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The world faces great uncertainties ahead, with global trends in leadership shifting away from cooperation to protectionism. Despite the dubious times, global analyst and CEO of Difference Group, Dr. Dan Steinbock, believes the Philippines is on the right path to continue and capitalize on its positive growth.

At a seminar organized by state think tank Philippine Institute for Development Studies (PIDS), Steinbock detailed a foreboding outlook of the future. The radical polarization in the European Union over issues of immigration and unity, Beijing getting ready for the next Politburo, the impact of demonetization in India, and US President Donald Trump recalling policies and plans rolled out during the Obama administration, including the Trans-Pacific Partnership (TPP), have made it difficult to predict economic outcomes.

Under Trump, the US's withdrawal from the TPP and forcible renegotiation of the North American Free Trade Act (NAFTA) has put regional and global trade partnerships at an unease. Steinbock says the Philippines has to be mindful of the risks of new protectionist policies that can hit remittances and its offshore industries.

According to Steinbock, policymakers and leaders should strive to develop the country's manufacturing sector. A strong manufacturing sector will be able to not only sustain the country's consistently positive growth on average, it will also take the economy to the next level, and help the country reduce its exposure to external risks.

"Catch-up growth is slowing down," said Steinbock, "It is slowing down in the Tiger economies--it is slowing down in China. When that happens and the countries outside the region have less money to give, will the Philippines be able to grow?"

Politically, Steinbock opined that President Rodrigo Duterte's foreign policy has been pragmatic.
He added that changes concerning defense policies in the South China Sea and currency valuations in China will contribute to the drastic deterioration of US-China relations, placing the Philippines in a difficult situation in the middle.

Policymakers must pay attention not only to insulating the Philippines from the effects of geopolitical shifts but also to upgrading the country's capacity to deal with such economic and political shocks.


The Philippines needs to develop an enabling "ecosystem" of policies and institutions to scale up social enterprises.

In a recent study released by state think tank Philippine Institute for Development Studies (PIDS), authors Marife Ballesteros and Gilberto Llanto remarked that social enterprises can be an important force in addressing the gaps between the country's paradoxical experience of positive growth and persistent poverty.

Ballesteros and Llanto, PIDS acting vice president and president, respectively, noted that the current policy environment has failed to capture the needs of social enterprises which in turn has hampered their growth. The emergence of community economies, which include social enterprises, presents a unique set of policy and institutional requirements.

Social enterprises, compared to for-profit enterprises and nonprofit organizations, are businesses that put communities at the center of their enterprise. At the core of their objectives include promoting social welfare, enabling sustainable development, and encouraging investments for empowering communities.
Currently, the United Nations has included community economy as part of its social and solidarity economy agenda, which gives attention and support to businesses that "can be vehicles for profit, people empowerment, peace, and other moral imperatives".

A 2013 survey by the Institute for Social Entrepreneurship in Asia reported that around 30,000 organizations in the Philippines may be classified as social enterprises. They are made up of firms in various forms, including social cooperatives, fair trade organizations, microfinance institutions, and trading and development companies.

Currently, there is a proposed bill in Congress that focuses on addressing the policy needs of social enterprises. Like the Magna Carta for MSMEs and the Barangay Micro Business Enterprises Act, the Poverty Reduction through Social Entrepreneurship or PRESENT Act includes important provisions on tax exemptions, special credit windows and guarantee funds, support for local government units, and other considerations like cash incentives for social enterprises that employ people with disabilities, comprehensive insurance for calamities, and resources from the government for comprehensive capacity building.

Ballesteros and Llanto explained that unlike the other two laws, the PRESENT bill does not promote the exemption of social enterprises from the minimum wage law. This is because they "are known to pay above the minimum wage and apply other fair trade principles".

However, the bill faces visceral challenges, including a question of definitions, where there is currently a "lack of agreement" on what differentiates social enterprise activities from those of for-profit and nonprofit entities. There is also a question of social enterprises overlapping with social protection policies and programs of the government.

That said, the authors acknowledge the potential of social enterprises as an avenue to respond to social challenges left unmet by existing entities"whether they are of the state, the for-profit sector, or the nonprofit sector.

