Press Releases Archived (October 2013)

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Manila - The Economic and Social Commission for Asia and the Pacific (ESCAP) launched its 2013 theme study "Building Resilience to Natural Disasters and Major Economic Crises" in Manila on August 14, with think tank Philippine Institute for Development Studies (PIDS) co-organizing the event. The launch of the study, part of ongoing efforts by ESCAP to raise awareness on the importance of resilience-building, featured prominent experts from the Philippines and international organizations. Policymakers discussed strategies on how organizations and policymakers can address the twin threats of natural disasters and economic crises in an increasingly interconnected world.

The study is particularly relevant to the Philippines, a country noted for its commitment to community-based disaster risk reduction. Policymakers have taken to heart the mantra that prevention and preparedness is far more effective, and less costly, than relief and recovery efforts. On average, from 2009 to 2011, 70 percent of the annual disaster risk reduction (DRR) budget was set aside for projects and programs that reduced the exposure of population and assets, compared to only 27 percent that was allocated to disaster response and recovery. Programs such as BRACE (Building Resilience and Awareness of Metro Manila Communities to Natural Disasters and Climate Change Impacts) strengthen community-based disaster risk management and support vulnerable families living in hazard-prone areas.

Welcoming the participants, PIDS President Gilbert Llanto underscored the importance of resistance building to inclusive growth. "Resilience or the capacity to withstand, adapt to, and recover from crises is particularly important for the poor and the marginalized. When these shocks occur, they are hurt disproportionately, making them fall into poverty or slide back to poverty, overturning past efforts to make their lives better. Lack of resilience contributes to the worsening of poverty levels. It makes economic growth all the more less inclusive and makes the disparity between the rich and the poor wider."

The keynote address was delivered by the Honorable Corazon Juliano Soliman, Secretary of the Department of Social Welfare and Development, who highlighted that, "resiliency is not only the work of an individual or of just a single agency. In reality, resiliency comes from and nurtured by the convergence of efforts of the people, government, civil society groups, and other sectors. This is because the shocks that we experience are not just typical shocks, they have adverse impacts on the economic, social, and psychological aspects of people's lives."

Secretary Soliman also remarked that, "regional integration against climate change is important as it will build synergy for a regional social protection fund. For example, ASEAN provided additional assistance and relief when the country was hit by typhoon Pablo."
Dr. Shamika Sirimanne, Director of the ICT and Disaster Risk Reduction Division of ESCAP, and team leader of the study, presented the main findings. "Multiple shocks in Asia and the Pacific are converging in new ways that demand more comprehensive and systemic approaches to building resilience. A single incident, which might once have been localized and managed in isolation, now has multiple and interrelated regional and global consequences. This calls for new economic frameworks. Policy solutions must balance short-term economic stability with long-term development," she noted.

Dr. Sirimanne added that disaster risk reduction is extremely important for inclusive and sustainable development, and is a key component of strengthening regional resilience. She reminded audience members and journalists in attendance: "First and foremost, governments must invest in prevention and preparedness.and do more to protect the poor and vulnerable groups. Local communities need to be empowered because they are at the forefront of recovery efforts."

All the panelists highlighted the importance of protecting the poor and vulnerable groups during natural disasters and economic crises.

"Geo-hazard maps are useful, but they should be incorporated with socioeconomic information to identify sectors and people affected by the calamity. This will help determine how many children and women need to be relocated and how many senior citizens and persons with disabilities need to be assisted," Dr. Celia Reyes, Senior Research Fellow at PIDS.

Dr. Vinod Thomas, Director-General of Independent Evaluation at the Asian Development Bank, emphasized a critical point: "Prevention is critically important and, therefore, preparedness and investments in disaster risk reduction must be prioritized." He noted that in the Philippines, "disaster preparedness is underemphasized compared to disaster response." In recent years, however, efforts have increased to correct this imbalance, yielding good results. "Effective prevention and evacuation did help lessen the number of deaths of typhoon Pablo in Cagayan de Oro, Mindanao, last year, which accounted for one death case and conspicuously much lower than the 674 deaths of typhoon Sendong in 2011," Dr. Thomas said.

Meanwhile, Mr. Jose Luis Oquinena, Executive Director of the Gawad Kalinga Community Development Foundation, highlighted the important role of local communities and local governments. "Preparedness is all about having an organized community, and organizing a community is essential to get people prepared when a disaster occurs." Based on his long experience working with poor communities in the Philippines, he noted that, "it is a big challenge to convince evacuees to be relocated. Their usual response is it is not needed because their life lies in God's hands." Forced relocation disrupts the continuity of people's lives. "To convince them, relocation sites must be made more productive wherein people are not only provided with shelter but also a source of sustainable livelihood or income," Mr. Oquinena said.

Undersecretary Jude Esguerra III of the National Anti-Poverty Commission added that, "the challenge of the Department of Interior and Local Government is to help localities come up with action plans for disaster risk reduction." He identified 20 provinces in the country with the highest number of poor households exposed to high risk of flooding and landslides.

In her concluding remarks, Dr. Luiza Carvalho, United Nations Resident Coordinator and United Nations Development Programme Resident Representative for the Philippines, noted the important role of regional cooperation in building resilience to multiples shocks: "The coordinated planning, convergence, and synergy of efforts with our partners at the local, national, regional, and even global levels is needed to promote exchange cooperation and to develop resilience collectively. By working together, we can produce solutions that are far greater than the sum of individual country responses," she emphasized.

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Extending the Pantawid Pamilyang Pilipino Program or 4Ps beyond five years for current beneficiaries is needed to allow the poor to "outgrow" the government`s conditional cash transfer (CCT) program. This was emphasized by experts from the state think tank Philippine Institute for Development Studies (PIDS) in a forum last July 31.

The resource speaker, PIDS Visiting Research Fellow Vicente Paqueo, noted that the 'Pantawid' extension will be economically and socially beneficial and will also give the government more time to work out a transition strategy and pursue policy reforms that will lead to a massive expansion of job opportunities for beneficiaries.

President Benigno S. Aquino III announced the extension of the 4Ps in his fourth State of the Nation Address last July 22, citing research findings and policy recommendations of PIDS.

