Infrastructure and Basic Services (Social and Economic Overhead)
Situationer Ways forward.
In 1998, only 76 percent of the population had access to water supply, 79.45 percent, to sewerage, and 8.07 to telephone service. There was also a backlog of 1.10 million housing units, 30,087 classrooms and 117,842 hospital beds. Only 76 percent of barangays were electrified (32,218/42,082).
The country’s road network is sufficient and able to connect the major islands of the country through ferry linkages but only 88 percent of bridges are permanent. Cargo handling at the Port of Manila container terminal approximates international standards of 25 to 30 boxes per hour. Air traffic growth rates are below that of Indonesia, Thailand and Malaysia, both for international and domestic travel. Rail ridership has gone down for both commuter and long-haul (on account of bus and car competition and poor service) but light rail transits are the more environment- and user friendly transport modes in Metro Manila today. Mail is faster because of e-mail and courier services and by end of 1999, telephone density per 100 population had reached closed to 10.
While Central Luzon, Metro Manila and the Calabarzon area account for 30 percent of the
country’s population and about 55 percent of the country’s gross domestic product (GDP), these areas have lost or are fast losing their agricultural land. Food will have to be sourced from regions like
Cagayan Valley and Mindanao. The transport and logistics system should thus be adequate and
efficient to help bring down the cost of food for workers, especially in the country’s industrial
heartland. This will make food plentiful at reasonable prices and make the country’s wages
internationally competitive. The Philippines’ transport system relies heavily on the road network which handles about 90 percent of the country’s passenger movement and about 50 percent of freight movement. While national roads are extensive and serve priority production areas and population centers, roads that lead to many tourism destinations and conflict-affected areas are inadequate. Of the approximately 202,000 kms.
of roads nationwide, 15 percent are classified as national roads, and therefore provided for and maintained by the DPWH. Provincial roads account for 13 percent, while city/municipal roads constitute 11 percent of the total. The balance of 60 percent of the road network is classified as barangay roads, which are mostly unpaved and built in the past by DPWH. Farm-to-market roads fall under this last category. Barangay roads have been devolved to local government units (LGUs). National roads in the Autonomous Region in Muslim Mindanao (ARMM) have also been transferred from DPWH to the ARMM. National arterial and secondary roads are currently 70 percent paved while 93 percent of national bridges are permanent. There are more than 1,400 ports in the country but many of them are extremely small. There are 408 private ports, mostly dedicated for the private enterprises’ exclusive use. There are 213 fishing ports which are handled by the Philippine Fisheries Development Authority. The Philippine Ports Authority (PPA) operates 114 public ports. The remaining ports are very small and serve mainly as feeder ports. Interisland routes provide regular roll-on roll-off (RORO) vessel operations, connecting the main islands of Luzon, Visayas and Mindanao. The recent implementation of the Strong Republic Nautical Highway (SRNH) connected the islands of Luzon to Mindoro, Panay, Guimaras, Negros and Mindanao. In past years, social and economic opportunities have been concentrated in Metro Manila, prompting migration to the metropolis. Overpopulation, however, has depleted the resources of the region, deteriorated the environment and increased traffic congestion. Despite the decreased desirability of the living environment, people have continued to flock into the National Capital Region (NCR). Studies conducted for the Philippines’ transport sector identified several challenges, which include the need for efficient transport institutions; increased private sector participation in the implementation of transport infrastructure and services; and improved monitoring and maintenance of existing infrastructure, especially of roads.
Metro Manila, the most urbanized region in the country, needs a PhP7 B transport infrastructure program to support current service levels and where water supply is enjoyed by less than 80 percent of the population, sewerage is available to only 20 percent, telephone service to less than 50 percent of households and close to 5 percent live in flood-prone areas. Improvements are also urgent in the areas of security, fire protection and emergency and disaster management. These conditions can easily worsen given the lack of financial and other resources and when continuing population increases that outpace agricultural productivity and industrial growth and overall economic development. 1. As infrastructure projects are expensive and beyond the capacity of any one level of government, LGUs and the private sector shall be tapped as partners in the development and implementation of infrastructure. Amendment of Build-Operate-Transfer (BOT) Law to promote wider private sector participation.
2. Through the Department of Trade and Industry (DTI), creation of a Philippine Infrastructure Corporation (PIC) as a subsidiary of the National Development Company so that the government could build, among others, airports, seaports, railways, dams, irrigation systems, and express ways critical to economic growth.
3. Sale of government bonds; PIC to manage
the fund by bidding out and awarding construction projects to the most qualified entities.
4. Prioritization of infrastructure projects that are strategic and critical to stimulate trade and investments, such as: (a) RORO ports and the highways connecting them; (b) roads and rail
systems that will decongest Metro Manila, the Clark-Subic Highway, and highways that are catalytic
to development in Luzon, Visayas and Mindanao; (c) roads and airports to tourism hubs; and
(d) affirmative action projects for Mindanao and other highly impoverished conflict-ridden areas.
4. Prioritized program of airport development to serve as gateways to regional centers and major tourism destinations, e.g. Clark (Diosdado Macapagal) International Airport upgrading.
5. Deregulation and progressive liberalization of civil aviation ; enhancement of commercial viability of airports.
6. Expansion of Strong Republic Nautical
Highway (SRNH) through the completion of the vital links of the Western, Eastern and Central Nautical Highways.
7. Establishment of a Maritime Equity Corporation of the Philippines to support the full implementation of the Road-RORO Terminal System through the acquisition of modern RORO vessels to be leased to qualified operators under a lease purchase agreement; simplification of the guidelines and procedures in the processing/issuance of required Clearance to Develop/Permit to Construct and Certificate of Registration/Permit to Operate red.
8. Deregulation of routes and rates to make the maritime transport more cost-efficient and discourage monopolies/cartels; comprehensive review of the present port tariff system shall be undertaken and consequent development and implementation of a cost-based tariff shall be pursued.
9. Modernization of vessels by giving incentives as embodied in the newly enacted RA 9295, An Act Promoting the Development of the Philippine Domestic Shipping, Shipbuilding and Ship Repair and Ship Breaking, Ordaining Reforms in Government Policies Towards Shipping in the Philippines, and for Other Purposes.
10. Implementation of Communications, Navigation and Surveillance/Air Traffic Management with International Civil Aviation Organization standards. 11. Implementation of the Road Safety Action Plan formulated by the interagency Road Safety Committee
12. Nautical Highways to Link the Entire Country
13. Decongestion of Metro Manila
• Establish new centers for government,
business and housing in Luzon, in the Visayas,and in Mindanao
• Develop Clark-Subic
• Develop the Southern Luzon Corridor
• Improve transport within Metro Manila
• Address critical infrastructure bottlenecks
along national roads and bridges to speed traffic out of Metro Manila.
14. Tourism Infrastructure: Access to Major Tourism Destinations (Roads and Airports)
15. Affirmative Action for Peace and Development in Mindanao and Other Highly
Impoverished Areas
16. Bureaucratic and Legislative Reforms
• conversion of the Air Transportation Office into a corporate body
• restructure port institution to improve port service; regulatory functions to be transferred to independent regulators; amendment of the PPA Charter as port regulator and operator.
