PIDS in the News Archived (July 2015)

The Department of Social Welfare and Development (DSWD) on Monday denied a report that nearly a third of the beneficiaries of the modified Conditional Cash Transfer program (MCCTP) last year are not poor.

DSWD Assistant Secretary Javier Jimenez said the allegation"which suggests that P19 billion of the funds went to people who are not poor"is erroneous because it was based on a calculation drawn from 2009 figures, when the budget for the governments poverty alleviation initiative was much smaller, rather than the most recent data for last year.

The claim, which was made in a report published by an online news site last month, was based on the figure in the Learning Lessons publication of the Asian Development Banks Independent Evaluation Department.

A portion of the paper stated that improvements are needed in the programs targeting system to reduce an estimated leakage rate of 30 percent.

Di natin pwedeng i-multiply yung 30 percent na yun sa current budget ng DSWD for MCCTP. In 2009, we only had about 300,000 families involved in the program. Over the years, habang nag-eexpand ang budget ng DSWD, padami na nang padami ang beneficiaries. There are currently about 4.4 million families covered by the program, Jimenez said in a news forum.

2009 data

The ADB had earlier issued a statement clarifying that the statistics mentioned in its report was sourced from a 2013 study done by the Philippine Institute of Development Studies, which in turn was based on 2009 data and earlier poverty targeting practices.

Under the MCCTP, also called the Pantawid Pamilyang Pilipino Program (4Ps), cash grants are provided monthly to poor households if they fulfil health- and education-related conditions.

ADB country director for the Philippines Richard Bolt said the 4Ps now ranks as the third largest CCT program in the world after those of Brazil and Mexico.

For participating households, Pantawid has helped promote near-universal enrolment of elementary school-age children, reduced child labor, and improved access to pre- and post-natal care, he said in a statement.

Congress has allocated P62.3 billion for MCCTP in the P2.6-trillion national budget for 2015.

Community involvement

While errors in targeting CCT beneficiaries have been substantially reduced by the DSWD, ADB and other stakeholders, Jimenez said the agency continues to implement safeguards to ensure the MCCTPs funds go to deserving beneficiaries.

Among the mechanisms instituted by the DSWD to implement the MCCTPs implementation is the Grievance Redress System (GRS), which captures and processes complaints about the program and the beneficiaries.

Some 77,000 beneficiaries have been delisted from the program as a result of the GRS, Jimenez said.

Moreover, the agency has also enlisted the help of communities in implementing the poverty reduction program.

Habang nag-eexpand ang aming programa at may mga potential beneficiaries, nagkakaroon kami ng community assembly sa bawat barangay o munisipyo kung saan sila galing. Ipinapaskil namin ang kanilang [potential beneficiaries] mga pangalan doon to get feedback from members of the community, Jimenez said.

With these mechanisms, we can say that the list of beneficiaries under the Pantawid program are validated households, he added.

Second round of profiling

Social Welfare Secretary Corazon Soliman said the DSWD is currently conducting the second round of the National Housing Targeting System for Poverty Reduction (NHTS-PR) that will profile whether a household is poor or close to poverty using certain indicators.

She said a new round of profiling had to be conducted because recent disasters have rendered several families poor, homeless and even jobless.

After this second round of assessment, we should be able to get a registry of who should be included in our programs, particularly the Pantawid Pamilya, she said in a statement. "

Author: Xianne Arcangel
Date: July 06, 2015
Source: GMA News

Our politicians keep on talking about the need for food security to justify the failed policy of subsidizing NFA. Now, NFAs total debts are more than our national defense budget. Our rice policy that favors traders with government connections has also resulted in higher cost of food overall that reduces the competitiveness of our industrial labor costs in comparison with our regional neighbors.
The real food security problem, Kiko Pangilinan recently told me, has to do with our farmers becoming an endangered species, so to speak. According to Pangilinan, the average age of farmers is 57, only a few years away from the mandatory retirement age of 60 to 65.
According to Kiko, a new generation of Filipinos refuses to go to rice farming and that is a threat to food security... When a new generation refuses to farm, who will feed the people? Pangilinan asked.
But who can blame the next generation for refusing to be rice farmers like their fathers? They saw how being a rice farmer condemned their parents to poverty. We have failed to make rice farming profitable for the farmer, or even give them a decent living. Its not surprising their children would rather take their chances in the squatter communities in the urban areas.
Los Banos-based Ciel Habito, who was FVRs NEDA chief, wrote in his column that many of our rice farmers might do better than continue to plant rice. They should, he said, consider planting something more remunerative than rice, especially if the lands they are tilling are less suited to rice anyway.
But the big problem, Habito observed, is whether government, and seemingly Philippine society as a whole, wants them to keep on planting rice in the hope of achieving the dream of full rice self-sufficiency"never mind they are likely to remain in poverty if they do.
Habito noted that even if rice has traditionally received the lions share (up to 70 percent) of our farm budget, at the expense of many other important commodities the rice farmers in greater need hardly benefit from the huge sums In fact, Habito observed, evidence indicates the primary beneficiaries of government budgetary allocations for rice have been the better-off, more productive farmers, not the worst-off among them.
The really bad news, according to Habito, is the more we pursue 100-percent rice self-sufficiency, the more we make most Filipinos food-insecure. Food security and food self-sufficiency are two different things. Food security denotes reliable access to adequate, affordable, safe and nutritious food. Our self-sufficiency policy has had the perhaps unwitting effect of making rice much more expensive to Filipino consumers than it needs to be, with the Filipino poor suffering the most.
The Food and Agriculture Organization (FAO) simply says a country has food security when all people, at all times, have physical and economic access to sufficient, safe, and nutritious food to meet their dietary needs and food preferences for an active and healthy life. It says nothing of where the food comes from.
According to Kiko, we are importing this year 750,000 MT of rice from both Thailand and Vietnam. Another 187,000 MT was imported by the private sector under the Minimum Access Volume in the 1st quarter.
NEDA Secretary Arsenio Balisacan, a former Agriculture usec and an expert in the economics of rural poverty, said the problem of food security stems from the policy of quantitative restrictions (QRs): the protectionist practice of limiting rice imports beyond a certain amount in order, supposedly, to protect local farmers.
Such a policy, he explained, produced the opposite effect by limiting access to rice, the single most important food item among Filipinos. As numerous studies have shown, adopting a QR regime on rice has been anti-poor, anti-equity, anti-growth, and anti-development, Balisacan said.
Indeed, a government think tank, the Philippine Institute for Development Studies (PIDS), has shown a liberalized trade regime for food security is the more appropriate policy. Consumers would then be able to buy less expensive rice from Thailand and Vietnam.
The Institute even recommended QRs for rice should not be renegotiated for extension, instead rice should be fully deregulated. The replacement of QRs with tariffs would bring the government additional revenues.
This sounds fine for the population in general, but what about the nations rice farmers? After removing QRs, Sec. Balisacan proposes to focus on increasing the rice farmers income through income diversification and enhancements like adding a milking carabao which can generate an annual income equivalent to two hectares of rice land, food processing, piggery, etc.
But the Department of Agriculture no longer does extension work which has been relegated to LGUs. It was observed LGUs seem to have little interest in helping farmers since votes are concentrated in poblacions. Our DA bureaucracy may need total overhauling as we liberalize rice imports.
Our per capita consumption is around 114 kilos annually and with 100 million population thats about 11.4 million MT of rice consumed annually. We produce about 12 million metric tons of rice but over 1 million tons is lost or wasted due to poor post harvest facilities or damaged, thus around 1.4 million tons is the estimated shortfall. Last year the NFA imported 1.7 million MT, according to Kiko.
Regarding NFAs debt, Kiko told me it is now down from P177 billion to P149 billion. Still huge, Kiko admits, but at least it has not ballooned further. Budget for our national security is in the vicinity of P115 billion. NFAs net loss (after subsidy) significantly decreased from P10.82 billion in 2013, to a net income (after subsidy) of P1.875 billion in 2014 (as of December 31, 2014).
According to Kiko, he has been able to bring NFAs debt down through the efficient implementation of the sale of NFA rice. The regular milled rice sold at P27 were a wash while the well milled rice sold at P32 a kilo produced some earnings for the NFA. It really is not profit considering the importation is tariff free.
Kiko said they focused on NFAs two mandates: the protection of farm gate prices and stabilizing retail rice prices. He said they are always conscious of their balancing needs the welfare of our farmers and the poor who are most affected by any instability in rice prices, and at the same time leveling the playing field in the rice industry.
Kiko said they are preparing the local rice industry for the lifting of the QRs as negotiated with the World Trade Organization. With the impending deregulation of the rice industry, Kiko sees the transformation of the NFA from regulatory to primarily maintaining buffer stock. We should be ready for open markets ahead.
Economists, however, say reforms are long overdue. One of my colleagues in the Foundation for Economic Freedom (FEF) remarked: Ask any good economist what is the biggest waste of government resources in recent years and he will readily point to the NFA program of rice subsidies.
As a subsidy program, it fails the needs test since the subsidized rice is available to all, whether rich or poor. Indeed, studies have shown less than 25 percent of the poor have access to NFA rice.
Worse, it is quite likely a large fraction " maybe more than half " of the rice is sold by the NFA at the official government price to some lucky people who repack the NFA rice and re-sell them at market prices
It does nothing for the poor farmers who, especially at a time of high rice prices (like now) are deprived the benefits of a remunerative price. On a more fundamental level, it distorts market signals and misallocates resources in the agricultural sector and rest of the economy
Many studies have been written on why NFA needs to be re-engineered, and how better off consumers and farmers would be if funding is redirected as targeted subsidies to poor consumers and invested in productive assets like rural infrastructure to help farmers.
Technocrats in NEDA, Finance, and the Department of Agriculture, assisted by multilateral and bilateral institutions, have tried to push for reform without success. The vested interests are just too entrenched, and the rents too much.
Kiko Pangilinan is also working within a less than ideal situation where responsibilities for agriculture are divided between him and P-Noy favorite, Agri Sec. Procy Alcala. No wonder whatever gains Kiko may have accomplished are limited. Alcala is another of the fair haired boys of P-Noy who drag him down, but are allowed to cling on.
Oh well another reason why we cant wait for this regime to exit Back to our question, who will plant our rice if we continue to condemn rice farmers to a life of poverty?//
Boo Chancos e-mail address is bchanco@gmail.com. Follow him on Twitter @boochanco


Author: Boo Chanco
Date: July 06, 2015
Source: Philippine Star

Secretary Greg Domingo of the Department of Trade and Industry (DTI) and his team deserve congratulations for the long-awaited automotive industry roadmap, most aptly named CARS (Comprehensive Automotive Resurgence Strategy Program). This was the subject of a recent consultation meeting of the DTI with an Eminent Persons Group to get advise on the new industrial policy thrust of the government.

CARS represents several years of hard work of Undersecretary Che Cristobal and Assistant Secretary Fita Aldaba, who is also senior fellow and vice-president of the government think tank the Philippine Institute for Development Studies. They painstakingly crafted a plan and forged a difficult consensus -- especially with the Department of Finance -- on a new thinking on an industrial policy that involves government support for a program that is well-targeted, time-bound and performance-based.

The search for a national pathway to create quality jobs that will absorb almost a million new entrants in the labor market and the 11 million who are unemployed and underemployed was also the topic of a recent experts roundtable chaired by National Economic and Development Authority Secretary Arsi Baliscan. A most interesting presentation came from Asian Development Bank adviser Jesus Felipe. Based on his study of more than 100 economies over time, he suggested that for the Philippines, the long-term challenge was not how to ignite growth, but rather how to become a modern industrial service economy. According to him, this would need economic transformation, including pushing into niches that foster structural transformation, innovation and entrepreneurship in close partnership with willing and able private sector. He argued that manufacturing continues to be important today despite the rise in services -- as engine of growth (economies of scale, technical progress, and learning) and as an escalator sector (high-productivity catch-up). The DTIs CARS is driving in the same direction.

A few economist friends are skeptical that a government unable to collect garbage or enforce traffic laws properly can do industrial policy right. For example, National Scientist Raul Fabella, in his column last week, wrote that the government ought to economize on limited government capacity, focusing on its role as enabler, such as in providing required infrastructure, a role it has failed across administrations (Of CALAX, industrial policy and the nature of the State, June 29).

I am more confident. We can afford experimental interventions as long as public financial exposure is calibrated, there is a clear path to realizing the programs objectives, and with the right private partners. Just like public-private partnerships in infrastructure where there have been notable successes.

Moreover, the timing is right. With progress in forging an ASEAN Economic Community, major foreign direct investors keen to participate in a growing ASEAN middle-class market are looking for new investment sites in the region, in one case in partnership with an established local conglomerate. I wonder however if CARS as designed can entice new entrants that can drive structural transformation of the kind Dr. Felipe discussed. It seems aimed primarily at the incumbent assemblers, as the barriers to entry are too high for a new participant to satisfy the conditions. (I gather the initial feedback even from incumbent assemblers is that conditions are too steep, given that their current run rates and regional production strategies are already well established.)

It may be time to consider a more fundamental change in the overall regulatory framework of the Motor Vehicle Development Program, a three-decade-old program, so that players with newer technologies and platforms can come in. Perhaps rather than stipulating processes, technologies and business conditions, it should allow for greater leeway in meeting its objectives?

For example, Executive Order 158 specifies painting and welding as necessary activities to qualify -- even when many firms have already moved to global production processes not bundled this way. Should there not be more flexibility that also takes into account already revealed

Philippine comparative advantage in automotive electronics? In 2004, electronics was 10% of the value of cars; in 2014, it was 35%, and expected to double to 70% in another 10 years.

I understand there is a serious automobile OEM (original equipment manufacturer) that has already partnered with a local established conglomerate on the feasibility of the Philippines as an ASEAN manufacturing hub. This same conglomerate has expanded its electronics manufacturing business by expanding its global footprint in China, Europe and the Americas. It has gone where the business opportunities has told them to go. A major global automobile OEM coming to the Philippines will surely attract its suppliers if it makes business sense to do so, and if there is an attractive investment framework.

These ingredients can be our bridge to a manufacturing future -- a modern industrial service economy that Dr. Felipe spoke of. I hope these investments are made here in the Philippines. A pity if it is lost to a more forward-looking and flexible ASEAN neighbor.//

Romeo Bernardo is Philippine GlobalSource advisor and is a board director of IDEA.

Author: Romeo Bernardo
Date: July 05, 2015
Source: BusinessWorld

Experts say reducing the number of buses that ply EDSA would significantly reduce travel time and costs of traffic for commuters

FIX BUS SYSTEM. JICA says it's possible to reduce the number of buses in EDSA by 50% without affecting services to commuters. File photo
MANILA, Philippines " Reorganizing the bus system along EDSA and assuring better wages for drivers is key to easing the massive traffic jams that plague Metro Manila motorists, experts said.
Research by the Philippine Institute of Development Studies (PIDS) showed that an effective policy to reduce the number of buses plying the 24-km road would significantly reduce the travel time and cost of traffic for commuters, according to Prof. Roehlano Briones.
Transport agencies and members of the academe convened in an event organized by the PIDS, Action for Economic Reforms, and Consumer Unity and Trust Society International to discuss competition reforms in the bus transport sector.
An earlier report by the Japan International Cooperation Agency (JICA) showed that the Philippines lost P2.4 billion every day in 2012 due to traffic jams, with the amount likely to rise if solutions are not implemented.
A 2014 JICA study also said that it was possible to reduce the number of buses in EDSA by 50% without adversely affecting service to bus passengers.
Aside from the high density of vehicles snarling traffic along the major thoroughfare, accidents " many of them involving buses " also aggravate road congestion.
To solve this, experts recommend giving bus drivers and conductors fixed wages instead of relying on the current boundary system. In this system, the drivers take-home pay is the total amount earned from fares minus a fixed amount that he gives to the bus company.
The boundary system forces bus drivers to compete with each other to pick up more passengers, often at the expense of the passengers safety and regard to traffic rules.
In 2012, the labor department released Department Order 118-12, which gives bus drivers both a fixed wage and a commission component.
The order outlines the two tiers of the salary: a fixed wage that should not be lower than the applicable minimum wage set by the government, and a commission that varies according to the employer's net revenues. " Rappler.com


Author:
Date: July 03, 2015
Source: Rappler.com

MALACA'ANG on Thursday countered assertions of Vice President Jejomar C. Binay, claiming that the Aquino administration is masipag, maagap, masinop (hardworking, prompt, and prudent) in addressing the needs of the people.

The Palace issued these remarks after Mr. Binay launched another tirade against the Aquino administration on Wednesday during the launch of the opposition United Nationalist Alliance (UNA).

Members of UNA, Mr. Binay said, are not tamad, usad-pagong at teka-teka sa pagharap sa mga problema ng bayan. (lazy, slow, and indecisive when facing the countrys problems).

Mr. Binay have launched attacks against the Aquino administration since he quit the Cabinet as the Presidential Adviser on Overseas Filipino Concerns and chairman of the Housing and Urban Development Coordinating Council on June 22.

At the same press briefing on Thursday, Communications Secretary Herminio B. Coloma Jr. mentioned some accomplishments of the Aquino administration, citing data and survey to support their claims.

The responsible thing to do is to base statements on actual data, Mr. Coloma said. If there are accusations, the appropriate thing to do is to present these with concrete bases and these should not be based on speculation, clich, or rhetoric.

On Wednesday, the Vice President in his speech said that many Filipinos remain jobless and hungry and that poverty remains rampant.

However, Mr. Coloma cited a Social Weather Stations survey in May which found that 13.5 percent or three million families are experiencing involuntary hunger at least once in the past three months.

This figure is 3.7 points below the 17.2% or 3.8 million families in Dec. 2014 and the lowest in 10 years since May 2005 when it was 12%.

Another survey showed that self-rated poverty went down by 3 percent from the average of 54% recorded in 2014.

He also noted that the unemployment rate went down to 6.6% in January from 7.5% last year. The number of overseas Filipino workers also went down to 8.4 million from 10 million.

The Palace official cited the findings of a Philippine Institute for Development Studies and United Nations Childrens Fund study which showed that the proportion of out-of-school children -- aged five to 15 years old -- to the total number of kids in the Philippines dropped to 5.2% from 11.7%.

Mr. Coloma said President Benigno S. C. Aquino III has built on the platform of good governance.

The Aquino administration has brought forth a government that is open, transparent and accountable, he said. --


Author: Kathryn Mae P. Tubadeza
Date: July 02, 2015
Source: BusinessWorld

MALACA'ANG on Thursday countered assertions of Vice President Jejomar C. Binay, claiming that the Aquino administration is masipag, maagap, masinop (hardworking, prompt, and prudent) in addressing the needs of the people.

The Palace issued these remarks after Mr. Binay launched another tirade against the Aquino administration on Wednesday during the launch of the opposition United Nationalist Alliance (UNA).

Members of UNA, Mr. Binay said, are not tamad, usad-pagong at teka-teka sa pagharap sa mga problema ng bayan. (lazy, slow, and indecisive when facing the countrys problems).

Mr. Binay have launched attacks against the Aquino administration since he quit the Cabinet as the Presidential Adviser on Overseas Filipino Concerns and chairman of the Housing and Urban Development Coordinating Council on June 22.

At the same press briefing on Thursday, Communications Secretary Herminio B. Coloma Jr. mentioned some accomplishments of the Aquino administration, citing data and survey to support their claims.

The responsible thing to do is to base statements on actual data, Mr. Coloma said. If there are accusations, the appropriate thing to do is to present these with concrete bases and these should not be based on speculation, clich, or rhetoric.

On Wednesday, the Vice President in his speech said that many Filipinos remain jobless and hungry and that poverty remains rampant.

However, Mr. Coloma cited a Social Weather Stations survey in May which found that 13.5 percent or three million families are experiencing involuntary hunger at least once in the past three months.

This figure is 3.7 points below the 17.2% or 3.8 million families in Dec. 2014 and the lowest in 10 years since May 2005 when it was 12%.

Another survey showed that self-rated poverty went down by 3 percent from the average of 54% recorded in 2014.

He also noted that the unemployment rate went down to 6.6% in January from 7.5% last year. The number of overseas Filipino workers also went down to 8.4 million from 10 million.

The Palace official cited the findings of a Philippine Institute for Development Studies and United Nations Childrens Fund study which showed that the proportion of out-of-school children -- aged five to 15 years old -- to the total number of kids in the Philippines dropped to 5.2% from 11.7%.

