PIDS in the News Archived (May 2016)

MANDALUYONG CITY, Apr. 30 -- Despite the slowdown in the Asia-Pacific regions economic outlook, the Philippines had experienced a growth trajectory.
During the press launch of the Economic and Social Survey of Asia and the Pacific 2016 held here yesterday, Dr. Jose Ramon G. Albert, Senior Research Fellow of the Philippine Institute for Development Studies said the countrys gross domestic product (GDP) growth rate was at 6.3 percent from 2010 to 2014, the highest five-year average during the past 40 years. The high GDP growth was sustained in 2015.
Now, we are expecting it (the high GDP growth rate) to continue this year, he said.
Albert said that recent economic growth in the Philippines has been at par with, and even surpassed those of other countries in Asia-Pacific region.
Like the rest of the Asia-Pacific countries, Albert said the Philippines had a little bit of volatilities in domestic financial market but underlying fundamentals remained sound.
Weve had inflation averaging under two (2) percent last year compared to other economies in the region which is good news, he added.
The economic outlook for developing Asia-Pacific economies is broadly stable but is clouded by uncertainty due to risks of financial volatility and high private debts, according to the United Nations Economic and Social Survey of Asia and the Pacific 2016.
Fiscal policy can potentially place an important role in enhancing economic growth, particularly through spending on education, health, infrastructure, which will have significant impact on the distribution of income and opportunities for long-term growth, said Heather Lynne Taylor, UN Economic Affairs Officer.
Good Governance
Albert said that the current administrations good governance agenda of a corruption-free government (Kung walang corrupt, walang mahirap) led to successive credit-rating upgrades and improvements in various global competitiveness rankings for the country.
One of the agenda also include investments in human capital. For 2015 alone, Albert said the government allocated budget for education at about US$ 8 billion, an 18.6 percent increase from 2014.
Moreover, the conditional cash transfer (CCT) program provides assistance for poor households on condition that children go to school and get deworming, and mothers avail of maternal health services.
Education grants are provided per child (maximum of three children per household only) and per month for 10 months.
Assistance is also extended to child beneficiaries for them to finish their high school education with a monthly cash assistance.
The number of out-of-school children also declined from 3 million in 2008 to about 1 million in 2013 through the CCT, increased budget for the Department of Education and the full implementation of the K to 12 program.
The big challenge according to Albert, is sustaining these gains, especially the CCT and other investments in the social sector.
Other challenges he cited also include the need to boost the countrys competitiveness and productivity, climate for innovation, and improved infrastructure spending. (PRC-PIA)

Author: Patricia Ruth B. Cailao
Date: May 30, 2016
Source: PIA

TO make Pantawid Pamilyang Pilipino Program (4Ps) more effective in reducing poverty, the Philippine Institute for Development Studies (PIDS) has asked the government to refine the implementation conditional-cash transfers before institutionalizing the program.
In a briefing on the status of poverty, inequality, employment and health in the context of social-protection programs held at the House of Representatives, Celia Reyes, PIDS senior research fellow, said institutionalizing the 4Ps or the Conditional Cash Transfer (CCT) Program will have massive implications on the national budget.
Reyes said policy-makers should first refine the 4Ps by identifying areas in the program that need to be improved.
The proportion of children attending school has been increasing over time [due to 4Ps]. This is something that is actually consistent. [However], the potential impact of such programs can be stunted when certain conditions are not fully considered, Reyes said.
Initially, while the 4Ps was designed to assist children ages 6 to14 years old, it has been noted that the school-participation rate for that age group is already very high. It is really in the older group where you have the problem, she added.
According to Reyes there is also big disparity between the proportion of children aged 16 to18 years old who are attending school in the poorest decile, compared to children of the same age group in the richest decile.
As we would expect, the average years of schooling would increase with income. So, thats 11 years average schooling for those belonging in the richest decile, and only about five years for those belonging in the poorest decile. If you wanted to provide some assistance, you would really need to target the poorest, Reyes said.
Shifting resources
Reyes also said to fine tune the CCT Program, the government should shift the assistance from elementary to high school, and revisit the amount of grants it provide for students.
[We should] look at the possibility of shifting resources from elementary to high school and strengthening support at the high-school level as a policy starting point, she said.
It is no surprise that high-school graduates earn higher income, at about P284 a day, higher than those who are not high school graduates, at only about P171 per day. Meanwhile, those who are college graduates earn around P623 per day, while those who have completed post-graduate studies earn around P1,216 per day, Reyes added.

Reyes said she is not recommending to extend the 4Ps to tertiary. However, she urged policy-makers to explore ways to link up 4Ps recipients and broaden their opportunity of reaching tertiary level of education.
She also said there should be different interventions or programs for chronic poor, or those people living in poverty over extended period of time, and for transient poor, or those who move in and out of poverty.
Addressing the needs of the chronic poor requires structural and long-term solutions, like investing in education and human capital strategies. The transient poor, on the other hand, requires a different and more specific approach, not to mention the policy input of other government agencies and sectors"like labor, finance and disaster resilience"which are just as equally important to combating poverty, Reyes added.
The 4Ps was first implemented during the administration of former President and now Lakas Rep. Gloria Arroyo of the Second District of Pampanga.
Status
Last February, the House of Representatives has approved on third and final reading a measure institutionalizing the 4Ps or the CCT, while the Senate version of the bill is still pending for committee approval.
The lower chamber version of the bill, principally authored by Nationalist Peoples Coalition Rep. Susan Yap of Tarlac and Arroyo, seeks to break the intergenerational cycle of poverty through investment in human capital and improved delivery of basic services to the poor, particularly education, health and nutrition.
The measure also said that subject to certain conditions, each qualified household-beneficiary shall receive a CCT equivalent to P500 per month for health and nutrition expenses or the equivalent of P6,000 per qualified household-beneficiary per year.
A maximum of three children per qualified household-beneficiary shall be given conditional grant for educational expenses, it said.
The measure added that P300 per month per child enrolled in elementary, or the equivalent of P3,000 per 10-month school year; P500 per month per child in junior high school, or the equivalent of P5,000 per 10-month school year; P700 per month per child enrolled in senior-high school, or the equivalent of P7,000 per 10-month school year.
The bill said that a supplementary education grant of P300 per month shall be given to the child in elementary or high school who has maintained passing grades in all subjects after the second year of availment of the program.
For 2016, the government has allotted P64 billion for the CCT.//

Author: Jovee Marie de la Cruz
Date: May 28, 2016
Source: Business Mirror

CEBU, Philippines - The Philippines should liberalize its rice sector to bring down prices of rice, considered a staple in most Filipino households, an International Monetary Fund official said.
IMF Resident Representative to the Philippines Shanaka Jayanath Peiris said a change in the country's rice policy is needed considering that local rice prices are higher compared to those of its neighbors in Southeast Asia.
Peiris cited that rice prices in the Philippines are "40 percent higher" compared to Vietnam's.
"Rice is the staple of the poor," Peiris said in a recent interview.
The Philippine government has implemented the quantitative restriction (QR) on rice, allowing it to limit the entry of cheap rice imports into the country to protect rice farmers.
The QR, allowed by the World Trade Organization (WTO), is expiring next year.
Currently, rice prices in the country are managed through a buffer stock approach by the National Food Authority.
But Peiris believes the Philippines "should liberalize instead."
By liberalizing, local rice prices would come down with global costs, he said.
State think tank Philippine Institute for Development Studies had previously said that removing the QR would increase rice imports but bring down rice prices at the same time.
Peiris acknowledged that bringing down tariffs on rice imports would significantly affect rice farmers as the entry of cheaper rice imports would lead to lower farmgate prices.
But this is where, the IMF official pointed out, the government should come in by giving a safety net for farmers through the conditional cash transfer.
He added it's important to address the high rice prices which affect every Filipino.
"This may have effect on some farmers but the high prices are also affecting everybody," he noted.
The rise in food prices has been cited as one of major factors causing the country's poverty incidence.
The WTO approved in July 2014 the Philippines' bid to continue imposing high tariff on imported rice at a limited volume until June 2017. The QR's extension involves increasing the volume of rice imports at a reduced, although still high tariff. (FREEMAN)

Author: Carlo S. Lorenciana
Date: May 28, 2016
Source: Freeman

Investments approved by the Board of Investments (BOI) rose 13 percent in the first quarter of the year to P61.94 billion from P54.62 billion in the same period last year as investor confidence was sustained despite the forthcoming elections, according to Ceferino Rodolfo, managing head of BOI.

Rodolfo said continued growth in investments is also a reflection of the relevance of granting incentives to specific sectors particularly those which are underinvested but are socially relevant even as he added the income tax holiday (ITH) granted by the BOI accounts for a mere .3 percent of gross domestic product(GDP) annually.

The investment approvals were generated from 73 projects from various sectors and are expected to create at least 12,841 new jobs once fully operational.

Rodolfo attributed the increase in approved investments to big-ticket energy-related projects which recorded the largest share, 47 percent, of the total approved investments in the three-month period at P29.34 billion, up 113 percent from P13.759 billion energy-related investment projects a year ago.

Investments in real estate projects particularly economic and low-cost housing also jumped 96.56 percent to P17.870 billion three months into the year from P9.091 billion in the comparable period last year, accounting for 29 percent of total approved investments in the period.

The other projects in the first quarter of 2016 came from transportation and storage with P9.22 billion (15 percent); manufacturing, P4.78 billion (eight percent); and accommodation and food services activities sector, P350.69 million (one percent).

Major manufacturing sub-sector projects approved in the first three months of the year include food products (84 percent share or P3.99 billion); motor vehicles, trailers and semi-trailers (three percent share or P122.59 million); leather and other related products (one percent share or P62.01 million); and other manufacturing products (12 percent share or P593.77 million).

Local investments accounted for 86 percent of the total investment approvals in the first quarter amounting to P53.49 billion, while the remaining 14 percent came from foreign sources amounting to P8.45 billion.

The Netherlands was the countrys top investor in the first quarter of 2016 with P5.95 billion, accounting for 70 percent share of the total investments, followed by the United States of America with P604.54 million (seven percent)); United Kingdom,
P505.49 million (six percent); Singapore, P294.13 million (three percent); and China PROC, P141.64 million (two percent).

Meanwhile, Rodolfo said the grant by the BOI of incentives is backed by theoretical and empirical studies and which have resulted in higher investments, exports and employment.

A study conducted by Rafaelita Aldaba, Department of Trade and Industry assistant secretary, would show actual ITH incentives claimed as a percentage of GDP was only .33 percent in 2004 and .31 percent in 2012 when it granted P32.9 billion tax holiday.

Investments in the same year came in multitudes hitting P858 billion while exports totaled P90 billion and employment 149,878.

Tax payments reached P21.9 billion, offsetting by that much the taxes waived for the year.

That study was submitted to the House ways and means committee as input to two bills, the fiscal incentives rationalization and the Tax Incentives Management and Transparency Act.

Aldaba said a separate study conducted by the Philippine Institute for Development Studies would show that incentives are the top consideration of investors when investing in the country.

Rodolfo defended the use of incentives for the Philippines to stay ahead given the limitations provided by law, compared with competitor countries like Vietnam, Thailand and Singapore which are able to give flexible perks.

EO (Executive Order) 226 (or the Omnibus Investments Code) is the oldest among (incentive laws in the region) and the Philippines ITH period is the shortest at an average of three years, he said.

Rodolfo stressed the need for BOI to direct incentives to sectors that need investments such as agriculture and socialized housing.

Among all sectors, agriculture is always behind. We are trying to help that sector. We want to forge linkage in agriculture and growth in manufacturing. Socialized housing does not only have economic justification but a societal goal as well, Rodolfo said, citing the 3.26 million backlog for this year alone.

Yet agricultures share of incentives granted was a mere four percent of total ITH availed between 1995 and 2012. Housing had a similar share.

Between those years, BOI granted a total of P247.6 billion in ITH of which about P9 billion and P10 billion went to agriculture and socialized housing, respectively.

For socialized housing, BOI has tightened qualifications for incentive availment in the current Investment Priorities Plan, ensuring that structures are already up when the proponent starts availing perks.

Aldaba said the grant of incentives is temporary and performance based and follows a set of criteria like employment generation, ability to address missing gaps in the supply and value chain, creation of spillover effects and promotion of a competitive market.//

Author:
Date: May 03, 2016
Source: Malaya

The Philippine economy can still manage to sustain its current growth path, or at least expand by six percent, despite the uncertainties brought by the change in administration, analysts said.

With only one week left before the May 9 elections, the candidates vying for the top government post are already in the last leg of their campaigns, as most of them have laid down their plans for the next six years.

However, most analysts seem to say that the Philippines can maintain its current growth trend, regardless of who will lead the country until 2022.

Jose Ramon Albert, senior research fellow of state-funded think tank Philippine Institute for Development Studies said that the current administration has already set the stage by putting a lot of investments in human capital, particularly through the conditional cash transfer program, which has resulted in a declining number of out of school children.

He pointed out that the countrys gross domestic product (GDP) growth rate of 6.3 percent in 2010 to 2014 was the highest five-year average during the past 40 years, while growth was sustained in 2015 at 5.8 percent.

He said that the recent economic growth in the Philippines has been at par with, and even surpassed, those of other countries in the Asia Pacific region.

The next government will be under severe pressure to come up with mechanisms to make sure that growth is inclusive, and that everyone should be benefitting from this growth, Albert said.

We understand that whoever takes charge will steer the ship. But still, even if there are risks, you also have to recognize that we have a very good government bureaucracy that will try its best to still work within the policy priorities, he added.
Albert pointed out that whoever is in charge will still need an economic team.

You will need to judge not just whoever wins on his or her capabilities but on the team itself that will support the President. Im pretty sure that whoever wins will be able to find good people because we have so much human capital everywhere, he said.

For his part, Benjamin Diokno, UP economist, said that growth of 7 to 8 percent is possible, only if the next President has the vision and the political will to pursue a growth-oriented fiscal policy and is willing to cause the amendment of the restrictive economic provisions in the Constitution on his/her first year.

The economy is expected to grow at 6 percent during the first half of the next Presidents term. For the next half, growth at 7 to 8 percent is possible only if the appropriate reforms and expansionary fiscal policies are adopted during the next Presidents first three years, Diokno said.

The former budget secretary said that the next administration should focus on growth-oriented infrastructure nationwide, agricultural modernization, manufacturing, and tourism.

(There could be) strong growth if the next President is decisive, focused, and able to assemble competent men and women. Weak growth if its business as usual, Diokno said.

Meanwhile, Cid Terosa, University of Asia and the Pacific economist, said that the next President should establish his or her work on the strong macroeconomic fundamentals of the economy.

If the next President alters the current upward course of the economy through his/her policies and reforms, we might find ourselves starting from scratch all over again, Terosa said.

He said that the next President should generate more investments from domestic and foreign investors, create quality jobs, and strengthen the technological, institutional, and human resource foundations of the economy.

We need somebody who can lead others to keep the economy moving. We need a passionate leader and mover of people and ideas, Terosa said.

Meanwhile, most international institutions also expect that the economy will grow by 6 percent and up this year and next, despite the change of leadership.

However, the World Bank pointed out that the outcome of the general elections pose some uncertainties.

While the foundations for more inclusive growth have been put in place, there is still the risk of reversals of hard won gains in securing macroeconomic stability and deepening governance, especially in public spending, the World Bank said in its Philippine Economic Update.

A key priority for the new government will be to create more and better jobs through an accelerated structural reform agenda, it added.

The multilateral bank agency said that trends in recent years point to the beginnings of a more inclusive growth pattern, which needs to be sustained over a longer period before the poor can feel the impact of higher growth and better governance in their daily lives.

In the past six years, the government has preserved macroeconomic stability, promoted transparency, and directed the growing fiscal space towards pro-poor infrastructure and services, the World Bank said.
What is needed now is to consolidate the reforms made and to accelerate the economic reform agenda by moving ahead at full speed, it added.

The report further said that priority is needed in Mindanao, where decades of conflict and weak Manila-centric policies have kept it from reaching its potential.

Meanwhile, a report recently released by think tank GlobalSourcePartners said that market players have seemingly taken the view that the May 9 vote will not derail the countrys reform program nor harm the current growth trajectory, especially if the new administration brings in a competent cabinet team.

What is at issue is whether the next President will be able to take the economy to a higher growth path by removing supply bottlenecks and constraints to doing business, bringing in more investments that create more local jobs, and raising per capita incomes, the report said.

All this depends on the winning candidates leadership skills, his/her ability to spend political capital to muster legislative, bureaucratic, and societal support for needed reforms, and his/her deftness in outmaneuvering entrenched interests opposed to reforms. He/she would also need to quickly demonstrate results and establish a track record to build confidence, it added.//

Author: Angela Celis
Date: May 02, 2016
Source: Malaya

The Board of Investments had granted a total of P247.6 billion in incentives to investors from 1995 to 2012, half of which went to power projects and the rest to other industries including mining, infrastructure, socialized mass housing, and agriculture.
In a briefing, Trade and Industry Assistant Secretary for industry development Rafaelita Aldaba, who conducted the study Globalization and the Need for Reinforced Tax and Fiscal Incentives Policy while she was still with the government think tank Philippine Institute for Development Studies (PIDS), said that tax and fiscal incentives for the power sector accounted for 51 percent of total while socialized mass housing accounted for 4 percent each.
The study also showed that the actual ITH claimed by BOI-registered enterprises as percentage of GDP amounted to 0.33 percent in 2004 and 0.31 percent in 2012. In that year, BOI registered enterprises claimed a total of P32.9 billion in ITH as against their total investments of P858.5 billion, exports of P90 billion and tax payments of P21.9 billion. The BOI firms also generated 149,878 jobs in that same year.
The study, which was submitted by BOI to Congress as inputs to the crafting of the TIMTA (Tax Incentives Management and Transparency Act) and the Rationalization of Fiscal Incentives Bill, also cited theoretical basis and empirical studies on factors that affect investment decisions by companies.
Based on the study, the grant of incentives to investments was the number one reason for investors in their decision to invest in the country.
The other reasons cited in the study according to ranking are transparent government policies, low tax rate and low tax liabilities, low incidence of labor strike, legal framework for dispute resolution, political stability, protection of intellectual property, low corruption, good infrastructure and equal treatment of investors.
On the continued grant of incentives to the mass housing sector, BOI Director Corazon Halili-Dichosa said this has been questioned several times.
But Dichosa said there is a social relevance to this policy. She cited the current housing backlog of up to 3.26 million housing units.
Since the government or the National Housing Authority cannot supply all these requirements, Dichosa said the BOI continued to grant the incentives to encourage property developers to come up with a low-cost (socialized) mass housing component.
Dichosa explained that a developer can only avail of the tax incentives once it has complied with the requirement that 20 percent of total cost of development should be allotted for socialized mass housing or housing units with a price of P450,000 and below.//

Author: Bernie Magkilat
Date: May 02, 2016
Source: Manila Bulletin

In response to calls to institutionalize the conditional cash transfer program or the Pantawid Pamilyang Pilipino Program (4Ps), an expert from state think tank Philippine Institute for Development Studies (PIDS) stressed that the targeting of the 4Ps should first be refined to make it more effective in reducing poverty.

In a briefing on the status of poverty, inequality, employment, and health in the context of social protection programs, PIDS senior research fellow Celia Reyes said institutionalizing the 4Ps will have massive implications on the national budget. She said policymakers should first identify areas in the program that need to be improved.

Reyes said programs like the 4Ps have produced encouraging results and was even ranked by the World Bank as one of the best-targeted social safety net programs in the world in its 2015 report.

Reyes however, noted that the potential impact of such programs can be stunted when certain conditions are not fully considered.

Initially, while the 4Ps was designed to assist children ages 6 to 14 years old, it has been noted that the school participation rate for that age group is already very high. It is really in the older group where you have the problem, explained Reyes.

She also noted a huge disparity between the proportions of children aged 16 to 18 years old who are attending school in the poorest decile compared to children of the same age group in the richest decile.

Aside from targeting the poorest, Reyes suggested shifting resources.

If you want to finetune the program, we would need to shift the assistance from elementary to high school, and probably revisit the amount of grants that we give to high school, recommended Reyes.

In relation to the need to help young and poor Filipinos attend high school, Reyes presented a comparison of average daily wage rates based on the level of education. It is no surprise that high school graduates earn higher income at about P284 a day, higher than those who are not high school graduates at only about P171 per day. Meanwhile, those who are college graduates earn around P623 per day while those who have completed post-graduate studies earn around P1,216 per day.

Reyes clarified she is not recommending to extend the 4Ps to tertiary. However, she advised policymakers to explore ways to link up 4Ps recipients and broaden their opportunity of reaching tertiary level of education. She iterated looking at the possibility of shifting resources from elementary to high school and strengthening support at the high school level as a policy starting point.

Reyes also emphasized that there should be different interventions or programs for chronic poor, or those people living in poverty over an extended period of time, and for transient poor, or those who move in and out of poverty.

Addressing the needs of the chronic poor requires structural and long term solutions like investing in education and human capital strategies. The transient poor, on the other hand, require a different and more specific approach, not to mention the policy input of other government agencies and sectors " like labor, finance, and disaster resilience, which are just as equally important to combating poverty, Reyes said.

Studies show that there has been a slight decline in poverty incidence in recent years, but the actual number of poor people has increased due to rapid population growth. Policymakers must tailor solutions to minimize the occurrence of poverty because poor people are not uniform and their needs are not uniform as well, Reyes concluded.//

Author: Misha Borbon
Date: May 01, 2016
Source: Baguio Midland Courier

Investments approved by the Board of Investments (BOI) rose 13 percent in the first quarter of the year to P61.94 billion from P54.62 billion in the same period last year as investor confidence was sustained despite the forthcoming elections, according to Ceferino Rodolfo, managing head of BOI.

Rodolfo said continued growth in investments is also a reflection of the relevance of granting incentives to specific sectors particularly those which are underinvested but are socially relevant even as he added the income tax holiday (ITH) granted by the BOI accounts for a mere .3 percent of gross domestic product(GDP) annually.

