PIDS in the News Archived (January 2016)

MANILA, Philippines " The Department of Health (DOH) is being urged to take advantage of technology to popularize its health programs.
In a study released by the Philippine Institute for Development Studies (PIDS) it said the DOH should create a virtual learning environment for its Resource Center for Health Systems Development (RCHSD), a research site launched in 2009 to keep the public informed about the countrys health system policies and programs.
But with an e-learning feature, the DOH would be able to reach those who cannot access the RCHSD. It can engage a wider audience and eliminate restrictions of geographic distance, time, and lack of resources, limitations to mobility, and other limiting factors.
PIDS consultant Ayedee Ace Domingo recommended a asynchronous self-paced approach, which does not require administrators once the courseware is developed, and it is less rigid with its syllabus and timeline.
However, the DOH would need to organize a developing group for the programs it intends to offer, she said.
The group should consist of a program manager, instructional designer, subject matter expert, programmers, course administrator, online facilitators and tutors, and technical support.
The development of programs has five stages " analysis and identification of goals; design of the course; development of the programs content, storyboard, and courseware; implementation; and evaluation.
With an e-learning feature on the RCHSD, the DOH would help the public become more informed about the countrys health system policies and programs. This could foster greater understanding and engagement among stakeholders toward a healthier Filipino society.
The PIDS recommendations fall in line with calls of the United Nations for sustainable development activities in the areas of education and health.
In its 2015 Human Development Report, the UN said governments must make strategic investments into education and health care. It likewise took note of technology as an important instrument for sustainable development.
Wide access to technology improved financial inclusion and reduction of other barriers to sustainable development pathways, it said in the report.//


Author:
Date: January 02, 2016
Source: The Times

MANILA, Philippines - Public investment has contributed more to economic growth during the Aquino administration than in the previous decade, reflecting the benefits of better projects and procurement processes.
Economic growth is more strongly correlated with NG (national government) capital outlays starting July 2010, Finance undersecretary and chief economist Gil Beltran said in an economic bulletin.
This means that NG capital outlays since then have had more significant contribution to economic growth than previously, he said.
According to Beltran, an increase of one percent in public investments has added 0.88 percentage points on real gross domestic product (GDP) growth from July 2010 to September 2015.
GDP is the sum of all products and services created in an economy. Real GDP is the main gauge used to measure economic activity.
The five-year positive correlation during the Aquino administration was higher than the 0.72 percentage points added by every additional percent of public investments from July 2000 to July 2010.
A positive correlation suggests that public investments and GDP growth move in tandem such as when one increases, the other rises too, and vice-versa.
Reform in procurement, project planning and design and performance evaluation of NG agencies contributed to more efficient NG capital outlays, Beltran said.
Such reforms should continue to be implemented, he added.
Sought for comment, Jose Ramon Albert, senior researcher at the Philippine Institute for Development Studies, said while it is good growth is benefiting more from public investments, their private counterparts are more important.
Empirically, NG investments are important, but it is the private sector investments that matter for sustainability, Albert said in an e-mail over the weekend.

Based on Beltrans figures, private investments showed insignificant contribution to economic growth for both pre- and during Aquino administration.
It is possible that the effect of private investments were understated if PPP (public-private partnership) investments were not included, Albert said.//


Author: Prinz P. Magtulis
Date: January 04, 2016
Source: Philippine Star

MANILA, Philippines " A government think-tank is urging the Philippine Health Insurance Corp. (PhilHealth) to replace its inefficient and outmoded case-based payment (CBP) scheme.
In a study, the Philippine Institute for Development Studies (PIDS) said the CBP works as a retrospective payment mechanism where hospitals are reimbursed a given amount after filing a claim for a given case, with reimbursement time spanning within four to five months.
Hilton Lam, author of the study, noted that the CBP scheme resulted in an increase of out-of-pocket expense for the members.
As CBP replaced the fee-for-service, it was found out that the amount reimbursed by PhilHealth from the case rates was not sufficient to cover hospital expenses. Majority of the admissions in which patients shoulder the remaining expenses not covered by the CBP scheme goes to balance billing, Lam explained.
Lam cited the additional drawbacks of the CBP scheme which include high administrative cost of screening cases and potential decrease in quality of care due to providers avoiding complex cases or not giving the appropriate level of care.
Instead, the study urged PhilHealth to consider the GBP as an alternative payment mechanism for improving efficiency and decreasing transaction costs. This should be implemented together with an efficient and improved CBP and strict implementation of the no balance billing (NBB).
Conceived in 2012, the GBP system covers all PhilHealth members in non-private accommodations.
However, it was not implemented due to lack of hospital capacity particularly on information systems.
The PIDS consultant believes GBP is a potential cost-containment mechanism that can be used to support the Department of Healths Universal Health Care program, which aims to ensure that all Filipinos, especially the poor, receive the benefits of health reform.
Under the GBP scheme, government hospitals should submit their applications to be considered under the program with priority given to facilities that meet certain criteria, such as those with at least 90 percent bed capacity dedicated to non-private accommodations, centers of quality and referral hospitals, hospitals connected to e-claims facility, and local government unit hospitals implementing province-wide programs to ensure high PhilHealth enrolment.
Unlike the CBP, GBP is a prospective payment mechanism in which hospitals will be given funds to cover future claims, thereby cutting administrative costs. This also makes payment to providers more efficient as funds are provided in advance to avoid reimbursement delays.//


Author: Ted P. Torres
Date: January 03, 2016
Source: Philippine Star

MANILA, Philippines " The Department of Health (DOH) is being urged to take advantage of technology to popularize its health programs.
In a study released by the Philippine Institute for Development Studies (PIDS) it said the DOH should create a virtual learning environment for its Resource Center for Health Systems Development (RCHSD), a research site launched in 2009 to keep the public informed about the countrys health system policies and programs.
But with an e-learning feature, the DOH would be able to reach those who cannot access the RCHSD. It can engage a wider audience and eliminate restrictions of geographic distance, time, and lack of resources, limitations to mobility, and other limiting factors.
PIDS consultant Ayedee Ace Domingo recommended a asynchronous self-paced approach, which does not require administrators once the courseware is developed, and it is less rigid with its syllabus and timeline.
However, the DOH would need to organize a developing group for the programs it intends to offer, she said.
The group should consist of a program manager, instructional designer, subject matter expert,
The development of programs has five stages " analysis and identification of goals; design of the course; development of the programs content, storyboard, and courseware; implementation; and evaluation.
With an e-learning feature on the RCHSD, the DOH would help the public become more informed about the countrys health system policies and programs. This could foster greater understanding and engagement among stakeholders toward a healthier Filipino society.
The PIDS recommendations fall in line with calls of the United Nations for sustainable development activities in the areas of education and health.
In its 2015 Human Development Report, the UN said governments must make strategic investments into education and health care. It likewise took note of technology as an important instrument for sustainable development.
Wide access to technology improved financial inclusion and reduction of other barriers to sustainable development pathways, it said in the report.//


Author: Ted P. Torres
Date: January 02, 2016
Source: Philippine Star

MANILA, Philippines " A government think-tank is urging the Philippine Health Insurance Corp. (PhilHealth) to replace its inefficient and outmoded case-based payment (CBP) scheme.
In a study, the Philippine Institute for Development Studies (PIDS) said the CBP works as a retrospective payment mechanism where hospitals are reimbursed a given amount after filing a claim for a given case, with reimbursement time spanning within four to five months.
Hilton Lam, author of the study, noted that the CBP scheme resulted in an increase of out-of-pocket expense for the members.
As CBP replaced the fee-for-service, it was found out that the amount reimbursed by PhilHealth from the case rates was not sufficient to cover hospital expenses. Majority of the admissions in which patients shoulder the remaining expenses not covered by the CBP scheme goes to balance billing, Lam explained.
Lam cited the additional drawbacks of the CBP scheme which include high administrative cost of screening cases and potential decrease in quality of care due to providers avoiding complex cases or not giving the appropriate level of care.
Instead, the study urged PhilHealth to consider the GBP as an alternative payment mechanism for improving efficiency and decreasing transaction costs. This should be implemented together with an efficient and improved CBP and strict implementation of the no balance billing (NBB).
Conceived in 2012, the GBP system covers all PhilHealth members in non-private accommodations.
However, it was not implemented due to lack of hospital capacity particularly on information systems.
The PIDS consultant believes GBP is a potential cost-containment mechanism that can be used to support the Department of Healths Universal Health Care program, which aims to ensure that all Filipinos, especially the poor, receive the benefits of health reform.
Under the GBP scheme, government hospitals should submit their applications to be considered under the program with priority given to facilities that meet certain criteria, such as those with at least 90 percent bed capacity dedicated to non-private accommodations, centers of quality and referral hospitals, hospitals connected to e-claims facility, and local government unit hospitals implementing province-wide programs to ensure high PhilHealth enrolment.
Unlike the CBP, GBP is a prospective payment mechanism in which hospitals will be given funds to cover future claims, thereby cutting administrative costs. This also makes payment to providers more efficient as funds are provided in advance to avoid reimbursement delays.//


Author:
Date: January 03, 2016
Source: The Times

Hopes for a resurgence in the Philippine automotive manufacturing industry could not have been stronger and more apparent last year especially after a new government fiat was released targeting to do just that.
At least for the biggest automotive assemblers in the country, the promise of a P27-billion incentive package being dangled under Executive Order No. 182, which provides for the implementation of the Comprehensive Automotive Resurgence Strategy (CARS) Program, was deemed worth looking into despite the ambitious requirements set by the government.
Trade officials are highly optimistic that the program will take off, as they anticipate applications to start coming in after the Department of Trade and Industry (DTI) released the implementing rules and regulations last Dec. 19. A commitment was also made on the part of the trade agency to fast-track the applications for the CARS Program to enable local automotive assemblers to take advantage of what was perceived to be the third wave of Asean motorization.
Only two assemblers, Toyota Motor Philippines Corp. and Mitsubishi Motors Philippines Corp., have been vocal and concrete in expressing their interest to participate in a program that, if successful, is seen to attract more than P27 billion in new parts manufacturing investments among others.
The program also aims to produce at least 600,000 vehicles, generate some 200,000 new jobs, and spur economic activity estimated to be worth P300 billion. The resulting contribution to gross domestic product is estimated at about 1.7 percent.
Its not only the assemblers that are expected to benefit from the program. Philippine automotive parts makers are also anticipating a significant boost in their respective businesses since the CARS Program requires the participants to produce 200,000 units of a single model over the course of six years.
Trade Assistant Secretary Rafaelita M. Aldaba said the Philippine automotive sector would be highly crucial in the resurgence of the countrys manufacturing industry, as it could drive the growth of feeder industries across the supply chain. A car, she said, has over 30,000 parts and its construction was dependent on metal, chemical, plastic, textile, rubber, glass, steel, electrical and other manufacturing sub-sectors.
Through inter-industry and supply chain linkages, auto manufacturing can have a large multiplier effect in an economy because any expansion in the automotive industry drives growth in feeder industries. While the Philippines domestic production of automobiles is currently limited, there are clear opportunities to increase production as the countrys middle class grows and Asean economic integration creates an open market of over six million people, Aldaba said.

Vehicle exports
Since the program sees vehicle production outpacing current domestic demand, it is expected that the country will also resume exporting vehicles. The end goal is to eventually position the Philippines as a manufacturing hub in the region.
For 2015, sales of motor vehicles could have surged by about 36 percent to an estimated 320,000 units, from the 234,747 units sold the previous year. For 2016, automotive players are hoping for at least a 10 percent growth to roughly 350,000 units on the back of a strong and steady demand from the domestic market.
A discussion paper entitled Industrial Policies and Implementation: Philippine Automotive Manufacturing as a Lens cited the estimates of the Philippine Automotive Competitiveness Council Inc. (PACCI), which said the local sector has the potential to make 273,000 units by 2017 (of which 225,000 will be for domestic market and 48,000 for exports market) and 506,000 units by 2022 (of which 350,000 for domestic and 156,000 for exports market).
As of end-October 2015, the Philippines continued to be a laggard in the region in terms of motor vehicle production, having produced only 83,874 units, latest data from the Asean Automotive Federation showed. This was equivalent to a marginal 2.6 percent of the 3.28 million units produced by five Asean member states.
Thailand remained the frontrunner in motor vehicle production in the region with 1.6 million units produced in the first 10 months of the year. It was followed by Indonesia (940,495 units), Malaysia (519,171 units), and then Vietnam (138,347 units).
Anti-competitive claims
No matter how rosy the picture may seem, there are industry players"particularly those that cannot take advantage of the incentives offered by the CARS Program"that see this new policy as anti-competitive.
They said the program largely favored the oldest and biggest automotive firms in the country over other existing companies and new entrants. These assemblers have a capacity less than the 200,000-unit production requirement under the CARS Program.
They also scored the fact that there were no provisions that could entice foreign assemblers to enter the local automotive scene since the programs requirements were deemed too high or ambitious.
The country was also deemed no match to the likes of Thailand, which offers better propositions to investors. High power costs, lack of suppliers, and inadequate infrastructure also continued to hamper the Philippines from becoming a hub for this crucial industry.
Another player, meanwhile, was still hoping the CARS Program would provide other means to enable companies to participate. Isuzu Philippines Corp. (IPC) also hoped to have a special window for mass transport.
The volume requirement of 200,000 units remains a problem for us Hopefully we can have a win-win situation. Were still studying it to see if there are windows for us to participate, say if they can have a special window for mass transportation (requirements) such as jeepneys, said IPC marketing head Joseph Bautista.
Crucial year
This year will be a crucial year for the CARS Program since this will see the implementation of the new industrial policy. Applications are expected to be filed by the players and approved by the trade agency, while incentives must already be appropriated in government budgets and rolled out during the period.
Hopes are also high that this new program will not suffer the same fate as the Motor Vehicle Development Program (MVDP), which was regarded as a failure for its inability to spur automotive manufacturing industries in the country.
During the period that the MVDP was in place, Ford Motor Co. shut down its vehicle assembly operations in Sta. Rosa, Laguna as part of the ongoing restructuring of the regional manufacturing operations of the company.
According to the Philippine Institute for Philippine Studies, critical to the success of the CARS Program is to have a dedicated infrastructure to harmonize national and international standards, test products and processes, among others.
While there is no immediate concern over the impact of the elections, PIDS said strong political support and continuity of reforms were needed.
The most challenging and difficult dimension of the policy reform process is policy implementation. Even the best laid industrial plan may be waylaid by anticipated and unforeseen factors The success of the policy reform program for the automotive manufacturing industry will depend on a number of factors and the interplay of goals and interests of various stakeholders, a PIDS discussion paper stated.
A challenging question is the issue of continuity of policy reform under the next administration. The country will elect its national leaders in May 2016 and continuing policy reform efforts is uppermost in the minds of the people, the paper read.//

Author: Amy R. Remo
Date: January 09, 2016
Source: Philippine Daily Inquirer

In 1995, the Philippines was granted special treatment in rice by the WTO, thereby allowing it to maintain its import monopoly and quantitative restrictions (QRs). This privilege will expire by 2017, hence compelling the rice sector to undergo tariffication. Removal of special treatment will lead to intensified competition from imports and lower domestic prices, reducing farmers income. In the following we will assess options for agricultural production support options for rice farmers after tariffication.
TYPES OF AGRICULTURAL SUPPORT SCHEMES
Domestic subsidies are typically provided through productivity-oriented programs, direct payments, or a combination of both. Productivity-oriented programs include research and development (R and D) and irrigation investments. While such programs are important productivity-oriented programs, our assessment focuses on direct payments. The Philippines is already spending considerable amounts for support of rice farmers under its self-sufficiency program, which should be kept in place. However, productivity-oriented programs tend to impact the medium to long-term, whereas the removal of QRs have immediate impacts. Direct payments appear to be the more appropriate safety net for rice farmers. Direct payments are classified into three types namely, traditional support, deficiency payments and decoupled payments.

Traditional support: examples are price support and procurement schemes. NFA procurement is an example of traditional support.

Deficiency payments are payments that compensate farmers for when farmgate prices fall. Payments under this type are equal to the difference between a target price and the market price. The US, South Korea, and Thailand have implemented deficiency payment schemes for farmers.

Decoupled payments refer to lump-sum payments unrelated to price or quantity. Since these payments are a form of assistance to farmers in their transition to a free-market, decoupled payments are capped, and time-bound. The US, Mexico, EU, Turkey, and South Korea, are examples of countries that have implemented decoupled payment schemes. Due to minimal distortion, decoupled payments are permitted without restriction by WTO.

Based on past research, traditional schemes such as the market price support and consumer subsidy are disadvantageous, due to high fiscal burden, leakage, and market distortion. For example, in the Philippines, traditional support has imposed high cost, driving the net debt position of the National Food Authority up to 143 billion pesos. In Thailand, a paddy pledging program cost the government the equivalent of over a trillion pesos, and led to huge stockpiles of rice.

Deficiency payments appear to be a better alternative; when Thailand switched to a Price Insurance Scheme (PIS), it was able to reduce budgetary outlays for farmer support, while still increasing the number of beneficiaries, from 1 to 3.2 million farmers. However, deficiency payments are still vulnerable to high fiscal cost when farmgate prices happen to fall to unexpectedly low levels. On the other hand, decoupled payments address the problem of wastage and high fiscal burden affecting traditional and deficiency payments.

A SCHEME OF DECOUPLED PAYMENTS FOR THE PHILIPPINES
In the following, we evaluate a possible compensatory payment scheme (2017-2022) that would serve as a safety net for rice farmers after tariffication. Rice farmers registered under the Registry System for Basic Sectors in Agriculture (RSBSA), or their heirs, are eligible to receive payments. The annual compensation formula is posited as follows:

Total Payments = P5/kg. x (actual imports -- normal imports) / 0.654

To compute payments for each farmer, total payments from the payment compensation formula shall be divided by the area harvested. This will be distributed per cropping season (twice a year). To avoid fiscal problems, eligible farm area is capped at 2 hectares per farmer. In practice, actual imports and area harvested will be approximated by the previous years figures.

To compute expected and normal imports, as well as assess the financial viability of the program, we apply an economic model called the Total Welfare Impact Simulator (TWIST). TWIST will be used to assess two scenarios: baseline scenario and an tariffication scenario. The former assumes QRs are maintained, with a fixed farmgate price of P17 per kg. (NFA support price); the baseline is the basis for the normal rate of imports in the compensation formula. The alternative scenario adopts the same assumptions, except that it posits the repeal of QRs, and imposition of a 35% tariff equivalent (2017 onwards).

Simulation analysis shows that tariffication leads to the following changes relative to the baseline (average of 2017-2022):

Palay output will be lower by 2.5 million tons per year.

Farmgate price will be lower by an average of P4.60 pesos per kg.