Mr. Coloma said President Benigno S. C. Aquino III has built on the platform of good governance.

The Aquino administration has brought forth a government that is open, transparent and accountable, he said. --


Author: Kathryn Mae P. Tubadeza
Date: July 02, 2015
Source: BusinessWorld

It was Adolf Hitler who pointed out first what is known as the big-lie propaganda technique, which his Joseph Goebbels perfected: Tell a big lie, keep repeating it, and people will eventually believe it.
Hitler in his Mein Kampf even explained why it is so effective: (The masses) would not believe that others could have the impudence to distort the truth so infamously.
The big-lie technique is what Aquino has been employing in his desperate effort to justify what is inarguably the biggest case of malversation of government funds in our history and perhaps even in the world " the P144 billion or $3 billion used for his grossly-misnamed Disbursement Acceleration Program (DAP).
Aquinos big lie, repeated again and again in so many versions, is that the DAP was intended to stimulate the economy, and funded projects beneficial to the country.
Hitler and Goebbels would have congratulated Aquino.
Intentionally or not, Aquinos big-lie trick has successfully brought much of public discourse to such really tangential issues as whether or not he had good faith in undertaking the DAP scheme or " an inane question actually " whether or not the Administrative Code of 1987 authorizes the President to spend government funds in whatever way he wants. (It doesnt; only savings are authorized, which the Supreme Court found were not the funds Aquino used.)

Aquinos oath taking, before Justice Conchita Carpio-Morales,
Chief Justice Renato Corona behind: DAP really started here.
Some of the more reasonable of what have been called the Noytards (rabid believers of Aquino) in social media postings concede that the DAP was unconstitutional but still insist that, anyway, it funded good projects such as the acquisition of a Doppler radar.
The truth is that, launched in October 2011 when he moved to take out Corona, it was the only way for Aquino to raise the huge slush fund and additional pork barrel money he needed to motivate Congress to undertake the unprecedented ouster of Chief Justice Renato Corona.
The list of 116 projects funded through the DAP released the other day by the budget department incontrovertibly confirms such bribe money in the form of pork barrel and patronage funds authorized by Aquino as follows:
Item 41 (in the DBM listing), Other Various Local Projects P6.5 billion released: This item shall fund priority local projects nationwide requested by legislators, local government officials and national agencies, according to the DBM document itself.
Item 73, Other various infrastructure projects: P8.1 billion released. The DBM document even explains: This item shall fund priority local projects nationwide requested by legislators, local government officials, and national agencies.
These two items were the source of the P100-million bribe money per legislator that Sen. Jinggoy Estrada exposed on September 25, 2012, and which Coronas defense counsel Judd Roy 3rd reported during the trial.
Evidence of this had been unearthed in the form of a copy of Senate President Franklin Drilons letter marked Private and Confidential to several senators asking him or her to submit to Dir. Gen. Yolanda Doblon on or before August 31, 2012, P50 million worth of infrastructure projects you wish to be funded in 2012.
Item 53, GOCCs: Other Various Local Projects, P1.9 billion. This item shall fund priority development projects nationwide in the areas of municipal ports, farm-to-market roads, local roads and bridges, livelihood, nutrition development and electrification through certain government and government-owned or controlled corporations. Who decided what projects would be funded? Abad, after instructions from Aquino.
Item 42, Development Assistance to the Province of Quezon, P750 million. That certainly would have been a big incentive for then Sen. Edgardo Angara, whose power base is Quezon province, to vote to remove Corona. And that P750 million is on top of the P50 million DAP-funded pork barrel funds he had received in 2012. No wonder his son, now Sen. Juan Edgardo Angara, has been so energetic in defending Aquinos DAP, as one done in good faith.
One venue also for ensuring Congress support for his project to remove Corona, was through massive funds for local governments, which are under the aegis of congressmen and senators, among these:
LGU Support Fund, P4.5 billion; NHA: On-site Development for Families along dangerous areas, P10 billion; Relocation sites for informal settlers along Iloilo River and its tributaries, P100 million (No wonder Congress prosecutor Iloilo Rep. Niel Tupas had so much energy for the trial.); Mindanao Rural Development Project, P919 million; Various Priority Infrastructure Projects, P2.8 billion; and the biggest pork barrel of course, P8.6 billion for local governments in the Autonomous Region in Muslim Mindanao.
But Aquino and his budget secretary Florencio Abad, of course, realized that the hijacking of funds from projects appropriated by Congress for the bribe money would be so obvious if the money funded only that agenda, even if disguised as priority infrastructure funds.
So they included as many projects they could identify immediately, and Abad just asked Cabinet members what they wanted to fund, if money not in the appropriations laws were available.
This is the reason why several of the projects the DAP funded had practically nothing to do with stimulating the economy but which Cabinet members and allies asked for as if asked by Santa Claus what they wanted for Christmas, among them:
Economic Planning Secretary Arsenio Balisacan asked for P100 million for the institution which has been his base for decades, the Philippine Institute for Development Studies to buy a new building for its headquarters;
Tourism Secretary Ramon Jimenez asked for and got P5 billion for his Tourism Road Infrastructure, another P500 million to fund the advertisement costs abroad for his Its more fun in the Philippines slogan; and P200 million to move from the Manila headquarters it has had for decades to a JB Building in Makati. That last expenditure would have been a boon for the owners of JB building. Was there a bidding where the new tourism department offices would be?
Technical and Skills Development Authority head Joel Villanueva probably thought that a drastic expansion of his agencys operations would boost his chances of winning a Senate seat in the 2013 elections, and asked for, and got, P1.6 billion additional funding for its training programs, nationwide.
Interior and Local Governments Secretary Mar Roxas asked for, and got, P250 million Performance Challenge Fund for local governments, which he dispensed at his discretion to build up his political base for his presidential ambitions in 2016. That is on top of the P4.5 billion LGU support fund mentioned above, which he distributes at his discretion.
And, of course, Peace Adviser Teresita Deles got one of the biggest allocations P1.8 billion for peace activities of her office, which included campaigning here and abroad to win Aquino a Nobel Peace Prize.
These Cabinet secretaries should check if their requests were made in writing. If they were, they should beg Abad to shred it.
As I will explain on Friday, several Sandiganbayan and Supreme Court decisions include as conspirators the recipients of government funds in malversation cases. They are also jailed, and ordered to shoulder the return of the money involved with the official who illegally released the funds.
Aquino, of course, wasnt one to be left behind in the distribution, as it were, of the loot. Hindi pagugulang, as that precise Pilipino term would put it.
He allocated from DAP funds P2 billion for road projects in his home province of Tarlac, and where his familys crown jewel, Hacienda Luisita, is conveniently located. Abad and public works secretary Rogelio Singson were even so sycophantic: A note in the DBM document said: The total requirement was increased from P1.1 billion to P2 billion after DPWH reviewed and adjusted the costing.
Still looking for projects to cover for the real nefarious goal of his DAP, Aquino probably was mulling over this as his eyes fell on his Presidential Security Group bodyguard. Kayo, Sarge, kailangan ba niyo ng pera?
Voila, he allocated P250 million from the DAP to enhance command in (sic) control of critical information and communications of PSG.
You might suspect, though ,that Aquino or Abad may have the gift of prescience. Aquino allocated P20 million out of DAP money to the DILG to build a facility to house high-risk and high-profile inmates.
This would be, according to the DBM document, at Camp Bagong Diwa in Bicutan, and definitely not the one in Camp Crame where senators Jinggoy Estrada and Bong Revilla are jailed. Costing P20 million, that facility probably has a smoking room and another for electronic games.//
tiglao.manilatimes@gmail.com

Author: Rigoberto D. Tiglao
Date: July 15, 2015
Source: Manila Times

THE GOVERNMENTS conditional cash transfer program has mechanisms for rooting out ineligible beneficiaries from its database, the Department of Social Welfare and Development (DSWD) said.

We have a Grievance Redress System (GRS) which captures and processes complaints about the program and the beneficiaries. Through this, we have already delisted more than 77,000 beneficiaries, Secretary Corazon J. Soliman said in a statement. Ms. Soliman was responding to reports that the program, known as Pantawid Pamilyang Pilipino, allegedly suffers a leakage rate of 30%. The leakage data was attributed to a study by the Asian Development Bank (ADB).

Philippine Country Director Richard Bolt was quoted as saying in the statement that the figure in the Learning Lessons publication of ADBs Independent Evaluation Department is sourced from a 2013 study done by the Philippine Institute of Development Studies (PIDS), which is based on 2009 data and earlier poverty targeting practices. It is unfortunate that this reference was not clear. Mr. Bolt added that the problems related to beneficiary targeting raised in the PIDS report has been fully addressed by the DSWD and the conditional cash transfer program.

As such, we are confident that the issue raised is no longer the case in the ongoing conditional cash transfer program, Mr. Bolt said.

In a separate statement, the DSWD said it clarified with the ADB that the study in question was based on 2009 data.
It has been six years since the data being referred to was generated. Then, we only had 700,000 household-beneficiaries. Now, we have expanded to more than 4.4 million. A number of steps have already been taken to address the problems that arose when it was still being started. Different institutions, including ADB, has even recognized the Departments efforts in line with this, she added.

Secretary Soliman shared that the department is currently conducting its second round of National Household Targeting System for Poverty Reduction (NHTS-PR) that will profile whether a household is poor, near-poor or non-poor through the indicators specified by the department.

The NHTS-PR, or Listahanan, will help us determine who and where the poor are. After this second round of assessment, we should be able to get a registry of who should be included in our programs, particularly the Pantawid Pamilya, she explained. --


Author: J. E. Villaruel
Date: July 29, 2015
Source: Business World

MANILA, Philippines - Department of Education (DepEd) Secretary Armin Luistro recently hailed Albay as a model for the countrys basic education, for ensuring the welfare of teachers and students, delivering quality education, and providing sound school facilities.
Luistro was in Albay early this week for the Grand Summit on Senior High School, DepEds campaign for the K+12 program held at the Albay Astrodome. Some 4,500 educators and education stakeholders from the provinces four schools divisions attended the summit.
Whenever I visit schools in Albay, I feel a great sense of pride. I have yet to see a school in Albay that is not cared for, Luistro said in his keynote speeh during the summit.
Albay schools are known for their cleanliness and are well maintained by school heads. Many of the buildings have toilets, kitchens and water facilities and also serve as evacuation centers during typhoons
Albays pioneering education program, a brainchild of Gov. Joey Salceda, is among the programs conceptualized to have a lasting impact on development. It is of Albays two entries to the Galing Pook Awards this year, along with Team Albay Humanitarian Missions.
The K-12 program is an essential ingredient in the recipe for poverty reduction, said Salceda.
This program will lead to a more equitable country where our students will become more employable, and on a global standard, he added.
Albay has put a high premium on education and is the only province in the country with a fully institutionalized Provincial Education Division (PED) approved by the Civil Service Commission and the Department of Budget and Management. Created by a Provincial Board ordinance, it seeks to ensure program consistency and continuity.
Under PED, Salceda launched the Albay Higher Education Contribution Scheme (AHECS), a scholarship assistance program that has sent to college some 77,137 students in the province since 2008. This is supported by a similar scholarship scheme for high school, the Education Quality for Albayanos (EQUAL) program. Further reforms enabled the province to vastly improve its performance in the National Achievement Test (NAT) where it rose from a poor 177th place in 2007 to 19th place in 2012.
Albay PED has an initial target of one college graduate for every Albayano family under AHECS, which has recently been upgraded to include another vocational graduate per family. Toward this end, Albay has forged a strong partnership with education movers that led to the creation of the Albay Council on Education, a multi-sectoral body composed of various stakeholders on education including the four DepEd division superintendents in the province.
Salceda said a strong education program is one of the formulas for Albays economic development and anti-poverty mission that includes programs in tourism, health, agriculture and business. He stressed that education, has an even higher investment recovery potential than road projects.
Albay has posted other outstanding gains in education: improved participation rate in NAT from 72 percent in 2007 to 98 percent in 2013 in elementary as per PIDS-UNESCO study; a vastly reduced school dropout rate of only 0.2 percent at present versus national average of 1.3 percent as per PIDS-UNESCO study; 76,137 scholars in tertiary education, the largest pool ever of 188,000 college graduates outside of national government, whether public or private programs.//

Author:
Date: July 20, 2015
Source: Philippine Star

RELEGATED TO the sidelines during the signing of the Fair Competition Act in Malacaang two weeks ago was an important piece of legislation with a huge economic impact on trade and the local shipping sector.

Republic Act No. 10668, or the liberalized Cabotage Law, will allow foreign-flagged vessels to call at Philippine ports and enable importers and exporters to load cargoes in foreign ships going in and out of the country.

Previously, only domestic vessels were permitted to engage in coastwise trading, or the carrying of cargoes from one domestic port to another. This was a protectionist policy aimed at promoting the development of the local shipping industry that, sadly, did not happen.

A 2014 study by the state think tank Philippine Institute for Development Studies (PIDS) observed that the absence of competition in domestic shipping has resulted in the bloated cost of transporting raw materials to manufacturing sites, finished products and agricultural goods to various destinations, and imported products to distribution areas. These increased overall operating costs that were eventually passed on to consumers as high prices. PIDS argued that relaxing the Cabotage Law was necessary to bring down domestic shipping costs and, in turn, lower the prices of goods.

Another study, by the Joint Foreign Chambers of Commerce in the Philippines, provided a concrete example: A 40-foot container shipped domestically from Manila to Cagayan de Oro would cost $1,860 compared with foreign transshipment via Hong Kong of $1,144 or Kaohsiung at $1,044. A local trader, in effect, could save 43 percent in shipping costs through transshipment via Kaohsiung than directly using domestic shipping services. Senate President Franklin Drilon also had another example. He noted that shipping dry cargo from Davao to Taiwan cost about $450 per 20-foot equivalent unit (TEU) compared to $680 when shipped from Davao to Manila, which was much shorter in distance.

The aging and small domestic fleet of the maritime transport industry has also contributed to high local shipping costs. While the Philippines is the worlds fifth-biggest shipbuilding country, domestic shipping lines continued to use smaller and even older vessels in transporting cargo, which were uncompetitive compared to those of their foreign counterparts. The small capacity of cargo vessels implied longer transit and more turnaround times in ports, resulting in higher shipping costs, according to PIDS. It noted that domestic shipping was dominated by vessels with a capacity of 200-300 TEUs compared to those of foreign container ships that carried as much as 5,000 TEUs.

In his speech at the signing ceremony in Malacaang, President Aquino said allowing foreign vessels from a port outside the Philippines to carry cargo to their domestic port of final destination will make the export and import of products faster and cheaper [and] lead to a more vibrant market. Stakeholders, from consumers to businessmen, will be able to save [money].

As an added benefit, allowing foreign ships access to other ports in the country will stimulate economic activity in areas outside the capital and help free up space and congest the port in Manila, which earlier was the only place in the country where foreign ships could load and offload cargo.

Similar to the deregulation of the airline industry that drove ticket prices down and led to a surge in domestic tourism, relaxing shipping rules can also trigger a decline in costs and increase trade. It may, hopefully, also prod local shipowners to modernize and make their operations more cost-efficient.

Of course, much still needs to be done. Private shipowners have raised the need to develop port infrastructure"big foreign cargo ships need bigger berthing facilities"and for the government and the private sector to work on moving production areas closer to the provincial ports and highways to further increase efficiency.

More importantly, the government must ensure that Philippine ports of entry and exit are fully shielded against smuggling or dumping of goods. Otherwise, the relaxed Cabotage Law will only worsen the current situation where an assortment of commodities illegally enter the archipelagos porous maritime borders. This is where the strengthening of the Bureau of Customs, the Coast Guard and the Philippine Ports Authority should come in.

Author:
Date: July 28, 2015
Source: Philippine Daily Inquirer

NO BACKLOGS. Students participate in an activity during the opening of classes at the President Corazon C. Aquino Elementary School in Quezon City. File photo by Ben Nabong/Rappler Photo by Ben Nabong/Rappler

MANILA, Philippines " In his last State of the Nation Address (SONA) on Monday, July 27, President Benigno Aquino III assured the next administration that education backlog will be the least of its worries.
"Malinaw po: Hindi na tayo mag-iiwan ng sakit ng ulo sa susunod sa atin (It is clear: We will no longer leave behind headaches for the next administration)," Aquino said as he enumerated figures on classrooms, textbooks, seats, and teachers.

Backlogs in 2010
REMOVED BY 2012 REMOVED BY 2013
61.7 million textbooks
2.5 million classrooms seats

66,800 classrooms
145,837 teachers
The education department estimated an additional 4.7 million students will enroll until 2017, so more classrooms need to be built, more teachers need to be hired, and more textbooks and seats need to be bought:

NEEDED BUILT/HIRED WILL BE BUILT/WILL BE HIRED IN 2015 IN 2016 BUDGET
CLASSROOMS 118,000 33,608 41,000 43,000
TEACHERS 130,000 29,444 39,000 60,000
DELIVERED WILL BE DELIVERED IN 2015 IN 2016 BUDGET
TEXTBOOKS 73.9 million 88.7 million 103.2 million
CLASSROOM SEATS 1.6 million 1.6 million 4.4 million
"Ayon nga po kay Brother Armin, ang sumatutal na naipagawa nating mga classroom at na-hire na mga guro ay higit pa sa pinagsama-samang nagawa mula sa nakalipas na 20 taon bago tayo manungkulan," Aquino said.

(According to Brother Armin, the total number of classrooms built and teachers hired is more than what was accomplished for the last 20 years before we stepped into office.)

K to 12, out-of-school youth

On Monday, the President also reiterated the country's need for the K to 12 program, although there was no mention of the petitions that have been filed against it before the Supreme Court (SC).

"Kinekwestyon na ang credentials ng ating mga kababayan sa ibang bansa. Meron na ring na-demote dahil hindi sapat na patunay ng kakayahan ang diplomang tangan niya."

(Other countries are already questioning the credentials of our graduates. Others were even demoted because their diplomas are no longer enough to prove their qualifications.)

He added: "Kung ang lumang kalakaran sa edukasyon ay maihahalintulad sa manggang kinalburo, ngayon sinisiguro nating hinog ang kakayahan ng mga estudyante ng magpanday ng sariling kinabukasan."

(If the old system of education can be likened to a mango that is forced to ripen, now we're making sure that the skills of our students are already ripe so they can forge their own future.)

With the signing of the Enhanced Basic Education Act of 2013, two years have been added to the basic education system of the Philippines. The largest batch of students under the program will enter senior high schools grade 11 in 2016, and grade 12 in 2017.

To date, at least 5 petitions have already been filed before the SC to suspend the K to 12 program. Critics believe government should focus on the existing problems in education instead of introducing a new system.

Aquino on Monday also hailed the education department's Alternative Learning System and the social welfare departments Pantawid Pamilyang Pilipino Program for the drop in the number of out-of-school youth (OSY) in the Philippines.

He cited figures from Philippine Institute for Development Studies which reported a decrease in the number of OSY from 2.9 million in 2008 to 1.2 million in 2013. " Rappler.com

Author: Jee Y. Geronimo
Date: July 27, 2015
Source: Rappler.com

WITH over two million rural households depending on rice farming, the Filipino dream of self-sufficiency in rice exerts a powerful hold on vote-hungry politicians as well as the popular imagination.

This dream was again revived by the Aquino administration in 2010 as a performance objective through its Food Self-Sufficiency Program (FSSP), which targeted total self-sufficiency (zero rice imports) by either 2013 or 2016.

But was this dream ever realistic at all to begin with? History says no. (See Table 1.)

Previously, average annual growth in palay production exceeded 6 percent only once, in the mid-80s, due almost entirely to the high-yield new varieties from the Green Revolution hatched in Los Baos, Laguna. But since 1994, the historical average has only been 3.2 percent, or half the FSSP target of 6.3 percent growth a year.

Wide gap

The gap is especially wide for irrigated palay, where FSSP hopes to increase the rice-planted area by an ambitious 4.1 percent a year through new or rehabilitated irrigation systems. One has to ask if this will ever match the natural advantages of, say, Vietnam and Thailand, the biggest rice exporters in the Association of Southeast Asian Nations (Asean), whose large and fertile plains are watered by the great Mekong River delta. The historical record with our irrigated palay area is only halfway to the target.