The investment approvals were generated from 73 projects from various sectors and are expected to create at least 12,841 new jobs once fully operational.

Rodolfo attributed the increase in approved investments to big-ticket energy-related projects which recorded the largest share, 47 percent, of the total approved investments in the three-month period at P29.34 billion, up 113 percent from P13.759 billion energy-related investment projects a year ago.

Investments in real estate projects particularly economic and low-cost housing also jumped 96.56 percent to P17.870 billion three months into the year from P9.091 billion in the comparable period last year, accounting for 29 percent of total approved investments in the period.

The other projects in the first quarter of 2016 came from transportation and storage with P9.22 billion (15 percent); manufacturing, P4.78 billion (eight percent); and accommodation and food services activities sector, P350.69 million (one percent).

Major manufacturing sub-sector projects approved in the first three months of the year include food products (84 percent share or P3.99 billion); motor vehicles, trailers and semi-trailers (three percent share or P122.59 million); leather and other related products (one percent share or P62.01 million); and other manufacturing products (12 percent share or P593.77 million).

Local investments accounted for 86 percent of the total investment approvals in the first quarter amounting to P53.49 billion, while the remaining 14 percent came from foreign sources amounting to P8.45 billion.

The Netherlands was the countrys top investor in the first quarter of 2016 with P5.95 billion, accounting for 70 percent share of the total investments, followed by the United States of America with P604.54 million (seven percent)); United Kingdom,
P505.49 million (six percent); Singapore, P294.13 million (three percent); and China PROC, P141.64 million (two percent).

Meanwhile, Rodolfo said the grant by the BOI of incentives is backed by theoretical and empirical studies and which have resulted in higher investments, exports and employment.

A study conducted by Rafaelita Aldaba, Department of Trade and Industry assistant secretary, would show actual ITH incentives claimed as a percentage of GDP was only .33 percent in 2004 and .31 percent in 2012 when it granted P32.9 billion tax holiday.

Investments in the same year came in multitudes hitting P858 billion while exports totaled P90 billion and employment 149,878.

Tax payments reached P21.9 billion, offsetting by that much the taxes waived for the year.

That study was submitted to the House ways and means committee as input to two bills, the fiscal incentives rationalization and the Tax Incentives Management and Transparency Act.

Aldaba said a separate study conducted by the Philippine Institute for Development Studies would show that incentives are the top consideration of investors when investing in the country.

Rodolfo defended the use of incentives for the Philippines to stay ahead given the limitations provided by law, compared with competitor countries like Vietnam, Thailand and Singapore which are able to give flexible perks.

EO (Executive Order) 226 (or the Omnibus Investments Code) is the oldest among (incentive laws in the region) and the Philippines ITH period is the shortest at an average of three years, he said.

Rodolfo stressed the need for BOI to direct incentives to sectors that need investments such as agriculture and socialized housing.

Among all sectors, agriculture is always behind. We are trying to help that sector. We want to forge linkage in agriculture and growth in manufacturing. Socialized housing does not only have economic justification but a societal goal as well, Rodolfo said, citing the 3.26 million backlog for this year alone.

Yet agricultures share of incentives granted was a mere four percent of total ITH availed between 1995 and 2012. Housing had a similar share.

Between those years, BOI granted a total of P247.6 billion in ITH of which about P9 billion and P10 billion went to agriculture and socialized housing, respectively.

For socialized housing, BOI has tightened qualifications for incentive availment in the current Investment Priorities Plan, ensuring that structures are already up when the proponent starts availing perks.

Aldaba said the grant of incentives is temporary and performance based and follows a set of criteria like employment generation, ability to address missing gaps in the supply and value chain, creation of spillover effects and promotion of a competitive market.//

Author:
Date: May 03, 2016
Source: Malaya

Despite the upcoming national elections, investment pledges approved by the Board of Investments (BOI) still rose by 13 percent to nearly P62 billion in the first quarter, demonstrating the continued strong investor confidence in the Philippine economy.
Previous election periods have traditionally shown a decline in investment approvals as most investors would usually adopt a wait-and-see stance until after the elections, Trade Undersecretary Ceferino S. Rodolfo said in a press briefing Monday.
Data from the BOI showed that the investment commitments would be poured in 73 projects that were expected to create close to 13,000 new jobs once fully operational.
The increase in investment pledges can be attributed to the big-ticket energy-related projects, which accounted for the biggest share at P29.34 billion or 47 percent of the total approved investments for the first three months of the year.
Investments in real estate projects, particularly the economic and low-cost housing, also grew by 97 percent to P17.87 billion in the same period this year. These real estate investment projects accounted for 29 percent of the total approved investments in the period.
Other projects approved by the BOI in the first quarter of 2016 came from transportation and storage with P9.22 billion (15 percent), manufacturing with P4.78 billion (8 percent) and accommodation and food services activities with P350.69 million (1 percent).
Rodolfo stressed the need to continue providing incentives for investors as this was the top factor being considered by many companies, particularly from abroad, in their decision to locate here.
Given the high cost of doing business in the country, fiscal incentives are applied to compensate or offset obstacles in the business environment such as complex regulations, high cost of power, logistics, transport and smuggling.
An earlier study conducted by state think tank Philippine Institute for Development Studies showed that the top factor that affected a firms decision in the Philippines was the investment incentives, followed by transparent government policy, low tax rates and tax liability, low incidence of labor strife and legal framework for dispute resolution.
Trade Assistant Secretary Rafaelita M. Aldaba stressed that the income tax holiday being granted to investors were economically justified as these have generated billions worth of investments and new job opportunities. For instance, the total income tax holiday incentive claimed in 2012 amounted to P32.9 billion, representing 0.31 percent of the countrys gross domestic product.//

Author: Amy Remo
Date: May 03, 2016
Source: Philippine Daily Inquirer

The Department of Trade and Industry (DTI) on Monday justified its administration and grant of fiscal incentives through the Board of Investments (BOI), saying the grant of perks remains a top factor in attracting foreign direct investment.
Trade Assistant Secretary for Industry Development and Trade Policy Rafaelita M. Aldaba was reacting to a report early this month critical of the governments policy on the grant of fiscal incentives. The report zeroed on inefficient sectors, such as agriculture and mass housing, which both received the lions share of fiscal perks.
Our study shows that there is an economic justification and societal component for giving incentives. In fact, the Philippine Institute for Development Studies conducted a survey that incentives [are] the No. 1 factor that affects investors decision to locate to the Philippines, Aldaba told reporters on Monday.
By ranking, the other reasons cited by DTI officials that affect investors decision to invest in the country are transparency in government policy, low tax rates, low tax liability, low incidence of labor strikes and legal framework for dispute resolution.
The recent report referred to by the DTI denounced the BOIs grant of incentives and was based on an internal study made by the DTI last year.
According to Aldaba, the study was requested by the House Committee on Ways and Means at the height of congressional deliberations on fiscal incentives in 2015.
She pointed out that in 2012 the amount of income-tax holiday (ITH) given away by the government amounted to P32.9 billion, or only .3 percent of the countrys national output.
In return for the ITH, the Philippines attracted investments in that same year amounting to P859 billion, P90 billion in exports and P21.9 billion in other forms of tax payments.
Trade Undersecretary Ceferino S. Rodolfo, likewise, clarified that underperforming sectors are exactly the areas where most government support is needed, hence the grant of incentives.
You really need incentives in those areas precisely because these are socially relevant areas, but are underinvested. You have to direct the investments to agriculture and socialized housing because of those reasons, Rodolfo said.
The BOIs inclusion of mass housing in their Investments Priorities Plan entitles the sector to fiscal incentives, including an ITH period of four to six years. But the availment of ITH will only come if they comply with the socialized housing component, wherein the real-estate developer has to allocate 20 percent of the project cost to socialized housing.
BOI Executive Director Corazon Halili-Dichosa said this is especially pressing, given the housing backlog that the Philippines of some 3.26 million homes as reported by the National Housing Authority.
By giving them incentives, theres a condition to first build the socialized housing component, Dichosa added.
She said an ITH availment in every sector undergoes a rigorous approval process at the DTI, adding that the office ensures that socialized housing units for low-income groups are already erected before they incentives are officially granted.
Aldaba, likewise, noted that agriculture and mass housing each received, at most, only 4 percent of the total ITH availment from 1995 to 2012.
Based on DTI data, the total ITH availed of in that period amounts to P247.6 billion. Power, infrastructure, mining, and build-operate-transfer projects top the list of sectors receiving the bulk of ITH.//

Author: Catherine Pillas
Date: May 02, 2016
Source: Business World

Power projects are the biggest recipients of tax incentives, according to a study commissioned by the Trade Department.
The agency said of the total P247.6 billion income tax holiday enjoyed by industries over an eight-year period from 2005 to 2012, power projects cornered 51 percent, or around P126 billion.
Infrastructure projects and mining were the two other major recipients.
The study conducted by the Philippine Institute for Development Studies was commissioned by the Trade Department to determine the extent of assistance needed to help industries grow.
Trade assistant secretary Corazon Halili-Dichosa said socialized housing and agriculture comprised nearly 4 percent each of the total ITH given during the period.
This means that these sectors still need incentives to strengthen their industries to allow development to take place. These are not underperforming sectors and they have not been receiving the giants share of the pie, to correct some misinterpretations, she said.
Until 2016, housing backlog is still seen at 3.2 million. This is the reason why the government continues to incentivize housing projects asking developers to dedicate a niche of their operations to socialized housing, the study said.
Trade assistant secretary Rafaelita Aldaba said there were certain economic justifications to determine the extent of incentives that should be given to a sector.
The survival of manufacturing firms is strongly associated with government subsidy. Firms receiving subsidy are more likely to survive than those who are not, particularly SMEs receiving subsidy are less likely to exit than those who are not, the study said.
The amount of fiscal incentives the government gives to projects is the top reason why investors keep on investing.
The study showed that apart from incentives, other factors considered contributory to the decision for investing in the Philippines were transparent government policy, low tax rate and low tax liability, low incidence of labor strife, legal framework for dispute resolution, political stability, protection of intellectual property, low corruption, very good infrastructures and equal treatment of investors.
The Trade Department said it was aware that incentives should be temporary and performance-based, taking into account the projects capability to generate employment, ability to address missing gaps in the supply and value chain, create overspill effects and the promotion of a competitive market environment.//

Author: Othel V. Campos
Date: May 02, 2016
Source: The Standard

QUEZON CITY, May 13 - Despite the increasing contribution of small and medium enterprises (SMEs), particularly in terms of job generation and contribution to GDP in the Association of Southeast Asian Nations (ASEAN) region, experts argue that they remain one of the regions untapped resources.

In a recent forum organized by state think tank Philippine Institute for Development Studies (PIDS), Asian Development Bank (ADB), Department of Trade and Industry, Management Association of the Philippines, and Financial Executives of the Philippines, experts concurred that a lot can still be done to unleash the potential of SMEs.

Currently, SMEs comprise the largest number of firms in the ASEAN region. They generate the majority of jobs and substantially contribute to ASEANs GDP.

ADBs Vice President for Knowledge Management and Sustainable Development Bambang Susanto stressed in his keynote address the importance of opening access and opportunities for micro and small and medium enterprises.

To help SMEs play their role in the domestic, regional, and global production networks, Susanto suggested that the ASEAN Economic Community (AEC) must build the physical connectivity of SMEs, raise their labor productivity and skills to standards of global value chains, and improve their access to finance.

Meanwhile, PIDS Senior Research Fellow Erlinda Medalla and ADB Advisor Ganeshan Wignaraja discussed how to improve SMEs access to market and investment opportunities in the AEC.

SMEs play a role not just as a vehicle for poverty reduction but also as an engine of growth, said Medalla. She emphasized the sectors employment and value added contributions to the Philippine, which peaked at 65 percent and 35 percent, respectively. Across Southeast Asia, Wignaraja noted that SME employment makes up 74 percent of all jobs, and contributes 41 percent of the GDP of ASEAN economies.

Yet, Wignaraja lamented that these contributions are not yet reflected in international trade. Wignaraja observed that high-performing SMEs make up only 21 percent of direct exports across ASEAN economies.

Many factors obstruct the growth of SMEs, but one of the oft-cited problems is the lack of access to finance and credit. Wignaraja explained that the current banking and credit structure does not know how to deal with SMEs. Bank requirements on collateral and business and finance plans are strict. Unable to comply and lacking financial literacy, SMEs are often forced to rely on informal resources.

SMEs simply do not have access to the capital they need to expand or participate in larger business and trading activities. According to Wignaraja, total credit gap, or the difference between formal credit provided to SMEs and estimated SME financing needs in ASEAN, amounts to as much as USD 52.8 billion.

Wignaraja also pointed out that as China begins to slow down and move out of labor-intensive industries, firms in countries like the Philippines, Malaysia, and Thailand will have more business opportunities as suppliers of a range of products.

International trade itself has fundamentally changed in the 21st century and is no longer about direct exports. Instead, trade increasingly means global supply chains where different production on stages are located across geographical space and linked by trade in intermediate inputs and final goods, Wignaraja pointed out.

Meanwhile, Medalla said the Philippines does not have much of a choice whether or not it wants to partake in this new landscape. In an increasingly economically integrated ASEAN, she said, SMEs have to work within a globalized setting.

However, she added that not all SMEs can export, and they do not need to. The goal should be for them to have all the opportunities to participate and engage in business in order to help them grow and contribute in sustaining the expansion of the economy.

To do this, Medalla enumerated a number of factors that the Philippines has to address to encourage SMEs to participate in value chains. She reiterated Wignarajas point about addressing the lack of access to finance and credit, but added that enabling the environment for SME firms to develop competitiveness and connectivity must be prioritized as well.

While Wignaraja believes that much of the work must be done by business and private sector in boosting labor productivity, improving the investment climate, raising infrastructure spending, improving information and communication technology infrastructure, and increasing financial access for SMEs, both experts are in agreement that the government also has a critical role to play in SMEs success.

Governments role is to enable and facilitate the linkages and access to markets, finance, and technology, and to remove various barriers to entry and exit. The role of the new Competition Law will be very important, Medalla said.

Policymakers should also concentrate on enhancing strategic opportunities. Medalla said the kind of policies needed depends on which SME sector policymakers intend to help. She recommended policies that would raise SMEs capability to comply with AEC standards, such as developing the halal industry, improving trade facilitation, and identifying standards to enable them to access a duty-free ASEAN market.

She also recommended helping each sector gain competitive advantage through industry clustering, sharing services facilities, and developing industry roadmaps.

The opportunities are there in the supply chains, said Wignaraja. The business sector has to adopt smart strategies to capture opportunities to participate in the production networks, and policymakers must create the enabling business environment for SMEs to thrive. (PIDS)


Author:
Date: May 13, 2016
Source: PIA

Small and medium enterprises (SMEs) remain one of the Association of Southeast Asian Nations (Asean) untapped resources and governments has a critical role to play in the sectors success.
This was the message of experts in a recent forum organized by state think tank Philippine Institute for Development Studies (PIDS), Asian Development Bank (ADB), Department of Trade and Industry, Management Association of the Philippines, and Financial Executives of the Philippines.
The experts agreed that the contribution of SMEs, particularly in terms of job generation and contribution to gross domestic product (GDP) in Asean is increasing and that much can still be done to unleash the sectors potential.
Currently, SMEs comprise the largest number of firms in the region. They generate the majority of jobs and substantially contribute to Aseans GDP.
ADBs Vice President fo r Knowledge Management and Sustainable Development Bambang Susanto stressed in his keynote address the importance of opening access and opportunities for micro and small and medium enterprises.
To help SMEs play their role in the domestic, regional, and global production networks, Susanto suggested that the Asean Economic Community (AEC) must build the physical connectivity of SMEs, raise their labor productivity and skills to standards of global value chains, and improve their access to finance.
Meanwhile, PIDS Senior Research Fellow Erlinda Medalla and ADB Advisor Ganeshan Wignaraja discussed how to improve SMEs access to market and investment opportunities in the AEC.
SMEs play a role not just as a vehicle for poverty reduction but also as an engine of growth, said Medalla.
She emphasized the sectors employment and value-added contributions to the Philippine, which peaked at 65 percent and 35 percent, respectively.
Across Southeast Asia, Wignaraja noted that SME employment makes up 74 percent of all jobs, and contributes 41 percent of the GDP of Asean economies.
Yet, Wignaraja lamented that these contributions are not yet reflected in international trade, highlighting that high-performing SMEs make up only 21 percent of direct exports across Asean economies.
Credit gap
Many factors obstruct the growth of SMEs, but one of the often problems is the lack of access to finance and credit, Wignaraja said, noting that the current banking and credit structure does not know how to deal with SMEs.
Bank requirements on collateral and business and finance plans are strict. Unable to comply and lacking financial literacy, SMEs are often forced to rely on informal resources, Wignaraja observed.
SMEs simply do not have access to the capital they need to expand or participate in larger business and trading activities, the ADB advisor added.
According to Wignaraja, total credit gap, or the difference between formal credit provided to SMEs and estimated SME financing needs in Asean amounts to as much as $52.8 billion.
Wignaraja also pointed out that as China begins to slow down and move out of labor-intensive industries, firms in countries like the Philippines, Malaysia, and Thailand will have more business opportunities as suppliers of a range of products.
International trade itself has fundamentally changed in the 21st century and is no longer about direct exports. Instead, trade increasingly means global supply chains where different production on stages are located across geographical space and linked by trade in intermediate inputs and final goods, Wignaraja pointed out.
Meanwhile, Medalla said the Philippines does not have much of a choice whether or not it wants to partake in this new landscape.
In an increasingly economically integrated Asean, she said, SMEs have to work within a globalized setting.
However, she added that not all SMEs can export, and they do not need to. The goal should be for them to have all the opportunities to participate and engage in business in order to help them grow and contribute in sustaining the expansion of the economy.
To do this, Medalla enumerated a number of factors that the Philippines has to address to encourage SMEs to participate in value chains.
She reiterated Wignarajas point about addressing the lack of access to finance and credit, but added that enabling the environment for SME firms to develop competitiveness and connectivity must be prioritized as well.
Govt role
While Wignaraja believes that much of the work must be done by business and private sector in boosting labor productivity, improving the investment climate, raising infrastructure spending, improving information and communication technology infrastructure, and increasing financial access for SMEs, both experts are in agreement that the government also has a critical role to play in SMEs success.
Governments role is to enable and facilitate the linkages and access to markets, finance, and technology, and to remove various barriers to entry and exit. The role of the new Competition Law will be very important, Medalla said.
Policymakers should also concentrate on enhancing strategic opportunities. Medalla said the kind of policies needed depends on which SME sector policymakers intend to help.
She recommended policies that would raise SMEs capability to comply with AEC standards, such as developing the halal industry, improving trade facilitation, and identifying standards to enable them to access a duty-free Asean market.
She also recommended helping each sector gain competitive advantage through industry clustering, sharing services facilities, and developing industry roadmaps.
The opportunities are there in the supply chains, said Wignaraja, adding that the business sector has to adopt smart strategies to capture opportunities to participate in the production networks, and policymakers must create the enabling business environment for SMEs to thrive.//

Author: Mayvelin U. Caraballo
Date: May 12, 2016
Source: Manila Times

MANILA, Philippines " State think tank Philippine Institute for Development Studies (PIDS) is urging the Department of Education (DepEd) to improve the documentation and review the targets of its School-Based Feeding Program to enable the government to have a proper basis for determining program beneficiaries in succeeding years.
In an impact evaluation study, PIDS consultant Ana Maria Tabunda said there are inaccuracies in the documentation of the date of activities and the nutrition profiles " age, weight and height " of the beneficiaries.
The errors produce results such as lower post-feeding height and weight among beneficiaries.
Inaccurate data affect program evaluation
These inaccurate data in school documents and those obtained during the survey by PIDS researchers constrain proper assessment not only of the initial nutrition status of would-be program beneficiaries but also the improvement in such status, Tabunda said.
She recommends that all schools, including non-beneficiary schools, be provided with weighing scales and height measurement equipment.
All schools need to be provided with these equipment since non-beneficiary schools also need to submit accurate nutrition status reports which serve as the basis for determining which schools should implement the feeding program, Tabunda said.
The training for school heads, nurses and teachers on the use of equipment and instruction on proper documentation will help in the proper selection of beneficiary schools and in the monitoring and evaluation of the program.
Although the goal of having at least 70 percent of the beneficiaries attain normal nutrition status by the end of the feeding program may have not been attained in school year 2013 to 2014, these are caused by problems beyond the control of the program implementers, she said.
Program evolution
DepEds feeding program was first offered as the Breakfast Feeding Program in 1997 to address short-term hunger among public school children.
It eventually shifted focus to addressing undernutrition or malnutrition after school year 2008 to 2009.
In 2012, it was renamed School-Based Feeding Program as feeding time was no longer limited to breakfast.
For school year 2014 to 2015, the national government targeted all the 562,262 severely wasted children enrolled in kindergarten to Grade 6 in public schools for inclusion in the program " about 3.8 percent of 14.9 million children enrolled in public schools.
The program provides food to severely wasted children, or those whose weight-for-height measurements are below the minus-three standard deviation cut-off established by the World Health Organization for well-nourished populations.
It is conducted in schools over a period of 100 to 120 feeding days for a given batch of program beneficiaries.
School attendance improved
Tabunda said despite the glitches, the feeding program was implemented well, with a majority of the implementers and beneficiaries expressing a desire to see the program continued and if possible expanded.
The study noted that the programs goal of improving school attendance among beneficiaries to at least 85 percent for the current school year had been attained.
However, children who are not beneficiaries also have good school attendance records. As such, the feeding program appears to help improve attentiveness in class and sociability of beneficiary students.
For the impact evaluation study, PIDS surveyed seven percent of the total number of severely wasted pupils in elementary schools for academic year 2013 to 2014. It aims to assess the outcomes and impact of the feeding program in terms of its educational and nutritional objectives.//

Author: Czeriza Valencia
Date: May 12, 2016
Source: Philippine Star

By VG Cabuag, David Cagahastian, Bianca Cuaresma, Mary Grace Padin, Jovee dela Cruz, Lenie Lectura,
Jonathan Mayuga, Recto Mercene, Catherine Pillas and Joel R. San Juan

NEITHER the strongest nor the most intelligent species would survive"according to Charles Darwin: It is the one that is the most adaptable to change that will.
Supporters cheer as presidential candidate Mayor Rodrigo R. Dutertes campaign motorcade makes its way through the streets of Malabon on April 27.
Running on the slogan Change is Coming, President-elect Rodrigo R. Duterte should expect"as he is also expected"to get adapted to changes. He needs to, as Darwin said, if he seeks political survival.