Paqueo presented five arguments supporting the CCT extension based on his study with co-authors PIDS Senior Research Fellow Aniceto Orbeta, AusAid Consultant Tarcisio Castaneda and ADB Senior Education Specialist Chris Spohr: (1) poverty and income inequality remain high and stable; (2) the Pantawid program has been a credible, effective, and valuable instrument for poverty alleviation in the short run; (3) an extension will be an opportunity to produce greater positive impact on the welfare of the poor; (4) an extension will provide social stability and support to allow the government to undertake reforms; and (5) a significant improvement in high school enrollment and completion is expected with moderate subsidies for cash grants.

"The concerns about creating a culture of dependency and irresponsible use of CCT cash assistance have been shown to be overblown and unfounded. In fact, household spending on health and education increased remarkably in both absolute amount and as a share of total consumption spending," Paqueo told stakeholders, citing their analysis of data from the Annual Poverty Indicators Survey.

By extending the 4Ps to enable beneficiaries to finish high school, they would be in a substantially better position to get jobs and become economically productive in the future, he pointed out. Economic yields from high school graduation are significantly higher than from elementary graduation. At 2012 prices, 2008 earnings of high school graduates averaged P23,112, clearly higher than those of elementary graduates` P10,339. Moreover, poverty incidence in households headed by high school graduates, at 15.95 percent, is just about half that of households headed by elementary graduates.

Based on simulations by Paqueo`s research team, an additional PhP5-billion in the budget to cover eligible 12- to 18-year-olds can support a rise in high school completion rate from 44.5 percent to 53 percent. An outcome of 75 percent or better will require an additional PhP10 billion in the budget.

Discussants in the forum were PIDS Senior Research Fellow Celia Reyes, Social Weather Stations President Mahar Mangahas, AIM Policy Center Executive Director Ronald Mendoza, and Ibon Foundation Executive Director Sonny Africa. Social Welfare and Development Secretary Corazon "Dinky" Soliman was present to share her thoughts and to solicit inputs from the participants.

Sec. Soliman disclosed that the government is looking at helping an additional 2 million children under the Pantawid extension, bringing the total number of beneficiary children to 10 million. Soliman also revealed that they are proposing to give PhP500 assistance to high school beneficiaries. The increase from PhP300 is in relation to Reyes` study that high school students have more expenses than elementary students because public high schools are located in poblacions (towns) and not in the barangays. Households with children attending high school therefore incur higher expenses from transportation cost and higher cost of living in the poblacions than if their children are only attending elementary school.

Reyes, whose earlier recommendation to "deepen" the Pantawid program to achieve better human capital outcomes formed the basis of the President`s SONA pronouncement, emphasized that the 4Ps program should be harmonized with other government programs to ensure that children finish high school. This will increase the employability of the poor in higher productivity and faster-growing sectors, she said.

It would be better to pursue a deepening of the program "rather than expanding it to cover as many poor people as possible," Reyes added. Her other recommendations include giving education support at a higher grade, prioritizing indigenous people, and differentiating assistance by gender given that more boys than girls are out of school.

Paqueo emphasized that "Pantawid should remain a bridging program and continue to be articulated as such to avoid false expectations and welfare dependency."

PIDS President Dr. Gilberto Llanto said the CCT program should be examined in the light of the Philippine economy and context. "The need for evidence-based policy has assumed greater significance," he said.

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Extending the Pantawid Pamilyang Pilipino Program or 4Ps beyond five years for current beneficiaries is needed to allow the poor to "outgrow" the government's conditional cash transfer (CCT) program. This was emphasized by experts from the state think tank Philippine Institute for Development Studies (PIDS) in a forum last July 31.

The resource speaker, PIDS Visiting Research Fellow Vicente Paqueo, noted that the 'Pantawid' extension will be economically and socially beneficial and will also give the government more time to work out a transition strategy and pursue policy reforms that will lead to a massive expansion of job opportunities for beneficiaries.

President Benigno S. Aquino III announced the extension of the 4Ps in his fourth State of the Nation Address last July 22, citing research findings and policy recommendations of PIDS.

Paqueo presented five arguments supporting the CCT extension based on his study with co-authors PIDS Senior Research Fellow Aniceto Orbeta, AusAid Consultant Tarcisio Castaneda and ADB Senior Education Specialist Chris Spohr: (1) poverty and income inequality remain high and stable; (2) the Pantawid program has been a credible, effective, and valuable instrument for poverty alleviation in the short run; (3) an extension will be an opportunity to produce greater positive impact on the welfare of the poor; (4) an extension will provide social stability and support to allow the government to undertake reforms; and (5) a significant improvement in high school enrollment and completion is expected with moderate subsidies for cash grants.

"The concerns about creating a culture of dependency and irresponsible use of CCT cash assistance have been shown to be overblown and unfounded. In fact, household spending on health and education increased remarkably in both absolute amount and as a share of total consumption spending," Paqueo told stakeholders, citing their analysis of data from the Annual Poverty Indicators Surveys.

By extending the 4Ps to enable beneficiaries to finish high school, they would be in a substantially better position to get jobs and become economically productive in the future, he pointed out. Economic yields from high school graduation are significantly higher than from elementary graduation. At 2012 prices, 2008 earnings of high school graduates averaged P23,112, clearly higher than those of elementary graduates` P10,339. Moreover, poverty incidence in households headed by high school graduates, at 15.95 percent, is just about half that of households headed by elementary graduates.

Based on simulations by Paqueo's research team, an additional PhP5-billion in the budget to cover eligible 12- to 18-year-olds can support a rise in high school completion rate from 44.5 percent to 53 percent. An outcome of 75 percent or better will require an additional PhP10 billion in the budget.

Discussants in the forum were PIDS Senior Research Fellow Celia Reyes, Social Weather Stations President MaharMangahas, AIM Policy Center Executive Director Ronald Mendoza, and Ibon Foundation Executive Director Sonny Africa. Social Welfare and Development Secretary Corazon "Dinky" Soliman was present to share her thoughts and to solicit inputs from the participants.

Sec. Soliman disclosed that the government is looking at helping an additional 2 million children under the Pantawid extension, bringing the total number of beneficiary children to 10 million. Soliman also revealed that they are proposing to give PhP500 assistance to high school beneficiaries. The increase from PhP300 is in relation to Reyes' study that high school students have more expenses than elementary students because public high schools are located sdfsdvsdvsdvsd

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Competition policy reforms should be in place to level the playing field and prevent powerful interest groups and individuals from controlling the market.