The view through the windshield confirms the perspective from the rear mirror. Figure 1 shows a range of projections of annual rice imports by the Philippines (in thousand metric tons), based on the Arkansas Global Rice Model developed by Eric Wailes, professor at the University of Arkansas, from the experience of 40 rice-exporting and -importing countries.

The midpoint of the projections (the mean) tells us that we will still be importing rice every year till 2022. And below the lower boundary of the range, there is only a 10 percent likelihood that we will become self-sufficient by 2015 and begin enjoying negative imports (i.e. exports) thereafter. In fact, the government has already projected nearly 100,000 MT of rice imports by the middle of this year.

Of course, the probability of success is only one reason to do anything and not even the most important reason at that.

The more important questions are these:

Will this action be worth it?

Will the benefits outweigh the costs?

Will those net benefits conform with and maybe even reinforce other things that are also considered important?

Not worthwhile if costly

Self-sufficiency in rice is worthwhile to the rice-consuming majority only to the extent that it provides real rice security: sufficient rice supply at affordable and stable prices.

Second, it is worthwhile to the rice-producing minority to the extent that it sustains its livelihood, assuming that rice farming is, in fact, the best alternative open to it. And there are"as with everything else"all sorts of costs to think about.

Consider a neighborhood block with 20 families. They all love pan de sal for breakfast. One family, headed by Mang Panadero, bakes pan de sal in an old-fashioned pugon. Every morning he sells it to the other 19 families for P150 a dozen.

One day a Vietnamese bakery opens for business down the road. With the latest in baking technology, they can sell exactly the same quality of pan de sal, but for only P100 a dozen. What should the neighborhood do?

Status quo: The other families love Mang Panadero, so they continue to buy his pan de sal even at a premium of P50 a dozen, or 50 percent. That premium, paid by 19 families, totals a tidy sum of P950 received by Panadero every day. Economists regard it as addition to producer surplus.

Better alternative: Money is tight, so the 19 families shift their business instead to the Vietnamese newcomer and collectively save P950 a day. Now that it is savings, this amount can be added to consumer surplus.

With those savings, the families can choose to buy more than one dozen pan de sal a day, or butter and eggs to go with the bread. The added consumer surplus is now stimulating additional demand for pan de sal and other goods from the bakery, the neighborhood grocery and other producers.

Since the families do still love Mang Panadero, they could set aside, say, P100 a day from their savings as a charity fund for his family. With that money, at least his family can continue to buy pan de sal at the same low price as their neighbors.

Mang Panadero now faces the challenge of modernizing his pugon, or looking for other customers outside the neighborhood, if he wants to stay in the pan de sal business. Alternatively, he could start making something else that his neighborhood wants to buy but is not yet available. What about pan de coco? Maybe his neighbors will even agree to pitch in more money to help him transition to a new livelihood.

The simple illustration above can be transferred to the countrys rice sector. (See Table 2.)

Over the four years from 2006 to 2009, the country incurred an average economic cost (a negative net surplus) of P6.7 billion a year from its rice policies. This increased by three times to P20.17 billion a year from 2010 to 2012, when the Aquino administration launched its FSSP.

Causes of welfare cost

This economic welfare cost was caused by the following:

Price difference between locally grown and imported rice. In 2012, the average price of local rice was about 50 percent more expensive than Vietnamese rice.

Lower rice consumption due to high prices of locally grown rice. This is especially true for the poor, whose food budgets are more limited.

Quantitative restriction on rice imports under a special treatment that the Philippines has enjoyed from the World Trade Organization since 1994. Among other things, this reduces tariff revenues that might otherwise be collected from unrestricted imports.

Net costs of FSSP, estimated at over P50 billion over the programs six-year life even if it achieves its self-sufficiency targets.

Cost of National Food Authoritys (NFA) price support, such as its mandate during lean harvest times to buy palay at above market (high palay procurement price paid to farmers) and sell rice at below market (low official release price charged to consumers).

To its credit, the Department of Agriculture is now saying that it never targeted total self-sufficiency in rice, only optimum sufficiency. Malaysia, for example, only targets 80-percent self-sufficiency.

We hope this rethinking by government leads to a repurposing of FSSP: away from the questionable objective of zero imports toward a more realistic objective of simply improving the productivity of our rice farmers to make them more competitive within unrestricted Asean and global markets.

Rice security via trade

Ironically, the Asean region is home to two of the worlds largest rice importers (the Philippines and Indonesia) as well as two of the largest rice exporters (Thailand and Vietnam). The difference in per capita rice production (kilograms per person) between the two groups has been inexorably widening since the early 90s. (See Figure 2.)

It makes sense for the regions rice exporters to be selling more and more to its rice importers over time. And yet the Asean region as a whole has been exporting more of its rice to the rest of the world than to each other since 1980. (See Figure 3.)

Clearly, much remains to be done in order to deepen and stabilize the rice trade between the regions rice exporters and importers:

Exporters must be able to rely upon importers long-term purchase commitments so that they can invest in the necessary production capacity.

Importers must be given guaranteed access to export supplies even during episodes of global market volatility.

Broader and more transparent trading arrangements will lead to wider sharing of market information, reducing the uncertainty and miscalculations that are the real cause of price volatility.

The sharp global rice price hike in 2008, for example, could have been avoided if Vietnamese rice traders had not hedged against higher export prices by sitting on their rice stocks, prompting the Philippines to counterhedge by buying excessive amounts of rice abroad.

In the long run, greater rice trade will encourage the emergence of new rice exporters, such as Myanmar and Cambodia, which share the natural advantages of their bigger neighbors in Indochina.

The instinct to protect ones rice sector is almost visceral and not just in the Philippines. Rice (followed by sugar) is mentioned most often on the short lists of tariffable (and almost always agricultural) items that Asean members are allowed to exempt from intraregional free trade. Any progress made toward opening up and deepening regional rice trade can only be a collective achievement.

Repurposing NFA

As the region opens up its rice trade, the Philippines must make difficult choices about the different ways its rice farmers have been protected by government. In particular, the countrys grain agency, the NFA, must decide whether it should continue to play two roles from among its multiple mandates:

Should the NFA continue to be the countrys sole authorized importer of rice?

Should the NFA continue to provide price support"whether to rice farmers or rice consumers"that piles on ever larger amounts of subsidies and debt?

The first one is a command-and-control role that rarely does well in a market-driven economy. Consider that the NFA and its Vietnamese counterpart, Vinafood 2, together account for about half of the regions rice trade. Any miscalculation by one or the other, or both, tends to be magnified and prolonged, as in 2008.

Open market

By comparison, in a truly open market, the dynamic interaction between many private importers and many sellers converges into an equilibrium price that truly reflects the underlying scarcity of rice. This continuous exchange of information among many players also stabilizes the price and minimizes its volatility over time.

This in turn allows those players to make reasonable and long-term commitments and investments.

The same market pricing dynamic applies to the local production and distribution of rice. As subsidies are phased out, the NFA can also seek a financial restart by shifting the burden of its accumulated debt over to government.

With more and cheaper imports, economic surplus will return to our consumers from our farmers. Some of that surplus can be recycled back to the farmers, e.g. by using some of the additional tariff revenues from higher imports to fund a conditional-cash-transfer program for the neediest farmers, or to help finance the redirection of their activity and resources toward nonrice, higher-value and perhaps, exportable crops.

Smaller NFA role

This leaves the NFA with a potentially smaller set of restricted roles:

Maintain buffer rice stocks (both imported and locally grown) in support of domestic disaster response and poverty alleviation.

Provide logistical services in remote areas with poorly developed supply chains, while pursuing market upgrading in other areas (e.g. by establishing negotiable warehouse receipts).

Other regulatory oversight, e.g. monitor rice purchase agreements, enforce rice grades and standards, and license legitimate rice importers (without applying import ceilings).

In short, rice security through self-sufficiency is a false mantra. The proper policy choices are to seek rice security on behalf of the majority of consumers; rely on open trade with our rice-exporting neighbors to deliver most of that security; maintain buffer stocks against the unexpected; and support our rice farmers with direct livelihood assistance as well as long-term productivity improvement through technology and extension programs.

(Roehlano M. Briones, Ph.D., is a senior research fellow at the Philippine Institute for Development Studies. Gary Olivar is a banking and political consultant. They wish to acknowledge valuable research insights from Ramon Clarete, Ph.D., former dean of the University of the Philippines School of Economics. All three WITH over two million rural households depending on rice farming, the Filipino dream of self-sufficiency in rice exerts a powerful hold on vote-hungry politicians as well as the popular imagination.

This dream was again revived by the Aquino administration in 2010 as a performance objective through its Food Self-Sufficiency Program (FSSP), which targeted total self-sufficiency (zero rice imports) by either 2013 or 2016.

But was this dream ever realistic at all to begin with? History says no. (See Table 1.)

Previously, average annual growth in palay production exceeded 6 percent only once, in the mid-80s, due almost entirely to the high-yield new varieties from the Green Revolution hatched in Los Baos, Laguna. But since 1994, the historical average has only been 3.2 percent, or half the FSSP target of 6.3 percent growth a year.

Wide gap

The gap is especially wide for irrigated palay, where FSSP hopes to increase the rice-planted area by an ambitious 4.1 percent a year through new or rehabilitated irrigation systems. One has to ask if this will ever match the natural advantages of, say, Vietnam and Thailand, the biggest rice exporters in the Association of Southeast Asian Nations (Asean), whose large and fertile plains are watered by the great Mekong River delta. The historical record with our irrigated palay area is only halfway to the target.

The view through the windshield confirms the perspective from the rear mirror. Figure 1 shows a range of projections of annual rice imports by the Philippines (in thousand metric tons), based on the Arkansas Global Rice Model developed by Eric Wailes, professor at the University of Arkansas, from the experience of 40 rice-exporting and -importing countries.

The midpoint of the projections (the mean) tells us that we will still be importing rice every year till 2022. And below the lower boundary of the range, there is only a 10 percent likelihood that we will become self-sufficient by 2015 and begin enjoying negative imports (i.e. exports) thereafter. In fact, the government has already projected nearly 100,000 MT of rice imports by the middle of this year.

Of course, the probability of success is only one reason to do anything and not even the most important reason at that.

The more important questions are these:

Will this action be worth it?

Will the benefits outweigh the costs?

Will those net benefits conform with and maybe even reinforce other things that are also considered important?

Not worthwhile if costly

Self-sufficiency in rice is worthwhile to the rice-consuming majority only to the extent that it provides real rice security: sufficient rice supply at affordable and stable prices.

Second, it is worthwhile to the rice-producing minority to the extent that it sustains its livelihood, assuming that rice farming is, in fact, the best alternative open to it. And there are"as with everything else"all sorts of costs to think about.

Consider a neighborhood block with 20 families. They all love pan de sal for breakfast. One family, headed by Mang Panadero, bakes pan de sal in an old-fashioned pugon. Every morning he sells it to the other 19 families for P150 a dozen.

One day a Vietnamese bakery opens for business down the road. With the latest in baking technology, they can sell exactly the same quality of pan de sal, but for only P100 a dozen. What should the neighborhood do?

Status quo: The other families love Mang Panadero, so they continue to buy his pan de sal even at a premium of P50 a dozen, or 50 percent. That premium, paid by 19 families, totals a tidy sum of P950 received by Panadero every day. Economists regard it as addition to producer surplus.

Better alternative: Money is tight, so the 19 families shift their business instead to the Vietnamese newcomer and collectively save P950 a day. Now that it is savings, this amount can be added to consumer surplus.

With those savings, the families can choose to buy more than one dozen pan de sal a day, or butter and eggs to go with the bread. The added consumer surplus is now stimulating additional demand for pan de sal and other goods from the bakery, the neighborhood grocery and other producers.

Since the families do still love Mang Panadero, they could set aside, say, P100 a day from their savings as a charity fund for his family. With that money, at least his family can continue to buy pan de sal at the same low price as their neighbors.

Mang Panadero now faces the challenge of modernizing his pugon, or looking for other customers outside the neighborhood, if he wants to stay in the pan de sal business. Alternatively, he could start making something else that his neighborhood wants to buy but is not yet available. What about pan de coco? Maybe his neighbors will even agree to pitch in more money to help him transition to a new livelihood.

The simple illustration above can be transferred to the countrys rice sector. (See Table 2.)

Over the four years from 2006 to 2009, the country incurred an average economic cost (a negative net surplus) of P6.7 billion a year from its rice policies. This increased by three times to P20.17 billion a year from 2010 to 2012, when the Aquino administration launched its FSSP.

Causes of welfare cost

This economic welfare cost was caused by the following:

Price difference between locally grown and imported rice. In 2012, the average price of local rice was about 50 percent more expensive than Vietnamese rice.

Lower rice consumption due to high prices of locally grown rice. This is especially true for the poor, whose food budgets are more limited.

Quantitative restriction on rice imports under a special treatment that the Philippines has enjoyed from the World Trade Organization since 1994. Among other things, this reduces tariff revenues that might otherwise be collected from unrestricted imports.

Net costs of FSSP, estimated at over P50 billion over the programs six-year life even if it achieves its self-sufficiency targets.

Cost of National Food Authoritys (NFA) price support, such as its mandate during lean harvest times to buy palay at above market (high palay procurement price paid to farmers) and sell rice at below market (low official release price charged to consumers).

To its credit, the Department of Agriculture is now saying that it never targeted total self-sufficiency in rice, only optimum sufficiency. Malaysia, for example, only targets 80-percent self-sufficiency.

We hope this rethinking by government leads to a repurposing of FSSP: away from the questionable objective of zero imports toward a more realistic objective of simply improving the productivity of our rice farmers to make them more competitive within unrestricted Asean and global markets.

Rice security via trade

Ironically, the Asean region is home to two of the worlds largest rice importers (the Philippines and Indonesia) as well as two of the largest rice exporters (Thailand and Vietnam). The difference in per capita rice production (kilograms per person) between the two groups has been inexorably widening since the early 90s. (See Figure 2.)

It makes sense for the regions rice exporters to be selling more and more to its rice importers over time. And yet the Asean region as a whole has been exporting more of its rice to the rest of the world than to each other since 1980. (See Figure 3.)

Clearly, much remains to be done in order to deepen and stabilize the rice trade between the regions rice exporters and importers:

Exporters must be able to rely upon importers long-term purchase commitments so that they can invest in the necessary production capacity.

Importers must be given guaranteed access to export supplies even during episodes of global market volatility.

Broader and more transparent trading arrangements will lead to wider sharing of market information, reducing the uncertainty and miscalculations that are the real cause of price volatility.

The sharp global rice price hike in 2008, for example, could have been avoided if Vietnamese rice traders had not hedged against higher export prices by sitting on their rice stocks, prompting the Philippines to counterhedge by buying excessive amounts of rice abroad.

In the long run, greater rice trade will encourage the emergence of new rice exporters, such as Myanmar and Cambodia, which share the natural advantages of their bigger neighbors in Indochina.

The instinct to protect ones rice sector is almost visceral and not just in the Philippines. Rice (followed by sugar) is mentioned most often on the short lists of tariffable (and almost always agricultural) items that Asean members are allowed to exempt from intraregional free trade. Any progress made toward opening up and deepening regional rice trade can only be a collective achievement.

Repurposing NFA

As the region opens up its rice trade, the Philippines must make difficult choices about the different ways its rice farmers have been protected by government. In particular, the countrys grain agency, the NFA, must decide whether it should continue to play two roles from among its multiple mandates:

Should the NFA continue to be the countrys sole authorized importer of rice?

Should the NFA continue to provide price support"whether to rice farmers or rice consumers"that piles on ever larger amounts of subsidies and debt?

The first one is a command-and-control role that rarely does well in a market-driven economy. Consider that the NFA and its Vietnamese counterpart, Vinafood 2, together account for about half of the regions rice trade. Any miscalculation by one or the other, or both, tends to be magnified and prolonged, as in 2008.

Open market

By comparison, in a truly open market, the dynamic interaction between many private importers and many sellers converges into an equilibrium price that truly reflects the underlying scarcity of rice. This continuous exchange of information among many players also stabilizes the price and minimizes its volatility over time.

This in turn allows those players to make reasonable and long-term commitments and investments.

The same market pricing dynamic applies to the local production and distribution of rice. As subsidies are phased out, the NFA can also seek a financial restart by shifting the burden of its accumulated debt over to government.

With more and cheaper imports, economic surplus will return to our consumers from our farmers. Some of that surplus can be recycled back to the farmers, e.g. by using some of the additional tariff revenues from higher imports to fund a conditional-cash-transfer program for the neediest farmers, or to help finance the redirection of their activity and resources toward nonrice, higher-value and perhaps, exportable crops.

Smaller NFA role

This leaves the NFA with a potentially smaller set of restricted roles:

Maintain buffer rice stocks (both imported and locally grown) in support of domestic disaster response and poverty alleviation.

Provide logistical services in remote areas with poorly developed supply chains, while pursuing market upgrading in other areas (e.g. by establishing negotiable warehouse receipts).

Other regulatory oversight, e.g. monitor rice purchase agreements, enforce rice grades and standards, and license legitimate rice importers (without applying import ceilings).

In short, rice security through self-sufficiency is a false mantra. The proper policy choices are to seek rice security on behalf of the majority of consumers; rely on open trade with our rice-exporting neighbors to deliver most of that security; maintain buffer stocks against the unexpected; and support our rice farmers with direct livelihood assistance as well as long-term productivity improvement through technology and extension programs.

(Roehlano M. Briones, Ph.D., is a senior research fellow at the Philippine Institute for Development Studies. Gary Olivar is a banking and political consultant. They wish to acknowledge valuable research insights from Ramon Clarete, Ph.D., former dean of the University of the Philippines School of Economics. All three are fellows of Foundation for Economic Freedom, an advocacy for free-market reforms supported by good governance.)



Author: Roehlano M. Briones and Gary B. Olivar
Date: July 26, 2015
Source: Philippine Daily Inquirer

Vice President Jejomar Binay on Thursday lamented the state of health care in the Philippines, claiming the Aquino administration used funds for public health to bribe its allies.
In a speech during the 83rd Annual National Convention of the Philippine Health Workers Association, the Vice President recalled how the Aquino administration cut back on the budgets of the Lung Center of the Philippines, National Kidney and Transplant Institute, and Philippine Heart Center by P970.6 million.
This administration has been a tightwad in spending for necessary services, so much so that the World Bank has commented that our growth has been hampered by governments underspending in public works and social services, Binay said.
But there is a lot of money. The money was unfortunately used to bribe politicians so the ruling party could get rid of their political enemies, he added.
The money, the Vice President alleged, was used to fund programs headed by the administrations leaders and friends, which included the junket for the hearing of the Philippines case against China at the International Tribunal on the Law of the Sea (Itlos) in The Hague.
While three members of the delegation presented before the tribunal, more than 35 high-ranking officials flew to The Hague in business class and were given first-class hotel accommodation.
Binay also questioned the administrations insistence on increasing the budget of its pet project, the Conditional Cash Transfer (CCT) while spending less on health care.
According to Binay, the World Health Organization (WHO) recommended that five percent of a countrys gross domestic product (GDP) must be spent on health care.
We are below this standard, with the government concentrating on the CCT, he said.
Isa nga itong malaking palaisipan sa akin, binibigyan ng pantawid ang mga mahihirap para pumunta sa health center, pero hindi naman pinopondohan nang maayos ang health center. Paanong makatutulong ang programang ito na mapabuti ang kalusugan ng mga mahihirap? (This has been a puzzle to me. The poor are being urged to go to health centers which have not been receiving enough funds) he added.
He said while there are significant increases in public health budget, many Filipinos are still unable to access basic health services.
Also, a third of the annual budget increase of the Department of Health goes to PhilHealth.
Although Filipinos have PhilHealth cards, they wont be accommodated in government hospitals which lack health workers.
Binay said there are only 17 hospital beds and three public health workers for every 10,000 sick Filipinos.
Hindi po problema ang pera. Ang kailangan ay isang gobyernong makapagbibigay ng tunay at mabilis na serbisyo sa mamamayan. Ang kailangan ay isang mapagkalingang gobyernong nakaiintindi ng totoong daing ng sambayanan (Money is not the problem. What we need is a government that will give speedy service to the people, a caring government that understands the need of the people), he added.
Binay outlined his plan on how to improve the Philippine healthcare system. He pledged to provide easy access to quality healthcare just like what is provided to the residents of Makati City.
He said the city government built the Ospital ng Makati, where residents get free check-up, hospitalization and medicines.
He also moved to strengthen the capacity of the local government unit to deliver health services.
According to Binay, special attention must be given to local government units in rural areas where funding is limited and where poverty incidence is at its highest.
Ayon sa isang pag-aaral ng Philippine Institute for Development Studies [PIDS], napako na sa 2,300 ang bilang ng rural health units. We must therefore improve health planning and service expansion to these areas, including those caught in conflict, he added.
Binay said he plans to equitably spend the health budget to increase hospital facilities, boost hospital staff and improve their skills.
He also aims to increase the salary and benefits of healthcare professionals working in government especially those working in the provinces.
Sisikapin nating madagdagan ang hospital beds ng 100,000 sa unang dala-wang taon ng aking administrasyon lalo na at ito ang kinakailangan para maging medical tourism destination ang ating bansa. Makaaasa ang ating mga duktor at public health workers ng karagdagang taas ng sahod at palalawigin natin ang mga benepisyo, he said.
This is the health program we offer our people. It supports our broad goal to attain inclusive and sustainable growth through intensive jobs-creation activities and expanded social services, he added.//


Author: Bernice Camille V. Bauzon
Date: July 23, 2015
Source: Manila Times

These thoughts are being written on the weekend prior to the Presidents final State of the Nation Address (SONA)"thus purely speculative. By the time the reader reads this, s/he may already have heard or read the speech itself

Past Philippine presidents have focused their final SONAs on achievements, legacies, and remaining tasks. Except for former President Joseph Estrada, who was cut off mid-way by EDSA II and a graft conviction. He talked specifically about the Mindanao peace process in his third SONA. Past presidents mainly showed the latest situation of the political economy in their respective contexts and how their programs affected it.