And many"captains of industries, influential market players, economists and trade officials"are already expecting the changes or reforms outgoing President Aquino initiated six years ago would continue, alongside new ones that could be credited with the incoming Duterte leadership bloc.
The latter could be the amendment of the Constitution of the Republic of the Philippines that, according to Austria-born Guenter Taus, president of the European Chamber of Commerce of the Philippines (ECCP), could propel foreign direct investments to the Philippines. A resolution seeking to relax the restrictions in the Constitution failed to pass the 16th Congress, as observers said the Aquino administration was averse to changing the Constitution.
Under a Duterte administration, that may come to fruition, as his spokesman Peter Lavina has been quoted in a The Guardian article as saying the profanity-speaking President-elect will push to rewrite the Constitution.
A boy happily shows campaign wrist bands of presidential candidate Mayor Rodrigo R. Duterte.

He should focus on attracting more local and foreign private-sector players to invest in many priority government infra opportunities by actively, openly pursuing the PPP [public-private partnership] modality, Aboitiz Equity Ventures Inc. First Vice President Roman Anthony V. Azanza told the Business Mirror.

Legislation-wise, he [President-elect Duterte] should build on the solid PPP institutional foundations set up by his predecessors, as well as pass the critical PPP [bill] into law.
For political analyst Ramon Casiple, Duterte should push for Charter change (Cha-cha) in his first year in office.

Weve been telling all the new presidents about that [Cha-cha], because if you already reached half of your term and you open that up to the people, you will be accused that you want to stay in power, Casiple, who is also the executive director of the Institute for Political and Electoral Reform (IPER), said in an interview.

If he [Duterte] will do such major moves, like Cha-cha, on his first year, then the people will somehow be receptive of it, he added.

However, he said, the federalism agendum being pushed by Duterte should be studied thoroughly.
Pag federalism kasi iba yun; yung government mismo hinati mo na. Hindi ganun kasimple. Bagong gobyerno, bagong rules, Casiple said. Cha-cha ka, then pag-aralan natin ang federalism.

This legal-path trajectory is just one of the many crossroads stakeholders are putting in front of Duterte, who, as a mayor, chose to drive a taxi at night to check on the Southern Philippine capital Davao City.

PPP

THE wish list of local and foreign businessmen, government officials and groups is as long as the patience of Dutertes naysayers with his supporters, called Duter-tards, on social media. On top of this list is the PPP.

Local and foreign business groups in the country underscored the need to roll out PPP projects quicker.
I think Duterte should give focus to the PPP, make sure that the projects awarded will be finished on time, and that those in the pipeline will continue, Philippine Chamber of Commerce and Industry (PCCI) President George T. Barcelon said in an interview over the telephone.

The Makati Business Club, (MBC) composed of the countrys largest businesses, also underscored the need for accelerated infrastructure development via the PPP Program.

To continue the momentum, one key component may be to continue, sustain and speed up the PPP rollout, rather than review everything all over again, especially since our PPP has been recognized globally as best practice, MBC Executive Director Peter Perfecto said.

For the foreign chambers, the passage of the PPP Act is, likewise, a must in order to jump-start more private investment in national infrastructure projects.
Dying

SADLY, the PPP Act is as good as dead. In an interview with the BusinessMirror in mid-April, Speaker Feliciano Belmonte Jr. admitted that the chance for Congress to pass the bill is slim to none due to lack of time.

Belmonte said there may be no more time for both chambers of Congress to pass the measure on third reading.

Based on the legislative calendar, Congress sessions adjourned on February 3 as part of its preparation for the May national and local elections. Sessions will resume on May 23 and end on June 10.
The two chambers will convene first as National Board of Canvassers before the approval of other pending priority bills.

When approved, the PPP Act will institutionalize the Project Development and Monitoring Facility, the PPP Governing Board and the contingent liability fund. The proposed amendments include the separation of regulatory and commercial functions of government-owned and -controlled corporations, and create a list of projects called projects of national significance.

By virtue of being included on the list of projects of national significance, projects will be insulated from local laws, among others, by local government units.

The proposed amendments also include allowing time-bound temporary restraining order, and the extension of the period for Swiss Challenge to six months, from the current two-month period.
Also, the said piece of legislation will give the executive director of the PPP Center a fixed tenure, and will, likewise, make the said body a voting member of the Investment Coordination Committee and the Cabinet Committee of the National Economic and Development Authority (Neda).

Infrastructure development

THE PPP, however, is just one of the many thorns in the shrub of ills plaguing the countrys infrastructure development.

In a text message, Management Association of the Philippines President Perry Lim Pe cited transportation infrastructure reforms as a go-to point for the incoming Duterte administration.
Faster implementation of transportation infrastructure projects was also cited by the American Chamber of Commerce of the Philippines.

Our new president should make investing in infrastructure a top priority on both his investment and legislative agendas, Azanza said.

He explained that these two fronts are crucial to solving the so-called infrastructure gap in the Philippines.

Investment-wise, he should bring the many PPP deals that were already launched to bid in order to send a strong signal that the new government is committed to working with the private sector in solving our infra backlog.

Ayala Corp. Managing Director Eric C. Francia said the company hopes that the new President will accelerate the rollout of major infrastructure projects, especially the main international airport and mass transport.

Liberal Party Rep. Winston Castelo of Quezon City said the Duterte administration should initiate a deliberate conscious effort to fast-track flagship infrastructure projects to meet the peoples great expectation on his administration wanting for immediate change on his first 100 days in office.
Philippine Institute for Development Studies (PIDS) Senior Research Fellow Adoracion Navarro said it is also important to increase the countrys public infrastructure targets to 6 percent of GDP from the current target of 5 percent.

Traffic

ATENEO de Manila University Economics professor Alvin Ang said efforts to improve infrastructure spending must also be addressed by improving the governments absorptive capacity. This can be done by retraining employees, especially those in local governments, to speed up processing and other important functions.

There must also be strong political will in terms of using these infrastructure projects to reduce congestion in urban areas, not only in Metro Manila.

Yung sa Metro Manila, urban centers, kailangan ma-solve ang traffic [problem]. Kasi hindi lang infrastructure ang solution nun, administrative yung ibang kulang dun, Ang said. Kaya nga siya nanalo partly yung rule of law, yung order, so kailangan strictly ma-enforce ang order.

Isaac S. David, the president of MTD Philippines Inc., described the country as one of the slowest in terms of infrastructure development.

Considering that the Philippines has been lagging behind our Asean neighbors and the rest of the world in terms of infrastructure, I wish that Duterte will focus on the implementation of the much-needed infrastructure, like toll roads and expressways, mass-transport system and to decongest Metro Manila by transferring or creating a satellite national government center at Clark, which he promised during the debate, he said.

Navarro said the Duterte administration can also implement potentially controversial reforms, such as a comprehensive urban bus-transport policy in Metro Manila.

She suggested that the government implement an arterial-feeder bus-transport route in Metro Manila and consolidate bus operations into fewer companies with enough buses.

The scheme might encounter resistance from existing bus companies and result in commuters complaints about the inconvenience of or confusion in transfers between arterial and feeder routes, so advance information campaign will be needed, she added.

Taxes

OTHER than the constitutional amendment, tax reform is on the priority list of foreign businessmen grouped under the ECCP. The ECCP said reforms should address both the personal income and corporate income tax.

We would like to see the new government to act on comprehensive tax reform in the following months, Taus said in his reply to questions sent via electronic mail. Tax reform that lowers corporate income tax to a more internationally competitive level and lessens the burden on employers and employees by reducing and aligning personal income-tax brackets to current salary ranges.

House Committee on Ways and Means Chairman and Liberal Party Rep. Romero Quimbo of Marikina City said lowering individual and corporate income-tax rates should be prioritized in the next government.

Besides addressing criminality, the next government should study tax reform, Quimbo added.
Duterte earlier said he doesnt favor lowering individual and corporate tax rates, adding he needs funds for the government infrastructure projects.

But mining industrys big players under the Chamber of Mines of the Philippines recommend the deferral of the proposal to increase taxes in mining pending the governments comprehensive tax reform.
Pidss Navarro said there is a need to implement a comprehensive tax and customs-reform program that can substantially increase revenues by around 20 percent of GDP.

Reit

TAX is also an issue with the Real Estate Investment Trust (Reit) law. The countrys tax authorities are subjecting to a 12-percent value added tax (Vat) a Reit company. Theres also a one-time tax to be able to set up a Reit company.

Philippine Stock Exchange Inc.s Chief Operating Officer Roel Refran said in other countries, they did not subject to sales tax the Reit, since theres already the one-time tax.

Were not [re]inventing the wheel, Refran told the BusinessMirror. This is used in Japan, Australia, Singapore and in the US. And its not going to be a legislative amendment, because thats hard to do. Its just going to be the IRR [amendment to the implementing rules and regulations], and also the appropriate SEC [Securities and Exchange Commission] memo circular.

The Bureau of Internal Revenue earlier said the IRR for the Reit is fair, and tough measures were placed to ensure the private sector would not unduly benefit from the Reits real purpose of recycling capital.

IRR

REFRAN said he wants the incoming administration to revisit the IRR for the Reit products.
When it [REIT] was implemented, there were additional requirements [that], when you look at the law, it did not provide such a high bar.

Refran said, for instance, the law states that the Reit shall be a public company with an ownership of just 33 percent. When the IRR was implemented, it placed an additional requirement that states over a three- to four-year period, the Reit should be owned by at least 66 percent, or two-thirds, of the public.

The Reit law was enacted in 2009, with the main aim of promoting the development of the capital market, broadening the participation of the public in the ownership of real estate in the Philippines; and use the capital market as an instrument to help finance and develop infrastructure projects.

The IRR of the said law, however, was crafted by the Aquino economic team.

The law was designed to recycle real-estate assets by placing them in another Reit company in which the public can invest into by purchasing shares. The shares of the company can also be traded at the PSE.
These property firms may not be big firms, such as Ayala Land Inc. and SM Prime Holdings Inc. A Reit can also be a simple parking-lot operator, expressways that exact toll on their users, prison facilities and airports.

Construction

THE countrys construction industry, meanwhile, said it will introduce to the next administration the building of instant flyovers. These are city bridges using modular systems or prefabricated materials that could be placed in congested areas of Metro Manila and parts of the country as part of a solution to the worsening traffic situation.

Jorge Consunji, president and COO of DM Consunji Inc., said the members of the Philippine Constructors Association (PCA) may push to the next administration the use of new technology in building flyovers.

DM Consunji Inc. is the construction arm of conglomerate DMCI Holdings Inc.

As a rule of thumb, using the new technology may cut construction time by 30 percent, and the bridge can also last by at least 20 years. It costs about P1.2 billion per kilometer to build one.

During former President Gloria Macapagal-Arroyos administration, the government purchased several modular system or prefabricated flyovers that were meant to be put up in heavy-traffic areas in Metro Manila. One such area targeted was Katipunan Avenue in Quezon City, where two major colleges are located.

These were, however, set aside and not utilized by the Aquino administration.
The PCA may just ask the next administration to utilize these materials for the project, Consunji said in a news briefing.

We [DM Consunji Inc.], along with all the other member-contractors at PCA, are prepared to offer this technology to the next administration. It is high time that worsening traffic condition in Metro Manila be addressed as promptly as possible, Consunji, a former PCA president, said.

Given a chance, our association would like to propose this new technology. Although its more expensive versus the construction of conventional flyovers, this technology promises to improve the traffic condition in Metro Manila.

A conventional flyover takes about 18 months to complete.

Delays in construction, however, are caused by the right-of-way issues and the transfer of utility wires, cables and pipes buried under the ground.

Consunji said these are some of the issues they hope could be addressed by the incoming government.

Economists

ALL the tough talk from the Duterte camp in the months leading to last Mondays polls may be put to the test as local economists weigh in on the policies needed to push the economy forward.

Economists interviewed by the BusinessMirror highlighted the need to promote regulatory reform, the importance of agriculture and research and development, and a focus on urban planning.

There is no dearth in good policy prescriptions. What is lacking is implementation of policies. [I] hope that the Duterte administration can put a spark in the implementation phase, University of Asia and the Pacific School of Economics Vice Dean George Manzano said.

Manzanos economic wish list included investor-friendly policies, such as following the rule of law, honoring the sanctity of contracts, promoting transparency of processes, and liberalizing the investment regime.

He also urged the expansion of investments in energy by facilitating investments in renewable energy and power, as well as the creation of clear regulations in the sector.

Agriculture

MANZANO also urged the Duterte administration to shift to higher-value agriculture, as well as credit and technology transfer. He added that the governments rice policy must be reviewed, and efforts must be increased to clamp down on smuggling.

Supporting the agriculture sector, PIDSs Navarro said, can be done by setting a macro target of 1 percent of GDP for research and development.

Encouraging R and D, as well as innovations, can help the agribusinesses and small and medium enterprises (SMEs) improve and diversify their products.

Eagle Watch senior fellow Alvin Ang said the Duterte administration needs to increase infrastructure spending because it has the potential to solve the countrys employment woes, particularly in agriculture.
Samahang Industriya ng Agrikultura (SINAG) Executive Director Jayson Cainglet told the BusinessMirror farmers are expecting Duterte to achieve what President Aquino has failed to do in the past six years of his term.

Because we feel like the incumbent administration has flopped in advancing Philippine agriculture, farmers will really expect major changes during Dutertes term, he said in a phone interview. Were hoping this time the administration wont fail us.

Cainglet added that as someone coming from Mindanao, Duterte should truly understand the challenges faced by the agricultural sector.
He said Sinag is counting on Duterte to address issues, such as smuggling, access to credit, and free irrigation services.

Neglected

PHILIPPINE Maize Federation Inc. (PhilMaize) President Roger Navarro also called on the incoming administration to focus its efforts on the agriculture sector.

We hope that this time, the government will really focus on agriculture, because this sector has long been neglected in our country.

PhilMaizes Navarro added that there is a need to implement policy reforms"particularly those that involve production, trade and export"and rationalize the distribution of the Department of Agricultures (DA) budget.

We know for a fact that the bulk of the budget for agriculture is mostly given to Luzon, then about 35 percent is divided between the Visayas and Mindanao, Navarro explained. It should change, especially that the new president will be from Mindanao.

United Broilers Raisers Association President Elias Jose Inciong, for his part, said the next administrations thrust should be in promoting climate-change resiliency and sustainability.

If [the Duterte administration] can address the challenges brought about by climate change, especially on water supply and distribution, that would be a major and long-term achievement, he said.
Water, the industry leader said, is a basic necessity, especially for crops.

It may not affect [poultry and livestock growers] directly and immediately, but if you do not address the issue on water, where will you get your feeds for your poultry and livestock? If you address that, you address sustainability already, he ended.

Poverty reduction among fishermen should also be a focal point of government efforts, nongovernmental organization Tambuyog Development Center Inc. (TDC) insisted.

TDC Executive Director Arsenio Tanchuling said stopping illegal fishing, implementing the Comprehensive National Fisheries Industry Development Plan 2016-2020, and providing settlement areas for fishermen near their fishing grounds would be crucial in uplifting the lives of fishermen.

According to Agriculture Undersecretary Emerson Palad, the DA has already prepared a transition team that will present to the next agriculture secretary the agencys programs and recommendations. We will brief the new secretary and his or her team regarding what the agency has achieved, what programs became successful, which programs need adjustment, among others. We have to discuss it with them so that the transition will become smooth and seamless.//


Author: VG Cabuag
Date: May 11, 2016
Source: Business Mirror

Inaccuracies in recorded nutrition status such as age, height, and weight measurements of children in public schools are among the major constraints that state think tank Philippine Institute for Development Studies (PIDS) encountered in assessing the effectiveness of the Department of Educations School-Based Feeding Program (SBFP).

In her presentation at a seminar organized by PIDS and the Cordillera Studies Center of the University of the Philippines Baguio, PIDS Consultant and UP Professor Ana Maria Tabunda noted that there were inaccuracies in documenting the date of activities undertaken as part of the feeding program as well as the height and weight measurements and nutrition status of children before and after the feeding program. She said that there were also errors in the entries for birth dates and ages.

Glaring errors include inconsistent recorded heights such as children having lower post-feeding height than pre-feeding height and missing post-feeding weight or height measurements. These inaccurate data in school documents as well as those obtained during the survey by PIDS researchers constrain proper assessment not only of the initial nutrition status of would-be program beneficiaries but also the improvement in such status, Tabunda said.

Thus, for proper documentation of the childrens progress, she recommended that all schools, including nonbeneficiary schools, must be provided with the recommended weighing scales and height measurement equipment. All schools need to be provided with these equipment, since non-beneficiary schools also need to submit accurate nutrition status reports, which serve as the basis for determining which schools should implement the feeding program, she explained.

Tabunda also suggested that school heads, school nurses, and teachers must be trained on the proper use of such equipment and instill in them the importance of proper documentation of the prefeeding, feeding, and postfeeding phases of the program. Accurate documentation, according to Tabunda, help in the proper selection of beneficiary schools and beneficiary pupils, as well as in monitoring and evaluating program outcomes.

She suggested that DepEd should provide schools with an application program such as Microsoft Excel to help them correctly compute a childs age to the nearest month.

Tabunda suggested that DepEd should review its basis for the 70 percent nutrition target for the SBFP, which has since been increased to 80 percent in the school year 2015-2016 implementation.//

Author:
Date: May 07, 2016
Source: Baguio Midland Courier

Exporters are urging the Philippine Competition Commission (PCC) to fast track the implementing rules and regulation (IRR) of the Philippine Competition Act.
This would help the industry to identify good market and competition practices and attract more investment under the Asean Economic Community (AEC).
Republic Act 10667or the Philippine Competition Act (PCA) will help ensure that existing businesses operate on within a level playing field, said Philippine Exporters Confederation Inc. (Philexport) President Sergio Ortiz-Luis Jr.
This is critically important within the Asean Economic Community to protect both local and foreign businesses with the legal environment against anti-competitive trade practices, he said in a recent conference on the Comprehensive Competition Law.
Ortiz-Luis said many countries, including Asean neighbors Indonesia, Malaysia, Singapore, Thailand, and Vietnam, have adapted strong legal frameworks to guard against anti-competitive trade practices.
It is interesting to note that these countries also register higher foreign direct investments or FDIs than its Asean brothers which have not adopted their competition law, he said.
The newly passed competition law was signed in July 2015, and was passed in December the same year.
Ortiz-Luis said there is a need for micro, small and medium enterprises (MSMEs) to participate in economic growth.
While exporters are mainly global players, our interest lies on the fact that exporters also consume domestic goods and services as part of export production. For this reason, a conducive environment must be in place to ensure that prices, quality and availability of these goods and services must be at competitive levels, he said.
At the same time, however, as global and regional players, we want to help ensure that they compete in a level playing field, he added.
For her part, Erlinda Medalla, a senior research fellow at the Philippine Institute for Development Studies (PIDS), said the new competition law keeps firms from unfairly dominating the market by means other than becoming more efficient than other players.
Medalla noted the abuse of market power includes agreements to fix prices and
outputs, agreement to divide markets, collusive tendering and bid rigging, resale price maintenance, exclusive dealing, and tying sales to limit competition from rival firms.
Its a landmark legislation. Its about time we have one. On the whole, it provides a good legislative framework for competition policy and law, Medalla said.
Earlier, PCC Chairman Arsenio Balisacan said the commission would complete the IRR in June.//


Author: Kristyn Nika M. Lazo
Date: May 09, 2016
Source: Manila Times

President has overseen rapid economic growth"but as he ends his term, rates of hardship remain stubbornly high.

MANILA"Philippine President Benigno Aquino III can tout many gains during his six years in power, including a soaring economy, strong corporate profits, and a decline in graft.
But one of his goals has proven elusive: reducing poverty.
With the term-limited Mr. Aquino due to step down next month following Mondays election, 26.3% of Filipinos are still poor, according to the government, the same level as when he took office in 2010. The failure taints Mr. Aquinos legacy and has divided opinion here over whether the country is on the right track.
Aquino didnt meet our needs, said Shirley Rala, a 54-year-old mother-of-four and one of the capital Manilas estimated 4 million slum dwellers. Im hoping the new president can do more.
The shortfall wasnt for lack of effort.
Mr. Aquino significantly boosted spending on health and education, especially on youth"the sort of attention that social scientists say should alleviate poverty. Anti-poverty Secretary Joel Rocamora said the Philippines would reap huge benefits from this strategy over time, but that the gains would take years to impact the poverty statistics.

Unfortunately, this long-term approach was never going to be useful for winning this years elections, Mr. Rocamora said.
Mr. Aquino presided over an unprecedented boom. Gross domestic product grew by an average 6.2% a year while foreign investment and tourist arrivals reached record highs. Credit-ratings firms rewarded the administrations prudent fiscal management and anticorruption efforts with upgrades.
The nations top 10 conglomerates"led by San Miguel Corp., SM Investments Corp., and JG Summit Holdings Inc."more than doubled annual sales to $44 billion between 2010 and 2015. Their profits rose by half to around $4 billion. The net worth of the 40 richest Filipinos more than tripled in that period to $71.4 billion, according to Forbes.
Such facts bolster a widely held view that the rich have benefited most from the Aquino boom. That has hurt Mr. Aquinos preferred candidate, former interior secretary Manuel Roxas, who has lagged behind in the polls.