In a forum organized by state think tank Philippine Institute for Development Studies (PIDS) with the Consumer Unity and Trust Society (CUTS) International based in Jaipur, India, and the Action for Economic Reforms (AER), Department of Justice Assistant Secretary and Head of the Office for Competition Geronimo Sy confirmed the anti-competitive practices of powerful Filipino businessmen. Sy revealed that a Filipino-Chinese business tycoon once used his influence to restrict the 13th Philippine Congress in passing a competition bill.

Sy cited politicians owning generic drug firms and lobbying to have their generic drugs qualify for government bidding. A local trucking cartel also exists in the Philippines, he disclosed, wherein some ports only accept goods that go through the trucking cartel.

Nevertheless, the Philippines did a 10-point jump in the Global Competitiveness Index from 75th by the end of 2011 to 65th by the end of 2012. According to Sy, such an improvement of performance can be associated with the creation of the Office for Competition which is only in its second year. Still, he emphasized the importance of having an effective competition law and policy to strengthen the office's bulwark against prevailing issues that impede competition.

In the same forum, PIDS Vice-President and Senior Research Fellow Rafaelita Aldaba disclosed an exclusive dealing by a canned tuna giant company. The controversial company used its "voluntary loyalty program" to restrict San Marino corned tuna products in selected dealers and retailers. She related a common practice by dominant companies of buying out their competitors once they become strong. Aldaba also underscored the conflicting roles of the Philippine Ports Authority as regulator, developer, and operator of ports.

The seminar was part of the activities of the three-year project of PIDS, CUTS, and AER on "Competition Reforms in Key Markets for Enhancing Social and Economic Welfare in Developing Countries" or CREW.

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The Philippine Institute for Development Studies (PIDS) inaugurated its 22nd PIDS Corner at the main library of the Western Mindanao State University (WMSU) in Zamboanga City on July 9, 2013.

The PIDS Corner is the Institute's knowledge dissemination strategy aimed at making its research outputs more visible and accessible in the provinces. The PIDS Corner has shelves containing various studies and publications produced by PIDS throughout the years. These are made available for free as sources of information for researchers, students, faculty, and local decisionmakers. The Institute started this project in 2006. Since then, there are now 22 PIDS Corners in different parts of the Philippines, the Corner at WMSU being the latest.

In his remarks of bequest, PIDS President Gilberto Llanto encouraged students and faculty members to read PIDS studies as they are excellent resources on various socioeconomic topics encompassing trade, infrastructure, taxation, health, education, poverty analysis, and climate change, to name a few.

Meanwhile, Dr. Milabel Enriquez-Ho, President of WMSU, expressed her appreciation to Dr. Llanto for choosing the university to host the PIDS Corner. "It is a very timely resource for the university as we are preparing a development roadmap for our future," she said.

Also present during the inauguration were PIDS Research Information Director Sheila V. Siar who presented the SocioEcononomic Research Portal for the Philippines or SERP-P, an online knowledge resource being maintained by PIDS; PIDS Senior Research Fellow Adoracion Navarro; Division Chief for Public Affairs Romero Lopez; and Information Officer Phidel Marion Vineles.

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State think tank Philippine Institute for Development Studies (PIDS) has a new president. Dr. Gilberto M. Llanto officially took his oath of office on July 4 at the National Economic and Development Authority (NEDA), Pasig City, with Socioeconomic Planning Secretary and NEDA Director-General Arsenio Balisacan administering the oath.

Dr. Llanto takes over from Dr. Josef T. Yap, who served PIDS for two consecutive terms from 2005 to 2013.

He was a Senior Research Fellow of PIDS and also served as its Vice-President.

Dr. Llanto also served as Deputy Director-General of the NEDA and Executive Director of the Agricultural Credit Policy Council. He chaired the Technical Board of the Investment Coordination Committee during his stint at the NEDA, which gave him first-hand insights into factors constraining infrastructure development. He was also President of the Philippine Economic Society from 2003 to 2004.

As a public finance expert, Dr. Llanto holds important positions in different local financial institutions. He is a member of the Governing Board of the Agricultural Guarantee Fund Pool. He also serves as an independent director of the CARD Bank, a leading microfinance institution in the country. Dr. Llanto is also a member of the Konrad Adenauer Medal of Excellence Committee, which gives awards to outstanding local government units in the Philippines.

Dr. Llanto has a Ph.D. in Economics from the UP School of Economics. He has researched and published extensively on financial markets, public economics, local governance, institutional economics, and infrastructure regulation.

He authored several books and research papers, including Policy and Regulatory Issues and Challenges in Microinsurance: a Philippine Case (2008); The Impact of the Global Financial Crisis on Rural and Microfinance in Asia (2009); A Review of Build-Operate-Transfer for Infrastructure Development (2010); Make 'Deliberate' Haste in Rolling Out the 4Ps (2010); Does Poor Rural Infrastructure Constrain Agricultural Productivity? (2011); The Assignment of Functions and Intergovernmental Fiscal Relations in the Philippines 20 years after Decentralization (2012); The Philippines: Recent Developments in the Subnational Government Debt Markets (co-authored); and Water Financing Programs in the Philippines: Are We Making Progress? (2013). He is presently an associate editor of the Philippine Review of Economics.

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The Philippine APEC Study Center Network`s 17th General Assembly and Annual Symposium are set to kick-off on June 28 at the Little Theatre, Xavier University, Cagayan de Oro City.

The symposium, which has the theme `Resiliency of Local Economies to Natural Disasters`, is being organized by Xavier University-Ateneo de Cagayan in partnership with PASCN and will be held from 8:00 am to 12 noon. It intends to highlight the capacities and initiatives of local governments and the economic sector in reducing the risks associated with natural disasters and in improving their adaptation and recovery. The passage of Republic Act 9729, also known as the Climate Change Act of 2009, established the legal and institutional framework for climate change governance and mainstreaming climate resilience into government mandates across sectors.



In a broader regional perspective, emergency preparedness is one of the key elements of the human security agenda of the Asia-Pacific Economic Cooperation (APEC). In 2009, APEC Leaders reaffirmed the importance of enhancing human security and reducing the threat of disruptions to business and trade in the Asia-Pacific region. APEC`s Emergency Preparedness Working Group was formed to address this issue and to play a constructive role in enabling the region to better prepare for and respond to emergencies and disasters. Climate change and disaster risk management is also one of five proposed areas of priority for the Philippines for the 2015 APEC Summit.



