PIDS in the News Archived (September 2016)

QUEZON CITY, Sept. 5 - Investing in risk reduction and building a resilient economy is the focus of this years celebration of the Development Policy Research Month (DPRM). Celebrated every September in accordance with Presidential Proclamation No. 247, DPRM is a nationwide information and advocacy event being led by state think tank Philippine Institute for Development Studies (PIDS) since 2003. It aims at raising public awareness on the importance of policy research in nation-building and at promoting broad-based literacy of development issues confronting the country.
This years theme, "Angkop na Kahandaan: Matatag na Ekonomiya at Lipunan (Investing in Risk Reduction for a Resilient Philippines), highlights the need for in-depth reflections and analyses of resilience building, risk reduction, and structural transformation, and the role of appropriate policy interventions in building the country's resilience to various economic, environmental, political, and social risks and stresses.

According to PIDS President Gilberto Llanto, there is a need to look beyond natural hazards and acknowledge that the sources of risks are many and that those risks are interconnected.

The Philippines has been battered by a host of shocks, including the 2008"2009 global financial crisis and strong natural hazards. Recently, more sources of risk have emerged such as the slowdown of growth in big Asian economies and the sharp drop in the price of oil directly impacting oil-producing countries that host many overseas Filipino workers. Likewise, rising food prices, infrastructure and transportation problems, energy security concerns, and increasingly destructive climate-related events further agitate an already vulnerable economy.

Thus, Llanto stressed the importance of building communities with absorptive, adaptive, and transformative capacities. We need communities that can withstand various kinds of shocks and stresses and are more resilient to change than their previous state, Llanto said.

To formally launch the DPRM, a press conference is scheduled on September 5, Monday, from 10:30 am to 12:30 pm at the Philippine Information Agencys (PIAs) office in Quezon City. Invited resource persons are National Risk Reduction and Management Council Executive Director Ricardo Jalad, Health Secretary Paulyn Jean Rosell-Ubial, Project NOAH Executive Director Mahar Lagmay, and Bangko Sentral ng Pilipinas Governor Amando Tetangco, Jr. Topics to be covered during the press conference include the country's national risk reduction and management framework, health preparedness and response plan for infectious diseases and pandemics, the role of science and technology in risk reduction, and reducing financial risks through proper macroeconomic policies and prudent oversight.

This will be followed by a series of press conferences in Legazpi City, Tacloban City, and Zamboanga City. Organized in partnership with the PIA central and provincial offices, these events enable PIDS to further increase its reach at the local level and draw awareness in the provinces on the importance of policy research and the DPRM theme.

Likewise, PIDS personnel and invited resource speakers will further share and expound on the topic of investing in risk reduction and building resilience by guesting on radio and television public affairs shows throughout September.

A series of fora anchored on the theme is also being organized by PIDS and partner-agencies.
On September 1, the 2nd Mindanao Policy Forum will be held in Butuan City. Jointly organized by PIDS, Mindanao Development Authority, and Father Saturnino Urios University, this event will convene local policymakers, government staff, business sector, and civil society members in the Caraga region to discuss issues in the agriculture and environment sectors and how it may be possible to reduce their vulnerabilities, based on the results and policy recommendations from studies conducted by the organizers.

Another highlight of the DPRM celebration is a joint workshop by PIDS and the World Bank that focuses on small and medium enterprises (SME) in the Philippines. The workshop will focus on the five key constraints to SME development: business environment, innovation and skills, access to finance, access to markets, and development of ICT/digital entrepreneurship. It aims to inform the governments new MSME Development Strategy 2016-2020 by diagnosing the constraints, offering solutions based on good international practice, and recommending optimal modalities of policy implementation.

As the DPRMs main event, the Second Annual Public Policy Conference on Risks, Shocks, Building Resilience will be held on September 22 at the Marco Polo Ortigas in Pasig City with the Bangko Sentral ng Pilipinas as co-sponsor. Building on the success of the inaugural conference in 2015, this years conference program has a wider assortment of presentations that are distributed in five sessions, each tackling a particular kind of risk (e.g., macroeconomic/financial, environmental, agricultural, health). Resource speakers include researchers and practitioners based in the Philippines and overseas. Around 150 participants are expected to attend this conference, which will have Secretary for Socioeconomic Planning and NEDA Director-General Ernesto Pernia as keynote speaker.

Capping the month-long celebration is a joint forum by PIDS and the University of San Carlos (USC) in Cebu City on September 29. This forum on social protection and risk management will feature PIDSs impact evaluation studies on the Community Mortgage Program (CMP), a government financing scheme that enables organized residents of slums to borrow funds for land purchase and housing development, and the agricultural insurance programs of the Philippine Crop Insurance Corporation. To coincide with this seminar, a new PIDS Corner will be inaugurated at the USC Library. A PIDS Corner is a small section stacked with PIDS publications in selected provincial and university libraries outside of Metro Manila. Through this facility, the Institute makes its studies more accessible to students, faculty members, researchers, and policymakers located outside of Metro Manila. (PIDS)

Author:
Date: September 05, 2016
Source: PIA

Manila should just convert the quantitative restriction (QR) on rice into tariffs, as the extension of the rice import quota could do more harm than good, according to experts.

Economists told the BusinessMirror that extending the QR on rice is no longer viable and could hurt poultry growers, hog raisers and farmers planting other crops.

The problem is not whether you win or lose in negotiations, but we need to find out whether farmers or the entire agriculture sector benefited under the QR regime, said economist Pablito M. Villegas, who is also spokesman of the Philippine Chamber of Agriculture and Fisheries Inc.

Roehlano M. Briones, senior research fellow of the Philippine Institute for Development Studies, said extending the QR on rice is a lose-lose proposition.

Because other members of the World Trade Organization [WTO] would ask concessions from us, other agriculture subsectors could suffer, Briones said.
In 2015, industry sources told the BusinessMirror that the Philippines was forced to lower the tariff on pork offal to 5 percent, from 40 percent, when Manila negotiated for an extension of the QR in 2014.

Are we ready to do that again? Maybe its time for the rice to finally give way. Its time for rice to sacrifice for itself, Briones said.

Dr. Rolando T. Dy, executive director of the University of Asia and the Pacifics Center for Food and Agri Business, said other WTO members could ask for zero duty on pork and sugar.

Briones said it would be better for the Philippines to just convert the QR"a nontariff barrier"
into tariffs.

Its the only way to ensure that rice farmers wont be hurt so much by the lifting of the QR, he said, adding that the 35-percent tariff on rice is based on the countrys commitment to Asean.

According to the WTO General Council Ruling in July 2014, the Philippines should subject rice imports to ordinary customs duties right after the QR waiver extension expires on June 30, 2017.

That would be really the countrys option. As I see it, the Philippines will request for conversion into tariff right after the 2017 expiration of QR. The government could impose a very high tariff, Briones said.

Earlier, Agriculture Secretary Emmanuel F. Piol told the BusinessMirror the administration is inclined to ask the WTO for a two-year extension of the QR on rice.

Upon its accession to the WTO in 1995, the Philippines was allowed to enjoy the rice QR for 10 years. Manila was able to secure an extension when it lapsed in 2004.

After it lapsed in 2012, Manila again negotiated for an extension. In 2014 the WTO gave its go signal to the Philippines to implement the QR for two years.

The DA chief said the government was not able to prepare rice farmers to go head to head with its counterparts in Asean, like Thailand and Vietnam.

The quantitative restriction on rice must be extended for at least two more years [as] rice farmers need more time to prepare, Piol said in a phone interview.

Under the QR, rice imports within the minimum access volume (MAV) of 805,200 metric tons per year are slapped with a lower
tariff of 35 percent, while imports in excess of the MAV are slapped a higher tariff of 50 percent.//

Author: Jasper Y. Arcalas
Date: September 08, 2016
Source: Business Mirror

"We are doing things right, but we need to do more."

This was the message of Dr. Gilberto Llanto, president of state think tank Philippine Institute for Development Studies (PIDS), during a press conference in Quezon City in line with the celebration of the 14th Development Policy Research Month (DPRM).

The press conference, which was conducted in partnership with the Philippine Information Agency, was part of a series of events the Institute has organized throughout the month of September.

The DPRM is celebrated across the country every September in view of Malacaang Proclamation No. 247 issued in 2002.

The proclamation declares the observance of a DPRM to promote and draw public awareness and appreciation of the importance of policy research in the formulation of sound policies, programs, and projects. The proclamation also designated PIDS as the lead government agency in the yearly celebration of the DPRM.

This year's DPRM highlights the importance of building the country's resilience, aptly captured in the event slogan, "Angkop na Kahandaan: Matatag na Ekonomiya at Lipunan".