Retail price will be lower by an average of P7.00 pesos per kg.

Imports will be larger by 2.25 million tons per year.

Tariff revenues will average 27.7 billion per year.

Based on the assumed compensation formula, payments will equal 17 to 18 billion pesos per year.

Earmarking the rice tariff revenue to pay for the compensation scheme is feasible. Assuming eligible area is at 4 million hectares, payments per hectare is equal to P4,750. In this case, for 2 hectares of irrigated farmland, farmers could receive P19,000 per year. This is greater than transfer per household from the conditional cash transfer program (CCT) which is P15,000 for 3 children. Note that compensatory payments can be received simultaneously with the CCT.

TARIFFICATION INEVITABLE
Tariffication of the Philippine rice sector by 2017 is inevitable. The inevitable transition to a more open rice trade regime should be accompanied by safety nets for smallholders suffering from intensified competition from imports. We have evaluated a compensatory transfer scheme combined with a 35% tariff equivalent as a feasible support scheme once special treatment is removed. Such a compensatory scheme should be implemented alongside existing productivity-enhancing programs for the rice sector.

Roehlano M. Briones and Lovely Ann Tolin are Research Fellow and Research Analyst, respectively, at the Philippine Institute for Development Studies. The study is conducted under the multi-country CREW Project, supported by CUTS International Jaipur.

Author:
Date: January 10, 2016
Source: BusinessWorld

MANILA, Jan. 14 -- The National Economic and Development Authority has projected that the sustained reduction in the country's poverty incidence in terms of population will be between 18 percent to 20 percent for 2016, from 26.3 percent in 2009, President Benigno S. Aquino III said on Wednesday.

This reduction in the number of poor households in the country is due to the implementation of pro-poor programs, such as the Conditional Cash Transfer (CCT) program, the President said during a conference on sustaining the gains of the CCT, held at the Asian Development Bank headquarters in Mandaluyong City.

He noted that according to the preliminary result of the latest round of assessments conducted by the National Household Targeting System, almost 1.55 million CCT families, or more than 7.7 million Filipinos, have been lifted out of poverty.

He said he believes the CCT is an effective tool to fight poverty and the administration has proven that.

With enough political will, the right and prudent concentration of resources and funds, and the proper implementation of a solution borne out of our correct identification of problem, massive transformation can take place, he said.

One of the key expansions to the CCT program involved covering households with children in high school, based on the finding that those who graduate from high school earn 40 percent more than those who merely attained some elementary education.

Just last year, the President said, the first batch of the 4th year high school student beneficiaries of CCT graduated. Of the 333,673 graduates, more than 13,400 finished with honors and various awards.

Students who choose to enroll in technical-vocational programs under the Technical Education and Skills Development Authority (TESDA) will be further enabled to go beyond being casual workers without security, he added.

President Aquino pointed out that if a student joins the business process outsourcing (BPO) industry, where a monthly salary of P18,000 is already considered at the low end, he will earn P234,000 in a year. If he is given the maximum tax deduction, his annual income tax will be at P7,900, the President said, adding that for TESDAs Training for Work Scholarship Program, the government invests about P7,155 for every scholar.

In the first year of employment alone, the investment of government would be paid back in full, with profit, he said.
The Chief Executive further noted that 10.18 million children are benefitting from the CCT, 1.9 million of whom are in high school.

Citing a May 2015 study of the Philippine Institute for Development Studies and the UNICEF, he said that despite the increase in population, the number of out-of-school youth decreased from 2.9 million in 2008 to 1.2 million in 2013.

The government has raised the CCT's budget allocation from P10 billion in 2010 to P62 billion in 2015, allowing it to increase the number of beneficiaries from 786,000 poor households in 2010 to nearly 4.4 million poor households and homeless families in five years.

For 2016, the Aquino government has further increased the programs budget allocation to P62.7 billion to cover 4.6 million households, including those who have graduated from extreme poverty and are considered near poor, or those who are at risk of sliding back to an impoverished state with just one catastrophic disease or natural disaster. (PCOO/PND)

Author:
Date: January 14, 2016
Source: PIA

President Benigno Aquino III says that more than 7.7 million Filipinos, or some 1.55 million families, have been lifted out of poverty due to the Conditional Cash Transfer (CCT) program, which his administration has scaled up from the time of his predecessor.
Speaking at the second and final day of the conference Sustaining the Gains of the Conditional Cash Transfer Program in the Philippines held at the Asian Development Bank headquarters on Wednesday, Aquino said that the budget for the CCT program had been increased from P10 billion in 2010 to P62 billion last year.
Within five years, the number of poor households covered by the initiative swelled from 786,000 to about 4.4 million.
This year, the budget went up further to P62.7 billion, an amount which the President said would cover 4.6 million households. The coverage includes those who have graduated from extreme poverty and are now considered near poor " who, while not necessarily poor by definition, are at risk of sliding back to an impoverished state with just one catastrophic disease or a natural disaster.
Aquino explained that the CCTs effects were generational. This meant that the programs beneficiaries " and in effect, the whole of society " would only reap the full benefits of the governments support long after I return to private life.
As an illustration, he pointed out that the initiative had been expanded to cover households with children in high school, given that high school graduates earn 40 percent more than those who had only finished grade school.
The first batch of fourth year high school student-beneficiaries of CCT graduated last year, with 13,400 out of 333,673 finishing with honors and awards. Among them were two students who are now studying Engineering at the University of the Philippines, and were expected to get quality jobs and earn better salaries when they graduate, the President said.
He added that other high school graduates could enroll in technical-vocational programs under the Technical Education and Skills Development Authority (TESDA) so that they could go beyond being casual workers without security.
A business process outsourcing (BPO) employee, for example, could earn at least P18,000 monthly or about P234,000 annually.
Aquino reported that 10.18 million children were now benefitting from the CCT, including 1.9 million high school students.
As more and more of our children from less fortunate families attend school through the help of CCT as well as the reforms and investments in basic education, we continue to see an improvement in the figures of out-of-school youth, he said.
He also cited a May 2015 study of the Philippine Institute for Development Studies and UNICEF which showed that despite the increase in the Philippines population, the number of out-of-school youth decreased from 2.9 million in 2008 to 1.2 million in 2013.
These same students who are able to attain a higher level of education thanks to the CCT, one day, through their contributions to the economy and through the taxes they remit, will help further break the cycle of poverty, and keep the engines of inclusiveness engaged at full throttle, he said.
In short: Through the CCT and other meaningful interventions, we are spurring a virtuous cycle, where empowered Filipinos in turn become the keys through which their fellowmen are likewise empowered.
Aquino added that through the CCT, as well as parallel initiatives in healthcare, education, housing, rehabilitation, and poverty alleviation, the National Economic and Development Authority (NEDA) projected that poverty incidence in terms of population would decrease to anywhere between 18 and 20 percent this year, from 26.3 percent in 2009.
He appealed to the public to choose the right leader during the May polls so that such gains would be sustained.
Sustaining, strengthening, and refining the CCT will be left to the hands of my successor. That person will be confronted with a very simple question, which I myself faced: Will he help his countrymen help themselves? he said.//


Author: Tricia Aquino
Date: January 15, 2016
Source: Interksyon TV5

President Benigno Aquino III says the success of the Conditional Cash Transfer program in fighting poverty attests to the wisdom of 'Daang Matuwid,' and why this path must be continued by the next leader, hopefully his preferred one

MANILA, Philippines " President Benigno Aquino III on Wednesday, January 13, trumpeted the gains of his administrations flagship anti-poverty program, saying it has lifted over 7.7 million Filipinos from poverty since he took over in 2010.

Aquino made the announcement at the Conference on Sustaining the Gains of Conditional Cash Transfer (CCT) in the Philippines at the Asian Development Bank.

"The preliminary result of the latest round of assessments conducted by our National Household Targeting System (NHTS), or what we call Listahanan 2, reports that almost 1.55 million CCT families, or over 7.7 million of our countrymen, have been lifted out of poverty," the President said.

The NHTS for Poverty Reduction, led by the Department of Social Welfare and Development (DSWD), provides a government database of poor Filipino households " reference for potential beneficiaries of social protection programs.

Aquino said the data has led the National Economic and Development Authority (NEDA) to forecast a "sustained reduction" in the countrys poverty incidence, in terms of population, to 18% to 20% this year, from 26.3% in 2009.

'Virtuous cycle'

The President said that among his administrations key innovations in the CCT, which was inherited from the Arroyo administration, is its expansion to include households with children in high school.

He said this is "based on the finding that those who graduate from high school earn 40% more than those who merely attained some elementary education."

Aquino said that the first batch of the 4th year high school student beneficiaries of CCT " numbering 333,673 " graduated in 2015. Of the graduates, over 13,400 finished with honors and various awards.

The President said some have gone to college while others can opt to enroll in courses at the Technical Education and Skills Development Authority (TESDA), which would help them land better jobs.

He also said that 10.18 million children are currently benefiting from CCT, 1.9 million of them in high school.

Aquino said that as more children from poor families attend school with the help of CCT and other reforms in basic education, figures of out-of-school youth are expected to improve.

He cited the May 2015 study of the Philippine Institute for Development Studies and the United Nations Childrens Fund (Unicef) which showed that "despite the increase in our population, the number of out-of-school youth decreased from 2.9 million in 2008 to 1.2 million in 2013."

"Through the CCT and other meaningful interventions, we are spurring a virtuous cycle, where empowered Filipinos in turn become the keys through which their fellowmen are likewise empowered," he said.

The President also cited other government efforts to make the CCT more sustainable " extending support to families not covered by the regular program, such as those in the streets and indigenous peoples.

Addressing critics of the program, who believe it is ineffective and must be scrapped, Aquino reiterated that the intended benefits are not immediate. (READ: What's the real score on poverty?)

"Some quarters have failed to understand the key principle behind the CCT: its effects are generational. All the beneficiaries now covered by the program, and through them society in general, will only be able to reap the full benefits of governments support long after I return to private life " which has now become a matter of months," he said.

Back to patronage politics?

Towards the end of his speech, Aquino again pitched for the continuation of the CCT program through his preferred successor " whom he did not name.

The President noted that the CCT did not flourish as much under the previous administration as it was marred by patronage politics, a situation that may recur under another leader.

"That person will be confronted with a very simple question, which I myself faced: Will he help his countrymen help themselves? Or will he choose the counterproductive path, adhere to a policy of sustaining our peoples dependence on those in power, and solely take on the burden of determining everyones future?" he said.

"Will he reestablish a system of patronage, and allow our resources to diminish, as the mechanisms of government to feed, clothe, shelter, and provide are used to enhance the politics of personality?" Aquino continued.

Aquino said that worse, the next president might even stop CCT which, he added, has shown that "Daang Matuwid is a correct path, with proven results, towards ending the vicious cycle of poverty."

"It is my deepest hope that, coming into the elections, our people have realized that they can demand for more good governance, and I believe that they will choose the right leader " one who has integrity and experience, who will sustain our gains, and who will definitely put country above self," he said.

Aquino is rooting for former interior secretary Manuel "Mar" Roxas II and his running mate, Camarines Sur 3rd District Representative Leni Robredo.

The President had earlier said that beneficiaries of his administration's programs, including CCT, will do most of the "campaigning" for the administration tandem, which is running on the platform of continuity of reforms of the Aquino administration. " Rappler.com

Author:
Date: January 13, 2016
Source: Rappler.com

ECONOMIC Planning Secretary Arsenio Balisacan is leaving his post at the National Economic and Development Authority (NEDA) to head the Philippine Competition Commission (PCC), a new body created under the landmark Fair Competition Act or Republic Act 10667.
As PCC chairman, Balisacan will have a seven-year term, according to a highly-placed government source.
Under the law, the commission will have four commissioners and an executive director.
A Palace official, who asked not to be identified for lack of authority to speak on the matter, said Balisacans appointment will be announced by President Benigno Aquino 3rd before a ban on appointments takes effect on March 25.
Its more of a reward for his contribution to the administration. We know how valuable he [Balisacan] is and how well he managed his position as NEDA chief. Whatever happens after the elections, we are sure that Balisacan will continue to be there to share his expertise, the source told The Manila Times in an interview.
Also to be rewarded, he said, are three deputies of Executive Secretary Paquito Ochoa Jr., two of whom will fill up two of the six vacancies at the Sandiganbayan.
The two officials are Deputy Executive Secretary for General Administration Teofilo Pilando Jr. and Deputy Executive Secretary for Special Concerns Michael Musngi.
The third, Menardo Guevarra, Deputy Executive Secretary for Legal Affairs, will be appointed to the PCC along with Balisacan.
Guevarra will be tasked to help Balisacan there. They will be the pioneers in the commission, the source said.
The Presidents cousin, Sen. Paolo Benigno Bam Aquino 4th, was the principal author of the measure that created the PCC, which seeks to prevent unfair business practices such as monopolies and combinations of trade, among others.
Senator Aquino had described the law as historic and game-changing because its the first time weve ever had a competition law.
As chairman of the PCC, Balisacan will be in charge of leveling the playing field by prohibiting anti-competitive agreements, abuses of dominant positions and mergers and acquisitions that limit, prevent and restrict competition.
The commission aims to benefit consumers by giving them more choices and lower prices.
Also, the PCC shall shepherd the countrys economy in the Association of Southeast Asian Nations Economic Community (AEC).
Prior to the passage of the Act, the Philippines was the only country among the five original Asean members that had no effective competition law.
The competition law was among the top priorities of Congress, having been in the legislative mill since the time of the Presidents mother, Corazon Aquino.
Balisacan was appointed as NEDA chief on May 10, 2012, and has since been in charge of addressing critical constraints that make economic growth slow, uneven and exclusive to certain segments of the Philippine society.
Concurrent to his role as secretary of Socioeconomic Planning and Director-General of NEDA, he also serves as Board Chairman of the Philippine Institute for Development Studies and the Philippine Center for Economic Development; the first Governing Board Chairman of the Public-Private Partnership Center of the Philippines; and the first Board Chairman of the Philippine Statistics Authority.
Balisacan, as one of the doers in the Aquino Administration, has been able to influence policies, programs and projects to facilitate inclusive economic growth, employment creation and poverty reduction.
He is credited for the recent remarkable performance of the Philippine economy that averaged 6.2 percent for the past few years, the fastest growth rate for the country in four decades.
Meanwhile, the Palace source claimed that the expected appointments of the three deputies of Ochoa will be a form of goodwill for their contribution to the Aquino government.
The problem is that while Musngi has been considered among 37 nominees shortlisted by the Judicial and Bar Council (JBC), Pilando was not.
The JBC previously issued a list of the 37 nominees for the six vacancies in the anti-graft court.//

Author: Joel M. Sy Egco
Date: January 13, 2016
Source: Manila Times

LA TRINIDAD, Benguet -- A detecting machine is now operational after the province received a Gene Xpert machine for the rapid detection and identification of drug resistant tubercuosis (TB).
Lodged at the Integrated Provincial Health Office (IPHO) here, the equipment is part of the National Tuberculosis Program (NTP), which aims to eliminate TB cases in the Philippines by 2020.
We have low cases of TB in our province compared to other provinces in the Cordillera region but it doesnt assure us that there are only few people suffering from the disease, said Governor Nestor Fongwan during the launching and turnover of the Benguet NTP Laboratory at the Provincial Health Office last month.
The Gene Xpert machine donated by the Philippine Business for Social Progress (PBSP) through the Department of Health"CAR, we can now give quality test to people suspected of the disease, said Fongwan.
Case detection with the use of the Xpert machine can be availed free of charge.
According to the World Health Organization, TB is still one of the worlds top health challenges with new TB cases and deaths of nearly 1.5 million people each year. In the Philippines, TB is still one of the most fatal treatable diseases.
The recent Philippine Institute for Development Studies show that 712 Filipinos acquire TB every day but only 632 get their treatments.
In Benguet, there was low detection rate of the disease from 2009 to 2014 but with high success rate or those cured and have completed treatment, said Provincial TB Nurse Coordinator Purita Maguen.
There were 86 cases diagnosed in 2009, 67 in 2010, 87 in 2011, 66 in 2012, and 42 in 2014. Treatment of cases for the period ranged from a low of 81 percent in 2014 to a high of 96.7 percent in 2012.
TB is not included in the Top 10 causes of death and morbidity in the province but it doesnt mean that Benguet is free of such disease. This can be attributed to the fact that most people dont have their check-ups if they have cough and also for the reason that TB is difficult to detect, said Dr. Nora Ruiz, provincial health officer.
But with the Gene Xpert Machine, TB can be easily diagnosed.
Dr. Allan Fabella, PBSP medical specialist, said the machine can detect mycobacterium tuberculosis complex and resistant to Rifampicin in less than two hours in comparison to the standard culture which can take two to six weeks for the result.
The information generated using the equipment also aids in selecting suitable treatment especially

Author: Susan Aro/with Sandy Calado
Date: January 13, 2016
Source: Sun Star Cebu

I have already heard from entrepreneurs whom I have interviewed for several articles in the past that for them to succeed in the competitive food startup scene, they need to have a solid identity; something that they can hold on to when a customer asks: Why should I eat in your restaurant, and not in the one in the other block?
But for each of these two food businesses, their respective identity isnt just all part of a business concept. It would be insensitive to say so. Rather, their identity is an advocacy.
I have to say, the dining experiences in these food businesses may be completely different, but they both gave me a message that I probably wont get in any other bars and cafes anytime soon.
Puzzle Gourmet Store and Cafe
Comets Loop, Project 4, Quezon City