And it has benefited other candidates. Rodrigo Duterte, a city mayor who pledges to snuff out crime to lift the economy and reduce poverty, has surged in the latest polls. The other leading challengers, Sen. Grace Poe and Vice President Jejomar Binay, also fault Mr. Aquino for failing to deliver inclusive growth and say they will address that.
Mr. Aquino has acknowledged his limited success in battling poverty. Somewhere about the middle of the term, we were surprised that the poverty numbers were not moving as fast as we had hoped, he told The Wall Street Journal. This prompted a more focused effort by investing a huge amount in social services.
In response, Mr. Aquino expanded a cash giveaway policy set by his predecessor. Payments of up to $50 every two months to the poor grew sevenfold to 5 million families and totaled $5 billion. They depended on beneficiaries children attending school.
Its a long-term investment in human capital, said Cielito Habito, a former socioeconomic planning secretary. Theres never been a better targeted system in the Philippines.
All the leading presidential candidates have pledged to extend the popular program. That is good news to the residents of Sawata, a Manila slum. The payments have been a big help, said Elizabeth Santiago, a 40-year-old mother of eight, whose fisherman husband makes about $10 a week. The government sets the poverty threshold at $195 a month for a family of five.

Shanties sit over a polluted river in Navotas city, north of Manila. Mr. Aquino has acknowledged his
limited success in reducing poverty. PHOTO: ROMEO RANOCO/REUTERS
Still, conditions in the slum have barely changed, she said beside her familys shack, perched on mounds of rotting trash over a fetid waterway. A boy paddled past using a chunk of Styrofoam as a raft.

Gains in social services were undermined elsewhere, Mr. Habito said. The administration was slow to build new infrastructure, he said, weakening foreign investment and job creation. While praising Mr. Aquino for bringing unemployment below 7% for the first time in decades, the creation of jobs in agriculture and manufacturing was inadequate to ease poverty, he said.
Roehlano Briones, an economist at the Philippine Institute of Development Studies, blamed the stubborn poverty rate on poor agricultural policy. Mr. Aquinos policy of pursuing food security by meeting most of the Philippines rice requirements made it up to 40% more expensive than on international markets, he said.
Rice is a quarter of the expenditure of poor households, Mr. Briones said. This is all at the expense of the poor.
Can the Philippines Stay on Track?

Non-rice farmers have meanwhile received little help and are the poorest of the poor, Mr. Briones said. Theres been an exodus from the countryside because people cant make a living there, he said.
The main presidential candidates have promised major agricultural investments. Mr. Duterte has pledged to freeze most infrastructure spending in the first year of his presidency to pay for urgent investment in food production.
Ms. Rala, the Sawata resident, said she was unlikely to vote for Mr. Aquinos pick, Mr. Roxas. Still, she didnt blame Mr. Aquino for problems that have afflicted the Philippines for generations.
This countrys problems are so big, she said. Its not all his fault.//


Author: Trefor Moss
Date: May 05, 2016
Source: Wall Street Journal

The governments total infrastructure funding for health facilities reached P16.9 billion between 2010 and 2014, according to a study released by the Philippine Institute for Development Studies (PIDS).

In a study, titled The Impact of Improving Capital Stock on the Utilization of Local Health Services: Preliminary Findings on the Evaluation of the HFEP, PIDS senior research fellow Oscar F. Picazo said that this translated to an annual investment of only P3.4 billion during the period.

The funding was extended through the Health Facilities Enhancement Program (HFEP), which sought to provide infrastructure and medical equipment to government health facilities.

The average funding per health facility is small: P9.8 million per hospital/infirmary and P1.8 million per RHU [Regional Health Unit]/CHO [City Health Office], the study stated.

However, data showed that despite the small average funding received by RHUs and CHOs, the study found that hospitals with HFEP, on a monthly basis, catered to an average of 98 expectant mothers, which is three times more than the 32 deliveries in hospitals without HFEP.
For outpatient consultations, hospitals with HFEP had an average of 70 patients, or 2.3 times more than in those without HFEP, which had an average of 30 patients.

For inpatient admissions, HFEP-supported hospitals had an average of 47 inpatient admissions per day, nearly double, or 1.8 times, the 26 average inpatient admissions in those that did not receive HFEP.

In terms of before and after scenarios of the HFEP, data showed not all HFEP recipients were able to increase their health services.

For outpatient consultations, around 75 percent of the RHUs, or 45 out of 60, with complete data showed increased outpatient consultations.

Further, some 65 percent of hospitals, or 39 out of 57, with complete data showed increased outpatient consultations.

For birth deliveries, some 49 percent of RHUs and CHOs, or 29 out of 55, with complete data showed increased birth deliveries.

Around 75 percent of hospitals and infirmaries, or 46 out of 61, with complete data showed increased birth deliveries.

For inpatient services, some 81 percent of hospitals and infirmaries, or 47 out of 58, with complete data showed increased inpatient admissions per day.

The impact of capital investments is often diluted by staff shortage and dramatic contractualization of health workers, as well as persistent [medication] drug shortage, the study stated.

The study recommended the conduct of additional studies on hospital occupancy of local government units and the efficiency of local hospitals using data from the HFEP survey.

Further study is also recommended to examine the contractualization of health workers and the adequacy and workload of health workers in RHUs/CHOs.

Other studies must also be undertaken on the PhilHealth coverage of local health units; the practice of no-balance billing and point of care enrollment; and health financing innovations used by health facilities.

The study included data from 266 RHUs/CHOs (159) and hospitals and infirmaries (107) located provinces nationwide.

Around 26 provinces were included in the study. This included 11 provinces in Luzon; eighth in Mindanao; and seven in the Visayas.//

Author: Cai Ordinario
Date: May 09, 2016
Source: Business Mirror

Exporters are pushing for the fast-track drafting and approval of the implementing rules and regulations (IRR) of the law designed to foster improved market competition crucial to attracting more investments into the country important within the Asean Economic Community (AEC).

Philippine Exporters Confederation Inc. (Philexport) President Sergio Ortiz-Luis Jr. said Republic Act 10667, or the Philippine Competition Act, will help ensure that existing businesses operate in a level playing field. The law was signed on July 21, 2015.

This is critically important within the Asean Economic Community to protect both local and foreign businesses with the legal environment against anticompetitive trade practices, he said in a recent conference on the comprehensive competition law.

Ortiz-Luis Jr. cited many countries, including Asean neighbors Indonesia, Malaysia, Singapore, Thailand and Vietnam which have adapted strong legal frameworks to guard against such trade practices.

It is interesting to note that these countries also register higher foreign direct investments, or FDI, than its Asean brothers which have not adopted their competition law, he said.

The export leader underscored the need for micro, small- and medium-scale enterprises (MSMEs) to participate in the growth of the countrys economy.

While exporters are mainly global players, our interest lies on the fact that exporters also consume domestic goods and services as part of export production. For this reason, a conducive environment must be in place to ensure that prices, quality and availability of these goods and services must be at competitive levels, he noted. At the same time, however, as global and regional players, we want to help ensure that they compete in a level playing field.

To fully benefit from such environment, the Philexport head said the country should hasten the approval of the IRR of the law now that Secretary Arsenio M. Balisacan, who is credible and competent, has been appointed as head of the Philippine Competition Commission (PCC).

The PCC is a quasi-judicial body tasked to enforce and implement the provisions of the Philippine Competition Act.

Likewise, Ortiz-Luis Jr. encouraged companies to draft and implement their compliance program to avoid the risks of violating the law.

Another legal groundwork to attract more investors has been completed. The test is again in the proper implementation where private sector and government can play important roles. Let us continue to do our part to help ensure that the gains flow through all stakeholders, he said.

Meanwhile, Dr. Erlinda Medalla, a senior research fellow at the Philippine Institute for Development Studies, said the new competition law prevents firms from unfairly obtaining market power by means other than becoming more efficient than other players
Medalla identified examples of errant firm behavior, including agreements to fix prices and outputs; agreement to divide markets; collusive tendering/bid rigging; and resale price maintenance, exclusive dealing, tying sales, designed to limit competition from rival firms.

Its a landmark legislation; about time we have one. On the whole, it provides a good legislative framework for competition policy and law, she said.//

Author:
Date: May 09, 2016
Source: Business Mirror

QUEZON CITY, May 5 - Inaccuracies in recorded nutrition status such as age, height, and weight measurements of children in public schools are among the major constraints that state think tank Philippine Institute for Development Studies (PIDS) encountered in assessing the effectiveness of the Department of Educations (DepED) School-Based Feeding Program (SBFP).

In her presentation at a seminar organized by PIDS and the Cordillera Studies Center of the University of the Philippines (UP) Baguio, PIDS Consultant and UP Professor Ana Maria Tabunda noted that there were inaccuracies in documenting the date of activities undertaken as part of the feeding program as well as the height and weight measurements and nutrition status of children before and after the feeding program. She added that there were also errors in the entries for birth dates and ages.

Glaring errors include inconsistent recorded heights such as children having lower post-feeding height than pre-feeding height and missing post-feeding weight or height measurements. These inaccurate data in school documents as well as those obtained during the survey by PIDS researchers constrain proper assessment not only of the initial nutrition status of would-be program beneficiaries but also the improvement in such status, Tabunda explained.

Thus, for proper documentation of progress, she recommended that all schools, including nonbeneficiary schools, must be provided with the recommended weighing scales and height measurement equipment. All schools need to be provided with these equipment, since nonbeneficiary schools also need to submit accurate nutrition status reports, which serve as the basis for determining which schools should implement the feeding program, she explained.

Tabunda also suggested that school heads, school nurses, and teachers must be trained on the proper use of such equipment and instill in them the importance of proper documentation of the prefeeding, feeding, and postfeeding phases of the program. Accurate documentation, according to Tabunda, help in the proper selection of beneficiary schools and beneficiary pupils, as well as in monitoring and evaluating program outcomes. In addition, she suggested that DepED should provide schools with an application program such as Microsoft Excel to help them correctly compute a childs age to the nearest month.

Given that the administration component of the budget has been increased, it was also recommended that food budget allocation must be increased. Likewise, the effect of inflation should also be considered in food budget allocation.

Finally, the Tabunda suggested that DepED should review its basis for the 70-percent nutrition target for the SBFP, which has since been increased to 80 percent in the school year (SY) 2015-16 implementation.

The link between malnutrition and poor performance in school such as absenteeism, early dropout, and poor classroom performance of school children is well established in the literature. Likewise, evidence shows that school-based nutrition and health interventions are effective in improving school performance. Thus, the DepED has been conducting conditional food transfer programs since 1997.
DepEds feeding program was first offered as the Breakfast Feeding program in 1997 to address short-term hunger among public school children. It eventually shifted focus to addressing undernutrition or malnutrition after SY 2008-2009. In 2012, it was renamed to its current name SBFP as feeding time was no longer limited to breakfast. For SY 2014-15, the national government targeted all the 562,262 severely wasted children enrolled in kindergarten to Grade 6 in public schools for the SBFP, or about 3.8 percent of approximately 14.9 million children enrolled in public schools. Previously, DepED had been targeting only a fraction of the total number of severely wasted pupils due to budget constraints.

The SBFP provides food to severely wasted children or those whose weight-for-height measurements are below the minus-three standard deviation cut-off established by the World Health Organization for well-nourished populations. It is conducted in schools over a period of 100 to 120 feeding days for a given batch of program beneficiaries.

According to the PIDS paper jointly authored by Tabunda, PIDS Senior Research Fellow Jose Ramon Albert, and PIDS Consultant Imelda Agdeppa, the SBFP was generally implemented well, with majority of the school heads, teachers, and parents expressing appreciation for the program and with many of them expressing a desire to see the program continued, and if possible, expanded.

Although the target goal of having at least 70 percent of beneficiaries attain normal nutrition status by the end of the feeding program may have not been attained in SY 2013-14, the paper noted that these are caused by problems beyond the control of program implementers.

Meanwhile, the goal of improving school attendance by beneficiaries to at least 85 percent for the entire school year had been attained. However, the authors pointed out that children who are not beneficiaries of the program also have good school attendance records. They added that the feeding program appears to help improve attentiveness in class and sociability of beneficiary pupils.

The PIDS study, which surveyed about 7 percent of the total number of severely wasted pupils enrolled in the public elementary schools for SY 2013-14, aims primarily to assess the outcomes and impact of the SBFP in terms of its stated educational and nutritional objectives. It is part of a research project by PIDS to evaluate the effectiveness and impacts of key government programs and projects. Spearheaded by the National Economic and Development Authority and the Department of Budget and Management, the impact evaluation (IE) studies were conducted to promote greater transparency and accountability in government. IE is a special type of research that allows policymakers and program implementers to ascertain whether a particular program is achieving its objectives and whether the results are attributable to the intervention. (PIDS)

Author:
Date: May 05, 2016
Source: PIA

Its hard to go beyond discussing Rodrigo Duterte because, really, what else is there? The subject must consume our interest because it will consume our lives over the next six years. (And, yes, Mr. Ferdinand Marcos Jr., it will be six years. There is no Plan B or any other wild idea. And in regard to the VP race, I hope whoever loses has as much love for the Philippines as Mar Roxas does. He said: Its not about me. Its not about anyone. Its about how we love our country and how well do all that we can for her. The loser should not drag out the decision, but just accept it graciously.)
Today Im going to suggest a few things that presumptive President-elect Duterte might want to do. The people voted for him because he promised what this administration didnt give: action. It was change they wanted; the straight path (daang matuwid) was but a rutted dirt road. They want a cemented one, built fast. But fast wasnt in this administrations vocabulary.
Expectations are high, but so is the level of fear. No one quite knows what to expect from this enigma of a man. A man who came from nowhere to become the leader of 100 million people. What will he do? Are his threats and outrageous comments just comments? Or is it really the way he is going to direct the country?
If I were an optimist Id say, as his supporters have, that its all just winning talk. Hell be different. A pessimist would fear the return to Marcosian dictatorship. Well, Im neither an optimist nor a pessimist. As an engineer, Im a realist. The glass isnt half-full or half-empty; its too big. Disciplining buses on Edsa or restricting them to curbside lanes wont solve the problem, as optimists might hope. Taking half of them off the road and paying drivers a fixed salary will.
President Duterte needs to start with some quick actions that have immediate and noticeable impact so that people come quickly on board. They can say, Wow, this is a man who gets things done. Longer term support then follows.
President Aquinos no wangwang policy had that effect. But he didnt go beyond it, so it remained an isolated, out-of-the-box change. I believe Duterte is going to be very out-of-the-box, sometimes"and it may be cause for worry"on things about which we may not be too happy. For instance, I dont believe in a liquor ban or in any other ban unless really, really necessary. Bans only encourage violation and crime.
There are things Id do immediately that would really make people sit up and take notice: Declare a clean Philippines, rice at half price, and free-flowing traffic in Manila.
Puerto Princesa is a clean city. It is because there are rubbish bins everywhere and littering is penalized. The bins arent stolen because there are holes in them (you cant take them home for storing rice or water), and the penalty for theft is high. President Duterte can order it nationwide. He did at his miting de avance in Luneta, and several hundred thousand people took their trash with them. Those at the rallies of others, or at the polling stations, didnt, because there was nowhere in which to put the trash. And people are careless of their trash.
So, bins. Let the private sector provide them so none of the nonsense of public bidding, lower bidder (a subject Ill discuss one day), etc. Corporations can do it as a public service and, in return, be allowed to advertise on the bins.
Id also require the beneficiaries of the conditional cash transfer program to devote a day a week to cleaning their environs as payment for the handout. Then establish awards (Filipinos love awards) for the cleanest city, the most beautiful city, overall cleanest and most beautiful. Lets have a clean Philippines.
As to rice, I mentioned this in my column on Nov. 12, 2015 (Give the consumer a break). Unbelievably (does no one want cheaper rice?), there was no reaction. A well-researched PIDS (Philippine Institute for Development Studies) report determined that if rice were traded on an open market, it would, like other products openly marketed, result in lower prices as competition and source selection flourish. The study concluded that if the National Food Authority were taken out of the trade and control of rice and tariffs were removed, the price of regular milled rice would fall from P33.08 per kilogram to P19.80/kg. I venture to say that 100 million Filipinos would be very happy about that.
The negative side is that it would make life even more difficult for the 2.4 million rice-growers. But would it? It wouldnt if they were assisted to shift to other, higher-value crops, and if they were provided with the water, the seeds, the tools and the techniques that rice farmers in Vietnam and Thailand use. The soil and climate are much the same, so the differences are man-determined. And so, man can fix them.
The thing is it can be done if the will is there.
Theres a third thing Id do for Manila, and thats get traffic moving. It can be done by implementing the one word that defines Duterte: discipline. Buses and jeepneys stopping only at designated stops and close to the curb. Malls and schools with off-street parking, pickup and drop-off areas. Intersections kept clear. Traffic aides trained in ensuring rapid traffic flow. The Metropolitan Manila Development Authority given full authority (which local mayors will agree to cede) over traffic movement on all roads. Theres much, much more thats beyond this column, but has been well detailed by Eddie Yap of the Management Association of the Philippines and others (myself, too, in my column on July 9, 2015, Get Angry). It can be done. Discipline.
A clean Philippines, cheap rice, traffic moving. Awake to a new day. With a new President.* * *


Author: Peter Wallace
Date: May 19, 2016
Source: Philippine Daily Inquirer

Credit gap, the difference between credit given and actual demand, for small and medium enterprises in the Association of South East Asian Nations is estimated at $52.8 billion.

The huge credit gap will likely widen if SMEs are not helped, according to experts in a forum sponsored by state think tank Philippine Institute for Development Studies (PIDS), Asian Development Bank (ADB), Department of Trade and Industry, Management Association of the Philippines, and Financial Executives of the Philippines.

The experts pointed out that a lot can still be done to unleash the potential of SMEs.

Despite the significant contribution of small and medium enterprises (SMEs) to employment and to the economies, experts said they remain as one of the regions untapped resources.

SMEs comprise the largest number of firms in the Asean region, producing majority of jobs and substantially contributing to the sub-regions gross domestic product (GDP).

BambangSusanto, ADBs vice president for knowledge management and sustainable development, stressed in his keynote address the importance of opening access and opportunities for MSMEs.

To help SMEs play their role in the domestic, regional and global production networks, Susanto said the Asean Economic Community (AEC) must build the physical connectivity of SMEs, raise their labor productivity and skills to standards of global value chains, and improve their access to finance.


Meanwhile, Erlinda Medalla, PIDS senior research fellow, and GaneshanWignaraja, ADB advisor, discussed ways on how to improve SMEs access to market and investment opportunities in the AEC.

SMEs play a role not just as a vehicle for poverty reduction but also as an engine of growth, Medalla said.

She emphasized the sectors employment and value added contributions to the Philippines, which peaked at 65 percent and 35 percent, respectively.

Across Southeast Asia, Wignaraja noted SME employment makes up 74 percent of all jobs, and contributes 41 percent of the GDP of Asean economies.

Yet, Wignaraja said these contributions are not yet reflected in international trade.

Wignaraja said high-performing SMEs make up only 21 percent of direct exports across Asean economies.

Many factors obstruct the growth of SMEs, but one of the often cited problems is the lack of access to finance and credit.

Wignaraja said the current banking and credit structure does not know how to deal with SMEs. Bank requirements on collateral and business and finance plans are strict.

Unable to comply and lacking financial literacy, SMEs are often forced to rely on informal resources, as they simply do not have access to the capital they need to expand or participate in larger business and trading activities.

Wignaraja said the total credit gap, or the difference between formal credit provided to SMEs and estimated SME financing needs in Asean, amounts to as much as $52.8 billion.

Wignaraja also pointed out as China begins to slow down and move out of labor-intensive industries, firms in countries like the Philippines, Malaysia and Thailand will have more business opportunities as suppliers of a range of products.

International trade itself has fundamentally changed in the 21st century and is no longer about direct exports. Instead, trade increasingly means global supply chains where different production on stages are located across geographical space and linked by trade in intermediate inputs and final goods, Wignaraja said.

Medalla said the Philippines does not have much of a choice whether or not it wants to partake in this new landscape.

In an increasingly economically integrated Asean, she said, SMEs have to work within a globalized setting.

However, she added not all SMEs can export, and they do not need to. The goal should be for them to have all the opportunities to participate and engage in business in order to help them grow and contribute in sustaining the expansion of the economy.

To do this, Medalla enumerated a number of factors that the Philippines has to address to encourage SMEs to participate in value chains.

She reiterated Wignarajas point about addressing the lack of access to finance and credit, but added that enabling the environment for SMEs to develop competitiveness and connectivity must be prioritized as well.

While Wignaraja believes much of the work must be done by business and private sector in boosting labor productivity, improving the investment climate, raising infrastructure spending, improving information and communication technology infrastructure, and increasing financial access for SMEs, both experts agree that the government also has a critical role to play in SMEs success.

Governments role is to enable and facilitate the linkages and access to markets, finance and technology, and to remove various barriers to entry and exit. The role of the new Competition Law will be very important, Medalla said.

Policymakers should also concentrate on enhancing strategic opportunities. Medalla said the kind of policies needed depends on which SME sector policymakers intend to help.

She recommended policies that would raise SMEs capability to comply with AEC standards, such as developing the halal industry, improving trade facilitation and identifying standards to enable them to access a duty-free Asean market.

She also recommended helping each sector gain competitive advantage through industry clustering, sharing services facilities and developing industry roadmaps.

