governments are different and these starting conditions influence targets, and ultimately the probability of hitting the PDP targets.
What would be crucial is for government to adopt long-term targets (similar to the SDGs), so that empirical performance of governments may be compared across time in relation to these long term targets.
PNoy said in his final SONA, Simula pa lang ito, recognizing that there is still an unfinished agenda as there are some Filipinos who are being left behind.
The President had a final salvo about initiating an anti-dynasty bill. This bill will most certainly be another legislative landmark that will be added to the RH law, the revised sin tax law, the Competition Act, and the amended Cabotage Law.
The latter two legislations are clearly going to change the business landscape. The anti-dynasty bill, if passed by Congress and signed into law, will also provide more inclusivity in the political arena.
We cannot expect inclusive growth and development if we do not work on changing structures in business and politics that will likewise make them more inclusive.
Government, the private sector and the entire country will need to work in close partnership, examining both our gains and failures in the past, if we are to build a better future, and that future starts today. " Rappler.com
Dr. Jose Ramon "Toots" Albert is a professional statistician. He is a Senior Research Fellow of the governments think tank Philippine Institute for Development Studies(PIDS), and the president of the countrys professional society of data producers, users and analysts, the Philippine Statistical Association, Inc. for 2014-2015. He is also a member of the Armed Forces of the Philippines Multi-sectoral Governance Council.
Martin Joseph M. Raymundo is a Research Analyst at the Philippine Institute for Development Studies (PIDS). He received a bachelors degree in Development Studies from the University of the Philippines Manila in 2014, where he graduated cum laude.


Author: Jose Ramon Albert and MJ Raymundo
Date: August 12, 2015
Source: Rappler.com

The Conditional Cash Transfer (CCT) program is a long-term solution to intergenerational poverty.

National Economic and Development Authority (NEDA) Director General Arsenio Balisacan pointed this out yesterday as he defended before the House Committee on Appropriations the continued implementation of CCT, often called the government dole-out program.

Under the proposed 2016 national budget, the CCT program will be allocated P62.67 billion, up from P62.3 billion in 2015, to benefit 4.6 million household beneficiaries, Budget Secretary Florencio Butch Abad told the same House panel chaired by Davao Rep. Isidro Ungab.

At yesterdays Development Budget Coordinating Committee (DBCC) briefing on the P3.002-trillion national budget for 2016 before the House Committee on Appropriations, Balisacan justified the scaling up of the CCT program or the Pantawid Pamilyang Pilipino Program (4Ps) to cover more beneficiaries, including those in high school and beneficiary families.

However, opposition lawmakers Leyte Rep. Ferdinand Martin Romualdez, who heads the House Independent Bloc, and House Senior Deputy Minority Leader and Bayan Muna party-list Neri Colmenares maintained that the Aquino government should instead invest more on providing decent jobs to Filipinos rather than spending billions of pesos for the CCT.

Let us teach our people how to catch fish and not to continuously depend on governments resources through the CCT. It is the primary duty of the state to ensure that quality and decent jobs are given to Filipinos. The need for livelihood and jobs are the real concerns now and this is a long-term solution to address the widespread poverty, Romualdez, president of the Philippine Constitution Association (Philconsa), said.

LONG-TERM SOLUTION

But Balisacan said the decision to expand to high school aged children was based on research evidence that older Filipino children have lower school attendance rates than younger ones.

More generally, contrary to allegations that the CCT program is a dole out, I would like to emphasize that the CCT program is actually meant to provide a long-term solution to poverty.

It is grounded on studies (PIDS study in 2011) that a large part (47.4 percent in 2009) of our poor population are chronically poor, he told the Ungab panel.

The incentives or conditions that have been set in terms of health and education are actually meant to enable these poor families to break the cycle of intergenerational poverty and to fulfill our long-term objective of sustainable and inclusive growth, Balisacan pointed out.

He noted that poverty incidence has been reduced to 25.8 percent, with about half a million Filipinos lifted out of poverty between 2012 and 2014.

This implies a more equitable and inclusive distribution of the gains from economic development, he said.

While, admitting that they still have a lot of ground to cover in improving our peoples welfare, Balisacan said they have started to see greater inroads against poverty with faster growth, more jobs, and greater investments in social services.

CCT FOR VOTE BUYING?

But Colmenares warned that as May, 2016, national elections near, the CCT will likely be used by the Aquino administration for vote buying.

The CCT had always been questionable because it is essentially legalized vote buying because it is a means to influence voters and not a means to alleviate poverty, he said.

The budget should instead be used for creating jobs and implementing genuine land reform. This would benefit the poor more than the hundreds of billions spent for CCT, he pointed out.

Colmenares said the dole-out program, which has been implemented since the time of former President Gloria Macapagal Arroyo, failed to address the vicious cycle of poverty.

Matagal na tayong tumatawid pero di pa rin umaabot sa papuntahan, he said.

Romualdez had lamented that despite reported irregularities, the Aquino government increased the CCT budget this year from P62.6 billion in 2014 to P62.3 billion.

DSWD Secretary Corazon Soliman had assured that they have put in place measures that will ensure that rightful beneficiaries receive assistance under the 4Ps.

In separate interviews, Colmenares fellow Makabayan bloc lawmakers " Gabriela partylist Rep. Luz Ilagan and Kabataan partylist Rep. Terry Ridon renewed calls to scrap the CCT program.

From the very start we opposed this program. Along the way, we pointed out the anomalies, the problems, the weaknesses of the program. Such a humongous amount, increased every year, has not addressed poverty at all. It should be scrapped. The additional danger is that it will be an election instrument, Ilagan said.

The CCT should be scrapped altogether. By losing a third to unintended persons, it should already be a clear sign that the CCT is ineffective in poverty alleviation, Ridon said.

Youth group Anakbayan joined the opposition to the CCT program as it assailed massive cuts in the budget of state universities and colleges.

The group said that the budget cut was evident in the case of the University of the Philippines (UP).

As the allocation for education is being ripped profusely, Anakbayan accused President Aquino of pampering political allies through the bloated P62.67-billion CCT budget.

Worse, Malacaang also allocated P65.9 billion for the Public-Private Partnership (PPP) program for 2016 to sweeten the pot for companies willing to plunk in some investments for infrastructure projects before the Aquino administration leaves next year.

Anakbayan national chairperson Vencer Crisostomo said practically all SCUs will suffer the same fate as UP, which has no capital outlay for improving its dormitories and sprucing up its facilities, just as it has little to spend for new instructors.

UP recently figured in the news for failing to provide adequate housing facilities for students and overbooking classes.

For his part, Party-list Rep. Terry Ridon of Kabataan asked Aquino: How can our state universities provide decent services to students if the government continues to cut their budget? This situation only highlights the stark misprioritization of the Aquino administration " more funds for big business, less for social services.

The funds for CCT and PPP, Crisostomo said, come from hard-earned money from taxpayers who subsidize the still-idle beneficiaries of the CCT.

ADVERSE STUDIES

Worse, studies conducted by the Oxford University in England pointed to instances when local officials, particularly in Eastern Visayas, took control of the ATM cards of beneficiaries and made a cut on the P1,400 monthly subsidies.

For its part, the World Bank (WB) noted fund leakages that account for 19 percent of the total budget.

Their findings are close to the estimate of a former chief of the National Anti-Poverty Commission (NAPC) who said 40 percent of the beneficiaries were not dirt-poor and should be deleted by Soliman.

The DSWD has been implementing the CCT program to provide financial assistance to poor families since 2008.

Last March, the House Committee on Poverty Alleviation approved a bill seeking to institutionalize the CCT program to reduce poverty and promote human capital development in the country. (With a report from Chito A. Chavez)

Author: Charissa Luci
Date: August 11, 2015
Source: Manila Bulletin

The National Economic and Development Authority (NEDA) has underscored the importance of accurate and reliable statistical data and evidence which are crucial in determining how best to allocate limited resources.

This was stressed by Economic Planning Secretary Arsenio Balisacan yesterday during the launching of the Census of Population 2015 at Hotel Rembrandt in Quezon City.

The government relies on accurate statistical data to ensure that the policy decisions and actions we make truly respond to the peoples needs. The census is particularly useful for development planning from the national to local levels, investment programming, and targeting beneficiaries of social services such as health, education, housing and social protection, said Balisacan.

He noted that the census is an important input for political exercises, as the formation of congressional districts and cities depend partly on population count. It is also a basis for determining the amounts to be allocated for local government units (LGUs).

Even businesses and industries will also find the census data useful for identifying sites for establishing their businesses, determining consumer demand for various goods and services, and improving labor supply.

I have seen the power that high-quality data can lend to the formulation of public policies that affect millions of lives, said Balisacan.

Household-level statistics, including those generated from the census of population, have been important inputs to the design and implementation of poverty reduction programs and projects such as the Pantawid Pamilya program, and the National Health Insurance program.

Our interventions to minimize the impact of natural disasters on vulnerable communities and populations also rely greatly on statistics that provide information on geographic characteristics.

Balisacan pointed out that many of the policies and recommendations contained in the Updated Philippine Development Plan are based on the surveys and statistics generated by the Philippine Statistics Authority, as well as the body of research produced by leading local and foreign scholars and groups, including the University of the Philippines and the Philippine Institute for Development Studies (PIDS).

As we monitor our countrys progress towards achieving inclusive growth, we continue to rely on statistics generated from household surveys to check whether we need to make adjustments in order to hasten the pace of poverty reduction.

The NEDA is looking forward to the conduct of the 2015 Census of Population by the Philippine Statistics Authority (PSA). We can hardly wait to get the results of a complete enumeration of households in the entire country as these will provide us the data required to properly plan and implement social and economic development plans, policies, and programs, especially now that we are embarking on a process of crafting a long-term vision for the Philippines, Balisacan said.

Academic and research institutions are also looking forward to digging into the census data to study population growth and geographic distribution, prepare population projections at the national and sub-national levels, and do studies on a wide range of topics that we hope will also be useful to us in government, Balisacan added.

