PIDS in the News Archived (December 2016)

QUEZON CITY, Dec. 7 (PIA) --The Philippine Institute for Development Studies (PIDS) has outlined several recommendations to improve the design and implementation of the college scholarship grants for the children of Pantawid Pamilyang Pilipino Program (4Ps) beneficiaries.
In a forum organized by PIDS and the Congressional Planning and Budget Research Department (CPBRD) of the House of Representatives, PIDS Senior Research Fellow Aniceto Orbeta presented the findings of a PIDS study that evaluated the operational issues and impacts of the Students Grants-in-Aid Program for Poverty Alleviation (SGP-PA).
The SGP-PA, which was introduced in 2012, has been expanded in 2014 to become the Expanded SGP-PA or the ESGP-PA. It aims to alleviate poverty by increasing the number of college graduates among poor households and eventually getting them employed in high value-added occupations.
The SGP-PA is intended for identified 4Ps households. It provides a grant that is sufficient to cover the usual education expenses. The grant consists of PHP 10,000 per semester for tuition and other fees, PHP 2,500 per semester for textbooks and other learning materials, and PHP 3,500 per month for 10 school months as stipend. Living allowance is also provided. The total grant amounts to PHP 60,000 per academic year per student.
The ESGP-PA is being implemented by the Commission on Higher Education (CHED), the Department of Social Welfare and Development (DSWD), the Department of Labor and Employment, and selected state universities and colleges (SUCs). Initially, the SGP-PA provided scholarship to 4,041 students from identified and classified poor households. This number increased by 36,412 beneficiaries under the ESGP-PA starting academic year 2014-2015, bringing the total number of beneficiaries to 40,453. The number of implementing SUCs also increased from 35 to 112 across the country.
Given that the success of the program is measured based on the number of grantees that are able to graduate, Orbeta emphasized the importance of choosing grantees who have a relatively high likelihood of completing their degrees.
Enforcing admission exams, according to Orbeta, is one way of achieving this objective. This recommendation was based on the result that shows a strong correlation between entrance exams scores and academic performance in core subjects.
Orbeta also reiterated the importance of full financing for scholarship programs such as the ESGP-PA, which are targeted to poor households.
"There are other school-related expenses that are not covered by the grant but are necessary for the students to complete their degrees. For example, there is no budget allocation for summer courses, on-the-job trainings, national competency exams, field trips, and thesis," Orbeta explained.
The study also pointed out aspects of the program that are not within the academic realm. As most grantees experience cultural change from being relocated to a more urbanized setting, there should be interventions to help them cope with these changes.
"With appropriate interventions, well-selected students with poor socioeconomic background are able to perform as good as their peers. The results show that the effect of their poorer socioeconomic background is reflected only in their poorer grades in the first year. By the second year, they are already performing at par in Math and even better than their peers in Science and English," Orbeta explained.
Lastly, Orbeta calls for the institution of a well-thought-out monitoring system so that critical features of the program can be rigorously assessed.
Orbetas study on the SGP-PA is part of a series of impact evaluation (IE) studies conducted by PIDS to evaluate the effectiveness and impacts of key government programs and projects. IE is a special type of research that allows policymakers and program implementers to ascertain whether a particular program is achieving its objectives and whether the results are attributable to the intervention. (PIDS/RJB/SDL/PIA-NCR)

Date: December 07, 2016
Source: PIA

MANILA, Philippines - Replacing the quantitative restriction (QR) on rice with a 35 percent tariff on imports would lower palay (unmilled rice) prices by as much as P5 per kilogram and rice retail prices by around P7 per kilogram, a new study by the Philippine Institute of Development Studies (PIDS) said.
The study said opening the Philippine rice market to more imports would double the baseline importation level of 2.2. million tons to around 4.4 million tons in the succeeding years from the expiration of the QR in the middle part of 2017. This is because domestic output is still insufficient to meet domestic demand.
Specifically, palay prices are expected to fall by P4.56 per kilogram while rice retail prices are seen to fall by P6.97 per kilogram.
Tariffication of the Philippine rice sector by 2017 is inevitable. Since our analysis suggests massive fall in domestic prices, it is imperative to provide farmers a measure for income support, PIDS said.
The extended QR, which would lapse in June 2017, is meant to protect the livelihood of Filipino rice farmers while they are strengthening their production capability. This extension was borne out of two years of negotiation with the World Trade Organization (WTO) and various member countries under the Aquino administration.
Through the QR, the Philippines imposes a high tariff of 35 percent on imported rice, the volume of which has been restricted to 805, 200 metric tons (MT). Importing outside the QR is even more expensive as inbound shipments would be levied a duty of 40 to 50 percent.
To fill the supply gap, the National Food Authority (NFA) imports rice through tenders and intervenes in the market by selling the staple at a cheaper price.
The Philippines would not be going for another extension of the QR as the government is finally recognizing the need to reallocate the significant resources spent on rice production to other means of reviving the agricultural sector such as crop diversification.
To blunt the immediate effects of the removal of the special tax treatment on the staple on farmers incomes, PIDS is recommending the institution of a compensatory payment scheme for farmers, a direct cash transfer program similar to the conditional cash transfer (CCT) scheme.
This is proposed to be implemented over and above the existing production support provided by pertinent government agencies to enable them to transition to a more open trade environment.
Using a so-called Total Welfare Impact Stimulator (TWIST), PIDS said the government can afford to carry out compensatory transfers to rice farmers of as much as P19,000 per year at stable world market prices and P17,000 per year at 20 percent increase in world market prices.
Assessment shows that the compensatory transfer scheme can operate at a feasible cost, with 35 percent tariff rate applied, said PIDS. It should be reiterated that the compensatory scheme aims not to displace existing programs, but as a supplementary measure to be financed from rice tariff revenues, said PIDS, noting that compensatory payments can be received simultaneously with the CCT.
Imposing a 35 percent tariff on rice imports, would enable the government to collect between P17 billion to P18 billion annually.
Hence, earmarking the rice tariff revenue to pay for the compensation scheme is a feasible funding strategy. Residual money from the tariff revenues could be used for other product-enhancement measures for rice farmers, said PIDS.
The National Economic and Development Authority (NEDA) sees the removal of the QR as a major strategy in bringing down the countrys poverty incidence to between 13 to 15 percent by the end of the Duterte administration in 2022.
Imposing a competitive tariff on rice imports would lower the cost of the staple that eats up 20 percent of the budget of the poor. At the same time, it would enable the agriculture sector to transition to the production of more high value crops.
There is already consensus in the economic cluster in the Duterte cabinet to remove the QR but the Department of Agriculture is still firmly against it.//

Author: Czeriza Valencia
Date: December 02, 2016
Source: Philippine Star

THE current crop insurance available for banana farmers is unsustainable due to its low coverage, according to a study released by the Philippine Institute for Development Studies (Pids).