"The Philippines has a social and cultural environment conducive for social entrepreneurship to emerge. This is largely attributed to the widespread focus in the country on the bottom-of-the-pyramid issues and the strong participation of the civil society and the private sector in social issues," concluded the authors.
It would beneficial for the Philippines to nurture that environment through sound policies.

If you wish to know more about this study, download a copy of the Policy Note from this page: and pubyear=2017

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If properly implemented, the government's National Greening Program (NGP) can help in reducing poverty and preserving the environment.

In a policy note released by state think tank Philippine Institute for Development Studies (PIDS), Senior Research Fellow Danilo Israel said there is high probability the expected outcomes of the NGP will be attained, if it is implemented efficiently and effectively and as planned.

The NGP was a priority program of the Aquino administration aimed at poverty reduction, food security, environmental stability and biodiversity conservation, and enhancement of climate change mitigation and adaptation. It had a total budget of PHP 31 billion for five years and aimed at planting 1.5 billion seedlings in 1.5 million hectares of land nationwide from 2011 to 2016.

As of June 2016, over 1.3 billion seedlings of various tree species have been planted in more than 1.6 hectares of open, denuded, and degraded forest lands. The PIDS study noted that the program exceeded its target area at 113 percent but fell short in its target seedling planted at 90 percent. These figures, according to the study, already equaled or even surpassed what the Philippine government had accomplished in reforestation in the past 50 years.

Considering the government's decision to extend the program to 2028, Israel said it is worthwhile to evaluate the NGP's performance and look at the issues and problems encountered during its implementation. Taking effective steps to improve its implementation will go a long way to ensure its success, he said.

The impact evaluation of the NGP conducted by PIDS estimated that the implementation of the program will result in a 0.3-percent increase in the total output of the economy in 2020, 1 percent in 2030, and 2.5 percent in 2050. The forestry sector is expected to post the highest output growth effect, which is estimated to reach to as high as 5.5 percent in 2050.

According to Israel, the NGP also has the potential to increase household income and decrease poverty. Almost three-fourths of households in NGP sites claimed there had been significant increases in their incomes. This was likewise confirmed by simulations done by PIDS, comparing business-as-usual scenario versus having the NGP.

In terms of employment generation, the NGP has provided 3.3 million jobs, around half a million of which are in upland and rural communities.

It also contributed in recovering forest areas. Using 2010-2015 figures, the Food and Agriculture Organization ranked the Philippines fifth among countries with most annual forest gain, with 240,000 hectares or 3.5-percent annual increase.

However, the study noted that while the NGP has been successful in planting seedlings, issues like low survival rate of trees planted and poor program monitoring have persisted. There have also been allegations of corruption among the Department of Environment and Natural Resources (DENR) and people's organization (PO) leaders, which created conflict within the community organizations in NGP sites.

Thus, Israel recommended a review of the design of the NGP, in terms of individual species and mix of tree species planted, tree spacing, and other important technical parameters. He contended that the design and tree species planted by the NGP are not always appropriate to the sites.

Likewise, he suggested the grant of additional incentives, such as harvesting rights, livelihood support, mechanism for long-term financing, and addressing tenure issues, to communities in order to sustain plantations. Further, the project should allocate enough funds for capacity building of the POs and for strengthening the capacity of the DENR personnel to monitor corruption in NGP activities, he added.

Lastly, Israel also emphasized the importance of placing the ultimate responsibility for all reforestation initiatives on the Forest Management Bureau (FMB). He cautioned against the conversion of FMB to a bureau and instead proposed the creation of a new agency tasked only with reforestation, possibly answering directly to the president.

If you wish to know more about this study, download a copy of the policy note from this page:


State think tank Philippine Institute for Development Studies (PIDS) disproved arguments against the sex education provision of the Reproductive Health (RH) Bill in a paper written by Michael Abrigo and Vicente Paqueo.

Critics of the RH bill have lobbied that age-appropriate health and sex education in schools will lead young people to have sex much earlier and will increase rates of sexual activity.

Abrigo and Pacqueo cited studies showing not only the lack of evidence for these claims but also the evidence for the opposite.