The PASCN was established in 1996 through an administrative order as the Philippines` response to the APEC Leaders Education Initiative which aims to develop regional cooperation in higher education and research. It is composed of 10 member institutions, namely, the Asian Institute of Management, Ateneo De Manila University, Central Luzon State University, De La Salle University, Mindanao State University, Silliman University, University of Asia and the Pacific, University of San Carlos, University of the Philippines, Xavier University, Department of Foreign Affairs-Foreign Service Institute, and the Philippine Institute for Development Studies, which serves as PASCN`s lead agency and secretariat.

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About 400 researchers from all over the world are expected to converge in Manila on 19-21 June 2013, to attend the 14th Annual Global Development Network (GDN) Conference themed "Inequality, Social Protection and Inclusive Growth." The conference is being organized in partnership with the Asian Development Bank (ADB), the East Asian Development Network (EADN), and the Philippine Institute for Development Studies (PIDS). The venue will be at the ADB Headquarters in Ortigas Center, Mandaluyong City.

According to Dr. Josef T. Yap, PIDS president, "In the Philippines, the government's Pantawid Pamilyang Pilipino Program of conditional cash transfers is an example of a social protection measure that, in the short run, raises incomes and allows people to build their human capital, to eventually reduce poverty. This, and other similar social policies, will be among the topics to be taken up in the three-day conference."

In the aftermath of the global financial crisis and in view of the growing inequality in the developing world, issues related to social protection are becoming very crucial. More and more, policymakers are beginning to realize the benefits of social protection not only for long-term sustainable and inclusive growth, but also for political stability in developing countries.


Francois Bourguignon, chancellor of the Paris School of Economics and former chief economist of the World Bank, will be the keynote speaker. The topics to be discussed during the conference are: inequality - conceptual and measurement issues; multidisciplinary dimensions of inequality; global perspectives on inequality; the determinants of inclusive growth; regional perspectives on inequality and inclusive growth; gender, inequality and social protection; structural vulnerability issues; mechanisms to promote social protection for inclusive growth; lessons learnt from social protection policies; sectoral experiences in the area of social protection and inclusive growth; key challenges for social protection policies; and inequality, social protection and inclusive growth in the context of the post-2015 development agenda.
Since its inception in 1999, GDN has organized conferences in almost every region of the world.

GDN conferences are unique, not just in the sheer numbers of people who attend, but also in the range of issues they discuss and the regions they represent. Another important feature of GDN conferences is that they provide promising young researchers from developing countries with the opportunity to showcase their research in an international forum and benefit from interaction with world-renowned academics and policymakers. This has important positive implications for research capacity building, a central element of the GDN mission.

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The country`s expanding middle-income population and billion dollars of annual remittances from overseas Filipino workers boost the potentials of our auto industry. At the same time, industry experts indicate that the third wave of motorization in the region is expected to take place between 2015 and 2022. All these potentials will be difficult to realize if smuggling and issues of importation of second-hand vehicles are not resolved swiftly.

A recent study by PIDS Senior Research Fellow Rafaelita Aldaba reveals that smuggling and importation of used vehicles impede the growth of the country`s auto industry. Murky policy environment, discrepancy of statistics on registered motor vehicles, and revenue losses in the industry are also discussed in the study, which reflect the government`s lackluster effort to curb car smuggling.

Aldaba noted that traders use the free ports and other special economic zones to bring in used cars in order to avoid paying the correct duties and taxes. Smuggled vehicles are priced 30-50 percent lower than their new counterparts and presents stiff competition to the domestic auto industry.

The study showed a significant data gap in the number of registered vehicles and auto sales between the LTO and the Chamber of Automotive Manufacturers of the Philippines (CAMPI). In 2009, for example, LTO`s new registered motor vehicles totaled 182,589 while CAMPI`s record of domestic sales showed a total of only 132,444 motor vehicles or a gap of 27 percent. This translates to revenue losses or calculated tax leakages of about PHP21 billion.

Aldaba noted that the country has in fact a law, Executive Order 156, that bans the importation of all types of used motor vehicles and parts and components (except those for diplomats and returning residents from abroad). However, it was declared unconstitutional by the Court of Appeals in 2003 until it was overruled by the Supreme Court in 2006. The effectiveness of the EO was tested anew by the entry of 200 imported used cars at Port Irene in Cagayan during the first quarter of this year.

The government and the private sector are crafting an auto industry roadmap to develop a globally competitive Philippine auto industry, but if smuggling persists, all these efforts will be put at risk.

Read the full study by downloading it from this link: http://dirp4.pids.gov.ph/ris/pn/pidspn1305.pdf.

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Deskilling is a double jeopardy for countries of origin and destination. It represents losses for countries of destination because the skills and talents of their foreign migrant workers are not fully utilized and, at the same time, origin countries lose a significant number of their skilled workers.

An analytical review conducted by Dr. Sheila Siar, PIDS Director for Research Information, underscores the difficulties faced by migrants when it comes to finding job in the host country and accentuates the role of governments to mitigate the negative impacts of deskilling.

As defined in the study, `deskilling` means to be deployed to positions lower that the migrants` educational attainment, training, or experience, owing to the nonrecognition of their overseas qualifications and the bias for education acquired in the host country, local experience, cultural know-how, and English proficiency.



Many traditional immigration countries such as the United States, Canada, Australia, and New Zealand give strong preference to migrant workers with higher education, skills, and professional training that they can transfer to their countries. However, it is not unusual for migrants to be relegated to lower status and lower paying jobs. Certain professions like medicine, nursing, law, and teaching also require overseas-educated migrants to undergo a `bridging` course or a supervised training and even work as an intern (in the case of doctors), and pass a licensing examination. These requirements may take a few months or some years to complete.

The study also emphasized the effects of race, gender, and ethnicity in the deskilling of migrant workers. In Canada, for example, there is less chance for migrants to hold a managerial position. Migrant engineers who migrated after the age of 27 and those who were born in the Philippines or in Eastern Europe have the lowest probability of holding engineering or managerial positions. Another study conducted in Australia found that non-Commonwealth Asian nurses are 70 percent less likely to be appointed to position of responsibility compared to nurses of English-speaking background or those from the UK, US, Canada, South Africa, and New Zealand.

The study highlighted the crucial role of governments of both countries of origin and destination in addressing the deskilling of migrant workers who are mostly from developing countries. The author noted that home countries, particularly their governments, should educate their departing migrants to prepare them for the challenges ahead. In the Philippines, the Commission on Filipinos Overseas and the Philippine Overseas Employment Administration-Overseas Workers Welfare Administration are the government bodies that perform this task through their country-specific pre-departure orientation seminars which are compulsory for all departing permanent migrants and for those who are leaving the country on temporary labor contracts, respectively. On their part, governments of destination countries should have a more in-depth investigation of the actual situation of their migrants instead of just relying on statistics and evaluation reports proclaiming the success of their migration policies.