In 1998, former President Fidel V. Ramos underscored a 6.8 % Gross National Product, per capita income of P48,200, a stable 4.6% inflation rate, 1.5 million jobs generated, and reduced poverty and infant mortality that he attributed to deregulation, investment liberalization, and agrarian reform policies.

Similarly, former President Gloria Macapagal Arroyo noted that the country was able to weather a 2008 global economic crisis because of a strong economy developed through key government reforms, including putting people first and introducing new revenue measures.

If his previous SONA scripts are any indication, President Benigno S. Aquino III is expected to make a similar presentation"most likely giving primacy to indicators that the country is achieving inclusive growth through governments adherence to daang matuwid, or good governance, and anti-corruption efforts. It is certainly a valid claim"ratified by international ratings on both counts. Politically, with a presidential election year coming and a popular opponent"who is facing graft and corruption problems of his own"scheduled to give a Contra-SONA, we can expect a significant amount of nay-saying, specific counter examples and probably some open accusations of hypocrisy. Our job, as body politic, will be to sort out fact from spin and attempt to judge our coming choice of candidate with care. Each of us will decide how valid"in terms of the countrys welfare"the various claims are.


Militants from different groups marching along the stretch of Commonwealth Avenue to Batasang Pambansa in protest of Pres. Aquino's 2014 State of the Nation Address. Philstar.com/File

Among a range of Leftist civil society organizations, different interpretation of the SONA will already have emerged. Full of caricatures and gross simplifications designed to gin up the resentments and prejudices of their constituents, they will no doubt rehash the same charges of inutility and cruelty, seeing the president as no less than the incarnation of the devil himself. Instead of achievements and legacies, they will argue that not only has there been no significant change in the country in the last 5 years, but that the country has reverted back to the darkest of feudal ages. They will truck in the usual charges"that the Aquino administration has failed to address poverty, corruption, and human rights abuses"and they will have no trouble giving examples of failure in each area. While we all know the administration has been less than perfect, we also know that the existence of such cases does not necessarily mean there has been no significant change. In fact, there is ample evidence to suggest otherwise. Recently, for instance, government has been generally perceived to be less corrupt with a ranking of 85 out of 175 countries in Transparency Internationals Corruption Perception Index. More importantly, the Human Rights Victims Reparation and Recognition Law was passed in 2013 for the benefit of Martial Law victims"a landmark achievement.

Likewise, were the countrys indigenous peoples to issue a State of the Indigenous Peoples Address, it would most likely assert that government has failed to protect them from mining and plantation encroachment in ancestral domains, in addition to militarization, and human rights violations. Specific to this administration, they might point out that a simple joint administrative order has made the recognition of their ancestral domain claims even more complicated and cumbersome.

Without doubt, the Aquino administration continues to face challenges, understandable in light of the fact that we are far from living in a political utopia.

The government in general comes under heavy criticism for having no convictions on the Maguindanao massacre cases, even after all this time. It is certainly a source of concern that a high-profile mass-murder case takes longer than a presidents entire term to complete. However, under our system of division of powers, the Executive has already done as much as it can. The body of law passed by the Legislative and the court procedures underwritten by the Judicial branch are what lawyers are now using to delay the case.

More firmly in the presidents lap are the accusations of slow response to both the MNLF conflict in Zamboanga City and"on a much larger scale"to Super-typhoon Yolanda. But these cases have not exactly been swept under the rug. In fact, progress in both military and disaster response capability has been noteworthy.

But the most flak has come from the Mamasapano tragedy. One problem is that the President has never clearly explained how suspended Police Chief Alan Purisima came to supervise"rather than merely be consulted on"the covert operation. More personally, the President has been lambasted for not apologizing and for not admitting his own responsibility in the death of 44 SAF operatives and 17 MILF combatants. Still, it should be noted that, thus far, government has provided financial and livelihood assistance to the families of the fallen 44 and has also conducted several investigations to get to the bottom of the issue.

From a governance perspective, the President is seen by most to be honest and clean. His detractors, however, contend that his administration applies a double standard"that he ran after members of the opposition, like former President Arroyo, former Chief Justice Renato Corona, former Senate President Juan Ponce Enrile, and Senators Jinggoy Estrada and Bong Revilla"for corruption, while retaining such close allies such as Budget Secretary Butch Abad and Agriculture Secretary Proseso Alcala. Former Police Chief Purisima would also be gracing that list, were he not already dismissed for cause and facing charges from the Ombudsman"a move the Palace has announced it approves.

Many argue that the President has been slow in firing erring appointees. Extreme loyalty is clearly a PNoy"as well as a Pinoy"characteristic. But he has, in fact, accepted the resignations of officials, up to, and including, Cabinet members. He has just been somewhat slow in doing so. But in some cases, I consider that wise. For instance, many impute dishonesty to Butch Abad over the DAP funding process, even after it was declared unconstitutional by the Supreme Court. Well, what actually happened with the SC is discussed in detail in a previous column (http://www.philstar.com/opinion/2015/02/23/1426576/dap-and-politics-budgeting), but ultimately the Court impugned no dishonesty to anyone in the administration; constitutional points were clarified and corrective legislation passed.

A 7.2% GDP growth in 2013 and an average of 6.9% is still the biggest boon in the economy compared to past administrations. Efforts are already actively being made to improve our investment climate to ease the cost and process of doing business, in the interests of attracting the private sector. Still, our taipans need to be convinced to help create more and better quality jobs. And despite improved R and D in some areas, Wi-fi speed remains incorrigibly slow. But poverty levels have gone down from 27.9% in 2012 to 25.8% in 2014. Now, if only poverty can be reduced in tandem with economic gains"and if the 700,000 hectares of agricultural land still in the hands of big landowners can still be distributed to landless farmers and farm workers--perhaps inclusive growth may still be achieved.

The admininstration has also made significant strides in human development and social protection. The Department of Education, for instance, has provided free education in all public elementary and high schools all over the country and is set to fully implement its K-12 Program. The Department of Health has made PhilHealth more accessible to the public, was able to expand its coverage of medical services, and has even provided it for free to all senior citizens.

At the same time, the Department of Social Welfare and Development has provided conditional cash transfers to more than 4 million poor households to provide children a chance to go to school and finish basic education, and for poor families to receive medical services.

And in the foreign policy front, despite a relatively weak military force, our government has still been able to send a firm message to the Chinese government that were not about to give up our claims in the West Philippine Sea. However, host countries have yet to be satisfactorily dealt with in terms of their violations of OFW rights.

My personal assessment here was reinforced by a recent pre-SONA Facebook posting by scholar Dr Jose Gatmaitan Toots Albert of the Philippine Institute for Development Studies.

Three things are very clear to me that government has good marks on, he said. a.) spending better for social sector"DepED, DOH, and the CCT of DSWD"which have some positive outcomes already and for sure will have many more returns in the long run; b.) changing the investment grade status of the country and improving the perception of corruption; and c.) standing up to China.

By any standard, the Aquino government has been a marked improvement over its predecessors. While some of its promises are yet to be realized, it has nonetheless made great strides in various areas"such as the passage of the Responsible Parenthood and Reproductive Health Law and the Philippine Competition Act"and has significantly improved the countrys credit rating and investment grade. It has set an impressive threshold for succeeding administrations to aspire to. Despite the many criticisms it has received, my belief is that this is an administration whose accomplishments will have long and deep effects on the lives of every Filipino, and whose advances towards good governance will be emulated by many for years to come.

Author: Lila Ramos Shahani
Date: July 27, 2015
Source: Philippine Star

MANILA, Philippines - Several agricultural products have emerged as major beneficiaries of the Japan-Philippines Economic Partnership Agreement (JPEPA), a comprehensive bilateral trade and investment agreement between the two countries.
The Philippine Institute for Development Studies (PIDS) noted the huge surge in exports of fresh bananas following the implementation of the JPEPA.
Beyond market access, the Philippines will benefit from training and the transfer of technology and skills as well as the opportunity for institution building and domestic reforms, the PIDS said.
The JPEPA covers 7,476 tariff lines of Philippine exports, 93 percent of which are industrial goods, with the rest consisting of agricultural products.
According to the provisions of the JPEPA, tariffs on 5,994 product lines or around 85 percent of these goods were scheduled for immediate elimination when the agreement became effective in 2008.
Increasing East Asian economic integration compelled the country to enter into bilateral and regional free trade agreements (FTAs) to overcome barriers to trade.
The Regional Comprehensive Economic Partnership (RCEP) is poised to be the worlds biggest trading block, covering 40 percent of world trade, the PIDS said.
As a region-wide FTA, it holds great promise for stronger economic cooperation by achieving robust trade and investment flows.
It is estimated that the value of trade between the Philippines and RCEP members is $60 billion.
However, for the country to maximize the potential of RCEP, it has to address the impediments that have continued to stall the countrys growth: low utilization of FTAs, narrow fiscal space, inadequate infrastructure, and weak investor confidence,the PIDS noted.
FTAs generally call for market access and investment liberalization but they can also be instruments to increase competitiveness enabling the country to compete better in the global economy.
Another FTA in the offing is the United States-led Trans-Pacific Partnership (TPP).
Currently at an advanced stage of negotiations, this trade alliance is envisioned to serve as a vehicle for Asia-Pacific-wide integration, representing more than 658 million people and a combined gross domestic product of $20.5 trillion or 26 percent of global trade.
With its Asia-Pacific coverage, TPP aims for wider and deeper free trade scope encompassing investments, goods, and services.
The PIDS said the Philippines stands to gain from the TPP, particularly in increasing its exports or defending its market share. However, an issue that the Philippines should address both with the RCEP and the TPP is its ability to realize the benefits and manage the costs from these agreements.//


Author: Ted P. Torres
Date: July 26, 2015
Source: Philippine Star

MANILA, Philippines - The camp of Vice President Jejomar Binay yesterday accused Budget and Management Secretary Florencio Abad of avoiding the plunder charges filed against him over the controversial Disbursement Acceleration Program (DAP).
What is incredible is that Abad can say with a straight face there was nothing illegal or immoral about DAP, said Rico Quicho, the Vice Presidents spokesman for political affairs.
What is baseless is Abads persistent claim that DAP helped stimulate the economy when even the Commission on Audit says otherwise, he added.
Quicho cited a COA report released last year, which showed that four government-owned and -controlled corporations were slow or completely failed in releasing DAP funds.
The report said the state-owned firms reported to have unspent DAP funds were the National Dairy Authority, National Electrification Administration, Philippine Fisheries Development Authority and the Philippine Institute of Development Studies.
The plunder charges were filed against Abad by Bonifacio Alentajan, former president of the Philippine Constitution Association. The complainant also asked Ombudsman Conchita Carpio-Morales to suspend Abad while the complaint is pending investigation.
Abad expressed surprise over the charges.
That is absolutely without any basis. Its a figment of their imagination. Incredible! I do not think they are even serious at all about filing that complaint, he said.
On the latest complaint, Quicho expressed doubts that the case filed against Abad would prosper.
Knowing the partiality and selectiveness of the ombudsman, I have serious doubts if this will prosper, he said.//


Author: Janvic Mateo
Date: July 26, 2015
Source: Philippine Star

The camp of Vice Presidenty Jejomar Binay said that Budget Secretary Butch Abad who was charged with plunder for the controversial disbursement allocation program to shut up and face the music.
Vice presidential spokesperson for political affairs, lawyer Rico Quicho made the comment in light of Abads reaction to the plunder charge filed against him by former president of the Philippine Constitution Association, Bonifacio Alentajan.
That is absolutely without any basis. Its a figment of their imagination. Incredible! I do not think they are even serious at all about filing that complaint, Abad told reporters who sought his reaction on the charges.
Binays camp finds Abads remark wanting. What is incredible is that Abad can say with a straight face there was nothing illegal or immoral about DAP. What is baseless is Abads persistent claim that DAP helped stimulate the economy when even the Commission on Audit (COA) says otherwise, Quicho said.
A COA report released last year showed that four government-owned and -controlled corporations (GOCCs) were slow or completely failed in releasing DAP funds.
The state-owned firms reported to have unspent DAP funds were the National Dairy Authority (NDA), National Electrification Administration (NEA), Philippine Fisheries Development Authority (PFDA), and the Philippine Institute of Development Studies (PIDS).
Quicho also expressed doubts about whether the case filed against the budget secretary would prosper, as he again slammed the Office of the Ombudsman for employing selective justice.
But knowing the partiality and selectiveness of the Ombudsman, I have serious doubts if this will prosper, said Quicho.
The Vice Presidents camp has repeatedly scored the Ombudsmans seeming preferential treatment for administration allies, while fast tracking cases against the Binay family.
The Ombudsman is hell-bent in consolidating the pending complaints against the Vice President and to file a plunder case against him to showcase the administrations discredited tuwid na daan promise even if it directly transgresses the Constitution, Quicho previously said.
Various youth groups filed plunder raps against Abad last year. Among the groups were Kabataan party-list, Youth Act Now! and National Union of Students of the Philippines.
So far, the Ombudsman has failed to decide on these cases.
The Supreme Court declared several provisions of the DAP as unconstitutional July last year.
The latest plunder charge filed by Alentajan accused Abad of illegally transferring public funds duly appropriated to one government agency to another without legislative authority, and feloniously awarded and released fifty million pesos each to the senators who voted for the impeachment of Chief Justice Renato C. Corona, or almost one billion pesos.//


Author: Vito Barcelo
Date: July 26, 2015
Source: The Standard

MANILA - ''Face the music.'' This is the challenge of the camp of Vice President Jejomar Binay to Budget Secretary Butch Abad, who is facing another plunder case in connection with the Disbursement Acceleration Program (DAP).

Lawyer Bonifacio Alentajan, former president of the Philippine Constitution Association (Philconsa), cited in his plunder complaint before the Office of the Ombudsman Senator Jinggoy Estrada's privilege speech in 2013 wherein he claimed that senators received P50 million each from DAP for voting for the impeachment of then Supreme Court Chief Justice Renato Corona.

Abad branded the complaint as baseless and incredible, saying it was just "a figment of their imagination."

In a statement on Saturday, vice presidential spokesperson for political affairs Atty. Rico Quicho criticized Abad for still insisting that there was nothing illegal in the DAP, several provisions of which were declared unconstitutional by the high court in July last year.

"What is incredible is that Abad can say with a straight face there was nothing illegal or immoral about DAP. What is baseless is Abad's persistent claim that DAP helped stimulate the economy when even the Commission on Audit (COA) says otherwise," Quicho said.

He cited a COA report released last year that showed four government-owned and -controlled corporations (GOCCs) -- National Dairy Authority (NDA), National Electrification Administration (NEA), Philippine Fisheries Development Authority (PFDA), and the Philippine Institute of Development Studies (PIDS) -- were slow or completely failed in releasing DAP funds.

Quicho, however, expressed doubts that the case against the budget secretary would prosper due to the alleged "partiality" and "selectiveness" of the Ombudsman.

"The Ombudsman is hell-bent in consolidating the pending complaints against the Vice President and to file a plunder case against him to showcase the administration's discredited 'tuwid na daan' promise even if it directly transgresses the Constitution," said Quicho.//


Author:
Date: July 26, 2015
Source: ABS-CBNnews.com

NOY APPOINTEES IN PRA FACE PLUNDER RAPS
The plunder charges are raining on the closest allies of President Aquino and the camp of Vice President Jejomar Binay said the associates of Aquino, particularly Budget Secretary Florencio Butch Abad, should face the music.
Abad should be forthright instead of evading the issues lodged against him through the media, Binays spokesman for political affairs Rico Quicho said.

Quichos comment was made in light of Abads reaction to the plunder charge filed against him by former president of the Philippine Constitution Association (Philconsa), Bonifacio Alentajan, for his involvement in the controversial Disbursement Allocation Program (DAP).

That is absolutely without any basis. Its a figment of their imagination. Incredible! I do not think they are even serious at all about filing that complaint, Abad was quoted by the media as saying when asked for his reaction to the charges.

Contrary to the tuwid na daan (straight path) advocacy of Aquino, his appointees in the Philippine Reclamation Authority (PRA), including the elder brother of Transportation Secretary Joseph Emilio Abaya, also acting president of the Liberal Party (LP), were also slapped with plunder charges in a scam involving a P41-billion estate.

Anti-graft crusaders have filed plunder and graft charges before the Office of the Ombudsman against incumbent and former executives of the erstwhile PEA, now known as Philippine Reclamation Authority (PRA) for their deliberate shortchangings, deceptions and conspiracies with a property developer to defraud Government and the Filipino people in the biggest scam of (state) asset disposition involving the 1988 sale of an estimated P41-billion estate for just P472 million.
Respondents in this plunder and graft complaint filed by CGCPP are the state-run firms incumbent chairman Roberto Muldong, incumbent general manager Peter Anthony Abaya, the LP officials elder brother, and incumbent members of its board; former general manager Eduardo Zialcita and the chairman and members of the PEA Board in 1988 when the sale was consummated; and the succeeding executives and board directors before the current set of officers.

Quicho dared Abad to categorically declare there was nothing immoral on his disbursement of the DAP which was declared illegal by the Supreme Court (SC).

What is incredible is that Abad can say with a straight face there was nothing illegal or immoral about DAP. What is baseless is Abads persistent claim that DAP helped stimulate the economy when even the Commission on Audit (CoA) says otherwise, Quicho rebutted.

A CoA report released last year showed that four government-owned and -controlled corporations (GOCCs) were slow or completely failed in releasing DAP funds.

The state-owned firms reported to have unspent DAP funds were the National Dairy Authority (NDA), National Electrification Administration (NEA), Philippine Fisheries Development Authority (PFDA), and the Philippine Institute of Development Studies (PIDS).
Quicho also expressed doubts about whether the case filed against the budget secretary would prosper, as he again slammed the Office of the Ombudsman for employing selective justice.

But knowing the partiality and selectiveness of the Ombudsman, I have serious doubts if this will prosper, said Quicho.
The Vice Presidents camp has repeatedly scored the Ombudsmans seeming preferential treatment for administration allies, while fast tracking cases against the Binay family.

The Ombudsman is hell-bent in consolidating the pending complaints against the Vice President and to file a plunder case against him to showcase the administrations discredited tuwid na daan promise even if it directly transgresses the Constitution, Quicho previously said.

Various youth groups filed plunder raps against Abad last year. Among the groups were Kilusang Magbubukid ng Pilipinas (KMP), Kabataan party-list, Youth Act Now! and National Union of Students of the Philippines (NUJP).

So far, the Ombudsman has failed to decide on these cases.

The High Court declared several provisions of the DAP as unconstitutional July last year.