• establishment of Strategic Rail Authority/ Office; a Track Authority will also be established out of the existing PNR and LRTA; private concessionaires would provide all rail services.
• review of the role of the MMDA vis-à-vis transport agencies
17. Reforms to Resolve Financing Issues
• Review of BOT Law and its IRR
amended and guidelines
• Creation of an autonomous Highway
Authority out of the DPWH
• Expansion of the Road Fund
Reference
1. AIM Policy Center, ed. Luningning Achacoso-Sevilla , “The Ties that Bind: Population and Development in the Philippines 2nd ed.”2004
2. NEDA, Medium-Term Philippine Development Plan 2004-1010
Monday, July 15, 2013
NOTES ON The Medium-Term Philippine Development Plan for the Period 2004-2010: Trade and Commerce
Trade and Commerce
Situationer Ways forward.
Investment and trade, among others, are essential to job creation. Modest investment spending is a key reason why unemployment remains high at 11.4 percent. Investment, as a portion of gross domestic product (GDP) was 19.5 percent in 2001 and expec-ed at 20.1 percent in 2004. Foreign investments have been slow in coing to the country. For example, the in-ease in foreign direct investment in-lows from US$1.43 billion in 2002 to US$1.49 billion in 2003 was insignificant and did not reduce unemployment. This situation is a result of several factors, including the pull of investments towards China, weakening investor confidence due to concerns about fiscal sustainability, and structural problems such as peace and order and a weak infrastructure and logistics system. The latter, for example, has hampered the distribution of products. Based on the World Competitiveness Report, the Philippines’ ranking slid from 48 in 2001 to 56 in 2002 among the countries included in the Global Competitiveness Ranking (GCR). The high cost of doing business has hampered the competitive-ness of the Philippines. Power costs are higher compared to China, Taipei, Korea, and Indonesia due to high distribution charges. (Philippine power rates, however, are lower than Singapore, Malaysia, Thailand, and India). At the same time, telephone and mobile phone charges were the highest among ASEAN member countries.2 Also, the limited government funding for infrastructure is adversely affecting the country’s competitiveness. The Philippine infrastructure and capital outlay perfor-mance vis-à-vis other Asian countries is the lowest for the period 1998-2002, averaging a mere 3.3 percent of GDP. The poor quality of infrastructure is perennially cited as the main problem in the Philippines’ global competitiveness. Philippine ex-ports also face stiff global competition as countries continually strive to improve their productivity and competitiveness. Exports (in dollar terms) grew by 2.4 percent in 2003 and 8.5 percent as of August 2004 while imports grew at 6.1 percent in 2003 and 6.9 percent as of July 2004. While Philippine merchandise exports (in dollars) grew at an average of 19.2 percent in 1992-1997, export growth decelerated to 14.8 percent in 1998-2000 and further to –1.1 percent in 2001-2003. Philippine merchandise exports were affected by the melt-down in the IT sector in 2000. Exports have grown modestly in 2003 as global demand firmed up. The ADB’s forecast of 8.5 percent growth of Philippine merchandise exports in 2004 is at par with Malaysia and five percentage points higher than Indonesia’s, while Thailand and Singapore will post higher growth rates. A. Targets Investment rate target - from 19 percent to 28 percent of GDP as a result of increased investment promotion activities. Increased spending on public infrastructure by PhP100 billion shall be pursued through greater private sector investments. Exports of goods and services are targeted to increase from US$39 billion to US$50 billion in two years or a minimum growth of 10 percent every year as the government focuses on priority areas such as ICT, automotive, electronics, mining, health care, and tourism. These are where the country has comparative advantage because of its human resources and geographic location and the revitalization of the power, airlines, and shipping industries. The government will strengthen its program to support three million entrepreneurs and small and medium enterprises (SMEs) by providing credit, technology, and marketing assistance. Loans to self employed small business owners will be tripled.
B. 5 Strategic Measures
1. Make food plentiful at reasonable prices to make our labor cost globally competitive;
2. Reduce the cost of electricity to make the cost of running our machines and our manufacturing processes regionally competitive;
3. Modernize the physical infrastructure and logistics system at least cost to ensure efficient movement of goods and people;
4. Mobilize and disseminate knowledge to upgrade our technologies and increase our people’s productivity; and
5. Reduce red tape in all government agencies to reduce transaction costs
C. Focus of Job Creation Thrusts:
1. High skill industries and services, namely, software, business processing outsourcing or BPO, contact centers, fashion garments, jewelry, medical services, automotive, electronics, health care;
2. Medium skill industries and services, namely, agribusiness, tourism, hotels and restaurants, entertainment; and
3. Simple skill industries and services such as construction, SMEs, micro-enterprise.
D. Policy Objectives
1. Promote investments in agribusiness.
2. Promote entrepreneurship and SME development.
3. Promote energy independence and savings.
4. Promote investments in infrastructure.
5. Promote investments in exports.
E. Action Plan
1. Agribusiness
2. Entrepreneurship Micro, small and medium enterprises (MSMEs) play a significant role in our country’s development. In 2001, MSMEs accounted for 99.6 percent of the country’s total business enterprises (811,589) and enerated a 69.1 percent share of total employment. While SMEs provide more jobs compared to large enterprises, they however, contribute only 32 percent of value added.
a. Provide credit, technology and marketing support for three million MSMEs; and
b. Empower existing SMEs to generate additional employment through increased lending and promotion of Big Brother-Small Brother program.
Trade and Investment On a yearly basis, target loans shall be PhP24 billion in 2004; PhP28.80 billion in 2005; PhP34.56 billion in 2006; PhP41.47 in 2007; PhP49.77 in 2008; PhP59.72 billion in 2009; and PhP71.66 billion in 2010. The participation of private financial institutions to promote and comply with the mandatory lending quota to SMEs shall be further encouraged. The legal impediments to the establishment of an SME Credit Bureau shall be removed. The establishment of an SME credit rating/scoring system shall be fast-tracked. The implementation and operation of the SME Capital Market shall be strengthened and venture capital financing shall be promoted.
The One Town-One Product (OTOP) Program shall be implemented (the development and promotion of a product or service where a town has competitive advantage. The OTOP interventions include: provision of a comprehensive package of assistance to MSMEs and OFWs through a convergence of services by LGUs, NGAs and private sector in product/design development, skills and entrepreneurial training, marketing assistance and introduction of appropriate technologies. OTOP also promotes the Big Enterprise-Small Enterprise Program as a source of technology and market, ensures sustainability of the MSME through the industry clustering approach by capitalizing on complementation among towns within a province or a region. Technology based entrepreneurship shall be encouraged and supported.