In addition, the mismatch between immigration laws and labor policies must be addressed by destination countries, the study noted. There should be better labor policies and suitable settlement strategies for their migrants to provide them with a positive environment to achieve professional and economic stability with less difficulty.

You may read the full study by downloading this link: http://dirp4.pids.gov.ph/ris/dps/pidsdps1330.pdf.

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The government needs an inclusive growth model to transform the industrial sector into a key player in generating investment, employment, and innovation.

A research study by PIDS Senior Research Fellow Rafaelita Aldaba recommends to the present administration to implement industrial policy reforms that will enhance the country`s firm productivity, deepen linkages of domestic firms and small and medium enterprises (SMEs) with large domestic and multinational companies, and gain more investment inflows. This is to capitalize on the rapidly changing global conditions wherein emerging economies like the Philippines are becoming key players as the United States, European Union, and Japan continue to face slower growth, said Aldaba.

She noted the need for the revival of the manufacturing sector to attain more inclusive and sustained growth. The sector`s weak performance is clearly manifested by its low contribution to employment, investment, and productivity growth. Manufacturing growth was slow, averaging only 0.9 percent and 2.5 percent in the 1980s and 1990s, respectively. Modest growth was also posted in the 2000s at 4.1 percent.

Aldaba also emphasized that the country`s manufacturing export base has become less diversified with the country`s exports heavily concentrated in three product groups: automotive and electronic parts and components, garments and textile, and machinery and transport equipment. These are low value-added and labor-intensive product sectors and considerably dependent on imported inputs.

To transform the industrial sector into a strong engine for economic growth, the country needs an industrial policy that focuses in the short-run on strengthening emerging industry champions, maintaining the competitiveness of industries where the country has comparative advantage and rebuilding the existing capacity of industries especially those with strong potential to generate employment, address missing gaps, and create linkages and spillover effects. In the medium term, Aldaba suggests new investments and expansion in upstream and core sectors such as iron and steel and other metals as well as in intermediate parts and components industries. In the long-run, a globally competitive manufacturing industry with strong forward and backward linkages is envisioned with the Philippines as active participant in the production networks of companies engaged in the manufacture of food, garments, electronics, and machinery.

A Comprehensive Manufacturing Industry Roadmap is being formulated by the Department of Trade and Industry-Board of Investments, and the Philippine Institute for Development Studies, to identify industrial activities where the Philippines may have strong potential for sustained growth and job generation.

You may read the full study by downloading the following links: http://dirp4.pids.gov.ph/ris/dps/pidsdps1321.pdf

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Persons with disabilities (PWDs) who are members of the Disabled Person`s Organization (DPO) and have good educational background have better access to employment.

A research study conducted by PIDS Research Associate Christian Mina found that DPO membership and educational attainment are strongly correlated with higher employment opportunities among PWDs. The findings were obtained through an analysis of the 2008 and 2010 disability surveys in selected cities of Metro Manila and Rosario, Batangas, respectively.

According to the study, the proportion of employed PWDs in the urban area is relatively higher among those who are members of at least one DPO compared to those who are not. One clear example of this is that the majority of visually impaired respondents, who are members of DPOs, are working as masseurs. It is thus interesting to note that DPOs have a significant role in empowering PWDs by providing them productive work.

Likewise, in the rural areas, it is revealed that PWDs who are largely dependent on entrepreneurial income are more closely related to being a DPO member and at least a high school graduate. In this regard, it would be a good idea for the local government to collaborate with DPOs in conducting regular activities catered for PWDs such as income-generating activities, socialization, and rehabilitation, among others.

The PIDS study also noted that PWDs with postgraduate degrees tend to get professional jobs. Those who have college diploma are more likely to become officers/supervisors, service/sales workers, or clerks. On the other hand, PWDs who either have no formal schooling or are at most have reached the elementary level are more likely associated with being laborers/unskilled workers whose job security is not assured and who receive lower pay.

Good educational background is also considered as an important requirement in gaining employment. Thus, one of the recommendations of the study is for the government to offer scholarship programs to PWDs or alternative learning avenues for skills development to help them gain stable employment.

For more information, you may download the full study from this link: http://dirp4.pids.gov.ph/ris/dps/pidsdps1313.pdf.

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Two years from now, the Philippines and other ASEAN members will be moved toward a single market and production base under the ASEAN Economic Community (AEC) by 2015. However, the readiness of our small and medium enterprises (SMEs) for this regional economic integration draws a big question mark.

PIDS Vice President Rafaelita Aldaba`s study raises concerns over the weak performance of SMEs despite regional measures implemented in the ASEAN Strategic Action Plan for SME Development 2010-2015 (ASAPSD) and the ASEAN Policy Blueprint for SME Development 2004-2009 (APBSD).

A perception survey was conducted to evaluate the impacts of these frameworks. Four SMEs and one government-member of the SME Working Group were surveyed to evaluate the Philippine implementation. Both groups scored low in average effectiveness.

Majority of the respondents perceived that the APBSD had limited impact on facilitating SMEs` access to information, market, human resource development and skills, finance, and technology. Likewise, the ASAPSD has been perceived to have little concrete impacts in terms of enhancing competitiveness and flexibility of SMEs in moving toward a single market and production base.

In the study, the weak performance of SMEs has been attributed to the large number of barriers that SMEs face, particularly poor access to finance, technology, and skills, as well as information gaps and difficulties in product quality and marketing. Although there are government institutions or agencies responsible for development and technology support of SMEs, the growth of the sector has not been vigorous enough to propel the economy.

In 2006, micro, small, and medium enterprises (MSMEs) dominated the economy and accounted for almost 99.6 percent of the total number of establishments. However, they only accounted for 61.2 percent of the country`s total employment and 35.7 percent of total value added. Firm size distribution has also not changed significantly in the past two decades. Micro enterprises still formed the bulk of MSMEs, with a share of 91.6 percent, whereas medium and small enterprises accounted for only 0.4 percent and 7.7 percent, respectively.

The study also notes that that in spite of present programs and policies created for SMEs (e.g., establishment of Small Business Corporation for SME financing), access to finance has remained one of the most critical factors affecting the competitiveness of the sector. Many private banks are still reluctant to lend to SMEs because of lack of credit information and low appreciation of lending to small businesses. More specific issues on SME financing include lack of acceptable collateral, slow loan processing, short repayment period, high interest rates, difficulties in loan restructuring, and lack of start-up funds.

