Press Releases Archived (March 2015)

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State think tank Philippine Institute for Development Studies (PIDS) is holding a Pulong Saliksikan titled "Fed`s Monetary Policy and the Rising Dollar: Impact on Asia and Emerging Economies" on 11 February 2015, Wednesday, from 2:00 p.m. to 4:00 p.m. at Romulo Hall of the NEDA sa Makati Bldg., 106 Amorsolo St., Legaspi Village, Makati City.

Central banks play a vital role in global growth prospects and currency markets in the near future. In the United States, the economic recovery is likely to strengthen, but there is no return to the pre-2008 status quo in the labor markets and the level of debt continues to rise. What will be the impact of the US government`s expected rate hikes on the Asian and large emerging economies? Will the European Central Bank and the Bank of Japan`s anticipated expanded quantitative easing also affect Asian markets like the Philippines?

Addressing these issues is the seminar`s resource speaker, Dan Steinbock, PhD, a recognized expert of the multipolar world. His research focuses on international business, international relations, investment and risk among the major advanced economies (G7) and large emerging economies (BRICS and beyond). With his advisory activities, he monitors more than 40 major advanced and emerging economies worldwide, including the Philippines. Altogether, he monitors some 40 major world economies and a dozen strategic nations. In addition to his advisory activities (www.differencegroup.net), Dr Steinbock is affiliated with the India, China, America Institute (www.icainstitute.org), the Shanghai Institutes for International Studies (China), and the EU Center (Singapore).

The seminar will be streamed live via the PIDS website (www.pids.gov.ph).

Interested parties who may wish to attend the seminar may contact the PIDS Research Information Staff through telephone numbers 893-5705 (c/o Ms. Necy Aquino) and 892-4059 (c/o Ms. Necy Aquino or Ms. Misha Borbon), fax number 893-9589 or e-mail address: naquino@mail.pids.gov.ph.

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A recent study by state think tank Philippine Institute for Development Studies (PIDS) found some promise in the government`s National Greening Program but suggests there is still room for improvement in areas of information management, monitoring, and fund management.

A recent study by state think tank Philippine Institute for Development Studies (PIDS) found some promise in the government`s National Greening Program but suggests there is still room for improvement in areas of information management, monitoring, and fund management.

The Policy Note titled "The National Greening Program: Hope for our Balding Forests" written by Dr. Danilo Israel and Maria Diyina Gem Arbo, PIDS senior research fellow and research analyst, respectively, discusses the performance of the NGP, ways to improve its implementation mechanisms, and the newly commenced impact assessment project being conducted by PIDS.

The NGP launched in 2011 to plant 1.5 million seedlings in 1.5 hectares over a period of six years is an attempt by the government to include objectives beyond restoring forest areas, such as reducing poverty; promoting food security, environmental stability, and biodiversity conservation; and enhancing climate change mitigation and adaptation.

"The NGP has provided some measure of hope for the recovery of our already balding forests, an objective that previous national reforestation programs have miserably failed to achieve," say the authors.

Despite the achievements of the program, there are plenty of areas for improvement, such as data and information gathering and analysis; monitoring and inspection of tree survival; access to funds and increased personnel; and reporting and auditing practices.

The rate of deforestation in the Philippines over the past century is a thing of notoriety. The Philippines is one of the 17 mega diversity countries. Conservation International ranks the country fourth on the most threatened forest hotspot. Annually, from 2000 to 2005, the country lost 1.98 percent or 157,400 hectares of forests"one of the highest rates of deforestation in the world.

Deforestation is fundamentally caused by human demand. There are laws in place, but the lack of implementation makes it difficult to properly regulate logging, mining, and land conversion to areas of agriculture or settlement.

While it can be argued that social progress is worth the cost, the rate at which deforestation occurs is unsustainable.

Without inclusive programs, habitats, biodiversity, and the entire ecosystem remain in peril. Deforestation also leads to spikes of carbon dioxide content in the atmosphere, contributing to global warming.