In a study, titled Impact Evaluation of Banana Insurance Program of the Philippine Crop Insurance Corp. (PCIC) in the Davao Region, researchers found that only 55 percent of the cost of banana production is covered by the governments crop insurance.

PCIC insurance, at its present coverage level, is not sufficient to create impact on stabilizing income of banana farmers hit by shocks, the study stated.

Without the subsidy of the government, and status quo on coverage and premium rate, crop insurance in the country will not be sustained especially in the case of banana, it added.

Apart from the low coverage, the PCIC insurance offering for banana growers has a low penetration rate among farmers due to lack of information.

The study said this may be due to the lack of PCIC personnel in the Davao region. The researchers found that PCIC only has 11 regular personnel and 25 job orders covering seven provinces in the region.

The researchers recommended that satellite offices must be created in municipalities to make crop insurance for banana farmers.

It is encouraged to improve information and education campaign to encourage more farmers to avail [themselves] the insurance packages. Tarpaulin containing PCIC packages should be posted in strategic location in every MAO [Municipal Agriculture Office]/FITS [farmers information and technology services] Centers, the study read.

The lack of information also affect the willingness of banana farmers to pay for the crop insurance.

The research found that on the average, for a maximum coverage of P300,000 per hectare, those willing to pay for crop insurance will only shell out P1,278.87, instead of the annual premium of P10,500.

Those who are not willing to pay P3,000 for the same maximum coverage are only willing to pay P421.19 annually.

Willingness to pay of crop insurance premium for a maximum coverage of P300,000 per hectare is very low among banana farmers, the study stated.

The reliance of farmers to government subsidy entails a future problem on the sustainability of PCIC, it added.

The insurance cover or sum insured for banana farmers are the cost of production inputs as agreed upon by PCIC and the insured.

This includes a portion of the value of the expected yield but it should not exceed 120 percent of the cost of production inputs.

The premium rate ranges from 2 percent to 7 percent of the total sum insured, subject to deductible and coinsurance provisions.

Those under the premium subsidy by the government automatically have a 3-percent premium rate.//

Author: Cai Ordinario
Date: December 11, 2016
Source: Business Mirror

THE current crop insurance available for banana farmers is unsustainable due to its low coverage, according to a study released by the Philippine Institute for Development Studies (Pids).

In a study, titled Impact Evaluation of Banana Insurance Program of the Philippine Crop Insurance Corp. (PCIC) in the Davao Region, researchers found that only 55 percent of the cost of banana production is covered by the governments crop insurance.

PCIC insurance, at its present coverage level, is not sufficient to create impact on stabilizing income of banana farmers hit by shocks, the study stated.

Without the subsidy of the government, and status quo on coverage and premium rate, crop insurance in the country will not be sustained especially in the case of banana, it added.

Apart from the low coverage, the PCIC insurance offering for banana growers has a low penetration rate among farmers due to lack of information.

The study said this may be due to the lack of PCIC personnel in the Davao region. The researchers found that PCIC only has 11 regular personnel and 25 job orders covering seven provinces in the region.

The researchers recommended that satellite offices must be created in municipalities to make crop insurance for banana farmers.

It is encouraged to improve information and education campaign to encourage more farmers to avail [themselves] the insurance packages. Tarpaulin containing PCIC packages should be posted in strategic location in every MAO [Municipal Agriculture Office]/FITS [farmers information and technology services] Centers, the study read.

The lack of information also affect the willingness of banana farmers to pay for the crop insurance.

The research found that on the average, for a maximum coverage of P300,000 per hectare, those willing to pay for crop insurance will only shell out P1,278.87, instead of the annual premium of P10,500.

Those who are not willing to pay P3,000 for the same maximum coverage are only willing to pay P421.19 annually.

Willingness to pay of crop insurance premium for a maximum coverage of P300,000 per hectare is very low among banana farmers, the study stated.

The reliance of farmers to government subsidy entails a future problem on the sustainability of PCIC, it added.

The insurance cover or sum insured for banana farmers are the cost of production inputs as agreed upon by PCIC and the insured.

This includes a portion of the value of the expected yield but it should not exceed 120 percent of the cost of production inputs.

The premium rate ranges from 2 percent to 7 percent of the total sum insured, subject to deductible and coinsurance provisions.

Those under the premium subsidy by the government automatically have a 3-percent premium rate.//

Author: Cai Ordinario
Date: December 11, 2016
Source: Business Mirror

PORT and road decongestion will hinge on strategies like limiting the intake of ports in the capital and increasing the use of rail and information technology solutions, the Philippine Institute for Development Studies (PIDS) said.

In a report, Easing Port Congestion and Other Transport and Logistics Issues, the government think tank recommended the dispersal of port operations to other locations across the country, the revival of nighttime freight operations by trains and the implementation of a web-based 24-hour integrated truck dispatching, appointment and booking system as short-term measures.
For the medium term, PIDS recommended that the government create a shifting system among the ports in Manila, Batangas and Subic, adopting a rationalization plan for port development and investment programs in the Greater Capital Region (GCR) ports and upgrade logistics, port operations, and customs in Batangas and Subic.
Also among its medium-term recommendations are the revival of freight by rail from the Port of Manila to CICD, rehabilitate Philippine National Railways (PNR) Line for rail freight and requiring international shipping lines to establish inland container stations.
For the long term, PIDS recommended the government to draft a multimodal transport and logistics development plan for the country that would run from Manila to Mindanao, with special emphasis on the Manila-Sorsogon-Leyte-Surigao segment.
Sorsogon is the take off point for ferries from Luzon to the Visayas while Surigao is the Mindanao landing area for ferries from the eastern Visayas.
If the government is unable to provide funds needed to improve the PNR system, a public-private
partnership (PPP) program might be more viable instead, PIDS said.