"By resilience, the DPRM underscores not just resilience to the effects of climate change and natural hazards but resilience to all kinds of risk factors, whether economic, financial, environmental, technological, geopolitical, or societal," Llanto said in his opening speech.

Also with him were officials from member-agencies of the DPRM Steering Committee, namely, Philippine Information Agency Director General Harold Clavite, Civil Defense Public Affairs Chief and Spokesperson Romina Marasigan, Department of Health Undersecretary Gerardo Bayugo, and Chief Information Officer Oscar Lizardo of Project NOAH or the Nationwide Operational Assessment of Hazards.

No escaping geography During the press conference, Llanto presented the risk landscape outlined by the World Economic Forum, highlighting the varied, interconnected, and constantly evolving nature of risks.

He explained that this year's DPRM aims to influence the country's policymakers and different sectors to make policies and programs that can help the Philippines become resilient in the face of multiple risks.

He also cited a United Nations study listing the Philippines the second most at risk country in the world to natural hazards and disasters.

In the agriculture sector alone, for instance, the cost of damages to property caused by tropical cyclones amounted to roughly PHP 36 million in 2014, according to data from the Office of Civil Defense.

"We cannot escape geography. Like it or not, these things will happen year in and year out," he explained. The Philippines is located along the Pacific Ring of Fire, which makes it vulnerable to frequent typhoons and earthquakes.

'Not enough resilience' Llanto clarified, however, that while we are exposed to multiple risks and very vulnerable to them, the Philippines is not hopeless. In fact, the country, he said, is doing fine in terms of the growth of its gross domestic product (GDP).

As of the second quarter of 2016, the Philippine GDP grew 7 percent, according to the latest data of the National Economic and Development Authority. "We are in an era of political stability, and we are able to put our house in order," Llanto said.

During his presentation, Lizardo also added that the Philippines currently has "world-class" facilities that can help the government assess the behavior of hazards.

For flooding, the country, he said, is equipped with hazard maps and flood modelling simulations that can identify the most flood-prone areas down to the barangay level.

His agency has likewise developed hazard maps for landslides and storm surges that local government units can use for planning disaster risk management and land development.

"I cannot think of any country in our particular region that does the same," the chief information officer of Project NOAH said.

Despite these successes, Llanto cautioned: "We cannot be complacent and that is what we want to emphasize in this years DPRM." He stressed that other areas may still be needing improvement although the country has already implemented outstanding strategies in addressing environmental and health hazards.

Llanto also bared the country currently does not have enough resilience due to the institutional and policy reforms done by the previous administrations. "However, there is a need for us to broaden our understanding of risks and resilience.

We need to look beyond natural hazards and acknowledge that the sources of risks are many and that those risks are interconnected," Llanto explained.

"We are a very vulnerable country. We have to do something, not only about the environment but also about developing resilience in our local communities," he added.

He said these communities should have absorptive, adaptive, and transformative capacities, able to withstand various shocks and stresses and more resilient to change than their previous states.

'Develop resilience thinking' The PIDS official explained that while the government has already created different types of responses, such as climate information systems, what the country really needs is to "develop resilience thinking".

"We need to make this idea [of resilience] filter down to the last household in local communities," Llanto told the members of the press. He said it is important to raise the awareness of households on the things that are happening around them, otherwise "they will be caught unprepared."

The DPRM theme of building a resilient Philippines is aligned with the focus of the Institutes new five-year research agenda for the period 2015-2019.

"The studies of our experts in agriculture, health, fiscal policy, among others, in the next five years will be guided by the said theme," Llanto said. Other press conferences related to the DPRM are expected to be held in Pampanga, Legaspi, and Tacloban.

A joint policy forum with the World Bank-Philippines on small and medium scale enterprises development will also be conducted on September 8.

A seminar on social protection and risk management co-sponsored by the Institute with the University of San Carlos in Cebu is slated for September 29.

The highlight of the DPRM is the Second Annual Public Policy Conference on "Risks, Shocks, Building Resilience" on September 22 in Pasig City. (PIDS) -

Author:
Date: September 07, 2016
Source: PIA

Strong economic fundamentals and policy reforms made it possible for the Philippines to withstand the effects of natural disasters, but resilience goes beyond disaster risk reduction, an economist said yesterday.
Economist Dr. Gilberto Llanto, president of the Philippine Institute for Development Studies (PIDS), said though the Philippine economy is doing well, there is a need to build more capacities to respond to interconnected risks and shocks that cripple economic and development gains.
What are we doing right? The institutional and policy reforms made through time, from the terms of former President Gloria Arroyo to President Benigno Aquino, the Philippine economy was able to develop resilience but [this is] not enough because a segment of the population is still in deep poverty, Llanto said in a briefing at the Philippine Information Agency.
As a country often battered by extreme weather events and natural disasters, the Philippines faces interconnected and overlapping risks, thus the need to build resilient communities to mitigate the impact of disaster-related events.
We have to be prepared and develop resilience in communities. Not because we are exposed to natural hazards, we are hopeless. We are doing fine, but we cant be complacent about that, he said.We need to develop resilience thinking not just on the government level but down to the household level, he added.
The 2014 World Risk Report identified the Philippines as the third among 15 countries worldwide most exposed to natural hazards. In the same report, the Philippines ranked second among 15 countries that are most at risk to natural hazards worldwide.Among sectors, agriculture remains to be the most vulnerable in times of natural disasters such as typhoons. //

Author:
Date: September 06, 2016
Source: The Daily Tribune

QUEZON CITY, Sept. 5 - Investing in risk reduction and building a resilient economy is the focus of this years celebration of the Development Policy Research Month (DPRM). Celebrated every September in accordance with Presidential Proclamation No. 247, DPRM is a nationwide information and advocacy event being led by state think tank Philippine Institute for Development Studies (PIDS) since 2003. It aims at raising public awareness on the importance of policy research in nation-building and at promoting broad-based literacy of development issues confronting the country.

This years theme, "Angkop na Kahandaan: Matatag na Ekonomiya at Lipunan (Investing in Risk Reduction for a Resilient Philippines), highlights the need for in-depth reflections and analyses of resilience building, risk reduction, and structural transformation, and the role of appropriate policy interventions in building the country's resilience to various economic, environmental, political, and social risks and stresses.

According to PIDS President Gilberto Llanto, there is a need to look beyond natural hazards and acknowledge that the sources of risks are many and that those risks are interconnected.

The Philippines has been battered by a host of shocks, including the 2008"2009 global financial crisis and strong natural hazards. Recently, more sources of risk have emerged such as the slowdown of growth in big Asian economies and the sharp drop in the price of oil directly impacting oil-producing countries that host many overseas Filipino workers. Likewise, rising food prices, infrastructure and transportation problems, energy security concerns, and increasingly destructive climate-related events further agitate an already vulnerable economy.

Thus, Llanto stressed the importance of building communities with absorptive, adaptive, and transformative capacities. We need communities that can withstand various kinds of shocks and stresses and are more resilient to change than their previous state, Llanto said.

To formally launch the DPRM, a press conference is scheduled on September 5, Monday, from 10:30 am to 12:30 pm at the Philippine Information Agencys (PIAs) office in Quezon City. Invited resource persons are National Risk Reduction and Management Council Executive Director Ricardo Jalad, Health Secretary Paulyn Jean Rosell-Ubial, Project NOAH Executive Director Mahar Lagmay, and Bangko Sentral ng Pilipinas Governor Amando Tetangco, Jr. Topics to be covered during the press conference include the country's national risk reduction and management framework, health preparedness and response plan for infectious diseases and pandemics, the role of science and technology in risk reduction, and reducing financial risks through proper macroeconomic policies and prudent oversight.

This will be followed by a series of press conferences in Legazpi City, Tacloban City, and Zamboanga City. Organized in partnership with the PIA central and provincial offices, these events enable PIDS to further increase its reach at the local level and draw awareness in the provinces on the importance of policy research and the DPRM theme.

Likewise, PIDS personnel and invited resource speakers will further share and expound on the topic of investing in risk reduction and building resilience by guesting on radio and television public affairs shows throughout September.

A series of fora anchored on the theme is also being organized by PIDS and partner-agencies.

On September 1, the 2nd Mindanao Policy Forum will be held in Butuan City. Jointly organized by PIDS, Mindanao Development Authority, and Father Saturnino Urios University, this event will convene local policymakers, government staff, business sector, and civil society members in the Caraga region to discuss issues in the agriculture and environment sectors and how it may be possible to reduce their vulnerabilities, based on the results and policy recommendations from studies conducted by the organizers.