It is clear that the NGP isn`t enough to reintroduce trees into deforested land. A comprehensive reforestation program is what the NGP hopes to achieve.

To improve and enhance the NGP`s performance, the authors of the study emphasize addressing the challenges that slow its progress.

Firstly, substantive data must be gathered and provided to fully come up with a substantive picture of the program`s progress.

The available data--exceeding planting sites and actual target per hectare by 14 percent by the end of 2013, and yet missing the yearly seedling target per year--are not enough to determine whether or not the NGP is on the way to achieve its objectives.

Secondly, monitoring and inspection of trees have to be enforced to monitor, ensure, and increase the rate of survival, which currently sits at 61 percent. The goal is 85 percent.

The Commission on Audit (COA) criticized the Department of Environment and Natural Resources report on the NGP for not having an inspection or monitoring system for the survival rate of the seedlings. The program focused its evaluation too much on quantity instead of quality, according to the COA report.

That same year, a study, also by Israel, claimed that participants on the ground viewed the program`s performance positively. It increased livelihood opportunities and improved environmental condition. But delays in availability of mobilization fund and limited personnel have held back NGP performance, making it only partially effective and efficient.

The framework for the impact assessment of the NGP contains four components - economic, social, environmental, and institutional. All of which will be evaluated as the program continues, hopefully to provide a more in-depth picture for studies to improve implementation mechanisms for the NGP and for future reforestation programs.

You may download a copy of the study by clicking this link:
http://dirp3.pids.gov.ph/webportal/CDN/PUBLICATIONS/pidspn1502.pdf

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The Philippines risks failing to fully enjoy the gains of its economic growth if the government does not adopt a strategic national urbanization blueprint and follow it through with strong implementation.

In a discussion paper originally presented to the Network of East Asian Think-Tanks in Singapore last September, Philippine Institute for Development Studies (PIDS) Senior Research Fellow Adoracion M. Navarro concludes that the status of the country`s urban planning and implementation is fragmented and lacks complementarity.

Navarro`s paper, Scrutinizing Urbanization Challenges in the Philippines through Infrastructure Lens, explores the experience of the Philippines in urban planning and how it stagnated. Navarro suggests that a coherent solution is not only found in promoting national coordination, but also in the opportunities and experiences of the countrys regional neighbors.

Past

There were attempts to organize settlement and introduce mass transport between precolonial and Spanish colonial times. But modern urban planning as we know it wasnt introduced until the American colonial government commissioned Daniel Burnham to improve Manila.

After the country achieved full independence in 1946, the National Urban Planning Commission was created, but local governments undermined its recommendations and regulatory powers. This refractory pattern would continue, as Navarro`s paper demonstrates, and exacerbated by a failure in successive national administrations to strongly implement urban development plans.

These failures led to the decentralization of responsibilities to specific agencies. Navarro notes that oftentimes, these agencies did more permitting and licensing, foregoing their power to craft strategic urban development plans with actual physical targets and that take into consideration circulation space, physical infrastructure, and connectivity or mobility in ever expanding urban areas.

But it`s not just the habitual inefficiency of national agencies.

Local government units (LGUs), though required by law to produce a Comprehensive Land Use Plan, are often trapped in their own problematic practices. LGU infrastructure projects do not outlive administrations. Navarro says that they focus too much on residential or commercial plans, or are often too inward, failing to complement and capitalize on the opportunities of working with neighboring local communities.

Present

The percentage of Filipinos living in urban areas is expected by the UN to rise from its current 45.3 percent to 56.3 percent by 2030 and 65.6 percent by 2050. The problem, cited by the World Bank in their East Asia`s Changing Urban Land Escape report, is that the rate of increase in urban land area does not match.

By 2010, 23 million Filipinos were living in urban areas, having grown at a 3.3-percent annual rate from the 17 million by the turn of the millennium. Meanwhile, the land area has only expanded annually at 2.2 percent.