The opportunities are there in the supply chains, Wignaraja said.//

Author: Angela Celis
Date: May 16, 2016
Source: Malaya

MANILA, Philippines " Small and medium enterprises in ASEAN must be given improved access to financing and global value chain to become significant contributors to the growth of the economic bloc, said state-run think tank Philippine Institute for Development Studies (PIDS).
In a recent forum organized by PIDS, experts from the Asian Development Bank (ADB), Department of Trade and Industry, Management Association of the Philippines and Financial Executives of the Philippines said despite the increasing contribution of SMEs to job creation in the region, their full potential has yet to be harnessed.
ADBs vice president for knowledge management and sustainable development Bambang Susanto said it is important to open access to finance and opportunities in the global value chain.
The ASEAN Economic Community (AEC) must build the physical connectivity of SMEs, raise their labor productivity and skills to standards of global value chains, and improve their access to finance, he said.
PIDS senior research fellow Erlinda Medalla said SMEs in the region must not only become a vehicle for poverty reduction but an engine of growth as well.
Several factors obstruct the growth of SMEs in the region but the foremost problem is the lack of access to financing as bank requirements on collateral and business plants are strict.
Unable to comply or sometimes lacking financial literacy, owners of small businesses are forced to rely on informal resources.
SMEs simply do not have access to the capital they need to expand or participate in larges business and trading activities, said ADB advisor Ganeshan Wignaraja.
The total credit gap of the difference between formal credit provided to SMEs and estimated financing needs for SMEs in ASEAN is currently placed at $52.8 billion.//

Author: Czeriza Valencia
Date: May 15, 2016
Source: Philippine Star

CEBU, Philippines - Capacitating entrepreneurs in the locality " or in barangays " will bring growth to the grassroots.

Speaking during the "Negosyo sa Barangay" forum in Cebu City last Friday, Virgilio Espeleta, vice president for business development, said it is important to build a stronger entrepreneurship culture in localities.

"There's economic activity in Cebu," Espeleta said, urging people to take advantage of this by becoming entrepreneurs.

He said growth in the barangays cannot keep pace with macroeconomic growth.

One way to address this, he said, is to develop more small entrepreneurs who will create jobs and income.

CCCI President Melanie Ng said: "We should not just be consumers, we should also be doers, manufacturers of products for local consumption and export."

They said there is a need to inspire and change the mindsets of the people in the grassroots level to develop their own enterprises and become financially able.

In a previous policy note, the Philippine Institute for Development Studies said barangays should be more effective in spending their limited funds to harness the economic capabilities of their communities and entrepreneurial spirit of their people for development outcomes.

In the conclusion of that study, PIDS said local autonomy would mean the economic empowerment of the people as contributors to inclusive economic growth in their localities and catalysts of positive change.

"It is hoped that economic empowerment would translate into political empowerment in order for Filipinos to be able to end their human poverty and address the root causes of the country's institutional problems. Thus, it is imperative for barangays to provide an enabling environment and facilitative conditions to realize such economic and political potential," PIDS noted.//

Author: Carlo S. Lorenciana
Date: May 16, 2016
Source: Freeman

THINK construction reporting, and what comes to mind?
Carl Jerome Maroma, a correspondent for CLTV36, used to think it was all about crafting a story about an infrastructure project and relevant details. He has since had a rethink.
Construction reporting is often associated with stories focusing on the physical and technical aspects of an infrastructure work, often highlighting details such as the magnitude of a project, costs, target dates of completion, impressive specifications, and industry performance vis-a-vis GDP growth, among others.
But while it is essential to see the industry as a vital cog in sustainable development, it is largely off the radar of some members of the media looking into the industry. Maroma was no exception.
The challenge for the press is to explore unreported or underreported stories revolving around the industry, using the lens of sustainable development.
This was the highlight of the Luzon round of the seminar-workshop series on construction reporting organized by the Philippine Press Institute (PPI), in partnership with Holcim Philippines, on April 27-29 in Pandi, Bulacan. Maroma was one of around 20 participants in the seminar, themed Taking the High Road to Better Construction Stories.
The Mindanao and Visayas legs of the PPi-Holcim seminar will be held in Malaybalay, Bukidnon on May 18-20 and Tagbilaran City in Bohol province on May 24-26, respectively.
Veteran journalist and PPI training director Tess Bacalla said construction reporting should go beyond the usual, or superficial, stories that often deal mainly with the physical and technical side, without going deeper to unearth issues that lend themselves to more interesting and nuanced stories, and thus to broader public discussion, around the industry.
Target issues
Don Gil Carreon, media relations specialist at Holcim Philippines, a cement and aggregates company, said there are five target issues that underpin sustainable construction. These include the efficient and sensible use of resources as well as the participation of communities in construction or infrastructure development efforts to ensure social inclusion at all stages.
An infrastructure project, he said, should also demonstrate innovative concepts in terms of design, materials and methods, and should be transferable to a range of other applications. The industry must also exercise flexibility to adapt to change, Carreon said.
Against this backdrop, journalists, for instance, could write a story on how a particular infrastructure project affects or alters the way of living of people in a community such as schools and relocation sites for informal settler families (ISFs).
The challenge for the media is to find an interesting topic for a construction-related story. Such a story could resonate with readers even if they are not involved in the construction sector, Bacalla said.
It is also important to tell stories from the perspective of ordinary citizens who could be affected by, or benefit from, construction or infrastructure projects.
Links to inclusive growth
Dr. Adoracion Navarro, senior research fellow of public think tank Philippine Institute of Development Studies (PIDS), highlighted the links between infrastructure and inclusive growth.
Navarro said that physical infrastructure, including housing, transportation and telecommunications networks, promotes inclusive growth by facilitating connectivity and enhancing livelihood opportunities for the public.
These also stimulate mobility and speed up delivery, and overall cost, of production inputs.
However, infrastructure spending is growing at a slow rate in the country, Navarro said.
We have monitored some growth in the number of infrastructure projects under the Aquino administration, especially with the roll-out of public-private partnership (PPP) scheme, but it is still not enough, she said.
As of April 2016, at least 12 infrastructure projects under the PPP initiatives have been awarded, including the P24.40-billion Bulacan Bulk Water Supply Project. The majority of proposed projects are still in their early stages, PPP records showed.
The Philippines is at the third to the last rung in terms of quality of roads, air transport, port and railroad infrastructure among the ten member-nations of the Association of Southeast Asian, Navarro noted.
Informal settlers
Another infrastructure-related area where much need to be done is the resettlement of informal settlers in urban areas, particularly in Metro Manila.
The choice of Pandi, a second-class municipality in Bulacan, as seminar venue afforded the participants the chance to visit a resettlement site for informal settler families and witness firsthand how the lack of an inclusive approach to their relocation, including inadequate facilities on-site, has impacted the affected families.
Prior to the field visit, Kreeger Bonagua, deputy lead coordinator of the Presidential Commission for the Urban Poor (PCUP), gave an overview of the current interventions of the government to address the needs of ISFs, including those living in danger areas or displaced due to government projects.
Bonagua said that while half the Philippine population, estimated at close to 102 million, are now living in urban areas, at least 15 percent of them are ISFs. The urbanization has been spawned by several factors, including migration from rural areas, in hopes of better opportunities, he said.
It turns out that there are many stories on construction aside from the usual reporting about infrastructure projects. Talking to people affected by a project is a good start, Maroma, the CLTV36 correspondent, said. (PR)

Author:
Date: May 18, 2016
Source: Sun Star Cebu

Small and medium enterprises (SMEs) are the key drivers of growth among economies of Association of Southeast Asian Nations (Asean) members, but experts say these remain one of the regions untapped resources.
In a recent forum organized by state think tank Philippine Institute for Development Studies (PIDS), the Asian Development Bank (ADB), the Department of Trade and Industry, the Management Association of the Philippines, and the Financial Executives of the Philippines, trade experts said a lot could still be done to unleash the potentials of SMEs.
Currently, SMEs comprise the largest number of firms in Southeast Asia. They generate the majority of jobs and substantially contribute to the regional blocs GDP.
ADB Vice President for Knowledge Management and Sustainable Development Bambang Susanto stressed in his keynote address the importance of opening access and opportunities for micro, small and medium enterprises.
To help SMEs play their role in the domestic, regional, and global production networks, Susanto urged the Asean Economic Community (AEC) to build the physical connectivity of SMEs, raise their labor productivity and skills to standards of global value chains, and improve their access to finance.
PIDS Senior Research Fellow Erlinda Medalla and ADB Advisor Ganeshan Wignaraja discussed ways to improve the SMEs access to market and investment opportunities in the AEC.
SMEs play a role not just as a vehicle for poverty reduction, but also as an engine of growth, said Medalla.
She underlined the sectors employment and value-added contributions to the Philippines, which peaked at 65 percent and 35 percent, respectively.
Across Southeast Asia, Wignaraja noted that SME employment makes up 74 percent of all jobs, and contributes 41 percent of the GDP of Asean economies.
Yet, Wignaraja lamented that these contributions were not yet reflected in international trade.
Wignaraja observed that high-performing SMEs make up only 21 percent of direct exports across Asean economies.
Many factors obstruct the growth of SMEs, but one of the oft-cited problems is the lack of access to finance and credit.
Wignaraja explained that the current banking and credit structure does not know how to deal with SMEs. Bank requirements on collateral and business and finance plans are strict. Unable to comply and lacking financial literacy, SMEs are often forced to rely on informal resources.
SMEs simply do not have access to the capital they need to expand or participate in larger business and trading activities, Wignaraja said.
He added that total credit gap, or the difference between formal credit provided to SMEs and the estimated SME financing needs in Asean, amounts to as much as $52.8 billion.
Wignaraja also pointed out that, as China begins to slow down and move out of labor-intensive industries, firms in countries like the Philippines, Malaysia, and Thailand will have more business opportunities as suppliers of a range of products.
International trade itself has fundamentally changed in the 21st century and is no longer about direct exports. Instead, trade increasingly means global supply chains where different production on stages are located across geographical space and linked by trade in intermediate inputs and final goods, Wignaraja said.
Medalla added that the Philippines does not have much of a choice on whether or not it wants to partake of this new landscape.
In an increasingly economically integrated Asean, she said, SMEs have to work within a globalized setting.
However, she added that not all SMEs can export, and they do not need to. The goal should be for them to have all the opportunities to participate and engage in business in order to help them grow and contribute in sustaining the expansion of the economy.
To do this, Medalla enumerated a number of factors that the Philippines must address to encourage SMEs to participate in value chains.
She agreed with Wignarajas point about addressing the lack of access to finance and credit, but added that enabling the environment for SMEs to develop competitiveness and connectivity must be given priority, as well.
While Wignaraja believes that much of the work must be done by the business and private sectors in boosting labor productivity, improving the investment climate, raising infrastructure spending, improving information and communication technology infrastructure, and increasing financial access for SMEs, both experts agree that the government also has a critical role to play in the success of SMEs.
The governments role is to enable and facilitate the linkages and access to markets, finance, and technology, and to remove various barriers to entry and exit. The role of the new Competition Law will be very important, Medalla said.
Policymakers should also concentrate on enhancing strategic opportunities, they said.
Medalla said the kind of policies needed depends on which SME sector policymakers intend to help. She recommended policies that would raise SMEs capability to comply with AEC standards, such as developing the halal industry, improving trade facilitation, and identifying standards to enable them to access a duty-free Asean market.
She also recommended helping each sector gain competitive advantage through industry clustering, sharing services facilities, and developing industry roadmaps.
The opportunities are there in the supply chains, said Wignaraja. The business sector has to adopt smart strategies to capture opportunities to participate in the production networks, and policymakers must create the enabling business environment for SMEs to thrive.//

Author: Luis Leoncio
Date: May 15, 2016
Source: The Market Monitor

THINK construction reporting, and what comes to mind?
Carl Jerome Maroma, a correspondent for CLTV36, used to think it was all about crafting a story about an infrastructure project and relevant details. He has since had a rethink.
Construction reporting is often associated with stories focusing on the physical and technical aspects of an infrastructure work, often highlighting details such as the magnitude of a project, costs, target dates of completion, impressive specifications, and industry performance vis-a-vis GDP growth, among others.
But while it is essential to see the industry as a vital cog in sustainable development, it is largely off the radar of some members of the media looking into the industry. Maroma was no exception.
The challenge for the press is to explore unreported or underreported stories revolving around the industry, using the lens of sustainable development.
This was the highlight of the Luzon round of the seminar-workshop series on construction reporting organized by the Philippine Press Institute (PPI), in partnership with Holcim Philippines, on April 27-29 in Pandi, Bulacan. Maroma was one of around 20 participants in the seminar, themed Taking the High Road to Better Construction Stories.
The Mindanao and Visayas legs of the PPi-Holcim seminar will be held in Malaybalay, Bukidnon on May 18-20 and Tagbilaran City in Bohol province on May 24-26, respectively.
Veteran journalist and PPI training director Tess Bacalla said construction reporting should go beyond the usual, or superficial, stories that often deal mainly with the physical and technical side, without going deeper to unearth issues that lend themselves to more interesting and nuanced stories, and thus to broader public discussion, around the industry.
Target issues
Don Gil Carreon, media relations specialist at Holcim Philippines, a cement and aggregates company, said there are five target issues that underpin sustainable construction. These include the efficient and sensible use of resources as well as the participation of communities in construction or infrastructure development efforts to ensure social inclusion at all stages.
An infrastructure project, he said, should also demonstrate innovative concepts in terms of design, materials and methods, and should be transferable to a range of other applications. The industry must also exercise flexibility to adapt to change, Carreon said.
Against this backdrop, journalists, for instance, could write a story on how a particular infrastructure project affects or alters the way of living of people in a community such as schools and relocation sites for informal settler families (ISFs).
The challenge for the media is to find an interesting topic for a construction-related story. Such a story could resonate with readers even if they are not involved in the construction sector, Bacalla said.
It is also important to tell stories from the perspective of ordinary citizens who could be affected by, or benefit from, construction or infrastructure projects.
Links to inclusive growth
Dr. Adoracion Navarro, senior research fellow of public think tank Philippine Institute of Development Studies (PIDS), highlighted the links between infrastructure and inclusive growth.
Navarro said that physical infrastructure, including housing, transportation and telecommunications networks, promotes inclusive growth by facilitating connectivity and enhancing livelihood opportunities for the public.
These also stimulate mobility and speed up delivery, and overall cost, of production inputs.
However, infrastructure spending is growing at a slow rate in the country, Navarro said.
We have monitored some growth in the number of infrastructure projects under the Aquino administration, especially with the roll-out of public-private partnership (PPP) scheme, but it is still not enough, she said.
As of April 2016, at least 12 infrastructure projects under the PPP initiatives have been awarded, including the P24.40-billion Bulacan Bulk Water Supply Project. The majority of proposed projects are still in their early stages, PPP records showed.
The Philippines is at the third to the last rung in terms of quality of roads, air transport, port and railroad infrastructure among the ten member-nations of the Association of Southeast Asian, Navarro noted.
Informal settlers
Another infrastructure-related area where much need to be done is the resettlement of informal settlers in urban areas, particularly in Metro Manila.
The choice of Pandi, a second-class municipality in Bulacan, as seminar venue afforded the participants the chance to visit a resettlement site for informal settler families and witness firsthand how the lack of an inclusive approach to their relocation, including inadequate facilities on-site, has impacted the affected families.
Prior to the field visit, Kreeger Bonagua, deputy lead coordinator of the Presidential Commission for the Urban Poor (PCUP), gave an overview of the current interventions of the government to address the needs of ISFs, including those living in danger areas or displaced due to government projects.
Bonagua said that while half the Philippine population, estimated at close to 102 million, are now living in urban areas, at least 15 percent of them are ISFs. The urbanization has been spawned by several factors, including migration from rural areas, in hopes of better opportunities, he said.
It turns out that there are many stories on construction aside from the usual reporting about infrastructure projects. Talking to people affected by a project is a good start, Maroma, the CLTV36 correspondent, said. (PR)

Author:
Date: May 18, 2016
Source: Sun Star Cebu

The Philippine Competition Commission (PCC) must investigate and prosecute suspected violators of the countrys competition law, particularly in the Information and Communications Technology (ICT) sector, according to a study by the Philippine Institute for Development Studies (PIDS).

In a discussion paper, titled Examining Trends in ICT Statistics: How Does the Philippines Fare in ICT? PIDS senior research fellows Jose Ramon Albert and Ramonette B. Serafica and PIDS specialist Beverly T. Lumbera cautioned the country may encounter difficulties in reaping digital dividends if the PCC hesitates in probing and investigating such violations.
The newly established Philippine Competition Commission will, likewise, need to develop the capacity to investigate and prosecute complex violations to competition law, the authors said.
Many cases in high-income countries can provide guidance to developing countries, like the Philippines, as we promote competitive environments that will further enhance and sustain economic activity, they added.
The PCC was designed as a quasi-judicial body that shall be responsible for the implementation of a national competition policy pursuant to the legislation.
If the PCC can improve, at the least, Internet access in the Philippines, the authors said, the country can make a huge step toward a more inclusive society.
The authors added that the Internet can allow micro and small firms to directly connect with potential buyers abroad through the Internet and social media, or gain business partners.
The authors also said marginalized groups can also improve their access to social services through digital technologies.
The PCC, given its quasijudicial powers, can serve to protect consumers in any particular sector, as it can conduct inquiries, investigate and penalize all forms of anticompetitive agreements, abuse of dominant position and anticompetitive mergers and acquisitions, the authors said.
The authors said Internet penetration in the Philippines has increased to 39.7 percent in 2014, from only 2 percent in 2000. The rapid increase in the Internet started in 2010, when the countrys Internet penetration rate jumped to 25 percent, from only 9 percent in 2009.
However, Internet access in the Philippines only ranks fifth in the Asean. The country trailed behind Singapore, Brunei Darussalam, Malaysia and Vietnam.
The rapid increase in Internet access of Filipinos allowed millions to embrace social media. The study quoted data from We Are Social, which stated that social-media penetration rate in the country, was at 47 percent, with 48 million active social-media users as of January 2016.
The authors said the data from We Are Social also showed almost half, or 46 percent, of Internet users nationwide use the Internet daily.
About 30 percent use the Internet once a week; a sixth, or 16 percent, use the Internet at least once (but less than four times) every month; and a tenth, or 8 percent, use the Internet less than once a month.//

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

QUEZON CITY, May 19 - Small and medium enterprises (SMEs) are the key drivers of growth among economies of Association of Southeast Asian Nations (Asean) members, but experts say these remain one of the regions untapped resources.

In a recent forum organized by state think tank Philippine Institute for Development Studies (PIDS), the Asian Development Bank (ADB), the Department of Trade and Industry, the Management Association of the Philippines, and the Financial Executives of the Philippines, trade experts said a lot could still be done to unleash the potentials of SMEs. Currently, SMEs comprise the largest number of firms in Southeast Asia.

They generate the majority of jobs and substantially contribute to the regional blocs GDP. ADB Vice President for Knowledge Management and Sustainable Development Bambang Susanto stressed in his keynote address the importance of opening access and opportunities for micro, small and medium enterprises.

To help SMEs play their role in the domestic, regional, and global production networks, Susanto urged the Asean Economic Community (AEC) to build the physical connectivity of SMEs, raise their labor productivity and skills to standards of global value chains, and improve their access to finance.

PIDS Senior Research Fellow Erlinda Medalla and ADB Advisor Ganeshan Wignaraja discussed ways to improve the SMEs access to market and investment opportunities in the AEC.

SMEs play a role not just as a vehicle for poverty reduction, but also as an engine of growth, said Medalla.

She underlined the sectors employment and value-added contributions to the Philippines, which peaked at 65 percent and 35 percent, respectively.

Across Southeast Asia, Wignaraja noted that SME employment makes up 74 percent of all jobs, and contributes 41 percent of the GDP of Asean economies.

Yet, Wignaraja lamented that these contributions were not yet reflected in international trade.

Wignaraja observed that high-performing SMEs make up only 21 percent of direct exports across Asean economies.

Many factors obstruct the growth of SMEs, but one of the oft-cited problems is the lack of access to finance and credit.

Wignaraja explained that the current banking and credit structure does not know how to deal with SMEs. Bank requirements on collateral and business and finance plans are strict. Unable to comply and lacking financial literacy, SMEs are often forced to rely on informal resources.

SMEs simply do not have access to the capital they need to expand or participate in larger business and trading activities, Wignaraja said.

He added that total credit gap, or the difference between formal credit provided to SMEs and the estimated SME financing needs in Asean, amounts to as much as $52.8 billion.

Wignaraja also pointed out that, as China begins to slow down and move out of labor-intensive industries, firms in countries like the Philippines, Malaysia, and Thailand will have more business opportunities as suppliers of a range of products.

International trade itself has fundamentally changed in the 21st century and is no longer about direct exports. Instead, trade increasingly means global supply chains where different production on stages are located across geographical space and linked by trade in intermediate inputs and final goods, Wignaraja said.

Medalla added that the Philippines does not have much of a choice on whether or not it wants to partake of this new landscape.
In an increasingly economically integrated Asean, she said, SMEs have to work within a globalized setting.

However, she added that not all SMEs can export, and they do not need to. The goal should be for them to have all the opportunities to participate and engage in business in order to help them grow and contribute in sustaining the expansion of the economy.

To do this, Medalla enumerated a number of factors that the Philippines must address to encourage SMEs to participate in value chains.

She agreed with Wignarajas point about addressing the lack of access to finance and credit, but added that enabling the environment for SMEs to develop competitiveness and connectivity must be given priority, as well.

While Wignaraja believes that much of the work must be done by the business and private sectors in boosting labor productivity, improving the investment climate, raising infrastructure spending, improving information and communication technology infrastructure, and increasing financial access for SMEs, both experts agree that the government also has a critical role to play in the success of SMEs.

The governments role is to enable and facilitate the linkages and access to markets, finance, and technology, and to remove various barriers to entry and exit. The role of the new Competition Law will be very important, Medalla said.

Policymakers should also concentrate on enhancing strategic opportunities, they said.

Medalla said the kind of policies needed depends on which SME sector policymakers intend to help. She recommended policies that would raise SMEs capability to comply with AEC standards, such as developing the halal industry, improving trade facilitation, and identifying standards to enable them to access a duty-free Asean market.

She also recommended helping each sector gain competitive advantage through industry clustering, sharing services facilities, and developing industry roadmaps.

The opportunities are there in the supply chains, said Wignaraja. The business sector has to adopt smart strategies to capture opportunities to participate in the production networks, and policymakers must create the enabling business environment for SMEs to thrive. (PIDS)

Author:
Date: May 19, 2016
Source: PIA

The Philippines high-value and herbal products should be making headway in export markets within the ASEAN region now that integration is finally happening, especially because these commodities already conform to the regional standards.