Another highlight of the DPRM celebration is a joint workshop by PIDS and the World Bank that focuses on small and medium enterprises (SME) in the Philippines. The workshop will focus on the five key constraints to SME development: business environment, innovation and skills, access to finance, access to markets, and development of ICT/digital entrepreneurship. It aims to inform the governments new MSME Development Strategy 2016-2020 by diagnosing the constraints, offering solutions based on good international practice, and recommending optimal modalities of policy implementation.

As the DPRMs main event, the Second Annual Public Policy Conference on Risks, Shocks, Building Resilience will be held on September 22 at the Marco Polo Ortigas in Pasig City with the Bangko Sentral ng Pilipinas as co-sponsor. Building on the success of the inaugural conference in 2015, this years conference program has a wider assortment of presentations that are distributed in five sessions, each tackling a particular kind of risk (e.g., macroeconomic/financial, environmental, agricultural, health). Resource speakers include researchers and practitioners based in the Philippines and overseas. Around 150 participants are expected to attend this conference, which will have Secretary for Socioeconomic Planning and NEDA Director-General Ernesto Pernia as keynote speaker.

Capping the month-long celebration is a joint forum by PIDS and the University of San Carlos (USC) in Cebu City on September 29. This forum on social protection and risk management will feature PIDSs impact evaluation studies on the Community Mortgage Program (CMP), a government financing scheme that enables organized residents of slums to borrow funds for land purchase and housing development, and the agricultural insurance programs of the Philippine Crop Insurance Corporation. To coincide with this seminar, a new PIDS Corner will be inaugurated at the USC Library. A PIDS Corner is a small section stacked with PIDS publications in selected provincial and university libraries outside of Metro Manila. Through this facility, the Institute makes its studies more accessible to students, faculty members, researchers, and policymakers located outside of Metro Manila. (PIDS)

Author:
Date: September 05, 2016
Source: PIA

The second Mindanao Policy Research Forum will open the Development Policy Research Month celebration in September.

A policy forum on Nurturing Resilient Communities in Mindanao towards Sustainable Development will be hosted by Philippine Institute for Development Studies (PIDS), Mindanao Development Authority and Father Saturnino Urios University at the FSUU in Butuan City today.

A lunchtime press conference on the same day will discuss the DPRM 2016 theme of Investing in Risk Reduction for a Resilient Philippines.

Undersecretary Janet Lopez, executive director of MinDA, will tackle Fostering Partnerships with Academic and Research Groups for Mindanaos Sustainable Development.

PIDS Senior Research Fellows Dr. Celia Reyes will discuss the massive study evaluating the design, implementation and impact of the crop insurance programs being delivered by the Philippine Crop Insurance Corp.

Dr. Danilo Israel will reveal the results of the impact evaluation of the National Greening Program and will reveal whether or not it has effectively achieved its objectives.

In the afternoon, FSUU will present its disaster reduction and risk management initiatives. Resource persons from Caraga Sate University will present their study on the Comprehensive Land Administration and Information Management System.

The presentations will be followed by a broad lineup of discussants, which includes people from different sectors"private, government and civil society.

The PIDS Socioeconomic Research Portal for the Philippines team will talk about the open access agenda. SERP-P coordinator Mark Vincent Aranas will show how to use the knowledge resources in the SERP-P.

The DPRM has been celebrated across the country every September since 2003 in view of Malacaang Proclamation 247 to promote policy research in the formulation of sound development plans, programs and policies. The proclamation designated state think tank PIDS as the lead government agency in the yearly observance.//

Author:
Date: September 01, 2016
Source: The Standard

MANILA, Philippines " State-run think tank Philippine Institute for Development Studies (PIDS) said grants for water supply and sanitation projects in the municipalities must be redesigned to expand coverage and ensure the sustainability of investments.

In a new policy note, PIDS said current regulations for the the water supply and sanitation sector are insufficient to drive investments in local government units (LGUs).

The current state of economic regulations for the water supply and sanitation sector is not effective enough to compel LGUs and water districts to expand, improve the quality of their services, and upgrade their service standards, said PIDS.

This situation is most pronounced in LGU-run utilities given their conflicting proprietary and regulatory mandates. Without a regulatory stick, the realistic option for government to drive investments in the medium term is to offer financing incentives. Grant resources, therefore, will still be necessary to achieve the goal of universal coverage for water supply by 2025 and sanitation services by 2028, it added.

Addressing the water supply and sanitation requirements of the country has been a key component in the development plans of previous administrations. The medium term development plans of the past two administrations laid down mechanisms for the attainments of the Millenium Development Goals (MDGs) for water supply and sanitation.

The Philippine Water Supply Sector Roadmap 2010 Update laid down the direction for attaining universal water coverage in the country by 2025. The Philippine Sustainable Sanitation Roadmap also provides for means to universal access to water sanitation by 2028.

Among the strategies employed for the attainment of these goals is the provision of grant financing to municipalities suffering from inadequate water supply and sanitation"specifically defined as locales where less than 50 percent of the household population have access to safe water supply. Two grant financing programs have so far been implemented: the Presidents Priority Program for Water Supply (P3W) which ran from 2005 to 2010 under the Arroyo administration and the Sagana at Ligtas na Tubig para sa lahat which started in 2011 and will last until the end of 2016.

The grants are coursed through the Local Water Utilities Administration (LWUA) and the Municipal Development Funds Office (MDFO). LGUs also provide counterpart funding.

PIDS said an evaluation of the two programs generally showed positive outcomes such as the provision of safer sources of water, longer time availability of water, improved water pressure, decline in waterborne diseases in the municipalities, improvement of hygiene and emergence of income-generating activities that use water (such as piggeries and car wash business).






The P3W, which had a total budget of P5.42 billion, covered 499 water-short municipalities prioritized based on deficiency of access to safe water sources, poverty incidence and manifestation of waterborne diseases. Out of the total, only 39 municipalities graduated from being water short.

The Salintubig program, which had a budget of P5.81 billion covers 455 municipalities. Out of the total, only 62 municipalities have so far graduated from being waterless.

PIDS said, however, that these programs lacked focus on sanitation as it is not part of the program design of P3W and it is not a strong component of the Salintubig program. The programs also lacked proper assessment of water sources in the municipalities. PIDS noted because the capacity of a water supply system is limited by the capacity of the source, incorrect assessment can result in inadequate service and wasted investments.

Several investments made under the programs also proved to be unsustainable because of substandard design and construction and poor maintenance of facilities.

As such, PIDS recommends several improvements in the program design. These include creating an effective water source identification and development process, employing a stricter selection process for grant recipients, instituting an effective monitoring and evaluation system for the program, increasing the budget for technical assistance for LGUs and water districts and addressing sustainability-related issues.

PIDS also urges opening the water sector to public-private partnerships.

Medium-term targets can be achieved through a combination of grants, loans, equity, or public-private partnerships. These grants will be for those areas where safe water access rates are lowest and, at the same time, have low capability to pay or where poverty is most severe, said PIDS.

Author: Czeriza Valencia
Date: September 14, 2016
Source: Philippine Star

VIENTIANE, Laos " President Rodrigo Duterte has highlighted the need for the Association of Southeast Asian Nations (ASEAN) to work together to fight transnational crime and to support small businesses to preserve the economic gains in the region.

We should act together in concert to ensure that the economic gains we made so far will advance at full speed so that ASEAN can confidently play its rightful role as a global player contributing to the economic growth and prosperity, Duterte said during the 13th ASEAN Business and Investment Summit on Tuesday here.

I attach great importance on how laws are crafted and implemented to bring good governance and order and to provide an enabling environment for the countrys progress and prosperity.

The president said ASEAN needs stronger resolve and action to combat transnational crime, which he described as one of the most difficult and complex problems in the region and a pressing concern for the Philippines.

The trade in illicit and illegal drugs in particular has emerged as a pressing problem for our countries undermining social cohesion and the rule of law and socio-economic program of a country, he added.

Duterte also called on the members of the regional bloc to redouble their efforts on intelligence gathering, interdiction, arrest and prosecution of terrorists.

Recent events too have shown, terrorism and violent extremism rearing its ugly heads and threatening to pull us back from our onwards advance to progress. We shall not be cowed. We will press on, the Philippine president said.

Duterte also cited the need to support micro, small and medium enterprises (MSMEs), a major source of employment. He said the Philippines is working to enhance the policy and regulatory environment and to provide businesses an affordable and innovative digital platform and access to finances.

We will work and collaborate with ASEAN in helping the SMEs look for all ways to connect them in the countries of the ASEAN and the world, the president said.

Duterte also pushed for the hastening of the growth and integration of sub-regional frameworks in ASEAN such as the Greater Mekong Sub-Region, the Indonesia-Malaysia-Thailand Growth Triangle and the Brunei-Indonesia-Malaysia-Philippines East ASEAN Growth Area or BIMP-EAGA.