After going rounds and rounds in Project 4, the cab driver and I finally found our destination: Puzzle Gourmet Store and Cafe. I am not sure if the owners of this cafe strategically decided to have their business located in a puzzling spot to suit the cafes name (well, they acknowledged to me that most customers typically have a hard time locating their cafe), but getting there was kind of, literally, a puzzle.
But getting there was also an experience of learning. Its as though you have come to a place where answers are served.
Let me explain that bit thoroughly.
Jose Canoy was diagnosed with autism at age four. His family knew and accepted that Jose wasnt going to grow up just the way neurotypical individuals do. But at the same time, they didnt want 21-year-old Jose to just grow up and do nothing for himself.
Quite honestly, there arent a lot of options for individuals like Jose--adults who have mental disabilities--so we knew it was going to be up to us to think of something for him to do, says Joses sister and Puzzles co-manager Ysabella Canoy.
And so they established Puzzle in April last year, which was envisioned as a place for Jose to be a waiter and be able to socialize with customers, hopefully getting more people talk and be more open about autism. Later on, they also started inviting some of Joses friends from the group therapy to come and work with him.
But why a cafe? Why not, say, a spa? Or a gaming center or a boutique? Whats in a cafe that they thought would help the differently abled hone their work skills better than anywhere else?
Ysabella says that being in a cafe would challenge Jose and the other differently abled staff to interact with people. After all, they want not just Joses work skills but also his social skills to improve through Puzzle.
They get to converse, dance, take pictures, and make memories with customers, she says. The differently abled staff have a script memorized so they would know how to properly take the customers orders.
But--in a pretty unique business like Puzzle, theres always a but--theres always the possibility of having customers who would ask Jose and his fellow staff anything thats not in their script. It teaches them to listen, respond, and relate It combines the school setting where theyre being looked out for, being taught new skills, as well as the workplace setting where theyre challenged to think, follow rules, and are given expectations.
Business-wise, the cafe is doing pretty well for a greenhorn in the startup scene. They have customers who come from places like Laguna, Pampanga, Davao, Zambales, and even United States and Europe. The advocacy has definitely given the cafe its identity, says Ysabella.
Currently, there are 16 people with special needs who work as trainees at Puzzle, and five neurotypical individuals who work as the regular employees.
Altogether, they make dining at Puzzle an experience where, as I was saying earlier, the correct answers are given to peoples common questions and misconceptions about people with special needs. Usually, when people think about special needs, their immediate reaction and emotion is that of sadness, pity, and is often met with stigma. We want to change that, says Ysabella.
We want to be able to help [the customers] become more sensitive and educated about [autism], and that hopefully, they, too, can do their part in doing something to help spread the word about how being different is beautiful.
Upon arrival at the Hobbit House Manila--which is located at the heart of the red light district of Ermita--one late evening, a waiter welcomed me and said, Wow, sir, ang tangkad ninyo naman! Ano height ninyo, bossing?
I wasnt surprised with his question, given that the waiter stood at 40. Im 60, you see, so he is, literally, a small person. And in that particular bar, he isnt an oddity. Here, it is the small persons who are the spectacle of the night. Here, they reign supreme.
Established in 1973, the Hobbit House is inspired by J.R.R. Tolkiens The Lord of the Rings. The huge round-shaped main door is an obvious giveaway to this fact.
When you enter, a bell would ring to announce your arrival. You wont need a lot of time to feel the reference to the epic high-fantasy novel; the stacks of old books, foreign beers, dim-lit interiors, hardwood furniture, old American figures, and of course the persons with dwarfism serving steaks and beers transport you to the Shire, or the region in the fictitious Middle-earth from The Lord of the Rings where the Hobbits reside.
I noticed that most of the customers were foreigners. Oo, marami talagang foreigners dito. May mga regular customer kami na bumabalik-balik kasi nagiging friends na nila yung staff namin, lalo na yung small persons, says manager Mary Ann Crisostomo.
I met two Germans while I was here. One of them suggested a drink to me when they noticed that I was having a hard time choosing which beer I would order. Since they were Germans, their beer preferences were rather strong, which probably explains why I can hardly remember the name of the drink that I got. Later on, I learned that theyre writers, too.
I love the Philippines. There are so many stories here, one of them said. So every time I visit here and get kind of homesick, I go here [at Hobbit House] because they have this German beer, he said.
How do they find the small persons? I love them, he said. Last time, I asked for a photo with them, and then suddenly, one of them just sat on my lap! Like, literally, his entire body occupied my lap! He was just like a dog who jumped on me. But it was cool. I love them so much.
Mary Ann says that the bar doesnt aim to give in-your-face information about small persons--like why theyre born that way or what their special needs are, if theres any. Its rather the opposite; the bar aims to let the people feel that--putting the obvious dissimilarity in the height aside--the persons of short stature are in no way different, that they belong to the same community were in. It just happened that theyre shorter than most of us, thats it.
Ang gusto talaga namin, kapag nandito ang customers, makakapag-chill lang sila kasama yung friends nila or family nila. At siyempre kasama rin kaming mga maliliit, adds Mary Ann. Yes, shes among the 10 small persons who do the day-to-day work at the Hobbit House.
Of course, they also want to give the small persons a place where they can learn valuable work skills. Nine of them take and serve customers orders, and another one is in the kitchen. Kaya rin naman namin yung mga ganiyang trabaho, says Mary Ann. Patunay itong Hobbit House Manila diyan.
It should be overwhelming for us Filipinos that the country is, at least, slowly becoming more and more embracing to the differently abled. Puzzle Gourmet Store and Cafe and Hobbit House Manila are not exactly the first and only businesses that give hiring opportunities to the persons with disabilities; Suyen Corporation (the company behind clothing giant Bench) and Lamoiyan Corporation (the mother company of household products Hapee, Dazz, and Licealiz, among others) have already started giving employment chances to the differently abled years back.
A study from the Philippine Institute of Development Studies published in 2013 also shows that the proportion of employed persons with disabilities in the urban area is 58.5%, and 41.9% in the rural area.
Sana habang tumagal pa ang panahon, maging mas [acceptable] ang mga tao sa aming small persons, says Mary Ann. Kaya rin naman namin na magtrabaho at magpasaya.
With how Hobbit has been in the district for more than 40 years by now, and with how startups like Puzzle are starting to put up places where the differently abled can show their gravitas, I should say that its pretty evident that Mary Anns wish is already being granted.
Its still in the process, but at least the light is already visible from the eyes of the customers and the staff, whether theyre neurotypical or otherwise.---BMS/GMA Public Affairs

Author:
Date: January 11, 2016
Source: GMA News

Whoever wins the next presidential election, said the distinguished sociologist Randy David, would not be so stupid as to stop the Pantawid program. This was in this weeks Conference on Sustaining the Gains of the Conditional Cash Transfer Program in the Philippines, at the Asian Development Bank, after he had introduced himself as being an independent adviser of the CCT for some time, and admitted that he was skeptical of the program in the beginning.
Randy is now convinced, by hard evidence, that the Pantawid program is working well. He is careful to point out that, since it is essentially a scholarship program for children, its fruits will be reaped after many years, when the children find better work than their parents. Pantawid is a program against intergenerational poverty.
Thus, the drops in poverty and hunger seen in recent Social Weather Stations surveys are not due to Pantawid; the Pantawid children are not yet due to join the workforce. The drops are more likely due to the relative mildness of inflation. If poverty and hunger were to rise soon, neither would it imply the failure of Pantawid.
Pantawid is like nurturing an orchard that bears fruit in the long term. The health of the orchard can be assessed, by science, even before fruiting begins.
SWS is proud to have done the special surveys of mothers, children, teachers, health workers, local officials, bank officials and others that were used by the government, the World Bank and the ADB to assess Pantawid. It stands by its survey quality, whether or not an impact assessment is favorable.
Aniceto Orbeta Jr., of the Philippine Institute for Development Studies, told the conference that his findings are favorable"the children are attending at least 85 percent of their classes, and not cutting them due to a need to earn money by work; the mothers are getting pre- and post-natal care; the work efforts of adult family members have been stable (i.e., there is no dependency); there is no rise in drinking or gambling; etc. (See also Real evidence supports Pantawid, Opinion, 7/18/15.)
Pantawid is the first propoor program of the Philippine government to use a scientific system to identify beneficiaries. UP School of Statistics dean Dennis Mapa talked on the National Household Targeting System for Poverty Reduction (Listahanan), which selects the Pantawid beneficiaries from a present data base of some 10 million households from the poorest areas of the country.
The starting criterion for selection is the official poverty line, plus modest adjustments to allow the near poor to qualify. The official line is so stingy"even cruel, I would say"that literal adherence would disqualify three out of ten Pantawid beneficiaries. I prefer to call the seven of ten selections bulls eyes, and the other three selections good hits, who are near poor rather than nonpoor (see Pantawid: 71% bulls eyes, Opinion, 7/20/13; disclosure: I am a member of the Listahanan advisory committee).
President Noynoy Aquino obviously deserves credit for recognizing Pantawids value, continuing it without changing its name, and expanding the beneficiaries from 800,000 in 2010 to 4.4 million by 2014. At the conference, ADB president Takehiko Nakao pledged another $400 million to support the CCT.
The Pantawid program is one of the best CCTs in the world, said panelist Rogelio Gmez Hermosillo, former national coordinator of Oportunidades, the CCT of Mexico. He, Randy David, and the other panelists (Alison Chartres, assistant secretary of the Australian Department of Foreign Affairs and Trade; Aleksandra Posarac, lead economist, World Bank-Manila; and Karin Schelzig, senior social protection specialist, ADB) strongly urged that Pantawid be allowed to maintain its focus, and warned against burdening it with other objectives.
The conferences closing speaker was Angelita Castillo, a Pantawid mother and family session leader, who has graduated from the program. Pointing to her neat attire, she said, Maybe you think I am not a beneficiary, because I look like this? I didnt look like this before. Now I do, thanks to Pantawid. She managed to get four extra years of schooling, and now, in her 40s, has become a schoolteacher, and will continue to help the Pantawid.//

Author: Mahar Mangahas
Date: January 16, 2016
Source: Philippine Daily Inquirer

MANILA, Philippines - With more than 10 million Filipino children benefiting from the governments conditional cash transfer (CCT) program, President Aquino said yesterday he was surprised that the stipend for the household-beneficiaries had become a source of inspiration and transformation for the marginalized sector.
Speaking at the Conference on Sustaining the Gains of the CCT Program in the Philippines at the Asian Development Bank (ADB) headquarters in Mandaluyong City, Aquino said the undertaking addressed poverty in a sustainable manner.
When we were discussing the program early on in the administration, I wondered if the stipend and support given to families would uplift them from their situations. I believe we have proven that " with enough political will, the right and prudent concentration of resources and funds, and the proper implementation of a solution borne of correct identification of problem " massive transformation can take place. And, far beyond the drastic increase in CCT coverage, massive transformation is taking place, the President said.
Some quarters have failed to understand the key principle behind the CCT: its effects are generational. All the beneficiaries covered by the program, and the society in general, will be able to reap the full benefits of governments support long after I return to private life, he added.
The ADB provides partial funding for the CCT program and regularly evaluates its implementation to determine whether it will continue providing loans for the purpose.
The monthly cash grant for CCT beneficiaries is tied with other government programs such as medical check ups for children and pregnant women as well as enrolment in public schools.
Aquino said 10.18 million Filipino children are covered by the CCT program, with 1.9 million of them enrolled in high school.
A study of the Philippine Institute for Development Studies and United Nations Childrens Fund in May last year showed that the number of out-of-school youth decreased from 2.9 million in 2008 to 1.2 million in 2013.
Aquino said 1.55 million CCT families or 7.7 million Filipinos were lifted out of poverty based on results of the latest assessment conducted by the National Household Targeting System.
Students who chose to enroll in technical-vocational programs under the Technical Education and Skills Development Authority were able to secure permanent jobs, the President said.
The government increased the CCT budget from P62 billion in 2015 to P62.7 billion this year to cover 4.6 million households.
$400-M ADB grant
Touched by the testimony of a CCT beneficiary in Cebu, ADB chief Takehiko Nakao said yesterday he personally recommended the approval of an additional $400-million loan for the project.
Nakao said he was fortunate to meet with CCT beneficiaries in Cebu in February 2015.
I was touched when one of them said she was able to finish schooling with the support of the CCT program, he said. She was enthusiastic and is looking forward to a better future.
Nakao said the additional funding for the CCT program would be released soon.
He noted that the governments CCT program had become a strategy to bring about lasting change.
Nakao said the CCT program helps poor children finish basic and secondary education, improving their health and enhancing future employment potentials.
The goal is to break a vicious cycle that has trapped millions of Filipino families in poverty, he said.
We are proud to be a partner of the Philippine government in curbing poverty in the region, he added.
The bank first provided a $400-million loan to the Philippines in 2010 under its social protection support project. Partners of the Philippines for the CCT program include the World Bank, the Australian government and other groups.
Nakao lauded President Aquino and his administration for the CCT program.
This program is a model for developing countries in the world. ADB looks forward to our continued partnership in promoting the shared vision for a Philippines free of poverty, Nakao said.
The $400-million loan is payable in 25 years, Social Welfare Secretary Corazon Soliman said.
Soliman said the World Bank provided $450 million in funding over five years.
The ADB and WB grants cover 999,000 household-beneficiaries. The rest of the beneficiaries are funded directly by the government, Soliman said.
She said the loans that would be part of the governments budget would ensure continuity of the CCT program even after Aquinos term.
Soliman added they had been working with the Senate and the House of Representatives to institutionalize the CCT program as requested by the beneficiaries so it would not be a victim of politics.
She said the law would guide future administrations as to how to implement the program. But Soliman admitted there might be no more time to pass the proposal because of the upcoming campaign period.
Soliman said the CCT would be an election issue because it could be a guide in choosing the countrys next leaders.
She cited a Social Weather Stations survey, which showed that a majority of respondents would vote for the presidential candidate who would continue the CCT program./

Author: Aurea Calica
Date: January 14, 2016
Source: Philippine Star

MANILA, Philippines " The government should intensify public-private partnership (PPP) projects involving universal health insurance system, according to a think tank.
In a study, the Philippine Institute for Development Studies (PIDS) said the government could take the PPP route in addressing the health needs of people in far-flung areas.
Availability and accessibility of health care services is a crucial determinant in the decision to avail or not to avail of health insurance, Denise Valerie Silfverberg, PIDS consultant, said.
Studies show the lowest coverage of the Philippine Health Insurance Corp. (PhilHealth) is in lone-standing islands or island provinces that are not physically attached to the urbanized centers in the regions.
The issue of availability and accessibility might be particularly true for certain provinces that are more geographically constrained, the study pointed out.
Government providers can address this problem through the provision of mobile clinics or the improvement of district hospitals especially in geographically isolated areas, with the help of private sector partners in a national, regional or provincial level.
Both can be done through public-private partnership. PhilHealth can help address this issue by assisting in the accreditation process of the closest health-care facilities, the study pointed out.
Furthermore, PhilHealth can facilitate information campaigns in selected areas to let people know where the closest PhilHealth-accredited facilities are located and what services they can avail themselves of using their health insurance.//

Author: Ted P. Torres
Date: January 17, 2016
Source: Philippine Star

MANILA, Philippines " Exporters, producers and processors of agriculture and fishery products must diversify their portfolio to gain competitive advantage in overseas market and maximize the countrys potential benefits from the ASEAN economic integration, a state think tank said.
Although a longer value chain is needed to realize diversification, it delivers more benefits, said a policy note titled Improving the readiness of A and F industries to the ASEAN integration released by the Philippine Institute and Development Studies (PIDS).
PIDS said a public program that encourages product diversification may result in larger value added, more jobs and income opportunities in on- and off-farm activities.
It cited as an example coconut products which could be processed to produce coconut sugar, virgin coconut oil and other coconut-based products.
The PIDS also underscored opportunities that exist in commodities that the Philippines can produce competitively, such as sugar, corn, animal feed, tobacco and palm oil.
Growth in international demand is also expected to benefit exporters that can meet the increasing requirements related to environment, food safety and commercial policies of importing countries.
To be more competitive, the quality of the countrys A and F products should be improved. This can be done through the application of good production practices, such as good agricultural practices and good manufacturing practices, it said.
Improving the quality of Philippines products also requires further investment in human capital development to upgrade skills, it added.
The PIDS study said economic integration tends to displace local industries that may not be competitive in the absence of trade protection.
The key to realize larger and more diverse market opportunities of regional integration is to facilitate the movement of economic resources previously in displaced import- competing industries to export-oriented industries and to make more effective those that are already in export-oriented industries, it said.
Further, the PIDS said local producers must find a way to become competitive other than by being granted production or export subsidies, which are often inefficient and vulnerable to leakages.
Businesses need to innovate to adapt to the impacts of climate change, respond to the challenges of rising input costs and take advantage of the opportunities for value adding in their industry.
High degree of preparedness of agro-based value chains is necessary to translate market opportunities into new sources of incomes for the countrys agricultural and fisheries producers, it said.
One of the recommendations is to establish industry roadmaps with stakeholders to determine market opportunities and the needed resources to realize them.
The PIDS study also underscored the need for the government to provide stronger and more effective support to local producers to better prepare them for the ASEAN economic integration.

Author:
Date: January 17, 2016
Source: Philippine Star

THE Cebu Chamber of Commerce and Industry (CCCI) plans to strengthen its partnership with the academe this year to help prepare Cebus graduates for opportunities that will arise following the formal launch of the Asean Economic Community (AEC).
We expect a lot to happen this year. Aside from the entry of cheaper goods, we expect mobility of professionals in the regional level, said CCCI president Ma. Theresa Chan.
This is one area where the chamber can work closely with the academe to prepare our graduates for this integration.
Beginning this year, professionals from Asean countries can expect greater mobility to work within the region.
While experts do not foresee massive displacement of Filipino workers, they warn of a skills challenge that needs to be addressed through a strengthened educational system and professional regulation, a National Economic Development Authority (Neda) report said.
Mutual recognition
Chan said Cebu is in a better position to take advantage of the opportunities in Asean, especially in terms of employment, because of the quality of its talent pool.
One reason foreign companies operate here is to dip into our talent pool.
But Chan emphasized that while we enjoy this strength, continuous talent development programs should be pushed and that schools should adopt academic programs that are aligned with Asean standards.
She believes that a strong academe-industry collaboration in workforce development is still key to be globally competitive and to achieve economic gains.
Neda has explained the entry of foreign professionals is currently prohibited by Philippine laws without a special permit to practice their profession or unless allowed by a reciprocity clause.
The ASEAN Mutual Recognition Arrangements (MRAs), however, allow freer movement of professionals by standardizing regulations and procedures for employment.
So far, the Asean countries have signed MRAs for seven professions: architectural services, surveying, medical practitioners, dental practitioners, engineering services, nursing and accounting services, and tourism professionals.
A state think-tank, the Philippine Institute of Development Studies (PIDS), has warned that Filipino workers will face a skills challenge with the expected shifts in regional integration.
The agency noted that shortage of applicants with right competencies will be the biggest recruitment challenge for the countrys domestic workforce. It encouraged the academe and training institutions to revise their curricula to adjust to the labor demand in Southeast Asia.
The AEC officially kicked off last Dec. 31, 2015. The Asean regional bloc is expected to rival China, India and Japan. It has the worlds third largest labor force, which is relatively young. The region has over 600 million consumers.//

Author: Katlene O. Cacho
Date: January 17, 2016
Source: Sun Star Cebu

MANILA, Philippines " Web designer Maria Zurbano kisses her three-year-old daughter goodbye and sets out in the pre-dawn darkness for a torturous commute through the Philippine capital.