This was highlighted by Roehlano Briones, Senior Research Fellow of Philippine Institute for Developmental Studies (PIDS), during an ASEAN Economic Community 2016 forum on updates, challenges, and opportunities on food security.

Briones said that the Philippines should support high-value exports in taking advantage of essentially free trade in agricultural goods within ASEAN.

He even encouraged farmer leaders across the country to give urgent attention in bringing the rest of the agricultural sector back on track.

We must take advantage of the increase market access in ASEAN on the export side for us not to miss of the opportunity, Briones said.

AEC is not a threat to be managed but an opportunity to be seized by the Filipino farmers, he added.

Based on Trademap, the Philippines have reduced its agricultural exports to the ASEAN economies with 14.5 percent in 2005 to 9.7 percent in 2015.
These include exports on animal, vegetable fats and oils, cleavage products, edible fruits, nuts, peel of citrus fruits, fish, other meats and seafood.

He said that industry roadmaps were an important mechanism for developing public-private sector alliances essential for improving competitiveness and AEC as an impetus for reforms and investments.//

Author: Madelaine B. Miraflor
Date: May 15, 2016
Source: Malaya

Allowing the National Food Authority (NFA) to monopolize rice importation is a feasible way to end smuggling, according to the agency, the Samahang Industriya ng Agrikultura (Sinag) and agricultural think tank Meganomics Specialists International Inc.
However, the NFA and an analyst from the Philippine Institute for Development Studies (PIDS) warned
that doing so could open the country to serious repercussions from the World Trade Organization (WTO) after the countrys quantitative restriction (QR) on rice expires in 2017.
Recently, incoming Agriculture Secretary Emmanuel F. Piol vowed that the Duterte administration will end rice smuggling in the Philippines by restricting private entities from importing the staple.
NFA Spokesman Angel G. Imperial Jr. told the BusinessMirror disallowing the private sector to ship rice into the country is legal under Presidential Decree (PD) 4, series of 1972.
Thats possible. If you look at PD 4, its only the government, through the NFA, that is authorized to import. The NFA is the one that allows the private sector to import rice, Imperial said in a phone interview
Sinag Executive Director Jayson Cainglet also agreed, underscoring that the NFA is the body that issues importation permits to the private traders.
Solution to smuggling?
According to Cainglet, private-sector importation opens an avenue for smuggling in the country.
He noted that private-sector importation was originally intended to give rice cooperatives a chance to trade the commodity. However, financiers and consolidators are taking advantage of these cooperatives to smuggle and gain profit.
Its not really the rice cooperatives who are importing rice. They are incapable because they dont have the capital and the know-how. They are being used by financiers and consolidators, Cainglet said.
When push comes to shove, the industry leader said its always the rice cooperatives that are pressed for charges, while the consolidators get away scot-free.
In fact, Sinag is currently helping three cooperatives that have cases in the Court of Appeals, because their names were the ones indicated in the import permit. These rice co-ops, they cant work, they cant go out, whereas the consolidators are free and unpunished, Cainglet lamented.
Sinag said it has been pushing for the government to take over the importation of the commodity for
years now. He said importation through the
government-to-government (G-to-G) scheme is easier to monitor.
All rice shipments that come in to the country that are not bought by the NFA will immediately be considered smuggled, Cainglet said.
Sinag, citing data from the United Nations Comtrade, earlier revealed that, of the P200 billion worth of agricultural goods smuggled into the country since 2010"the start of President Aquinos term"to 2014, P94 billion were rice imports.
In terms of volume, 2.7 million metric tons (MT) of rice were smuggled from 2010 to 2014, the group added.
Aside from capping the flow of smuggled rice into the country, Meganomics President and CEO Pablito M. Villegas said government procurement of rice also reduces the import cost of importation by about 10 percent to 15 percent.
G-to-G importation will not only curve smuggling, but will also ensure that the price of rice is just right. Meaning, they will be much cheaper than internationally traded rice that passes through the rigmarole of many intervening agents and middlemen, Villegas claimed.
On the other hand, PIDS Senior Research Fellow
Roehlano Briones argued that it should be the done otherwise, or the private sector doing the importation.
The presumption is that the NFA can do the importation as equally well as the private sector. I submit, no, Briones said.
Briones pointed out that rice procurement done by the public sector will always be a hostage of politics, whereas the private sector will do it purely as a commercial transaction.
[Let the private commercial business] assess the amount of rice to import as a foresight, anticipation on their part. If they make a mistake, they get burned, if they get it right, they will gain profit, he said. The government doesnt have that motivation. So thats why Im extremely skeptical that decisions by the NFA will be in any way superior than the markets.
Briones also argued that simple countermeasures in the past were able to control smuggling, even with the private sector allowed to import.
I heard from a reputable Customs authority that smuggling used to happen in major ports, as Customs examiners just collected tariffs and allowed rice to come in even without import permits. That practice has already been stopped, and now smuggling in major ports has also stopped, he cited.
The expert called for the government to instead monitor shipments in small and nontraditional ports, where smuggling is happening now.
Allow the private sector to import, then make sure they pay the right taxes, right sanitary and phytosanitary clearancesthese are the basic things the government should check for, he said.
WTO sanctions
Implementing the kind of rice-importation policy where only the NFA is allowed to buy rice from abroad wont be a problem for the country until 2017, according to Imperial.
The Philippines, under the WTO, was granted permission to extend its QR until 2017. In exchange, the country has committed to increase its minimum access volume (MAV) for rice to 805,200 MT. Rice shipped into the country under the MAV scheme are slapped a tariff of 35 percent. For now, there is no problem because whats important to the WTO is that we import that MAV, [whether through the government or the private sector], Imperial said.
But when asked what will happen after the QR expires, the official said, We have to observe what is the next administrations stand about it.
After the Philippines scraps its QR, the assumption is that the countrys rice trade would become liberalized.
Imperial cautioned the country could face sanctions from the WTO if it pushes through with its new rice-import policy.
There are a number of possible implications. Other members could join forces and disallow the entry of certain products from the Philippines, he said.
Briones also warned the Philippines could be sued by its comembers in the organization.
If you violate a provision of the WTO, then yeah, we are open to being sued. Another member can file a case against us in Geneva and then well have to defend ourselves, Briones said.
But he said there is still a way to skirt this problem.
Basically, if you maintain an exclusive importation right to a state-trading entity, you have to show that the entity makes decisions purely on a commercial basis. So in a way, it will become like a private trader. Somehow, that concession to protection is still there in the WTO, he explained. Villegas added it will be easy for the Philippines to explain to the WTO why the Philippines is allowing the government to monopolize rice imports.
All of these commitments should be done not against the interest of our nation. Our excuse is that liberalization is resulting in undue economic losses. When you do a lot of this importation, and allow smuggling to continue, you distort the price of rice against the interest of the local farmers, Villegas said.//

Author: Mary Grace Padin
Date: May 20, 2016
Source: Business Mirror

CEBU, Philippines - Capacitating entrepreneurs in the locality " or in barangays " will bring growth to the grassroots.
Speaking during the "Negosyo sa Barangay" forum in Cebu City last Friday, Virgilio Espeleta, vice president for business development, said it is important to build a stronger entrepreneurship culture in localities.
"There's economic activity in Cebu," Espeleta said, urging people to take advantage of this by becoming entrepreneurs.
He said growth in the barangays cannot keep pace with macroeconomic growth.
One way to address this, he said, is to develop more small entrepreneurs who will create jobs and income.
CCCI President Melanie Ng said: "We should not just be consumers, we should also be doers, manufacturers of products for local consumption and export."
They said there is a need to inspire and change the mindsets of the people in the grassroots level to develop their own enterprises and become financially able.
In a previous policy note, the Philippine Institute for Development Studies said barangays should be more effective in spending their limited funds to harness the economic capabilities of their communities and entrepreneurial spirit of their people for development outcomes.
In the conclusion of that study, PIDS said local autonomy would mean the economic empowerment of the people as contributors to inclusive economic growth in their localities and catalysts of positive change.
"It is hoped that economic empowerment would translate into political empowerment in order for Filipinos to be able to end their human poverty and address the root causes of the country's institutional problems. Thus, it is imperative for barangays to provide an enabling environment and facilitative conditions to realize such economic and political potential," PIDS noted. " (FREEMAN)

Author: Carlo S. Lorenciana
Date: May 15, 2016
Source: Philippine Star

Rampant corruption, lack of rule of law and poor regulatory quality have no significant impact on the flow of foreign capital in a country, according to a study released by the Philippine Institute for Development Studies (Pids).
In a discussion paper, titled Cross-country Econometric Study on the Impact of Fiscal Incentives on FDI [foreign direct investments], author Ma. Laarni D. Revilla said foreign investors are much more concerned about taxes, GDP, population, infrastructure and investment climate.
This result goes to show that countries that are ranked high in terms of corruption and provide poor regulatory environment may still to receive huge FDI, Revilla said.
Some empirical studies provide evidence of a negative link between corruption and FDI inflows, while others fail to find any significant relationship, she added.
Among the factors that have significant impact on FDI, Revilla said population can bring in the most significant increase in foreign capital.
Her findings showed that a 1-percent increase in population could translate to a reduction of $1.34 billion worth of FDI.
Revilla said other studies have noted that market size is not a determinant of FDI for a developing country due to low income.
Another significant factor is the effective average tax rate (EATR). Any 1-percent increase in EATR leads to a decrease of $271 million in FDI.
It is important to note that an increase in the EATR, which refers to the reduction in the returns on an investment due to the host countrys fiscal system, significantly decreases FDI. This relationship may lead to the so-called race-to-the-bottom effect of tax competition, Revilla said.
Revilla added that since these findings are true for Asean members, she said countries in the region must coordinate to maximize the gains, particularly in the area of taxes.
She added there is a need to protect trade in the Asean without undermining the governments budget. This can be done through policies that involve tax-rate adjustments or changes in the tax regime.
Asean countries, she said, can also determine the optimal size and scope of tax rates and other investment incentives.
This strategy will protect all countries from the various harmful effects of tax competition. Last, to complement the adjustments in tax rates, other country-specific factors that affect the entry of FDI may be identified and worked on, Revilla said.
In the Philippines overhauling the tax system is part of the reforms being sought from the next administration.
The overhaul of the tax system is being eyed as a means to address inequalities in the tax system and additional revenues for much-needed infrastructure projects.
In a recent Senate Centennial Lecture Series, experts from the Pids, the Department of Finance (DOF) and Tax Management Association of the Philippines agreed that the countrys tax system needs to change.
The countrys personal income tax (Pit), specifically, has not been updated since 1997. This has resulted in what is called bracket creep, where low-income taxpayers hurt more than their high-income counterparts.
Bracket creep, Pids Senior Research Fellow Rosario G. Manasan explained, has occurred because of the nonindexation to inflation of Pit brackets.
This means the coverage of each tax bracket does not take into consideration the current value of the peso.
Manasan said this presents a problem because the current value of the Philippine peso, using the 2014 Consumer Price Index (CPI), is already less than half of its value in 1998.//

Author: Cai Ordinario
Date: May 23, 2016
Source: Business Mirror

The current system of selection under the Shared Service Facilities (SSF) Program of the Department of Trade and Industry (DTI) could be prone to abuse and misuse, according to a paper by the Philippine Institute for Development Studies (PIDS).
In a discussion paper, titled Preliminary Assessment of the Shared Service Facilities, the team of researchers, led by PIDS senior research fellow Erlinda M. Medalla, found that a more transparent system is needed in selecting projects.
Notwithstanding the sound judgments shown by DTI personnel, conscious effort should still be exerted in making the selection process more transparent to sidestep the slightest hint of abuse and personal biases, the paper stated.
The authors said the predetermined selection procedure under the SSF can be misused to favor certain establishments.
The current system, the PIDS researchers said, the projects proposed under the SSF are usually below P1 million and can easily be identified at the regional or provincial level.
While this allows more projects to be approved and undertaken within a shorter time period, it could lead SSF to only take on projects that are less substantive that may lack value addition.
To discourage preference for small projects with minimal impact on productivity, there might be a need to increase the threshold of project costs under the control of provincial or regional offices, the authors said.
Apart from this, the PIDS research team found that cumbersome requirements of national agencies, such as the Bureau of Internal Revenue, have led to delays in SSFs.
Further, delays were also caused by DTIs lack of technical capability, particularly in terms of properly identifying the technical specifications of requested facilities and equipment.
The PIDS researchers added that there were suggestions to develop a database of all existing (both accredited and nonaccredited) suppliers with information regarding their technical experience.
This database should also include the capability in fabricating production equipment, as well as some important technical information regarding the equipment they manufacture.
Indeed, much of the delays encountered by program implementers are, in so many ways, affected by existing procurement rules. All too often, the rightful suppliers shun government accreditation because of cumbersome requirements, the researchers said.
As of the October 4, 2014, data, the DTI was able to utilize 53.63 percent of the funds allocated for SSF. Of this amount, some 41 percent, or P290.3 million, was established and 12 percent, or P85.2 million, was obligated.
Among the regions, Region 3 had the biggest fund allocation at P115.3 million; next was CAR with P74 million; and third was Region 4A, which has P70.5 million fund allocation for SSF. Region 6 had the lowest share with P19 million, which is roughly 2.7 percent of the total allocated fund for 2013.//

Author: Cai Ordinario
Date: May 23, 2016
Source: Business Mirror

The Philippines and other members of the Association of Southeast Asian Nations should coordinate to limit the size and scope of investment incentives to protect themselves from harmful effects of tax competition on their budgets.

The Philippine Institute for Development Studies discussion paper titled Cross-Country Econometric Study on the Impact of Fiscal Incentives on Foreign Direct Investment (FDI) emphasized the need to protect trade in the region without undermining the governments budget through policies that involve adjustments in the tax rates or changes in the tax regime.

The government think tank also recommended that the Philippines act on other factors that encourage foreign investments to come and not rely solely on tax cuts.

It cited as an example the building of infrastructure, foreign investors current prime concern in the Philippines.

The countries in the Asean may coordinate in order to determine the optimal size and scope of these tax rates and other investment incentives. This strategy will protect all countries from the various harmful effects of tax competition, the paper said.

The report cited a previous study which pointed out how tax competition in the Asean can destabilize the budget of the countries involved in trade.

The report said the increasing level of competition for FDI in the 1990s triggered many countries to offer fiscal incentives which include tax holidays, import duty exemptions, investment allowances and accelerated depreciation.

In recent years, tax incentives have become an important factor in determining FDI location. Asian countries, particularly China, Korea, Taiwan, Hong Kong and Japan, are persistent in keeping their tax rates competitive, the paper said.

The report said in the Philippines, there is a disagreement on whether the benefits of fiscal incentives outweigh the costs in terms of forgone revenue.

The discussion paper cited a 2002 report which attempted to estimate the losses in total revenues in the Philippines due to fiscal incentives.

It is important to remember that fiscal incentives, since they are privileges given to investors, bring about losses in income, the paper said.

The estimates of forgone income in the country, based on the previous study cited in the report, range from P7.2 billion to P12.5 billion.

To complement the adjustments in tax rates, other country-specific factors that affect the entry of FDI may be identified and worked on, the report said.

Since infrastructure has been identified to influence FDI flows, an example may be increasing infrastructure funding to build or renovate facilities that may further attract investors, it added.

The number one in the wish list of businessmen for the incoming administration is the need to lift constitutional restrictions on doing business in the Philippines, including the limitation on ownership.

Other way is to simplify the tax code, according to Philippine Stock Exchange president Hans Sicat.//

Author: Angela Celis
Date: May 23, 2016
Source: Malaya

A TOP official of the gift, decors and houseware (GDH) export sector is hoping the new administration will work for real inclusive growth and address issues in microfinance for more entrepreneurs to participate in the global value chain.
Financing remains a critical factor for our small raw material suppliers to grow. Interventions are already in place but we need to further strengthen the financing plan for the micro, small and medium enterprises (MSMEs), said Cebu GDH President Venus Genson, owner of Art N Nature Manufacturing Corp.
Provisions of presumptive president Davao City Mayor Rodrigo Dutertes eight-point economic agenda including ensuring the Philippines remains attractive to foreign investors; enhancing competitiveness in doing business in the country; and providing support services to small farmers to increase productivity and improve market access.
We are hopeful about this new administration, especially in helping our small players in the business grow, she said.
State think-tank Philippine Institute for Development Studies (PIDS) noted that getting the SME sector integrated into regional and intra-regional global value chains will help them expand, tap more markets and grow their revenues.
The study underscored the need for policy makers to develop a comprehensive and centralized credit information system for both firms and banks to use. It also pushed for research and development investments to help SMEs participate more in the global value chain.
More manufacturing
Genson reported that GDH exports are a lot better now than in the previous years as the economies of major markets, including the US, are recovering. The Philippine Government, on the other hand, has intervened by way of charting a direction for the sector.
The GDH sector is doing well. We are receiving fresh orders from our overseas buyers, said Genson, who also cited a strong collaboration among the government, private sector and academe.
The Department of Trade and Industry (DTI) and the University of the Philippines Institute for Small-Scale Industries (UP-ISSI) partnered last year to create a strategic roadmap for the GDH sector.
We are happy that our government has started moving from being too concentrated in services export to manufacturing, she said. We are now really creating an industry out of it unlike in the past that it was more about cottage industries.
Government will be looking at innovative ways to improve access to trade finance of MSMEs as outlined in the Philippine Export Development Plan (PEDP) 2015-2017. Exporters should be given more access to help them diversify markets, improve their competitiveness, and enhance the quality and range of their merchandise. It also calls on government institutions tasked to assist exporters in their financing requirements to step up in extending credit guarantees and explore new sources of credit.
The Export Development Council also intends to seek assistance from international financial institutions such as the World Bank and Asian Development Bank for long-term SME financing projects.//

Author: Katlene O. Cachos,
Date: May 23, 2016
Source: Sun Star Cebu

Think tank urges govt to review incentives policy
IN the face of evidence showing that fiscal incentives do not significantly affect the level of foreign direct investment (FDI) in the country, the state think tank Philippine Institute for Development Studies (PIDS) is urging the government of the Philippines and other Southeast Asian countries to review their fiscal incentive policies urgently.
Citing various research studies, PIDS said that fiscal incentives could hypothetically raise total investment by attracting foreign investors, but that available evidence contradicts that assumption, and shows that fiscal incentives do not significantly affect the level of FDI in the country.
A healthy overall economic status of a country is still the more important determinant of FDI, PIDS said.
The government think tank also pointed out that surveys show investors themselves claim that they do not make decisions based on incentives alone.
For the most part, the investment decisions have already been made by the time incentives are taken into consideration, it said.
In the Philippines, there is ongoing debate over whether the benefits of fiscal incentives outweigh the costs in terms of forgone revenue, with one new law, the Tax Incentives and Management Act (TIMTA) already having been signed last December, and a second proposed law, the Rationalization of Fiscal Incentives, expected to be taken up by the incoming 17th Congress.
Common investment promotion
It is common for developing countries to offer foreign investors significant fiscal incentives in order to encourage FDI and eventually stimulate local economic growth.
Some of these fiscal incentives include lengthy tax holidays, expensing or other generous tax treatment of new investment expenditures, and other tax reductions as well as providing roads, worker training, and other public inputs at below market prices.
Tax incentives are thought to help stimulate foreign investment effectively and efficiently. In general, developing countries grant tax incentives to investments related to manufacture, exploration and extraction of mineral reserves, promotion of export, and the tourism and leisure sectors.
These countries usually do not have incentives aimed at the headquarters of companies and service sectors, except for Malaysia, Singapore, and the Philippines, which employ reduced corporate tax rates to attract company headquarters, PIDS said.
PIDS also noted that early econometric studies generally reveal that the effect of tax policy on FDI is rather limited, at least compared to other factors such as political stability, the costs and availability of labor and basic infrastructure.
In the Philippines, the history of granting fiscal incentives dates as far back as 1946, when tax exemptions were given to new and necessary industries for a period of four years, it said.
The think tank pointed out that the most important kinds of fiscal incentives are those in the form of income tax holiday and exemption from import duties.
Since policymakers agree that FDI plays a crucial role in economic growth, the design and aim of fiscal incentives, in recent years, focused more on attracting investments, it said.
Furthermore, PIDS said the advantages and disadvantages of fiscal incentives have been discussed in several earlier studies.
One study explained that FDI involves not only the entry of capital but also the internal utilization of intangible assets such as technology and managerial expertise that are specific to a given firm.
If this transfer of technology, managerial expertise, skills and other intangible assets from one country to another are completely internalized, the rate of return will fully capture the net benefits of an investment.
Another study noted that fiscal incentives do not induce more investment per se but channel investments to desirable sectors.
More study needed
A particular report also emphasized that the lack of available information on the relationship between fiscal incentives and FDI is indeed an important issue.
One way to address this is to prepare and present annual reports that show the benefits generated by foreign investment projects such as level of employment generated, amount of investment on infrastructure, net exports, among others.
Another way is to determine the primary attractions for investment in the Philippines.
It recommended that surveys might be conducted in order to pinpoint the strategies and considerations of corporations when choosing an investment location.
This will help the country identify what factors (i.e., general tax regime, level of tax incentives, infrastructure, available human capital, etc.) truly matter to investors and therefore further improve on them, it said.
Next, there is a need to reform the administration of fiscal incentives in the country.
Since the selection of firms qualifying for incentives is decided by several committees, including the Board of Investments, National Economic and Development Authority, Department of Finance, and Department of Agriculture, the process of granting incentives may be subject to lobbying and political pressure, PIDS noted.
Lastly, PIDS said the race-to-the-bottom effect of the tax competition in the region undermined the Philippines budget.
There is thus a need for the countries in the Asean [Association of Southeast Asian Nations] to coordinate in order to limit the size and scope of investment incentives. This will protect countries from the harmful effects of tax competition on their own budgets, it concluded.//

Author: Mayvelin U. Caraballo
Date: May 22, 2016
Source: Manila Times

The Duterte campaign promised the nation that change is coming. Close to 40 percent of the voters bought that promise. The question now is can Mr. Duterte deliver change?