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The Philippines has a very promising economic future but the country needs to improve on its governance, competitiveness, and fiscal management.

In a seminar-forum co-organized by the Philippine Institute for Development Studies (PIDS), the International Monetary Fund (IMF), and Bangko Sentral ng Pilipinas (BSP), leaders from these institutions shared their views on the prospects of the Philippines in achieving inclusive economic growth.

`The Philippines has large favorable factors because it has macroeconomic stability, abundant natural resources, and a large working-age population. However, it needs to improve its governance, competitiveness, and attractiveness to investments,` Dr. Anoop Singh, Director of the Asia and Pacific Department of the IMF, said during the seminar-forum which focused on the theme `The Quest For Inclusive Economic Growth`.

According to Singh, growth in the Philippines does not show much robustness as compared to other Asian countries. But he is optimistic with the World Economic Outlook`s projected growth of over six percent for the Philippines this year.

`What needs to be done to raise growth is to have more investments and higher productivity,` said Singh. The country`s weak investment climate can be strengthened by improving health and education outcomes and labor market efficiency, and creating strong institutions.

Singh also mentioned that government revenue in the Philippines is low compared to other Asian countries. `There is a need for higher government revenue to raise public investment,` he said. He recommended raising revenue by increasing the country`s tax base. `Get rid of exemptions that restrict the tax base by increasing and improving tax administration.`

Accentuating the importance of foreign direct investments (FDI) to the economy, Singh said FDI promotes competition which is needed for higher productivity. He then suggested that the country`s foreign ownership limits should be lessened, and its low ranking on ease of doing business index must be improved. According to the World Bank, the Philippines is in the 138th place on ease of doing business, clearly lagging far behind Malaysia which is at 12th place.

The IMF Director strongly supports the conditional cash transfer (CCT) program or the Pantawid Pamilyang Pilipino Program (4Ps) of the Philippine government. He said with optimism that it should be continued because CCT programs have significantly helped in decelerating economic inequalities in Latin America.

PIDS President Dr. Josef Yap, on the other hand, brought attention to the country`s recent economic performance. `The GDP growth rate had jumped to 6.6 percent last year from 3.9 percent in 2011,` Yap said. This is the highest growth rate in the ASEAN region. Yap disclosed that this was largely driven by the growth in public and private construction.

In terms of gross domestic investment rate, Yap echoed Sigh`s earlier comment that the country has a low investment rate and this fact becomes more glaring when compared to its neighboring countries. `Indonesia has already exceeded its gross domestic rate of 31.1 percent in 1994 with 33 percent in 2011,` Yap said. `On the other hand, the Philippines did not even reach 25 percent since 1994,` he added.

According to the president of the country`s foremost think tank, conglomerates are reluctant to invest in the country because of their captured market. Meanwhile, competitive sectors are also reluctant to invest because the costs they received from the conglomerates are also high (power, shipping, telecommunication costs, etc.).

Yap suggested that the government should play a big role in addressing the coordination problem among the different sectors of the economy as this severely constrains investments into the country.

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In the summer of 2012, Mindanao experienced a crippling power crisis which revealed the shoddy and fragmented state of energy infrastructure in the region as well as in the whole country. For weeks now, a lot of attention is once again drawn to the energy sector because of the precariously low power supply which is feared to put a brake on economic development. Businesses, for instance, have voiced concerns that the country`s energy situation may slow down and even stunt the country`s economic growth.

A study conducted by Philippine Institute for Development Studies (PIDS) Senior Research Fellow Adoracion Navarro warns that the Mindanao power crisis may stage a comeback in this year's and next year's summer season given that there had been no additions to the baseload capacity.

The demand for power in Mindanao has continuously spiked through the years with rapid urbanization and increased industrialization. According to the Navarro's study, consolidated forecasts for the electricity demand for the period of 2010-2019 show an annual average demand growth of 4.28 percent in Mindanao, which is higher than national rate of 3.63 percent in the same period.
Citing 2012 data from the Department of Energy (DOE), the study notes that the Mindanao grid at present has 37.31 percent baseload generating capacity, a far cry from Luzon`s 63.94 percent and Visayas` 71.88 percent. Mindanao`s generating capacity is also heavily dependent on hydropower which has become unreliable in the face of worsening deforestation of watersheds and siltation of river systems. Of the total 1,616 megawatts (MW) dependable generation capacity in Mindanao, 1, 038 MW come from hydropower plants such as the Agus and Pulangui plants.

Mindanao`s peak demand could reach 1,428 MW this year and 1, 823 MW by 2019. The study explains that to meet peak demand and, at the same time, maintain security and reliability of the power grid, generation capacity must not only correspond to peak demand but also provide for other ancillary services. According to DOE, there should be a reserve margin of at least 21 percent of peak demand. The total generation capacity consequently should be 1,728 MW in 2013 and 2,206 MW in 2019.

However, the dependable capacity in Mindanao is now only 1,616 MW. This means that the power system could run a reserve shortfall of 112 MW for this year--a clear sign that last year's power crisis may happen again. The study says that this gap can only be filled in 2015 when a new coal power plant in Sarangani would already have been built to supply additional 105 MW.

Navarro urged the energy department to implement short-term solutions for likely peaks in the summers of 2013 and 2014, as well as medium- to long-term solutions for increasing generating capacity and managing demand. She recommends for the short term the rehabilitation of the Agus and Palangui hydropower plants and the promotion of interruptible load program for large consumers in the region. She adds that a more aggressive information, education, and communication campaign on the power situation and power outlook in Mindanao should be undertaken.

For the long term, Navarro recommends the implementation of demand-side management programs, the interconnection of the Visayas and Mindanao grids, coming up with a definitive decision on the privatization of Agus and Palangui plants, and implementation of reforestation and watershed management programs, among others.

For more information, you may download the full study from this link: http://dirp4.pids.gov.ph/ris/pn/pidspn1217.pdf.

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PIDS Senior Research Fellow Adora Navarro was chosen as one of Manila's 40 under 40 International Development Leaders by Devex, the world's largest community of aid and development professionals. In a reception held on February 19 in Makati City, Dr. Navarro and 39 other Manila-based development leaders were acknowledged for their influence on the development agenda and impact on development results either in the Philippines or abroad.