Her ordeal, a return trip of up to six hours every weekday, is expected to get even worse as the number of cars explodes in the chaotic Asian mega-city of more than 12 million people.
Dubbed carmaggedon by locals, business leaders are warning Manila could come to a total standstill despite grand government plans to tackle its traffic.
Physically, during these trips, I feel ill. My back is always hurting. It affects my health to have to sit down for so long, said Zurbano, 36, as she waited for a bus outside her home at 5:00 am.
After finally ending a cramped mini-bus trip of just 17 kilometers (10.6 miles) to the financial district of Makati, Zurbano despaired of being trapped in a traffic hell.
Traffic just gets worse and worse. I just get more stressed and stressed but it doesnt look like anything will change. I will just have to learn to bear with it, she said.
Huge traffic costs
Traffic in the capital and its surroundings is already costing the country about three billion pesos ($64 million) a day, or about 0.8 percent of gross domestic product, according to government figures.
And it is steadily worsening as an emerging middle class fuels an auto boom " car sales rose 23 percent last year with nearly 300,000 new vehicles hitting the roads.
Compounding the problem, decades of infrastructure neglect has left Manila with a just a few major roads across the city and their gridlock peak hours often last for three or four hours.
Commuters have few other options with Manilas dilapidated rail network tiny in comparison with neighboring Southeast Asian capitals such as Jakarta, Kuala Lumpur and Bangkok.
A chaotic private bus and mini-bus network with drivers who regularly flout traffic laws by, for instance, stopping in the middle of roads to pick up passengers, is widely perceived as adding to the problem.
This is going to be the most critical problem the next administration faces, John Forbes, a senior adviser at the American Chamber of Commerce in Manila, told AFP.
Forbes warned Manila risked becoming uninhabitable in the next three to five years " meaning people would simply be unable to get around the city " if urgent action was not taken to build roads and rail lines.
Elections for a successor to President Benigno Aquino, who is required by the constitution to stand down after a single six-year term, will be held in May.
Aquino has proved a generally popular president but he has been the target of fierce public criticism for a perceived lack of urgency in updating the nations creaking infrastructure.
He has earned widespread condemnation mid-way through his term with comments that worsening traffic was merely a sign of a growing economy.
Dreams of urban bliss
His aides have since sought to project a sense of empathy and urgency, pointing to new expressways and an extension of a train line as planned projects that will ease the congestion.
They have also emphasized the adoption in 2014 of a Dream Plan to fix the urban chaos, which outlines $65 billion of infrastructure spending by 2030.
The plan envisages a wide range of massive and unprecedented projects for the Philippines, such as a subway, satellite cities linked to Manila by high-speed rail, relocating air and sea ports, as well as many new roads.
Finance Undersecretary Gil Beltran, an economist who has studied the traffic problem, said the plans huge price tag is within the governments reach.
Financing should not be a problem because the funders are ready, Beltran told AFP, pointing to the nations improved credit rating that will allow cheaper loans, as well as expected help from the Japanese government and multilateral lenders.
But many experts believe there is little chance of many projects going ahead.
They point to the nations chaotic and corrupt democratic system, as well as a strangling bureaucracy, which prevent infrastructure development.
A glaring example is the construction of a 19-kilometer light rail line on the outskirts of the capital that was meant to have been finished by the end of last year " but it has not even been started.
Touting the project in 2013, Aquino joked he was ready to be run over a train if it was not completed by the end of 2015. But his government has not even finalized the tender process.
Gilbert Llano, president of the Philippine Institute for Development Studies, a government think-tank, echoed the ironic tones of many experts when talking about the governments infrastructure plan.
Its called a dream plan (because) it will stay in the realm of dreams, said Llanto. //

Author:
Date: January 18, 2016
Source: Philippine Daily Inquirer

As it turns out reforming social security is a well studied topic. A Google search reveals studies and articles by PIDS, the government economic think tank. There is also a ten year old study by the World Bank.
Interestingly, the lack of action on recommendations makes these documents seem current. The SSS management, particularly its Board, should have made stronger moves to get Malacaang and Congress on board the reform train.
The impression that one gets on reading these studies is the not too surprising reality that we do not always get good people to run the pension funds. Appointments to the boards and perhaps the staff as well, are politically determined and that imperils the funds.
Politicians, particularly Presidents, are easily tempted to use the pension funds for purposes other than their principal reasons for being that is to provide worker pensions and other benefits.
The main conclusion one gets after reading the studies is that we can certainly do a whole lot better managing those funds. But the attitude of the folks responsible for them is business as usual, meaning looking after their own benefits rather than the members.
It is no wonder that the World Bank study done in 2006 made a strong pitch for much improved governance and minimizing political interference. Management performance at the main pension funds, SSS and GSIS, had been spotty but not as bad as in the pension fund for the armed forces and the national police.
The World Bank wants members of SSS Social Security Commission, GSIS Board of Trustees, and other boards to have clear legal fiduciary responsibility to make decisions solely in the interest of members.
The World Bank also recommends that these officials should be chosen through a selection process that ensures professionalism and provides protection from political interference. It is particularly important to have a professional and depoliticized Investment Board for each of the pension funds.
The experience with having a politician on top of GSIS in the past administration supports this World Bank observation. How Erap used the pension funds to support cronies, as cited in his plunder conviction, is another sad experience.
Now that there is renewed public interest in how the pension funds invest, they have to be more transparent. They must make an effort to share their investment policies that set objectives regarding returns, risk management, types of assets, etc., in guiding their specific investment decisions.

Furthermore, the World Bank urged our pension funds to solicit outside professional investment advice. Independent asset managers and custodians should be used and prohibit inappropriate investments. Principles of overall risk management should guide rule making.
The World Bank also recommended that domestic equity investments should be shifted toward pooled instruments such as an allocation matching representation in the Philippine Stock Exchange index. This, the World Bank said, reduces the influence on specific share prices and avoiding the need to place members on corporate boards of directors.
Pension institutions only should invest in such instruments through market-priced, arms-length transactions Institutions only should invest in tradable securities, not in government loans.
The World Bank also recommended that supervision should be unified and strengthened. A new Insurance and Pensions Commission, built on the foundation of the current Insurance Commission, should supervise SSS, GSIS, Pag-IBIG, AFP-RSBS, all private pension schemes, and any similar instruments.
Additionally, SSS, GSIS, Pag-IBIG, and AFP-RSBS should be required to be audited annually by a private international audit firm experienced with auditing assets, liabilities and procedures of partially funded defined-benefit pension funds.
A PIDS paper, on the other hand, called for improving the financial viability of and corporate governance in both the GSIS and the SSS. It also emphasized the need for strengthening the link between contributions and benefits.
Specific recommendations include: (a) the removal of the minimum pension guarantee; (b) further increases in the contribution rate; (c) additional increases in the maximum salary credit; (d) review the use of the final salary as basis of pension benefit; and (e) an increase in the vesting period.
The PIDS paper called for improvement in the protection provided to pensioners. At present, pensions are adjusted in an ad hoc manner over time. The value of pensions may be better protected from erosion due to inflation if pensions are adjusted in a systematic manner through inflation indexation.
PIDS also doubts the wisdom of the practice of allowing pensioners to get their benefits as a lump sum at the time of retirement. The withdrawal of benefits in such a chunky manner rather than in the form of annuities tends to reduce the welfare of beneficiaries as they run the risk of outliving their retirement savings. This observation makes sense.
The PIDS study by Rosario Manasan cited the need for reforms aimed at broadening coverage and promote compliance. Poor compliance will persist if the incentives for evasion are engendered by the very design of pension benefits and contribution.
For instance, it was pointed out that the minimum pension provision and the provision that pensions are computed on the basis of salaries in the last five years of service tend to result in the evasion of the payment of appropriate premiums.
In short, these two provisions create incentives for workers and employers to collude by either (a) under-reporting earnings until the last five years of their working lives and/or (b) artificially boosting pay that is reported to the pension system in the last five years of their working lives.
On the other hand, the lack of sanctions on employers who either under-report or who do not remit the contributions they withhold from their employees obviously reduces the amount of contributions to the system. It also adversely affects the credibility of the system and discourages other workers from participating in the system.
They also pointed out that the fiduciary role of pension funds must be paramount. There had been many instances when the funds were used in pursuit of other domestic policy goals (e.g., financing of infrastructure investment, foreign exchange management, even outright political intervention) as these pension funds manage their investment portfolios.
Examples were cited of the politicization of the SSS and GSIS in the past.
Given the large pool of funds, it is often tempting for government bodies to direct the investment of a portion of these assets to specific domestic political purposes such as low-income housing, financing startup businesses, and development of the capital market, among others. While well intended, these economically targeted investments normally result in returns that are below market rates and thus deviate from the fiduciary principles.
The study cited that for instance, at the behest of the Marcos government, the GSIS funded the construction of numerous hotels, which later on became nonperforming loans in the mid-1980s. At about the same time, it also took over the ownership of the Philippine Airlines. More recently, both the GSIS and SSS acquired substantial shares in a commercial bank at the behest of former President Joseph Estrada in support of a cronys take-over of the said bank.
Like the World Bank, the PIDS study noted a need to strengthen the governance structure of SSS, particularly in terms of the selection of members of the Social Security Commission the broad selection criteria used for selecting the members of the Commission in the past had resulted in its limited technical capacity to understand complex technical issues and take appropriate policy decisions.
In contrast, this problem has been mitigated in the GSIS by the requirement in its charter that four out of the eight members of the GSIS Board come from the banking, finance, investment, or insurance sectors and that one be a recognized member of the legal profession.
PIDS also sought a reduction in administrative cost. It cited another study that found that the administrative cost of running the SSS and GSIS is high relative to that of social security systems in other countries. For instance, the operating expense of the pension fund in Malaysia is two percent of total contributions while that of the pension fund in Singapore is 0.5 percent of total contributions.
In contrast, the operating expense of the SSS stood at 11 percent of contributions in 2007, marginally higher than the corresponding ratio (10.7%) in 1995. On the other hand, the operating expense of the GSIS was equal to 15 percent in 2007, even higher than the corresponding ratio in 1996 (10.8%).
Like the World Bank, the PIDS study urged setting up a noncontributory social pension for aged poor. PIDS observed, the low coverage rate of the social security system underscores the importance of social safety nets not just for the aged but also for the informal sector.
There is a lot of real work to do to reform our social security systems. But politicians look at short term payback which do not address problems but endanger what we already have.//
Boo Chancos e-mail address is bchanco@gmail.com. Follow him on Twitter @boochanco

Author: Boo Chanco,
Date: January 22, 2016
Source: Philippine Star

MANILA, Philippines " Financial markets in major Asian economies are closely tied and move in tandem with those in China, explaining the latest bout of volatility sweeping the region, the chief economist of the Department of Finance said.

The close linkages between Asian countries is evident in the high correlation between their financial market indices, Finance Undersecretary Gil Beltran said in an economic bulletin last Monday.

According to Beltrans research, stock markets in nine Asian economies showed a 0.91 correlation to the Shanghai Composite Index.

A positive correlation suggests that bourses move in tandem such as when one rises, the rest also rise, and vice-versa. A correlation of one is considered strong, while zero means no relationship.

The nine countries included in the study were Japan, India, South Korea, Singapore, Thailand, Indonesia, the Philippines and Vietnam.

The relationship between China and the Asian markets tend to get weaker in the foreign exchange segment. Beltran calculated a correlation of 0.46 among the currencies in the region.

Still, currency rates are also highly correlated, the official said.

Global financial markets suffered huge selloffs going into the third week of the year over renewed concerns China, the worlds second largest economy, is slowing.

A report yesterday amplified this when China announced its economy grew 6.9 percent last year.

Volatility in Chinas stock and currency markets shook the financial markets of its Asian neighbors, Beltran said.

Sought for comment, Jose Ramon Albert, senior researcher at the Philippine Institute for Development Studies, said figures showed Asian countries should be watchful of China.

Clearly, we need to watch out for China. It can make or break our economies, Albert said in an e-mail.

Based on Beltrans figures, the Philippine Stock Exchange Composite Index already lost 7.23 percent this year as against Shanghai Composite Indexs 18.03 percent.

Other markets in the region also posted year-to-date losses in tandem with China: Japan (-9.91 percent), India (-6.70 percent), Singapore (-8.74 percent), South Korea (-4.2 percent), Thailand (-3.27 percent), Vietnam (-5.72 percent), Malaysia (-3.78 percent) and Indonesia (-1.5 percent).

For currencies, most have posted gains so far led by South Korean won (3.24 percent), Indian rupee (2.19 percent), Malaysian ringgit (2.38 percent) and the peso (1.87 percent).

They were followed by the Singaporean dollar (1.49 percent), Thai baht (0.9 percent), Indonesian rupiah (0.88 percent), Vietnamese dong (-0.3 percent) and the Japanese yen (-2.7 percent).

Author: Prinz Magtulis
Date: January 20, 2016
Source: Philippine Star

DAVAO CITY -- Attacks on the power transmission system in parts of Mindanao should be treated as acts of organized crime and prosecuted accordingly, a senior research fellow of the Philippine Institute for Development Studies (PIDS) has recommended.
In addition to what (the government) promised to do, I think they should also treat this the way you would an organized crime, and know that the primary strategy in deterring organized crime... (is) pro-active intelligence gathering, and more vigorous law enforcement activity, PIDS Adoracion M. Navarro in an interview.

Ms. Navarro said action from the government and the National Grid Corporation of the Philippines (NGCP), the operator of the main grid, is particularly crucial with the coming national and local elections on May 9.

I have confidence that the NGCP is capable of ensuring that damage remains localized and does not affect a wider area, but still sometimes Filipinos, in our optimism, do not aim to extrapolate and understand how worse scenarios could be; this in turn results in lack of planning for a worst-case scenario, she said.

Ms. Navarro also called for a contingency plan under involving standby power and increased security in order not to compromise the electoral process.

The public and the media, she added, should be able to connect (the attacks) to increase in the cost of electricity, economic losses due to electricity disruption, and inconveniences to the public... The NGCP has already asked the public to report suspicious activities through a hot line. There should be public outcry to hold the bombers accountable, Ms. Navarro said.

Following an order from President Benigno S. C. Aquino III, the Department of Energy (DoE) has reactivated a power task force to ensure supply stability, particularly during the elections.
However, members of the task force -- the top officials of the DoE, NGCP, National Electrification Administration, National Power Corp., Power Sector Assets and Liabilities Corp., National Transmission Corp., Philippine Electricity Market Corp. and Manila Electric Co. -- have yet to meet due to conflicting schedules, according to DoE Secretary Zenaida Y. Monsada.

Ms. Navarro said projections of adequate power supply in Mindanao starting this year with the opening of several new coal-fired power plants will not materialize if the transmission lines attacks are not stopped.



Author: Maya M. Padillo
Date: January 25, 2016
Source: Business World

THE following is a statement from the National Economic and Development Authority on the resignation of Director-General Arsenio M. Balisacan:

Economic Planning Secretary and NEDA Director-General Arsenio M. Balisacan resigned effective January 31, 2016 to head the newly-formed Philippine Competition Commission (PCC).

Taking on the job as the first chairperson of the PCC for me, is a very compelling challenge that is hard to ignore. I see this as both a great responsibility and another privilege to steer the economy toward the right direction to realize all its growth potential, said Balisacan.

Republic Act No. 10667, otherwise known as the Philippine Competition Act, which President Benigno S. Aquino III signed into law on July 21, 2015, created the PCC.

The commission is a quasi-judicial body that will enforce and implement the provisions of the Philippine Competition Act, including its implementing rules and regulations. Through this, it will ensure an efficient market competition in providing a level-playing field among businesses engaged in trade, industry, and all commercial economic activities.

The PCC aims to protect consumer welfare and advance both domestic, and international trade and economic development. Also, it has the mandate to conduct inquiries, investigate, and penalize all forms of anti-competitive agreements, abuse of dominant position, and anti-competitive mergers and acquisitions.

We would want to address the problem of having a growing economy but with the benefits of such growth only for a small sector. Promoting fair and healthy competition among firms is a major factor in ensuring that the benefits of growth are properly shared, said the new PCC Chief.

As Socioeconomic Planning Secretary and NEDA Director-General since May 2012, Balisacan was the first chair of the Philippine Statistics Authority Board and the Public-Private Partnership Center Board. Concurrently, he was chairman of the board for the Philippine Institute of Development Studies, Philippine Center for Economic Development, and the Philippine Statistical Research and the Training Institute.

Prior to his appointment to NEDA, Balisacan was Dean and Professor of the University of the Philippines School of Economics. He also served as the Director of the Southeast Asian Regional Centre for Graduate Study and Research in Agriculture or SEARCA from 2003 to 2009, and Undersecretary of the Department of Agriculture in 2000, 2001, and 2003.

Recognized as a leading development economist in Asia, Balisacan will be bringing to PCC, aside from his experience as Secretary of Socioeconomic Planning, is his expertise in development economics, international economics, and applied welfare economics. Balisacan has been an Academician of the National Academy of Science and Technology since 2008 and an Adjunct Professor at the Australian National University since 2011.

Meanwhile, Deputy Director-General Emmanuel F. Esguerra will serve as the Officer-in-Charge of NEDA.

Author:
Date: January 25, 2016
Source: Business World

Economic Planning Secretary and NEDA Director-General Arsenio M. Balisacan resigned effective January 31, 2016 to head the newly-formed Philippine Competition Commission (PCC).

The commission is a quasi-judicial body that will enforce and implement the provisions of the Philippine Competition Act, including its implementing rules and regulations, the National Economic Development Authority said on Monday.

"Through this, it will ensure an efficient market competition in providing a level-playing field among businesses engaged in trade, industry, and all commercial economic activities, NEDA said in an emailed statement.

Taking on the job as the first chairperson of the PCC for me, is a very compelling challenge that is hard to ignore. I see this as both a great responsibility and another privilege to steer the economy toward the right direction to realize all its growth potential, Balisacan said.
Malacaang, through Presidential Communications Secretary Herminio Coloma, announced President Benigno Aquino III's appointment of Balisacan as Chairperson of the Philippine Competition Commission for a term of seven years.
According to Executive Secretary Ochoa, the following were also appointed as Commissioners: Stella Alabastro-Quimbo, Johannes Bernabe, Elcid Butuyan and Menardo Guevarra.
Republic Act No. 10667 or the Philippine Competition Act, which President Benigno S. Aquino III signed into law on July 21, 2015, created the PCC.

The commission aims to protect consumer welfare and advance both domestic, and international trade and economic development. Also, it has the mandate to conduct inquiries, investigate, and penalize all forms of anti-competitive agreements, abuse of dominant position, and anti-competitive mergers and acquisitions.

We would want to address the problem of having a growing economy but with the benefits of such growth only for a small sector. Promoting fair and healthy competition among firms is a major factor in ensuring that the benefits of growth are properly shared, Balisacan said.

As Socioeconomic Planning secretary and NEDA director-general since May 2012, Balisacan was the first chair of the Philippine Statistics Authority Board and the Public-Private Partnership Center Board.

Concurrently, he was chairman of the board for the Philippine Institute of Development Studies, Philippine Center for Economic Development, and the Philippine Statistical Research and the Training Institute.