PIDS also recommended that the government conduct a thorough study on goods and passenger movement in the GCR.

In return, transport infrastructures (water, rail, road) could be properly planned and integrated, which would not only address the needs of the people but also that of the freight industry, it said.

In February 2014, the City of Manila imposed a truck ban preventing the freight and other large vehicles from using city streets during the day to ease congestion.

However, this disrupted port operations, affecting Philippine trade, because the Port of Manila is the largest in the country.

Evidently, the Manila truck ban triggered congestion at the Port of Manila and adversely affected exporters, importers, and manufacturers whose operations have been disrupted and face increasing transport cost, PIDS said.

Seven months later, Manila Mayor Joseph E. Estrada issued Executive Order (EO) 67 which lifted the truck ban indefinitely, which only helped ease port congestion but not the traffic crisis.

Ironically, the Manila truck ban was instigated by the congestion of Manilas streets caused by huge cargo traffic coming in and out of the Port of Manila, the lack of depots by shipping lines for their containers, and the lack of depots for cargo trucks that use Manilas streets as their parking garages, the report said.

Given the current congestion on the roads, Congress sought to give President Rodrigo R. Duterte special powers to coordinate traffic rules in Metro Manila and other urbanized areas.

Those emergency powers also cover infrastructure projects, promote alternatives for mobility, increase accountability and transparency as well as utilize information and communications technology to mitigate the congestion. --

Author: Danica M. Uy
Date: December 15, 2016
Source: Business World

In the midst of the different political noises, the Department of Trade and Industry (DTI) successfully convened the Manufacturing Summit on November 28 and 29. Through the efforts of the team of Trade Secretary Ramon M. Lopez, headed by Assistant Secretary Rafaelita M. Aldaba, the successful event brought together policy-makers, industry leaders and manufacturers working together to direct the manufacturing sector as a major engine of sustainable economic growth and job creation.

There were two major highlights of the summit. The first was the inspiring sharing by successful entrepreneurs, including keynotes by Diosdado Banatao and Jaime Zobel de Ayala.

The second was the culmination of consultations between the government (national and regional) and private sector (business and industry associations, manufacturers, value-chain participants and development partners) in identifying the most urgent reforms needed to push manufacturing to its full potential. The top 5 recommendations from each strategic area of concern were voted upon by the participants for action by the pertinent government agencies.
There were seven strategic areas of concerns that were discussed. These were competition and innovative industries; labor and skills; infrastructure; ease of doing business; small and medium enterprises; incentives and government support; and international trade policies.

Together with Dr. Mario Lamberte, former president of the Philippine Institute for Development Studies (PIDS), we served as moderators of the group that discussed incentives and government support.
The group was composed of industry members from garments, semiconductors, mining, agriculture, cement, handicrafts, jewelers, natural food and furniture.

Other participants were from Congress, Philippine Economic Zone Authority (Peza), Board of Investments (BOI), Japan International Cooperation Agency and the American Chamber of Commerce. Let me share my observations on what the different industries and enterprises are asking as forms of incentives to move their businesses.
First, it appears that our incentive regime up to today has been encouraging exporters and foreign investors only. The majority of the participants shared the view that the Philippine domestic market is a large market. There should be no distinction of prioritization. In line with this, there was a proposal to create a domestic economic zone to agglomerate the SMEs.

Second, incentives are supposed to be icing and not the main purpose of attracting investments and/or expansions. To the participants, the most critical issue that the government should address is the overall climate of doing business that significantly affect costs. This includes power, training and harmonization of policies, among others. The incentives that the government give will work better if these aspects are addressed first.
Finally, the group also observed that there are a number of government agencies giving incentives. Their incentives are not standardized and are biased for large investments. Thus, the current mechanism does not support SMEs directly.
Indeed, the session showed the need for a critical review of our incentive mechanisms. We know that our manufacturing sector is more productive than agriculture and services.

However, it employs the fewest workers and in terms of ratio to GDP, this has, in fact, remained stagnant for the last 20 years. This, in effect, is its disconnect in making manufacturing a sustainable engine of growth and job creation. In their final recommendations, the group did not ask for more incentives.

They asked the following: a) that the government remove the biases for domestic market focused businesses; b) that the road maps for the different industries should be benchmarked abroad and that they be made multiagency; c) simplification of processes for SMEs in availing themselves of incentives; d) standardization, simplification and coordination between and among investment agencies, such as the Peza, BOI and Bureau of Internal Revenue, in the implementation of incentives; and e) incentives should be time-bound, performance based and highly targeted.

Clearly, manufacturing needs an enabling environment first before it can consider looking at incentives. In a way, the current incentive environment is reflective of the condition that the country is not able to standardize such an enabling environment.

This is why the Peza and other economic zones have been created. While they are not necessarily wrong, they have created the impression that for incentives to operate, they have to be contained in a highly coordinated, simplified administrative enclave and area.

Thus, my view of the above recommendations is for the government to magnify and improve the existing mechanisms that are in place in economic zones. This is not a simple task.

First, the government has to take stock of all the existing investment agencies that it has created. It will require a substantial effort to harmonize all the rules and regimes offered by each agency and including also those at the local government levels.

Second, the government has to develop a critical institutional capacity in understanding needs of industries. This means that their role is beyond planning and regulation, but to a certain extent provide directions at different levels of governance.