Tap returning OFWs as sources of capital; OFWs shall be tapped to invest in micro and small income-generating projects and activities. The remittance profiling survey project for efficient remittance data collection shall be pushed. The Program for OFWs (LDPO) shall be immediately implemented. Partnerships/linkages with other formal remittance channels (e.g., foreign banks and money couriers) shall be established. The government with support from the private sector will conduct a massive information campaign, through trimedia, Presidential foreign trips, consultations, dialogues and symposia to encourage OFWs/migrant to invest in SMEs, use formal channels of remittance and save in banks particularly in GFIs. The SME Development Plan will include OFW utilization to establish a clear and well-defined working relationship between Department of Trade and Industry (DTI) as support provider for OFW/SMEs and OWWA as caretaker of OFWs. The use of formal channels for remittances will be promoted through incentive programs such as higher than prevailing interest rate in the market and other similar services offered by the informal network. The possible expansion of the formal banking branch network shall be studied to effectively link overseas workers with the remittance receiving families. Issuance of OFW bonds as savings and investments shall be explored. The SME Guidance Program shall continue its lending operations and venture capital funds and implement and expand the web-based marketing of SME receivables.
Continue product development as part of technology support
Provide an environment conducive to MSME development. The documentary requirements and processing time for registering BMBEs will be simplified and reduced. The Philippine Business Registry System will serve as platform for one-stop centers to facilitate business registration and harmonize government frontline services delivery. An on-line Investment Registration and Monitoring System and Business Action Centers — where a comprehensive package of assistance to businessmen/ entrepreneurs will be housed under one roof, shall be set up nationwide. To spur the development of MSMEs, access to information on business opportunities, available raw materials, available sources of funds and latest technologies including product design shall be facilitated. LGUs shall be encouraged and supported for SME Centers. Entrepreneurial culture will be developed and promoted by incorporating entrepreneurship in the educational curriculum. Labor productivity shall be enhanced and industrial peace promoted to ensure amiable relations between firms and workers. Local government units (LGUs) shall implement city development strategies such as city investment promotion, problem-solving activities as well as the Bayanihan Savings Replication Project and the One Cluster-One Vision Project.
Investments To sustain and generate investments, aggressive promotion campaigns shall be pursued especially in the identified priority areas that will support the country’s job creation thrusts. Focused investment promotion in priority markets (e.g. US, Europe, Japan, Taiwan and Singapore) for the retention, expansion and diversification of existing investments shall be undertaken in cooperation with major foreign companies operating in the Philippines and other partners (e.g. foreign embassies, business chambers and associations, international organizations, etc.). a. Draw up a more focused incentives package with focus on priority areas: Information Technology and IT-enabled Services Sector, Automotive, Electronics, Mining Healthcare and Wellness, Tourism, Shipbuilding, Fashion garments, Jewelry, and Agribusiness.
b. Simplify Investment Registration Procedures
Ongoing efforts to further simplify procedures and requirements in registering investments will be continued. These include reducing the documentary requirements, processing time, steps and fees as well as the issuance of various certifications. There shall be a nationwide implementation of online registration and monitoring of investments.
Exports To attain the US$50 billion export target by 2006, the industry shall move toward expanding the export base by tapping new markets, developing more competitive export products and services and maximizing opportunities through bilateral and multilateral agreements. Toward this direction, the following activities shall be undertaken:
a. Maximize exports and investment opportunities offered by trade agreements; The Philippines will continue to participate in and conclude various international trading arrangements, among others, the Japan-Philippines Economic Partnership Agreement (JPEPA), the ASEAN Priority Integration Program (PIP) and the ASEAN-China Free Trade Area under the Framework Agreement on Compre-hensive Economic Cooperation between ASEAN and the PRoC. Discussions on economic cooperation initiatives through the Asia-Europe Meeting (ASEM) will be continued while pursuing aggressively the European market. Possible trade agreements with other major trading partners including the US, Taiwan, South Korea, India, Canada, and Australia-New Zealand will be initiated. Studies to identify advantages and disadvantages of these agreements shall be conducted in consultation with various stakeholders. Development programs and activities in Mindanao and Palawan aimed at taking advantage of trade and other opportunities in the Brunei Darussalam-Indonesia-Malaysia-Philippines East ASEAN Growth Area (BIMP-EAGA) will be pursued. The external trade and marketing activities from Mindanao and Palawan to focus areas in BIMP-EAGA and its ASEAN Dialogue partners such as China, Japan, Korea, India and Australia shall be promoted and intensified. SME development activities in Mindanao and Palawan shall be coordinated and integrated to enhance trade in BIMPEAGA. Technical assistance will be provided to facilitate and enhance Philippine participation in BIMP-EAGA activities. The Mindanao and BIMP-EAGA database will be updated and maintained.
b. Pursue a market-driven strategy that will link our supply capacity closer to the high-impact markets. Export promotion will focus on the following priority markets: US, China and Hong Kong, Japan, ASEAN, European Union, Taiwan, Australia-New Zealand, South Korea, India, Canada, United Arab
Emirates and Kingdom of Saudi Arabia. The Philippine Export Development Plan (PEDP) for 2005-2007 will elaborate on this. A market-driven export promotion campaign will be undertaken for the following Philippine export products/services in addition to the priority areas where investments will be promoted.
(i) Marine Products:
(ii) Construction Materials/Services:
(iii) Gifts, Toys, Housewares and Holiday Decors
(iv) Home Furnishings
c. Simplify export and import procedures and facilitation The import and export documentation and clearance procedures will be automated to improve efficiency, transparency and accountability. Unnecessary administrative and legal barriers that hamper semiconductor and electronics exports will be dismantled. An electronic business facilitation platform will be developed to facilitate business matching and eventually, export transactions. The One Stop Export Documentation Center will be strengthened. The Automated Export Documentation System shall continue to be implemented. The manufacturing warehouse liquidation system shall be implemented.
d. Maintain existing and develop more competitive export products and services and diversify markets
The US$150 billion Halal market will be tapped using the United Arab Emirates and Kingdom of
Saudi Arabia as gateways. Philippine food products shall be exported to areas with significant OFW
presence. Product standards will be aligned with international standards. The government shall maintain its membership with the Pacific Accreditation Cooperation and International Accreditation Scheme for Quality Management System (QMS) to ensure international recognition of Philippine QMS certificates. Likewise, it shall pursue participation and negotiation of bilateral/multilateral recognition arrangements on conformity assessment activities (testing, certification, etc. especially on products that are regulated by foreign countries). The country shall intensify commercial intelligence to cover market information, competitor intelligence and potential and existing barriers to Philippine exports. In areas where there are no trade
posts but are potential markets, the diplomatic mission shall conduct trade promotion and commercial intelligence.
e. Legislative Agenda To further promote entrepreneurship, the amendment to the Magna Carta for SMEs (RA 6977 as amended by RA 8289) shall be pushed. To simplify and streamline import and export procedures, the Export Development Act shall be amended. PD 930 which simplifies export procedures by realigning functions of certain government offices/ agencies involved in processing export documents shall be repealed. Likewise, EO 1016 withdrew the inspection, commodity and export clearance requirements on Philippine exports shall be repealed. The amendment of EO 226 or the Omnibus Investment Code of 1987 shall be pursued to rationalize the investment incentive system.
Situationer Ways forward.