For those in Metro Manila who personally deal with poor public infrastructure on a day-to-day basis, it is not surprising when Navarro points out that the country has to invest smartly in its physical capital to be able to cope with such economic demand. The Philippine ranks 98 out of 144 countries in overall quality of infrastructure, bested by nearly all of its ASEAN neighbors except Vietnam, Lao PDR, and Myanmar.

She says the problem used to be the availability of resources. But now, the country has more fiscal room to move. What stands in the way is a historical lack of political will, and she is not alone in this observation.

The World Bank 2014 report on the country`s economic picture stated that infrastructure has surpassed corruption as the country`s foremost development obstacle.

A World Economic Forum observer complimented the Aquino administration`s advocacy for good governance, but added that good governance isn`t only about rooting out the corruption in the system. Richard Javad Heydarian, an Asia-Pacific economic analyst, said, "It is also about timely and effective implementation of strategic projects".

But prior to implementation, Navarro claims there are issues to tackle when it comes to designing plans.

The National Urban and Housing Development Framework for 2009-2016, which was designed by the Urban Development Coordinating Council and PIDS, contains all the recommendations that address urban competitiveness, poverty reduction, ensuring housing affordability and delivery, among others.

However, Navarro says there are a lot of areas for improvement.

"The plan has no articulation of purpose-driven and deliberate facilitation of goods and people mobility through strategic transport. It also did not articulate how urban development and growth corridors can be shaped by strategic infrastructure investments."

The national level of urban planning still lacks the level of direction and cohesion that is necessary to sustain and optimize the economic growth already achieved by the country.

Unaddressed, the problem trickles down and is exacerbated by local government level`s preference for short-term plans, which lack cohesion and complementarity.


Future

Navarro points to ASEAN and China, Japan, and South Korea as examples for alternative solutions. She encourages the country`s policymakers and decisionmakers to study how the strategic infrastructure investments of neighboring countries drove the direction and success of their urban developments.

Recently, the International Enterprise Singapore published a report encouraging Singaporean companies to invest in Philippine infrastructure. The economic environment is enticing, the report claimed, but the exact same setbacks and concerns Navarro cited in her discussion paper were mirrored.

The opportunities are many--aviation, railway, water, energy--but if the political culture remains, and this is not just about corruption, but also about discontinuity, lack of efficient planning, and an absent political resolve, Singaporean companies will remain reluctant.

In summary, Navarro encourages the Philippine government, from the national to the local level, to participate and commit to strategic national physical planning. Leaders must produce a framework that streamlines the implementation of infrastructure development in local governments while bearing in mind an overarching vision that also capitalizes on available local resources. ###

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MOOCs can help make education affordable and accessible

Massive open online courses (MOOCs) can be a good way to make education inclusive.

Speaking at a recent forum organized by state think tank Philippine Institute for Development Studies (PIDS) in Makati City, former World Bank Lead Economist Marito Garcia noted that the escalating cost of tertiary education can deprive poor people from getting high-quality education, and later on, quality high-paying jobs.

MOOCs can reduce the cost of education since these courses are open, free of charge, affordable, and self-paced. You can also earn a certificate by taking MOOCs, Garcia explained.

However, since MOOCs are offered via the web, Garcia stressed the importance of having a reliable broadband internet connection and a computer or mobile device. Otherwise, MOOCs will only benefit the elites, he cautioned. Nevertheless, a MOOC student does not have to be online at all times since lessons may be saved and downloaded in a USB stick, Garcia pointed out.

For the poor to be able to benefit from MOOCs, Garcia recommended for the government to try implementing a conditional MOOCs transfer that would complement the existing conditional cash transfer program. For example, the government could partner with service local internet providers in providing low-cost broadband internet connection and with funding organizations like the World Bank and the Asian Development Bank in providing computers or tablets to beneficiaries under certain conditions.