The recommendations of a multi-agency road map that is not only for planning, but also monitoring requires an active government partner working closely with industries in sustaining growth and creating jobs. //

Author: Dr. Alvin P. Ang
Date: December 15, 2016
Source: Business Mirror

In a forum held recently at the House of Representatives in Quezon City, PIDS Senior Research Fellow Celia Reyes noted that around half of the households who are engaged in agriculture can be considered as sometimes poor. According to Reyes, these are farmers who usually become poor when they are unable to recover from losses in their farm production after typhoons, flooding, and other calamities. She noted that providing safety nets such as crop insurance can protect these vulnerable households from sliding into poverty.
Crop insurance helps farmers manage risks by providing them with funds to cover production costs for the next season and finance household expenditures after a shock such as typhoon, flood, and drought, Reyes stated.
Reyes presentation at the House of Representatives was based on a PIDS study that aims to evaluate the design and implementation of the governments crop insurance program vis--vis its objectives as well as its sustainability and impact on farmers. The forum is part of the Legislative Forum Series organized by PIDS and the Congressional Planning and Budget Research Department of the House of Representatives.
The PIDS study, which was conducted in collaboration with major universities around the country, concluded that the Agricultural Insurance Program has a positive impact on farm households income and welfare. However, it also noted that the program, which is being implemented by the Philippine Crop Insurance Corporation (PCIC), leaves a lot to be desired.
Improvements in the design and implementation of the crop insurance program of the PCIC, particularly with regard to the penetration rate and insurance cover, can further increase its benefits to farmers, Reyes emphasized.
The crop insurance offered by the PCIC is considered as a production cost insurance as it typically insures the cost of production inputs of farmers, with prescribed cover ceilings. One of its programs is the free insurance to farmers and fisherfolk that are listed in the Registry System for Basic Sectors in Agriculture (RSBSA). RSBSA is a database of farmers, farm laborers, and fisherfolk in the 75 poorest provinces in the Philippines which the Philippine Statistics Authority maintains.
For the past three years, PCICs annual budget has been an average of PHP 1 billion. This amount was increased to P2.5 billion in the proposed 2017 national budget. Under the program, farmers with farm sizes of three hectares and below are the priority beneficiaries. Despite the increase in funding, Reyes noted that the amount is still not enough to cover all eligible beneficiaries under the existing RSBSA program.
In addition, the PIDS study pointed out that the actual insurance cover that PCIC pays is below the average production cost particularly for rice and corn. For example, PCICs average amount of cover per hectare for rice in 2015 was around PHP 21, 000 under the RSBSA program while average production cost per hectare is around PHP 42,000. According to Reyes, the low insurance cover is a trade-off of targeting more farmer beneficiaries for the free insurance program. Thus, the PIDS study suggested that given the limited funds, the free insurance premium subsidies should be directed to the poorest farmers.
Since PCIC will continue using the RSBSA as a targeting tool for giving free insurance premium, there is a need to validate and reconcile the list of farmers and fisherfolk in the RSBSA with the list of agrarian reform beneficiaries (ARBs), Reyes explained.
Another way for the PCIC to increase coverage rate of insured farmers, particularly for those not listed in the RSBA, is through partnerships with local government units (LGUs) such as in the case of Isabela, Cebu, Negros Oriental, and Davao del Norte. Reyes and her co-authors suggested LGU-PCIC partnerships in the form of full premium subsidy by the LGU or the provision of loans to farmers as the LGUs counterpart in the insurance premium.
Lastly, the PIDS study highlighted the low level of awareness of target beneficiary farmers about the programs of the PCIC.
Some farmer groups and LGUs are not aware of the different types of PCIC programs. There are also farmers who are not aware that they are insured under the RSBSA and that they are the priority beneficiaries of the program, Reyes stated. (PIDS)

Date: December 16, 2016
Source: PIA

FILIPINOS will spend less for health if the government expands the Philippine Health Insurance Corp. (PhilHealth), according to a study released by the Philippine Institute for Development Studies (Pids).

In a policy note titled Analysis of Out-of-Pocket Expenditures in the Philippines, former Pids researchers Valerie Gilbert Ulep and Nina Ashley de la Cruz said Filipinos health payments continue to go up despite efforts to lower prices of medicines and hospitalization costs.

The researchers recommended the expansion of the PhilHealth to include outpatient medicines which can reduce the costs of patients who do not need confinement for their health concerns.

The expansion should not be limited to the sponsored program, as selective benefit coverage losses the power of PhilHealth as the main purchaser. However, it should ensure that benefits are cost effective and necessary, the study read.

On the extreme, out of pocket health expenses could lead households to poverty.

The researchers said around 18 percent of the population are living in poverty, defined as total expenditure being lower than the subsistence spending.

If out of pocket health payments are netted out, this percentage rises to 19.4 percent.

Thus, 1 percent of the population become poor once health expenditure occurs. The poverty gap also increases from P282 to P300, the study read.

Data also showed the burden of health payments, which is a share of out of pocket expenditures on health on household capacity to pay, has increased to 4.8 percent in 2012 from 2.8 percent in 2000.

There was also an increasing trend in terms of catastrophic payments, which is based on the share of out-of-pocket health expense on income. The threshold set by the World Health Organization, when capacity to pay is used, is 40 percent.

Based on the data in the country, the proportion of households that incur catastrophic payments rose to 1.5 percent in 2012 from 0.49 percent in 2000.

This translates to roughly 1.5 million people spending more than 40 percent of their earnings on health care, the researchers said.

The researchers also recommended that the government should strengthen the provider payment mechanisms (PPM) of PhilHealth.

PPM is a powerful tool in controlling and stimulating the behaviors of consumers (patients) and health-care providers.

The study added that the government should also continue to pursue the expansion of PhilHealth to include nonpoor informal workers, which is now the battleground sector in achieving full coverage.//

Author: Cai Ordinario
Date: December 18, 2016
Source: Business Mirror

PASIG CITY, Dec. 22 -- To improve the effectiveness and efficiency of the collection and disbursement of the Motor Vehicle Users Charge (MVUC) fund, a study by state think tank Philippine Institute for Development Studies (PIDS) is calling for greater transparency and accountability among government agencies involved in the program.

The call was in response to allegations of misuse and politicized allocation of the MVUC fund. For example, a 2009 World Bank study noted that high share of MVUC funds were used to fund employment-generating roadside maintenance programs such as sweeping, beautification, and planting.

The MVUC, which is imposed through the registration fees of vehicles and penalties for overloading and collected by the Land Transportation Office (LTO), is envisioned as a new source of funding to finance road maintenance and minimize air pollution. MVUC is considered the third biggest source of tax revenue for the government, contributing an additional 40 percent of available funds for maintenance of national roads.

According to Republic Act (RA) 8794, funds collected from the MVUC should be placed in four special accounts in the National Treasury, namely, Special Road Support Fund (80%), Special Local Road Fund (5%), Special Vehicle Pollution Control Fund (7.5%), and Special Road Safety Fund (7.5 %). The tax forms the bulk of the annual motor vehicle registration.