Read more at http://www.mb.com.ph/neda-urges-support-to-population-census/#rMToJhLIBml3WZju.99

Author: Edu Lopez
Date: August 10, 2015
Source: Manila Bulletin

MORE than 1.4 million Persons With Disabilities (PWDs) will be exempted from the 12-percent value added tax (VAT) once Senate Bill 2890 is passed into law, said Senator Sonny Angara.

The Senate ways and means committee, chaired by Angara, reported out on Wednesday the proposed measure, a consolidated version of House Bill 1039 principally authored by Rep. Ferdinand Martin Romualdez and similar bills authored by Senate President Pro-Tempore Ralph Recto and Senator Bam Aquino.

Senate Bill 2890 seeks to expand the benefits and privileges of PWDs under Republic Act 7277 or the Magna Carta for Disabled Persons.

Based on the 2010 data from the Philippine Statistics Authority, there were over 1.4 million Filipino PWDs or 1.57 percent of the countrys population.

Under RA 7277, disabled persons are those suffering from restriction or different abilities, as a result of a mental, physical or sensory impairment, to perform an activity in the manner or within the range considered normal for a human being.

Angara noted that if the bill is passed into law, it will align the PWD law with that of the Expanded Senior Citizens Act which provides a VAT exemption on top of their 20-percent discount on particular goods and services.

Specifically, PWDs will be exempted from the VAT on land transportation, domestic air and sea travels; on fees and charges for medical and dental services including diagnostic and laboratory fees, and professional fees of attending doctors in all government facilities as well as in all private hospitals and medical facilities; on cost of medicines; on fees and charges in hotels, restaurants and recreation centers; and, on admission fees in theatres, cinema houses, concert halls, and other similar places of culture, leisure and amusement.

Aside from the VAT exemption, SB 2890 also aims to ensure that PWDs will be considered as a dependent of a taxpayer under the Tax Code provided that the PWD is not gainfully employed and is chiefly dependent and living with the taxpayer so that the taxpayer can claim additional personal exemption.

The Department of Finance pegged the estimated foregone revenue at P1.1 billion but the ways and means chairman argued that the actual foregone revenue may be lower considering the number of registered PWDs with IDs.

Based on the 2014 data from the Philippine Registry for Persons with Disability of the Department of Health, there are only 28,344 registered PWDs with IDs or a mere 2 percent of the total PWD population due to lack of necessary logistics of issuing offices such as the city and municipal social welfare development.

A Philippine Institute for Development Studies 2008 and 2010 survey showed that PWDs have very low participation in discount privileges mandated by the Magna Carta for PWDs mainly because they are not aware of any policy that supports them and because they do not have the required PWD ID.

Be that as it may, the benefits that will be derived by our PWDs and their families from this measure far outweigh the supposed revenue loss to the government, the senator said.

Angara is also set to file a resolution to look into the state of compliance and implementation of laws empowering PWDs to identify the gaps and the necessary measures that can be taken to ensure that they are provided with opportunities that will enable them to develop their potential and become fully participative members of society.

He further urged all agencies to intensify their information dissemination campaign, and to streamline the process for the application of the PWD ID.

Author: Macon Ramos-Araneta
Date: August 07, 2015
Source: The Standard

To give reprieve to the plight of persons with disabilities (PWDs), Senator Sonny Angara is pushing for the passage of a bill that seeks to exempt persons with disabilities from the 12-percent value added tax (VAT) on certain goods and services.

The Senate ways and means committee on Wednesday reported out Senate Bill 2890, a consolidated version of House Bill 1039 principally authored by Rep. Ferdinand Romualdez and similar bills authored by Senate President Pro-Tempore Ralph Recto and Senator Bam Aquino, which seeks to expand the benefits and privileges of PWDs under Republic Act 7277 or the Magna Carta for Disabled Persons.

"Tunay na nararapat lamang na bigyan ng ibayong atensiyon at tulong ng ating gobyerno ang mga kababayan nating may kapansanan. Ang mga tulong na ito hindi lamang sa pamamagitan ng direktang tulong pinansyal kung hindi pati na rin sa pagpasa ng mga panukalang batas na naglalayong mapagaan ang kanilang buhay," said Angara in his sponsorship speech.

Based on the 2010 data from the Philippine Statistics Authority, there were over 1.4 million Filipino PWDs or 1.57 percent of the country's population.

Under RA 7277, disabled persons are those suffering from restriction or different abilities, as a result of a mental, physical or sensory impairment, to perform an activity in the manner or within the range considered normal for a human being.

If this bill is passed into law, it will align the PWD law with that of the Expanded Senior Citizens Act which provides a VAT exemption on top of their 20-percent discount on particular goods and services.

Specifically, PWDs will be exempted from the VAT on land transportation, domestic air and sea travels; on fees and charges for medical and dental services including diagnostic and laboratory fees, and professional fees of attending doctors in all government facilities as well as in all private hospitals and medical facilities; on cost of medicines; on fees and charges in hotels, restaurants and recreation centers; and, on admission fees in theatres, cinema houses, concert halls, and other similar places of culture, leisure and amusement.

Aside from the VAT exemption, SB 2890 also aims to ensure that PWDs will be considered as a dependent of a taxpayer under the Tax Code provided that the PWD is not gainfully employed and is chiefly dependent and living with the taxpayer so that the taxpayer can claim additional personal exemption.

The Department of Finance pegged the estimated foregone revenue at P1.1 billion but the ways and means chairman argued that the actual foregone revenue may be lower considering the number of registered PWDs with IDs.

Based on the 2014 data from the Philippine Registry for Persons with Disability of the Department of Health, there are only 28,344 registered PWDs with IDs or a mere 2 percent of the total PWD population due to lack of necessary logistics of issuing offices such as the city and municipal social welfare development.

A Philippine Institute for Development Studies 2008 and 2010 survey showed that PWDs have very low participation in discount privileges mandated by the Magna Carta for PWDs mainly because they are not aware of any policy that supports them and because they do not have the required PWD ID.

"Be that as it may, the benefits that will be derived by our PWDs and their families from this measure far outweigh the supposed revenue loss to the government," the senator said.

Angara is also set to file a resolution to look into the state of compliance and implementation of laws empowering PWDs to identify the gaps and the necessary measures that can be taken to ensure that they are provided with opportunities that will enable them to develop their potential and become fully participative members of society.

He further urged all agencies to intensify their information dissemination campaign, and to streamline the process for the application of the PWD ID.

"Huwag nating maliitin ang natatanging potensiyal ng ating mga kababayang PWDs. Tunay na marami sa mga Pilipinong may kapansanan ang nagtagumpay sa iba't ibang larangan gaya ng negosyo, edukasyon, pulitika, at sports. Hindi naging hadlang ang kapansanan sa kanilang pagsisikap na makamit ang minimithing pangarap," Angara said.

"Truly, they have the capacity to become productive citizens of the nation if only we give them the necessary assistance and encouragement. Isang paraan lamang po ito para tulungan silang makatawid at makaakyat sa kanilang buhay. Nais lamang po natin siguraduhin na hindi po sila nag-iisa sa pagpasan sa kanilang kapansanan," he added.

Author:
Date: August 05, 2015
Source: Senate Press Releases

MANILA, Philippines - The year 2015 is the deadline for the Millennium Development Goals (MDGs) by the United Nations (UN). Set to replace them for 2016 are the Sustainable Development Goals (SDGs).

In line with this, members of the academe and the development sector formally launched the Philippine chapter of the Social Development Solutions Network (SDSN) on Monday, August 3.

The SDSN aims to help find concrete solutions to some of the worlds most pressing environmental, social, and economic problems to achieve sustainable development. SDSN is directed by economist Dr Jeffrey Sachs of the Earth Institute of Columbia University.

SDSN was first established by UN Secretary-General Ban Ki-Moon in August 2012. According to the UN, the initiative seeks to promote collaboration between governments, the academe, civil society, and the private sector.

The points of the SDG will serve as the guidelines for future development policies. In a press conference, Sachs told the media that just hours prior to the launch, in New York, the UN General Assembly finalized the SDG.

This means 193 governments have agreed in advance for the agenda, Sachs said.

New set of goals

There were 8 goals put forth in the MDG. For the SDG, there are 17 goals to serve as frameworks for future policies. There was originally 100.

The expanded agenda is a result of the estimate that the world population will rise to 9 billion by 2015 and that global gross domestic product will rise to more than $200 trillion, potentially increasing the risk of social inequality.

The new set of goals aims to involve the private sector and civil society in global development.
The SDGs contain a number of differences from the MDGs. The primary difference is that while the MDGs were crafted by a number of experts from international organization, the crafting of SDGs involved consultation efforts through a 70-state Open Working Group (OWG).

This included a series of global conversations that included 11 thematic and 83 national consultations, as well as door-to-door surveys. They also had the online My World survey, which asks for what individuals might have wanted to see in the SDGs.

The Philippines is not part of the Asia-Pacific Group of the OWG that helped draft the list.

The UN is set to hold a summit from September 25-27 later this year where they will adopt the final document. The head of the Roman Catholic Church, Pope Francis, is expected to address the summit delegates. (READ: Pope Francis: Beyond reports, action vs hunger more important)

Progress

The launch was preempted by a series of public lectures by members of the aforementioned sectors.

Sachs initiated the lectures, discussing the process that went into the crafting of the SDGs.

Its very heartening that at a time when we need this concept (of sustainability), rather than arguing about it, the entire global political community has come together to say yes, we will pursue sustainable development...economic development that is socially inclusive and environmentally sustainable...the triple bottom line, Sachs told the media.

(The Philippines) is on the frontline of global climate change. We need to reorient our economic strategies so it is holistic, truly sustainable, Sachs added. (READ: Jeffrey Sachs: Philippines has much to teach world)

Sachs was followed by National Economic Development Authority, Arsenio Balisacan who discussed countrys economic progress over the years.
Balisacan also said the Philippines had a high probability of meeting MDG indicators for food poverty, school participation, women empowerment, child mortality, combating malaria and tuberculosis, access to potable water, and access to sanitary toilet facilities.