Based on recent cabinet appointments, change is not apparent. I saw one complaint on social media that captures a skeptical sentiment: I voted for Duterte but it seems Gloria Arroyo won.

Indeed, some Duterte appointments are rethreads from the Arroyo era. There is nothing wrong with that if the appointees have been outstanding. That does not seem to be the case.

Other than the names, ideas are also important. We have age old problems and past administrations have applied the same old solutions that have not been effective.

Someone said something about the idiocy of applying failed solutions over and over in the hope of having a different outcome. Past administrations have been doing that and the Duterte administration is in danger of doing that too.

In a way, I like the appointment of former Gov. Manny Piol as agriculture secretary. He doesnt have formal training in agriculture, but he runs his own farm. I dont know how big a farm it is, but I can imagine that running a farm plus his direct contact with farmers as a provincial governor are good inputs in crafting and carrying out agriculture policies that work and not just in theory.

Mr. Piols first pronouncement, however, makes me wonder if change is coming. Maybe it is not just Mr. Piol, but Mr. Duterte himself. The former governor said it is the policy of Mr. Duterte to stop private importation of rice to stop smuggling. Only the NFA will do importations.

Perhaps, it will help Mr. Piol to get the economists of PIDS, the government economic think tank, to brief him on the problem. Or consult Dr. Rolly Dy, a native of Davao who is an expert in agri-business at the University of Asia and the Pacific.

It seems the policy of Mr. Duterte, as announced by Mr. Piol, is more of the same thing that already failed. The policy also resulted in piling up NFA debts that surpass our annual national defense budget.

The problem is precisely in the government agencys monopoly to import rice. Private importers have to get NFAs permit to import. This is at the root of corruption in NFA and the recyclable permits they issue are the basis of much rice smuggling. NFA officials also have the incentive to over import and pad costs of related services like trucking.

On the other hand, if we liberalized rice importation, the private traders will not import more rice than the market can buy. They can also respond more quickly to unexpected market demand, up or down.

Private importers will have the incentive to buy rice as cheaply as possible because theres competition from other importers. There will be no reason to smuggle rice because importation is allowed. We can also put an import tax and the proceeds used to help local rice farmers.

This is why a group of economists under the Foundation for Economic Freedom (FEF) called on the incoming Duterte administration to stop the rice importation monopoly of NFA. It is only through liberalizing rice importation that the new administration can make good on its promise of affordable food for the poor.

FEF believes liberalizing rice importation will enhance food security, rather than diminish it. Malaysia allows up to 30 percent of its needs to be met by rice imports.

The economists are sure liberalizing rice importation will definitely benefit the poor. Our country cannot bear rice to become more unaffordable especially at a time of supply uncertainty due to severe drought conditions.

There is also the need to unburden taxpayers with billions of annual subsidies to NFA which presently exceeds P150 billion, the economists urge. The World Bank estimates that for every P5 of spending for NFA, P4 are wasted leakages that provide no public benefit.

In any case, our rice quantitative restriction (QR) expires in 2017. After that, we are committed by our international trade obligations to allow private sector importers. The QRs on rice should have expired in 2012, but extended to 2017 at our request.

As part of the continued QR on rice, the Philippines has committed to cut tariff under the scheme starting July 2015. Tariff is now 35 percent and with minimum access volume or MAV of 805,200 MT. Purchases beyond that will be subject to a 50 percent rate.

In energy, Dutertes pick for Energy secretary promised to ensure reliable, steady and affordable power supply and work towards greater energy self-sufficiency. Those are wonderful motherhood objectives an Energy secretary has no power to deliver due to the nature of the sector today.

But I cannot blame Al Cusi, a close friend of Mike Arroyo, who was appointed to head the Energy department by Mr. Duterte, for trying to sound like he can deliver. Al has little or no background in energy, his last assignments under the Arroyo administration having been running NAIA, CAAP and the Philippine Ports Authority.

Al will be disappointed to eventually find out he got the worse Cabinet seat there is. Unlike during the time when I was with Energy under the late Ronnie Velasco, we had the power and resources to really manage the energy sector.

Today, the Energy secretary is powerless. The petroleum downstream sector is deregulated. All he can do is monitor prices in Singapore, make some computations and exert moral suasion on oil companies not to raise prices too much. During our time, we had Petron to set prices that the private oil companies must follow or lose market share.

In the power sector, we had NPC to build new plants and distribution lines. Now the Energy secretary must convince the private sector to invest in power plants and the power grid.

Once power plants are built, the private generators pretty much call the shots under EPIRA. Then there is the independent ERC for regulating the utilities including the approval of power rates.

There is PSALM which holds and manages assets of NPC. Here, the chairman of the board is the Secretary of Finance, not the Energy secretary.

The Energy secretary does not have powers, but has all the responsibilities. Al will get blamed when oil prices dont go down at the pump fast enough or go up too quickly. He will be blamed for blackouts even if all he can do is monitor the power supply situation through data given by NGCP.

I am not sure how the Energy department can handle government-to-government oil importations from Russia or some other country as some eager beaver in Davao announced. Government no longer has a refinery to process that crude. The independent oil companies import processed products from Singapore. Petron has a top rated refinery, but any deal has to benefit its bottom line.
On energy development, government has no money to risk in this very risky side of the energy business. We are dependent on private oil companies with the risk appetite. But they look at the most favorable deals that also depend on world oil market prices (now depressed and unattractive for exploration) and data about our geology.

A good Energy secretary must have some good ideas that can only come from years of experience in the energy business. Otherwise, he will be a non-performer, his best intentions notwithstanding.//

Boo Chancos e-mail address is bchanco@gmail.com. Follow him on Twitter @boochanco

Author: Boo Chanco
Date: May 25, 2016
Source: Philippine Star

FOLLOWING projections of La Nia coming in at the last quarter of the year, the Department of Agriculture (DA) said it is already starting the initial preparations to help farmers deal with the effects of the weather phenomenon.
Philippine Atmospheric, Geophysical and Astronomical Services Administrations (Pagasa) Climate Monitoring and Prediction Section Chief Anthony Lucero said there is a 50-percent chance of La Nias developing after the onslaught of El Nio in the country.
Right now, there is a 50:50 chance of La Nia happening. We will know for sure in July, Lucero said in aphone interview.
La Nia is characterized by the cooler temperature in the Equatorial Pacific, and is associated with above-normal rainfall levels.
The expert said that in three out of four cases where a strong El Nio occurs, La Nia follows.
This means there is a strong possibility that La Nia may occur after El Nio, Lucero said.
If La Nia does develop, he said the Philippines would feel its full impact by November 2016 to February 2017. He also warned those provinces lying along the Eastern coast of the country"including Quirino, Isabela, Quezon, Bicol region, Samar, Leyte, Surigao, Agusan, Compostela and Davao Oriental"may be the most vulnerable during that period.
Heeding this warning, DA Field Operations Service Director Christopher Morales told the BusinessMirror the agency, particularly the national rice and corn programs, along with the DAs regional coordinators, has already started to plan its possible interventions.
Last week we conducted an operational planning workshop with our National Rice and Corn Program coordinators nationwide to strategize and schedule our interventions [to mitigate the effects of the possible La Nia], Morales said.
It was then decided that planting for the wet cropping season (particularly in Central Luzon) should commence by May until the second week of June so farmers can already harvest by September, before the onset of La Nia.
It is already the start of the planting season, so some farmers have already started planting this May. But there are areas that have only started preparing their land as theyve only just started experiencing rains, Morales said. The latest, if some areas end up planting late, should be by early June. Theres a high risk of damage if farmers plant later than June.
The DA, he said, has enough buffer stocks on seeds and planting materials.
He said the DA is advising farmers to use flood-tolerant varieties to minimize damage caused by heavy rains and flooding. The agency can also withdraw some seeds and planting materials stocked for the next planting season in advance if needed, he said.
Most important, strict coordination with other national agencies, particularly the Pag-asa, will also be crucial in the agencys mitigation efforts, Morales said.
Morales said this will ensure the DA is kept up-to-date with the latest weather forecasts, which will help the agency plan out its interventions and provide advisories to farmers, such as when to plant or when to harvest their crops.
Though faced with the possibility of La Nia, Morales said the DA has not yet decided to propose for additional budget from the national government.
Right now, we are working with our regular budget. We have also received about P450 million as replenishment for our Quick Response Fund, which has already been fully utilized for rehabilitation efforts after Typhoons Lando and Nona, as well as El Nio. We can tap that, he said.
The decision to implement other interventions, as well as the request for additional budget, may be left to the next administration, Morales said. There will be a transition meeting with the incoming agriculture administration next week. One of the worries of Manny Pinol is the possible devastation by La Nia, so it will most likely be discussed, he said.
Meanwhile, the field operations director said the DA has not yet projected the possible extent of damage La Nia may cause to the agriculture sector.
Its hard to predict. There are many factors that we need to consider, such as the amount of rainfall and the period it will hit, Morales said.
Meganomics Specialists International Inc. President Pablito M. Villegas said the possible La Nia episode may have a negative impact on the growth of the agriculture sector.
Whats important, though, is the kind of climate resiliency mechanism the government will implement, he added.
Philippine Institute for Development Studies Senior Research fellow Roehlano Briones remained positive La Nias impact on the agriculture sector may not be as extensive as El Nios.
Theres not much production going on in the Eastern coast of the country, relative to other parts of the Philippines. So I think the effect will be much less than El Nio, which tends to occur over a very broad area, Briones said.//

Author: Mary Grace Padin
Date: May 27, 2016
Source: Business Mirror

The Duterte campaign promised the nation that change is coming. Close to 40 percent of the voters bought that promise. The question now is can Mr. Duterte deliver change?

Based on recent cabinet appointments, change is not apparent. I saw one complaint on social media that captures a skeptical sentiment: I voted for Duterte but it seems Gloria Arroyo won.

Indeed, some Duterte appointments are rethreads from the Arroyo era. There is nothing wrong with that if the appointees have been outstanding. That does not seem to be the case.

Other than the names, ideas are also important. We have age old problems and past administrations have applied the same old solutions that have not been effective.

Someone said something about the idiocy of applying failed solutions over and over in the hope of having a different outcome. Past administrations have been doing that and the Duterte administration is in danger of doing that too.

In a way, I like the appointment of former Gov. Manny Piol as agriculture secretary. He doesnt have formal training in agriculture, but he runs his own farm. I dont know how big a farm it is, but I can imagine that running a farm plus his direct contact with farmers as a provincial governor are good inputs in crafting and carrying out agriculture policies that work and not just in theory.

Mr. Piols first pronouncement, however, makes me wonder if change is coming. Maybe it is not just Mr. Piol, but Mr. Duterte himself. The former governor said it is the policy of Mr. Duterte to stop private importation of rice to stop smuggling. Only the NFA will do importations.

Perhaps, it will help Mr. Piol to get the economists of PIDS, the government economic think tank, to brief him on the problem. Or consult Dr. Rolly Dy, a native of Davao who is an expert in agri-business at the University of Asia and the Pacific.

It seems the policy of Mr. Duterte, as announced by Mr. Piol, is more of the same thing that already failed. The policy also resulted in piling up NFA debts that surpass our annual national defense budget.

The problem is precisely in the government agencys monopoly to import rice. Private importers have to get NFAs permit to import. This is at the root of corruption in NFA and the recyclable permits they issue are the basis of much rice smuggling. NFA officials also have the incentive to over import and pad costs of related services like trucking.

On the other hand, if we liberalized rice importation, the private traders will not import more rice than the market can buy. They can also respond more quickly to unexpected market demand, up or down.

Private importers will have the incentive to buy rice as cheaply as possible because theres competition from other importers. There will be no reason to smuggle rice because importation is allowed. We can also put an import tax and the proceeds used to help local rice farmers.

This is why a group of economists under the Foundation for Economic Freedom (FEF) called on the incoming Duterte administration to stop the rice importation monopoly of NFA. It is only through liberalizing rice importation that the new administration can make good on its promise of affordable food for the poor.

FEF believes liberalizing rice importation will enhance food security, rather than diminish it. Malaysia allows up to 30 percent of its needs to be met by rice imports.

The economists are sure liberalizing rice importation will definitely benefit the poor. Our country cannot bear rice to become more unaffordable especially at a time of supply uncertainty due to severe drought conditions.

There is also the need to unburden taxpayers with billions of annual subsidies to NFA which presently exceeds P150 billion, the economists urge. The World Bank estimates that for every P5 of spending for NFA, P4 are wasted leakages that provide no public benefit.

In any case, our rice quantitative restriction (QR) expires in 2017. After that, we are committed by our international trade obligations to allow private sector importers. The QRs on rice should have expired in 2012, but extended to 2017 at our request.

As part of the continued QR on rice, the Philippines has committed to cut tariff under the scheme starting July 2015. Tariff is now 35 percent and with minimum access volume or MAV of 805,200 MT. Purchases beyond that will be subject to a 50 percent rate.

In energy, Dutertes pick for Energy secretary promised to ensure reliable, steady and affordable power supply and work towards greater energy self-sufficiency. Those are wonderful motherhood objectives an Energy secretary has no power to deliver due to the nature of the sector today.

But I cannot blame Al Cusi, a close friend of Mike Arroyo, who was appointed to head the Energy department by Mr. Duterte, for trying to sound like he can deliver. Al has little or no background in energy, his last assignments under the Arroyo administration having been running NAIA, CAAP and the Philippine Ports Authority.

Al will be disappointed to eventually find out he got the worse Cabinet seat there is. Unlike during the time when I was with Energy under the late Ronnie Velasco, we had the power and resources to really manage the energy sector.

Today, the Energy secretary is powerless. The petroleum downstream sector is deregulated. All he can do is monitor prices in Singapore, make some computations and exert moral suasion on oil companies not to raise prices too much. During our time, we had Petron to set prices that the private oil companies must follow or lose market share.

In the power sector, we had NPC to build new plants and distribution lines. Now the Energy secretary must convince the private sector to invest in power plants and the power grid.

Once power plants are built, the private generators pretty much call the shots under EPIRA. Then there is the independent ERC for regulating the utilities including the approval of power rates.

There is PSALM which holds and manages assets of NPC. Here, the chairman of the board is the Secretary of Finance, not the Energy secretary.

The Energy secretary does not have powers, but has all the responsibilities. Al will get blamed when oil prices dont go down at the pump fast enough or go up too quickly. He will be blamed for blackouts even if all he can do is monitor the power supply situation through data given by NGCP.

I am not sure how the Energy department can handle government-to-government oil importations from Russia or some other country as some eager beaver in Davao announced. Government no longer has a refinery to process that crude. The independent oil companies import processed products from Singapore. Petron has a top rated refinery, but any deal has to benefit its bottom line.
On energy development, government has no money to risk in this very risky side of the energy business. We are dependent on private oil companies with the risk appetite. But they look at the most favorable deals that also depend on world oil market prices (now depressed and unattractive for exploration) and data about our geology.

A good Energy secretary must have some good ideas that can only come from years of experience in the energy business. Otherwise, he will be a non-performer, his best intentions notwithstanding.//

Boo Chancos e-mail address is bchanco@gmail.com. Follow him on Twitter @boochanco

Author: Boo Chanco
Date: May 25, 2016
Source: Philippine Star

The government must require an entrance exam and implement a more rigorous selection process of prospective student-grantees under the Students Grants-in-Aid Program for Poverty Alleviation (SGP-PA) and Expanded SGP-PA to ensure their success in state universities and colleges (SUCs), a paper released by the Philippine Institute for Development Studies (PIDS) said.
In its review and assessment of the program, PIDS consultant Denise Valerie Silfverberg and and senior research fellow Aniceto C. Orbeta Jr. said there is a strong correlation between entrance-exam scores and academic performance in core subjects.
The researchers found that under the current program, many grantees drop out of college because of being unprepared for tertiary education.
Given the thrust of the program, it is important that the grantees who are selected have a relatively high likelihood of completing their degrees, the authors said.
Enforcing admission exams is one way of achieving this objective. Conducting the admission exams will also serve as a good baseline for the grantees when monitoring their progress over time, they added.
Data showed that 39 percent of the grantees cited preference to work, uninterested, terminated and academic difficulties for dropping out.
Around 23 percent said they experienced academic difficulties, while 9 percent said they are already uninterested.
The paper stated some 5 percent chose to terminate their grants and 2 percent preferred to work.
However, some 21 percent said it was their personal decision to drop out. This, the authors said, should be probed further.
There is a need to probe deeper into the reasons why these grantees have dropped out, the authors said.
This has an important implication for the selection process. It reiterates the need to identify those who are actually willing to partake in tertiary education, they added.
Apart from these, the authors said there is a need to implement improvements that go beyond the academic realm, such as interventions for the program.
These can help prevent grantees from dropping out of their program because of pregnancy, familial obligations, financial difficulties and others.
Around 12 percent of grantees drop out because of pregnancy; 9 percent due to familial obligations; 9 percent, financial difficulties; and 5 percent, health conditions, such as pregnancy stress.
There are aspects to the program, which go beyond the academic realm. The cultural change experienced by the grantees from being relocated to a more urbanized setting than what they have been accustomed to is a legitimate issue brought up by the SUCs, the authors said.
The SGP-PA is a new initiative taken by the government to provide access to the poor but capable students to higher education.
The program was implemented in the academic year 2012 and 2013, with 4,041 selected beneficiaries from identified and classified poor households in the 609 focus municipalities covered under the DSWDs Pantawid Pamilyang Pilipino Program.
The program was rolled out in the academic year 2014 and 2015, with 36,412 beneficiaries under the Expanded SGP-PA (ESGP-PA), bringing the total number of beneficiaries to 40,453.
Total number of implementing SUCs expanded from 35 to 112 across the country.
The financial benefits of an SGP-PA grantee include P10,000 per semester for tuition and other fees, P2,500 per semester for textbooks and other learning materials, P3,500 per month for 10 school months as stipend. The total grant amounts to P60,000 per academic year per student.//

Author: Cai Ordinario
Date: May 24, 2016
Source: Business Mirror

MANILA, Philippines " There seems to be a disconnect in the incoming Duterte governments rice policy.

Plans to monopolize rice and make the Philippines self-sufficient in two years come at a time preparations are ongoing for the removal of a 12-year-old rice importation cap next year which is meant to protect local farmers.

At the center is the National Food Authority (NFA), the debt-ridden agency tasked to ensure enough supply and stable prices of basic staples such as rice and corn.

At the end of last year, NFA liabilities were pegged at around P150 billion.

The agency is tasked to come up with estimates of the countrys rice needs. From this, import plans are drawn. Since 2004, rice imports have been subject to quantitative restrictions (QR) from the World Trade Organization, imposing quotas to shield local farmers against competition with low-value crops from abroad.

The program has been extended twice and is now set to expire by 2017.

Actually, NFA is preparing for a no-QR environment. The period given us by WTO to move to a no-QR environment is over, Finance Undersecretary and chief economist Gil Beltran said.

NFA is going to focus on buffer stock management, he said in an e-mail.

In the current set-up, the plan looks desirable. Since 2010, the government has granted the private sector authority to import rice under the QRs minimum access volume. It bid out a certain amount of rice orders to private players who can import them at a low tariff.

Once QR is lifted, it will enable the country to ship in more rice, but with Dutertes plan to return to NFA the sole mandate to do so, observers have raised concern it would cost more taxpayers money and add to the countrys debt.

Rice self-sufficiency

Currently, an average of P12.78 billion in subsidies is shelled out every year to support NFA operations, Department of Finance data showed. This could easily increase as rice imports rise.

It is very hard to program our rice needs because you also have to consider a growing population, natural calamities, said Roehlano Briones, research fellow at the Philippine Institute for Development Studies.

This promise of rice self-sufficiency will be heard every now and then. I always see that happening. But every now and then, that will be missed, he added.

No less than the Aquino administration fell victim to its own rice independence thrust. Initially, shipments dropped from more than two million metric tons in 2009 to just around 500,000 MT in 2012.

By 2013, initial plans of around 200,000 MT were set only as buffer stock. By 2014, this shot back up to two million MT and 1.2 million last year, NFA data showed.

Rice self-sufficiency is a costly, impractical policy. (They) launched it, despite objections..., with a gigantic budget which yielded little, said Calixto Chikiamco, president of the Foundation for Economic Freedom (FEF).

The humongous budget was used as a justification for corruption in the awarding of contracts of post-harvest facilities, irrigation projects, he added.

Inevitably then, academic group FEF said it would be more cost-efficient to let the private sector participate in the rice industry with NFA as the regulator.

This may also come at the expense of local farmers. Romeo Bernardo, economist at think tank GlobalSourcePartners, said NFA could still protect domestic harvests by imposing tariff of as much as 30 percent.

NFA has a buy-high, sell-low program which basically means it purchases palay (unhusked rice) from local farmers above market rates, but sell them to consumers below prevailing prices.

This, however has also been partly blamed for NFA losses and debts.

Most of the price differences paid for by the consumers...came from forcing marginally productive rice lands into production or worse, into hands of corrupt officials and traders, Bernardo explained.

Welcome development

But Briones disagreed. He said while rice self-sufficiency is unattainable, giving NFA back its mandate, which is practically being practiced now, should not result into more obligations.

Importation will always be cheaper than domestic food production...The act of importation itself, government can make huge bulk orders according to our needs, he said.

You dont need a private trader to do this. Because if its them who will decide, it will depend on their business decisions which we cannot control, Briones added.

Beltran, for his part, said the current program of buying high and selling low are bound to change as farmers productivity improves with better facilities and irrigation as well as high-yielding crops.

To this end, incoming Agriculture Secretary Manny Pinols plan to put the NFA with other agriculture agencies such as the National Irrigation Administration under the same roof is a welcome development, Agriculture Undersecretary Emerson Palad said.

For now, however, Beltran said rice imports should be top priority in the budget.

Fiscal stability is a necessary condition for macroeconomic strength and should be preserved at all times. Still, the fiscal situation should adjust to resource constraints and changing priorities, he said. "

Author: Prinz Magtulis with Louise Maureen Simon
Date: May 25, 2016
Source: Philippine Star

To correct malnutrition practices, the incoming Duterte administration will need not only to continue this program but also to complement it with other programs.