The law also created the Road Board to ensure the prudent and efficient management and utilization of the Motor Vehicle Users Charge fund. It is assisted by the Road Board Secretariat (RBS) that is responsible for the implementation of the Board decisions and the day-to-day operation of the management of the Special Funds.

In a recent forum at the House of Representatives, PIDS Consultant and UP National Center for Transportation Studies Director Ma. Sheilah Napalang noted that recording of MVUC deposits can be made transparent and efficient through automation, regular reconciliation of records of the Land Transportation Office (LTO) and Bureau of Treasury records, and random audits. She added that automating the recording and encoding of collections and deposits will reduce human errors.

Napalang also pointed out the lack of a definitive operating procedure system in identifying and prioritizing projects under the MVUC fund.

Based on the discussion by the PIDS study team with the different Road Program Offices (RPOs) of the Department of Public Works and Highways (DPWH), it was intimated that projects are proposed by the District Engineer Office (DEO) or the Regional Offices and not generated by DPWH RPO using the Highway Development and Management model-4 (HDM-4) as stipulated in the MVUC Act. This also validates the 2011 finding of the Commission on Audit on the lack of effective procedures by the Planning and Evaluation Division (PED) of the RBS in the evaluation of 1,011 projects amounting to PHP 7.99 billion, Napalang stated.

Thus, the PIDS study recommends that for the special accounts under the DPWH, advance planning, programming, and project proposal development must be done within the DPWH itself. Also, the process should conform to RA 8794, wherein DEOs and RPOs must submit their proposed projects to the DPWH Central Office and that projects are prioritized using HDM-4.

In terms of approval and release, Napalang highlighted the lack of a systematic way for proponents to track their proposals due to considerable time gap between request for the project and the eventual release of the Special Allotment Release Order. She also pointed out the incapacity of the RBS to undertake monitoring and evaluation of MVUC projects given its limited technical personnel.

To solve these issues, the study recommended that information system and communication channels with local government units must be strengthened, particularly regarding conditionalities and eligible work categories. The study also recommended the establishment of a monitoring system to facilitate project implementation, monitor early warning signals on possible implementation problems, and recommend ways to fast-track implementation. The auditing system by the RBS must also be strengthened and a third-party audit setup must be explored, according to the study.

To enhance transparency, the PIDS study suggested that information on projects undertaken for the last five years be published on the Road Board website, along with a clear timeline from submission of project proposal to the Boards approval or disapproval. Another recommendation is to require project proponents to have an appropriate impact evaluation plan, where expected outputs and outcomes are stated.

The study also suggested that instead of abolishing the Road Board, it is more worthwhile to strengthen its oversight capability and transparency through at least three measures: (1) restructure it to include other road users aside from transport and motorist organizations, (2) make the Road Board's reports easily accessible to the public, and (3) re-orient the RBS as a fund manager and not an implementing agency. (PIDS)
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Date: December 20, 2016
Source: Philippine News

There are more than 12,000 families out in the streets of Metro Manila alone.
MANILA, Philippines " The Department of Social Welfare and Development (DSWD) urged local government units and other government agencies to do their part in solving the problem of street dwellers in the country, especially in Metro Manila.

The DSWD on Tuesday, December 20, presented the results of the consultation it conducted to enhance the programs for street families.

It said the following steps must be done by various agencies:

' Department of the Interior and Local Government (DILG) " strengthen implementation of the barangay code ' Department of Education (DepEd) " clarify overlapping programs for the education of street children ' Department of Health (DOH) " expand Philhealth coverage to street families ' Department of Labor and Employment (DOLE) " establish programs for livelihood assistance ' National Housing Authority (NHA) " review policies qualifying street families for housing assistance

"We cannot always be just rescuing children from the streets and then returning them to their families again and again and again. So long as the conditions of their families and their communities do not change, children from impoverished families will continue to go to the streets of cities and municipalities to beg for change or food, and in the process endanger their own safety and lives," DSWD Secretary Judy Taguiwalo said.

She also stressed the crucial role of the DILG in realizing the goal of rescuing over 12,000 street families " in Metro Manila alone.

"We need to improve the capacity of LGUs when it comes to their response to the needs of street children and families. Hindi tama na patay-sindi ang mga hakbang natin (It's not right that our initiatives are on and off)," she said.

Senate finance committee chairperson Loren Legarda, who attended the DSWD presentation, said barangay captains must draw families out of the streets and craft a program to rehabilitate them. (READ: How poverty affects street children psychologically)

Legarda added that under the 2017 national budget, already ratified by both houses of Congress and pending the President's signature, an additional P3 billion is allocated to PhilHealth to cover the medical needs of indigent families, including those out in the streets.

"They don't need to present a PhilHealth ID, an endorsement from a politician... as long as they go to a state hospital, their medical needs are free," said the senator in Filipino.

Street kids in PH

During its outreach program, the DSWD found that only 4 of the 158 families sampled in Manila are part of the government's flagship anti-poverty initiative, the Pantawid Pamilyang Pilipino Program (4Ps).

These families are made up of 505 individuals who are mostly children. More than a quarter (26%) are kids 1 to 4 years old while 22% are 9 to 12 and 18% are 13 to 16 years old. (READ: Children of the streets)

The Philippine Institute for Development Studies (PIDS) estimated in 2010 that there were about 45,000 to 50,000 street children around the country. Hope, a non-governmental organization working on children's welfare, puts the figure at up to 250,000 nationwide.

The DSWD is encouraging the public to report sightings of street kids through the Twitter account @savestreetkids, or for those in Metro Manila, through the hotline 734-8623.