The latest plunder charge filed by Alentajan accused Abad of illegally transferring public funds duly appropriated to one government agency to another without legislative authority, and feloniously awarded and released P50 million each to the senators who voted for the impeachment of Chief Justice Renato Corona, or almost one billion pesos.

More plunder cases

Also named respondents in this plunder and graft complaint lodged by the Crusaders against Graft and Corrupt Practices in the Philippines (CGCPP) are officials of the Manila Bay Development Corp. (MBDC), which has failed to turn this four-hectare property into a business hub over the past 27 years, in violation of the original sale agreement requiring its development by the buyer within five years of its acquisition.

Lawyer Fernando Perito, who is lead convenor of CGCPP, also urged the government in his affidavit-complaint to forfeit or take back this prime lot at what is now MBDCs Central Business Park II along Roxas Boulevard in Paraaque City, on the strength of Section 9 of the anti-plunder law"Republic Act No. 7080"empowering the State to recover unlawfully acquired public properties without any regard for prescription, laches or estoppel.

Also accused of plunder and graft charges are the members of the MBDC Board of Directors and its president George Chua, who signed with then-general manager Zialcita the Absolute Deed of Sale covering this deal on Aug. 23, 1988.
This is the second plunder and graft complaint against PEA and MBDC officials in connection with this P41-billion reclamation deal as the United Filipino Consumers and Commuters (UFCC) led by its convenor Rodolfo Javellana Jr. had recently filed a similar case before the Office of the Ombudsman.

Javellana noted in his affidavit-complaint that this highly irregular deal between PEA and MBDC officers surfaced only last year when the Uniwide Sales Realty and Resources Corp., as part of its ongoing legal battle with MBDC, came with a newspaper advertisement appealing to PEA to take back this property.

As for Peritos own affidavit-complaint, he noted that at the prevailing market rate of P40,000 per square meter in 1988, the reclamation property totaling 410,467 sq. m. was easily worth P41 billion, but PEA surprisingly sold it for a mere P1,100 per sq. m."or only P472,037,050.00"on condition that MBDC would develop it in five years time.

But MBDC has failed to develop the reclamation property up to now in violation of the terms of the 1988 sale agreement, said Perito.

Hence, he added, the former and current PEA executives are guilty of gross inexcusable negligence and evident bad faith that warrant the filing of plunder and graft charges against them, for failing to cancel the contract, confiscate the property, and take punitive action against these erring PEA and MBDC officers for defrauding the state and the Filipino people of an estimated P41 billion.
As of this date, the only vertical structure found within the subject property is the Uniwide Mall, Perito bewailed, and all other portions remain undeveloped, save for the construction of the Macapagal Boulevard, which somehow ate up portions of the subject property.

What is appalling is that PEA officials seriously neglected their duty to enforce such rights under the Deed of Sale despite MBDCs continuous non-compliance, he said.

MBDCs failure to develop the subject property to this date should have compelled PEA through its several general managers and Boards to cancel the said Contract, he added.

What is outrageously detrimental to the Philippine government and to the Filipino People is that the Philippine government sold this property to MBDC only in the amount of P472 million in exchange for a highly commercialized place originally intended to benefit the government in the form of tax revenues but remained unfulfilled, he said in his complaint.

PEA officers from 1988 to the present clearly exhibited gross inexcusable negligence and evident bad faith when they omitted to perform their obligation to enforce the rights of the government under the said Deed of Sale, thereby giving undue preference to MBDC to gain billions of pesos just by sitting on the property subject of the sale, Perito said.

All the respondents seemingly joined together to commit one goal"to deprive billions of pesos at the expense of the Filipino People"(and) all contributed to what could be the biggest scam of asset disposition by the Philippine government with a value of some P41 billion more or less if (the property is) sold between P80,000.00 and P100,000.00 per sq. m.,Indubitably, there are deliberate shortchangings, deceptions and conspiracies by our public officials in connivance with private persons against the welfare of the common folks and the interest of our country when they entered into a Contract so disadvantageous to our government and eventually affecting the lives of every Filipino, he added in his affidavit-complaint.

Perito pointed out that even if had taken place way back in 1988, this irregular transaction is not covered by the mandatory 10-year prescription period for the filing of plunder charges against guilty parties and the 20-year prescription period covering graft complaints, because prescription must be reckoned from the date of discovery.

It must be emphasized that the Filipino people became aware of the Deed of Sale just recently when the issue became public, he said. Hence, the filing of these cases against these former and present officials of PEA as well as against the owners and officers of MBDC (pursuant to the 2nd paragraph of Section 2 of the Anti-Plunder Law and Section 9 of the Anti-Graft and Corrupt Practices Act), is within the period allowed under the rules.

The fact that MBDC continuously failed to develop the subject property and the fact that PEA, to this date, did nothing to demand fulfillment is a clear indication of conspiracy between them, Perito said. PEA through its continuous inaction seemingly gives premium to MBDCs non-compliance as the property is now valued at around P41 billion more or less.

The inclusion of all PEA officers from 1988 onwards is justified, he said, because of their involvement by silence, acquiescence and non-concern on the open, notorious and mocking Contract that was so favorable to the buyer.

The Chairman and members of the Board of Directors of PEA are jointly and continuously committing this particular crime, he said. It is highly suspect and inexplicable why PEA Officers and Board of Directors in the past and now their successors have all remained indifferent with regard to MBDCs non-compliance.

Perito recalled that in exchange for acquiring the property at a bargain, MBDC was required under Article IV of the Deed of Absolute Sale to develop it within five years, based on the approved Parcellery Plans and Urban Design Guidelines.
Under the 1988 contract, MBDC was required to [1] submit a five-year Implementation Schedule covering the propertys development plan within six months from the buyers receipt of the written notice from the seller of the sales approval by the Office of the President (OP), [2] finish all horizontal development within the first two years, and [3] undertake at least 60% completion of all vertical development at the end of the fifth year.

None of these three requirements was ever complied with by MBDC, he said.//


Author: Charlie V. Manalo
Date: July 26, 2015
Source: The Daily Tribune

While the Philippines has had robust economic growth since 2010, even despite a weak global economy, it has had little progress in reducing income poverty. Recognising that some segments of society are left out in growth processes, the Philippine government has made inclusive growth the cornerstone of its most recent Philippine Development Plan.

The inclusive growth strategy includes more public investments in the social sector. In particular, bigger budgets have been given to both education and health. For 2015 alone, the education budget totals 361.7 billion pesos (US$8 billion), representing an increase of 18.6 per cent from the previous year. The government has also invested heavily in a conditional cash transfer (CCT) program referred to as the Pantawid Pamilyang Pilipino Program.
Primarily a social protection program, Pantawid was originally aimed at providing social assistance for poor households on the condition that these households invest in education and health, particularly of children, and access maternal health services. Grants for education amount to 300 pesos (US$8) per child per month for 10 months of the school year (for a maximum of three children per household). For health and nutrition, cash grants per household were 500 pesos (about US$12) per month per family. Starting in 2014, the government extended assistance to child beneficiaries to enable them to finish their high school education. Monthly cash assistance for high school students were increased to 500 pesos.
This CCT has become the largest social welfare intervention that the government has ever implemented. Since its inception, the CCT budget has continued to increase, as has the number of beneficiaries. During its pilot stage, the CCT had a budget of 50 million pesos to assist 6000 households. A year later, the budget grew to 299 million pesos to assist 300,000 households. The government has continued to scale up the program toward the official estimates of the number of poor households in the country.
The 2014 budget for Pantawid was 62.6 billion pesos with over four million households being assisted. This has coincided with the extension of assistance to child beneficiaries to complete high school. According to World Bank staff, Pantawidhas also become the third largest CCT program globally, next only to those of Brazil (with 8.8 million households) and Mexico (6.5 million households).
Recent official poverty data suggests that poverty incidence in the Philippines remains practically unchanged. Research shows that out of those in poverty in 2006, about a third (8 per cent of the population) had managed to exit poverty by 2009. But a tenth of the non-poor (also 8 per cent of the population) fell into poverty by 2009. Although only a 20 per cent of households in 2012 were poor, more than 30 per cent of households are strongly at risk of falling into poverty, with incomes hovering between the poverty line and twice the poverty threshold. Critics suggest that the huge budget could have been better spent in other pro-poor programs for livelihood and employment.
But the lack of poverty reduction is not necessarily the fault of the CCT. All things have not been equal. Climate disasters and other factors put nearly-poor households at strong risk of falling into poverty. World Bank staff also suggest that poverty would have further worsened without Pantawid: the official poverty rate (25 per cent in the first half of 2013) could have been 1.4 percentage points higher without the CCT. With the peso cash grant, the poverty gap index (representing the average amount of income required by the poor to reach the poverty line) has been reduced by 61 centavos.
Some think that giving money to the poor is not the best way to help since the poor may become dependent on that assistance. But studies show many positive outcomes from the CCT. Some suggest that the CCT has actually increased the desire for work of adult members of CCT beneficiaries. The same papers also show that the CCT has significantly reduced the hours worked by primary school-aged children, although it did not significantly affect the incidence of child labour.
An examination of education indicators show that the proportion of five-to-fifteen year old children in school had gone up to about 95 per cent by 2013 from 90 per cent during 2007"10. In 2008, there were an estimated 2.9 million out-of-school children, of which 1.2 million were of primary school age. By 2013, the number of out-of-school children had fallen to 1.2 million, of which 440,000 are of primary school age. So while there are still a considerable number of children who are not in school, there is clear evidence that the governments investments in Pantawid and in higher education budgets have started to pay off.
The CCT was premised on the poor having opportunity costs in sending their children to school, and that people respond to incentives. Investing in education is not only right in itself, but it is also yielding returns. All else being equal, we can expect less income inequality and lower poverty rates in the years to come, with better income prospects for these households given the improved education attainments of children. Can we ever do wrong when we invest in the education of children?//
Dr Jose Ramon G. Albert is a senior research fellow at government think tank the Philippine Institute for Development Studies, and the president of the Philippine Statistical Association, 2014"2015. From October 2012 to February 2014, he was secretary-general of the now defunct National Statistical Coordination Board.


Author: Jose Ramon G. Albert
Date: July 25, 2015
Source: East Asia Forum

Former Finance Secretary Margarito Gary Teves yesterday assured international groups that a Binay presidency will continue economic reforms and enhance the private-public partnership (PPP) projects that mostly failed to take off during the present administration.
Contrary to what the Institute of International Finance (IFF) says, a Binay presidency will continue the economic reforms, as well as enhance the private- public partnership programs that the present administration had started, Teves said.
A pro-Aquino broadsheet highlighted an IFF story claiming that the international finance group favors a Mar Roxas or Grace Poe presidency and doubts that the populist Binay will pursue reforms supposedly started under Aquinos term.

Based on his policy speeches and our interactions, we believe that the IFFs reservation toward a Binay presidency is unfounded, he added.

Teves said that Vice President Jejomar Binay will begin rolling out his plan of action in the coming months, especially since the campaign season will soon start.

I feel that they have some reservations about the VPs programs and platforms but that is understandable as the campaign season has not officially started, Teves said.

But that will soon change, as the VP will begin rolling out his economic plans that will actively push for inclusive economic growth, he added.

The IFF had said that a Mar Roxas or Grace Poe presidency would continue the Aquino administrations plans but is uncertain if the Vice President wins the 2016 national elections.

Teves also disputed the IFF, which said that a Binay presidency would be populist and could undermine the PPP program.
A Binay presidency will be market-oriented rather than populist. In fact, he is in favor of amending the economic provisions of the Constitution to attract more foreign direct investments (FDIs), which, in turn, will generate more jobs for Filipinos, Teves said.

Contrary to IFFs belief, a Binay presidency will continue to implement President Aquinos programs, for as long as these are above-board and benefit more Filipinos. For one, VP Binay will continue and enhance the PPP program. In his July 18 speech in Bacolod City, VP Binay said he will advocate for PPP as a means to accelerate the construction of more classrooms across the country. he added.

A Binay presidency, Teves said, will actively push for measures that would hasten the implementation of projects under the PPP scheme, such as amendments to the Build-Operate-Transfer Law, Right-of-Way Bill, and address bureaucratic inefficiencies.
Teves also noted that PPP projects under the current administration, however, have been beset by inadequacies and several delays resulting in underspending on infrastructure, which is a key driver of the economy.
VP Binay is for faster decision-making within the bounds of our law; he is for aggressive, yet prudent, spending. He will focus on the proper implementation and monitoring of projects and programs that will help achieve higher and sustained economic growth which is more inclusive, Teves said.

As an experienced chief executive, VP Binay takes a pragmatic approach on administration and development. He believes that social programs should be implemented only if there are corresponding revenues to finance and sustain them, he added.
Teves said that aside from implementing basic social services, a Binay presidency will endeavor to maintain a favorable debt-to-GDP and tax effort ratios to retain and further improve the countrys stable credit ratings.

More importantly, Teves said that a Binay presidency will ensure that everyone will benefit from the countrys growth.
A Binay presidency would see to it that economic growth and progress are cascaded to the poor and marginalized, as he had successfully done in Makati, Teves said.

Binay, meanwhile, scored the Aquino administration anew, this time over its alleged underspending on healthcare and said funds for public health are instead used to bribe allies of the administration.

In a speech during the 83rd Annual National Convention of the Philippine Health Workers Association, Binay hit the Aquino administration for trimming the budgets of the Lung Center of the Philippines (LCP), National Kidney and Transplant Institute (NKTI), and the Philippine Heart Center (PHC) by P970.6 million, only to use it to fund programs of its allies.

This administration has been a tightwad in spending for necessary services, so much so that the World Bank (WB) has commented that our growth has been hampered by governments under-spending in public works and social services, Binay said.

But there is a lot of money. The money was unfortunately used to bribe politicians so the ruling party could get rid of their political enemies. The money has been spent to fund programs of their favorite leaders and friends, including for junket to the hearing of ITLoS in The Hague. Only three made the oral arguments but more than 35 high-ranking officials were sent in business class plane tickets and first-class accommodation, the Vice President averred.

In other words, public funds are being used for politicking, he further said.

Binay also questioned the administrations insistence on increasing the budget of its pet project Conditional Cash Transfer (CCT) while spending less on health care.

The World Health Organization (WHO) recommends that five percent of our gross domestic product (GDP) must be spent on health care. We are below this standard, with the government concentrating on the Conditional Cash Transfer or CCT, Binay said.
This is one thing that puzzles me most. They are giving mon

etary assistance to the poor so they can go to a health center but then, they do not provide adequate funds for the health center. So what health program or assistance can the poor avail of in a health center? he added.

Binay said that while significant increases have been made in the public health budget in recent years, many still do not have access to basic health services.
He also questioned why a third of the annual increase in the Department of Health budget has gone to Philhealth.

While patients are given Philhealth cards, government hospitals lack health workers and equipment. So where does the less less-privileged patients have themselves admitted to? Presently, the hospital bed to patient ratio is 17:10,000, while the health worker to patient ratio is 3:10,000, Binay said.

Funding is not the problem, the problem is the absence of a government which could provide speedy and honest-to-goodness service to the people. What we need is a caring and compassionate government which could underdstand the plight of the people and attend to their needs, he added.

Binay cited a report from the Senate committee on health and demography that showed the government allotting P17.408 billion to hire healthcare professionals, build and improve healthcare facilities, and buy hospital equipment this year. He lamented how this amount of spending fails in comparison to the budget given to Philhealth.

Unfortunately, the money was never really used for what is what intended for. If we are to sum up the budgetary requirements for all those projected health expenditures, it would still pale in comparison to the budget given to Philhealth, Binay said.

This validates my earlier statements that this government is insensitive and incompetent. It is incompetent for having failed to resolve the needs of the public health sector. It is insensitive as it failed to have a clear grasp of what is happening down the grassroots, he added.

Meanwhile, Binay also outlined his plan on how to improve the Philippine healthcare system. He guaranteed to provide easy access to quality healthcare just like what is provided to the residents of Makati.

We have done that in Makati. We put up the Ospital ng Makati wherein indigent patients are accorded free medical check ups, free hospitalization with free medication. We also provide free consultations for those afflicted with heart ailments, he said.
He also moved to strengthen the capacity of the local government unit to deliver health services.

According to Binay, special attention must be given to local government units in rural areas where funding is limited and where poverty incidence is at its highest.

According to a study conducted Philippine Institute for Development Studies (PIDS), the number of rural health units was pegged to 2,300 units. We must therefore improve health planning and service expansion to these areas, including those caught in conflict, he added.

Senate hearing confirms VP

The result of yesterdays Senate blue ribbon committee bears out Binays allegations as the liability of health officials in the alleged anomalous and fraudulent claims to Philippine Health Insurance Corp. (Philhealth) was highlighted with no less than the lead prober, blue ribbon committee chair Sen.Teofisto TG Guingona noting their failure in detecting the supposed red flags.
None of the 82 cases involving various eye centers and clinics have been resolved by Philhealths Committee on Appealed Administrative Cases (CAAC) against health care providers, some of which have been pending for almost six years already or long before the discovery on the fund mess which has already amounted to P2 billion.

It has come to our attention that in the past, the DoH (Department of Health) and Philhealth do not walk in tandem. Sometimes, what Philhealth does is also not followed up by the DoH. How many people have to go blind before we do an honest to goodness (probe), before CAAC resolves these cases? Guingona said, addressing CAAC which is presently chaired by Riza Hontiveros-Baraquel.

The Philhealth and DoH must work together. There were red flags and they were not monitored, the senator said.
The committee was also told that even the issue on the questioned P2 billion benefit payment claims came up, some of eye clinics have been under monitoring, according to DoH Asst. Secretary Nicolas Lutero III.

Dr. Alexander Ayco of CAAC pointed to the lack of any existing guidelines which contributed to the piling up of cases as well as legal counsel who could provide them legal advise on the complaints or cases.

Ayco said that since he had been in CAAC in 2001, they have been reviewing cases that had bee
n lodged dating back as far as 2001.
But Guingona was not satisfied with the Aycos reason and insisted that the CAAC should have addressed the issues on guidelines and legal advisers to prevent delays.

DoH Secretary Janette Garin acceded to some of the lapses and the need to address the issues//


Author: Charlie V. Manalo
Date: July 24, 2015
Source: The Daily Tribune

MANILA WILL HOST the annual Asia-Pacific Economic Cooperation (APEC) Summit this coming November 18-19, 2015, or less than four months from now. Presidents and Prime Ministers of the 21 member-countries including the three largest economies in the world, US, China and Japan, will be coming to Manila for two days to discuss and sign certain agreements related to trade, investments and related concerns.
The Philippines trade and investments in the face of ASEAN integration just five months from now was also discussed last July 15 at the Tower Club in Makati City, sponsored by the Albert Del Rosario (ADR) Institute.

The convenor and main speaker was Dr. Epictetus Patalinghug (UP College of Business Administration, and a Trustee of ADR Institute). Discussants were Dr. Gilbert Llanto (President of the Philippine Institute for Development Studies/PIDS), Dr. Ramon Clarete (UP School of Economics/UPSE Prof. and former Dean), Mr. Donald Dee (Honorary Chairman, Philippine Chamber of Commerce and Industry/PCCI), and Atty. Wilfredo Villanueva (Head of Tax and General Counsel, SGV and Co.).

In his presentation, The Role of Exports and Foreign Direct Investments in Industrial Development, Dr. Patalinghug said that the five striking resemblance among highly successful economies were: (a) Openness to the global economy, (b) Macroeconomic stability, (c) High saving and investment, (d) Market allocation, and (e) Leadership and governance.

He also showed this summary of Philippine economic history. (See Table 1)

That is an objective and correct assessment. And it is not unique to the Philippines or its neighbors in the ASEAN, but rather the general trend for the rest of the world. If we check the economic integration and liberalization of the four newcomers to the ASEAN, namely Cambodia, Myanmar, Laos and Vietnam (CMLV), their pace of liberalization in trade and investments on average was much faster than the Philippines.

Let us focus on investments; in particular, foreign direct investments (FDIs). The UN Conference on Trade and Development (UNCTAD) released the World Investment Report (WIR) 2015 last month and that paper shows many interesting data. (See Table 2)

There was significant expansion in FDI inward stock (ie, net of FDI outflows) in many APEC member-economies. In particular, the expansion from 1994 to 2014 (two decades) were as follows:

* Americas: Peru 18x, Mexico and Chile 10x, US 7x, Canada 6x.