"Hailing from Mindanao, I commit to promote BIMP-EAGA. We intend to open up our other major islands like Mindanao and the Visayas with high quality backbone infrastructure," Duterte said.

We will accelerate infrastructure spending by improving national roads and bridges such as the Mindanao Logistics Infrastructure Network and other network master plans including the inter-island linkages. We have to further expand our roll on roll off facility to Davao-General Santos and Bitung in Indonesia.

The ASEAN, Duterte said, must also engage the world in a robust way in terms of the economy. He noted that the regional bloc is making progress in fulfilling its commitments to the ASEAN Free Trade. The regional bloc has free trade deals with Australia, New Zealand, China, Japan, India and South Korea.





With the establishment of the Regional Comprehensive Economic Partnership or RECP, we are now gaining further momentum in November 2016. The Philippines will host the RECP senior officials to further improve the phase on substance of our negotiations and conclude a comprehensive and high- quality RECP agreement in a timely manner, Duterte added.

The RCEP is a free trade deal that aims to connect 16 Asia Pacific economies. According to a paper by the Philippine Institute for Development Studies released in 2013, the partnership could lead to the worlds biggest trading bloc or about 40 percent of world trade. The RCEP talks cover trade in services and goods and intellectual property among other topics.

Duterte also urged the ASEAN member-states to ensure the effective implementation of previous agreements that facilitated economic integration.

He noted that an immense amount of effort and compromise was required from member states as they work to reconcile their national interests with the aspiration of the ASEAN community.

On the part of the Philippines, our economic focus will be towards the promotion of inclusive growth through innovation in four areas: micro, small and medium enterprises, e-commerce, youth and women entrepreneurship, Duterte said.//

Author: Alexis Romero
Date: September 07, 2016
Source: Philippine Star

The Philippines will be making another round of aggressive pitch to boost the capacities and competitiveness of micro, small and medium sized enterprises (MSMEs) during its chairmanship of the Association of Southeast Asian Nations (Asean) summit next year.
Trade Secretary Ramon Lopez said the countrys chairmanship priorities would revolve mostly around MSMEs, innovation and technology, youth and women, and regulatory coherence.
We will push for technology as we believe this can level the playing field for MSMEs. Were also pushing for e-commerce, digital economy and inclusive innovation as key economic priorities during our Asean chairmanship next year, Lopez said.
Our policy statement will be geared largely toward MSMEs"this will be the direction we [will take], the trade chief added.
Lopez disclosed that during the Asean summit held earlier this month, the Office of the United States Trade Representative (USTR) highlighted the Philippines culture of innovation and encouraged the country to look more into initiatives involving e-commerce and digital economy.
We were recognized for our efforts to push for MSMEs, innovation, digital trade, and cross border data process, because for them, these can be the game changers for the MSMES, he added.
It was during the Asean summit held in Lao Peoples Democratic Republic that President Duterte formally accepted the countrys chairmanship while urging his counterparts in the region to be the Philippines dynamic and vibrant partners.
The countrys hosting of the Asean summit, with the theme Partnering for Change, Engaging the World, would coincide with the 50th anniversary of the regional bloc in 2017.
Lopez also disclosed the Philippines was also expected to reiterate its support for the Regional Comprehensive Economic Partnership (RCEP)"a comprehensive trade agreement being negotiated between Asean member states and six dialogue partners namely Australia, New Zealand, India, Korea, Japan and China. This bloc alone accounts for nearly 30 percent of the worlds trade and is projected to have a combined gross domestic product (GDP) of about $21.2 trillion.
We might not be able to conclude the agreement this year but there is another effort to meet in November, during which we are hoping to complete it. But if not, there is always next year. We (the


Philippines) will be the chair then so we can push for it. This involves 16 economies in different stages of development and levels of openness, Lopez said.
The RCEP is expected to be favorable for the Philippines as it can boost the countrys GDP by 3 percent, improve general welfare by $2 billion, and reduce poverty incidence to 23.3 percent over a 10-year period up to 2023.
The Philippines trade and investment flows within the region are likewise seen to significantly improve and benefit as well, although the RCEP may initially put key industries and product sectors at a disadvantage, according to a discussion paper from the state think tank Philippine Institute for Development Studies.//

Author: Amy Remo
Date: September 19, 2016
Source: Philippine Daily Inquirer

Senate Minority Leader Ralph Recto is seeking today the condonation of all unpaid amortizations of agrarian reform beneficiaries, saying such a move will not only spare farmers from piling debts but also spur agricultural productivity all over the country.
Recto urged President Duterte to formally back Senate Bill 262, "saying that debt forgiveness is the best stimulus for the agrarian sector."
"We have bailed out banks and companies owned by billionaires. We have allowed power sector obligations to migrate as national debts. If we have pursued a debt forgiveness strategy for many troubled companies, why not one for poor farmers?" Recto said in justifying his proposal.
Referring to the mothballed facility in Bataan, the senator noted that "two generations of Filipinos had even paid billions of pesos for one lemon nuclear power plant which did not produce a single watt of electricity."
Recto said his bill is needed to authorize the cancellation of the obligations owed to the government by farmer-beneficiaries for parcels of land received.
According to one estimate, only P2.5 billion of the projected P14.3 billion collectible land amortization payments was actually collected from 1987 to 2004, Recto said.
A government think-tank, the Philippine Institute for Development Studies, revealed that the average land amortization collection rate by Land Bank of the Philippines from 1988 to 2008 was about 23 percent.
"Certainly, in the past, we have awarded bigger debt reprieves to a few. This one, with a lesser amount, is owed by many," Recto said.
"Given the situation, it can even be argued that a debt condonation is more urgent than a land conversion moratorium," Recto said, referring to a Palace announcement that Duterte will soon order a two-year freeze in the conversion of farmlands.
Recto said the high cost of agricultural inputs, low farm production and calamities have forced may farmers to miss out on amortization.
The minority leader stressed, however, that government must never abandon its policy of paying just compensation to landowners whose property were covered and distributed under the agrarian reform program.
"It is but fair for the landowners to receive payment for their land. There must be no disruption, nor delay of the repayment schedule," he said.


Recto said agrarian reform beneficiaries are having difficulty making both ends meet. "Requiring them to pay for the land awarded to them will only lead them to penury and to loan sharks."
"Instead of worrying where to get the money to pay for the land, agrarian reform beneficiaries must focus their efforts in making the land productive and in maximizing their new assets for higher income," he added.
"Kung hindi makakautang sa bangko ang mga magsasaka, tiyak na mapipilitan silang lumapit sa mga usurero. Isang bagyo lang ang dumaan, siguradong baon na sa utang ang mga kapatid natin sa bukid," he pointed out.
Earmarked capital repayments, he said, can be rechanneled to boost food production. "This will redound to more food on the table at a lower cost."
Recto explained that agrarian reform beneficiaries could maximize the full potential of their new assets if only the government would provide them with enough capital for farm inputs and other support services throughout the planting season.
Banks must also be encouraged to provide more windows for credit to farmers to ensure that they have sufficient capital to make the land productive, Recto added.
While they account for 30 percent of the country's workforce, farmers and fishermen make up almost 40 percent of the country's poor.
"In short, this is a strategy to raise food production and bring down the number of the rural poor," Recto said.//

Author:
Date: September 13, 2016
Source: Senate Press Releases

recommended to the Duterte administration the crafting of a new water-supply program for the poor.

In a policy note, titled Continue but redesign the grant program for water supply and sanitation, PIDS consultants and researchers said the new program can replace the Sagana at Ligtas na Tubig para sa Lahat (Salintubig) Program, which will end this year.

The new program, the researchers said, can improve on former President Benigno S. Aquino IIIs Salintubig program, as well as Gloria Macapagal-Arroyos Presidents Priority Program for Water Supply (P3W), which ran from 2005 to 2010.

Despite the challenges in the implementation of the P3W and Salintubig programs, the expansion of services that benefited more than 3 million people would not have been achieved without the grant assistance, the researchers said.

Given that the Salintubig Program is about to wind down in 2016, the Executive must propose a national successor program"one with an improved program design, it added.
Creating a new program will also enable the country to make good on its commitments to meet the 17 Sustainable Development Goals by 2030.

Improving the design of the program means adopting a criteria for prioritizing beneficiaries to avoid insertions on the list of beneficiaries during implementation.

The researchers said this can be done through a resolution from the National Economic and Development Authority (Neda), the countrys central planning agency.

The policy note also stated that the new program must match the programs budget with the list of eligible and prioritized municipalities.

The researchers added that the program design must also have a monitoring and evaluation system that can track intermediate outcomes or the number of beneficiaries connected to water systems.