Prior to his appointment to NEDA, Balisacan was dean and professor of the University of the Philippines School of Economics. He also served as the director of the Southeast Asian Regional Center for Graduate Study and Research in Agriculture or SEARCA from 2003 to 2009, and undersecretary of the Department of Agriculture in 2000, 2001, and 2003.

As a leading development economist in Asia, Balisacan is also bringing to PCC his expertise in development economics, international economics, and applied welfare economics.

He has been an Academician of the National Academy of Science and Technology since 2008 and an Adjunct Professor at the Australian National University since 2011.

Deputy Director-General Emmanuel F. Esguerra will serve as the NEDA officer-in-charge. " VS/NB, GMA News

Author:
Date: January 25, 2016
Source: GMA News

Economic Secretary Arsenio Balisacan resigned on Monday as National Economic and Development Authority director general to assume a new post as the first chairman of anti-monopoly body Philippine Competition Commission.
Taking on the job as the first chairperson of the PCC, for me, is a very compelling challenge that is hard to ignore. I see this as both a great responsibility and another privilege to steer the economy toward the right direction to realize all its growth potential, said Balisacan.
Balisacans resignation will take effect on Jan. 31. Neda deputy director-general Emmanuel Esguerra will serve as the officer-in-charge of the agency.
PCC was created after President Benigno Aquino III signed into law Republic Act No. 10667, or the Philippine Competition Act on July 21, 2015.
The commission is a quasi-judicial body that will enforce and implement the provisions of the Philippine Competition Act, including its implementing rules and regulations.
It is tasked to ensure an efficient market competition in providing a level-playing field among businesses engaged in trade, industry and all commercial economic activities.
PCC aims to protect consumer welfare and advance both domestic and international trade and economic development. It also has the mandate to conduct inquiries, investigate and penalize all forms of anti-competitive agreements, abuse of dominant position and anti-competitive mergers and acquisitions.
We would want to address the problem of having a growing economy but with the benefits of such growth only for a small sector. Promoting fair and healthy competition among firms is a major factor in ensuring that the benefits of growth are properly shared, Balisacan said.
Balisacan, who was appointed as Neda chief and economic planning secretary in May 2012, is also the first chairman of the Philippine Statistics Authority board and the Public-Private Partnership Center board.
Concurrently, he is also the chairman of the board for the Philippine Institute of Development Studies, Philippine Center for Economic Development and the Philippine Statistical Research and the Training Institute.
Prior to his appointment to Neda, Balisacan was dean and professor at the University of the Philippines School of Economics.
He also served as the director of the Southeast Asian Regional Center for Graduate Study and Research in Agriculture from 2003 to 2009 and undersecretary of the Agriculture Department in 2000, 2001 and 2003.
Recognized as a leading development economist in Asia, Balisacan will be bringing to PCC, aside from his experience as secretary of socioeconomic planning, is his expertise in development economics, international economics and applied welfare economics. Balisacan has been an academician of the National Academy of Science and Technology since 2008 and an adjunct professor at the Australian National University since 2011, Neda said.//

Author: Gabrielle H. Binaday
Date: January 25, 2016
Source: The Standard

Philippine leaders must create policies and programs that will assist small and medium enterprises (SMEs) to increase their participation in global value chains (GVCs), especially those that will make it easier for them to access finance and invest in innovations.
A paper released by state think tank Philippine Institute for Development Studies (PIDS) noted that getting the SMEs integrated into regional and intraregional GVCs helps them expand and grow their revenues as well as tap more markets.
It considered two export sectors in the Philippines as GVC success stories " the semiconductors and electronics industry and the business process outsourcing (BPO) industry.
The PIDS noted that research and development (R and D) investment is a key component in developing capabilities for SMEs to upgrade and expand, and increase participation in GVCs.
It said small businesses difficulty accessing credit also hinders them to innovate as many restrictive laws constrain them and lending institutions from engaging with one another.
The paper thus underscored the need for policymakers to develop comprehensive and centralized credit information system for both firms and banks to utilize.
The country likewise should improve the quality of transport systems and make electricity costs competitive.
The PIDS added it is also imperative to address trade barriers in the form of tariff and nontariff barriers that add cost to the product as the latter moves across regional and global chains.
It said the ASEAN is obliging its member-states under the ASEAN Economic Community (AEC) to conform to mutually agreed standards and reduce regulatory burdens in a bid to address nontariff measures.
The quality of regulations has to be prioritized by identifying regulations that facilitate business and competition, and reforming those that hinder, it added.
As competitive services are essential to GVC participation and upgrading, another study designed a framework for the national government to identify the necessary conditions for the transformation of various sectors of the national economy to assist local services firms become more competitive and to succeed internationally.
Investing in human capital, removing restrictions in services trade, and improving digital infrastructure are some of the elements of a comprehensive framework.
More importantly, leaders and policymakers must focus on capitalizing on the countrys core competencies and talent-its human capital-and on recreating the right environment that is conducive to capturing value chains and to enabling the participating local firms to access higher value-added segments in the chains, the PIDS study further said.
GVCs pertain to the life sequence of any given product or service, from its creation, transformation, transport, delivery and utilization.//

Author:
Date: January 24, 2016
Source: Manila Bulletin

Manila // Web designer Maria Zurbano kisses her three-year-old daughter goodbye and sets out in the pre-dawn darkness for a torturous commute through the Philippine capital.
Her ordeal " a return trip of up to six hours every weekday " is expected to get even worse as the number of cars increase in the chaotic Asian mega-city of more than 12 million people.
Dubbed carmaggedon by locals, business leaders are warning Manila could come to a total standstill despite grand government plans to tackle its traffic.
During these trips, I feel ill. My back is always hurting. It affects my health to have to sit down for so long, said Zurbano, 36, as she waited for a bus outside her home at 5am.
After finally ending a cramped mini-bus trip of just 17 kilometres to the financial district of Makati, Zurbano despaired of being trapped in more traffic.
Traffic just gets worse and worse. I just get more stressed and stressed but it doesnt look like anything will change. I will just have to learn to bear with it, she said.
Traffic in the capital and its surroundings is already costing the country about three billion pesos (Dh230 million) a day " or about 0.8 per cent of gross domestic product, according to government figures.
The problem is steadily worsening as an emerging middle class fuels an auto boom. Last year, car sales rose 23 per cent with nearly 300,000 new vehicles on the roads.
Compounding the problem, decades of infrastructure neglect has left Manila with a just a few major roads across the city and their gridlock peak hours often last for three or four hours.
Commuters have few other options with Manilas dilapidated rail network tiny in comparison with neighbouring South-east Asian capitals such as Jakarta, Kuala Lumpur and Bangkok.
A chaotic private bus and mini-bus network with drivers who regularly flout traffic laws by, for instance, stopping in the middle of roads to pick up passengers, is widely perceived as adding to the problem.
This is going to be the most critical problem the next administration faces, John Forbes, a senior adviser at the American Chamber of Commerce in Manila, said.
Mr Forbes warned Manila risked becoming uninhabitable in the next three to five years " meaning people would simply be unable to get around the city " if urgent action was not taken to build roads and rail lines.
Elections for a successor to president Benigno Aquino, who is required by the constitution to stand down after a single six-year term, will be held in May.
Mr Aquino has proved a generally popular president but he has been the target of fierce public criticism for a perceived lack of urgency in updating the nations creaking infrastructure.
He earned widespread condemnation mid-way through his term with comments that worsening traffic was merely a sign of a growing economy.
His aides have since sought to project a sense of empathy and urgency, pointing to new expressways and an extension of a train line as planned projects that will ease the congestion.
They have also emphasised the adoption in 2014 of a Dream Plan to fix the urban chaos, which outlines $65 billion (Dh238.7bn) of infrastructure spending by 2030.
The plan envisages a wide range of massive and unprecedented projects for the Philippines, such as a subway, satellite cities linked to Manila by high-speed rail, relocating air and sea ports, as well as many new roads.
Finance undersecretary Gil Beltran, an economist who has studied the traffic problem, said the plans huge price tag is within the governments reach.
Financing should not be a problem because the funders are ready, Mr Beltran said, pointing to the nations improved credit rating that will allow cheaper loans, as well as expected help from the Japanese government and multilateral lenders.
But many experts believe there is little chance of many projects going ahead.
They point to the nations chaotic and corrupt democratic system, as well as a strangling bureaucracy, which prevent infrastructure development.
A glaring example is the construction of a 19-kilometre light rail line on the outskirts of the capital that was meant to have been finished by the end of last year " but it has not even been started.
Touting the project in 2013, Aquino joked he was ready to be run over a train if it was not completed by the end of 2015. But his government has not even finalised the tender process.
Gilbert Llano, president of the Philippine Institute for Development Studies, a government think-tank, echoed the ironic tones of many experts when talking about the governments infrastructure plan.
Its called a dream plan [because] it will stay in the realm of dreams, said Mr Llanto.//
* Agence Frane-Presse

Author:
Date: January 24, 2016
Source: The National - World

Web designer Maria Zurbano kisses her three-year-old daughter goodbye and sets out in the pre-dawn darkness for a tortuous commute through the Philippine capital.
Her ordeal, a return trip of up to six hours every weekday, is expected to get even worse as the number of cars explodes in the chaotic Asian mega-city of more than 12 million people.
Dubbed carmaggedon by locals, business leaders are warning Manila could come to a total standstill despite grand government plans to tackle its traffic.
Physically, during these trips, I feel ill. My back is always hurting. It affects my health to have to sit down for so long, said Zurbano, 36, as she waited for a bus outside her home at 5am.
After finally ending a cramped minibus trip of just 17km (10.6 miles) to the financial district of Makati, Zurbano despaired of being trapped in a traffic hell.
Traffic just gets worse and worse. I just get more stressed and stressed but it doesnt look like anything will change. I will just have to learn to bear with it, she said.
Traffic in the capital and its surroundings is already costing the country about three billion pesos (Dh235 million; $64 million) a day, or about 0.8 per cent of gross domestic product, according to government figures.
And it is steadily worsening as an emerging middle class fuels an auto boom " car sales rose 23 per cent last year with nearly 300,000 new vehicles hitting the roads.
Compounding the problem, decades of infrastructure neglect has left Manila with a just a few major roads across the city and their gridlock peak hours often last for three or four hours.
Commuters have few other options with Manilas dilapidated rail network tiny in comparison with neighbouring Southeast Asian capitals such as Jakarta, Kuala Lumpur and Bangkok.
A chaotic private bus and minibus network with drivers who regularly flout traffic laws by, for instance, stopping in the middle of roads to pick up passengers, is widely perceived as adding to the problem.
This is going to be the most critical problem the next administration faces, John Forbes, a senior adviser at the American Chamber of Commerce in Manila, told AFP.
Forbes warned Manila risked becoming uninhabitable in the next three to five years " meaning people would simply be unable to get around the city " if urgent action was not taken to build roads and rail lines.
Elections for a successor to President Benigno Aquino, who is required by the constitution to stand down after a single six-year term, will be held in May.
Aquino has proved a generally popular president but he has been the target of fierce public criticism for a perceived lack of urgency in updating the nations creaking infrastructure.
He earned widespread condemnation midway through his term with comments that worsening traffic was merely a sign of a growing economy.
His aides have since sought to project a sense of empathy and urgency, pointing to new expressways and an extension of a train line as planned projects that will ease the congestion.
They have also emphasised the adoption in 2014 of a Dream Plan to fix the urban chaos, which outlines $65 billion (Dh239 billion) of infrastructure spending by 2030.
The plan envisages a wide range of massive and unprecedented projects for the Philippines, such as a subway, satellite cities linked to Manila by high-speed rail, relocating air and seaports, as well as many new roads.
Finance Undersecretary Gil Beltran, an economist who has studied the traffic problem, said the plans huge price tag is within the governments reach.
Financing should not be a problem because the funders are ready, Beltran told AFP, pointing to the nations improved credit rating that will allow cheaper loans, as well as expected help from the Japanese government and multilateral lenders.
But many experts believe there is little chance of many projects going ahead.
They point to the nations chaotic and corrupt democratic system, as well as a strangling bureaucracy, which prevent infrastructure development.
A glaring example is the construction of a 19-kilometre light rail line on the outskirts of the capital that was meant to have been finished by the end of last year " but it has not even been started.
Touting the project in 2013, Aquino joked he was ready to be run over a train if it was not completed by the end of 2015. But his government has not even finalised the tender process.
Gilbert Llano, president of the Philippine Institute for Development Studies, a government think tank, echoed the ironic tone of many experts when talking about the governments infrastructure plan.
Its called a dream plan (because) it will stay in the realm of dreams, said Llanto.//

Author:
Date: January 24, 2016
Source: Gulf News.com

MANILA, Philippines " Web designer Maria Zurbano kisses her 3-year-old daughter goodbye and sets out in the pre-dawn darkness for a torturous commute through the Philippine capital.
Her ordeal, a return trip of up to 6 hours every weekday, is expected to get even worse as the number of cars explodes in the chaotic Asian mega-city of more than 12 million people. (READ: Taming Manila traffic: Hits and misses of 2015)
Dubbed "carmaggedon" by locals, business leaders are warning Manila could come to a total standstill despite grand government plans to tackle its traffic.
"Physically, during these trips, I feel ill. My back is always hurting. It affects my health to have to sit down for so long," said Zurbano, 36, as she waited for a bus outside her home at 5:00 am.
After finally ending a cramped mini-bus trip of just 17 kilometers (10.6 miles) to the financial district of Makati, Zurbano despaired of being trapped in a traffic hell. (READ: Is there no way to deal with traffic in Metro Manila?)
"Traffic just gets worse and worse. I just get more stressed and stressed but it doesn't look like anything will change. I will just have to learn to bear with it," she said.
Huge traffic costs
Traffic in the capital and its surroundings is already costing the country about P3 billion ($64 million) a day, or about 0.8% of gross domestic product, according to government figures.
And it is steadily worsening as an emerging middle class fuels an auto boom " car sales rose 23% last year with nearly 300,000 new vehicles hitting the roads.
Compounding the problem, decades of infrastructure neglect has left Manila with a just a few major roads across the city and their gridlock "peak hours" often last for 3 to 4 hours.
Commuters have few other options with Manila's dilapidated rail network tiny in comparison with neighboring Southeast Asian capitals such as Jakarta, Kuala Lumpur and Bangkok.
A chaotic private bus and mini-bus network with drivers who regularly flout traffic laws by, for instance, stopping in the middle of roads to pick up passengers, is widely perceived as adding to the problem.
"This is going to be the most critical problem the next administration faces," John Forbes, a senior adviser at the American Chamber of Commerce in Manila, told Agence France-Presse
Forbes warned Manila risked becoming "uninhabitable" in the next 3 to 5 years " meaning people would simply be unable to get around the city " if urgent action was not taken to build roads and rail lines.
Elections for a successor to President Benigno Aquino, who is required by the constitution to stand down after a single 6-year term, will be held in May.
Aquino has proved a generally popular president but he has been the target of fierce public criticism for a perceived lack of urgency in updating the nation's creaking infrastructure.
He earnt widespread condemnation mid-way through his term with comments that worsening traffic was merely a sign of a growing economy.
Dreams of urban bliss
His aides have since sought to project a sense of empathy and urgency, pointing to new expressways and an extension of a train line as planned projects that will ease the congestion.
They have also emphasized the adoption in 2014 of a "Dream Plan" to fix the urban chaos, which outlines $65 billion of infrastructure spending by 2030.
The plan envisages a wide range of massive and unprecedented projects for the Philippines, such as a subway, satellite cities linked to Manila by high-speed rail, relocating air and sea ports, as well as many new roads.
Finance Undersecretary Gil Beltran, an economist who has studied the traffic problem, said the plan's huge price tag is within the government's reach.
"Financing should not be a problem because the funders are ready," Beltran told Agence France-Presse, pointing to the nation's improved credit rating that will allow cheaper loans, as well as expected help from the Japanese government and multilateral lenders.
But many experts believe there is little chance of many projects going ahead.
They point to the nation's chaotic and corrupt democratic system, as well as a strangling bureaucracy, which prevent infrastructure development.
A glaring example is the construction of a 19-kilometer light rail line on the outskirts of the capital that was meant to have been finished by the end of last year " but it has not even been started.
Touting the project in 2013, Aquino joked he was ready to be run over a train if it was not completed by the end of 2015. But his government has not even finalized the tender process.
Gilbert Llano, president of the Philippine Institute for Development Studies, a government think-tank, echoed the ironic tones of many experts when talking about the government's infrastructure plan.
"It's called a dream plan (because) it will stay in the realm of dreams," said Llanto. "

Author: Mynardo Macaraig
Date: January 24, 2016
Source: Rappler.com

The Philippines has performed well in the past few years relative to its peers. It demonstrated great resilience to exogenous shocks that would have undone less capable economies. But will it be able to sustain its positive economic position?
There are positive signs. Revised forecasts put GDP growth in 2015 between 5.7"6 per cent and forecasters expect a strong rebound in the coming year. The government has maintained an official forecast of 6"7 per cent. It expects higher growth in 2016, even when the current administration ends its term of office in June.
Policy reform efforts led to sound macroeconomic foundations and an improved governance framework. Both these factors encouraged investment and business activity as well as a consistent build-up of foreign exchange reserves. Foreign exchange reserves sat at US$80.6 billion at the end of November " enough to cover over 10 months of imports and payments of services and income. And international credit rating agencies have upgraded the Philippines credit rating thanks to policy reform.
The Philippines also sustained consumption growth due to substantial remittances from overseas Filipino workers (around US$20 billion) and low inflation. The services sector " mainly the IT Business Process Outsourcing industry " has significantly contributed to output and employment. Strong internal demand will remain as a significant growth driver in the future.
The government has successfully worked for the recent passage of critical reform laws: competition policy, liberalising the banking system, as well as managing and improving transparency of tax incentives. It has strengthened universal health insurance and sustained its conditional cash transfer program which covers millions of poor families and has been designed to improve the education and health status of the poor.
But the issue is whether the economy can sustain this record growth performance amid very challenging times. Certain headwinds could make for rough sailing.
As the Philippine economy integrates more closely with the global and regional economy, external events will have a bigger impact on domestic growth prospects. Weak external demand will have negative impacts on the growth of trade and services. The Philippines had a trade deficit equivalent to US$3.8 billion in October. Chinas slowing growth and recession in Japan do not bode well for the economy. Weaknesses among ASEANs major trading partners will also have negative spillover effects on ASEAN member states like the Philippines.
Because of this, there is a great risk that trade-led growth may not be a viable option for the Philippines in the immediate future. The Philippines still suffers critical development constraints: infrastructure is inadequate and there are problems with connectivity. It does not help that government spending has been somewhat constricted by procurement processes and bureaucratic inefficiency. Populist legislators have also introduced revenue-eroding measures. The current Aquino administration created significant fiscal space " a measure of the governments room for policy manoeuvre " but this could eventually disappear, much to the regret of the new administration after the national elections in May 2016.
The Aquino administration ends on 30 June 2016 and, according to the Constitution, the current president cannot run for re-election. As in the past, there will be a peaceful and orderly transition to a new government, but the issue of succession provokes several questions. Will the next leader be as committed to policy reform and improved governance as Aquino? Will there be policy reversals because of tremendous pressure from opportunistic politics? Will the next leadership be able to put together an able and responsible team who will stay the course and tackle the more difficult reforms in policies and institutions?
There will not be a lack of contenders in the political market who might put political expediency over difficult reform. This poses a danger to the economy because Philippine politics is already personalist and opportunistic. Many voters dont vote on issues but are mesmerised by personal charisma and (empty) promises made by political entrepreneurs.
The challenge to the electorate is to select a leader who will not flinch at the sight of difficult reforms. On the contrary, they should have the courage to make bold policy decisions and inspire the government machinery to implement them. The electorate needs to be better informed and educated. The Philippines recent growth experience was made possible by reforms in governance and policy.
This years success could serve as a reminder to the electorate to choose the right leaders. A rising middle class engendered by continuous growth, returning overseas Filipino workers who have experienced living in well-functioning societies, as well as better informed young voters who actively participate in social media could hopefully constitute the swing vote for a leader with the best interest of the country in mind.
Meanwhile, the current Philippine leadership must fully utilise its remaining political capital to pursue difficult reforms covering trade facilitation and regulatory frameworks. It must continue to invest in both human and physical capital that will raise productivity in the future.
Gilbert M. Llanto is the president of the Philippine Institute of Development Studies.
This article is part of an EAF special feature series on 2015 in review and the year ahead.