Investment and trade, among others, are essential to job creation. Modest investment spending is a key reason why unemployment remains high at 11.4 percent. Investment, as a portion of gross domestic product (GDP) was 19.5 percent in 2001 and expec-ed at 20.1 percent in 2004. Foreign investments have been slow in coing to the country. For example, the in-ease in foreign direct investment in-lows from US$1.43 billion in 2002 to US$1.49 billion in 2003 was insignificant and did not reduce unemployment. This situation is a result of several factors, including the pull of investments towards China, weakening investor confidence due to concerns about fiscal sustainability, and structural problems such as peace and order and a weak infrastructure and logistics system. The latter, for example, has hampered the distribution of products. Based on the World Competitiveness Report, the Philippines’ ranking slid from 48 in 2001 to 56 in 2002 among the countries included in the Global Competitiveness Ranking (GCR). The high cost of doing business has hampered the competitive-ness of the Philippines. Power costs are higher compared to China, Taipei, Korea, and Indonesia due to high distribution charges. (Philippine power rates, however, are lower than Singapore, Malaysia, Thailand, and India). At the same time, telephone and mobile phone charges were the highest among ASEAN member countries.2 Also, the limited government funding for infrastructure is adversely affecting the country’s competitiveness. The Philippine infrastructure and capital outlay perfor-mance vis-à-vis other Asian countries is the lowest for the period 1998-2002, averaging a mere 3.3 percent of GDP. The poor quality of infrastructure is perennially cited as the main problem in the Philippines’ global competitiveness. Philippine ex-ports also face stiff global competition as countries continually strive to improve their productivity and competitiveness. Exports (in dollar terms) grew by 2.4 percent in 2003 and 8.5 percent as of August 2004 while imports grew at 6.1 percent in 2003 and 6.9 percent as of July 2004. While Philippine merchandise exports (in dollars) grew at an average of 19.2 percent in 1992-1997, export growth decelerated to 14.8 percent in 1998-2000 and further to –1.1 percent in 2001-2003. Philippine merchandise exports were affected by the melt-down in the IT sector in 2000. Exports have grown modestly in 2003 as global demand firmed up. The ADB’s forecast of 8.5 percent growth of Philippine merchandise exports in 2004 is at par with Malaysia and five percentage points higher than Indonesia’s, while Thailand and Singapore will post higher growth rates. A. Targets Investment rate target - from 19 percent to 28 percent of GDP as a result of increased investment promotion activities. Increased spending on public infrastructure by PhP100 billion shall be pursued through greater private sector investments. Exports of goods and services are targeted to increase from US$39 billion to US$50 billion in two years or a minimum growth of 10 percent every year as the government focuses on priority areas such as ICT, automotive, electronics, mining, health care, and tourism. These are where the country has comparative advantage because of its human resources and geographic location and the revitalization of the power, airlines, and shipping industries. The government will strengthen its program to support three million entrepreneurs and small and medium enterprises (SMEs) by providing credit, technology, and marketing assistance. Loans to self employed small business owners will be tripled.
B. 5 Strategic Measures
1. Make food plentiful at reasonable prices to make our labor cost globally competitive;
2. Reduce the cost of electricity to make the cost of running our machines and our manufacturing processes regionally competitive;
3. Modernize the physical infrastructure and logistics system at least cost to ensure efficient movement of goods and people;
4. Mobilize and disseminate knowledge to upgrade our technologies and increase our people’s productivity; and
5. Reduce red tape in all government agencies to reduce transaction costs
C. Focus of Job Creation Thrusts:
1. High skill industries and services, namely, software, business processing outsourcing or BPO, contact centers, fashion garments, jewelry, medical services, automotive, electronics, health care;
2. Medium skill industries and services, namely, agribusiness, tourism, hotels and restaurants, entertainment; and
3. Simple skill industries and services such as construction, SMEs, micro-enterprise.
D. Policy Objectives
1. Promote investments in agribusiness.
2. Promote entrepreneurship and SME development.
3. Promote energy independence and savings.
4. Promote investments in infrastructure.
5. Promote investments in exports.
E. Action Plan
1. Agribusiness
2. Entrepreneurship Micro, small and medium enterprises (MSMEs) play a significant role in our country’s development. In 2001, MSMEs accounted for 99.6 percent of the country’s total business enterprises (811,589) and enerated a 69.1 percent share of total employment. While SMEs provide more jobs compared to large enterprises, they however, contribute only 32 percent of value added.
a. Provide credit, technology and marketing support for three million MSMEs; and
b. Empower existing SMEs to generate additional employment through increased lending and promotion of Big Brother-Small Brother program.
Trade and Investment On a yearly basis, target loans shall be PhP24 billion in 2004; PhP28.80 billion in 2005; PhP34.56 billion in 2006; PhP41.47 in 2007; PhP49.77 in 2008; PhP59.72 billion in 2009; and PhP71.66 billion in 2010. The participation of private financial institutions to promote and comply with the mandatory lending quota to SMEs shall be further encouraged. The legal impediments to the establishment of an SME Credit Bureau shall be removed. The establishment of an SME credit rating/scoring system shall be fast-tracked. The implementation and operation of the SME Capital Market shall be strengthened and venture capital financing shall be promoted.
The One Town-One Product (OTOP) Program shall be implemented (the development and promotion of a product or service where a town has competitive advantage. The OTOP interventions include: provision of a comprehensive package of assistance to MSMEs and OFWs through a convergence of services by LGUs, NGAs and private sector in product/design development, skills and entrepreneurial training, marketing assistance and introduction of appropriate technologies. OTOP also promotes the Big Enterprise-Small Enterprise Program as a source of technology and market, ensures sustainability of the MSME through the industry clustering approach by capitalizing on complementation among towns within a province or a region. Technology based entrepreneurship shall be encouraged and supported.
Tap returning OFWs as sources of capital; OFWs shall be tapped to invest in micro and small income-generating projects and activities. The remittance profiling survey project for efficient remittance data collection shall be pushed. The Program for OFWs (LDPO) shall be immediately implemented. Partnerships/linkages with other formal remittance channels (e.g., foreign banks and money couriers) shall be established. The government with support from the private sector will conduct a massive information campaign, through trimedia, Presidential foreign trips, consultations, dialogues and symposia to encourage OFWs/migrant to invest in SMEs, use formal channels of remittance and save in banks particularly in GFIs. The SME Development Plan will include OFW utilization to establish a clear and well-defined working relationship between Department of Trade and Industry (DTI) as support provider for OFW/SMEs and OWWA as caretaker of OFWs. The use of formal channels for remittances will be promoted through incentive programs such as higher than prevailing interest rate in the market and other similar services offered by the informal network. The possible expansion of the formal banking branch network shall be studied to effectively link overseas workers with the remittance receiving families. Issuance of OFW bonds as savings and investments shall be explored. The SME Guidance Program shall continue its lending operations and venture capital funds and implement and expand the web-based marketing of SME receivables.
Continue product development as part of technology support
Provide an environment conducive to MSME development. The documentary requirements and processing time for registering BMBEs will be simplified and reduced. The Philippine Business Registry System will serve as platform for one-stop centers to facilitate business registration and harmonize government frontline services delivery. An on-line Investment Registration and Monitoring System and Business Action Centers — where a comprehensive package of assistance to businessmen/ entrepreneurs will be housed under one roof, shall be set up nationwide. To spur the development of MSMEs, access to information on business opportunities, available raw materials, available sources of funds and latest technologies including product design shall be facilitated. LGUs shall be encouraged and supported for SME Centers. Entrepreneurial culture will be developed and promoted by incorporating entrepreneurship in the educational curriculum. Labor productivity shall be enhanced and industrial peace promoted to ensure amiable relations between firms and workers. Local government units (LGUs) shall implement city development strategies such as city investment promotion, problem-solving activities as well as the Bayanihan Savings Replication Project and the One Cluster-One Vision Project.