Balisacan also showed, however, that the Philippines has a medium probability of meeting target indicators for income poverty and underweight children and a low probability of meeting target indicators for cohort survival or the percentage of enrollees who graduate, gender disparity in political participation, maternal mortality, access to reproductive healthcare, and combatting HIV/AIDS.

Challenges

After the lectures of Sachs and Balisacan, a panel of reactors gave their opinions on the SDGs.

Dr Emmanuel de Dios, President of the Human Development Network, welcomed the new paradigm of the SDG, adding how it no longer makes sense to continue following the paradigm of development from the days of the industrial revolution or even the tiger economies.

In particular, he emphasized the role of research and development in universities. The universities have to be configured. Our universities are in the business of educating professionals...the production of individual careers. We are not, I fear, in the business of producing solutions, de Dios said.

Executive Secretary of the Catholic Bishop Conference of the Philippines (CBCP) National Secretariat for Social Action Fr. Edwin Gariguez expressed his support for the SDG, saying the Catholic Church in the Philippines has always had the prerogative to be involved in development. (READ: Cardinal Tagle elected head of global Catholic charities)

Social Watch convenor Professor Leonor Briones talked about the imperative for universities to take part in development. Briones said universities must require more from their students besides poems and term papers. (READ: #PHVote 2016 challenge: Lets go to Tondo)

Briones talked about the problem of education and employment for women, political participation of women, and how the civil code does not treat women as equal citizens. Briones also brought up the limitations of the civil code on same-sex marriage.
Briones also warned of the challenge the country faces on underspending. We keep on adding and adding money but we dont improve government procedures, structures, rules, which still continue under the old ways of doing things, Briones said. (READ: SONA 2015: Aquino govt continues to underspend)

Chief Finance Officer and Finance Group head of the Ayala Corporation, Jose Teodoro Limcaoco represented the private sector. He agreed with de Dios and Briones, saying universities in the country are excellent at educating but leave much to be desired in terms of research and development.

President of Youth Lead Philippines Metodio Maraguinot Jr. told the delegation the youth should be treated as partners in the process of development. Rizal said the youth are the future. I say we are also the present, Maraguinot said.

Lofty goals

After talking about the the governments achievements in expanding fiscal space without increasing tax burdens, Budget Secretary Florencio Abad proposed his own, more concise version of the SDGs.

Lead Convenor of the National-Anti Poverty Commission (NAPC) Joel Rocamora, on the other hand, said there is still much work to be done as far as eradicating poverty goes and its important to constantly debate on the meaning of inclusive growth.
After the lectures concluded, the SDSN was formally launched with members signing an oath of commitment.

The following are the SDSN-Philippines Council members who signed:

Emmanuel de Dios Ph.D., the President of the Human Development Network
Rosalinda Pineda-Ofreneo Ph.D., President of Homenet Philippines and Regional Coordinator of Homenet Southeast Asia
Mary Jean Caleda, Ph.D., Assistant to the Dean for Research and Governance Practice of the Ateneo School of Governance
Fernando Aldaba Ph.D., Dean of the Ateneo de Manila University School of Social Sciences
Francis Magno Ph.D., Director of the Jessie M. Robredo Institute of Governance
Edgar Chua, Chairman of Philippine Business for Environment
Manuel Pangilinan, Chairman of Philippine Business for Social Progress
Jesus Arranza, Chairperson of the Federation of Philippine Industries
Alfredo Yao, President of the Philippine Chamber of Commerce and Industry
Francisco del Rosario Jr., President of the Management of Association of the Philippines
Leonor Briones, Head of the Alternative Budget Initiative of Social Watch
Wigberto Taada Sr., former senator and Quezon 4th district representative
Filomeno Sta. Ana III, Action for Economic Reform Coordinator
Arsenio Tanchuling, President of Alyanasa Agrikultura
Isagani Serrano, Acting President of the Philippine Rural and Reconstruction Movement
Gilbert Llanto, President of the Philippine Institute of the Development Studies, and Regional Coordinator of the East Asian Development Network under the Global Development Network
Solita Collas-Monsod, Professor Emeritus of the Schoolf Of Economics of the University of the Philippines and Founder of the Philippine Human Development Network
Edwin Gariguez, Executive Secretary of the Catholic Bishops Conference of the Philippines National Secretariat for Social Action

As membership to the SDSN is open, a number of attendees also signed the pledge of commitment to the SDGs. " Rappler.com

Author: Gerard Lim
Date: August 04, 2015
Source: Rappler.com

Recto: 'This should be augmented because if there will be 50,000 employees affected, it translates into about P840 in monthly aid per individual.'

MANILA, Philippines " Senator Ralph Recto has called on the government to increase its assistance funds to displaced college teachers and workers due to the implementation of the K to 12 program.
Recto said the Department of Labor and Employments (DOLE) proposal of P500 million assistance funds in the national budget should be increased, saying it is not enough for the affected employees.
This should be augmented because if there will be 50,000 employees affected, it translates into about P840 in monthly aid per individual, Recto said in a statement on Sunday, August 9.
With this, the senator suggested that funds allocated for non-urgent and postponable activities in the P3 trillion national budget be rechanneled to augment the DOLE aid package to K to 12 affected personnel.
To identify and correct deficiencies, Recto called on the Department of Budget and Management (DBM) to list in one package all programs that will aid displaced faculty and personnel.
Under the K-to-12 plan, Grade 10 finishers are kept in high school for two more years of senior high school beginning 2016. This will lead to temporary unemployment of college faculty and personnel when high schools stop churning out college-bound graduates next year.
The idea, he said, is to find out if the DOLE-Department of Education-Technical Education and Skills Development Authority "Commission on Higher Education Joint Guidelines on the Implementation of the K to 12 are fully funded.
Assistance to college workers could come in the form of employment in public schools through green lanes dedicated to them, assignment to senior high school class if the college offers it, moratorium on the payment of SSS and PagIBIG loans, training, livelihood packages, and other forms of bridge financing.
The Philippine Institute for Development Studies has predicted that up to 33,000 college instructors may be temporarily idled until the pioneering Grade 12 class graduates in 2018. " Rappler.com

Author:
Date: August 09, 2015
Source: Rappler.com

The Asian Development Bank (ADB) Institute has recently conducted an APEC conference series for researchers and scholars to discuss with policy makers the merits and controversies of the APEC agenda in Manila.

The APEC Study Centers (ASCs) Consortium Conference is basically an academic conference between the ASCs of the APEC-member countries.

(It) provides an excellent opportunity for researchers, scholars and policy makers to discuss and exchange ideas on the APEC themes and to identify areas for regional collaboration among other ASCs, a statement from the ADB Institute said.

APECFor the event, the ADB was joined by the Philippine Institute for Development Studies (PIDS), Philippine APEC Study Center Network, and the Ateneo de Manila University. The forum provided information sharing between APEC economies and research groups.

PIDS said the conference " which was part of the Second Senior Officials Meeting " discussed enhancing trade and investments, as well as supply chains to fully reap the benefits of global value chains.

Trade is central to the world economy and a main driver of global integration. Production chains mean that most products or services are assembled with inputs from many countries, said PIDS. Supply chain connectivity then is vital for the efficient flow of trade among APEC economies by allowing firms to source materials from any part of the world and to deliver products and services to consumers anywhere in the world.

Supply chain connectivity covers trade facilitation, physical infrastructure, and people-to-people exchanges and networks, added PIDS. The gains from regional integration"and how extensive the scope of these gains will be"largely depend on the volume and quality of trade and investment patterns, infrastructure, and connectivity in the APEC region. Supply chain barriers cause higher operating and capital expenses, increased risks, and lower trade volume.

The ADB Institute said conference discussions could are inputs for APEC working groups and later, might also be integrated in the APEC leaders statements.

The official theme of the 2015 APEC Philippines is Building Inclusive Economies, Building a Better World.

By gathering academics and policy makers and stimulating dialogue, the conference will help achieve the larger goals of the Philippines as this years APEC host economy, said ADB Institute.//


Author: Lee C. Chipongian
Date: August 09, 2015
Source: Manila Bulletin

A new industrial policy for the Philippine automotive manufacturing sector is expected to significantly boost local vehicle production in two years, the Philippine Institute for Development Studies (PIDS) said.
Citing estimates from the Philippine Automotive Competitiveness Council Inc. (PACCI), a PIDS discussion paper read the local sector has the potential to make 273,000 units by 2017 (of which 225,000 will be for domestic market and 48,000 for exports market) and 506,000 units by 2022 (of which 350,000 for domestic and 156,000 for exports market).
As of end 2014, the Philippines produced only 88,845 motor vehicles and 729,480 motorcycles, data from the Asean Automotive Federation showed. If the estimated vehicle production will materialize, this will reflect a more than 200 percent surge in local assembly operations.
The government recently issued Executive Order No. 182 that provides for the implementation of the Comprehensive Automotive Resurgence Strategy (CARS) Program, which dangles some P27 billion worth of incentives for its participants.
Apart from enabling the country to resume vehicle exports, the new industrial policy is also expected to increase the market share of completely knocked-down (CKDs) units, or those assembled here. It is also seen to generate P41 billion in additional investments, P150.5 billion worth of additional output, P11.1 billion worth of additional household income, as well as 70,000 new jobs. //