Author: Gilberto Llanto
Date: January 26, 2016
Source: East Asia Forum

Intensified trade with Asean and the rest of the global economy would put the Philippines at a disadvantage given the lack of infrastructure and slow government spending on public goods and services, the head of Philippine Institute of Development Studies (PIDS) said yesterday.
But the countrys chief economist remained bullish on trade as the value of imported goods grew for the sixth-straight month last November at a rate fastest in Asia, which Economic Planning Secretary Arsenio M. Balisacan said reflected investor confidence in the country.
Economists of debt watcher Standard and Poors, meanwhile, told a webcast that the biggest risks to the countrys investment-grade credit rating remained the low capita to gross domestic product ratio as well as barriers to institutionalize the good governance framework.
If under a new administration by midyear the governance agenda stalls or [the new President] reverses gains in the Philippines external position will there be downward pressures in ratings, according to S and P.
For PIDS president Gilbert M. Llanto, the bigger issue with regards the economy this year was if it can sustain [the] record growth performance amid very challenging times, citing that certain headwinds could make for rough sailing mainly in terms of trade.
As the Philippine economy integrates more closely with the global and regional economy, external events will have a bigger impact on domestic growth prospects. Weak external demand will have negative impacts on the growth of trade and services. Chinas slowing growth and recession in Japan do not bode well for the economy. Weaknesses among Aseans major trading partners will also have negative spillover effects on Asean member-states like the Philippines, Llanto explained.
Because of this, there is a great risk that trade-led growth may not be a viable option for the Philippines in the immediate future. The Philippines still suffers critical development constraints: Infrastructure is inadequate and there are problems with connectivity. It does not help that government spending has been somewhat constricted by procurement processes and bureaucratic inefficiency, he said.
The government nonetheless remained bullish on external trade prospects as a preliminary report of the Philippine Statistics Authority showed that the imports bill jumped 10.1 percent to $6.1 billion in November last year from $5.5 billion a year ago. The increase posted last November sustained the year-on-year jumps being posted since June.
Exports, however, which economists had said was the main drag to economic growth during the fourth quarter of 2015, likely ended the year with a year-on-year drop, Balisacan said.
In a statement, the National Economic and Development Authority (Neda) attributed the imports growth that month to higher purchases of capital goods, consumer goods and raw materials and intermediate goods.
In November, the value of imported raw materials and intermediate products, which make up two-fifths of the total, increased by 14 percent year-on-year to $2.5 billion.
Capital goods imports, meanwhile, jumped 40.8 percent that month, Neda said.
The value of imported consumer goods rose 8 percent year-on-year to $1 billion due to higher purchases of durable goods and home appliances.
Despite an expected slow recovery in the global economy, continued growth in the countrys merchandise imports signifies the increasing investment demand in the Philippines, said Balisacan, who is also Nedas director general. Capital goods as well raw materials and intermediate goods are being used in manufacturing.
At the end of the first 11 months of 2015, imports grew 4.5 percent to $62.6 billion from $59.9 billion in the previous year.//

Author: Ben O. de Vera
Date: January 27, 2016
Source: Philippine Daily Inquirer

The Philippine Institute for Development Studies (PIDS) has significantly cut its growth forecast for the economy to a range of 5.7 percent to 6 percent in 2015. Worse, the state think tank said the May elections could drag further the countrys growth this year.
Initially, the PIDS forecast a full-year growth of 6.8 percent in its May 2015 announcement. But with the weaker-than-expected growth in the first semester and the impact of El Nio, the economy is now forecast to register even slower growth.
The official full-year GDP data will be released by the Philippine Statistics Authority on Thursday.
The current Philippine leadership must fully utilize its remaining political capital to pursue difficult reforms covering trade facilitation and regulatory frameworks. It must continue to invest in both human and physical capital that will raise productivity in the future, Pids President Gilbert M. Llanto said. Llanto added that these investments will be crucial, especially in 2016, when the country is faced with major headwinds.
He said the Philippiness integration with its Asean neighbors, as well as the political uncertainty from the coming elections, may cut the countrys economic growth this year. Llanto said the slowdown in the economies of the Aseans trading partners could spill over to the Philippine economy this year.
Chinas slowing growth and recession in Japan do not bode well for the economy. Weaknesses among Aseans major trading partners will also have negative spillover effects on Asean member-states like the Philippines, Llanto added.
The negative spillover effects of the slowdown in China and Japan, which are also among the Philippiness major trading partners, may slowdown the countrys trade performance this year.
This is a concern, given that exports and imports growth have since been hampered by the countrys critical development constraints, such as poor infrastructure and connectivity. Llanto said the trade sector is also burdened with inefficient procurement processes and red tape. These are the same factors that affect the countrys overall business climate.
While the current administration has put in place counter measures, Llanto said these are still insufficient, and President Aquino has less than six months before his term expires. Llanto added that this is the reason the political uncertainty caused by the presidential elections in May may also drag the economy this year.
The PIDS president said there is a risk that the coming elections will again see personality politics at work. This poses a danger on the kind of leadership the country will have in the next six years. There will not be a lack of contenders in the political market who might put political expediency over difficult reform. This poses a danger to the economy because Philippine politics is already personalist and opportunistic. Many voters dont vote on issues, but are mesmerized by personal charisma and [empty] promises made by political entrepreneurs, he added.
The PIDS is not the first institution to cut its growth forecast for 2015 and 2016. The latest one was the United Nations Economic and Social Commission for Asia and the Pacific (Unescap).
In its Economic and Social Survey of Asia and the Pacific 2015: Year-End Update, Unescap cut its growth forecast for the Philippines to 6.3 percent for 2016, from the initial estimate of 6.4 percent it made prior to December 2015.
The lackluster public spending in 2015, Unescap added, likely caused Philippine GDP growth to slow to 5.9 percent last year compared to the UN agencys previous estimate of 6.5 percent.//

Author: Cai Ordinario
Date: January 26, 2016
Source: Business Mirror

OVER 40% of Filipinos not employed in the formal sector have no health insurance coverage, according to the findings of a study by Philippine Institute for Development Studies (PIDS).
The coverage rate for Individually Paying Program (IPP) at the national level ranges between 56% and 58%, depending on the estimate of potential dependents.

This indicates that over 40% of the population who do not qualify as dependents and are not employed in the formal sector has no health insurance coverage, PIDS said.

IPP is the voluntary component of the countrys social health insurance. Enrolled in this scheme are individuals who opt to pay for their own membership including the self-employed, self-earning, and those in occupations without a formal employer-employee relationship.

According to PIDS, coverage rates came in as low as 3% in Sulu and Tawi-tawi, a finding it called abysmal.

PIDS said the low coverage rates maybe due to respondents incorrectly classifying themselves under formal private establishments instead of under the informal sector categories.

The study noted that Bicol and Eastern Visayas Regions have among the lowest coverage rates at 23.58% and 28.95%, respectively.

PIDS said the availability of health care resources appears to be an important consideration in terms of the level of coverage in the province, with more private hospitals making it more likely for a province to have higher coverage rates.

This indicates that the existence of private hospitals seemingly encourages individuals to enroll into the health insurance scheme, presumably with the notion that if care is sought, they can avail of private medical services with the use of PhilHealth, it said.

PIDS noted that income levels do not appear to be a factor in determining the level of insurance coverage.

PIDS recommended channelling public funds into the health insurance system instead of to public providers and to examine depth of the coverage of the IPP.

There is an impression that the coverage offered by the health insurance will not account for the majority of their health expenditures, it said, adding that individuals will see no need to avail of health insurance if they hold such views. --


Author: Kathryn Mae P. Tubadeza
Date: January 26, 2016
Source: Business World

Dubbed "carmaggedon" by locals, business leaders are warning Manila could come to a total standstill despite grand government plans to tackle its traffic
MANILA: Web designer Maria Zurbano kisses her three-year-old daughter goodbye and sets out in the pre-dawn darkness for a torturous commute through the Philippine capital.
Her ordeal, a return trip of up to six hours every weekday, is expected to get even worse as the number of cars explodes in the chaotic Asian mega-city of more than 12 million people.
Dubbed "carmaggedon" by locals, business leaders are warning Manila could come to a total standstill despite grand government plans to tackle its traffic.
"Physically, during these trips, I feel ill. My back is always hurting. It affects my health to have to sit down for so long," said Zurbano, 36, as she waited for a bus outside her home at 5:00 am.
After finally ending a cramped mini-bus trip of just 17 kilometres (10.6 miles) to the financial district of Makati, Zurbano despaired of being trapped in a traffic hell.
"Traffic just gets worse and worse. I just get more stressed and stressed but it doesn't look like anything will change. I will just have to learn to bear with it," she said.
HUGE TRAFFIC COSTS
Traffic in the capital and its surroundings is already costing the country about three billion pesos ($64 million) a day, or about 0.8 percent of gross domestic product, according to government figures.
And it is steadily worsening as an emerging middle class fuels an auto boom -- car sales rose 23 percent last year with nearly 300,000 new vehicles hitting the roads.
Compounding the problem, decades of infrastructure neglect has left Manila with a just a few major roads across the city and their gridlock "peak hours" often last for three or four hours.
Commuters have few other options with Manila's dilapidated rail network tiny in comparison with neighbouring Southeast Asian capitals such as Jakarta, Kuala Lumpur and Bangkok.
A chaotic private bus and mini-bus network with drivers who regularly flout traffic laws by, for instance, stopping in the middle of roads to pick up passengers, is widely perceived as adding to the problem.
"This is going to be the most critical problem the next administration faces," John Forbes, a senior adviser at the American Chamber of Commerce in Manila, told AFP.
Forbes warned Manila risked becoming "uninhabitable" in the next three to five years -- meaning people would simply be unable to get around the city -- if urgent action was not taken to build roads and rail lines.
Elections for a successor to President Benigno Aquino, who is required by the constitution to stand down after a single six-year term, will be held in May.
Aquino has proved a generally popular president but he has been the target of fierce public criticism for a perceived lack of urgency in updating the nation's creaking infrastructure.
He earnt widespread condemnation mid-way through his term with comments that worsening traffic was merely a sign of a growing economy.

DREAMS OF URBAN BLISS
His aides have since sought to project a sense of empathy and urgency, pointing to new expressways and an extension of a train line as planned projects that will ease the congestion.
They have also emphasised the adoption in 2014 of a "Dream Plan" to fix the urban chaos, which outlines $65 billion of infrastructure spending by 2030.
The plan envisages a wide range of massive and unprecedented projects for the Philippines, such as a subway, satellite cities linked to Manila by high-speed rail, relocating air and sea ports, as well as many new roads.
Finance Undersecretary Gil Beltran, an economist who has studied the traffic problem, said the plan's huge price tag is within the government's reach.
"Financing should not be a problem because the funders are ready," Beltran told AFP, pointing to the nation's improved credit rating that will allow cheaper loans, as well as expected help from the Japanese government and multilateral lenders.
But many experts believe there is little chance of many projects going ahead.
They point to the nation's chaotic and corrupt democratic system, as well as a strangling bureaucracy, which prevent infrastructure development.
A glaring example is the construction of a 19-kilometre light rail line on the outskirts of the capital that was meant to have been finished by the end of last year -- but it has not even been started.
Touting the project in 2013, Aquino joked he was ready to be run over a train if it was not completed by the end of 2015. But his government has not even finalised the tender process.
Gilberto Llanto, president of the Philippine Institute for Development Studies, a government think-tank, echoed the ironic tones of many experts when talking about the government's infrastructure plan.
"It's called a dream plan (because) it will stay in the realm of dreams," said Llanto.- AFP/jb


Author:
Date: January 25, 2016
Source: Channel News Asia

The Philippines has performed well in the past few years relative to its peers. It demonstrated great resilience to exogenous shocks that would have undone less capable economies. But will it be able to sustain its positive economic position?
There are positive signs. Revised forecasts put GDP growth in 2015 between 5.7"6 per cent and forecasters expect a strong rebound in the coming year. The government has maintained an official forecast of 6"7 per cent. It expects higher growth in 2016, even when the current administration ends its term of office in June.
Policy reform efforts led to sound macroeconomic foundations and an improved governance framework. Both these factors encouraged investment and business activity as well as a consistent build-up of foreign exchange reserves. Foreign exchange reserves sat at US$80.6 billion at the end of November " enough to cover over 10 months of imports and payments of services and income. And international credit rating agencies have upgraded the Philippines credit rating thanks to policy reform.
The Philippines also sustained consumption growth due to substantial remittances from overseas Filipino workers (around US$20 billion) and low inflation. The services sector " mainly the IT Business Process Outsourcing industry " has significantly contributed to output and employment. Strong internal demand will remain as a significant growth driver in the future.
The government has successfully worked for the recent passage of critical reform laws: competition policy, liberalising the banking system, as well as managing and improving transparency of tax incentives. It has strengthened universal health insurance and sustained its conditional cash transfer program which covers millions of poor families and has been designed to improve the education and health status of the poor.
But the issue is whether the economy can sustain this record growth performance amid very challenging times. Certain headwinds could make for rough sailing.
As the Philippine economy integrates more closely with the global and regional economy, external events will have a bigger impact on domestic growth prospects. Weak external demand will have negative impacts on the growth of trade and services. The Philippines had a trade deficit equivalent to US$3.8 billion in October. Chinas slowing growth and recession in Japan do not bode well for the economy. Weaknesses among ASEANs major trading partners will also have negative spillover effects on ASEAN member states like the Philippines.
Because of this, there is a great risk that trade-led growth may not be a viable option for the Philippines in the immediate future. The Philippines still suffers critical development constraints: infrastructure is inadequate and there are problems with connectivity. It does not help that government spending has been somewhat constricted by procurement processes and bureaucratic inefficiency. Populist legislators have also introduced revenue-eroding measures. The current Aquino administration created significant fiscal space " a measure of the governments room for policy manoeuvre " but this could eventually disappear, much to the regret of the new administration after the national elections in May 2016.
The Aquino administration ends on 30 June 2016 and, according to the Constitution, the current president cannot run for re-election. As in the past, there will be a peaceful and orderly transition to a new government, but the issue of succession provokes several questions. Will the next leader be as committed to policy reform and improved governance as Aquino? Will there be policy reversals because of tremendous pressure from opportunistic politics? Will the next leadership be able to put together an able and responsible team who will stay the course and tackle the more difficult reforms in policies and institutions?
There will not be a lack of contenders in the political market who might put political expediency over difficult reform. This poses a danger to the economy because Philippine politics is already personalist and opportunistic. Many voters dont vote on issues but are mesmerised by personal charisma and (empty) promises made by political entrepreneurs.
The challenge to the electorate is to select a leader who will not flinch at the sight of difficult reforms. On the contrary, they should have the courage to make bold policy decisions and inspire the government machinery to implement them. The electorate needs to be better informed and educated. The Philippines recent growth experience was made possible by reforms in governance and policy.
This years success could serve as a reminder to the electorate to choose the right leaders. A rising middle class engendered by continuous growth, returning overseas Filipino workers who have experienced living in well-functioning societies, as well as better informed young voters who actively participate in social media could hopefully constitute the swing vote for a leader with the best interest of the country in mind.
Meanwhile, the current Philippine leadership must fully utilise its remaining political capital to pursue difficult reforms covering trade facilitation and regulatory frameworks. It must continue to invest in both human and physical capital that will raise productivity in the future.
Gilbert M. Llanto is the president of the Philippine Institute of Development Studies.
This article is part of an EAF special feature series on 2015 in review and the year ahead.

Author: Gilberto Llanto
Date: January 26, 2016
Source: East Asia Forum

MANILA, Jan. 26 -- Economic Planning Secretary and National Economic and Development Authority (NEDA) Director General Arsenio M. Balisacan has resigned effective January 31, 2016 to head the newly-formed Philippine Competition Commission (PCC).

Taking on the job as the first chairperson of the PCC for me, is a very compelling challenge that is hard to ignore. I see this as both a great responsibility and another privilege to steer the economy toward the right direction to realize all its growth potential, said Balisacan.

Republic Act No. 10667, otherwise known as the Philippine Competition Act, which President Benigno S. Aquino III signed into law on July 21, 2015, created the PCC.

The commission is a quasi-judicial body which will enforce and implement the provisions of the Philippine Competition Act, including its implementing rules and regulations. Through this, it will ensure an efficient market competition in providing a level-playing field among businesses engaged in trade, industry, and all commercial economic activities.

The PCC aims to protect consumer welfare and advance both domestic, and international trade and economic development. Also, it has the mandate to conduct inquiries, investigate, and penalize all forms of anti-competitive agreements, abuse of dominant position, and anti-competitive mergers and acquisitions.

We would want to address the problem of having a growing economy but with the benefits of such growth only for a small sector. Promoting fair and healthy competition among firms is a major factor in ensuring that the benefits of growth are properly shared, said the new PCC Chief.

As Socioeconomic Planning Secretary and NEDA Director-General since May 2012, Balisacan was the first chair of the Philippine Statistics Authority Board and the Public-Private Partnership Center Board. Concurrently, he was chairman of the board for the Philippine Institute of Development Studies, Philippine Center for Economic Development, and the Philippine Statistical Research and the Training Institute.