Evidence from studies and surveys by Johns Hopkins Bloomberg School of Public Health, the Medical University of South Carolina, the Research Institute for Tropical Medicine, the University of California, and the Philippine Statistics Authority all support the efficacy of sex education in delaying sexual initiation among young people.

Abrigo and Paqueo noted that reproductive health and sex education do not raise adolescent populations sexual desires, but actually inhibits them. In addition, they argued that sex education also makes young adults more sexually responsible by using condoms, which lowers the risks of spreading sexually transmitted infections.

Studies show that sex education keeps young people informed and enables them to delay engaging in sexual activities to a much later age. Women who have sex and get pregnant at a much earlier age than their peers tend to attain lower levels of education.

"Filipinos especially teenagers and young adults are not well-informed about sex-related issues that could intimately and personally affect them. Addressing this information deficiency with appropriately designed sex education can be beneficial," authors maintained.

Sex education in school is a practical solution. According to the PIDS paper, it seems more prudent for the government to ensure that the youth get age-appropriate sex education than keep them ignorant.

"It is not uncommon for the young to grow up without having quality time with parents and their surrogates to discuss about sex-related issues. Often, they get false information and bad advice from peers who also need proper sex education," the authors explained.

The PIDS paper, however, acknowledged the risks in providing the youth with comprehensive sexuality education in public schools. Thus, it suggested ways to deal with concerns of premature and improper exposure to inappropriate materials.

"School officials can work together with parents, community leaders, teachers, local experts, social scientists, and health educators to develop a sex education program that is designed to provide students with accurate information about HIV/AIDS and other sex-related issues," recommended the authors.

They also argued that it is better to develop a sex education program based on a deep consultative process with key stakeholders than preventing government from providing students with opportunities to learn from professionally developed sex education programs solely because of pre-conceived ideas of their consequences.

"Moral beliefs and good intentions alone are not enough to determine whether a policy position is beneficial or detrimental to the well-being of the countrys citizensEmpirical evidence is necessary to protect them against the unintended consequences of well-meaning but misinformed policy stance," the authors concluded.

If you wish to know more about this study, download a copy of the Discussion Paper from this page: ###


A study by state think tank Philippine Institute for Development Studies disclosed the unintended consequences of open access fishing and fishing ban policies in the Zamboanga Peninsula, the country's sardine capital.

Authors Danilo Israel, Milva Lunod-Carinan, and Vicente Paqueo said the Philippines has reached its maximum economic yield (MEY) as early as the 1960s. For instance, fish stock harvest from 1998 to 2001 was 30 percent higher than they should be. Having gone beyond the MEY, the fishery sector has not only depleted the economic value of its livelihood source but has also caused alarming damage to the environment. The economic losses from overfishing are estimated at PHP 6.25 billion.

The Philippines has always ran an "open access" approach in managing its marine ecosystem as sources of food. Over the years, the growing population has led to a rise in demand within the fishery industry, culminating in huge strains on the country's marine resources. Open access, argued Israel and his co-authors, is the root cause of the dwindling catch and the dire state of marine resources.

To counter the effects of overfishing in the Zamboanga Peninsula, the fishery sector and the local governments implemented a three-month closed season strategy, precipitating a "gradual shift" from an open-access "full development approach" to the "conservation, protection and sustained management of fisheries". Based on reports, the ban led to increased catch of high-priced fish species, increased numbers and sizes of spawners and sardine eggs, and more tuna catches in some parts of the peninsula.

But it was not without dire consequences. Fishermen, cannery workers, and tin can manufacturers lost their jobs during the three-month closed season. The price of sardines in the local market also shot up during the ban, taking away a cheap and staple source of food for the local poor communities.

The authors cautioned against ignoring the negative effects of the ban. "While there are observable benefits in terms of increased sardine productivity due to the closed season, there are also real costs in terms of lost employment not only within the industry itself but also in its backward and forward linkage industries as well as increases in sardine price that need to be studied. The total costs of administering the ban also need to be considered, including those borne by government, the private sector and other," they said.

If you wish to know more about the study, you may download a copy of the Discussion Paper from this page: and pubyear=2016