Should the government approve the proposed unified financing framework for the sector, which is currently pending Neda Board approval, the next water supply and sanitation grant program and its guidelines should be subsumed under this framework, the researchers stated.

Apart from these, the policy note stated there is a need to lessen the risk of having insufficient water resources throughout the duration of the program.

This, the researchers said, can be done by carving out a component for water source identification and development.

The researchers also said there is a need to provide a higher budget for technical assistance for local government units and local water districts.

The additional budget will help cover technical assistance for strategic sector planning, project preparation and design, and procurement and construction supervision.

The P3W initially identified 432 waterless municipalities using the 2000 Census of Population and Housing. However, its target grew to 449 waterless municipalities when the municipalities in the Autonomous Region in Muslim Mindanao were split, resulting in the formation of 17 new municipalities.

The Salintubig Program, meanwhile, targeted 455 municipalities and 1,353 barangays"all of which were identified as waterless. These municipalities were prioritized based on their level of access to safe water, poverty incidence, and manifestation of waterborne diseases.//

Author: Cai Ordinario
Date: September 14, 2016
Source: Business Mirror

CEBU, Philippines - Policy makers should not limit their concepts of resilience to natural disasters but they must also consider and plan for socio-political risks.

Marife Ballesteros, vice president of Philippine Institute of Development Studies, said during the Kapihan sa PIA-Cebu forum yesterday that socio-political risks include the present geopolitical tensions in the West Philippine Sea, repatriation of Overseas Filipino Workers as a result of various types of crisis, health risk such as pandemics and financial risks such as exchange rate fluctuations, falling commodity and oil prices, among others.

The PIDS believes that risks are many and interconnected and currently the Philippines has few and relatively inadequate studies on risks, disasters and resilience.

"The country needs a so-lid policy framework," it said.

It added that the Philippines is located on the earthquake belt, the Ring of Fire, and the typhoon corridor and it has many communities standing in the path of these disasters.

It said that the Philippines is second on the list of top countries that are most at risk worldwide.

"Countries at risk have high vulnerability and exposure levels, but with little or disproportionate ability to respond or adapt accordingly," PIDS added.

According to PIDS, local communities that do not have good resilient systems are exceptions rather than the rule and it needs to be changed.

The change must start with producing more studies and evidence-based research on risks, disasters and resilience on order to inform policy as well as having a proactive information and education campaign on the importance of building communities with multiple resilience.

Ballesteros also talks about the so called "Black Swan" events which are extreme types of shock that are totally unpredictable and unanticipated shocks that can change the political landscape like the 9/11 incident.

For a resilient Philippines, government agencies must work hand in hand especially at the barangay levels, said Anthony Arsenal, DSWD-7 Planning Officer.

DSWD adopts a social protection that constitutes policies and programs that seek to reduce poverty and vulnerability and to enhance the social status and right of the marginalized.

Social Protection programs aims to lift people out of poverty. It also seeks to prevent people.

Author: Mitchelle L. Palaubsanon
Date: September 29, 2016
Source: Freeman

LOCAL governments in Cebu should set up a reliable early warning system to better prepare their constituents in dealing with natural calamities, the regional Department of Science and Technology (DOST-7) said yesterday.

In yesterdays Kapihan sa PIA (Philippine Information Agency) forum, DOST Regional Director Edilberto Paradela said they have more than 100 sensors in the province to monitor weather, water and earth movements.

He said they have six years worth of data acquired by these facilities that can help LGUs to map out their contingency plans and equipment to rescue and assist affected families.
Paradela said automated rain gauges, seismicity meters, and automated weather stations were installed all over Central Visayas as well as water level monitoring systems in Argao, Barili, Carcar, Talisay, Kansaga (Consolacion), and Toledo City.

Because of the sensors, we can determine the flood-prone areas, the route of the flooding and the time when the rains would come nine hours before it happens, he said.

Paradela said they also have equipment to determine the typhoons exact occurrence and direction in real time as well as unmanned seismicity meters located in Argao, Bogo, and in their Lapu-Lapu City office to detect earthquakes.

He said they are developing an improved flood-hazard and disaster map for Central Visayas in partnership with the University of San Carlos.

Paradela said this data is available to the public and they should use this data to better prepare themselves for emergencies and to avoid building homes in landslide-prone areas and sites with fault lines.

The forum at the Ramon Aboitiz Foundation Inc. (RAFI) plenary hall was held in line with the Philippine Institute for Development Studies (PIDS) 14th Development Policy Research Month (DPRM) which carried the theme Building Resilience.//

Author: Izobelle T. Pulgo
Date: September 28, 2016
Source: Cebu Daily News

THE poor Filipinos of this country are so wealthy they are targeted to pay additional taxes. That is, if proposals at the 17th Congress are approved and a new tax law is passed.

This is the reason lawmakers are treading so lightly on such proposals.

We are currently studying it if its doable, House Speaker Pantaleon D. Alvarez said.

Representative Alvarez of Davao del Norte was referring to the proposal of the Department of Finance (DOF) to lower personal income tax (PIT). But to do so, an estimated P179 billion would be considered foregone revenues.

Hence, the DOF is leaning towards imposing additional taxes on several commodities and remove the value-added tax (VAT) exemptions of senior citizens and persons with disabilities (PWDs).
Liberal Party Rep. Romero Quimbo of Marikina said the government and Congress should study carefully what sector they really want to tax.

Im not in total agreement with excise tax, Quimbo told reporters on Wednesday. I think we need to be very careful and be very precise in targeting the sector we want to tax.

The lawmaker also reminded reporters to remember that this measure is being pursued as a compensating measure for revenue losses resulting from income-tax lowering.

Thats the only justification I can see to support it, Quimbo said. But if ultimately the excise tax will affect the poor more than the rich, thats not going to be acceptable.

According to Quimbo, the last thing the government wants is to transfer the tax burden from the middle class"the sector that will benefit from income-tax reduction"to the poor, the ones who will shoulder [for example, the] bulk of the excise tax on fuel.

Thats inequitable and not progressive, he added.

Oppositions

LIBERAL Party Rep. Edcel Lagman of Albay said his group called The Legitimate 8 is opposing the DOF proposal to remove VAT exemptions of the senior citizens and PWDs.

Definitely, Im against the proposal, Lagman said. This is especially not proper after the signing of the Centenarian Act of 2016 that brings into focus the problems arising from an aging population.

One of the measures [that] should help the elderly is tax exemption from VAT, Lagman added.

Meanwhile, Party-list Rep. Carlos Isagani T. Zarate of Bayan Muna said that the DOF should follow President Dutertes instruction last August to lift antipoor and gender-biased taxes.

So the DOF should drop its proposal to increase taxes for oil products and expand the value added tax (VAT) base, Zarate said. This [proposal] would be counter-productive and would wipe out or, at the minimum, drastically reduce the benefits of lower income taxes. This proposal is patently antipeople and would definitely have an adverse effect on consumers.

Zarate added that he believes higher taxes for oil would create a domino effect that would spike the prices of basic goods and services like water and electricity.

Just imagine, how much a P10 increase in gasoline and P6 increase in diesel would affect the price of rice, fish and meat? Zarate added.

The lawmaker also asked Finance Secretary Carlos G. Dominguez III to reconsider his agencys proposal and look for other non-tax means that would not hit the poor hard.

We can look at the national budget for other items that could defray the lost tax revenue from lowering income taxes, Zarate said.

He cited as example the Risk Management Fund, seen getting P30 billion. There is also the Comprehensive Automotive Resurgence Strategy, proposed to have a budget of $600 million, or P28.2 billion, according to Zarate. He also cited the Industry Competitive Fund, which may get P5 billion.

Long overdue

BUT according to Quimbo, the DOFs tack to lower individual income tax rates is actually long overdue. Quimbo, who is also the House deputy speaker, said the income tax should be adjusted considering that the P500,000 a person earns, for example, amounts to P1.1 million today.

Rosario Manasan, senior research fellow of the Philippine Institute for Development Studies (Pids), describe Quimbos view as the phenomenon of bracket creep.

According to Manasan, the phenomenon results from non-indexation to inflation of personal income-tax brackets.

Simply put, bracket creep occurs when employees income increases over time as a result of inflation, a statement from the state think tank said. This pushes them to pay higher taxes, but their purchasing power remains the same.

According to the Pids, the Philippines has not adjusted its personal income-tax system since 1998.

In the current setup, Quimbo said those earning P10,000 or less every month pay a 5-percent income tax, while those with annual earnings of P500,000 and above pay a 32-percent income tax.

The PIT

UNDER the DOF proposal, workers earning not over P250,000 annually will be exempted from paying a PIT should the 17th Congress approve its passage into law.