Author: Patty Pasion
Date: December 20, 2016

THE iron hand of the President can be seen in his war on drugs. Blood stains on the streets, left as remnants of this war, are among the biggest changes that have come to neighborhoods and city centers.
But on the economic front, the Presidents nature to give his people a free hand in economic and financial affairs has allowed policy-makers enough leeway to craft a high economic growth path for the Philippines.
While the current administration cannot take all the credit for the economys high growth, the continued optimism on the Philippine economy is something this administration could claim.
Economic prospect
After growing 7.1 percent in the third quarter, multilateral agencies, such as the Asian Development Bank (ADB) and the World Bank, have raised their growth prospects for the country.
The ADB upgraded the countrys full-year GDP forecast to 6.8 percent, from the estimate of 6.4 percent in September, and raised its 2017 outlook to 6.4 percent, from 6.2 percent.
The World Bank projected the Philippine economy to grow at 6.8 percent in 2016, compared with the 6.4-percent forecast released in October. It also revised upward its growth projection for the Philippine economy in 2017 to 6.9 percent, compared with its October forecast of 6.2 percent. In 2018 the economy is expected to expand at 7 percent.
Economists believe, however, that the eco-nomic success of the country under the Duterte administration comes from the fact that seven out of the zero to 10-point agenda of the government came from the previous administrations.
Ateneo School of Government Dean Ronald U. Mendoza told the BusinessMirror that the continuation of economic policies, such as maintaining macroeconomic stability, boosting infrastructure spending, reinvigorating the agricultural sector and strengthening the countrys social protection system, particularly the Conditional Cash-Transfer Program, is a good sign.
Mendoza said this is unique to the current administration since the tendency of new administrations is to abandon all economic policies espoused by the previous administration to make its mark.
That seven of the 10 economic policy priorities will seek to build stronger results from the previous six years is a good sign, since the evidence suggests that policy design is often not the problem in the Philippines"its policy execution and implementation all the way to the local government level thats necessary, Mendoza said.
The optimistic projections of multilateral development banks and many local economists rest mainly on the recent economic policies set by the Duterte administration, particularly on infrastructure spending.
University of Asia and the Pacific School of Economics Dean Cid Terosa said the Duterte administrations plan to push greater infrastructure spending and tax reform are key factors in raising and sustaining economic growth.
Terosa said the goal of the current ad-ministration to increase infrastructure spending to 5 percent of GDP is unprecedented in the Philippines.
Data from the Neda showed that the countrys infrastructure spending to GDP ratio has steadily increased to 5.1 percent in 2016, from 1.8 percent in 2011. Prior to 2016, the countrys highest spending for infrastructure projects reached only 4 percent of GDP.
This, despite the setting a target to raise infrastructure spending to GDP to 5 percent under the Arroyo and Aquino administrations. The goals were set based on the recommendation of local economists and multilateral development banks who said the Philippines was already lagging behind its Asean neighbors in terms of infrastructure spending. I believe these policies should continue because they are unprecedented. The country has never spent at least 5 percent of GDP on infrastructure and has not comprehensively planned tax reforms that include lowering personal- and corporate-income taxes, Terosa said.
No micromanager
The free hand given by the President has also affected the way agencies are being run. Socioeconomic Planning Secretary and National Economic and Development Authority (Neda) Secretary Ernesto M. Pernia is thankful that the President is not a micromanager. Pernia said micromanaging the economy sustaining over 100 million Filipinos would result in slow progress in the medium term.
Pernia said the changes in the Neda, an oversight agency that is tasked to evaluate various public projects, as well as advice the President on economic policy and planning, is a testament to the positive impact of the President on the economy.
I think things are moving faster in the Neda and its because the President is not a micromanager, Pernia said. I think theres been a quantum change in getting projects to the Neda Board.
Pernia said the first Neda Board meeting lasted only 15 minutes, while the second meeting was only an hour and 50 minutes long. The first Neda Board meeting was chaired by Pernia because the President was in a meeting, while the second meeting was attended by Duterte. The Neda secretary said once the presentations were made, Duterte only asked questions pertaining to economic rates of return for certain projects that were being discussed.
Pernia said once these questions were answered to the Presidents satisfaction, the projects were already approved by the Neda Board. In sum, the Neda Board approved a total of P392.93 billion worth of new projects.
This estimate does not include Operation and Maintenance (O and M) contracts for five public-private partnership (PPP) projects, which amount to P108.18 billion. These five PPP airport O and Ms are for the Iloilo, Bacolod, Laguindingan, Davao and New Bohol (Panglao) Airports.
Neda Undersecretary Rolando G. Tungpalan told the BusinessMirror that faster project approval and implementation is a change that is needed particularly in project approvals. Tungpalan said under the Aquino administration, only around 30 percent of the projects that were evaluated and approved were implemented and completed.
This trend was also seen in the number of PPP projects that were completed. Of the 12 projects that were awarded, only three were completed"Daang Hari-Slex Link Road (Muntinlupa-Cavite Expressway) Project; PPP for School Infrastructure Project (PSIP) Phase I; and the Automatic Fare Collection System (AFCS).
The Naia Expressway (Phase II) Project was completed under the current administration.
During the previous administration, we had a lot of projects approved but it never got off the ground. [I estimate] only 30 percent of projects were implemented, Tungpalan said. [In terms of its effect on underspending], 2014 was the most alarming. Maybe it was a confluence of events. No. 1, the number of approved projects [went] beyond the capacity of agencies to take on, and then second, agencies did not implement projects.
The Aquino administration, through the Neda Board, approved a total of 115 projects worth P1.64 trillion in six years. Based on Neda data obtained by the BusinessMirror, the Aquino administrations project approvals were P3 billion more than those made in the last six years of the Arroyo administration.
The largest project approved by the Neda Board was the P170.7-billion-worth North-South Railway Project (NSRP)-South Line, while the smallest was the P231.21-million Local Government Units Investment Program Supplement 3 project.
Work plan for 2017
While the current administration currently enjoys the approval of economists in terms of economic policies, there is much work to be done.
Mendoza said some of the key reform battles in 2017 for the Duterte administration include overhauling the tax system, including corporate- and income-tax reforms, as well as restoring the progressivity and fairness of the tax system, particularly for the middle class.
One of the key reform issues in tax progressivity and fairness is the removal of bracket creep in the personal-income tax (PIT) system. Since the PIT has not been updated since 199, this resulted in what is called bracket creep, where low-income taxpayers hurt more than their high-income counterparts.
Bracket creep, Philippine Institute for Development Studies (PIDS) Senior Research Fellow Rosario G. Manasan earlier explained, has occurred because of the nonindexationto inflation of PIT brackets. This means that the coverage of each tax bracket does not take into consideration the current value of the peso.
Mendoza also said that, apart from tax reform, the Duterte administration will be faced with the expiration of the quantitative restriction (QR) on rice in the middle of 2017. With majority of the economic managers keen on the nonextension of the QR, Mendoza said this should prompt for a better food-security strategy since this could be the most important poverty-reducing policy of the Duterte administration.
Terosa added that, given the importance accorded by the government for socioeconomic policies, particularly those that aim to boost rural, agricultural and industrial productivity, these must be implemented aggressively. He also said there is a need to improve transparency, accountability and control of corruption. A direct and incisive war on poverty, income inequality and unemployment has to outshine the war on drugs in the near future, Terosa said.
Pernia earlier said the significant increase in food prices, particularly rice, pushed the poverty line up by almost 30 percent over the last six years. The rapid pace of population growth, with additional 10 million Filipinos in just six years, has also made poverty reduction a steep challenge.
Apart from these, Pernia said the Neda is keen on continuing the change it has introduced, particularly the Three-Year Rolling Infrastructure Program (TRIP); Public Investment Program Online System (Pipol); AidData Project; and streamline Investment Coordination Committee (ICC) review procedures.
Pernia said the TRIP is a consolidated list of all infrastructure programs of the government, identifying immediate priorities to be undertaken in three-year periods. A joint project with the Department of Budget and Management, it will also assure that once an infrastructure program has been planned and rolled out, it will continue to receive funding from the government.
Pipol, meanwhile, is an online database for government projects. Included in this database are comprehensive details of government projects, plus their status updates. Pernia said that in September, United States Agency for International Development officially turned over to the Neda the AidData Project, a Web-based mapping tool that monitors the distribution and impact of donor assistance to government programs and projects in the Philippines.
With regard to efforts to streamline ICC review procedures, minor changes in scope, design, cost and extension of implementation or grant validity of projects will now be delegated to the level of the ICC, the Department of Finance and the Neda Secretariat, as applicable, based on existing laws, rules and regulations.
I dont think we can move faster than [this], otherwise, were going to suffer health-wise. We [now] have a long laundry list of projects to present to [funders like] China, Pernia said.
In terms of projects and project approvals, the Neda intends to play a more proactive role next year and in the coming years. Tungpalan said some of the major changes that they will institute is for Neda to do milestone monitoring of projects.
Tungpalan said previously, projects are monitored on a period basis. But this usually results in unforeseen delays and problems that cost the Filipino taxpayer.
He said under milestone monitoring, projects will be monitored according to the targets and accomplishment dates they have set. This will help fast-track projects and help prevent future delays and problems.
Tungpalan said the goal of the Neda now is to have a special focus on results and mutual accountability. He said there is a need to break away from a compartmentalized approach to project planning, evaluation and monitoring.
Another key reform that the Neda will undertake starting next year is to also monitor the cost overruns incurred by PPP projects. Under the current set up, Neda only monitors big-ticket projects funded by official development assistance.
Tungpalan said with the availability of new technology, such as drones and satellite maps, the government can better monitor projects.
Our mind-set is to hit the ground running, do things 24/7 [and] have the sense of urgency [since we lost] so many years, six years, Tungpalan said.
A little over five months is not enough time to say that an administration has done well or not, especially if the Presidents campaign promise of bringing change will be the barometer. But what is certain is that, as the year draws to a close, the Duterte administration is facing major headwinds.
Efforts to reform the system, bring life back to sectors long neglected, such as agriculture, and order in infrastructure will be among the most challenging but need to urgently addressed. After all, livelihoods and lives are on the line. Lifting millions of Filipinos from poverty remains to be the main goal. The only question now is how to move forward.//