* North Asia: China 15x, S. Korea 12x, Japan 9x, HK 7x, Taiwan 5x.

* Southeast Asia: Vietnam 23x, Singapore 17x, Indonesia 16x, Thailand 13x, Philippines 11x, Malaysia 6x.

Australia, New Zealand and PNG did not experience significant FDI expansion.

Russia and Brunei are the outliers with 114x and 103x expansion, respectively, mainly because they have very low base in 1994. Russia has emerged from partial disintegration where a number of central Asian economies (Georgia, Kazakhstan, Tajikistan,) separated from the former USSR. APEC was formed in 1989 but Russia, along with Vietnam and Peru, joined it only in 1998.

In terms of FDI stock/GDP ratio, three economies that have undertaken unilateral trade liberalization (meaning no or little trade negotiations) stand out: Hong Kong, Singapore and Chile, with ratio of 535%, 296% and 80%, respectively.

Some important lessons from the above numbers and discussion:

One, openness to trade almost always results in high attractiveness to foreign investments and all the opportunities they bring -- technological, financial, managerial, and market access. Clear examples are HK, Singapore and Chile. Also the socialist economies China and Vietnam that allowed certain degrees of economic freedom and the market system.

Two, global capitalism is about integration and competition, complementation and substitution, happening simultaneously. Business risks will always be there. Companies and people need to keep their radar for adaptation and familiarization of those risks, while keeping the pace of innovation at regular or higher levels.

Three, for the Philippines, its FDI stock/GDP ratio of 20% is the lowest among its neighbors in SE Asia, but this is not something to look down or commiserate. Some richer economies have rates lower than 20% like Taiwan, Japan, S. Korea and China. Nonetheless, this should be one reminder that the country needs to amend its Constitution to remove protectionist provisions that restrict or prohibit foreign investments in many sectors of the Philippine economy.

Four, more than low taxes and/or high profit, foreign businessmen are concerned more with the security of their investments, that threats of confiscation and political harassment are zero or kept to the minimum. Respect of private property, rule of law, and economic freedom by the people, producers and consumers alike, domestic and foreign entrepreneurs alike, are important factors to attract, retain and expand investments in the economy.

Bienvenido S. Oplas, Jr. heads the free market think tank, Minimal Government Thinkers, Inc., and also a fellow of the South East Asia Network for Development (SEANET), a regional center that advocates trade and investments liberalization.




Author: Bienvenido S. Oplas, Jr
Date: July 23, 2015
Source: Business World

Power industry leaders are giving the thumbs up to governments creation of a multisectoral task force to study ways to reduce the price of electricity.
Energy Secretary Carlos Jericho Petillas mandate for this task force is to evaluate current breakdown/components of electricity and identify factors affecting them, conduct multisectoral public consultations nationwide to present their findings; and identify ways and measures to help reduce the price of electricity and ensure its efficiency.
The creation of the task force was an offshoot of the May 31, 2013 dialogue in Malacaang in which labor groups proposed the creation of a dedicated group, which will include the labor sector and consumers groups representatives, to monitor, discuss and resolve issues affecting the power supply and affordability of electricity in the country.
In light of the very important role of this group, it goes without saying that its members should be those who truly represent our interest.
Some groups are questioning the naming of Philippine Independent Power Producers Association (PIPPA) former president David Relito Tan, who after his messy legal battles here and abroad, managed to recycle himself as a self-styled industry expert at the height of last semesters power crisis by blaming certain industry players for the electricity mess, on the basis of his alleged biased and distorted facts about the Philippine power situation.
The multisectoral task force will be headed by Dr. Adoracion Navarro, a senior fellow at the Philippine Institute for Development Studies (PIDS) who is on the Devex list of 40 global development leaders in Metro Manila under 40 years of age. She will be represented in the task force by PIDS president Gilberto Llanto.
Other members include Secretary Petilla, businessman Raul Concepcion of Govt Watch; and representatives from the Joint Foreign Chambers (JFC), Philippine Chamber of Commerce and Industry (PCCI), Federation of Filipino Chinese Chamber of Commerce and Industry (FFCCCI), PIPPA, Manila Electric Co. (Meralco), National Consumers Affairs Council (NCAC), National Federation of Womens Club of the Philippines (NFWCP), Coalition for Consumer Protection and Welfare Inc. (CCPW), Matuwid na Singil sa Kuryente Consumer Alliance Inc. (MSKCA), Alliance of Progressive Labor (APL) and NAGKAISA (United).
But industry watchers are raising their eyebrows as to why MSK is one of five consumer groups in this task force, given its questionable status as a functioning NGO.
Tan is a task force member in his capacity as MSK president. While Tan was at one time PIPPA president and is thus supposedly knowledgeable about the complex energy sector, since then, he has been hounded by complaints or cases.
According to SEC records, two of MSKa key officers"corporate secretary Lorna Asilo and treasurer Videt Ursula Cusi"both certified under oath that this NGO has not been in operation since its incorporation in 2011 up to the present,
So why has Tan been blessed to be in the company of distinguished industry leaders in the task force when he is representing a fledgling consumer group that is actually dormant, as attested to by its own key officers?
And how about Tans record as an energy executive?
On June 17, 2010, the Court of Appeals ordered Tan and his Power One Group of Companies (formerly Edison Industries Inc.) to pay retrenched workers who earlier filed an illegal dismissal case against Tans firm before the NLRC.
There is also a case at the Supreme Court filed by Mid-Islands Power Corp. against Power One and Tan over their power supply accord; as well as another one at the ERC pertaining to Power Ones deal with the Oriental Mindoro Electric Cooperatve Inc. (ORMECO).
There is another for fraudulent intent which Philippine National Bank (PNB) filed against Tan and Edison-Hubbard Corp. in the San Francisco Superior Court involving a $7 million unsettled bank loan. The court ruled that debtor intended to defraud his creditors and/or the trustee.
There had also been criticisms about Tans commentaries regarding last Decembers electricity price shock, since they ignored ERCs March 3 order to WESM operator Philippine Electricity Market Corp. (PEMC) to re-run or recompute the spot market rates during the Malampaya shutdown on the belief that the prices then were unreasonable and irrational as a result of market abuse.
With Petillas directive for task force members to undertake complete dissemination of all discussions and agreements during the conduct of dialogues, there are now apprehensions that Tan, given his bias against certain major power industry players, might turn these nationwide consultations into mere launching pads for his attacks on his pet peeves in the power sector.
Global mess
It looks like not all is well within the ranks of the powerful European pressure group Greenpeace.
While European pressure group Greenpeace is waging its war against Filipino scientists here, it looks like theres war within its own posh headquarters in Europe.
Greenpeace has gone all out in the last two decades to prevent the local science community led by UP Los Banos from introducing to Filipino farmers certain crop varieties that do not require chemical pesticides to ward off pests.
In fact, it is engaged in legal battle before the Supreme Court (SC) as it attempts to stifle a bid by Filipino scientists and farmers to get a go-signal from the High Court for the resumption of field trials for the pesticide-free eggplant variety called Bt Talong.
Back home in Europe, Greenpeaces office has been rocked by conflict following major discontent aired by its senior executives. The row was fueled by reports that Greenpeace executive Pascal Hustings flies between the groups Amsterdam office and his home in the wealthy state of Luxembourg several times a month. This will obviously worry Greenpeaces donors.
Another proof of Greenpeaces huge money chest is the major financial loss it reportedly suffered after its finance officer bet wrongly on the weak Eurodollar, resulting in losses amounting to some three million pounds sterling.
Greenpeace has so much money that it engages in foreign exchange market and corporate stocks speculation, while giving us the image of volunteers fighting to save the whale.
If the media reports are true, then Greenpeaces strength may have also become its debacle. It is now suffering from the problems that many do-good organizations which end up amassing money, have.
Despite these debacles besetting its swank Amsterdam headquarters, Greenpeaces money remains the biggest threat to our local science community.
That huge financial arsenal will continue to stand in the way of biotechnology research. That arsenal will continue to finance public relations and activist operations, as well as expensive legal suits.
Thats bad news for our scientists and farmers.
For comments, email at philstarhiddenagenda@yahoo.com


Author: Mary Ann Ll. Reyes
Date: July 23, 2015
Source: Philippine Star

DAVAO City Chamber of Commerce and Industry Inc. (DCCCII) welcomed Tuesday the signing of the new Cabotage Law by President Benigno Aquino III. The law is expected to lower the costs for both export and import cargoes.
Antonio T. dela Cruz, DCCCII president, said the newly-signed amended Cabotage Law will put an end to issues confronting shipping industry players on export and import shipping costs.
"We consider the amended Cabotage law as a welcome development because this has been a problem of the private sector, especially those who are into the shipping industry and those who regularly ship their products to and from Davao City," dela Cruz told Sun.Star Davao in a text message.
Ferdinand Y. Maranon, president of the Philippine Exporters Confederation (Philexport)- Davao, also said the new law is a good move of the Aquino administration.
"Davao shippers widely welcome this development. We commend the President's move in signing the amendments and considering this as his priority economic bills," Maranon said.
They said the revised law will foster competition among domestic shipping companies in the country and will pave way for lower shipping costs since logistics costs are expected to drop.
Earlier, Mindanao Development Authority (Minda) director for investment promotions and public affairs Romeo Montenegro said that healthy competition among shippers will result to competitive rates.
"Currently, our domestic shipping rates are very high. It is more expensive to ship products domestically than to ship it abroad. For instance, Davao to Indonesia is just $550 per TEU but if we do the same domestically it will cost around $1,200 to $1,300 per TEU," Montenegro said.
Before, only domestic shipping lines could serve domestic routes under the Cabotage Law.
According to a study conducted by Philippine Institute for Development Studies (Pids), "the absence of competition has resulted in high cost of transporting raw materials to manufacturing sites, finished products and agricultural goods to various destinations, and imported products to distribution areas, thereby increasing operational costs that are passed on to consumers as high prices."
Under the revision, foreign vessels will be allowed to pick up and deliver shipments straight to local ports across the country, eliminating the need to employ local shipping companies to transport goods between Manila and other domestic ports.

Author: Ace June Rell S. Perez
Date: July 21, 2015
Source: SunStarDavao

DAVAO City Chamber of Commerce and Industry Inc. (DCCCII) welcomed Tuesday the signing of the new Cabotage Law by President Benigno Aquino III. The law is expected to lower the costs for both export and import cargoes.
Antonio T. dela Cruz, DCCCII president, said the newly-signed amended Cabotage Law will put an end to issues confronting shipping industry players on export and import shipping costs.
"We consider the amended Cabotage law as a welcome development because this has been a problem of the private sector, especially those who are into the shipping industry and those who regularly ship their products to and from Davao City," dela Cruz told Sun.Star Davao in a text message.
Ferdinand Y. Maranon, president of the Philippine Exporters Confederation (Philexport)- Davao, also said the new law is a good move of the Aquino administration.
"Davao shippers widely welcome this development. We commend the President's move in signing the amendments and considering this as his priority economic bills," Maranon said.
They said the revised law will foster competition among domestic shipping companies in the country and will pave way for lower shipping costs since logistics costs are expected to drop.
Earlier, Mindanao Development Authority (Minda) director for investment promotions and public affairs Romeo Montenegro said that healthy competition among shippers will result to competitive rates.
"Currently, our domestic shipping rates are very high. It is more expensive to ship products domestically than to ship it abroad. For instance, Davao to Indonesia is just $550 per TEU but if we do the same domestically it will cost around $1,200 to $1,300 per TEU," Montenegro said.
Before, only domestic shipping lines could serve domestic routes under the Cabotage Law.
According to a study conducted by Philippine Institute for Development Studies (Pids), "the absence of competition has resulted in high cost of transporting raw materials to manufacturing sites, finished products and agricultural goods to various destinations, and imported products to distribution areas, thereby increasing operational costs that are passed on to consumers as high prices."
Under the revision, foreign vessels will be allowed to pick up and deliver shipments straight to local ports across the country, eliminating the need to employ local shipping companies to transport goods between Manila and other domestic ports.//


Author: Ace June Rell S. Perez
Date: July 21, 2015
Source: SunStarDavao

Each year during the second week of July, the National Academy of Science and Technology (NAST-DOST) convenes its members and representatives of the science community to deliberate on issues of national import and propose how science and technology can be deployed to address these issues.
Previous years themes of the NAST Annual Scientific Meetings (ASMs) include poverty eradication, food security, energy independence, manufacturing, transport and communication. Likewise, how modern science like biotechnology and information and communication sciences can be harnessed to advance our national purposes.
This week the topic was: Prevention and Control of Non-Communicable Diseases (NCDs).
While infectious, communicable diseases like HIV-AIDS, tuberculosis, dengue, malaria, diarrhea and schistosomiasis continue to hog media headlines and national attention, the grim reality is that NCDs have overtaken infectious diseases as primary causes of deaths among Filipinos.
Infectious diseases together cause 18% of mortalities but the four major NCDs add up to 54% of total deaths which is three times as much. Heart diseases, cancers, diabetes and chronic obstructive pulmonary diseases (COPDs) account for 33%, 11%, 5% and 5%, respectively of deaths.
MISCONCEPTIONS ABOUT NCDS
NCDs are often portrayed as life-style associated diseases. True enough because heart diseases, cancers, diabetes and COPDs are preventable and modifiable provided people stop smoking tobacco; consume more fruits, vegetables and fish and less animal fats, meats, sweet and salty snack foods; walk and exercise more and avoid excessive intake of alcohol.
However, there is increasing overwhelming evidence that the casuality of NCDs is in fact more complicated. Certain genetic factors predispose individuals/families to some non-communicable diseases. Likewise, health statistics provide convincing proof that the environment have a strong impact on their prevalence, mortality and morbidity.
Another misconception about NCDs is that they are diseases of the wealthy. Data increasingly show that NCDs cut across all economic classes from the very rich to the very poor. The poor are as prone to heart attacks, cancers, diabetes and COPDs as the rich. The difference, however, is that the rich get earlier and better medical care and are able to afford the medicines and treatments which can mitigate/delay consequences of the diseases.
A third misconception that is being challenged is that NCDs affect only the elderly. There is increasing data that more and more young people are suffering NCDs.

MULTISECTORAL ACTION REQUIRED
That NCDs are not exclusively determined by lifestyle choices but are heavily influenced by the environment, social and economic systems people find themselves in, therefore suggest that the conventional approach of education, information and communication is not enough.
Neither would policies and intervention measures initiated by the Departments/Ministries of Health be sufficient for the simple reason that other agencies of government, the private sector and society at large have more control over the broad environment.
They are as much the consequences of poverty and lack of access to basic welfare and health services. They can be alleviated by making healthy food plentiful and more accessible as well as provisions for health, sports and wellness in the workplace and neighborhoods. Consumption of tobacco and alcohol can be moderated by imposition of higher sin taxes.
For these reasons, NAST joins the call of various study groups in UP Manila, the Philippine Council for Health Research and Development (PCHRD), the Philippine Institute of Development Studies, and professional health societies that government declare an epidemic of non-communicable diseases as a dramatic way of raising awareness to the risks and damages from NCDs. This declaration should likewise persuade and mobilize all agencies of government, both national and local; the private sector and civil society organizations of the imperative to join hands in combatting the menace of NCDs.
Actually, the DOH is fully cognizant of the challenges of NCDs and has put forward a policy statement and broad program of work on the prevention and control of NCDs through DOH Administration Order 2011-003 during the incumbency of Health Secretary Enrique Ona.
But moving forward it is better that a National Commission be organized under the Office of the President with the Department of Health (DOH) Secretary as Chairman, in order for the DOH Secretary to have the mandate to call upon the whole of the bureaucracy to support the NCD program. In the countries which have embarked on NCD prevention and control programs, more favorable outcomes are obtained when ministry of health activities are executed with support of agencies outside the ministry.
In the long run, it is best that the National Commission be made permanent by way of legislation to make sure NCD policies, plans and programs are regularly funded and therefore consistent and sustainable from one administration to the next.***
Dr. Emil Q. Javier is a Member of the National Academy of Science and Technology (NAST) and also Chair of the Coalition for Agriculture Modernization in the Philippines (CAMP).
For any feedback, email eqjavier@yahoo.com.


Author: Dr. Emil Javier
Date: July 11, 2015
Source: Select Article Source

The Philippines, considered the most unfavorable country for investors, must go beyond investment policy reforms and offer an enhanced overall business climate if it wants to catch up with its neighbors in Southeast Asia in attracting foreign investors
This is the suggestion of Philippine Institute for Development Studies (Pids), a respected body, that thinks the county is getting from bad to worse when it comes to foreign direct investments (FDIs) receipts.
Although several investment policy reforms in the past years have helped to channel FDIs to the country, the Philippines has lagged behind its regional counterparts in the Association of Southeast Asian Nations (Asean) in overall share.
This is largely due to weak institutional and regulatory mechanisms and poor infrastructure, said Gilberto Llanto, lead author of the study titled Furthering the Implementation of AEC Blueprint Measures.
Considering the comparative advantage of the Philippines-availability of English-speaking, highly skilled workforce with strong cultural affinity to the United States, excellent geographical location and rich natural resource-FDI flow in the Philippines remains rather weak even after the initiated reforms and incentives, the study published by PIDS and emailed to select publications, including this paper, said.
But economic liberalization and investment reforms, including opening up the economy to greater foreign ownership and control, are not enough to generate much-needed investments or boost the countrys weak economic fundamentals, it added.
The Philippines has to improve its overall investment climate, economic competitiveness, and growth prospects as well.
The study cited an earlier World Bank group assessment that simply removing foreign equity restrictions is not sufficient for countries to attract and retain foreign investments.
It must be complemented by other requirements such as good regulations, strong investment climate fundamentals, well-functioning institutions, economic and political stability and respect for rule of law, said the study.
The research authors also pointed to the importance of implementing reforms in line with the Asean Comprehensive Investment Area (ACIA)-the regions principal investment cooperation program that promotes international best practices and adopts the key pillars of liberalization, protection, facilitation, and promotion.
This entails taking initiatives to improve the domestic business environment, economic regulations and corporate governance, and labor laws.
ACIA also calls for developing logistics infrastructure, stabilizing legal and economic systems, and adjusting measures.
On constitutional restrictions on land ownership, the authors suggested supporting stronger lease rights with provisions that allow lessees to sublease, subdivide, transfer or use lease rights as collateral.
The government has to press on with measures that will encourage competition and strengthen institutional and regulatory framework, especially in public utilities, said the paper.
Earlier, the Bangko Sentral ng Pilipinas (BSP) in an official statement released last month said the Philippines experienced sharp declines in FDIs in the first quarter of the year.
BSP said FDI inflows in the period amounted to $851 million, lower by 50.4 percent compared to the $1.7 billion posted in the same period last year.
Moreover, a report by the United Nations Conference on Trade and Development published June this year placed the Philippines in sixth place only in FDI flows to the 10 economies of Southeast Asia in 2014.
The country is in sixth place behind Singapore, the perennial leader in FDI receipt since the early 90s, Indonesia, Thailand, Malaysia and Vietnam, in FDI receipts.

Author: Ed Velasco
Date: July 20, 2015
Source: The Daily Tribune

First of three parts

Dindo Reyes looked forlornly at the stall in the Imus Public Market in Cavite that once provided for his family. Unoccupied for months, Reyes said he has decided to shutter his business than suffer more losses, as many of his regular customers no longer buy goods from him.

This predicament is also being experienced by vendors in other public markets. In a survey conducted by the BusinessMirror, 100 out of 153 respondents, or nearly 70 percent, said they prefer buying groceries in supermarkets rather than in the public market.

In an interview, Reyes said the family acquired their stall in the Imus Public Market in 2001. The business flourished until 2009, when sales dwindled and they started feeling the pinch.

Before the prevalence of convenience stores and supermarkets, Reyes said the public market will be teemed with shoppers before noon. Now, the buyers are gone and their suki, or regular customers, would barely throw them a glance as they enter the automatic doors of the supermarket nearby.

In the vicinity of the public market alone, there are six supermarkets and four convenience stores within a 500-meter radius. More supermarkets dot Aguinaldo High-way in Imus, closer to the growing subdivisions in the city.

A study written by Larry Digal from the Philippine Institute of Development Studies indicated that, because of the purchasing power and growth of dual-income families, there has been a high demand for convenience.