Author: Amy Remo
Date: August 08, 2015
Source: Philippine Daily Inquirer

MORE than 1.4 million Persons With Disabilities (PWDs) will be exempted from the 12-percent value added tax (VAT) once Senate Bill 2890 is passed into law, said Senator Sonny Angara.
The Senate ways and means committee, chaired by Angara, reported out on Wednesday the proposed measure, a consolidated version of House Bill 1039 principally authored by Rep. Ferdinand Martin Romualdez and similar bills authored by Senate President Pro-Tempore Ralph Recto and Senator Bam Aquino.
Senate Bill 2890 seeks to expand the benefits and privileges of PWDs under Republic Act 7277 or the Magna Carta for Disabled Persons.
Based on the 2010 data from the Philippine Statistics Authority, there were over 1.4 million Filipino PWDs or 1.57 percent of the countrys population.
Under RA 7277, disabled persons are those suffering from restriction or different abilities, as a result of a mental, physical or sensory impairment, to perform an activity in the manner or within the range considered normal for a human being.
Angara noted that if the bill is passed into law, it will align the PWD law with that of the Expanded Senior Citizens Act which provides a VAT exemption on top of their 20-percent discount on particular goods and services.
Specifically, PWDs will be exempted from the VAT on land transportation, domestic air and sea travels; on fees and charges for medical and dental services including diagnostic and laboratory fees, and professional fees of attending doctors in all government facilities as well as in all private hospitals and medical facilities; on cost of medicines; on fees and charges in hotels, restaurants and recreation centers; and, on admission fees in theatres, cinema houses, concert halls, and other similar places of culture, leisure and amusement.
Aside from the VAT exemption, SB 2890 also aims to ensure that PWDs will be considered as a dependent of a taxpayer under the Tax Code provided that the PWD is not gainfully employed and is chiefly dependent and living with the taxpayer so that the taxpayer can claim additional personal exemption.
The Department of Finance pegged the estimated foregone revenue at P1.1 billion but the ways and means chairman argued that the actual foregone revenue may be lower considering the number of registered PWDs with IDs.
Based on the 2014 data from the Philippine Registry for Persons with Disability of the Department of Health, there are only 28,344 registered PWDs with IDs or a mere 2 percent of the total PWD population due to lack of necessary logistics of issuing offices such as the city and municipal social welfare development.
A Philippine Institute for Development Studies 2008 and 2010 survey showed that PWDs have very low participation in discount privileges mandated by the Magna Carta for PWDs mainly because they are not aware of any policy that supports them and because they do not have the required PWD ID.
Be that as it may, the benefits that will be derived by our PWDs and their families from this measure far outweigh the supposed revenue loss to the government, the senator said.
Angara is also set to file a resolution to look into the state of compliance and implementation of laws empowering PWDs to identify the gaps and the necessary measures that can be taken to ensure that they are provided with opportunities that will enable them to develop their potential and become fully participative members of society.
He further urged all agencies to intensify their information dissemination campaign, and to streamline the process for the application of the PWD ID.//


Author: Macon Ramos-Araneta
Date: August 07, 2015
Source: The Standard

Metro Manila (CNN Philippines) " Francis Garcia is an engineer in a small company that imports solar cells and assembles them into lighting systems for homes and remote communities.
The company also makes solar-powered trays which are cleaner alternatives for farmers who dry grains on the road. It's a product developed by his companions in a Filipino inventors' cooperative.
But he admitted that few Filipino households can afford these products. The installation cost for home systems alone can exceed a million pesos.
Garcia added that tariffs for solar cells keep prices high.
Mataas pa talaga, nasa 20% pa. So nangyayari, siyempre when you have taxes, ipapasa mo rin yan sa mga buyer."
In June, President Aquino signed Executive Order 185 to lower tariffs on environmental goods and services to 5% or less by the end of the year. It was a move to ease the burden on solar power producers and consumers.
We have committed ourselves to liberalize the entry of 54 environmental goods, and so far we are doing excellent with that, said Department of Foreign Affairs Undersecretary Laura del Rosario, who is Senior Officials' Meeting chair of the 2015 Asia-Pacific Economic Cooperation [APEC] forum.
According to The APEC List of Environmental Goods, "APEC Leaders set an ambitious target " to develop a list of environmental goods (EG) which contribute to green growth and sustainable development, and to reduce applied tariffs on these goods to 5 percent or less by 2015."
All member economies of the APEC have made this commitment in line with the forum's goal to spur investment in environmental goods and services " and promote green growth in the region.
These goods include renewable energy equipment, waste recycling systems, and pollution meters.
According to APEC's Policy Support Unit, around $545.6 billion worth of economic goods and services is traded around the world.
Of this figure, the share of APEC members is nearly 60% " and the value continues to grow each year by 15.5% on average.
Citing solar power as an example, an economist said lower tariffs will benefit Filipino consumers and producers.
Lower tariffs means lower prices for electricity consumers because on the part of producers, the cost of generating solar power will also go down, said Ernesto Pernia, Professor Emeritus of the University of the Philippines School of Economics.
For his part, Garcia said that lower production costs will motivate producers to reduce costs " and encourage greater investment in solar power: "Immediately talagang maibababa namin yan."
Mas bumaba yung price mo mas maraming ma-eenganyo gumamit ng solar power system
But its not all good news. In a report, the Philippine Institute for Development Studies warned that the initiative would favor free-riders in that non-members could enjoy lower tariffs without reducing their own barriers."
Economies outside APEC might benefit from lower tariffs even if they dont reduce their own barriers " known as a free-rider problem.
By the Most-Favored-Nation (MFN) principle of the GATT [General Agreements on Tariffs and Trade], all tariff cuts negotiated within APEC must be extended to non-members," the report added.
Under an international trade rule, all tariff cuts negotiated within APEC must also be extended to non-members.
But Pernia said that this is no cause for concern.
I dont think that is something to worry about, because even if that happens, the benefits will not be diminished Suppose the Philippines imports from countries that are not members of APEC, then producers and consumers in the Philippines would benefit from lower tariffs, too.
It's still a long way to go before solar power " and other sources of renewable energy " can make a substantial contribution to the country's energy needs.
But companies like Garcia's can look forward to a viable venture with lower tariffs for environmental goods to begin with.//


Author: Miro Capili
Date: August 05, 2015
Source: CNN Philippines

MANILA, Philippines " Gender inequality hurts both men and women, with the latter shouldering extra weight.
Latest government data shows that the Philippines has so far failed 4 out of the 7 indicators for the Millennium Development Goal (MDG) of achieving gender equality and women empowerment. It also failed in reaching targets on maternal mortality and reproductive healthcare.
As the MDGs are expiring by the end of 2015, the global community is once again preparing for a new set of targets known as the Sustanabile Development Goals (SDGs), part of the United Nations' post-2015 development agenda.
One out of the 17 ambitious SDGs is to "achieve gender equality and empower all women and girls" in the next 15 years.
Will the Philippines fare better this time?
Philippine performance
The MDG of achieving gender equality expects governments worldwide to eliminate gender disparity among schools.
As of 2013, the Philippines has managed to balance the ratio of girls to boys in high school, but not in primary and tertiary education, the National Statistical Coordination Board reported.
Official data also revealed that Filipino boys are "underperforming in school." Girls fared better in literacy rates and national achievement tests, while boys were more likely to drop out.
But girls outperforming boys does not spell gender equality.
"When the woman in a family is the better educated and has larger potential income outside the home, she is expected to do both full-time work and fulfill traditional home and child-care duties," Clarissa David of the University of the Philippines and Jose Ramon Albert of the Philippine Institute of Development Studies wrote in June 2015. (READ: Why many of the hungry are women)
"Taken to the extreme, research in other countries has found that well-educated and highly paid women who are in unequal partnerships with their spouse are vulnerable to domestic abuse," they added.
In fact, one-fourth of married Filipino women has experienced sexual, physical, or emotional violence from their husbands, the 2013 National Health and Demographic Health Survey showed. And over 3,000 Filipino girls experienced child abuse in 2014, the Department of Social Welfare and Development (DSWD) documented. This is nearly double the number of cases among boys.
It is important to note how gender inequality during childhood could extend its impacts until much later.
Meanwhile, in terms of governance, there are also less Filipino women in leadership positions.
Filipino women in political seats
Source: Philippine Commission on Women
Women in Senate 6 out of 24 senators
Women in House of Representatives 79 out of 289 representatives
Women as governors (2013 elections) 23%
Women as municipal mayors
(2013 elections) 21%
During the launch of the Sustainable Development Solutions Network-Philippines on Monday, August 4, Leonor Briones of Social Watch also emphasized the importance of gender in development.
From 1998 to 2013, there has always been more employed men than women, official labor statistics showed.
Employed persons in the Philippines
Source: Department of Labor and Employment
Men Women
1998 16.7 M 9.9 M
2005 19.9 M 12.4 M
2013 23.2 M 14.97 M
If only more women were given fair access to education and jobs, they could greatly contribute to the economy, Briones stressed.
The same goes for lesbian, gay, bisexual, and transgender (LGBT) Filipinos who might be missing out on economic opportunities due to discrmination.
Old laws, old problems
Although the Philippines has several laws supporting women, Briones argued that it also has outdated policies that need to go.
"You have the Civil Code of the Philippines which still contains provisions which do not necessarily treat women as equal citizens," Briones explained.
Discriminatory provisions in the PH Civil Code:
The husband is the administrator of the conjugal property.
No marriage license shall be issued to a widow till after 300 days following the death of her husband.
The wife cannot, without the husband's consent acquire any property by gratuitous title, except from relatives.
The wife manages the affairs of the household.
The wife may exercise any profession or occupation or engage in business. However, the husband may object.


"Now in this day and age, when we might have same-sex marriages, and if the law says that it is the husband whos head of the family, how do we determine who is the husband and who is the wife? Thats a very serious question," she added.
Unlike the MDGs which did not give much attention to LGBT issues, the SDGs might provide an avenue for such discussions.
While advocates are criticizing the Philippines for upholding archaic laws discrminating women, they are also praising it for introducing innovative policies like the Reproductive Health (RH) law.
RH, the UN Women stressed, is closely linked to development: "Sustainable development cannot be achieved unless all women and girls enjoy universal access to sexual and reproductive health and rights over the life cycle, enabling them to make free and informed decisions about sex and reproduction."
With the RH law in full swing, much is to be expected of the Philippines in achieving women empowerment in the coming years, according to advocates. Results, however, are yet to be seen.
Ways forward
Unlike the MDGs which primarily focused on education, the SDGs propose to also look at mechanisms for addressing gender-based discrimination and violence; unequal access to political participation, reproductive health, and paid work; and harmful practices like child marriage and female genital mutilation.