Devex's 40 under 40 program recognizes the important work of the next generation of leaders in the international development community around the world.

Dr. Navarro was cited for her research that helped provide guidelines, methodologies, toolkits and practical approaches to maximize the use of development finance and public resources.

In a concept paper she wrote in 2009, Navarro called for a more logical allocation of grants and subsidies in the water supply and sanitation sector through the use of prioritization criteria based on poverty, incidence of water-borne diseases and water service coverage. She also wrote a paper defining tourism-logistics-transportation convergence areas and advocating the use of this definition in harmonizing national and secondary road transport investments.

Dr. Navarro was chosen from a pool of more than 250 candidates. Navarro and her co-awardees are global development professionals based in Manila that include young leaders from international donor agencies, implementing partners, local government units, media and multinational companies as well as founders of social enterprises and members of civil society.

Dr. Navarro finished her doctorate in economics from the UP School of Economics. Her fields of expertise include infrastructure, public-private partnerships, and electricity markets.
Previous Devex 40 under 40 events were held in Washington D.C. in 2010 and in London in 2011. The Philippines is the first developing country chosen by Devex to host the event.

To know more about Devex 40 Under 40 International Development Leaders Awards, please visit their website at http://manila40.devex.com/

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The Philippine Institute for Development Studies (PIDS) congratulates Hon. Arsenio M. Balisacan on his confirmation as Socioeconomic Planning Secretary and NEDA Director General by the bicameral Commission on Appointments. Secretary Balisacan is also the Chair of the Board of Trustees of PIDS.

President Benigno Aquino III appointed then UP School of Economics Dean Balisacan in May 2012 to replace Cayetano Paderanga who resigned for health reasons.

Basilacan was an expert adviser to nongovernmental organizations and institutions such as the World Bank, Asian Development Bank, and United Nations in the areas of poverty, food security, agricultural and rural development, human development, impact assessment, and governance.

He was agriculture undersecretary from 2000 to 2001 and director of the Southeast Asian Regional Center for Graduate Study and Research in Agriculture from 2003 to 2009.

Balisacan was also adjunct professor of the Australian National University, and executive director of the Philippine Center for Economic Development.

Basilacan graduated magna cum laude from the Mariano Marcos State University. He earned his master's degree from the University of the Philippines in Los Banos and his doctorate from the University of Hawaii.

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The Philippine Institute for Development Studies (PIDS) continues to be recognized in international think tank rankings for its outstanding public policy research, analysis, engagement, and impact.

In the 2012 Global Go To Think Tanks Report and Policy Advice of the Think Tanks and Civil Societies Program of the University of Pennsylvania, PIDS ranked 40th and 79th on the list of the world`s best social policy think tanks and development think tanks, respectively.

The Go To Think Tanks index is a comprehensive ranking of the world`s top think tanks and has been described as the insider`s guide to global marketplace of ideas. For its latest rankings, 6,603 think tanks from 182 countries were invited or nominated to participate in the process.

`We are pleased with the continued international recognition for our quality of policy research,` PIDS President Josef T. Yap said. `Still, we feel that no formulaic rankings can fully capture the distinctiveness of any think tank. The Global Go-To Think Tank is just one measure of a think tank's performance and impact, and should be used in conjunction with other metrics. PIDS continues to be the authority in Philippine economic and social development policy research and is one the most influential, most quoted, and most trusted think tanks in the country and in the region.`

PIDS is a state-funded think tank devoted to independent research and innovative policy solutions. Since its establishment in 1977, it has been engaged in conducting long-term, evidence-based research that serves as inputs in crafting socioeconomic policies for the country. PIDS has completed over 800 studies covering a wide range of issues that encompass macroeconomic, agricultural, trade and industrial policies, health economics, environment, natural resource management, urban development and social services, and governance. The Institute has also made significant contribution and influence on Philippine development policy through its active and close collaboration with government agencies, academic and research institutions, and international organizations. Its various research outputs are widely disseminated through its publications (both print and online), conferences, and seminars conducted on a nationwide scale.

A great strength of PIDS is its linkage with various international research networks. It has assumed leadership roles in regional knowledge networks such as the East Asia Development Network (EADN), a group of research institutes, centers, and think tanks in the developing countries of East Asia. The Institute is also an active member of the Global Development Network (GDN), an international organization that aims to enhance the capacity of research institutions and individual researchers from developing countries in conducting high-quality research in the development field. PIDS, as the regional coordinator of EADN, is co-organizing GDN`s 14th Annual Conference with the Asian Development Bank (ADB). The conference, which has the theme `Inequality, Social Protection and Inclusive Growth`, will be held on June 19-21 at the ADB Headquarters.

PIDS has also conducted numerous economic briefings with representatives of multilateral agencies such as the ADB, World Bank, and various United Nations agencies, among others. It has also been consulted by bilateral donors and development agencies such as the USAID, AusAID, New Zealand Council for International Development, and the Agence Francaise de Developpement, among others.

For a copy of the Global Go-To Think Tank report, click here (www.gotothinktank.com/2012-global-goto-tank-index-report/)

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The Philippine Institute for Development Studies (PIDS) and the Asian Development Bank (ADB) have agreed to strengthen their institutional partnership on research dissemination and knowledge sharing by formalizing their collaboration through the SocioEconomic Research Portal for the Philippines (SERP-P).

PIDS President Josef T. Yap and ADB Southeast Asia Department Director General Kunio Senga signed last January 15, 2013, a Memorandum of Understanding (MOU) which states that both institutions have agreed to collaborate in making the studies/research found in their respective repository sites available to the public through SERP-P.

The SocioEconomic Research Portal for Philippines or SERP-P is an online knowledge repository which contains completed, ongoing and pipeline research studies related to socioeconomic development and policymaking in the Philippines. It links different socioeconomic studies conducted by various research institutions.

Yap pointed out in his opening remarks that formalizing the partnership between PIDS and ADB through SERP-P is a strong embodiment of PIDS`s core mandate of providing a common link between government and research institutions and of establishing a repository for socioeconomic research information and other related activities. He further explained that SERP-P is a powerful tool in aiding the policymaking process by providing easy access to pertinent studies that have been undertaken on a particular issue. In fact, SERP-P is currently linked to the Economic Resource Base for Legislators (ERBL), a website containing major socioeconomic bills filed at the Philippine House of Representatives. Yap added that SERP-P is not just a research portal but a network of excellent research institutions as well.