This may be the reason some Filipinos prefer one-stop shopping to minimize time and energy, regardless of the additional cost. It may not be surprising at all to see supermarkets displacing small retailers and growing larger in size, since consumers themselves search for convenience, the study read.

In the same BusinessMirror survey, respondents said they would rather go to supermarkets, as they are cleaner, convenient and more accessible.

Items are reliable and youre assured that there is no overpricing happening, but they may be a bit expensive, said one respondent from Quezon City.

Experts said the decline of public markets is lamentable, given its significance in history and Filipino culture. For one, the local market served as a venue where the youths are exposed to Filipino traditions.

Social anthropologist Maria Carinnes Gonzalez said public markets allow people to develop a sense of cooperation among people in their community. Also, while Filipinos practice haggling, or tawad, Gonzalez said it is not the amount of money that mattered during the process but the fact that someone was able to convince another person to lower the price of a product.

It was the conversation, the connection, that mattered, she said.

The public market is also considered to be a venue where people not only purchase items, but to know about whats going on in the community, as well. It then becomes a source of knowledge about a particular community.

Its like a barber shop, its where you get all the juicy stories from the barber, Gonzalez said.

Economist Al Faithrich Navarrete explained the dynamics of the public market, loosely referred to as palengke by most people, and how it stood as the center of trade where all major transactions transpired.

Navarrete agreed that the local market served as a venue for social transactions within a community, as well, giving an opportunity for people to interact and form bonds over transactions and purchases.

In the case of Reyes, the public market served as a venue where he was able to forge good relationships with people in the community. Some of his customers even became their family friends. Inaalagaan lang namin [sila], customer service ba, he said, recalling how his regular customers helped him during their time of need, especially when his business hit rock-bottom.

When sales started going down, Reyes said his loyal customers kept the store going. He went as far as not letting them pay for the items they need and to let them settle the balance some other day. This proved to be unsustainable, as revenues dropped significantly in the next few months.

This forced Reyes to get a loan just so he could keep his business running. But the interest was too high.

Aside from low sales, many stall owners are saddled with huge debts, as they wait for the day when their business would turn the corner. Eventually, they are forced to go out of business, as their debts become too big to manage.

Admittedly, it would be hard for us to compete with large companies that enjoy economies of scale and huge sales volumes, Reyes said.

It also doesnt help, he said, that products tend to be cheaper in supermarkets despite the air-conditioning and the cost of labor they incur. Suppliers tend to give discounts to supermarkets and, thus, lower market cost. This may explain why some products are more costly in the public market than in the supermarket.

Whether the public market is being visited or not, economist Navarrete said it is highly capable of becoming a deterrent of sorts when it comes to price regulation. Navarrete said the public market plays a critical role when it comes to price variations and supply, providing the public market with an ace in the supposedly lost war against its larger counterparts.

In essence, the public market could be a price regulator to ensure that supermarkets do not sell products at a very high price, Navarrete said.

For example, if the price of the supermarket is costly relative to the public markets cost, then people would naturally go to the latter. If public markets didnt exist and only supermarkets had products, buyers would not have a say whether they plan on changing prices very quickly, he added.

It was due to this nature that Navarrete called the public market one of the nearest examples of perfect competition, where an environment contains homogenous resources, and multiple parties buy and sell their products. In essence, due to the freedom given to people to sell and buy, competition is always constant. However, this profit-oriented approach may be proof that the community-based interaction in the market is slowly disappearing and being replaced by bigger establishments, completely with a new set of norms and culture for people to follow.

Gonzalez, for her part, said the change in shopping preferences is due to the Filipinos exposure to other cultures. While there is an increasing preference for convenience, she said this would not entail the disappearance of public markets.

This pronouncement, however, gives little comfort to vendors like Reyes, who are now on the lookout for other sources of income to feed their families. To be continued

Author: Mia Mallari and Marionne Lopez
Date: July 19, 2015
Source: Business Mirror

CEBU, Philippines - Freeing the Small and Medium Entrepreneurs (SMEs) from its limitations and recognizing the role of public goods in alleviating poverty, should be pushed by both national government and APEC level advocacies.

This is the recommendation made by Philippine Institute for Development Studies (PIDS) consultant Leonardo A. Lanzona, Jr. based on his latest study, which confirmed the role of social enterprise business model in empowering SMEs to sustain economic development.

Lanzona said although several policies in both national government and APEC levels aim to inflate the assistance for small and medium entrepreneurs, the role of public goods in reducing poverty is absent and freeing SMEs from its limitations are largely absent.

The economic expert suggested that APEC must encourage and work to promote social enterprises by forming global value chains across its member economies.

NGOs can also play a role by helping link social enterprises into these chains.

The idea is to support social enterprises, move them out of poverty, and encourage them to provide public goods in the economic community, and thereby truly enhance SME performance, stressed Lanzona.

If anything must be addressed, it is fundamental problems like poverty, and therein social enterprises can play a huge role.

"Poverty itself constrains these SMEs from achieving their full potential in terms of their access to better technology and quality of inputs," emphasized Lanzona in his paper.

Consequently, he strongly recommended that direct interventions of poverty reduction in the form of public goods are expected to support SMEs and to raise growth.

Social enterprises are inherently advantageous because they are able to generate employment, through nongovernment organizations and community institutions, for people in the most vulnerable positions. Social enterprises are organizations that employ commercial strategies to achieve ends of developing and improving human life and environmental well-being.

Some of these public goods include social protection, business opportunities, education, electricity, health, sanitation, and water. The common assumption is that these are the governments responsibility to provide.

Social enterprises operate in markets in order to address social needs and reduce inequality, recognizing that this has value.

While there is strong belief on the ability of SMEs to sustain economic growth, Lanzona demonstrates the problem in focusing the breadth of policymaking on the three main arguments for SME empowerment ---that they enhance competition and entrepreneurship; that their productivity is potentially bigger than large firms but is often held back by financial markets and institutional failures; and that their ability to increase employment and alleviate poverty is greater than that of larger firms.

Creating policies that are based on overstating the cause of SMEs and tailoring policymaking to decrease the costs of doing business solely for the sake of SMEs may result in efficiency. (FREEMAN)

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

Senator Bam Aquino has renewed his call to the government to support and strengthen the social enterprise (SE) sector as they help spur the growth of micro, small and medium enterprises (MSMEs) in the country, generate fresh jobs and livelihoods for many Filipinos.

"Social enterprises play a crucial role as they serve as catalyst in the growth of MSMEs, which we consider as backbone of our country's economy," said Aquino, chairman of the Senate Committee on Trade, Commerce and Entrepreneurship.

A social enterprise is a social mission-driven organization that conducts economic activities of providing goods and services that would improve the well-being of the poor and marginalized sectors.

"Strengthening social enterprises will help reduce poverty incidence in the country as they help provide jobs and livelihood, especially to those living in poor communities," added Sen. Bam, a world-renowned social entrepreneur.

To further emphasize the importance of social enterprises, Sen. Bam cited a recent Philippine Institute of Development Studies (PIDS) underscoring the importance of SEs in the growth of SMEs. According to PIDS, SEs are small- and medium-sized commercial businesses that provide valuable social service to customers and sustainable jobs and training for up to about 200 people.

The report said PIDS can help support SEs by linking them to global value chains, providing the necessary global public goods that can help address poverty directly.

In support of SEs in the country, Sen. Bam has filed Senate Bill No. 1046 or Poverty Reduction through Social Entrepreneurship (PRESENT) Act of 2014.

Under the bill, the existing Micro, Small and Medium Enterprise Development (MSMED) Council, which is attached to the Department of Trade and Industry (DTI), shall be strengthened and expanded to become the Enterprise Development Council or EDC to effectively spur the growth and development not only of the MSMEs, but of Social Enterprises as well.

"The EDC shall establish policies, plans and programs that will promote social enterprise initiatives, and identify sources of financing for the social enterprise sector for enterprise incubation, start-up and expansion," Sen. Bam said.

The bill establishes the Center for Social Enterprise Development where its primary responsibility is to develop, implement, monitor and evaluate a comprehensive Social Enterprise Development program.

The bill has hurdled the committee level and will move on to plenary deliberations in the Senate. "Kapag naisabatas, malaki ang maitutulong ng panukalang ito upang mabigyan ng karampatang suporta ang social enterprises sa ating bansa. Sa paraang ito, mas marami pa silang matutulungan na mahihirap nating kababayan," said Sen. Bam.

The program will provide capacity building and sustainability training programs, research and development for poverty reduction through SE development and information and assistance for the market expansion of SEs in both domestic and foreign markets.

"Kailangan nating suportahan ang mga makabagong ideya tulad ng social entrepreneurship sa pagtugon sa kahirapan sa ating bansa. Siguraduhin natin na ang natatamasang kaunlaran ng bansa ay maramdaman ng bawat Pilipino," added Sen. Bam, co-founder of two-award winning social enterprises, the Rags2Riches and Hapinoy program.

Author:
Date: July 17, 2015
Source: Senate Press Releases

While there were significant progress in several sectors, the Philippines needs to work more to achieve full compliance to its commitments to the Asean Economic Community (AEC) 2015, specifically the implementation of the National Single Window (NSW) meant to facilitate trade transactions.

A study published by the Philippine Institute for Development Studies (PIDS) emailed to select entities, including The Daily Tribune, said the Philippines has committed itself to current compliance and status of implementation of key AEC measures.
The PIDS study concluded that the Philippines made some significant progress in complying with its commitments particularly related to trade facilitation.

Note though that whilst some systems are already in place, the full automation of customs and related processes has yet to be achieved, the PIDS findings said.

On customs modernization, the paper identified remaining gaps in the implementation of inspection management, customs bonded warehouse management, post-clearance audit, Authorized Economic Operator management and raw materials liquidation system.

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

Political will and strong leadership, and commitment by legislators and the bureaucracy are crucial if the Philippines is to attain its commitments to key measures under an integrated AEC, particularly in services liberalization and trade facilitation- specifically NSW implementation, where the Philippines somewhat lags behind other countries, it noted.

The Philippine NSW, a trade facilitation project, is an internet-based application that allows parties involved in trade to lodge information and documents with a single entry point to fulfill all import, export and transit-related regulatory requirements.
The system is developed in line with recognized international standards to enable interoperability and seamless integration with other countries National Single Windows and the Aseans Single Window.

Under the services sector, the paper also cited major issues relating to the constitutional limitations and the need for other legislations and infrastructure to support the liberalization of the sector.

It pointed out that the prospect of amending the economic provisions of the Constitution has not generated enough traction among the population and some stakeholders.

The immediate course of action is to focus on what the executive branch of the government can do; this would require working with legislators in the crafting or amending of pertinent laws on the services sector, it added.//


Author: Ed Velasco
Date: July 16, 2015
Source: The Daily Tribune

Although foreign investors have expressed their desire to put up hard investments in the Philippines, the country is just not ready for it.
This was the sentiment shared by experts in academe and private sector in the recent ADR Institute discussion on the role of exports and foreign direct investments (FDI) in the countrys development in Makati City.
The think tank, which specializes in strategic and international studies, described the country as half-open for investment inflows, particularly from foreign players.
The limits set by the countrys Constitution on foreign equity in real estate and in key industries have set up a half-open and restrictive business environment that has frustrated the influx of much-needed FDI, ADR Institute said.
It added that if the Philippines is to promote itself as an investment destination, the country must bring its regulations to global standards. And relaxing the foreign-ownership rule is key among these.
We really are not friendly to foreign investors, University of the Philippines School of Economics Prof. Ramon Clarete said, citing instances of confusing and incoherent government regulations.
He also said the countrys corporate income-tax rate is the highest in the region.
We hear the market [players] always say the tax rates in the Philippines are not competitive, said Clarete, one of the discussants in the forum.
Likewise, Philippine Institute for Development Studies President Gilbert Llanto said that even though incentives and special pocket areas for development are being built in the country to attract FDI, foreign investors are still hesitant, as the majority of the human-resource pool are still in Metro Manila, which is"as described by some experts"already heavily congested.
This country knows what needs to be done. We just have to do it, SGV and Co. Head of Tax and General Counsel Wilfredo Villanueva said.
The Bangko Sentral ng Pilipinas reported earlier that April FDI inflows declined by 43 percent compared to the same period in 2014.//



Author: Bianca Cuaresma
Date: July 15, 2015
Source: Business Mirror

THE Cebu Chamber of Commerce and Industry (CCCI) is eyeing two sister-chamber agreements with Singapore and Vietnam before the end of this year.
Although CCCI is already a member of Confederation of Asia Pacific Chambers of Commerce and Industry (Cacci) which is already linked to the Asean chambers, CCCI president Ma. Teresa Chan, believes the sister-chamber agreement between CCCI and business chambers of Singapore and Vietnam will allow CCCI members to make personal connections with the business decision-makers, especially in the Asean countries.
CCCI has already officially inked a sisterhood deal with Malaysia, Indonesia and Thailand.
Connecting CCCI to its counterparts in Asean is vital towards the full implementation of the unified regional bloc this year, said Chan. She said this will open them to mutual trade exchanges and strengthen coopetition instead of competition among the Asean member countries.
Having a sister-chamber agreement will pave the way for smooth trade facilitation should investors from two countries decide to pour in investments. Its really different when you have connections with people who really know about the complexities of the market, said Chan.
The Philippine Institute of Development Studies (PIDS) said that the government should provide Filipino entrepreneurs market information on how to enter each country in the Asean for them to get a good slice of the 600 million Asean consumer base, citing different religions, traditions, and cultural affiliations as among the crucial factors in penetrating the multi-cultural consumer population.
The Philippines ranks sixth in foreign direct investments (FDI) among the 10 economies of Southeast Asia, according to the World Investment Report 2015 by the United Nations Conference on Trade and Development (UNCTAD).
The Philippines received $6.2 billion last year, a big jump from $3.7 billion in 2013.
Singapore recorded the highest FDI in Asean last year with a whopping $67.5 billion, up from $64.8 billion the preceding year. Indonesia came in second with $22.6 billion from $18.8 billion in 2013, follwed bye Thailand with $12.5 billion (down from $14 billion in 2013), Malaysia with $10.8 billion (from $12.1 billion previously), and Vietnam with $9.2 billion (from $8.9 billion).
Next to the Philippines is Cambodia with $1.7 billion from $1.9 billion from a year earlier, Myanmar with $946 million from $584 million, Laos with $721 million from $427 million, and Brunei with $568 million from $776.
In Asean FDI flows rose five percent to $133 billion in 2014 from $126 billion in 2013.


Author: Katlene O. Cacho
Date: July 15, 2015
Source: Sun Star Cebu

MANILA, Philippines - The policy allowing 54 environmental goods and services (EGS) tariff reduction should be assessed anew, according to the Philippine Institute for Development Studies (PIDS), the government think tank under the National Economic and Development Authority (NEDA).
EGS are products, services and technologies that contribute to green growth, environmental protection, climate action and sustainable development.
In 2012, the Asia Pacific Economic Community (APEC) listed 54 EGS that would be covered by liberalized tariff of five percent or less.
The aspiration is by bringing down the barriers within the APEC, there will be a subsequent increase in trade for environmental goods and services EGS, more green jobs will be generated, and a more environmentally sustainable growth will be pursued.
Reducing trade barriers in environmental goods and services would make it cost-effective for industries to adopt environmental technologies, the PIDS said in a study entitled, Evaluation of the APEC Environmental Goods Initiative: A Dominant Supplier Approach.
The tariff reduction will make intra-APEC business and trade of EGS more productive and profitable, and will make it easier to help APEC members address climate change challenges.
But liberalizing all of the 54 EGS may not yield uniform benefits the PIDS warned. Furthermore, member-countries may be less encouraged to participate if there are unchecked spillover benefits to non-member countries maintaining trade barriers for EGS.
APEC has a dominant supplier role in renewable energy and clean technology production. These are followed by waste water management and potable water treatment, management of solid and hazardous waste and recycling systems, and natural risk management.
The policy objective is to determine the cutoff level, the PIDS said. It added, there is no clear-cut answer to determining the optimal APEC predominance supply benchmark and it will most likely be determined through a political process.
PIDS recommends that policymakers in APEC consider it rational to set the ceiling of the trade negotiations at the level where APEC principally supplies 60 percent of exports.//


Author: Ted P. Torres
Date: July 13, 2015
Source: Philippine Star

Recently, the Conditional Cash Transfer (CCT) Program implemented by the Department of Social Welfare and Management (DSWD) came under attack. Again. More popularly known as 4Ps or Pantawid (Pantawid Pamilya Pilipino Program), political commentators seized on a report by the Asian Development Bank (ADB) which stated that close to P19 billion of the 4Ps budget did not go to the poor.

Cash grants have helped to bring about near-universal enrollment of elementary age children (6 -- 11 years old). Pantawid mothers are more likely to seek pre- and postnatal care and deliver babies in health facilities. Child labor among participating households has decreased by an average of seven days per month. -- AFP
What?! I have been a member of the programs National Independent Advisory and Monitoring Committee for over two years now and was shocked by the figure. So I did my own research.

It seems that the medias source was the ADB publicationLearning Lessons, which said: The inclusive growth study noted that improvements are needed in the programs targeting system. Where did the P19-billion figure come from? This is where it gets amazing. The footnote of the ADB document referred to a study by the Philippine Institute for Development Studies (PIDS), which estimated a leakage rate of nearly 30% using 2009 data.

In 2009, the CCT Programs budget was P8.3 billion, and the total number of beneficiaries was 777,500. Assuming the PIDS estimate of 30% was correct, then the amount of the purported leakage (based on the 2009 budget) would be P2.4 billion. How did the media come up with P19 billion? Simple. They applied 30% to the current budget (P62 billion). Voila! -- P19 billion, give or take P400 million. I may not be that great at math, but even a 4Ps high school beneficiary would know better than to use an outdated 2009 figure and apply it to 2015 data.

Assuming a 30% leakage is correct, the actual amount would be only 13% of the P19 billion figure thrown about by some so-called political commentators.
However, the estimate of 30% is a matter that requires investigation. As Yul Brynner as the King of Siam said, Its a puzzlement! I have asked the CCT Secretariat to find out what the formula was, since its own monitoring in 2010 actually delisted some 15% of the beneficiaries for noncompliance of the requirements.

What is the CCT all about, anyway? Why is the government, from the time of President Gloria Macapagal Arroyo to the present, supporting it with billions of pesos? Is it a poverty alleviation program, like so many before that threw money at the poor?

An inspired and useful program initiated by the Arroyo administration, the CCT adapted the programs implemented by Mexico and Brazil to help reduce poverty by subsidizing poor families with school-age children. To me, it seems like a scholarship program for poor grade-school kids.

How does it work in the Philippines? A poor family with no steady income, with children aged six to 14, can get up to P1,400 monthly for five years. The family gets the subsidy for a maximum of three children, as a health grant and the rest as educational assistance. The family needs to make sure the kids are healthy and attend school. Thus, the grant really is more like a scholarship for the kids. No kids, no grant. Kids fail in school, reduce the grant. Further, pregnant women are required to get pre- and post-natal check ups. To make sure that the beneficiaries really do accomplish the conditions set, the monitoring of Pantawid is quite strict. The public schools provide proof of enrollment and the grades of the kids, the Department of Health centers monitor the health of the babies, kids and mothers. Children up to five years old are required to undergo check-ups and vaccines.

Further, Pantawid has implemented a values formation program through the Family Development Services (FDS), where the beneficiaries in a community gather regularly to participate in capacity building on parenting, health and literacy, among many topics. Local nongovernment organizations are partners of the DSWD, with local coordinators acting as municipal links who facilitate the FDS. Parents are required to attend the FDS. Anecdotal information to date tells us that the transformation of the parents has been remarkable.

Launched in 2008 with 380,000 poor households, it doubled after a year. Today, the program has expanded to cover 4.4 million families this year. About 11 million school children are being supported. To date, the DSWD has reported that compliance of the beneficiaries with the conditions is high: 93% for health, 98% for education, and 96% for family development services.

With regard to the need to improve the selection of its beneficiaries, DSWD Secretary Dinky Soliman has been quite zealous. Several years ago she invited leaders from civil society, academe, business and the religious sector to be part of the National Independent Advisory and Monitoring Committee (NIAMC) to help improve the CCT operations. Currently chaired by Evelyn Singson, the NIAMC members are as zealous as Secetary Dinky. I have attended several meetings where NIAMC members, like Economist Winnie Monsod, investigated DSWD monitoring reports the way the Senate conducts its hearings (without the harassment, bullying and disrespect).