SUSTAINABILITY. Women contribute greatly to both national and household food security
Harnessing women's knowledge and collective action could help achieve sustainable development, the UN Women stressed. Apart from education, employment, and governence, women are also important players in:
Ecosystem conservation
Resource productivity and efficiency.
Building more sustainable, low-carbon and climate-resilient food, energy, water, sanitation, and health systems.
In September 2015, the UN will hold a summit to discuss the adoption of the SDGs. Out of the several goals that the world wishes to accomplish in the coming years, advocates are reminding governments not to forget to fate of women and girls. " Rappler.com


Author: Fritzie Rodriguez
Date: August 05, 2015
Source: Rappler.com

MANILA, Philippines - The move to shut down remittance firms in developed countries may negatively impact remittance flows to the Philippines but only temporarily, according to an official of the Philippine Institute for Development Studies (PIDS).
The policy of some advanced countries to close remittance firms may cause disruption in remittance inflows, which is an emerging risk to household spending, PIDS acting vice president Adoracion Navarro told The STAR.
She said this is being done by advanced economies to fight money laundering, which funds terrorism.
Since last year, the United States, Australia, New Zealand and United Kingdom have shut down remittance firms, supposedly to curb terrorist financing.
These countries host a large population of overseas Filipino workers (OFWs).
On balance, the disruption could hurt the spending of families who depend on the remittances, Navarro said.
Business ( Article MRec ), pagematch: 1, sectionmatch: 1
Cash transfers of OFWs grew at a slower pace of 1.5 percent in January and 2.4 percent in February.
But this picked up in March, April and May at 5.5 percent, 5.4 percent and 5.8 percent, respectively.
In 2014, the cash remittances of OFWs expanded 5.9 percent to $24.3 billion from $22.9 billion in 2013.
The PIDS official, however, noted the impact on the volume of remittances would only be during the adjustment period and the annual volume is perhaps unlikely to drastically go down.
The added costs of sending through other channels could also reduce the net amount sent, but perhaps only temporarily, she said.
This is because of the Filipinos behavior of demonstrating their love for their families, or what economists and financial analysts call resilience of Philippine remittance flows, Navarro explained.
For many Filipinos, love of family means being able to sacrifice for them. So OFWs try to maintain the same level of comfort, the same standard of living for their families back home through thick and thin, whether the global economy is down or not, or even when the global system, in meeting a worthy objective like anti-money laundering, puts barriers for them like this closure of some remittance channels, she said.//


Author: Danessa O. Rivera
Date: August 03, 2015
Source: Philippine Star

Agriculture must get a significant boost in the next 11 months to prepare the ground for continuing inclusive growth in the next administration.

President Aquino gave one of his most impressive speeches in his last State of the Nation Address (Sona) on July 27. Even the most skeptical will concede that P-Noy, with the documented facts and figures he presented, did an outstanding job for our people.

However, an area for potential improvement that should get more focus is agriculture. The table below compares the growth of the agriculture sector vis-a-vis the industrial sector in the Arroyo and Aquino administrations.

Growth Rate (%)
Agriculture Industry
2004 -2010 (Arroyo) 2.8 % 5.2 %
2010-2014 (Aquino) 2.1 % 6.5 %

Note that the 2.1% agriculture growth during the first year of President Aquinos term is only half of the 4.0% target.

The Department of Agriculture (DA) bureaucracy failed to support Secretary Proceso Alcalas call for significant agriculture development and increasing farmer and fisherfolk incomes.

We suggest three initiatives that should be carried out in the next 11 months to better achieve inclusive growth.

Roadmaps. The government think tank Philippine Institute for Development Studies (PIDS) collects and reviews sector roadmaps for the country. Twenty-nine have been submitted since October 2012, but not one on agriculture has ever been received.

While the industry sector had its subsectors guided by these roadmaps that the government and the private sector implemented in a united way, agriculture did not have this advantage. This may be one of the reasons why industry has grown much faster than agriculture.

In addition, industry improved more during the Aquino administration because it was guided by these roadmaps.

It should be noted that in 2014, the Department of Trade and Industrys (DTI) budget was less than P5 billion, while DAs budget was more than P70 billion.

We must start the formulation and implementation of agriculture roadmaps. These will help ensure the focused use of the DA budget as well as motivate joint private-public action to achieve unique necessary developments in each agriculture subsector.

With these roadmaps completed in the next 11 months, the next administration will have a general blueprint to follow.

Implementation. Even if good roadmaps are formulated, poor implementation will make them ineffective.

The DA has not responded adequately to Alcalas advocacy for true agriculture development and increasing farmer and fisherfolk incomes. There is a missing management system that will ensure systematic follow-ups, disciplined monitoring and evaluations, and corrective actions.

In 1988, I teamed-up with Trade Secretary Jose Concepcion and Product Standards Director Renato Navarette to introduce the ISO 9000 management system in the Philippines. Potential exporters who could not sell their products saw their businesses improve once they adopted this system.

Today, while all DTI Regional Offices have ISO 9000, none of their DA counterparts have it.

Program implementation is therefore considered more effective in DTI than in DA. In the next 11 months, the DA should have a concerted effort in putting into place an extensive and effective management system like ISO 9000 so that the next administration can effectively implement plans.

Smuggling. The estimated smuggling rate for both agriculture and industry steadily increased from 6 percent in 2005 to 35 percent in 2013. Thankfully, this decreased to approximately 30 percent last year. This is partly because of new Bureau of Customs management and support from the public-private sector-led National Competitiveness Councils Anti-Smuggling Committee.

For more than one and a half years, the departments of Finance, Justice, and Trade and Industry assigned official representatives to this committee. Recommendations were thus systematically carried out by these departments. On the other hand, the DA only appointed a representative last month. In effect, the anti-smuggling efforts of the DA suffered.

The DA should make up for lost time by giving top priority to fighting smuggling and providing full support to its newly-appointed member in the committee.

In the next 11 months, swift and decisive action should be taken in creating agriculture roadmaps, implementing effective management systems like ISO 9000, and ensuring anti-smuggling action.

We can then see more inclusive growth and a better foundation for the next administrations Tuwid na Daan.

(The author is chair of Agriwatch, former Secretary for Presidential Flagship Programs and Projects, and former Undersecretary for Agriculture, Trade and Industry. For inquiries and suggestions, email agriwatch_phil@yahoo.com or telefax (02) 8522112).

Read more: http://business.inquirer.net/196392/agriculture-boost-needed-in-the-next-11-months#ixzz3hoFTkHrb
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Author: Ernesto M. Ordoez
Date: August 04, 2015
Source: Philippine Daily Inquirer

WITH LESS than a year before the end of the Aquino administration, the government has yet to implement strategic programs for the chronic poor, who are unable to meet conditions that would allow them to benefit from anti-poverty programs.
There are no strategic programs targeting the chronic poor, Fernando T. Aldaba, dean of Ateneo de Manila University (ADMU) School of Social Sciences, said at a forum in Makati City entitled the Aquinos Last Mile: Ramping Up and Sustaining Daang Matuwid.

Among the programs for the chronic poor should include an unconditional cash transfer and measures in health, education and livelihood, the economist noted. According to recent estimates of the Philippine Institute for Development Studies, members of the chronic poor comprise 11.1% of the population and most of them -- at 85.8% -- live in rural areas. The sector experiences a state of impoverishment over an extended period of time.

Mr. Aldaba acknowledged that the governments conditional cash transfer (CCT) program -- which gives money to poor families as long as they keep their kids in school, among other conditions -- has done relatively well.

The next administration should continue the CCT program as it is a long-term human capital investment so the next administration should continue it.

Right now, were seeing partial effects, we have to sustain it, he said.

Some 4.4 million household-beneficiaries are currently registered under the CCT program.

Beneficiaries receive a P500 health grant per household every month and P300 education grant per child every month for ten months.

But the program remains unable to cover the chronic poor since they lack the ability to meet its conditions.

Mr. Aldaba also said that President Benigno S. C. Aquino III has not convened the NAPC (National Anti-Poverty Commission) ever.

Mr. Aldaba said it is important to convene the NAPC because you want to know the programs they need since there are representatives from the poor sector in the said commission.

Mr. Aldaba outlined four urgent concerns that the next administration should address: underemployment, chronic poverty, hunger mapping, and vulnerability.

Meanwhile, Calixto V. Chikiamco, Foundation for Economic Freedom president, also identified five arrows that will address widespread poverty in the Philippines.

During the Makati event, he said that the government should be open to foreign investment; modernize labor rules and regulations; increase agricultural productivity; bring about a competitive exchange rate; and undertake institutional reform.

Author: Kathryn Mae P. Tubadeza
Date: August 03, 2015
Source: Business World

President Aquino failed to address these, economists say:
MANILA, Philippines " Restricted foreign investments, underemployment, unrealistic minimum wage, and an underperforming agricultural sector are urgent concerns that the next administration should address because President Benigno Aquino III failed to deal with these, economists said.

During the Aquinos Last Mile: Ramping Up and Sustaining 'Daang Matuwid' forum in Makati City Monday, August 3, economists tackled the challenges to be faced by the next administration.

Although the Philippine economy has been growing for an average of 6.5% for the past 5 years, they said growth has not been fully inclusive.

"Sustaining economc growth is not all you need to do. Increased growth without reducing poverty is meaningless," Foundation for Economic Freedom President Calixto Chikiamco said in his speech.

For Budget Secretary Florencio Abad, poverty incidence in 2014 erased the gains that the government made since 2010.

Poverty incidence among Filipinos in the first semester of 2014 was estimated at 25.8%, according to the latest data of the Philippine Statistics Authority (PSA), higher than the 24.6% recorded in the same period in 2013.
GAINS ERASED. DBM's Florencio Abad says poverty incidence last year erased the gains the Philippines had since 2010. File photo by Fritzie Rodriguez/Rappler

GAINS ERASED. DBM's Florencio Abad says poverty incidence last year erased the gains the Philippines had since 2010. File photo by Fritzie Rodriguez/Rappler

Remove barriers to foreign investments

To cure widespread poverty in the country and achieve an inclusive economic growth, the next administration should not only remove foreign ownership restrictions in the Constitution, but all other barriers to entry not requiring constitutional change, Chikiamco said.