MOOCs are a relatively new concept of providing education. By definition, MOOCs are offered online, free of charge, and may be accessed by massive numbers of people. Courses are offered by top-performing universities from around the world such as Stanford University and Harvard University in the United States and the University of Tokyo and the National University of Singapore in Asia. Topics range from physical and social sciences and finance to music, humanities, and information technology, among others.

Popular providers of MOOCs include Coursera (www.coursera.org), which was founded by Stanford University professors, eDx (www.edx.org), which was established by the Massachusetts Institute of Technology and Harvard University, Udacity (www.udacity.com), and Khan Academy (www.khanacademy.org). These providers are considered models for delivering quality educational content through MOOCs.

In the Philippines, the University of the Philippines Open University (UPOU) has started offering MOOCs via its Massive Open Distance e-Learning (MODeL) (http://www.upoumodel.com). Currently, there are six free online courses in the MODeL for those who are interested to join the Business Process Management (BPM formerly BPO) industry.

Unlike in traditional learning institutions, the users and learners of MOOCs are a combination of professionals and students. In fact, most of the users of MOOCs already have their college degrees either bachelors, masters, or doctorate.

Development in MOOCs changes every month in terms of availability of learning platform. Many groups are now experimenting with blended MOOCs, which use a combination of online and face-to-face learning approaches.

According to Garcia, learners are more motivated to complete blended MOOCs compared to full online courses, where dropout rate is seen at 60 percent. Employers in the US also believe that hybrid MOOCs are more effective in training future workers than their full online counterparts.

Garcia also highlighted the big disconnect between graduate skills and market needs. He cited a World Economic Report article that says 72 percent of universities claim their graduates are ready to get a job. However, only 42 percent of employers say otherwise. Usually, it takes six months for employers to train their graduates to make them ready for work.

Jobs are changing radically as experienced in the services sector. MOOCs could be a solution to this mismatch since universities and other education providers can develop customized MOOCs on sought-after jobs. Taking MOOC can therefore give someone an edge in the labor market, he contended. ###

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An increase in world prices of agricultural commodities has nuanced impacts: good for the nation`s economy but bad for the poor.

Professor German Calfat, an expert on the relationship and nature of trade and national development at the University of Antwerp, shared this conclusion during a seminar-forum organized by state think tank Philippine Institute for Development Studies.

His presentation was based on the findings of his research on Poverty impacts of changes in the price of agricultural commodities: recent evidence for Argentina (an ex-ante analysis).

The study found that, in the experience of Argentina, an increase in world prices of agricultural commodities have positive macro effects on the Argentinian economy. However, the poorest and most vulnerable sector of society were negatively affected. The changes in labor income positively affected only the middle class, in that labor income increased. But the positive changes werent enough to compensate the overall increase in commodity prices.

Professor Calfat recommended that, as a countermeasure, Argentina and any country facing a similar situation should enforce complementary actions to address the distributional impact, especially on the poor, of raising international commodity prices.

The models used in Professor Calfat`s study relied on data from individual households. They demonstrated the relationship between wages, the increase in international prices, and the respondents` highest educational level. The study, however, did not include non-labor income in its models.

Professor Calfat`s conclusions raise questions on the notion that trade liberalization is good for all. The study shows that is not always the case.

Professor Calfat encouraged more studies to be done on the matter. Government measures that anticipate price changes and the interacting nature of their impacts must be enforced to protect those most vulnerable to the negative effects.
Philippine researchers and policymakers can replicate the models used and undertake their own study to gauge the distributional impact of trade liberalization and its relationship to poverty.

One relevant area worth looking into is the rice sector and the effects of the World Trade Organizations (WTO) extension of the high duties on imported rice.

The WTO Council for Trade in Goods approved the Philippines` waiver request for a special treatment on rice until 2017. The country sought the extension to give farmers time to enhance their production capability and adjust to the increasing competing with other rice-producing countries in the region.