Investments To sustain and generate investments, aggressive promotion campaigns shall be pursued especially in the identified priority areas that will support the country’s job creation thrusts. Focused investment promotion in priority markets (e.g. US, Europe, Japan, Taiwan and Singapore) for the retention, expansion and diversification of existing investments shall be undertaken in cooperation with major foreign companies operating in the Philippines and other partners (e.g. foreign embassies, business chambers and associations, international organizations, etc.). a. Draw up a more focused incentives package with focus on priority areas: Information Technology and IT-enabled Services Sector, Automotive, Electronics, Mining Healthcare and Wellness, Tourism, Shipbuilding, Fashion garments, Jewelry, and Agribusiness.
b. Simplify Investment Registration Procedures
Ongoing efforts to further simplify procedures and requirements in registering investments will be continued. These include reducing the documentary requirements, processing time, steps and fees as well as the issuance of various certifications. There shall be a nationwide implementation of online registration and monitoring of investments.
Exports To attain the US$50 billion export target by 2006, the industry shall move toward expanding the export base by tapping new markets, developing more competitive export products and services and maximizing opportunities through bilateral and multilateral agreements. Toward this direction, the following activities shall be undertaken:
a. Maximize exports and investment opportunities offered by trade agreements; The Philippines will continue to participate in and conclude various international trading arrangements, among others, the Japan-Philippines Economic Partnership Agreement (JPEPA), the ASEAN Priority Integration Program (PIP) and the ASEAN-China Free Trade Area under the Framework Agreement on Compre-hensive Economic Cooperation between ASEAN and the PRoC. Discussions on economic cooperation initiatives through the Asia-Europe Meeting (ASEM) will be continued while pursuing aggressively the European market. Possible trade agreements with other major trading partners including the US, Taiwan, South Korea, India, Canada, and Australia-New Zealand will be initiated. Studies to identify advantages and disadvantages of these agreements shall be conducted in consultation with various stakeholders. Development programs and activities in Mindanao and Palawan aimed at taking advantage of trade and other opportunities in the Brunei Darussalam-Indonesia-Malaysia-Philippines East ASEAN Growth Area (BIMP-EAGA) will be pursued. The external trade and marketing activities from Mindanao and Palawan to focus areas in BIMP-EAGA and its ASEAN Dialogue partners such as China, Japan, Korea, India and Australia shall be promoted and intensified. SME development activities in Mindanao and Palawan shall be coordinated and integrated to enhance trade in BIMPEAGA. Technical assistance will be provided to facilitate and enhance Philippine participation in BIMP-EAGA activities. The Mindanao and BIMP-EAGA database will be updated and maintained.
b. Pursue a market-driven strategy that will link our supply capacity closer to the high-impact markets. Export promotion will focus on the following priority markets: US, China and Hong Kong, Japan, ASEAN, European Union, Taiwan, Australia-New Zealand, South Korea, India, Canada, United Arab
Emirates and Kingdom of Saudi Arabia. The Philippine Export Development Plan (PEDP) for 2005-2007 will elaborate on this. A market-driven export promotion campaign will be undertaken for the following Philippine export products/services in addition to the priority areas where investments will be promoted.
(i) Marine Products:
(ii) Construction Materials/Services:
(iii) Gifts, Toys, Housewares and Holiday Decors
(iv) Home Furnishings
c. Simplify export and import procedures and facilitation The import and export documentation and clearance procedures will be automated to improve efficiency, transparency and accountability. Unnecessary administrative and legal barriers that hamper semiconductor and electronics exports will be dismantled. An electronic business facilitation platform will be developed to facilitate business matching and eventually, export transactions. The One Stop Export Documentation Center will be strengthened. The Automated Export Documentation System shall continue to be implemented. The manufacturing warehouse liquidation system shall be implemented.
d. Maintain existing and develop more competitive export products and services and diversify markets
The US$150 billion Halal market will be tapped using the United Arab Emirates and Kingdom of
Saudi Arabia as gateways. Philippine food products shall be exported to areas with significant OFW
presence. Product standards will be aligned with international standards. The government shall maintain its membership with the Pacific Accreditation Cooperation and International Accreditation Scheme for Quality Management System (QMS) to ensure international recognition of Philippine QMS certificates. Likewise, it shall pursue participation and negotiation of bilateral/multilateral recognition arrangements on conformity assessment activities (testing, certification, etc. especially on products that are regulated by foreign countries). The country shall intensify commercial intelligence to cover market information, competitor intelligence and potential and existing barriers to Philippine exports. In areas where there are no trade
posts but are potential markets, the diplomatic mission shall conduct trade promotion and commercial intelligence.
e. Legislative Agenda To further promote entrepreneurship, the amendment to the Magna Carta for SMEs (RA 6977 as amended by RA 8289) shall be pushed. To simplify and streamline import and export procedures, the Export Development Act shall be amended. PD 930 which simplifies export procedures by realigning functions of certain government offices/ agencies involved in processing export documents shall be repealed. Likewise, EO 1016 withdrew the inspection, commodity and export clearance requirements on Philippine exports shall be repealed. The amendment of EO 226 or the Omnibus Investment Code of 1987 shall be pursued to rationalize the investment incentive system.
NOTES ON The Medium-Term Philippine Development Plan for the period 2004-2010: Industrial Growth and Problems
Industrial Growth and Problems
Situationer Ways forward.
Higher levels of production and productivity are required to address existing supply gaps, to meet the increasing demand brought about by increasing population (and per capita consum-ption) and to respond to increasing competition from foreign producers.
From 1987 to 1997 the industry sector accoun-ted for 35% of the country’s GDP. On a per region basis, about 35% emanated from NCR, that dominates other regions in terms of invest-0ments in socio-economic concerns and infrastructure and host to national and international activities of government and the private sector.
By the 70s concern for the environment as a result of such concentration in Metro Manila led to the industrial dispersal policy and the more recent “national dispersion through regional concentration”.
As of May 1998, there were 13 Regional Agro-Industrial centers in the country spread from Cagayan down to Maguindanao. In addition, 9 Industrial Growth Corridors were also established from the Cordilleras down to Sultan Kudarat, including CALABARZON, RIZLAQUE, SOSKSARGEN, and SUDOPARIM.
On the provincial level, 20 provinces are prioritized for agro-industrial center development from Abra down to Surigao.
The Special Economic Zone and Bases Conversion and Development Acts provided for the establishment of 100 ecozones (including 37 Export Processing Zones) and the transformation of 0.12 million has. of former U.S. territory into eco zones or industrial development uses.