"This means reducing the foreign investment negative list, lowering the capital requirements for retail trade, and even liberalizing immigration rules to allow foreigners with certain skills to work here, the head of Foundation for Economic Freedom said.

The Resolution of Both Houses (RBH) 1 that seeks to open the Constitution to lifting of restrictions of foreign ownership and participation in various sectors is poised to be voted for approval on third and final reading of the House.

Meanwhile, the Philippine government in June retained its list of investment areas and economic activities with foreign participation restrictions.

"This will mean more foreign direct investment, more jobs, more technology transfer, better infrastructure, more competition, and lower prices for consumers," Chikiamco said.

Modernize labor rules and regulations

In April 2015, data from PSA showed that the country registered slightly lower unemployment (6.4%) and underemployment (17.8%) rates.

But Fernando Aldaba, dean of Ateneo de Manila University (ADMU) School of Social Sciences, said "despite lower rates, there is virtually no change in the number of workers who are either totally idle or underemployed."

Aldaba said that "a lot of people are still seeking for high-paying jobs, especially those who are involved in labor-inducing industries."

For Chikiamco, "modernization of labor rules and regulations will focus on labor productivity instead of unrealistic labor security and government-mandated wage-setting."

This means requiring labor permanency after 6 months; promoting on-the-job training through an apprenticeship program where trainees are paid less than minimum wages; and negotiating labor rates without regard to the legal minimum wage in select depressed, Chikiamco elaborated.

"Modernizing labor rules and regulations will promote employment especially among the young, the uneducated, and women; higher wages through higher productivity; and the creation of a skilled labor force," he added.

Increase agricultural productivity

"To revive agricultural sector, we need to liberalize rice import trade and shift resources away from subsidizing the National Food Authority and the rice sector to other higher-value agricultural products," Chikiamco said.

Increasing agricultural productivity, he said, would necessitate improving the security of property rights in the agricultural sector.

This is to amend the anti-development and anti-growth provisions in the Comprehensive Agrarian Reform Law, subdividing the collective titles under Certificate of Land Ownership Award, as well as removing the restrictions on sales and conveyance on agricultural land patents.
"What will increasing agricultural productivity accomplish?" Chikiamco asked the audience.

He said this would lead to more investments in the agricultural sector, reduced unemployment in the rural areas, lower food prices, and increased demand for industrial goods in the countryside leading to a positive feedback loop between industry and agriculture.
UNDERVALUED. Farmers contribute greatly to food security, and yet their efforts are left 'invisible and undervalued,' says the FAO. File photo by Fritzie Rodriguez/Rappler

UNDERVALUED. Farmers contribute greatly to food security, and yet their efforts are left 'invisible and undervalued,' says the FAO. File photo by Fritzie Rodriguez/Rappler

Create strategic program for the chronic poor

With the 10 remaining months, Aldaba pointed out that the Aquino administration has not created a strategic program for the chronic poor.

In an article written by Aldaba, he explained that chronic poverty is where a person cannot contribute to economic growth due to state of impoverishment over an extended period.

Citing a recent Philippine Institute Development Studies (Reyes, et al. 2011), Aldaba said that around 11.1% of the population is chronically poor.

"Typically, in some countries, its a two- to 3-year program. First two years, it is really purely grants in subsidies. Thats really how other countries do it. At the same time, you put in health and educational programs in it," Aldaba said when asked what the program should contain.

"Its a long-term human capital invesment so it is up to the next administration," he added.

Change the institution

"Institutional reform is about competence and governance, not just 'daang matuwid' (straight path)," Aldaba said.

Chikiamco agreed, saying: "Sure, theres no corruption if an infrastructure doesnt get built. But the economy suffers, anyway." (READ: #AnimatED: Unfinished business under Aquino)

For him, institutional reform must encompass the bureaucracy, the judiciary, and political institutions.

"The next President must make institutions accountable, transparent, competent, inclusive, and responsive. These can be done in various ways, but it is institutions which will shoot the 4 arrows. If the shooter is corrupt or incompetent, the arrows will miss their mark. Hence, institutional reform is an economic issue," Chikiamco said.

It is a consensus among economists that the current growth has only benefited a small portion of the population, with poverty incidence remaining high thus intensifying social inequities. "Rappler.com


Author: Chrisee Dela Paz
Date: August 03, 2015
Source: Rappler.com

Ive always had a love for trains, and Ive taken some wonderful trips on some of the worlds grandest. But Ive also used them to commute in a swift, efficient way from home to office when I lived in Sydney. Trains just make great sense, yet we have a country that has allowed the train system to go to hell.
In my July 30 column (Infrastructure brings communities together) I wrote: It wouldnt hurt at all if more emphasis and urgency were given to building train lines"and maintaining them. Trains are a great way to move large numbers of people, if you know how to run them. Its something this government doesnt know. So lets hope the next leader will prioritize maintenance and expansion of the train system going south and north from Manila to ease the traffic on the roads. And look after and expand the train system in the metropolis.
But, and I give the President credit for this, the government is waking up"at least for one line, and thats the South Line of the North-South Railway Project. Its going to be rebuilt"but with a serious omission: no cargo. America became the superpower it is on the backbone of a huge network of interconnecting railways crisscrossing the country. Trains carried passengers and cargoes everywhere. Factories sprouted along the lines. Cities grew along those lines. Wealth happened.
So Im delighted that something is finally going to happen here. Its just one line, but perhaps the most important outside the inner city lines. And those, Im sad to say, are just a story of continuing disaster from an administration that just cant seem to do whats so obvious: Leave the private sector alone to run those lines.
The proposed South Line is a line running from Tutuban station in Manila to Calamba (in Laguna) initially, then on to Batangas and Lucena (in Quezon)"and, later, from there on to Bicol. Its a line that used to exist, so it should be easy to resurrect. But, of course, it wont be because weak government control has allowed informal settlers to invade the line, and getting them out will be a long drawn out nightmare, as history has shown us. And particularly so here, as many of the informal settlers structures are very permanent. So in some areas, a new route may be needed.
With the rapidly growing populations in the south its a great and much-needed idea to revive the line. It should help decongest Manila, too, by allowing people to live elsewhere yet get quickly to the office in Manila. Theres no traffic on a rail line.
But theres a serious omission in the governments plan that I dont understand: The line would be for passengers only, yet Southern Luzon is where factories are sprouting, and where we want them to.
And Batangas is a port open to development as a very viable alternative to the port in Manila that is disastrously overcrowded, with road access for trucks that is totally inadequate. So a train service makes eminent sense.
The government think tank Philippine Institute for Development Studies (PIDS), in its report titled Port Congestion and Underutilization in the Greater Capital Region: Unpacking the Issues, recommends that cargoes bound for or coming from the south of Manila use the Batangas port.
Trucks carry one container, trains carry dozens. Roads get cleared. The cost of transporting a container falls dramatically. The cost of production or distribution falls equally dramatically. The Philippines improves its competitiveness on the world stage"and that attracts investment. Meanwhile, domestic consumers will get cheaper products. In fact, if Congress would like to lower income taxes at the same time to match our neighbors, we may get some serious levels of foreign investment into manufacturing. The sector has been experiencing some growth in the past few years, and we want to maintain that. More manufacturing investments would also translate into more livelihood and employment opportunities for Filipinos.
To repeat, a South Line carrying cargo makes eminent sense. The benefits it can bring to economic development are, quite simply, enormous. So Im hoping that the Department of Transportation and Communications and the Public-Private Partnership (PPP) Center will defer the release of the invitations to prequalify to bid to build and run the line until they look at the sensibility of adding cargo transport to the plan.
This will cost a lot more, but as it will be a PPP project, that cost will be borne by the private sector, not the government. The areas to the south of Luzon"Cavite, Laguna, Batangas, Rizal, Quezon, including the Bicol provinces"are where development is happening rapidly. These are where residential and commercial areas are being developed and factories are being built. Its a desirable development that needs full support.
The Calabarzon (Cavite-Laguna-Batangas-Rizal-Quezon) region, for instance, is the second largest contributor to the countrys total economic output (17.4 percent), only behind the National Capital Region (36.3 percent). Calabarzon and the Bicol region contributed a combined 18 percent to the Philippines total economic output in 2014.
That support has been recognized with the revival of the South rail, but it also needs the cargo component to be really effective"for businesses and people to realize the realtrickle-down benefits.
Weve all complained about the never-ending delays in getting things moving, but heres one where I think delay is well-justified. If the private sector thinks a dual line is doable, it makes eminent sense to do it. Lets do it.//

Author: Peter Wallace
Date: August 20, 2015
Source: Philippine Daily Inquirer

While the Philippines has made strides in its financial inclusion efforts, an economist said the governments role should remain limited to regulatory supervision while allowing the private sector to develop more accessible products and services.

The government has so far largely resisted the temptation of directly participating in the microfinance market despite a recent attempt to go back to directed credit programs. However, there is always the risk that politicians may sponsor credit programs funded by public monies to meet certain sociopolitical objectives, Philippine Institute for Development Studies president Gilberto M. Llanto said in the working paper Financial Inclusion, Education, and Regulation in the Philippines published by the Asian Development Bank Institute this month.

The microfinance community should be vigilant about such attempts to weaken the market-based microfinance ecosystem that has so far shown to be a workable approach to financial inclusion, Llanto added.

In the paper, Llanto noted that a market-based financial ecosystem was just the right environment for the microfinance sector to grow and develop in the country.

The current vibrancy of the microfinance and microinsurance markets in the Philippines is basically due to the reforms pursued by the government and regulators in collaboration with private sector stakeholders that led to a greater private sector role, chiefly by MFIs (microfinance institutions), in providing credit, deposit services, and other services to low-income sectors, he said.

Citing Bangko Sentral ng Pilipinas (BSP) data, Llanto said microfinance loans jumped by a compounded annual growth rate of 11.6 percent to P8.7 billion in 2013 from P2.6 billion in 2002.