In 2013, the governments think tank, the Philippine Institute for Development Studies, was provided extra resources by the Department of Budget and Management (DBM) to carry out impact evaluation studies that seek to measure changes in outcomes that can be attributed to particular projects, programs or policies.
Given my interest in poverty and education over the years, I worked with another statistician, Ana Maria Tabunda of the UP School of Statistics, and a nutritionist, Imelda Angeles-Agdeppa of the Food and Nutrition Research Institute, to carry out an impact evaluation of the governments School-based Feeding Program (SBFP), implemented by the Department of Education (DepED).
In school year 2013-2014, the SBFP of DepED targeted feeding more than 40,000 severely wasted students for a period of 100-120 feeding days using a 20-day cycle of standardized recipes with malunggay. When a childs weight is below three standard deviations from the median weight-for-height, the child is said to be severely wasted, while if the weight-for-height is lower than two standard deviations from the growth standard but higher than three standard deviations, then the child is moderately wasted.
According to DepED, the 2013 implementation of the program aimed to:
1. Rehabilitate at least 70% of severely wasted beneficiaries to normal nutritional status at end of
the feeding days;
2. Ensure 85% to 100% classroom attendance of beneficiaries;
3. Improve children's health and nutrition values and behavior. The Health and Nutrition Center of
DepED suggested that the SBFPs primary goal is the nutrition goal.
The impact of SBFP for the nutrition goal is the difference in nutrition status when a primary student is a beneficiary of a school feeding program and when s/he is not a beneficiary. The problem here is that we have missing counterfactuals. When a student becomes a beneficiary of the program, we can no longer observe her/his outcome as a non-beneficiary. Conversely, when a student is not a beneficiary, we cannot observe her/his outcome as a beneficiary.

Best approach
The best approach for an impact evaluation is to conduct a randomized controlled study, which involves having a targeted set of beneficiaries, and randomly assigned them into the program.
In practice, this is challenging to implement, so other approaches are used, including matching beneficiaries with nonbeneficiaries meant to perform a counterfactual analysis.
Thus the PIDS study to measure the SBFP impact involved mixed methods research, undertaking quantitative surveys of 1,151 program beneficiary pupils and their parents, as well as matched non-program beneficiary children and their parents. These surveys were supplemented with interviews of school heads of sampled beneficiary schools as well as counterpart schools from which matched non-beneficiary children were drawn.
Leaders or members of SBFP core groups in sampled beneficiary schools were also interviewed as well as one teacher of each sampled beneficiary. Focus group discussions (FGDs) were conducted in five schools to probe into program processes. The PIDS released a discussion paper providing the nitty gritty results of this impact evaluation study, as well as the main highlights in a policy note.
Did DepEd carry it out?
Before we undertook the impact evaluation work last year, we also conducted aprocess evaluation of the SBFP in 2014 to investigate whether DepED actually carried out the program as designed.
By and large, the DepED SBFP was carried out rather well, with the program creating a culture of care among stakeholders and fostering camaraderie among parents and teachers involved in the program. Program stakeholders expressed the hope that the SBFP gets continued and better support from government.

We did notice some issues that need improvement:
Absence of standard weighing protocols and instruments used among schools.
Difficulties in procurement and liquidation processes, and in filling out SBFP forms.
The need to re-examine program cost per student (P15 per meal and P1 for administration).
For 2013-2014, each SBFP meal was also meant to provide at least 300 calories for beneficiaries, which is much lower than (876) calories per meal in similar feeding programs in other developing countries.
Finally, SBFP gave lower feeding days compared to the 180 feeding-day-average in comparable feeding programs of developing countries.
Challenges in field work
The field work for the impact evaluation study posed many challenges: from difficulties in securing needed complete documentation from schools, to finding matched nonbeneficiaries.
The expanded coverage of the program in school year 2014-2015 (with DepED having been given resources to target all severely wasted students in this schoolyear) introduced a complication since about a third of the matched nonbeneficiary pupils, who were not beneficiaries in schoolyear 2013-2014, were beneficiaries in schoolyear 2014-2015. Further, a number of schools could not provide the study team with copies of nutrition status reports or SBFP forms, or provided incompletely-filled documents. Details of all the study limitations are provided in the PIDS discussion paper.

Impact on nutrition

The field work suggested that there were inconsistencies in verbal descriptors between the nutrition status recorded in SBFP forms and nutrition status reports, and the verified pre-feeding and postfeeding nutrition status computed from birthdates and weight and height measurements.

Working on data with verified pre-feeding and postfeeding nutrition status, we found that, of those children verified to be severely wasted prior to the feeding program, about 62% attained at least normal nutrition status at the end of the feeding program (see Table 1).

At least 62% of parents interviewed said that his/her child attained normal weight for height at the end of the SBFP; 19% said that their child did not, while the remaining 19% could not recall if their child or child did not attain normal weight or body mass index (BMI) at the end of the feeding program.


Table 1. Change in nutrition status of beneficiary children with verified pre- and post-feeding nutrition status, number of children (and row percentage).
Verified pre-feeding nutrition status Verified post-feeding nutrition status TOTAL
Severely Wasted Wasted Normal Overweight
Severely wasted 49
(17.1) 59
(20.6) 178
(62.0) 1
(0.4) 287
(100.0)
Wasted 5
(5.2) 24
(24.7) 68
(70.1) 0
(0.0) 97
(100.0)
Normal 3
(3.8) 5
(6.3) 71
(89.9) 0
(0.0) 79
(100.0)
Overweight 0
(0.0) 1
(100.0) 0
(0.0) 0
(0.0) 1
(100.0)
TOTAL 57
(12.3) 89
(19.2) 317
(68.3) 1
(0.2) 464
(100.0)

While the estimate 62% of reversion to normal status by severely wasted beneficiaries suggests that the program falls slightly short of the SBFP nutrition status target to have at least 70% of the beneficiaries attain normal nutrition status by end of the feeding, there were clearly various factors beyond the control of program implementers. These include characteristics and practices of beneficiary families or parents/guardians and the children themselves (age and severity of wasting at start of feeding program, in particular), that affected the nutrition outcome.
An overall comparison of the nutrition status of sampled beneficiary and nonbeneficiary pupils during the survey showed that more SBFP-fed severely wasted pupils attained and maintained normal nutrition status or better compared to nonbeneficiary counterparts (48% vs 41%).
Thus, we found evidence that SBFP does have an impact on the nutrition status of severely wasted students. A similar counterfactual analysis is found for wasted pupils, with the percentage improvement among the SBFP-fed wasted pupils exceeding that for their nonbeneficiary counterparts by nearly 8 percentage points (53.9% vs 46.1%).



Table 2a. Change in nutrition status of beneficiary children with consistently measured heights
during pre-feeding and survey periods, number of children (and row percentage)

Verified pre-feeding nutrition status Verified post-feeding nutrition status TOTAL
Severely Wasted Wasted Normal
Severely wasted 44
(24.6) 49
(27.4) 86
(48.0) 179
(100.0)
Wasted 8
(12.3) 22
(33.9) 35
(53.9) 65
(100.0)
Normal 8
(11.3) 20
(28.2) 43
(60.6) 71
(100.0)
TOTAL 60
(19.1) 91
(28.9) 164
(52.1) 315
(100.0)

Table 2b. Change in nutrition status of non-beneficiary children with consistently measured heights during initial measurement and and survey periods, number of children (and row percentage)
Verified pre-feeding nutrition status Verified post-feeding nutrition status TOTAL
Severely Wasted Wasted Normal Overweight Obese
Severely wasted 93
(30.0) 128
(27.7) 2
(41.3) 1
(0.65) 1
(0.32) 310
(100.0)
Wasted 27
(23.5) 53
(30.4) 0
(46.1) 0
(0.0) 0
(0.0) 115
(100.0)
Normal 12
(13.5) 62
(16.9) 0
(69.7) 0
(0.0) 0
(0.0) 71
(100.0)
TOTAL 132
(25.7) 243
(26.5) 2
(47.3) 1
(0.4) 1
(0.2) 514
(100.0)

School attendance
Among 200 pupil beneficiaries verified to be severely wasted prior to feeding and who had school attendance data, about 3%, attended school for less than 85% of total school days.
The median percentage attendance for the severely wasted children is 97.5%, which is comparable to school attendance of NB pupils, with 95% of these pupils attending 85% of total school days. Teachers interviewed pointed out that most of the SBFP children enrolled in their classes improved in attentiveness during the feeding program (96%) as well as after (95%).
The children also reportedly became more sociable during the feeding (97%), a development that was sustained after the feeding (96%). Improvement in class attendance was also reported by teachers for 94% of the beneficiary pupils; 92% of the children sustained good attendance.
Sustaining nutrition gains
Nutritional gains of the SBFP do not appear to be sustained in the case of many severely wasted beneficiaries a year or more after the feeding.
In particular, of 179 severely wasted beneficiaries whose nutrition status had improved to normal at end of feeding and who had consistent height measurements for pre-feeding and survey periods, about half (48%) remained normal by the time of the survey. Some regressed to wasted or severely wasted a year or more later.
This suggests the need to continue feeding most of severely wasted beneficiaries beyond the 100-120 day-feeding cycle, while simultaneously introducing government interventions (not necessarily DepED-administered) other than feeding programs to address capacity of disadvantaged families to provide for nutritional needs of their members.
Field interviews and FGDs suggest that the school year 13-14 SBFP program was generally implemented well, with majority of school heads, teachers and parents expressing appreciation for SBFP and with sizeable percentages of heads and teachers expressing a desire to see SBFP continued and expanded.
What children learned
Nearly all beneficiary schools implemented complementary DepED programs, Gulayan sa Paaralan Project (GPP) and Expanded Health Care Program (EHCP). Some parents mentioned that when the school their child was enrolled in sometimes lacked food, the feeding implementers added vegetables from the school garden to make up for the lack.
Children were taught the importance of good grooming, of washing hands before and after meals, of brushing their teeth and of good nutrition. Nearly all children say that they continue to wash their hands before and after eating both at school and at home. But only 69% of field interviewers found the children to be well-groomed at the time of the interview.
The SBFP was found to have positive unintended consequences: helping improve attentiveness and sociability of beneficiary pupils.
Teachers reported most beneficiaries enrolled in their classes improved in attentiveness during feeding (96%) as well as after (95%). The children also became more sociable during the feeding (97%), a development that was sustained after the feeding (96%). Improvement in class attendance was also reported by teachers for 94% of beneficiaries; 92% of the children sustained good attendance.
Ways forward
We reiterated our suggestion in the process evaluation for DepED to provide all schools with recommended weighing and height"measurement scales, rather than leaving procurement of such to the resourcefulness of school heads.
School heads, school nurses and class advisers, if not all teachers, should be trained on the proper use of such scales and on the importance of proper documentation of pre-feeding, feeding, and post-feeding phases of the program to help in the proper selection of beneficiary schools and beneficiary pupils, and in monitoring and evaluating program outcomes.
The basis for the 70% target in the SBFP nutrition goal has to be reviewed since 10% of normal and 30% of wasted children can regress to wasted or severely wasted status, possibly due to severe illness or growth spurt. The SBFP nutrition target has since been increased to 80% in the schoolyear 2015-2016, possibly because wasted children were included in the coverage of the program. But available data indicates that only about 70% of wasted beneficiaries attain normal nutrition status at the end of the feeding program.
Given that the administration component of the budget has been increased after school year 2013-2014, it is also important to increase the food budget allocation and consider inflation-adjusted increases.
While malnutrition is largely an economic issue, poor nutrition persists across socio-economic classes, but there is evidence from FNRI data that poor nutrition is connected with poverty.
Further, FNRI data suggests that malnutrition starts among children under five who carry it over to early childhood, leading to repercussions on learning achievements.
The next government will need not only to continue this program but also to complement it with other programs to correct malnutrition practices for children under 5, especially in the wake of the countrys commitment to the 2030 Agenda for Sustainable Development, and the Sustainable Development Goals to ensure no child gets left behind in both schooling and nutrition. " Rappler.com
Dr. Jose Ramon "Toots" Albert is a professional statistician who has written on poverty measurement, education statistics, agricultural statistics, climate change, macro prudential monitoring, survey design, data mining, and statistical analysis of missing data. He is a Senior Research Fellow of the governments think tank Philippine Institute for Development Studies.

Author: Jose Ramon Albert
Date: May 31, 2016
Source: Rappler.com

Conclusion
FOR the Philippines to continue its pursuit of inclusive growth, economists are urging the next administration under President-elect Rodrigo R. Duterte to implement various reforms, as well as continue some programs to address poverty.
However, it is important that these programs and policies are well-targeted, according to Romulo A. Virola, former secretary-general of the National Statistical Coordination Board (now part of the Philippine Statistics Authority).
Virola said the next administration must implement poverty-alleviation programs that should help families who have incomes that are close to the poverty line.
Doing so will prevent these families from returning to life of poverty. Likewise, such move, according to Virola, would help enable these families to bounce back when experiencing income shocks, such as sickness or temporary and permanent disability.
One way is to teach them to become entrepreneurial by improving their access to capital or giving them decent pay that will allow them to absorb income shocks that may come their way, Virola said.
Since inflation is low and unemployment is not so bad, the target should be to raise income; teach them to be entrepreneurial; and provide them with easy access to capital or pay them fair wages, he said. Maybe business is making too much money at the expense of our poor people"meaning that it is the rich who benefit more from our economic growth.
Continuing reforms
PROGRAMS that can improve the poors access to capital and basic services can also improve their chances of getting jobs, according to Virola. This may even encourage them to become entrepreneurs who can earn their keep and provide employment to other Filipinos, he added.
Reforms, like improving lending facilities so that small and medium enterprises (SMEs) can access much-needed capital or funds to expand their business, should also continue, according to some experts.
Asian Institute of Management Policy Center Executive Director Ronald Mendoza said this is a key reform that will benefit SMEs, which account for 99 percent of total firms nationwide and employ 60 percent of the countrys labor force.
Mendoza and other economists are also hoping the Conditional Cash-Transfer (CCT) Program of the Arroyo and Aquino administrations would continue. They said doing so will improve the chances of the poor in accessing quality education and health facilities.
Mendoza said the CCT is one of three major reforms needed for greater inclusive growth. Continuing the CCT program should be complemented with human capital investments so that young people have a fighting chance to break from poverty, he explained.
The two other reforms Mendoza believes should be continued include improving lending and other support for SMEs, and foreign direct investment. The latter, he said, would dramatically augment job creation and productivity.
Islamic finance
ADORACION Navarro, senior research fellow of the Philippine Institute for Development Studies, said financing reforms can also take the form of mobilizing savings for investments.
This is particularly important for Muslims in the Philippines because Islamic finance is not that developed in the country. PSA data showed the poorest region nationwide is the Autonomous Region of Muslim Mindanao, which has an average poverty incidence rate of 55.8 percent in 2012.
Navarro said one reason Islamic banking is not developed in the country is that there is only one Islamic bank nationwide. More players are needed to cater to the countrys Muslim population, he added.
If they are to strictly adhere to the tenets of Islamic banking, which prohibits riba or interest charging, they have fewer options because there is only one local Islamic bank"Al Amanah, Navarro said. Like in conventional banking, more players are needed in Islamic banking and Al Amanah needs other Islamic banks with which it can engage in financial intermediation transactions.
He said that in the immediate term, the incoming Duterte administration can conduct a value chain study of Islamic finance, see what constrains its development in each stage of the value chain and modify bank regulations to accommodate Islamic finance.In the medium to long term, additional Islamic banks and Islamic investment instruments must be created.
Agri growth
APART from these, economists, including Ateneo Center for Economic Research and Development Director Leonardo A. Lanzona Jr., said there is a need to focus on agriculture development and reforms.
Lanzona said the agriculture sector does not only provide a source of livelihood for farmers and fishermen, but also the source of raw materials for the manufacturing sector. Lanzona said food manufacturing accounts for 36 percent of the countrys total manufacturing sector. It has an estimated total value-added of P555.093 billion to the total worth of the manufacturing sector.
Earlier, Eagle Watch senior fellow Alvin Ang said that, while agriculture only accounts for 10 percent of the countrys GDP, its share in employment is 30 percent.
The slow growth of the agriculture sector in the past 20 to 30 years has prevented the rise in incomes of farmers and their liberation from poverty, according to Ang, who also teaches economics at the Ateneo de Manila University.

Actually, I would think that our biggest sector is really agriculture, Lanzona said. Weve been talking about being competitive. You can never be competitive in the agricultural sector, theres no way you can be competitive if you look closely at what were doing.
To boost the chances of Filipino farmers and fishermen in benefiting from economic growth, Lanzona urged the next administration to examine the possibility of just taxing landowners and introduce subsidies, including those that pertain to farm technology.
He added that the next president can also focus on financing other crops aside from the countrys staple"rice and corn.

Lanzona said the country already missed out on opportunities presented by other commodities in terms of global and regional trade.

For his part, agricultural think tank Meganomics Specialist International Inc. President and CEO Pablito M. Villegas called for policy reforms in the sector. Instead of implementing commodity-approach policies, Villegas said the government needs to focus on the comparative and competitive advantages of each province or region.

To me [the commodity approach policy] is terribly wrong. How do you promote, for example, fisheries in the inter land of Isabela? In the mountains of North Cotabato? You should go on more or less contortional approach, comparative advantage analysis. What are the comparative advantages of that area? Villegas said.

Agriculture should also be developed in such a way that it helps generate employment, he added.
Its only by linking agriculture with manufacturing and processing that we can develop a green agro-based industrial clustering system.
In terms of investment, Villegas said increasing the budget allocated for the sector and making sure these funds are used properly will help the government achieve true inclusive growth.
Citing the pronouncement made by President-elect Rodrigo R. Duterte in a meeting, he said the P1 billion incremental budget that may be given to each region specifically for agriculture would be a good step.
Duterte is talking about another incremental budget of P1 billion per region for agriculture. So if you add about P18 billion on top of the current budget for agriculture, which is P90 billion, and provided that these amounts will be used properly and local government units are given the mandate, we will be able to do it, he said.
More inclusive
IN the past weeks Duterte has bared an eight-point agenda to illustrate the socioeconomic priorities of his administration.

The agenda includes addressing the restrictive economic provisions in the Constitution, providing small farmers support services in pursuit of agricultural development and expanding the CCT program, among others.

If the next administration can implement its eight-point agenda, it may just be able to boost the countrys efforts to making economic growth truly more inclusive.//

Author: by Cai U. Ordinario and Mary Grace C. Padin
Date: May 31, 2016
Source: Business Mirror

MAYOR Rodrigo Duterte said that the recent abduction in Davao of Indian national, Jaspal Singh Malhi, had something to do with his money-lending business, better known as 5/6. Duterte said that the abduction could be due to a personal grudge related to his business. The mayor cautioned foreigners who are in the money lending business to be wary.

Davao City Police Office (DCPO) Director Vicente Danao Jr. said Wednesday that there is no confirmation yet whether Malhi was abducted or not. He said they tried to communicate with the family and friends of the Indian national, but none of them released any statement on the incident. Malhi was forcibly taken by two armed men to a waiting vehicle without a plate number.

Rachel Colyer, Daily Kos sent an article authored by Mari Kondo, here used as reference, on 5/6 loan sharking in a large informal sector comprised of micro-enterprises. Clients are impoverished Filipino ambulant, rolling store, stall vendors, whose survival in business relies heavily on borrowed money. This source of capital comes from the informal sector as well. Informal financiers called it 5/6. Two types of 5/6 financiers are found in Philippine public markets, each with a distinctive lending mechanism, Filipinos and immigrants from India.

Kondos paper considers the implications of having different financiers contribute to the development of micro-enterprises. First, regarded as last resource lenders, this financier is crucial to the most marginalized micro-entrepreneurs. Second, a part of the Indians lending money flows in from India through informal channels, quite an interesting phenomenon in this part of the world.

And third, despite their importance to Philippine micro-enterprises, little has been written about their financing practices. In the late 1980s and 1990s, extensive studies on micro-financing were conducted by the Philippine Institute of Development Studies, the Social Weather Stations, and other organizations. Since their purpose was to grasp the concept of both formal and informal micro-financing institutions for the purpose of macro policy formulation, differences across institutions by ethnicity were not highlighted. As a result, although Indian financiers are widely known among Filipinos, studies regarding their business practices are virtually non-existent.

Around 30 percent of the labor force in the Philippines are temporarily- or under-employed. The 5/6 moneylenders charge a nominal interest of 20 percent over an agreed period of time. A person who borrows 5 pesos from a 5/6 money lender over a period of one week repays 6 pesos, including 1 peso interest. Neither Filipino nor Indian 5/6 moneylenders require collateral or documents from their borrowers. The success of a borrowers business and loan repayment history provide a gauge of the borrowers credibility.

For various reasons, 5/6 moneylenders are prime and easy targets of hold-ups while on their collection routes. First, they are easily identified because of their appearance, often including a turban and beard as proof of being Sikh, and they are always on a motorbike. Second, their chance of having cash is high. We are like a walking cash dispenser, said one. Third, their everyday route is fixed and reliable so that borrowers can have payments ready. This predictability makes it easy to plan a hold-up once a Strangely his government, while promoting foreign investments drove away a bird already in hand. 56 is targeted.

Fourth, it is uncommon for Indian hold-up victims to report the incident to the police. Many are illegal immigrants without the required papers to conduct business in the country. Even if the hold-up is reported, the police may not be sympathetic to someone considered a violent foreign loan shark exploiting good Filipino citizens.

Finally, the social penalty imposed by Filipino communities upon a person who robs an Indian 5-6 is likely to be less than if a Filipino 5-6 were held up. The professional syndicates that kidnap wealthy Chinese businessmen leave the Indian 5-6 money lenders alone, considering them too petty. It is the goons of the markets and neighborhood gangs who find the Indians attractive targets.***

Author: Dahli Aspillera
Date: May 30, 2016
Source: Malaya