Author: Cai Ordinario
Date: December 28, 2016
Source: Business Mirror

CAGAYAN DE ORO CITY, Dec. 26 (PIA) --- Accessing regional social and economic data will now be easy with the opening of the Regional Socio-Economic Analysis and Research Center and Helpdesk (Re-SEARCH-X).

The idatabase facility is located at the ground floor of the National Economic and Development Authority (NEDA) Regional Office X Building corner Capistrano-Echem Streets in Cagayan de Oro City.

Mae Ester T. Guiamadel, NEDA-X assistant regional director, said the facility is intended to provide a better platform and easy access of frequently requested regional social and economic data.

Guiamadel said the facility offers data on four sectors: macro, economic, social and infrastructure.

Specifically, one can access data on economic updates such as the quarterly regional economic situationer (QRES); regional development plans and reports; socio-economic profile of the region; and data on trade and investments, exports, tourism, education, health, communication, power and transportation among others.

The facility also has library holdings and materials from the Philippine Institute for Development Studies (PIDS).

Guiamadel said they will update the database annually based on data from official sources and government agencies.

NEDA-X is also eyeing to build-up the facility next year to offer wider and more comprehensive data and facilitate sharing of data of government agencies. (APB/PIA-10)

Date: December 27, 2016
Source: PIA

CHRISTMAS decoration in the country is marked by Filipinized Western staples"Styrofoam Jack, synthetic pine trees and plastic snowflakes.

And just like the Christmas song, Filipinos also dream of a White Christmas even if its impossible. The holidays are certainly bizarre in a tropical country.

But when it comes to the holidays and food, you can always bet on the Filipino to have his own staples. Some may be borrowed from colonizers but, through the passing of time and traditions, they have slowly become authentic Filipino fare.

These days, no Christmas celebration is complete without queso de bola, ham and fruit cocktail. While Filipinos do not traditionally roast a turkey for the holidays, you can always bet that no Christmas spread is without chicken"whether roasted, fried, or drowning in ginger flavored soup, more famously known as tinola.

The Christmas song says it all:
Kay sigla ng gabi,
Ang lahat ay kay saya
Nagluto ang Ate ng manok na tinola
Sa bahay ng Kuya
ay mayroong litsonan pa
Ang lahat ay may handang ibat-iba.
Tayo na, giliw, magsalo na tayo
Mayroon na tayong tinapay at keso.
Di ba Noche Buena sa gabing ito
At bukas ay araw ng Pasko!

While this song remains true for some families, the changing times has forced Filipinos to also change their Noche Buena menu. Some have exchanged chicken for sumptuous glazed ham and chose to forego the lechon.

With this, the BusinessMirror has put together a Noche Buena Index that tells all of us how much Christmas in the Philippines costs these days.

While this years list is only based on the Department of Trade and Industrys Suggested Retail Prices (SRPs) in the past five years, it already tells consumers and manufacturers alike that the increase in the prices for seasonal items has been generally benign.

Roehlano Briones, a Philippine Institute for Development Studies (PIDS) research fellow, told the BusinessMirror that prices of seasonal items, such as those on the Noche Buena menu, are dependent on the supply of these items.