As for microinsurance, coverage among Filipinos increased to 19.95 million or 20.4 of the population in 2013 from just 3.1 million or 3.4 percent of the population in 2008, Llanto said, citing Insurance Commission figures.

Also, Llanto said BSP data showed that 40 banks obtained authority to market, sale and service microinsurance products in 2013, such that Rural Bankers Association of the Philippines figures indicated that rural banks total number of clients covered with microinsurance grew by 153 percent to 1.4 million that year from only about 543,500 in 2012.

This makes the Philippines one of the top microinsurance markets in Asia. The strong collaboration between insurance providers and the regulator were significant factors contributing to the rapid growth of microinsurance in the country, Llanto said.

According to the paper, the Philippine experience with microfinance shows the essential role played by a conducive policy and regulatory framework in motivating private financial services providers in making innovative financial products and services accessible to the poor.

But while [f]inancial deepening among the excluded segment of the population has started to take root and [f]inancial inclusion has started to expand, Llanto said there remain challenges being faced by the microfinance sector.

In this regard, Llanto recommended that the BSP, the Insurance Commission and the National Credit Council undertake financial education in cooperation with the school system at all levels: Primary, secondary, and tertiary.

Financial education should be incorporated into school curricula. Related to this is the importance of establishing a program of financial education for SMEs (small and medium enterprises), Llanto said.

There is also a role for civil society in promoting financial education, he added.

The following are among Llantos recommendations:

" Banks, in collaboration with the BSP, should work on a regular reporting format for SME access to formal loans

" There is a need for more effective enforcement of consumer protection and this could be promoted through financial education for low-income clients

" There is a need to support and make Credit Information Corp. fully operational as soon as possible. It needs good staff and substantial resources to accomplish its mandated tasks

" There is merit in developing appropriate regulation and supervision of mobile banking and various types of financial innovations for fostering financial inclusion. There is a need to balance the expansion of financial inclusion through emerging technologies and ensure the stability of the microfinance sector.

" The government and regulators should support the development of back-end infrastructure, that is, the backbone needed for efficient financial services, including payment switches, credit bureaus and collateral registry.//

Author: Ben O. de Vera
Date: August 19, 2015
Source: Philippine Daily Inquirer

Despite progress in automating operations at the Bureau of Customs (BoC), there is much room for improvement in the Philippines efforts to fully meet its commitments toward realizing the Association of Southeast Asian Nations (Asean) Economic Community (AEC), according to a government think tank.

Overall, the Philippines has made some significant progress in complying with its commitments related to trade facilitation, the Philippine Institute for Development Studies (PIDS) said in its latest discussion paper entitled Furthering the Implementation of
AEC Blueprint Measures.

The study, led by Dr. Gilberto Llanto, said whilst some systems are already in place, the full automation of customs and related processes has yet to be achieved.

On customs modernization, the PIDS noted gaps in the implementation of inspection management, CBW (customs bonded warehouse) management, post clearance audit, AEO (Authorized Economic Operator) management and raw materials liquidation system.

The full implementation of these features, whether it be through the e2m (electronic-to-mobile) system or a different system, is necessary to attain full automation and integration to the NSW (National Single Window).

BOC will soon be migrating from e2m to AsycudaWorld to manage transactions it handles. The shift has been somewhat delayed because the bureau had initially bid out its P650-million IT project, called the Integrated Electronic Customs Processing System, only to cancel it in favor of the United Nations-developed AsycudaWorld.

Asean member states are accelerating the modernization of customs techniques and procedures to enhance trade facilitation and expedite clearance of goods at customs.

Under the Asean Trade in Goods Agreement and the World Trade Organization Agreement on Trade Facilitation, the Philippines has committed to customs modernization, implementation of the NSW, and creation of the Philippine National Trade Repository.
The PIDS study noted that a number of Philippine customs processes have already been either automated or programmed for automation.

These include synchronizing the Harmonized Commodity Description and Coding System (HS) codes; tariff management; implementing a valuation system; manifest processing; goods declaration processing; risk management and selectivity; cargo release notification; appeals and arbitration; electronic payment system; and publishing customs rules.

Still in partial implementation, partly due to the lack of an IT system to support the automation, are inspection management, CBW management, post-clearance audit, AEO management, transit cargo tracking system, raw materials liquidation system, and customs integration initiatives.//

Author: Ed Velasco
Date: August 19, 2015
Source: The Daily Tribune

There is a vast potential for growth of economic ties between the Philippines and India in the services sector, particularly in the areas of information technology and business process outsourcing (IT-BPO).

This partnership will serve well the forthcoming Asean Economic Community and the larger Asean-India markets for services, according to policy notes published by the Philippine Institute for Development Studies (PIDS), a respected think tank, obtained by the Daily Tribune.

The paper noted that both countries can use the putative Asean-India Trade in Services and Investment Agreement to exploit greater synergies in their respective IT-BPO services where they have developed world-class capabilities.

Both countries can exploit their demographic advantages, high proficiency in English, expertise in IT-BPO services, and their relative cost competitiveness vis--vis other countries in Asia to create economies of scale and scope in the services sector, it said.

The paper considered the agreement timely as it will position both Asean and India to take advantage of global value chains (GVCs) in which high quality services such as banking, telecommunication and logistics serve as critical infrastructure for regional trading and regional production networks (RPNs).

The anticipated signing of the agreement can be a second pathway for stronger economic relations and cooperation after negotiations were completed two years ago.

It said the Philippines is a viable investment destination for growing operations such as IT-BPO business services.
In particular, India can tap the Philippines as a hub for expanding toward the Asean IT-BPO services chains. Meanwhile, the Philippines may benefit from the transfer of technology and expertise from higher-end Indian services, it added.

Further, the paper underscored the rationale for increased cooperation between India and the Philippines in the IT-BPO services sector, noting the two countries are the most cost-competitive destinations for IT-BPO services.

Both countries also have the technical and managerial expertise for providing IT-BPO services. They are both lower-cost and competitive destinations for such services, it further said. Ed Velasco//

Author:
Date: August 18, 2015
Source: The Daily Tribune

Conclusion

One of the things that the new administration would have to think about next year is whether it would push for the retention of rice-import quotas in 2017. Instead of slapping tariffs on all rice imports, the Philippine government decided to maintain the so-called quantitative restriction (QR) on rice to prevent the influx of cheap rice from neighboring Asian countries.

The QR has been in place for more than two decades. When the second extension for the trade protection expired in 2012, Manila opted to negotiate for its retention. Following negotiations with countries that have expressed their intention to consider Manilas bid, the World Trade Organization allowed the Philippines to continue implementing the QR until June 30, 2017.

In pushing for the retention of rice-import caps, Manila said removing the QR would threaten the livelihood of some 2.4 million rice farmers, who are small landholders. To maintain rice quotas, Manila had to raise the minimum access volume (MAV) of rice to 805,200 metric tons (MT), from the previous 350,000 MT. Rice imports that fall within MAV are slapped a tariff of 35 percent, lower than the 40-percent tariff imposed on out-MAV shipments.

The rationale behind the implementation of the QR, an expert said, is to ensure that Filipino farmers would be able to compete once the quotas are removed. A study, titled Benchmarking Philippine Rice Economy Relative to Major Rice-Producing Countries in Asia, found that rice production is relatively competitive in the Philippines. Findings, however, suggested that more needs to be done to ensure that farmers will survive once the government fully opens up the countrys rice market.

The study was commissioned by the Department of Agriculture (DA), and was done in close collaboration with the International Rice Research Institute. Using 2013 data, it examined rice production in the Philippines, China, India, Indonesia, Thailand and Vietnam.

The study revealed that, among the six countries, the Philippines ranked third in terms of the cost of producing rice per hectare. It also found that Filipino farmers paid the highest amount of irrigation fee, at P2,536 per hectare. In contrast, farmers in China do not pay for irrigation water.

Rice Watch Action Network (R1) lead convener Aurora Regalado said the government should consider reducing irrigation fees. Why do Filipino rice farmers pay costly irrigation fees when neighboring rice-exporting countries heavily subsidize their farmers by providing them free irrigation?

Regalado said the government and the rice sector need to work double time to prepare for the full impact of the possible lifting of the QR. R1 called for a mixture of strategies, which would incorporate or align initiatives rolled out under several government programs.

David Dawe, senior economist of the UNs Food and Agriculture Organization backed the Philippiness bid to pursue rice self-sufficiency. Dawe said, however, that the country should also be prepared to become competitive.

I think the government should pursue rice self-sufficiency based on enhanced competitiveness, lower cost of production per ton, and a sufficiency program based on research and development, Dawe said in an interview.

In terms of decreasing the current production cost of rice in the country, Dawe said the single biggest thing, or component, of rice-production cost is labor, adding that to reduce that, some kind of mechanization program should be pursued.

The government, he said, must closely examine whether the self-sufficiency program is making
progress. Dawe said the litmus test for the program is when the local rice sector is subjected to international competition to some extent through import.

Early this year Agriculture Assistant Secretary Edilberto de Luna told stakeholders of the rice industry to brace for the possible termination of the QR in 2017. The DA said it has jump-started nationwide consultations with its partners for this.

De Luna, who is in charge of the national rice and corn programs, said there is a need for the rice industry to prepare for this eventful scenario. He said theres a need to craft the best programs and directions to attain competitiveness and self-sufficiency in rice.

Among the strategies the DA had recommended include improved rice harvest by restoring irrigation facilities; adoption of high-yielding varieties; provision of farm equipment and facilities; and access to credit, among others.

Dr. Roehlano Briones, senior research fellow at the Philippine Institute for Development Studies, said the government should also prepare for income loss for local rice farmers. Lifting the QR, he said, would likely result in cheaper rice prices but lower farm-gate prices for locally produced rice.

What the government has to consider is how to actually provide temporary support to farmers to compensate for their income loss. The assistance could come in the form of a cash-transfer scheme or a price-guarantee scheme, Briones said in an e-mail to the BusinessMirror.