In addition, there are 5 Eco Zones managed by the BCDA (SBSEFZ, CSEZ, JHSEZ, PPSEZ and BTP). There are also over 400 firms within the country’s IT parks. In addition to the recommendations in the agricultural sector, inasmuch as agriculture is also a production sector, the government is guided by the following macro policies:
• review of the performance of existing industrial areas towards a decision on whether they should be maintained and supported, or used for alternative activities;
• exploration of alternative uses for non-performing industrial areas;
• promotion of the growth of IT industries as an economic activity, without prematurely constraining their locational preferences, and providing infra support and other appropriate Special Economic Zones incentives;
• promotion of ecotourism concept among existing tourist/recreational facilities and new projects as an alternative to other possibly destructive industrial projects;
• promotion of Industrial Peace; and
• promotion of clean production techniques.
Special economic zones or ecozones are selected areas with highly developed centers or which have potentials to be developed into agro-industrial, industrial, tourist/recreational, commercial, banking, investment and financial centers. May contain industrial estates, export processing zones, free trade zones and tourist/ recreational centers.
References:
1. NEDA, National Framework for Physical Planning 2001-2030, 2002
Situationer Ways forward.
Higher levels of production and productivity are required to address existing supply gaps, to meet the increasing demand brought about by increasing population (and per capita consum-ption) and to respond to increasing competition from foreign producers.
From 1987 to 1997 the industry sector accoun-ted for 35% of the country’s GDP. On a per region basis, about 35% emanated from NCR, that dominates other regions in terms of invest-0ments in socio-economic concerns and infrastructure and host to national and international activities of government and the private sector.
By the 70s concern for the environment as a result of such concentration in Metro Manila led to the industrial dispersal policy and the more recent “national dispersion through regional concentration”.
As of May 1998, there were 13 Regional Agro-Industrial centers in the country spread from Cagayan down to Maguindanao. In addition, 9 Industrial Growth Corridors were also established from the Cordilleras down to Sultan Kudarat, including CALABARZON, RIZLAQUE, SOSKSARGEN, and SUDOPARIM.
On the provincial level, 20 provinces are prioritized for agro-industrial center development from Abra down to Surigao.
The Special Economic Zone and Bases Conversion and Development Acts provided for the establishment of 100 ecozones (including 37 Export Processing Zones) and the transformation of 0.12 million has. of former U.S. territory into eco zones or industrial development uses.
In addition, there are 5 Eco Zones managed by the BCDA (SBSEFZ, CSEZ, JHSEZ, PPSEZ and BTP). There are also over 400 firms within the country’s IT parks. In addition to the recommendations in the agricultural sector, inasmuch as agriculture is also a production sector, the government is guided by the following macro policies:
• review of the performance of existing industrial areas towards a decision on whether they should be maintained and supported, or used for alternative activities;
• exploration of alternative uses for non-performing industrial areas;
• promotion of the growth of IT industries as an economic activity, without prematurely constraining their locational preferences, and providing infra support and other appropriate Special Economic Zones incentives;
• promotion of ecotourism concept among existing tourist/recreational facilities and new projects as an alternative to other possibly destructive industrial projects;
• promotion of Industrial Peace; and
• promotion of clean production techniques.
Special economic zones or ecozones are selected areas with highly developed centers or which have potentials to be developed into agro-industrial, industrial, tourist/recreational, commercial, banking, investment and financial centers. May contain industrial estates, export processing zones, free trade zones and tourist/ recreational centers.
References:
1. NEDA, National Framework for Physical Planning 2001-2030, 2002
NOTES ON The Medium-Term Philippine Development Plan for the period 2004-2010:Agricultural Issues: Food security and rice and corn production
Agricultural Issues: Food security and rice and corn production
Situationer Ways forward.
“Food security” as defined in R.A. 8435 – the Agriculture and Fisheries Modernization Act: “refers to the policy objective, plan and strategy of meeting the food requirements of the present and future generations of Filipinos in substantial quantity, ensuring the availability and affordability of food to all, either through local production or importation, oir both, based on the country’s existing and potential resource endowments and related production advantages, and consistent with the overall national development objectives an policies. However, sufficiency in rice and white corn should be pursued.”
Food security is especially relevant to rice and corn production because of the large proportion of Filipinos that are directly involved in production and consumption.
• The country has never been self-sufficient in rice and our history of importing rice goes back to the 1870s on account of the government” poor planning on food security.
• Over the 1990s (up to a few months ago), world rice prices were low and stable yet domestic consumer prices have been two to three times those of Vietnam and Thailand and also more volatile.
• Productivity-land deficit situations for corn, livestock and poultry, and fishery production; limited land, available land is inefficient.
• Conversion of agricultural land to non-agri uses
• Unsustainable, illegal farming methods and technologies
• Pollution of agricultural resources
• Natural calamities 1. Implement the Strategic Agricultural and Fisheries Development Zones or SAFDZs that have bee identified and mapped throughout the country. SAFDZs are key agricultural production areas with comparative advantage – location, soil characteristics, irrigation and support infra present and other physical features;
2. Identify existing agricultural lands, assess their production and productivity levels, and to the extent practicable and possible, protect these from conversion;
3. Identify potential agricultural expansion areas, with due consideration for competing land uses, protect these from conversion;
4. Identify marginal lands for agricultural production and provide these with appropriate technologies for basic subsistence requirements;
5. Provide infrastructure support that would link production areas to other land uses, and implement measures to increase productivity in SAFDZs, and in existing and expansion production areas;
6. Identify and delineate existing and potential agricultural, forest, and mining production areas; assess supply and demand requirements, implement measures to improve efficiency, and provide support infrastructure and other facilities; and
7. Promote water security through rehabilitation of denuded watersheds, focused irrigation programs, R & D, and the development and improvement of a water database.
National sufficiency in rice is often defended on the basis of national security – that is, distrust of the capacity and political will of the international market and community to supply food – particularly during times of international crises.
References:
1. NEDA, National Framework for Physical Planning 2001-2030, 2002
2. AIM Policy Center, ed. Luningning Achacoso-Sevilla , “The Ties that Bind: Population and Development in the Philippines 2nd ed.”2004
3. E. Boquiron, “Rice Shortage in the Philippines, unpublished work.
Situationer Ways forward.
“Food security” as defined in R.A. 8435 – the Agriculture and Fisheries Modernization Act: “refers to the policy objective, plan and strategy of meeting the food requirements of the present and future generations of Filipinos in substantial quantity, ensuring the availability and affordability of food to all, either through local production or importation, oir both, based on the country’s existing and potential resource endowments and related production advantages, and consistent with the overall national development objectives an policies. However, sufficiency in rice and white corn should be pursued.”
Food security is especially relevant to rice and corn production because of the large proportion of Filipinos that are directly involved in production and consumption.
• The country has never been self-sufficient in rice and our history of importing rice goes back to the 1870s on account of the government” poor planning on food security.
• Over the 1990s (up to a few months ago), world rice prices were low and stable yet domestic consumer prices have been two to three times those of Vietnam and Thailand and also more volatile.
• Productivity-land deficit situations for corn, livestock and poultry, and fishery production; limited land, available land is inefficient.