However, to make up for the foregone revenues, the DOF bill will expand the VAT base by reducing the coverage of its exemptions. These exemptions include privileges granted for senior citizens and PWDs, adjustment of excise taxes imposed on petroleum products and restructuring the excise tax on automobiles. The latter, however, exempts buses, trucks, cargo vans, jeeps, jeepney substitutes and vehicles with special purposes.

The finance department said the tax shall be computed in accordance with and at the rates established in two schedules. (See sidebars.)


The proposed measures, if approved, will amend a dozen Sections and Title VI of Republic Act 8424, or the National Internal Revenue Code, as amended.

Offsetting measures

INCLUDED as offsetting measures are the imposition of higher taxes on petroleum products and eliminating certain exemptions from VAT.

The bill seeks to repeal Section 4 of the Expanded Senior Citizens Act of 2010, as well as Sections 32-A and 33-A of the Magna Carta for PWDs.

Section 4 of the Expanded Senior Citizens Act of 2010 provides VAT exemption for medicines, professional fees of attending physicians in all private hospitals, land mass transit, airfare, seafare, use of services in hotels, admission fees in theater and cinema houses, funeral and burial services for the death of senior citizens.

Sections 32-A and 33-A of the Magna Carta for PWDs provide tax incentives to a family of a PWD.

Petro-tax

ALSO under the bill, effective on January 1, 2017, excise tax will be imposed on petroleum products. These products include the following:

Lubricating oils and greases, including but not limited to, base stock for lube oils and greases, high vacuum distillates, aromatic extracts and other similar preparations, and additives for lubricating oils and greases, whether such additives are petroleum-based, per liter and kilogram, respectively, of volume capacity or weight, P10 (from P4.50);
Processed gas, per liter of volume capacity, P6 (from P0.05);
Waxes and petrolatum, per kilogram, P10 (from P3.50);
On denatured alcohol to be used for motive power, per liter of volume capacity, P6 (from P0.05):
Naphtha, regular gasoline, and other similar products of distillation, per liter of volume capacity, P10 (from P4.35).
Leaded premium gasoline, per liter of volume capacity, P10 (from P5.35); unleaded premium gasoline, per liter of volume capacity, P10 (from P4.35);
Aviation turbo jet fuel, per liter of volume capacity, P10 (from P3.67);
Kerosene, per liter of volume capacity, P6 (from P0.00);
Diesel fuel oil and on similar fuel oils having more or less the same generating power, per liter of volume capacity, P6 (from P0.00);
Liquefied petroleum gas, per liter, P6 (from P0.00);
Asphalts, per kilogram, P6 (from P0.56);
Bunker fuel oil, and on similar fuel oils having more or less the same generating power, per liter of volume capacity, P6 (from P0.00).

The bill also said the tax rates shall be increased by 10 percent every year thereafter, effective January 1, 2018, through revenue regulations issued by the secretary of finance.

Revenue gain

BASED on the DOFs proposed comprehensive tax-reform package earlier turned over to Dominguez by former Finance Secretary Cesar V. Purisima, an excise-tax increase on gas, diesel and other oil products would bring an estimated revenue gain of P178 billion in its first year of implementation.

Instead of increasing taxes or expanding the VAT, we hope that Secretary Dominguez would help us in scrapping VAT from basic services, like electricity, water, oil products, and even systems loss, Zarate said.

However, the Congressional Policy and Budget Research Department (CPBRD) said the government should study carefully the proposal imposing excise tax on petroleum.

The CPBRD, the lower chambers think tank said in its policy brief that a change in tax structure produces a change in consumer behavior.

The emerging proposals to adjust excise tax on petroleum products are premised on the fact that most of the tax rates were set as early as 1996.

Several considerations must be taken into account in the process of reforming the tax system, the CPBRD report said.

For one, the CPBRD said the countrys excise tax must be comparable with those of member-states of the Association of Southeast Asian Nations (Asean).

Second, The increase in the price of basic commodities as a result of higher taxes could diminish the purchasing power of consumers, the CPBRD report said.

While diesel is excise-tax free in the Philippines, other Asean member-states impose specific tax or ad valorem tax rates on the same product, the report explained.

In particular, the peso equivalent of excise tax on diesel in Malaysia and Thailand are P31.97 and P3.19, respectively. Prior to the enactment of the Reformed VAT, or RA 9337, diesel was taxed at P1.63 per liter.

Three, petroleum products are essential inputs to the production, processing and movement of goods. The transport sector uses up more than two-thirds of total petroleum products, followed by commercial and industry sectors. Four, importers and refiners of oil products are subject to value-added tax, in addition to excise tax. Being a price-based tax, the VAT automatically responds to inflationary changes, which the specific excise tax is not able to capture, the policy body said.

As reported by the Department of Energy, 68 percent of total oil consumption goes to the transport sector, 11 percent to commercial and 9.3 percent to industry

Another important consideration is the impact of excise-tax increase on goods and services, the CPBRD added.

[To address this], the government must design well-targeted social protection"preferably direct subsidy"to mitigate the impact of additional taxes on poor households, it said.

Meanwhile, the CPBRD said incremental revenues from excise tax on petroleum products may be used to beef up infrastructure spending, to upgrade mass transport system and to improve traffic management, among others.

On the positive side, incremental revenues from higher tax rates will help the government to address the unmet needs of the Filipino people. Also, higher fuel price could result in more prudent use of petroleum products, longer service life for roads and bridges, traffic decongestion and lower carbon emission, it said.

Zero-VAT base

THE DOF bill said the following sales by VAT-registered persons shall be subject to zero-percent rate:

The sale and actual shipment of goods from the Philippines to a foreign country, irrespective of any shipping arrangement that may be agreed upon which may influence or determine the transfer of ownership of the goods so exported and paid for in acceptable foreign currency or its equivalent in goods or services, and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP);
The sale of goods, supplies, equipment and fuel to persons engaged in international shipping or international air-transport operations; provided that the goods, supplies, equipment and fuel have been sold and used for international shipping and air-transport operations;
Foreign-currency denominated sale;
Sales to persons or entities whose exemption under international agreements to which the Philippines is a signatory effectively subjects, such sales to zero rate;
Sale of gold to the BSP;
Direct exports by a registered export producer of exports products, or the sales of export products to another producer or to an export trader:

Meanwhile, the bill said subject to the provisions of this act the following transactions shall be exempt from VAT:

1. Sale or importation of agricultural and marine food products in their original state, livestock and poultry of a kind generally used as, or yielding or producing foods for human consumption; and breeding stock and genetic materials therefor.

Products classified under this paragraph shall be considered in their original state, even if they have undergone the simple processes of preparation or preservation for the market, such as freezing, drying, salting, broiling, roasting, smoking or stripping. Polished and/or husked rice, corn grits, raw cane sugar and molasses, ordinary salt and copra shall be considered in their original state;

1. Sale or importation of fertilizers; seeds, seedlings and fingerlings; fish, prawn, livestock and poultry feeds, including ingredients, whether locally produced or imported, used in the manufacture of finished feeds (except specialty feeds for race horses, fighting cocks, aquarium fish, zoo animals and other animals generally considered as pets);
2. Importation of personal and household effects belonging to the residents of the Philippines returning from abroad and nonresident citizens coming to resettle in the Philippines;
3. Services subject to percentage tax under Title V;
4. Services by agricultural contract growers and milling for others of palay into rice, corn into grits and sugar cane into raw sugar;
5. Medical, dental, hospital and veterinary services, except those rendered by professionals;
6. Educational services rendered by private educational institutions, duly accredited by the Department of Education(DepED), the Commission on Higher Education (CHED), the Technical Education and Skills Development Authority (Tesda)and those rendered by government educational institutions;
7. Services rendered by individuals pursuant to an employer-employee relationship;
8. Services rendered by regional or area headquarters established in the Philippines by multinational corporations, which act as supervisory, communications and coordinating centers for their affiliates, subsidiaries or branches in the Asia-Pacific region and do not earn or derive income from the Philippines;
9. Transactions that are exempt under international agreements to which the Philippines is a signatory or under special laws, except those under Presidential Decree 529;
10. Sales by agricultural cooperatives duly registered with the Cooperative Development Authority to their members; their importation of direct farm inputs, machineries and equipment, including spare parts thereof, to be used directly and exclusively in the production and/or processing of their produce;
11. Export sales by persons who are not VAT-registered;
12. Sale of real properties not primarily held for sale to customers nor held for lease in the ordinary course of trade or business;
13. Sale, importation, printing or publication of books and any newspaper, magazine review or bulletin, which appears at regular intervals with fixed prices for subscription and sale and which is not devoted principally to the publication of paid advertisements;
14. Transport of passengers by international carriers;
15. Services of bank, nonbank financial intermediaries performing quasibanking functions, and other nonbank financial intermediaries;
16. Sale or lease of goods or properties or the performance of services other than the transactions mentioned in the preceding paragraphs, the gross annual sales and/or receipts do not exceed the amount of P3 million (from P1.5 million);
17. Sale of power or fuel generated through renewable sources of energy, such as, but not limited to, biomass, solar, wind, hydropower, geothermal, ocean energy and other emerging-energy sources using technologies, such as fuel cells and hydrogen fuels.