A cash-transfer scheme, he said, would provide fixed and lump-sum payments to rice farmers. Under the price-guarantee scheme, farmers could be paid the difference between a benchmark price and an insurance price in case prices become too low. Briones said funds for these schemes could come from tariffs that would be slapped on rice imports once the QR is removed.

Briones said the possible lifting of the QR could also act as a transitional measure for farmers to diversify to high-value crops. With the lifting of the QR, Briones said rice importing should become an exclusive function of the private sector.

The detrimental effects [of the removal of the QR] on farmers are unavoidable, but these can be mitigated with the right preparation, he said.//

Author: Alladin S. Diega
Date: August 18, 2015
Source: Business Mirror

Past performance alone should not determine future budget levels. But a larger budget should be conditioned on the prospect of improved performance.

Consider the table below.

It contains the perceived performance of Department of Agriculture (DA) and Department of Trade and Industry (DTI); the actual performance of the agriculture and industry sectors in the first half of 2015; and the proposed DA and DTI budgets for 2016.

budgets-0818

The table shows the net performance perception based on a survey of 67 Makati Business Club executives.

Since it is not from a random sample, it does not represent a national view. When you subtract the percentage dissatisfied from the satisfied, the result is the net satisfaction percentage. DTI has a positive score while DA has a negative one.

The actual growth numbers are based on official government statistics. Industry did much better than agriculture.

To be fair, agriculture bears the brunt of natural calamities much more than industry.

The proposed DTI and DA budgets are being deliberated on by Congress today. DA should get a much larger budget than DTI because of the nature and enormity of its work for the agriculture sector. However, new measures should be instituted so that the large DA budget will be optimally used.

We must guard against corruption attempts, especially considering the coming May 2016 elections. Budget monitoring by the private sector through the legislated public-private Philippine Council for Agriculture and Fisheries (PCAF) should be strengthened.

For the first time in DA history, private sector members of the PCAF Budget Committee will visit the provinces next week to monitor DA budget use. They will also propose more effective budget monitoring and evaluation mechanisms.

When an Alyansa Agrikultura member of this Budget Committee asked for a report on the DA pork barrel investigation, a senior DA official dismissed him by saying: It is only politics. The private sector should no longer accept such answers.

Since the Agriculture Fisheries 2025 (AF 2025) Multi-stakeholders Conference on Feb. 10-11, 2011 was held, its unanimous recommendation of formulating and implementing commodity road maps was not systematically followed up.

The government think tank of Philippine Institute of Development Studies (PIDS) has received 29 industry road maps from DTI, but none from DA. The DA budget should be consistent with agriculture road maps so that budget use can be focused on the road maps priorities. DTI does this, resulting in both perceived and actual improved performance.

How can the DA budget be used in this manner if there are no approved road maps? We understand that there are nine agriculture road maps that have been completed. But they have not been released, allegedly because a tenth is still being finalized.

These road maps must now be released so that the more important work can proceed. This work is what DTI has been doing for the last three years. It is to organize public-private sector teams that will plan, implement, and be accountable for accomplishing the road maps objectives within a mutually agreed time frame. If DA does this, both perceived and actual improved performance will result from the large DA budget.

It was also unanimously recommended during the AF 2025 Conference that better management systems should be put in place at the DA.

Agriculture Secretary Proceso Alcala advocates the correct agriculture vision and works extremely hard to uplift the small farmers and fisherfolk. But his vision and work are sabotaged by unscrupulous elements in the DA bureaucracy. This can be largely prevented by a management system like the ISO 9000.

DTI takes this challenge very seriously. It has required most of its DTI units to implement this system. This system is reviewed periodically by outside management experts. If a DTI unit fails this periodic review, its ISO-accreditation is withdrawn. This is a major reason why DTI is successful.

Since most DA units do not have ISO 9000, there is no outside evaluation of their management system. If this system were in place, an added benefit is that corruption will be more easily detected. This is because deviations will surface automatically through this system, instead of having to rely on arbitrary reviews by officials.

The DA deserves the budget it is asking for. But increased budget release should be made conditional. We can learn from the example of the late Secretary Jessie Robredo. He made added releases to LGUs conditional to only those who earned the DILGs Seal of Good Housekeeping.

DA and DBM should do the same. This way, mechanisms like road maps and management systems can provide the justification for increased budget releases which will more likely result in improved performance.//

(The author is chair of Agriwatch, former Secretary for Presidential Flagship Programs and Projects, and former Undersecretary for Agriculture, Trade and Industry. For inquiries and suggestions, email agriwatch_phil@yahoo.com or telefax (02) 8522112).


Author: Ernesto M. Ordoez
Date: August 18, 2015
Source: Philippine Daily Inquirer

An adviser to the Asian Development Bank (ADB) has stressed the role of small and medium enterprises (SMEs) in economic development and how the Philippines can help enhance local SMEs in the global value chains.

Dr. Ganeshan Wignaraja told a forum sponsored by the Philippine Institute of Development Studies (PIDS) that SMEs are considered a vehicle for inclusive growth both at the national and regional levels.

The SMEs made up 99.6 percent of the total enterprises in the Philippines and accounted for more than 61 percent of the total employment across the country. However, SMEs contribution to the economy does not reflect in trade in terms of direct exports, said Wignaraja.

He noted that trade itself is no longer about direct exports. Trade is about being involved in factories across the world. It means supply chain trade. Asian entry in global value chains accounts for the growth in Asia.

The ASEAN share of world supply chain exports accounted for 9.3 percent of the world supply chain trade. The big players in Asia are currently neighbors to the north, and if the countries comprising the Association of Southeast Asian Nations (ASEAN) want to keep up, the region must adjust and change to acquire the necessary models and criteria to ensure increased participation, said Wignaraja.

He pointed to size, scale of production, access to technology, foreign equity, and access to credit as essential requisites. When it comes to size, being a big firm naturally begets advantages to expand due to larger scale of production, possibly better access to technology.

But Wignaraja said that being small can also work for an SME. By clubbing in clusters, SMEs can overcome some of the disadvantages of size and rely on the benefits of interdependence.

But its not just firms and whats inside of them. The environment of business support services around the firms also counts. The better the type of services firms have around, analyzed Wignaraja, the more chances theyll grow and capture more global value chains, he said.

He also noted that the lack of access to finance by SMEs is widespread in the Asian region with wider credit gap in the Philippines.

Wignaraja explained how changing collateral laws can prove important for SMEs.

In an SME cluster, for example, the use of peer pressure within a network of SMEs for a particular business to pay back its loans can help and has already worked in Japan.

Wignaraja explained that there is a lot to be done " expand banking, making financial access more inclusive, invest in financial literacy and education early in schools, improve banking systems, and develop better linkages for SMEs.

Meanwhile, Dr. Mario Lamberte of PIDS noted that banks not designed to lend to SMEs. Banks do a lot of consumer and corporate lending, but little for SME lending, despite the laws requiring them to do so.

The idea is for banks to think about innovations so they can introduce in their system ways of lending with SMEs. Banks often require business and financial plans. Many of the SMEs that really need credit do not have the capacity to prepare these plans, said Lamberte.

SMEs have the single entry accounting system but banks expect to see something more complex. The solution comes down to educating and designing programs to educate SMEs and improve their capabilities to scale up, he added.//

Author: Edu Lopez
Date: August 17, 2015
Source: Manila Bulletin

CEBU, Philippines " Despite calls to bring up the quality of education in the Philippines, the issue of waning first-rate educational system in the country has threaten the otherwise rosy local employment opportunities ahead.
The Philippine Institute of Development Studies (PIDS) has reminded once again the academe as well as authorities in the government to immediately look into this issue, while the Philippines is largely banking on its human capital to sustain the hyper economic projection.
Economist Gilberto M. Llanto of PIDS made this reminder during his recent visit to Cebu, saying that the educational institution has to catch up with the movement of high quality standard from employers all over the world, especially that the Philippines is gaining prominence as the hub for their back-office requirements.
According to Llanto, the Philippines has to work harder in constantly providing quality graduates that could support the growing need for degree holders, skilled workers, that could meet the high standard of global employers.
Llanto's reminder echoed the earlier pronouncement of Philippine Chamber of Commerce and Industry (PCCI) chairman for education Eduardo Gueriez-Ong, saying that the Philippine educational institutions should collaborate tightly in providing world-class quality system to prepare the country's manpower pool for global competition.
Ong even suggested that a strong tripartite partnership between government, academe, and industry should be started, in order to create an educational system that provides the right training to prepare Filipino workers to support local industry's expansion and compete in the global employment market.
Without intervention, the workforce will be unprepared for the skills requirements of local industry and the government's national development plan, undermining economic progress, he said.
In addition, local workers will be ill equipped to face the challenges-and take advantage of the opportunities-of "global realities" including globalization, trade liberalization, information and technology advancements, and bilateral and multilateral employment arrangements.
Ong said a strong workforce is crucial now that statistics show the Philippines' ranking in a number of world competitiveness indices going up in 2013 compared to 2012.
In a separate interview with the country's largest outsourcing employer--Convergys, despite efforts of upgrading the quality of graduates in the country, including that of Cebu, most companies have to individually work directly with the academe to get the right quality of graduates, who are ready for employment right after graduation.
Meanwhile, the Cebu Educational Development Foundation for Information Technology (Cedfit) will be working closely with the Cebu City ICT-BPO Council to promote technology related professional path for senior high students.
This is to sustain and boost Cebu's attractiveness to world's technology and outsourcing investors, as well as develop world-class local technology community, said Cedfit executive director Jun Sa-a.
Together with the office of ICT-BPO Council in Cebu City, headed by Edu Rama, Sa-a said the two organizations will roll out information drive to different barangays in Cebu City to invite senior high students to consider taking in information technology courses in college.
"We need to sustain our human resource supply. There are a lot of companies opening in Cebu and needing thousands of people, especially those that have degrees in the information technology fields," Sa-a told The Freeman.//

Author: Ehda M. Dagooc
Date: August 17, 2015
Source: Freeman