• Conversion of agricultural land to non-agri uses
• Unsustainable, illegal farming methods and technologies
• Pollution of agricultural resources
• Natural calamities 1. Implement the Strategic Agricultural and Fisheries Development Zones or SAFDZs that have bee identified and mapped throughout the country. SAFDZs are key agricultural production areas with comparative advantage – location, soil characteristics, irrigation and support infra present and other physical features;
2. Identify existing agricultural lands, assess their production and productivity levels, and to the extent practicable and possible, protect these from conversion;
3. Identify potential agricultural expansion areas, with due consideration for competing land uses, protect these from conversion;
4. Identify marginal lands for agricultural production and provide these with appropriate technologies for basic subsistence requirements;
5. Provide infrastructure support that would link production areas to other land uses, and implement measures to increase productivity in SAFDZs, and in existing and expansion production areas;
6. Identify and delineate existing and potential agricultural, forest, and mining production areas; assess supply and demand requirements, implement measures to improve efficiency, and provide support infrastructure and other facilities; and
7. Promote water security through rehabilitation of denuded watersheds, focused irrigation programs, R & D, and the development and improvement of a water database.
National sufficiency in rice is often defended on the basis of national security – that is, distrust of the capacity and political will of the international market and community to supply food – particularly during times of international crises.
References:
1. NEDA, National Framework for Physical Planning 2001-2030, 2002
2. AIM Policy Center, ed. Luningning Achacoso-Sevilla , “The Ties that Bind: Population and Development in the Philippines 2nd ed.”2004
3. E. Boquiron, “Rice Shortage in the Philippines, unpublished work.
NOTES ON The Medium-Term Philippine Development Plan for the period 2004-2010: Population and Poverty
MARY GRACE B. RANJO
Population and Poverty
Situationer Ways forward.
“Research has never proven a direct link between poverty and population growth, and it would be misleading to assume that one is directly dependent on each other. We cannot discount the other factors, like political shocks or external economic conditions, which added to the poverty problem, but we also cannot discount what research calls the mutually reinforcing relationship between the two that traps communities and families to poverty.” (4)
Contribution of “population dynamics” to economic growth, 1976-2000 A “do nothing” approach to population growth IF complemented by
- higher levels of agricultural output
- accessible education and
- support through a framework of responsive government policies
will allow population growth to serve as a catalyst for growth by providing a strong labor force that can drive the economy forward.
Otherwise, with the domestic economy unable to absorb and provide for the growth, the poverty gap widens.
Country Average Economic Growth, % Net Contribu- tion of Popula- tion, %
Philippines 4.10 1.06
Thailand 8.84 1.83
Indonesia 7.98 1.27
South Korea 9.9 1.66
Population growth in the Philippines contributed the least to economic growth.
Once upon a time, in the 70s to be a bit precise, the Philippines was thought to be a twin to Thailand – almost the same land area, econo-
mic structure, natural resources and goods 1. Prioritization and focus by government (more funds)
The National Anti-Poverty Commission is an inter-agency group created to, among others, generate funds for squatter relocation (through sale of vast government land holdings to private land developers - National Penitentiary, Muntinlupa to Ayala consortium).
Prioritization is key to short-term progress. It will require strong political will as “unpopular” decisions will have to be made and “painfully” (not for policy-makers and – implementers) carried through. Government must deal with waste, corruption, and defective projects.
traded in the international market, a beautiful people with the same Malay and mix Asian-European blood strain, and Bhumibol and Sirikit stood aside for Ferdinand and Imelda.
Population, 1975:
Philippines 43 M growing at 2.56%
Thailand 41 M growing at 2.73% 2. Sharing of responsibility by public and private sector
Private business and civil society share in many poverty-related programs: education, health, housing, community livelihood programs and vocational training. NGOs help in public information, community mobilization and play the role of watchdog and advocate.
Population, 2000:
Philippines 76 M
Thailand 61 M
GDP per capita, 1975:
Philippines US$ 1,502
Thailand US$ 805
GDP per capita, 2000:
Philippines US$ 3,971 grown at 41%
Thailand US$ 6,402 grown at 8.8%
3. Integration of population dimension into development planning and establishing a supportive, enabling policy environment.
4. “Family planning” / “planned parenthood
5. In assessing economic performance, cease and resist comparison with other countries in the region and use, but with great caution, eco nometric models that assess and, more impor tantly, point out the necessary areas for improve ment, e.g. labor force development, expansion of preventive health care, etc.so that population growth is not blamed for slow economic growth.
Population and Poverty
Situationer Ways forward.
“Research has never proven a direct link between poverty and population growth, and it would be misleading to assume that one is directly dependent on each other. We cannot discount the other factors, like political shocks or external economic conditions, which added to the poverty problem, but we also cannot discount what research calls the mutually reinforcing relationship between the two that traps communities and families to poverty.” (4)
Contribution of “population dynamics” to economic growth, 1976-2000 A “do nothing” approach to population growth IF complemented by
- higher levels of agricultural output
- accessible education and
- support through a framework of responsive government policies
will allow population growth to serve as a catalyst for growth by providing a strong labor force that can drive the economy forward.
Otherwise, with the domestic economy unable to absorb and provide for the growth, the poverty gap widens.
Country Average Economic Growth, % Net Contribu- tion of Popula- tion, %
Philippines 4.10 1.06
Thailand 8.84 1.83
Indonesia 7.98 1.27
South Korea 9.9 1.66
Population growth in the Philippines contributed the least to economic growth.
Once upon a time, in the 70s to be a bit precise, the Philippines was thought to be a twin to Thailand – almost the same land area, econo-
mic structure, natural resources and goods 1. Prioritization and focus by government (more funds)
The National Anti-Poverty Commission is an inter-agency group created to, among others, generate funds for squatter relocation (through sale of vast government land holdings to private land developers - National Penitentiary, Muntinlupa to Ayala consortium).
Prioritization is key to short-term progress. It will require strong political will as “unpopular” decisions will have to be made and “painfully” (not for policy-makers and – implementers) carried through. Government must deal with waste, corruption, and defective projects.
traded in the international market, a beautiful people with the same Malay and mix Asian-European blood strain, and Bhumibol and Sirikit stood aside for Ferdinand and Imelda.
Population, 1975:
Philippines 43 M growing at 2.56%
Thailand 41 M growing at 2.73% 2. Sharing of responsibility by public and private sector
Private business and civil society share in many poverty-related programs: education, health, housing, community livelihood programs and vocational training. NGOs help in public information, community mobilization and play the role of watchdog and advocate.
Population, 2000:
Philippines 76 M
Thailand 61 M
GDP per capita, 1975:
Philippines US$ 1,502
Thailand US$ 805
GDP per capita, 2000:
Philippines US$ 3,971 grown at 41%
Thailand US$ 6,402 grown at 8.8%
3. Integration of population dimension into development planning and establishing a supportive, enabling policy environment.
4. “Family planning” / “planned parenthood
5. In assessing economic performance, cease and resist comparison with other countries in the region and use, but with great caution, eco nometric models that assess and, more impor tantly, point out the necessary areas for improve ment, e.g. labor force development, expansion of preventive health care, etc.so that population growth is not blamed for slow economic growth.