Prior to his appointment to NEDA, Balisacan was Dean and Professor of the University of the Philippines School of Economics. He also served as the Director of the Southeast Asian Regional Centre for Graduate Study and Research in Agriculture or SEARCA from 2003 to 2009, and Undersecretary of the Department of Agriculture in 2000, 2001, and 2003.

Recognized as a leading development economist in Asia, Balisacan will be bringing to PCC, aside from his experience as Secretary of Socioeconomic Planning, is his expertise in development economics, international economics, and applied welfare economics. Balisacan has been an Academician of the National Academy of Science and Technology since 2008 and an Adjunct Professor at the Australian National University since 2011.

Meanwhile, Deputy Director-General Emmanuel F. Esguerra will serve as the Officer-in-Charge of NEDA. (NEDA) //


Author:
Date: January 26, 2016
Source: PIA

Slower global growth and the next administrations uncertain commitment on policy reforms and good governance pose major risks to the Philippine economy this year, an official of government think tank Philippine Institute of Development Studies said in a report Tuesday.
PIDS president Gilbert Llanto said the Philippine economy could face rough sailing this year because of threats from both external and domestic fronts.
As the Philippine economy integrates more closely with the global and regional economy, external events will have a bigger impact on domestic growth prospects. Weak external demand will have negative impacts on the growth of trade and services, Llanto said.
He said the Philippines had a trade deficit equivalent to $3.8 billion in October and Chinas slowing growth and recession in Japan did not bode well for the economy.
Llanto said weaknesses among Aseans major trading partners would have negative spillover effects on other member states like the Philippines.
Because of this, there is a great risk that trade-led growth may not be a viable option for the Philippines in the immediate future. The Philippines still suffers critical development constraints: infrastructure is inadequate and there are problems with connectivity, he said.
Llanto also said the issue of succession after the May presidential elections provoked several questions, such as if the next leader would be as committed to policy reform and improved governance.
Will there be policy reversals because of tremendous pressure from opportunistic politics? Will the next leadership be able to put together an able and responsible team who will stay the course and tackle the more difficult reforms in policies and institutions? Llanto asked.
There will not be a lack of contenders in the political market who might put political expediency over difficult reform. This poses a danger to the economy because Philippine politics is already personalist and opportunistic. Many voters dont vote on issues but are mesmerized by personal charisma and [empty] promises made by political entrepreneurs, Llanto said.
He said the challenge to the electorate was to select a leader who would not flinch at the sight of difficult reforms. On the contrary, he said, they should have the courage to make bold policy decisions and inspire the government machinery to implement them.
The electorate needs to be better informed and educated. The Philippines recent growth experience was made possible by reforms in governance and policy, Llanto said.
Policy reform efforts led to sound macroeconomic foundations and an improved governance framework. Both these factors encouraged investment and business activity as well as a consistent build-up of foreign exchange reserves, he said.
Foreign exchange reserves stood at $80.6 billion as of end-November, or enough to cover over 10 months of imports and payments of services and income. International credit rating agencies also upgraded the Philippines credit rating, also because of policy reforms.
Llanto said the Philippines sustained consumption growth due to substantial remittances from overseas Filipino workers and low inflation.
The services sector, mainly the IT business process outsourcing industry, has significantly contributed to output and employment.
The government has successfully worked for the recent passage of critical reform laws: competition policy, liberalizing the banking system, as well as managing and improving transparency of tax incentives. It has strengthened universal health insurance and sustained its conditional cash transfer program which covers millions of poor families and has been designed to improve the education and health status of the poor, he said.
Llanto said the current leadership must fully utilize its remaining political capital to pursue difficult reforms covering trade facilitation and regulatory frameworks. He said it should continue to invest in both human and physical capital that would raise productivity in the future.//


Author: Julito G. Rada
Date: January 26, 2016
Source: The Standard

The manufacturing industry has grown by 8.1 percent over the last five years and has been a leading growth driver of the economy. To help sustain this strong growth and create more and better jobs, the government has been pursuing a new industrial policy. This aims to upgrade and create globally competitive manufacturing industries with the government acting as facilitator in addressing the most binding constraints to growth preventing the entry of new firms or existing firms from moving up the value chain.


Need for CARS

At the heart of the manufacturing industry road map is the development of the automotive industry through the Comprehensive Automotive Resurgence Strategy (CARS) program. Auto manufacturing is a complex process with over 30,000 parts linked through various tiers covering raw materials and intermediate parts"from manufacturing (electronics, chemicals, steel, other metals, glass, rubber, plastic and textile) to services (marketing, banking and after-market sales).

As such, auto has one of the highest multiplier or spillover effects within the economy. Dr. Cid Tarosas (2011) calculations showed an output multiplier of 3.56 and an employment multiplier of 169 for every P100-million investment in the industry.

Automobile manufacturing is a high-tech and highly globalized industry with operations characterized by regional or global production networks. In these networks, auto companies have fragmented their processes, locating these in various countries that are competitive in producing these products. Competition has become tougher because countries must compete not only against other countries but also against other subsidiaries within the network.

Export hub

The Philippines aspires to become a manufacturing and export hub, like Thailand and Indonesia. Both have been assigned as production and export bases. In the case of the Philippines, our role has been limited to parts manufacturing serving as Toyotas transmission hub, and supplier of transmissions, manifolds and other parts under Mitsubishis regional operations.

To take advantage of the opportunities arising from regional integration (through the Asean Economic Community), the country needs to deepen its participation in these production networks of global automakers. The market potentials in both the domestic and regional markets are huge. In the Philippines, 500,000 units are expected by 2022 and in Asean, demand forecasts range from 3 million to
6 million units by 2020, with the third wave of motorization expected to take place in the Philippines in the same way that it occurred in Thailand in 2004 and Indonesia in 2010. (See Figure 1.)

Laguna, Cavite

We have an emerging auto cluster in Laguna and Cavite consisting of four automakers (Toyota, Mitsubishi, Honda and Isuzu) and 256 parts manufacturers of around 330 different components. With $4.3 billion in exports contributing 7 percent to our total exports in 2014, the industry is a net exporter of parts like ignition sets, radio receivers, brake system, transmissions, air filters, pneumatic tires, lead acid accumulators and other motor vehicle parts.

Data from the Philippine Statistics Authority for 2013 showed total employment of around 62,000 workers with compensation amounting to P17 billion (6 percent of total manufacturing), value of output of P321 billion (8 percent of total manufacturing) and value added of P154 billion (16 percent of total manufacturing). In 2014, total sales reached 269,164 units, representing a jump of 27 percent from 2013.

In terms of domestic production, volume was limited to 86,218 units due to the absence of scale economies, lack of a strong supplier base and high production costs. The industry is facing competitiveness issues that must be immediately addressed to transform and become a regional manufacturing hub. Assemblers are operating below the optimum production size and the estimated cost gap between the Philippines and Thailand ranges from P45,000 to P90,000 per vehicle.

Adjustment program

An adjustment program is necessary to address the cost competitiveness gap, strengthen the viability of the industry and facilitate its integration into the regional and global production networks. Figure 2 illustrates the effects of domestic market expansion on both assemblers, and parts and components manufacturers.

Higher volumes will allow both assemblers and parts and components manufacturers to attain scale economies leading to reduced costs. To make this happen, government support is critical to aid firms as they restructure their operations. Government can assist the industry by providing incentives to encourage upgrading and market expansion as well as enable the industry to create a niche in the global market and actively participate in global or regional production networks.

Auto road map

CARS was a product of research studies conducted by the Philippine Institute for Development Studies and the University of Asia and the Pacific since the 1990s. These served as inputs for the crafting of the Automotive Industry Road Map which was submitted by the industry association to the Department of Trade and Industry-Board of Investments (DTI-BOI) in 2013.

The main goal is to strengthen the manufacturing base by deepening our integration in global value chains to enable us to benefit fully from Asean Economic Community trade and investment. To achieve this, government support is critical in formulating a program to expand the domestic market. In Stage 2, domestic market expansion is expected to take place along with new investments and enhancement of local capabilities in auto parts manufacturing. (See Figure 3.)

EO, IRR

The process of formulating CARS took about three years from 2013 to 2015, involving many dialogues and consultations not only among the industry stakeholders but also among government agencies, academe, labor and civil society.

The executive order was signed on May 29, 2015 while the implementing rules and regulations (IRR) were approved on Nov. 16, 2015.

Parts making

CARS aims to jumpstart auto manufacturing, stimulate investments in parts manufacturing, generate quality jobs, create a competitive industry and become a regional hub in the very near future. The program focuses on developing parts manufacturing, particularly large body shell and plastic assemblies, common parts, strategic parts that are not yet manufactured in the country and shared facilities. Through the temporary support of P45,000 per unit, the program attempts to close the competitiveness gap and kick-start automobile development in the country.

Different from MVD

CARS represents a modern industrial policy. It is far different from the Motor Vehicle Development (MVD) programs carried out in the past. The program is centered on performance-based and time-bound incentives, and entails noncash mode of payment.

The fiscal support will be provided only after the fulfillment of conditions pertaining to investments in large body shell and plastic assemblies, strategic parts and production volume requirements. The program will be implemented over a period of six years.

In contrast, our old programs relied heavily on tariff and nontariff protection and regulations on the number of players, models and local content. In the current setting, these schemes no longer work especially given the global operations of auto companies in a highly open market environment. While tariff and nontariff barriers often lead to higher domestic consumer prices, fiscal support tends to do the opposite as it brings down domestic consumer prices.

Program mechanics

CARS will support three models covering the manufacture of the following:

Four-wheeled motor vehicles

Body shell assembly, large plastic assemblies, common parts, strategic parts not currently produced in the Philippines (See list below.) and shared testing facilities

To be eligible to enroll in the program, a carmaker must be internationally recognized, and has a proven track record and multinational operations, including R and D, manufacturing, marketing and after-sales services in Asia, Europe and North America. A carmaker must be endorsed by the participating carmaker to manufacture parts of its enrolled model, must be an original equipment manufacturing auto parts maker and a member in good standing of the Philippine parts makers association.

Criteria

In evaluating applications, the following criteria will be used:

Track record and model competitiveness, including global and domestic sales

New investments in body shell assembly and large plastic parts assemblies

Planned volume should be at least 200,000 units to be produced over a six-year period (model life of vehicle)

Economic impact of the investment plan: parts manufacturing, linkages, strategic and common parts, employment and consumer welfare

Impact on overall competitive environment and long-term industry development

Safety, fuel efficiency, emission level standards (not lower than standards under the Clean Air Act)

P27B budget

The program will have a total budget of P27 billion (or P9 billion per model) divided into two components: fixed (40 percent) and variable (remaining 60 percent). The fixed incentive support will cover capital expenditure for tooling, equipment and training costs for the initial start-up operation. It will be granted after investments in parts and component manufacturing have been completed and the first unit of vehicle using these parts and components has been rolled out.

Variable incentive

To be eligible for the production variable incentive, body-shell assembly must be at least 50 percent of the assembly by weight and production must exceed 100,000 units.

The mode of payment will be done through a tax payment certificate that can be used to settle tax liabilities, such as income, VAT, and excise and customs duties.

To operationalize the scheme, a joint administrative order was signed among the Department of Finance (DOF), Department of Budget and Management, Bureau of Internal Revenue, Bureau of Customs, Bureau of Treasury and the DTI-BOI. This covered the payment settlement process along with the responsibilities of each agency and the ground rules.

Monitoring

An interagency committee is created to monitor the programs administration and implementation. The committee is chaired by the DTI-BOI and consists of representatives of the DOF, National Economic and Development Authority, Department of Science and Technology, Department of Transportation and Communications, Technical Education and Skills Development Authority, Industry Development Council and the National Competitiveness Council. It is supported by a Project Management Office, which also serves as the program secretariat.

The committee will evaluate applications, and monitor and regularly assess the progress and effectiveness of the program. It will also coordinate with other agencies whose policies and programs affect the development of the auto industry and carry out research to formulate suitable policies for the industry. Numerous issues affecting the competitiveness of the industry and its effective implementation would have to be dealt with. These include infrastructures (roads, ports and power), trade facilitation (standards and customs procedures) and logistics.

The committee is envisioned to play an important role in promoting industry development and in coordinating solutions to these issues with both government and the private sector, and with local and international agencies.

Manufacturing takeoff

It is only through CARS that we can develop and catch up with our neighbors who have been actively implementing their own industrial policies, and granting fiscal and nonfiscal support to their domestic auto industries.

To take advantage of market opportunities, we need to strengthen the domestic auto market base. This is crucial to build the necessary scale that would bring down costs and allow us to become a future auto manufacturing regional hub.

With its strong forward and backward linkages with other sectors, the auto industry provides the foundation for broad-based industrial growth. The implementation of CARS signals governments vigorous support for and focus on industries with the automobile as the platform for manufacturing takeoff.

(Rafaelita Aldaba is an assistant secretary for the Industry Development Group of the Department of Trade and Industry. She is a former vice president and senior research fellow at the Philippine Institute for Development Studies.)


Author: Rafaelita Aldaba
Date: January 31, 2016
Source: Philippine Daily Inquirer

We went through several iterations of the project before we came to create what you now see on www.pampubliko.com. Indeed, it was often when we would explain our idea to other people and would then hear their interpretation of what we had just told them that we began to shape a kind of collective reading of what the Philippine public sphere and political landscape were missing. As we look forward to the upcoming election season and what the change of house will bring, our project, PAMPUBLIKO, seeks to reorient the mainstream political conversation to be premised on substantive discussion of policy, while also refreshing policy discussion to be more inclusive and accessible"not merely the province of academia and legislators. We do this because we believe that reorienting the prevailing national political discourse will foster progress in good governance, political accountability, and peoples empowerment in government.
Few developing countries have sufficient research centers to address their complex challenges with the kind of policy variety, depth and creativity needed. The Philippines, too, requires more flexible research centers to enrich our policy communitys intellectual ecosystem and cumulative offering. Though our start-up has neither the resources nor the deep empiricism of our countrys impressive, established think tanks"such as the Philippine Institute of Development Studies and AIMs Policy Center"a nimble policy center dedicated to innovative, strategic thinking can contribute renewed creativity and variety of thought to our policy community.
We specialize in long-term strategic and creative thinking, the kind which hard-pressed, overwhelmed bureaucrats do not have the luxury to indulge in as their agencies struggle to stay above water. The career bureaucrats that are the backbone of government are challenged to navigate the six-year stop-and-start process of administration change, and the politics of our single-term presidential system so often bracket and limit the progress of good government work. When you can only think along six-year timelines, the possibility for larger, longer visions closes.
Unencumbered by such restrictions, PAMPUBLIKO can employ its non-partisan, outsider position to think through more creative, strategic and longer-term possibilities. What would it look like if the Philippines were to legalize and regulate prostitution? What are the extra-legislative means to mimic the would-have-been effects of a bill to regulate political dynasties? More importantly, we also enjoin the public to join us in these conversations and think through what is possible for our country. What are the alternatives to what our political system is currently delivering?
A policy-oriented political discourse involves the people in the shaping of their countrys future. Rather than electing candidates for what they stand for and project, we can not only elect, but also craft, the future we hope to achieve for the Philippines. This year, going forward, and as we look back when we commemorate the 30-year anniversary of EDSA, lets have an issues-based discussion " one that transcends the politics of personalities and the circumscribed vision of a six-year term. Lets address the lack of political accountability by forcing candidates to run on specific, actionable, publicly vetted platforms. Lets talk policy, so more people can have a stake in the means and method of governance. Lets change the conversation.//
Nicole Del Rosario CuUnjieng is a PhD Candidate in Southeast Asian and International History at Yale University and co-founder of PAMPUBLIKO.com

Author: Nicole Del Rosario Cuunjieng,
Date: January 31, 2016
Source: Manila Times

In 2009-2010, one of then Senator Benigno S. C. Aquino IIIs campaign promises was no new taxes -- a promise his administration kept only technically. And thankfully so, as new taxes were needed in 2010, and as I will discuss at the end of this column, will be needed in 2016-2017, as part of a comprehensive fiscal reform program for our country to scale up to our peers.
I said technically because of the sin tax increase/reform done in 2012 which was presented as a tweaking of an existing tax, and not a new tax despite its big impact on -- and for -- the taxpaying public. It was a long delayed adjustment to make up for decades of erosion in the real value of the tax, but at the same time there was an increase in the effective tax rates, as well reform in the structure by unifying rates and incorporating an annual 4% increase.

By packaging it as a health measure aimed especially at discouraging the young from smoking and earmarking the incremental revenues to fund universal access to health care, its prime movers -- the Department of Finance (DoF), Department of Budget and Management, Department of Health, supported by the World Bank, World Health Organization, the International Monetary Fund, and other development partners -- were able to form a broad coalition of public support for it. This included constituencies for better economic governance and for public health. The Action for Economic Reform was at the forefront of this mobilization. Business organizations like the Makati Business Club, and our Foundation for Economic Freedom (which has five former Finance Secretaries in its rolls) were proudly also part of it. On the public health side were Health Justice, New Vois Association Phils., Philippine Cancer Society, Philippine College of Physicians, etc.

With all of these advocates, and the leadership of the President, the Finance Secretary, the Senate President, the Speaker of the House and the Committee Chairs, it passed but only after exciting deliberations and drama.

It quickly yielded dividends, total alcohol and tobacco excise tax collections upped by 85% in 2013 and a further 14% in 2014. This increase contributed P101.4 billion or 1% of GDP in the first two years. The tax to GDP was only 12.1% at the time the Aquino administration took over in 2010; in 2014, it stood at 13.6%. (See charts)

The improvements in collection are explained not just by the higher effective tax rates, but by improvements in plugging tax evasion. At the time the law was being deliberated, likely increase in evasion and smuggling was the strongest argument of those opposing it.

The critical administrative reform here is the introduction of security stamp taxes, a feature that is required under the Tax Reform Law passed in 1997 during the Ramos administration, but which the tobacco lobby has been able to obstruct for 15 years of the succeeding administrations. That is, until Bureau of Internal Revenue Commissioner Kim J. Henares came along.

In a transparent competitive bidding in 2013, the BIR and its partner in this project, the APO printing office, selected a provider of a highly secure stamp tax system -- IRSIS, a consortium of Israeli and Philippine companies.

Two years later, 95% of cigarettes sold nationally bear security stamps. Enforcement is aided by an innovative monitoring project conceived by the Department of Finance, and sponsored by the World Bank. A couple of hundred part time data collectors with smart phones scour the country doing whale sighting everywhere cigarettes are sold. The whale is the icon chosen by the BIR for the stamps -- I thought most apt for the proverbial big fish BIR has been trying to snare since I was in the DoF in the 90s. (Ok, the whale is not a fish.)