When we analyzed the accomplishments to date, we were impressed by the impact of the cash grants. In education, near-universal enrollment of elementary age children (6-11 years old) and the enrollment rate for children aged 12 -- 15 was six percentage points higher among Pantawid households than non-Pantawid ones. Child labor among Pantawid households has decreased by an average of seven days per month. Further, Pantawid mothers are more likely to seek pre- and postnatal care and deliver babies in health facilities.

Richard Bolt, ADB country director for the Philippines, has issued three statements to date to correct the misimpression that todays 4Ps is so poorly managed that P19 billion has been lost.

Acknowledging that there were leakage issues in 2009, Bolt wrote: The targeting issue raised in the PIDS report has been addressed by the Department of Social Welfare and Development and the Conditional Cash Transfer Program and related ADB support. As such, we are confident that the issue raised is dealt with in the ongoing Conditional Cash Transfer Program.

He goes further and states that the ADB Independent Evaluation report is strongly positive and supportive of the program and its achievements including improved health outcomes and increased school participation, as well as its likely effect on the employability of the beneficiaries, and their chances for breaking the inter-generational cycle of poverty.

Will Bolts statements arrest the attacks on 4Ps? I have heard the line of attack of some of the so-called commentators. Sadly, I doubt if they will give equal air time for the official ADB statements. Its just so much more rewarding to stoke the anger of the masses by repeating, ad nauseum, that the government has thrown away P19 billion. I do hope and pray that Congress will be guided by fact, not politicking, when they deliberate on the budget of the Pantawid program. After all, over 4.4 million families and 11 million school children, their constituents, will benefit. Hope springs eternal.

Amina Rasul is a democracy, peace and human rights advocate, and president of the Philippine Center for Islam and Democracy.//

aminarasul@yahoo.com


Author: Amina Rasul
Date: July 13, 2015
Source: BusinessWorld

A weakening peso would do little to boost the countrys stuttering export sector, according to a new central bank study, which stated that policymakers should focus on cutting power costs and improving infrastructure.

The Bangko Sentral ng Pilipinas (BSP) said the countrys export sectors failure to move up the value chain had little to do with currency dynamics.
Other factors that influence the trade balance are macroeconomic fundamentals, business climate, ease of doing business and productive capacity, a working paper by the BSPs Center for Monetary and Financial Stability showed.
The study noted that supply-side factors might be putting a constraint on production and, subsequently, on export performance.
In this case, an appropriate policy is to strengthen supply-side factors (such as infrastructure, logistics and overall business climate) to support a countrys competitiveness, the study said.
Foreign exchange policy has long been a main source of contention between policymakers and local exporters. A weaker peso makes Philippine-made goods cheaper overseas.
The BSP paper sought to analyze the effects of the pesos value relative to major trading partners such as the United States, Europe, Japan and countries in the Middle East.
Differences in the pesos movement relative to other emerging markets that compete with the Philippines in selling goods to rich countries were also considered.
Philippine Confederation of Exporters (Philexport) earlier this month said the pesos depreciation should help the country catch up in terms of competitiveness with trade-oriented peers in the region.
According to the BSP paper, local exporters should not expect changes in the pesos value to be the lynchpin for success. The BSP said the government should instead be pressured to ramp-up reforms that aim to help the countrys business climate.
The Comprehensive Manufacturing Industry Roadmap being formulated by the Department of Trade and Industry, Board of Investments, and the Philippine Institute for Development Studies is therefore a welcome endeavor to upgrade the capacity of industries, the BSP said.
Official data show that manufacturing accounts for only about a quarter of Philippine gross domestic product (GDP) while two-thirds of the economy relies on consumer spending. This proportion is reversed in other Southeast Asian countries such as Thailand and Malaysia.
Last May, shipments of Philippine products to other countries as measured by sales declined by 17.4 percent.//


Author: Paolo G. Montecillo
Date: July 14, 2015
Source: Philippine Daily Inquirer

A weakening peso would do little to boost the countrys stuttering export sector, according to a new central bank study, which stated that policymakers should focus on cutting power costs and improving infrastructure.

The Bangko Sentral ng Pilipinas (BSP) said the countrys export sectors failure to move up the value chain had little to do with currency dynamics.
Other factors that influence the trade balance are macroeconomic fundamentals, business climate, ease of doing business and productive capacity, a working paper by the BSPs Center for Monetary and Financial Stability showed.
The study noted that supply-side factors might be putting a constraint on production and, subsequently, on export performance.
In this case, an appropriate policy is to strengthen supply-side factors (such as infrastructure, logistics and overall business climate) to support a countrys competitiveness, the study said.
Foreign exchange policy has long been a main source of contention between policymakers and local exporters. A weaker peso makes Philippine-made goods cheaper overseas.
The BSP paper sought to analyze the effects of the pesos value relative to major trading partners such as the United States, Europe, Japan and countries in the Middle East.
Differences in the pesos movement relative to other emerging markets that compete with the Philippines in selling goods to rich countries were also considered.
Philippine Confederation of Exporters (Philexport) earlier this month said the pesos depreciation should help the country catch up in terms of competitiveness with trade-oriented peers in the region.
According to the BSP paper, local exporters should not expect changes in the pesos value to be the lynchpin for success. The BSP said the government should instead be pressured to ramp-up reforms that aim to help the countrys business climate.
The Comprehensive Manufacturing Industry Roadmap being formulated by the Department of Trade and Industry, Board of Investments, and the Philippine Institute for Development Studies is therefore a welcome endeavor to upgrade the capacity of industries, the BSP said.
Official data show that manufacturing accounts for only about a quarter of Philippine gross domestic product (GDP) while two-thirds of the economy relies on consumer spending. This proportion is reversed in other Southeast Asian countries such as Thailand and Malaysia.
Last May, shipments of Philippine products to other countries as measured by sales declined by 17.4 percent.//


Author: Paolo G. Montecillo
Date: July 14, 2015
Source: Philippine Daily Inquirer

Recently, the Conditional Cash Transfer (CCT) Program implemented by the Department of Social Welfare and Management (DSWD) came under attack. Again. More popularly known as 4Ps or Pantawid (Pantawid Pamilya Pilipino Program), political commentators seized on a report by the Asian Development Bank (ADB) which stated that close to P19 billion of the 4Ps budget did not go to the poor.

Cash grants have helped to bring about near-universal enrollment of elementary age children (6 -- 11 years old). Pantawid mothers are more likely to seek pre- and postnatal care and deliver babies in health facilities. Child labor among participating households has decreased by an average of seven days per month. -- AFP
What?! I have been a member of the programs National Independent Advisory and Monitoring Committee for over two years now and was shocked by the figure. So I did my own research.

It seems that the medias source was the ADB publicationLearning Lessons, which said: The inclusive growth study noted that improvements are needed in the programs targeting system. Where did the P19-billion figure come from? This is where it gets amazing. The footnote of the ADB document referred to a study by the Philippine Institute for Development Studies (PIDS), which estimated a leakage rate of nearly 30% using 2009 data.

In 2009, the CCT Programs budget was P8.3 billion, and the total number of beneficiaries was 777,500. Assuming the PIDS estimate of 30% was correct, then the amount of the purported leakage (based on the 2009 budget) would be P2.4 billion. How did the media come up with P19 billion? Simple. They applied 30% to the current budget (P62 billion). Voila! -- P19 billion, give or take P400 million. I may not be that great at math, but even a 4Ps high school beneficiary would know better than to use an outdated 2009 figure and apply it to 2015 data.

Assuming a 30% leakage is correct, the actual amount would be only 13% of the P19 billion figure thrown about by some so-called political commentators.
However, the estimate of 30% is a matter that requires investigation. As Yul Brynner as the King of Siam said, Its a puzzlement! I have asked the CCT Secretariat to find out what the formula was, since its own monitoring in 2010 actually delisted some 15% of the beneficiaries for noncompliance of the requirements.

What is the CCT all about, anyway? Why is the government, from the time of President Gloria Macapagal Arroyo to the present, supporting it with billions of pesos? Is it a poverty alleviation program, like so many before that threw money at the poor?

An inspired and useful program initiated by the Arroyo administration, the CCT adapted the programs implemented by Mexico and Brazil to help reduce poverty by subsidizing poor families with school-age children. To me, it seems like a scholarship program for poor grade-school kids.

How does it work in the Philippines? A poor family with no steady income, with children aged six to 14, can get up to P1,400 monthly for five years. The family gets the subsidy for a maximum of three children, as a health grant and the rest as educational assistance. The family needs to make sure the kids are healthy and attend school. Thus, the grant really is more like a scholarship for the kids. No kids, no grant. Kids fail in school, reduce the grant. Further, pregnant women are required to get pre- and post-natal check ups. To make sure that the beneficiaries really do accomplish the conditions set, the monitoring of Pantawid is quite strict. The public schools provide proof of enrollment and the grades of the kids, the Department of Health centers monitor the health of the babies, kids and mothers. Children up to five years old are required to undergo check-ups and vaccines.

Further, Pantawid has implemented a values formation program through the Family Development Services (FDS), where the beneficiaries in a community gather regularly to participate in capacity building on parenting, health and literacy, among many topics. Local nongovernment organizations are partners of the DSWD, with local coordinators acting as municipal links who facilitate the FDS. Parents are required to attend the FDS. Anecdotal information to date tells us that the transformation of the parents has been remarkable.

Launched in 2008 with 380,000 poor households, it doubled after a year. Today, the program has expanded to cover 4.4 million families this year. About 11 million school children are being supported. To date, the DSWD has reported that compliance of the beneficiaries with the conditions is high: 93% for health, 98% for education, and 96% for family development services.

With regard to the need to improve the selection of its beneficiaries, DSWD Secretary Dinky Soliman has been quite zealous. Several years ago she invited leaders from civil society, academe, business and the religious sector to be part of the National Independent Advisory and Monitoring Committee (NIAMC) to help improve the CCT operations. Currently chaired by Evelyn Singson, the NIAMC members are as zealous as Secetary Dinky. I have attended several meetings where NIAMC members, like Economist Winnie Monsod, investigated DSWD monitoring reports the way the Senate conducts its hearings (without the harassment, bullying and disrespect).

When we analyzed the accomplishments to date, we were impressed by the impact of the cash grants. In education, near-universal enrollment of elementary age children (6-11 years old) and the enrollment rate for children aged 12 -- 15 was six percentage points higher among Pantawid households than non-Pantawid ones. Child labor among Pantawid households has decreased by an average of seven days per month. Further, Pantawid mothers are more likely to seek pre- and postnatal care and deliver babies in health facilities.

Richard Bolt, ADB country director for the Philippines, has issued three statements to date to correct the misimpression that todays 4Ps is so poorly managed that P19 billion has been lost.

Acknowledging that there were leakage issues in 2009, Bolt wrote: The targeting issue raised in the PIDS report has been addressed by the Department of Social Welfare and Development and the Conditional Cash Transfer Program and related ADB support. As such, we are confident that the issue raised is dealt with in the ongoing Conditional Cash Transfer Program.

He goes further and states that the ADB Independent Evaluation report is strongly positive and supportive of the program and its achievements including improved health outcomes and increased school participation, as well as its likely effect on the employability of the beneficiaries, and their chances for breaking the inter-generational cycle of poverty.

Will Bolts statements arrest the attacks on 4Ps? I have heard the line of attack of some of the so-called commentators. Sadly, I doubt if they will give equal air time for the official ADB statements. Its just so much more rewarding to stoke the anger of the masses by repeating, ad nauseum, that the government has thrown away P19 billion. I do hope and pray that Congress will be guided by fact, not politicking, when they deliberate on the budget of the Pantawid program. After all, over 4.4 million families and 11 million school children, their constituents, will benefit. Hope springs eternal.

Amina Rasul is a democracy, peace and human rights advocate, and president of the Philippine Center for Islam and Democracy.//

aminarasul@yahoo.com


Author: Amina Rasul,
Date: July 13, 2015
Source: Philippine Daily Inquirer

Two weeks ago, we wrote an article that espoused a definition of the middle (income) class anchored on official poverty line thresholds. Those who are middle class have per capita incomes between four to ten times that of the poverty line.
This means that a household of five persons would be considered middle class if its total monthly family income in 2012 ranged from about four times the governments official poverty line, i.e., about 30 thousand (31,580) peso to ten times the poverty line, i.e. nearly 80 thousand (78,895) pesos. We mentioned that in 2012, there were about an estimated 3.6 million households.
This article caught the attention of Albay Governor Joey Salceda, who carefully examines statistics. Governor Salceda wanted more information on the number of households for these income classes, as the article only described this information for the two extremes: the rich, the poor, as well as the middle class.
While we answered Governor Salcedas question on his Facebook post, we opted to give this clarification to the larger netizen audience, as well as extra descriptions of the middle class.
Income classes revisited
In our last article, we categorized the entire income distribution into seven classes: the poor, the lower income class (but not poor), the lower middle class, the middle class, the upper middle class, the upper income class (but not rich), and the rich.
Those in the lower income class (but not poor) are of a considerable size. The lower middle class, middle class and upper class have a combined strength of 45.8 percent of total households, and two thirds (65.6 percent) of total household income.
In contrast, the poor and the lower income class makes up more than half of households (52.7 percent, or 11.3 million households), and have a quarter share (23.1 percent) of total household income in the country. At the other end of the spectrum, households in the upper income (but not rich) and the rich classes comprise only 1.5 percent of total households, and yet they have a share of 11.4 percent of total household income.
Table 1. Income Classes in the Income Distribution, Income Thresholds and Sizes of Income Classes in 2012


Income Class Definition Range of Monthly Family Incomes (for a Family Size of 5 members) Size of Class (i.e. Number of Households
Poor Per capita income less than official poverty threshold Less than PHP 7,890 per month 4.2 million
Low income (but not poor) Per capita incomes between the poverty line and twice the poverty line Between PHP 7,890 to PHP 15,780 per month 7.1 million
Lower middle income Per capita incomes between twice the poverty line and four times the poverty line Between PHP 15,780 to PHP 31,560 per month 5.8 million
Middle class Per capita incomes between four times the poverty line and ten times the poverty line Between PHP 31,560 to PHP 78,900 per month 3.6 million
Upper middle income Per capita incomes between ten times the poverty line and fifteen times the poverty line Between PHP78,900 to PHP 118,350 per month 470 thousand
Upper income (but not rich) Per capita incomes between fifteen times the poverty line and twenty times the poverty line Between PHP 118,350 to PHP 157,800 170 thousand
Rich Per capita incomes at least equal to twenty times the poverty line At least PHP 157,800 150 thousand
Note: Authors calculations on data sourced from 2012 Family Income and Expenditure Survey (FIES), Philippine Statistics Authority

Where do the middle class reside?

The biggest concentration of the middle class is in Luzon, especially in Metro Manila (which has a fourth of them), and neighboring CALABARZON and Central Luzon (see Table 2). In total, these three regions have more than half of the middle class.

The rich also reside in the same regions, while in contrast, the biggest concentration of the poor are in Central Visayas, Bicol, Western Visayas and Mindanao.

Low income classes that are non-poor, but clearly more vulnerable to becoming poor than other non-poor classes are predominant in Calabarzon, Central Luzon and Metro Manila.

Table 2. Income Distribution by Income Group and by Region, 2012
Region/Group Poor Low income (but not poor) Lower middle income Middle income Upper middle income High income (but not rich) Rich
I - Ilocos Region 3.7 6.2 5.5 4.4 4.3 3.9 3.5
II - Cagayan Valley 3.1 4.5 3.4 2.8 3.1 2.3 2.1
III - Central Luzon 5.7 11.3 14.4 12.4 9.0 10.5 8.8
IVA - Calabarzon 6.1 13.2 18.8 18.8 17.1 17.6 15.4
IVB - Mimaropa 3.6 3.3 2.7 2.4 2.0 1.7 3.5
V - Bicol Region 8.9 6.4 3.4 3.1 3.1 2.0 2.9
VI - Western Visayas 8.7 8.1 6.3 6.9 7.4 6.7 7.2
VII - Central Visayas 9.6 7.3 7.1 5.6 6.1 6.2 4.4
VIII - Eastern Visayas 8.0 4.2 2.6 2.5 2.8 4.0 3.4
IX - Western Mindanao 6.1 4.0 2.4 2.1 1.8 3.0 1.4
X - Northern Mindanao 7.6 4.8 3.2 3.0 3.1 3.4 4.4
XI - Southern Mindanao 6.4 5.6 4.5 3.6 3.0 4.4 1.8
XII - Central Mindanao 8.7 4.7 2.9 2.9 2.3 3.0 0.9
National Capital Region 1.8 8.7 18.4 25.6 31.5 27.1 36.6
Cordillera Administrative Region 1.6 1.6 1.8 2.1 2.2 1.6 2.3
Autonomous Region in Muslim Mindanao 6.4 3.1 1.0 0.2 0.1 0.4 0.0
CARAGA 4.0 2.8 1.7 1.5 1.3 2.1 1.4
In addition, as is to be expected, being middle class is an urban phenomenon with about two third of the middle class residing in urban areas (see Figure 1) while the poor and low income families are more concentrated in rural areas. Similarly, high income and rich families they tend to be more concentrated also in urban areas, just like the lower middle, middle, and upper middle income classes.
Figure 1. Income Distribution by Income Group and by Urban/Rural Classification

Note: Authors calculations on data sourced from the 2012 FIES, Philippine Statistics Authority
Family sizes of the middle class
Compared to poor and low income groups, the middle class tends to have a smaller family size, whether we consider data from 2012, or even earlier years (such as 2009 and 2006) when the Family Income and Expenditure Survey was conducted (Figure 2).
On average, middle class household comprises four members, lower than an average family size of six among poor households. While this does not mean that family size causes poverty, but it suggests that those with low income may be further weakening their purchasing power with more household members to support.
Figure 2. Average Family Size by Income Group, 2006, 2009 and 2012

Note: Authors calculations on data sourced from the 2006, 2009 and 2012 FIES, Philippine Statistics Authority
Sources of income
Household heads of the middle class tend to rely more on salaried jobs (Figure 3), and this may be the reason why the middle class accounts for the largest share to total income tax payments as well as to total taxes (Figure 4).
Figure 3. Major Source of Income by Income Group, 2012
Note: Authors calculations on data sourced from the 2012 FIES, Philippine Statistics Authority
Figure 4. Share to Total Income Tax and Total Tax by Income Group, 2012

Note: Authors calculations on data sourced from the 2012 FIES, Philippine Statistics Authority
Profile of OFW families
Overseas Filipino workers (OFW) have always been considered the new heroes of the country, having contributed regularly to economic performance.
Figure 5 shows that a majority of OFWs (a third of them) belong to families in the middle class, particularly the lower middle class, while the low income and middle class have a quarter each of these OFWs.
Figure 5. Families of Overseas Filipino Workers (OFWs) by Income Group, 2006-2012

Note: Authors calculations on data sourced from the 2006, 2009 and 2012 FIES, Philippine Statistics Authority
Income inequalities are very prevalent in the country, i.e. there are gross disparities in incomes among different income classes. What the profile of OFW families suggests is that the increasing wealth of our taipans and our economic growth is being built by the toil and sweat of people at the middle and lower income classes.
Isnt it time for our billionaires to become more responsible and ensure shared prosperity, or at least give back a bit of those profits to families of OFWs who have built these fortunes?
Isnt it time for the taipans to invest in creating more and better quality jobs, than the current jobs they offer up to five months?
Isnt it time for government to use its persuasive power on our taipans to do so?
A research paper by Dabla-Norris et al. released by the International Monetary Fund shows that an increase in the income share of the poor and the middle class is associated with higher economic growth, ceteris paribus.
In contrast, economic growth deteriorates when the income share of the rich increases. Isnt it time we seriously address income inequalities? Sister Stella L. once said kung di ngayon, kailan pa? " 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.
Raymond E. Gaspar is a Research Specialist at Philippine Institute for Development Studies (PIDS) and is currently a Masters in Development Economics student at the UP School of Economics.
Martin Joseph M. Raymundo (not in photo) is a Research Analyst at the Philippine Institute for Development Studies (PIDS).


Author: Jose Ramon Albert, Raymond Gaspar, and MJ Raymundo
Date: July 08, 2015
Source: Rappler.com