Automobiles

THE bill also said there shall be levied, assessed and collected an ad valorem tax on automobiles based on the manufacturers or importers selling price, net of excise and VAT.

Under the measure, if the net manufacturers price/importers selling price is P600,000, the excise tax will be 5 percent.

If the net manufacturers price/importers selling price is P600,000 to P1.1 million, the excise will be 20 percent of net manufacturing/importation price.

If the net manufacturers price/importers selling price is P1.1 million to P2.1 million, the excise will be 40 percent of net manufacturing/importation price.

If the net manufacturers price/importers selling price is P2.1 million, the excise will be 60 percent of net manufacturing/importation price.

The bill said the brackets reflecting the manufacturers price or importers selling price, net of excise and VAT will be indexed by the secretary of finance once every two years if the change in the exchange rate of the Philippine peso against the US dollar is more than 10 percent from the date of effectivity of this act.

House Committee on Ways and Means Chairman Rep. Dakila Carlo Cua said the DOF proposal will be studied carefully in the lower chamber, as the offsetting measures will affect the poor.

Lone Legislative District of Quirino representative Cua, meanwhile, said his committee will also consider the 25 bills filed at the lower chamber seeking to reduce the income tax imposed on individuals and corporations by amending the National Internal Revenue Code.

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

THE GOVERNMENT has put the damage caused by a recent dry spell at P15 billion, saying destruction to agricultural lands was not as bad as what was seen during a similar episode in the 1990s.
Socioeconomic Planning Secretary Ernesto M. Pernia, in a speech he wrote but delivered by his deputy Rolando G. Tungpalan as he is in New York for the United Nations General Assembly, said the Philippines survived one of the worst El Nio events, which ran from late last year until May 2016.

It affected almost eight million Filipinos, greatly impacting our economy and our environment. Damage to agriculture reached more than P15 billion in production losses, read the speech delivered before a conference in Pasig City yesterday.
The recent El Nio episode is said to be the worst since 1998.
Agriculture contracted by 2.8% year on year in the first semester, sustaining a contraction that began in the second quarter of 2015, according to national accounts data.
The decline in crop output was softer than the contraction seen in 1998 that went by the double digits amid a severe dry spell. The sector suffered four successive quarters of decline in 1998, with second quarter of that year alone logging losses of 11.5% on year, according to national accounts data.
According to the latest Department of Agriculture data, the dry spell damaged 1.84 million metric tons (MT) of crops from February 2015 to July 2016 totaling P15.21 billion.
By value, that outpaces the 1.06 million MT recorded during the severe dry spell that hit the country in 1997-1998. Rice crops recorded the most losses with 491,237 MT valued at P7.22 billion. Some 510,457 MT of corn valued at P5.3 billion and 429,2014 MT of high value crops at P2.57 billion were destroyed.
However, in terms of affected area, Christopher V. Morales, director at the Department of Agriculture (DA) Field Operations Service, said the 1990s dry spell was significantly more damaging.
In terms of area affected, worst pa rin ang 1997-1998 (the 1997-1998 El Nio was worst), Mr. Morales said in a text message.
Total area affected was recorded at 556,721 hectares, 206,222 hectares of which were badly hit. By contrast, around 292,000 hectares of rice and corn fields were destroyed in the 1990s, according to data from the Philippine Institute for Development Studies.
The government said mitigation measures allowed it to keep the damage at bay, creating early on a task force that will prepare the nation against the calamity.
To recall, former President Benigno S. C. Aquino III approved on Dec. 11 last year the allocation of P19.2 billion for projects outlined in the Roadmap to Address the Impact of El Nio (RAIN).
The so-called RAIN fund was not released so the DA was advised instead by the Budget department to utilize its regular funds and the remaining P500 million quick-response fund for the 2015 period.

Since the onset of the dry spell in February last year, the DA had been conducting cloud-seeding as part of mitigation efforts.
It also distributed pump irrigation equipment to address water scarcity in vulnerable areas. --

Author: J.C. Lim
Date: September 23, 2016
Source: Business World

A local think tank suggested the Philippines, with an already sophisticated labor pool, should consider moving from the low-cost manufacturing and service to more advanced technology and design-based manufacturing industry.

Philippine Institute for Development Studies President Gilberto Llanto said the country should develop higher-value industries, as other Southeast Asian countries are now offering lower labor cost to attract investors.

You cannot just rest your hopes on low-cost labor-intensive manufacturing because, sooner or later, low-cost countries, like Cambodia, would just take away those industries from us. So what we can do is, because we are a bit more on the higher development, more sophisticated than Myanmar, Lao PDR, Cambodia and Vietnam put all together, is really to try to develop our capacities, Llanto said.

He cited as an example the electronic industry where the Philippines can move from assembly to do more research and design.

Likewise, Australian-New Zealand Chamber of Commerce of the Philippines Chairman Emeritus Peter Wallace said other countries offering cheaper labor could easily outlast the Philippines in competitiveness if the country stays on its track as a low-cost manufacturing country.

He added that there is a need to adapt to technologies and eventually explore ideas of robotics integrated into business.

Low-cost manufacturing is very competitive and goes with countries and shifts very easily to where the lowest cost is and Philippines is not lowest cost. So instead of struggling to compete with low cost of garments and so on, move into higher productivity businesses where you need more skills. I think, that is an inevitability and, in todays highly technical work, needing more skills is becoming more important, Wallace said.

However, Wallace is concerned with the impact of adapting to advanced automation in employment, saying there has to be a solution for those people working traditional jobs which robotics can easily replace.

We have to be able to adapt to that, but I am concerned in the service sector as we talk about robotics. It is taking over a lot of skills that are already there. You look at all the auto industry, manufacturing cars, there are no people. It is all robots putting it all together. Before, it was a hundred people working in a factory, now there are five or 10, and that is going to get worse, Wallace said.

Llanto said robotics can be easily integrated to jobs whose nature is repetitive, like in call centers. He added that, while this may seem bad news for the business-process outsourcing (BPO) sector, the industry is expanding to include management and other higher-value tasks that require more skill from their labor force.

What is good with the BPO is that it has transformed. They are not just call centers in the Philippines right now. We have all these activities which are not voice-dependent so it is not just call centers. The risk is that artificial intelligence will prosper in activities that are repetitive. Call center is repetitive, customer inquiry, those jobs can be taken over by robotics, Llanto said.//

Llanto added that Philippines should strengthen its apprenticeship program in light of the transition from low-cost manufacturing to higher skill jobs so as to bring in surplus from the agriculture sector.//

Author: Danielle Gabriel
Date: September 24, 2016
Source: Business Mirror

The Philippines remained vulnerable to natural hazards, which has exposed the country to yearly economic losses of $1.6 billion.
According to policy think tank Philippine Institute for Development Studies (PIDS), the country ranked second in a list of 15 countries most at risk to natural hazards (28.25 percent), beaten only by another typhoon-bait country, Vanuatu (36.5 percent).
The country also was the third most exposed to natural hazards (at 52.46 percent), next to Vanuatu (63.66 percent) and Tonga (52.27 percent).
The 15 vulnerable countries include, among others, Japan, Cambodia, Brunei Darussalam, Chile and the Netherlands.
Exposure is defined as the entities such as the population, conditions of built-up areas, infrastructure component and environmental area exposed to impacts of one or more natural hazards. Risk, meanwhile, is the interaction between exposure to natural hazards including the adverse effects of climate change and the vulnerability of societies, according to the World Risk Report in 2014.
These risks translate to an annual average direct economic losses of $1.603 billion, which is 0.8 percent of the gross domestic product and 4.8 percent of annual government expenditure, according to World Bank and Global Facility for Disaster and Reduction and Recovery data.
In an effort to solve these shocks, the government recently allocated P19 billion to specifically address the effects of the El Nino phenomenon. Called the Roadmap to Address the Impact of El Nino (Rain), the fund was designed to provide measures of production support and water management to mitigate impact on vulnerable areas. Some of the measures include irrigation intervention, shifting to short-gestation crops while maximizing and optimizing production to non-threatened areas.
The government also planned to import rice in preparation for the effects of the La Nina phenomenon mildly affecting the country.
Nonetheless, PIDS noted this was not aimed at reducing large excess cost of rice paid by the Filipino consumer
PIDS suggested systems-wide programs on climate change and called on both public and private sectors to address the impact of climate change.//