The granular data collected for these whale sightings can be seen in the DoF Web site (dof.gov.ph) showing percent compliance by brand and by locality. Clearly, a powerful aid in monitoring tax compliance, instilling deterrence and for penal enforcement.

Commissioner Henares has announced security stamp taxes will forthwith be required also for alcohol products. A similar marking system is being contemplated for oil products by Bureau of Customs Commissioner Alberto D. Lina.

This tax policy and administrative reform program has been widely applauded. The Philippines credit rating was boosted by three notches, contributing to lower cost of borrowing of both government and the private sector, creating additional headroom for social and infrastructure spending.

Lower interest rates have also fueled private investments especially in housing, bringing direct benefits to our people. Health benefits were likewise palpable as smoking prevalence dropped from 29% in 2012 to 26% in 2014 in the general population, most strikingly among the young from 35% to 18%.

The sin tax reform program and its fruits have been impressive, but clearly not sufficient. Why?

1) Our infrastructure spending in the last 7 years has ranged from a low 1.4% of GDP to a high 2.1% according to the Philippine Institute for Development studies -- half of the 5% average in our neighbors. And we are paying the price for it -- in terms of gridlocks in roads, airports, seaports, lack of mass transport, no piped water outside Metro Manila, inadequate sewage systems, etc. The next administration will need to ramp up infrastructure spending to at least the same level of 5% of GDP -- preferably higher as one presidential candidate aims for.

2) Our latest tax to GDP (in 2014) at 13.%, is only 1.5 percentage points higher than at the start of this administration, below our peers. And far from the 15.3% record achieved in 1996 during the Ramos administration. Despite the heroic efforts of Commissioner Henares, there are limits in yield from tax administration reform, review of tax regulation and their reinterpretations. This has been the experience as well in other countries.

3) Additional spending commitment done by Congress for the next three years -- most notably increase in salaries, will add 0.5% of GDP every year for the next three years to the budget. The fiscal deficit though manageable at around 2%of GDP over the past five years, will be under pressure as a result of these advanced budget claims. Also from likely higher interest rates in both domestic and international markets. While our public debt to GDP of around 50% is comfortable, sharp increases in deficits will risk our newly minted investment grade rating.

4) The country has become tax uncompetitive. The corporate tax rate in the Philippines at 30% is much higher than countries in ASEAN which range from 17% for Singapore to 25% for Indonesia and Malaysia. Moreover, individual income taxes, especially on the low income levels have become inequitable as inflation pushed them up into brackets that were intended for the rich. Needed lowering in both corporate and personal income tax rates will require compensatory revenue measures elsewhere.

5) More fundamentally, our tax system needs drastic reform. Too complex, too many exemptions with debatable benefits, too narrow a base, too cumbersome and costly to comply with, and too prone to corruption despite well meaning efforts of its leadership.

A future column will float directions for a tax reform program, to include a variable tax on oil and other fuels, rationalization, perhaps a guillotine, on tax incentives and exemptions, including those in favor of senior citizens like me -- a perverse regressive subsidy paid for by the more numerous young poor. There are many other such exemptions and redundant incentives favoring groups and sectors that need to go.//

Romeo L. Bernardo was Finance Undersecretary during the Cory Aquino and Ramos administrations and board director of Institute for Development and Econometric Analysis Inc. (IDEA)

romeo.lopez.bernardo@gmail.com


Author: Romeo Bernardo
Date: January 31, 2016
Source: Business World

The Cebu Provincial Board has approved a resolution requesting the Cebu Chamber of Commerce and Industry (CCCI) and Metro Cebu Water District (MCWD) to spearhead a program that will provide a long-term solution to the worsening effects of El Nio.
PB Member Thadeo Ouano, who authored the resolution, noted that the Philippine Atmospheric, Geophysical and Astronomical Services Administration (Pagasa) has predicted that the El Nio phenomenon in the country will last until May this year.
The resolution states the need to address water shortage if the hot weather continues. It also calls for measures to mitigate the damage to agriculture as a result of the water shortage.
The resolution reminds the people that water treatment, recycling and conservation should be practiced daily.
The Philippine Institute for Development Studies said an average Filipino family consumes six liters of water per day for drinking and 12 liters for kitchen purposes.
The chamber has already initiated steps towards water conservation through information dissemination among its members.
The occurrence of El Nio since last year has compelled the Cebu Provincial government to conduct cloud seeding and build water reservoirs to counter its effects.
On Feb. 4, agriculturists from all over the province will meet to discuss and assess the effects of the said weather condition. //

Author: Izobelle T. Pulgo
Date: January 30, 2016
Source: Cebu Daily News

MANILA, Philippines - The Philippines has performed well in the past few years relative to its peers. It demonstrated great resilience to exogenous shocks that would have undone less capable economies. But will it be able to sustain its positive economic position?
There are positive signs. Revised forecasts put gross domestic product growth in 2015 between 5.7"6 percent and forecasters expect a strong rebound in the coming year. The government has maintained an official forecast of 6"7 percent. It expects higher growth in 2016, even when the current administration ends its term of office in June.
Policy reform efforts led to sound macroeconomic foundations and an improved governance framework. Both these factors encouraged investment and business activity as well as a consistent build-up of foreign exchange reserves. Foreign exchange reserves sat at $80.6 billion at the end of November " enough to cover over 10 months of imports and payments of services and income. And international credit rating agencies have upgraded the Philippines credit rating thanks to policy reform.
The Philippines also sustained consumption growth due to substantial remittances from overseas Filipino workers (around $20 billion) and low inflation. The services sector " mainly the IT Business Process Outsourcing industry " has significantly contributed to output and employment. Strong internal demand will remain as a significant growth driver in the future.
The government has successfully worked for the recent passage of critical reform laws: competition policy, liberalizing the banking system, as well as managing and improving transparency of tax incentives. It has strengthened universal health insurance and sustained its conditional cash transfer program which covers millions of poor families and has been designed to improve the education and health status of the poor.
But the issue is whether the economy can sustain this record growth performance amid very challenging times. Certain headwinds could make for rough sailing.
As the Philippine economy integrates more closely with the global and regional economy, external events will have a bigger impact on domestic growth prospects. Weak external demand will have negative impacts on the growth of trade and services. The Philippines had a trade deficit equivalent to $3.8 billion in October. Chinas slowing growth and recession in Japan do not bode well for the economy. Weaknesses among ASEANs major trading partners will also have negative spillover effects on ASEAN member states like the Philippines.
Because of this, there is a great risk that trade-led growth may not be a viable option for the Philippines in the immediate future. The Philippines still suffers critical development constraints: infrastructure is inadequate and there are problems with connectivity. It does not help that government spending has been somewhat constricted by procurement processes and bureaucratic inefficiency. Populist legislators have also introduced revenue-eroding measures. The current Aquino administration created significant fiscal space " a measure of the governments room for policy maneuver " but this could eventually disappear, much to the regret of the new administration after the national elections in May 2016.
The Aquino administration ends on 30 June 2016 and, according to the Constitution, the current president cannot run for re-election. As in the past, there will be a peaceful and orderly transition to a new government, but the issue of succession provokes several questions. Will the next leader be as committed to policy reform and improved governance as Aquino? Will there be policy reversals because of tremendous pressure from opportunistic politics? Will the next leadership be able to put together an able and responsible team who will stay the course and tackle the more difficult reforms in policies and institutions?
There will not be a lack of contenders in the political market who might put political expediency over difficult reform. This poses a danger to the economy because Philippine politics is already personalist and opportunistic. Many voters dont vote on issues but are mesmerized by personal charisma and (empty) promises made by political entrepreneurs.
The challenge to the electorate is to select a leader who will not flinch at the sight of difficult reforms. On the contrary, they should have the courage to make bold policy decisions and inspire the government machinery to implement them. The electorate needs to be better informed and educated. The Philippines recent growth experience was made possible by reforms in governance and policy.
This years success could serve as a reminder to the electorate to choose the right leaders. A rising middle class engendered by continuous growth, returning overseas Filipino workers who have experienced living in well-functioning societies, as well as better informed young voters who actively participate in social media could hopefully constitute the swing vote for a leader with the best interest of the country in mind.
Meanwhile, the current Philippine leadership must fully utilize its remaining political capital to pursue difficult reforms covering trade facilitation and regulatory frameworks. It must continue to invest in both human and physical capital that will raise productivity in the future.//

Gilbert M. Llanto is the president of the Philippine Institute of Development Studies.

Author: Gilberto Llanto
Date: January 26, 2016
Source: Philippine Star

The Philippines may have grown between 5.7 and 6 percent last year, compared with governments optimistic goal of 6 to 7 percent, according to Gilbert Llanto, president of the Philippine Institute for Development Studies (PIDS).

Llanto said the country has demonstrated great resilience to exogenous shocks in its sterling performance vis-a-vis its peers.

But will it be able to sustain its positive economic position? he asked.

Llanto, however, said certain headwinds make for rough sailing.

As the Philippine economy integrates more closely with the global and regional economy, external events will have a bigger impact on domestic growth prospects. Weak external demand will have negative impacts on the growth of trade and services. The Philippines had a trade deficit equivalent to $3.8 billion in October. Chinas slowing growth and recession in Japan do not bode well for the economy.

Weaknesses among Aseans major trading partners will also have negative spillover effects on Asean member-states like the Philippines, he said.

Because of this, there is a great risk that trade-led growth may not be a viable option for the Philippines in the immediate future. The Philippines still suffers critical development constraints: infrastructure is inadequate and there are problems with connectivity. It does not help that government spending has been somewhat constricted by procurement processes and bureaucratic inefficiency. Populist legislators have also introduced revenue-eroding measures. The current Aquino administration created significant fiscal space " a measure of the governments room for policy maneuver " but this could eventually disappear, much to the regret of the new administration after the national elections in May 2016, he added.

Llanto also said the issue of succession also raises questions.

Will the next leader be as committed to policy reform and improved governance as Aquino? Will there be policy reversals because of tremendous pressure from opportunistic politics? Will the next leadership be able to put together an able and responsible team who will stay the course and tackle the more difficult reforms in policies and institutions, he said.

There will not be a lack of contenders in the political market who might put political expediency over difficult reform. This poses a danger to the economy because Philippine politics is already personalist and opportunistic. Many voters dont vote on issues but are mesmerised by personal charisma and (empty) promises made by political entrepreneurs, he added.

The challenge to the electorate is to select a leader who will not flinch at the sight of difficult reforms. This years success could serve as a reminder to the electorate to choose the right leaders. A rising middle class engendered by continuous growth, returning overseas Filipino workers who have experienced living in well-functioning societies, as well as better informed young voters who actively participate in social media could hopefully constitute the swing vote for a leader with the best interest of the country in mind, Llanto also said.

There are also positive signs. Revised forecasts put GDP growth in 2015 between 5.7 and 6 per cent and forecasters expect a strong rebound in the coming year. The government has maintained an official forecast of 6 to7 per cent. It expects higher growth in 2016, even when the current administration ends its term of office in June, Llanto said.

Llanto said policy reform efforts led to sound macroeconomic foundations and an improved governance framework that encouraged investments and business activity as well as a consistent build-up of foreign exchange reserves.

Foreign exchange reserves sat at $80.6 billion at the end of November " enough to cover over 10 months of imports and payments of services and income. And international credit rating agencies have upgraded the Philippines credit rating thanks to policy reform, he noted.

The Philippines also sustained consumption growth due to substantial remittances from overseas Filipino workers (around $20 billion) and low inflation. The services sector " mainly the information technology-business business process outsourcing industry " has significantly contributed to output and employment. Strong internal demand will remain as a significant growth driver in the future, Llanto added.

Adding credibility to the countrys fundamentals are thats government effort for the passage of critical reform laws --- competition policy, liberalizing the banking system, as well as managing and improving transparency of tax incentives.

It has strengthened universal health insurance and sustained its conditional cash transfer program which covers millions of poor families and has been designed to improve the education and health status of the poor, Llanto said.

Llanto said the Aquino administration must fully utilise its remaining political capital to pursue difficult reforms covering trade facilitation and regulatory frameworks.

It must continue to invest in both human and physical capital that will raise productivity in the future, he said. //

Author: Albert Castro
Date: January 27, 2016
Source: Malaya

Gauging the efficacy of enrollment in PhilHealths Employed Program will help policymakers in the health sector determine a more effective approach in achieving the goal of universal coverage.
Last year, PhilHealth officials iterated their commitment to achieving universal coverage by 2016.
President Aquino signed an amendment of the National Health Insurance Act highlighting the responsibility of the national government to cover the health insurance premiums of Filipinos in the informal sector.
However, full coverage in the formal sector also needs due attention and improvement. Thirty percent of PhilHealths members come from the formal economy where enrollment is mandatory.
But based on a study by state think tank Philippine Institute for Development Studies (PIDS), full coverage is yet to be achieved.
The private sector currently sits at 95-percent coverage, while the government employed sector sits at 75 percent. Denise Valerie Silverberg, author of the study, argues that examining the level of PhilHealth coverage and enrollment in the formal sector will help policymakers bridge that gap.
Silfverberg surmised that the gap in coverage can be explained by looking at how some agencies comply with labor policy. For example, the low coverage rates may be attributed to the significant number of contractual employees in government who do not enjoy the benefits of being enrolled in PhilHealth.
The perpetuation of contractual employees " something the private sector is just as guilty " allows firms and agencies to stall enrollment of employees into the PhilHealth Employed Program and withhold appropriate benefits.
But companies deliberately shortchanging employees are not just the only flaws. Variations of enrollment rate can also be produced by characteristics that set the private and government sector apart, and other factors like establishment size and area.
For the private sector, sectoral employment, nature of employment, union coverage, union-employees ration and number of employees all influence variations of coverage rate. But in the provinces, it is the size of the firm that matters.
More employees hired by medium-sized establishments lead to a higher likelihood for the province to have lower coverage, Silfverberg pointed out, On the contrary, the greater the number of employees in large-sized enterprises, the more likely it is for the province to have higher coverage levels.
Silfverberg concluded that before the country can work toward full coverage, policymakers must find a way to address the problems that impede effective implementation of the national health insurance program. Enrollment should be more targeted, depending on the sectors where undercoverage occurs the most.
Monitoring by PhilHealth should also be strengthened. Medium-sized establishments, surmised by Silfverberg, are more likely to short change employees when it comes to health insurance enrollment if they are not closely monitored.
Employers have to be held accountable to follow the labor code provision on employee regularization. The rules are often undermined by resorting to a six-month cycle to prevent employees from being regularized, and to refrain from giving them their due benefits.
Employers " both public and private " should enroll their employees into the program, whether they are regular or casual. Compliance at the local government level should be also closely monitored. After all, it would be harder to close the gap if government units themselves do not implement the health insurance program in their own offices.//

Author:
Date: January 28, 2016
Source: The Daily Tribune

RICE HAS BEEN an indispensable staple food on the plates of the majority of Filipinos and is crucial in providing employment to millions of farmers. Rice policy adopts protectionism as an instrument for food security and livelihood promotion, limiting the intensity of competition from foreign suppliers of the staple.
A study by the Philippine Institute for Development Studies (PIDS) on the state of competition in the staple foods sector zeroes in on the current issues being confronted by the consumers and producers of rice. It examines the policy implications of the lack of competition between domestic and foreign producers in the countrys rice market. Findings show that the restraint in competition has been ultimately detrimental to consumers; opening up the rice trade, together with targeted producer support, will confer tremendous benefits to the rice-consuming public while helping farmers transition to a more competitive regime.

The National Food Authority (NFA) serves as the primary regulatory agency for the countrys main staple. Although the NFA seeks to promote food security and price stabilization, the outcome of its actions prove otherwise. These outcomes are directly attributed to its quantitative restrictions (QR) on rice importation, enforced by its statutory monopoly on rice importation.

The QR regime is uniquely applied for rice; due to the World Trade Organization Agreement, since 1995 the country has replaced QRs with tariffs for all other agricultural products -- a policy called tariffication. However, it applied for -- and obtained -- an exemption for rice. The exception is time-bound, ending initially in 2005, but extended by request of the Philippines to 2012, and again to 2017. The QR regime for rice has been programmed to support the goal of rice self-sufficiency, initially in 2013, now extended to 2016.

The exercise of the QR has elevated the domestic price above the world price of rice. Usually this has been accompanied with a stable domestic price of rice at the retail level, compared to the high volatility of the world price. There are some prominent exceptions, the price surge of 2013 being the most recent example. In this regard, the retail price of well-milled rice spiked to P32 in 2013 from P28 in the previous year. This amounts to an enormous 14% increase in the price of rice in just a year. Adding to this, 2013-2014 farmgate prices have also been relatively high, reaching a P20/kg level and above. This puts into question the competitiveness of the NFA procurement system and the viability of the existing import restrictions.

The price surge has been blamed on price manipulation by traders. However, this is mere scapegoating. The same study shows that the domestic marketing of rice is actually highly competitive. This is consistent with decades of studies of rice marketing, which have concluded likewise.

The real reason for the price increase is the shrinking import quota. The expectation is that domestic rice supply could expand sufficiently to meet domestic demand. Recent experience demonstrates that closing the supply-demand gap will require a higher domestic price -- an outcome detrimental to consumers, especially the poor and undernourished. Furthermore, interviews of key informants indicate that the little imports that are allowed, are cornered by a privileged few, who thereby make a killing out of the difference between domestic and world prices.

Protectionism in this case indisputably helps domestic producers, but harms consumers. An accepted method of comparing costs and benefits is economic surplus analysis, here implemented by a computer model of the rice market known as the Total Welfare Impact Simulator (TWIST).

TWIST is applied to the 2013 market in two alternative scenarios: first is free trade; second is increase in import quota back to 2011 levels. Opening up the sector through free trade will yield an economic benefit amounting to P138.5 billion. On the other hand, increasing the import quota would lead to about P25.2-billion increase in economic surplus.

Free trade is undeniably detrimental to farmers; the simulation shows that they will lose the equivalent of P34 billion. However the benefits to consumers is large, and net benefit to society is still large as mentioned above. Gradual reform can be implemented by converting the import quota into tariff protection, with a moderate level of tariff. This tarrification should be accompanied by producer support policies to avoid severe dislocation. Such policies are expected to strike a balance between the welfare of producers and those of consumers; in the end, the essence of food security is consistent access to affordable food.

Roehlano Briones and Lovely Ann Tolin are fellows from the Philippine Institute for Development Studies. This piece was adapted from CREW Diagnostic Country Report: Philippines, a study conducted by PIDS with financial and technical support from the Centre for Competition, Investment and Economic Regulation (CUTS-CIER), Jaipur, India. //

Author: Roehlano Briones and Lovely Tolin
Date: January 18, 2016
Source: Business World