It just so happens that some items have high inventory relative to demand so prices may be low against some benchmark, Briones said.

Setting SRPs are based on the DTIs market studies, as well as results of consultations and discussions with manufacturers. These are created to serve as guide for consumers and ensure that the prices charged by retailers are affordable.

Based on the data obtained by the BusinessMirror, a Filipino family of limited means, assuming that the cost of the items they buy follow the DTIs SRPs and they buy only one item each on the list of seasonal items, would require a budget of P500 to P600 every year. This, unfortunately, is significantly higher than the minimum wage set in various regions nationwide. This is even higher than the minimum wage for nonagricultural workers in Metro Manila at P491 per day.

If they have some more resources, some Filipino families could spend more than P2,500 if they are keen on buying certain brands that are more expensive and bigger quantities of certain items.

It is worth noting that this is around four times the minimum of expense of families with limited means. This is also not a surprise, since those who have higher incomes can spend more without breaking the bank.

Based on the 2015 Family Income and Expenditure Survey (FIES), when it comes to food expenses, the bottom 30 percent spend 59.7 percent of their income on food while the upper 70 percent only spend 38.8 percent. The national average spending on food"which is considered the top expense nationwide"takes up about 41.9 percent of total income.

Ultimately, the most expensive food item in the Noche Buena feast is ham and queso de bola. Ham can be bought for a minimum of 500 grams to a per kilo basis, while queso de bola is sold with a minimum weight of 300 grams to around 750 grams each.

Among the least expensive items on the menu are tomato sauce and spaghetti sauce, the cheapest of which can be bought for less than P20.

I dont think tingi matters because price data uses standard weights. Inflation also doesnt matter for individual prices,Briones said.

The holidays is really a special time for Filipinos. It is the time when family members from all over the country and the world come home to be with family and friends.

While many will argue that Christmas has become commercialized and, therefore, costs an arm and a leg to celebrate, the intangible value of the season has no monetary equivalent.

The price that Filipinos pay is largely made on food, which is the center of Christmas celebrations in the country. This is a small price to pay to spend time with those who matter most.

Author: Cai Ordinario
Date: December 25, 2016
Source: Business Mirror

Neri was 18, a college dropout on her first year, when she got a job at the department store in the mall. On the fourth month, she was told that her contract would end in 30 days. She felt bad when told that she could no longer be hired again. It turned out that she exceeded the allowable absences.

Nene was a high school graduate and didnt have the confidence to directly apply with the large store at the mall. She paid a P550 agency fee, deductible every 15 days from her salary, just to get a job through the agency. She was a good worker, but was told that her contract would end every five months. Afraid to go jobless, she accepted the arrangement. She thought that without the agency, she would never get a job in the store in the mall, considering her poor credentials and lack of experience.

Didings experience was different. Orphaned by her father while she was in high school, Diding helped her mother raise her four siblings in a poor Visayan town. Her aunt urged the family to move to Manila, where Diding applied with an agency as a Saleslady in the mall. After two years of repeated five-month contracts with the agency, she applied in another branch of the same department store. She readily passed the probationary period due to her two-year experience and skills in customer relations. Sheer luck? Try this. After six months, she was offered a regular position. After two years, she was promoted as Manager of the ladys wear section. She was able to send her siblings to college. Diding is now married, with a child, and works with the SSS office of the Philippine embassy in Dubai.

End of stories

I picked out these accounts from a paper, Beware of the End Contractualization! Battle Cry by my friend Dr. Vicente B. Paqueo, and Dr. Aniceto C. Orbeta of the Philippine Institute of Development Studies.

Drs. Paqueo and Orbeta wrote, The above stories depict the familiar experience of many Filipino workers who used temporary employment as a stepping stone screening device for better job opportunities of the disadvantaged. With the current clamor to end contractualization and the call to outlaw temporary employment contracts (TECs), will there still be stories like Neri, Nene and Diding in the future?

The Boston Consulting Group estimates that all over the world, more than 60 million workers are on non-standard forms of work arrangement, but are able to get by. After a record high in number of employed workers in the 1980s in the USA, a phenomenon called free agency and the rise of small entrepreneurs and professional contractors changed the landscape of the workplace. The more progressive companies regular workers or FTEs (full-time employees) are generally 30% of the total workforce. Majority are tempos, contractors employees, relievers, seasonal workers, or project employees. The companies core competencies (or trade secrets) reside in the few regular workers. Everything else (facetiously speaking, positions that dont rise to Vice-President levels) is outsourced or contracted out.

Unintended consequences

Drs. Paqueo and Orbeta continue, We examined empirical evidences for and against TECs (temporary employment contracts), articulating potential consequences for inclusive economic growth, especially to the stakeholder the proposal is supposed to protect: the Filipino workers.

The two researchers feel that curtailing TECs have the same effect as the impact of rapidly rising legal minimum wages (see Paqueo, Orbeta and Lanzona). Some proposed regulatory changes could inadvertently hurt the growth and survival of small Filipino enterprises .and prevent them from providing job opportunities to people with poor credentials. Such unintentional consequences could happen, should political leaders fail to recognize TECs role in the efficient functioning of labor markets.

Some large multinationals contract out some of their mainstream business functions to service cooperatives that have become experts in these functions. The head of a professionally-run cooperative said, Unbeknownst to some policy makers, we have regular employees who are also owners of the cooperative that have not even completed primary education. They are deployed with large multinationals that would otherwise not give them access to employment. As employees, they receive pay and benefits beyond those mandated by government. As owners, they receive annual dividends and patronage refund.

Drs. Paqueo and Orbeta conclude, While we do not pretend to present definitive conclusions about the anti-contractualization proposals, we believe that a more informed view of the policy proposal is needed. This is to allow time to find more efficient and less counter-productive alternatives to the proposed curtailment of TEC use. Based on our preliminary reading of immediately available information, we present a cautionary note.


Due to popular clamor, the DOLE is revising the rules on job contracting. Its a perfect gift if the revisions should result in more decent jobs for the millions of jobless Filipinos. Dont constrict investors capacity to create jobs but make them strictly observe workers rights.(Email:

Author: Ernie Cecilia
Date: December 25, 2016
Source: Philippine Daily Inquirer