NOTES ON The Medium-Term Philippine Development Plan for the period 2004-2010: Income Distribution and the Burdens of Taxation and Debt Payments
Income Distribution and the Burdens of Taxation and Debt Payments
Distribution of Family Income, 1988-1997
Family Income Groups Share in Total Income, %
1988 1991 1994 1997
Bottom 30% 9.3 8.5 8.8 7.8
Middle 40% 27.4 26.2 27.4 24.9
Top 30% 63.4 65.3 63.7 67.2
Note the “entrenched inequality” in this distribution table where a small segment of the population controls most of the wealth and accounts for most of the income.
Situationer Ways forward.
Income distribution and taxation
Government funds are raised from an inequitable and unevenly distributed economy.
This can perhaps explain why it is difficult to raise taxes – as the rich and the powerful resist – and also why it is difficult to make government expenditures pro-poor – the rich and powerful are able to influence government to address their concerns first.
We also have comparatively low revenue efforts. The low salaried group tend to be the “captured” tax payers.
In addition, government collects revenues from an economy where income-producing activities are unevenly-distribute geographically, and are generally concentrated in a few urban centers. This maldistribution of economic activity explains why government expenditures are concentrated in Metro Manila and other cities even as the population in greatest need for government services are in the countryside.
Official development assistance.
In 2004, more than 80% of government revenues went to debt payment; where the Philippine government earns 5 pesos, 4 pesos go to paying our foreign debts.
Wastage of foreign loans, i.e. commitment fees paid for on-going projects as of 2004 is almost US$50 M. • STOP nominal policy frameworks and
development strategy plans where available resources are never sufficient for the declared priorities.
• STOP passing legislation with unfounded
mandates.
• STOP adding insult to injury. With the last
30th percentile so impoverished, announcing reforms that will never be is like salt to their wounds.
• Improve revenue effort level relative to GDP
by increasing tax share (direct taxes) levied on and collected from the better-off families.
• Improve benefit yield from government
expenditure:
• Partnerships (health and education)
• Accountability (defense and police service)
• Deregulation
• Incentives for planned parenthood
• Government productivity enhancement
World Bank-funded Philippine government anti-corruption program and implementation of the Philippine government reorganization and plan.
STOP foreign and local borrowing. While completed power and energy production, as well as transportation infrastructure projects were loan-funded and have actually enhanced production capacities, parts of the national debt were misspent, wasted or stolen.
References:
1. AIM Policy Center, ed. Luningning Achacoso-Sevilla , “The Ties that Bind: Population and Development in the Philippines 2nd ed.”2004
2. ODA Watch, “ODA Policy in the Philippines: How can Civil Society Engage and Contribute”
Distribution of Family Income, 1988-1997
Family Income Groups Share in Total Income, %
1988 1991 1994 1997
Bottom 30% 9.3 8.5 8.8 7.8
Middle 40% 27.4 26.2 27.4 24.9
Top 30% 63.4 65.3 63.7 67.2
Note the “entrenched inequality” in this distribution table where a small segment of the population controls most of the wealth and accounts for most of the income.
Situationer Ways forward.
Income distribution and taxation
Government funds are raised from an inequitable and unevenly distributed economy.
This can perhaps explain why it is difficult to raise taxes – as the rich and the powerful resist – and also why it is difficult to make government expenditures pro-poor – the rich and powerful are able to influence government to address their concerns first.
We also have comparatively low revenue efforts. The low salaried group tend to be the “captured” tax payers.
In addition, government collects revenues from an economy where income-producing activities are unevenly-distribute geographically, and are generally concentrated in a few urban centers. This maldistribution of economic activity explains why government expenditures are concentrated in Metro Manila and other cities even as the population in greatest need for government services are in the countryside.
Official development assistance.
In 2004, more than 80% of government revenues went to debt payment; where the Philippine government earns 5 pesos, 4 pesos go to paying our foreign debts.
Wastage of foreign loans, i.e. commitment fees paid for on-going projects as of 2004 is almost US$50 M. • STOP nominal policy frameworks and
development strategy plans where available resources are never sufficient for the declared priorities.
• STOP passing legislation with unfounded
mandates.
• STOP adding insult to injury. With the last
30th percentile so impoverished, announcing reforms that will never be is like salt to their wounds.
• Improve revenue effort level relative to GDP
by increasing tax share (direct taxes) levied on and collected from the better-off families.
• Improve benefit yield from government
expenditure:
• Partnerships (health and education)
• Accountability (defense and police service)
• Deregulation
• Incentives for planned parenthood
• Government productivity enhancement
World Bank-funded Philippine government anti-corruption program and implementation of the Philippine government reorganization and plan.
STOP foreign and local borrowing. While completed power and energy production, as well as transportation infrastructure projects were loan-funded and have actually enhanced production capacities, parts of the national debt were misspent, wasted or stolen.
References:
1. AIM Policy Center, ed. Luningning Achacoso-Sevilla , “The Ties that Bind: Population and Development in the Philippines 2nd ed.”2004
2. ODA Watch, “ODA Policy in the Philippines: How can Civil Society Engage and Contribute”
NOTES ON The Medium-Term Philippine Development Plan for the period 2004-2010: National Output / National Economic Performance
MARY GRACE B RANJO
National Output / National Economic Performance
Gross National Product (GNP) is the value of all the goods and services produced in an economy, plus the value of the goods and services imported, less the goods and services exported.
Year GNP, in PhP Ann. Growth Rate, % Per capita increase in PhP
1975 453 B 10,600
1998 1,012 B 3.30 13,236
Despite the Asian crisis in 1997, our GNP and GDP sustained its growth momentum.
Gross Domestic Product (GDP) represents the total value of the goods and services produced by an economy over some unit of time (a month, a season, a year etc.). The "Domestic" part of the name comes from the fact, unlike GNP, it does not consider imports or exports in the calculation
Year GDP, in PhP Ann. Growth Rate, % Per capita increase in PhP
1975 454 B 10,600
1998 955 B 3.30 13,236
The growth of the GDP from 1995-2000 was driven by industry and services. Industry supported GDP growth with an annual average growth of 3.17 percent.
Services, benefiting from deregulation, surged by an annual average of 5.19 percent during the same period.
The share of agriculture and industry in the GDP however continues to decrease, a trend consistent with the increasing urbanization of the country’s population and the shrinking of the number of people engaged in non-agricultural activities and the number of people being laid off by manufacturing firms (?).
Regional Economic Performance
Regional shares to GDP, 1998
Region Percentage Share Region Percentage Share
NCR 31 VII 7
III 9 XI 7
IV 16 Other regions 23
VI 7
From 1995 to the present, the National Capital Region has maintained its economic dominance, accounting for 31 percent of GDP. Next to NCR are its contiguous neighbors Regions IV and III.
Regional share to GDP by sector, 1998
Regions IV, XI VI, and III have the highest contribution to agriculture (fishery, forestry).
The bulk of industrial output (mining and quarrying, manufacturing, construction, utilities) come from NCR, and Regions IV and III. Contribution through the services sector (transportation, communication and storage, trade, finance, house construction and real estate, private services, and government service), at 68 percent, come from NCR, and Regions IV, III and VII.
References:
1. NEDA, National Framework for Physical Planning 2001-2030, 2002
2. AIM Policy Center, ed. Luningning Achacoso-Sevilla , “The Ties that Bind: Population and Development in the Philippines 2nd ed.”2004
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