Author: Michelle Ann Ruiz
Date: September 23, 2016
Source: Philippine Daily Inquirer

DAVAO CITY, Philippines " President Duterte said yesterday he is not worried about turning off European and American investors with his foul mouth as he can always turn to China and Russia for investments.
They make an issue of my mouth. They always complain about my mouth. I do not care if they do not invest here. They can all go away, I can go to China, I can go to Russia. They are waiting for me, the President said in remarks before policemen at Camp Alagar, the regional police command in Cagayan de Oro City. Wala akong pakialam sa inyo (I dont care about you), he added.
He was reacting to S and P Global Ratings expressing its concern over diminishing predictability of government economic policies.
Despite its concern, S and P affirmed on Wednesday the Philippines long-term credit rating of BBB and short-term credit rating of A-2, with a stable outlook.
Duterte shrugged off S and Ps concern, saying the Philippines is formulating a new foreign policy.
Cabinet members also disputed S and Ps assessment but were nevertheless more diplomatic about it.
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I think the policy making has not changed, Trade secretary Ramon Lopez said in a press briefing in Malacaang.
We have investment protection that will give peace of mind to our investors. Our FTA (free trade agreements), they are all being honored, he added.
Presidential Communications Secretary Martin Andanar said the S and P assessment gives the government greater resolve to make the economy growth robust, sustainable and inclusive.
The Presidents commitment in the anti-illegal drug campaign and criminality will enhance the countrys image to attract more foreign investments. Peace and order is a must for investors to invest more in the country, Andanar said. As we all know, consumer optimism soared at the start of this presidency.
The President even joked about preferring to go to Asian countries where there is bountiful and lavishly served food.
Eh, dun sagbot lang (there they just serve grass), the President said, apparently referring to salads served in Western countries.
Despite Chinas seizure of areas clearly within Philippine territory, Beijing has never been at the receiving end of Dutertes vitriol.
The National Economic and Development Authority (NEDA) yesterday also downplayed concerns raised by S and P Global Ratings, saying the administration has been very clear about its growth plan under its 10-point economic agenda.
Rolando Tungpalan, NEDA deputy director general for investment programming, said that as far as economic policy is concerned, the Duterte administration remains focused on its strategy for making economic growth more inclusive.
Such strategy includes accelerating infrastructure projects and attracting more investments in the agriculture and industry sectors.
If we go back to the 10-point agenda, we have clarity. We are saying we are inviting foreign investments in the agriculture and industry sectors. We are spreading progress outside of Metro Manila to the regions and rural areas; we are building infrastructure that would boost competitiveness and productivity, Tungpalan told reporters on the sidelines of the 2nd annual policy conference of the Philippine Institute of Development Studies (PIDS).
The credit rating firm said a higher rating is unlikely over the next two years but stressed it may reconsider such position if improvements in the policy environment lead us to a better assessment of institutional and governance effectiveness.
The administrations 10-point economic agenda covers continuance and maintenance of current macroeconomic, fiscal, monetary and trade policies; institution of a progressive tax reform and more effective tax collection; increasing the competitiveness of businesses and improving the ease of doing business; accelerating annual infrastructure spending; promoting rural development; ensuring security of land tenure to encourage investments; investing in human capital development; promoting science and technology; improving social protection and strengthening the implementation of the Responsible Parenthood and Reproductive Health Law.
Tungpalan also noted that in the case of the mining industry " which strongly requires policy stability " the government has not made new policy pronouncements that contradict existing policies.
The Department of Environment and Natural Resources (DENR) has launched a sweeping audit of the operations of the countrys 40 metallic mines, more than half of which have been recommended for suspension for various violations.
Tungpalan stressed the government is operating within the bounds of existing laws and has so far not introduced new policies.
In the case of the mining sector, there is an existing law so it is a matter of enforcing those laws until the laws are amended. So we are sticking to the rules that are already available and there are no new policy pronouncements that take over existing policies. I see no evidence of inconsistencies for far, he said.
NEDA deputy director general for policy and planning Rosemarie Edillon said the agency is ensuring policy coherence in the creation of the new medium-term country development plan. " With Czeriza Valencia, Lawrence Agcaoili//

Author: Alexis Romero and Edith Regalado
Date: September 23, 2016
Source: Philippine Star

An economic planner yesterday downplayed concerns raised by debt watcher Standard and Poors Ratings Services that predictability of policymaking in the Philippines has somewhat diminished, noting the Duterte administration continues to pursue its 10-point economic agenda.

We are sticking to the rules that are already available and there are no new policy pronouncements that take over existing policies under the new administration, said Rolando Tungpalan, deputy director-general of the National Economic and Development Authority (Neda).

I see no evidence of inconsistencies so far, he said during the sidelines of annual public policy conference organized by government think tank Philippine Institute for Development Studies (PIDS).

Tungpalan cited for instance existing laws affecting the mining sector, which the government just enforces until such laws are amended.

We were laying the 10-point agenda and we were consistently following whatever those are, he added.

Standard and Poors decided to keep the Philippines BBB rating and stable outlook, but believed that policy predictability and stability somewhat diminished when the Duterte administration took over.

Despite this, Tungpalan said the government is inviting foreign investors to pour in their money into agriculture and industry sectors, and infrastructure which can boost competitiveness and productivity.

Author:
Date: September 23, 2016
Source: The Daily Tribune

Fragmented and overlapping management roles in water governance have plagued the countrys irrigation systems, according to a study presented at the Philippine Institute for Development Studies (PIDS) conference on Thursday.
In a presentation, titled Improving Irrigation Water Governance for a Resilient Agriculture, Agnes Rola of the University of the Philippines Los Baos said there are 15 line agencies and various local government units (LGUs) that are responsible for water management.
This does not include some 8,000 irrigators associations (IAs) that govern the countrys irrigation systems nationwide.
There is a fragmented and overlapping range of functions of the Philippine water-related agencies, Rola said. We counted about 30 of these, just the major agencies mandated to do water-related functions.
The fragmented functions in water governance is one of the major reasons that led to problems, such as the lack of updated data on water resources and the absence of a central policy on water.
Because of this, Rola said many farmers suffer since they do not have enough water for their crops.
She said only 50 percent of the countrys total irrigable area have irrigation systems. The countrys total irrigable land is 3 million hectares but only 1.6 million are irrigated.
While irrigation management transfer meant that IAs should now manage the system, it was found that there is still low capacities and severe funding constraints for operation and maintenance; and there are several agencies still involved in the delivery of water to farms, Rola said.
Many legal documents for water are a source of confusion and that water data for planning are insufficient, she added.
To address these concerns, Rola said there is a need to strengthen planning and regulatory decision-making processes for water resources.//

Author: Cai Ordinario
Date: September 22, 2016
Source: Business Mirror

The lack of funds has been cited as one of the major reasons crop insurance for Filipino farmers have limited reach and low coverage, according to the Philippine Institute for Development Studies (PIDS).
In a presentation on Thursday, PIDS Senior Research Fellow Celia Reyes said that, while crop insurance is a big help to farmers nationwide, it is not being maximized due to low penetration rate and insurance cover.
Improvements in the design and implementation, particularly with regard to the penetration rate and insurance cover, can further increase these benefits. This will make crop insurance an effective risk-management tool, Reyes said.
Due to insufficient funds, she said only 27 percent of rice farmers; 12.2 percent of corn farmers; and 3 percent of high-value commercial crop farmers are covered by crop insurance.
In terms of coverage of special programs, such as the free crop insurance, only 135,551 of the 1.92 million rice farmers and only 58,695 of 1.11 million corn farmers are covered.
Funds of special programs are not enough to cover all eligible beneficiaries. This leads to first-come, first-served implementation policy, Reyes said.
She added that crop-insurance cover is insufficient when compared to the average production cost per hectare.
The average production cost per hectare for rice is P42,475 and P25,546 per hectare for corn. But the average amount covered by the insurance reached only P20,730.08 per hectare and P19,842.37 per hectare for rice and corn, respectively.
PIDS data also showed that the average indemnity for rice is at P5,129.79 per hectare and P6,645.57 per hectare for corn.
What we find as that the insurance cover being provided by many of these programs is actually way below the production cost. So even if a farmers crops were completely damaged, the maximum amount that he can get as indemnity is much lower than the production cost, Reyes said.
She urged the government to improve the design of crop insurance to increase the penetration rate and insurance cover. Reyes added that there is a need to improve the targeting of beneficiaries for free insurance premium and to validate and update the list of farmers and agrarian-reform beneficiaries.
Reyes said local government units must also be involved in amending the crop-insurance program.//


Author: by Cai Ordinario
Date: September 22, 2016
Source: Business Mirror