Meanwhile, Senga expressed his pleasure that the partnership between PIDS and ADB has finally become official through SERP-P. He stressed that joining SERP-P provides an excellent opportunity for ADB to establish a stronger partnership with PIDS. This partnership, according to him, is anchored in ADB`s knowledge management action plan, which encourages linkages with local research institutions. Becoming a member of SERP-P is a great opportunity for ADB to widely disseminate its knowledge products, Senga said.

Member institutions of the SERP-P can directly upload their studies into the database, provide keywords, abstract, and even the full text of the papers. These are then made available to the general public using a user-friendly web interface. In the future, SERP-P will also include an inventory of social science experts in the country. Experts will be classified according to their fields of expertise. This is intended to promote knowledge exchange and research collaboration among social scientists in the Philippines. For the general public, a moderated forum is available so that users of the SERP-P can raise questions, interact, and share information with one another.

For more information about the SERP-P, visit the website at serp-p.pids.gov.ph. Or call PIDS at tel. no. 8924059 or email info@pids.gov.ph.


PIDS president Dr. Josef Yap (seated left) and Mr. Kunio Senga (seated right), Director General of Southeast Asia Department of the ADB, sign the memorandum of understanding on the SERP-P. Joining them are (standing L-R) Joven Balbosa, ADB Philippine country office; Rommel Lopez, chief of PIDS public affairs division; Richard Bolt, advisor of ADB Southeast Asia Department; Kristine Carla Oteyza, PIDS SERP-P coordinator; Dr. Sheila Siar, director of PIDS research information department; Neeraj Jain, Philippines country director of ADB; and Norio Usui, senior economist.

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PIDS president Dr. Josef Yap (seated left) and Mr. Kunio Senga (seated right), Director General of Southeast Asia Department of the ADB, sign the memorandum of understanding on the SERP-P. Joining them are (standing L-R) Joven Balbosa, ADB Philippine country office; Rommel Lopez, chief of PIDS public affairs division; Richard Bolt, advisor of ADB Southeast Asia Department; Kristine Carla Oteyza, PIDS SERP-P coordinator; Dr. Sheila Siar, director of PIDS research information department; Neeraj Jain, Philippines country director of ADB; and Norio Usui, senior economist.

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State think tank Philippine Institute for Development Studies (PIDS) held on Jan. 9, 2013 the first Pulong Saliksikan for this year. The event featured the research presentation of economist Victor Pontines on the prospects and benefits of coordinating exchange rate policies within the ASEAN + 3.

The Pulong Saliksikan Forum Series, which literally means `research meeting` in Filipino, is one of PIDS` research dissemination activities and strategies. A spin-off from the concept of academic research defense, this forum series provides a venue for in-house research staff and invited guest researchers to refine their methodology and elicit recommendations from an audience composed primarily of technocrats, academics, and experts on the topic at hand.
Pontines, a Research Fellow at the Tokyo-based Asian Development Bank Institute (ADBI), proposes for the coordination in exchange rates among the ASEAN +3 to promote intraregional exchange rate stability and to further facilitate intraregional trade. The ASEAN + 3 is composed of the 10 ASEAN member countries, Japan, China, and South Korea. At present, these countries follow different exchange rate regimes.

Exchange rate coordination, according to his study, `can be facilitated by the creation of an Asian Currency Unit (ACU) index` which can be used `for surveillance purposes, particularly, for purposes of assessing `over and undervaluation` of the individual currencies from the regional ACU average and for flagging emerging vulnerabilities in individual economies in the region.` He explains that this method has the advantage of arriving at an optimal regional currency basket and can lessen the contentious and political nature of exchange rate policy coordination.

Pontines further adds that, despite increased intraregional trade agreements, there has been very little coordination among governments in the region with respect to this issue. He therefore urged policymakers to consider his proposal especially with the imminent establishment of an ASEAN Economic Community by 2015.

Meanwhile, PIDS President Josef T. Yap commended Pontines` study. He said that `it comes at an opportune time because exchange rate issues have been perennially at the forefront of macroeconomic concerns in the region.` He also expressed concern about the issue by saying "that the biggest stumbling blocks to effective exchange rate coordination remain to be political and institutional factors.`

For more information, you may contact the Institute`s Public Affairs office at 892-4059 (c/o Gift Baroy or Gizelle Manuel) or email inquiries@pids.gov.ph. ###

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The Philippine Institute for Development Studies (PIDS) and the Department of Trade Industry Board of Investments (DTI-BOI) convened the Inception Workshop on the Formulation of the Manufacturing Industry Roadmap on October 19, 2012.

In January this year, DTI-BOI launched the Industry Roadmap Project in partnership with the private sector to craft sectoral roadmaps that would cover industry vision, goals and targets possibly till 2030 to serve as basis for the formulation of the Comprehensive National Industrial Strategy. The private sector takes the lead in determining the course of development of the industry while the government serves as `catalyst`, `facilitator`, and `enabler`.

To realize these goals, the DTI-BOI tapped the expertise of PIDS to formulate the Comprehensive National Industrial Strategy that would integrate the sectoral roadmaps and link the overall manufacturing roadmap with other economic sectors such as agriculture, fishing, forestry, mining, construction, and services.

The Institute, led by Senior Research Fellow Rafaelita Aldaba, crafted an analytical framework to be adopted in integrating the various sectoral roadmaps submitted to DTI-BOI. The framework will cover the following elements: (i) dynamically growing industries and those with latent comparative advantage, (ii) most binding constraints to industrial upgrading, and (iii) government action to remove constraints. The Inception Workshop was held to bring together various stakeholders from business, government, academe, labor, and civil society to present the framework and use it to identify the most binding constraints preventing industrial and technological upgrading and propose alternative measures to address these constraints and transform manufacturing into a major source of growth and employment.

The workshop was attended by various business leaders and government officials including DTI Sec. Gregory L. Domingo, Usec. Adrian S. Cristobal, Jr., National Economic and Development Authority (NEDA) Deputy Director-General Emmanuel F. Esguerra, and PIDS President Josef T. Yap, among others.

Domingo commended the partnership between the government and the business sector in organizing the event. He said the number of industries volunteering to craft their own roadmaps has increased. This is a bellwether, according to Domingo, to the positive reception and support by the private sector for the project which is expected to be completed in the first quarter of 2013.

Meanwhile, Aldaba said the roadmap project is crucial for faster and more inclusive and sustainable growth as well as for employment generation. The government will adopt a growth-oriented strategy to improve productivity growth, increase investment, promote export diversification and facilitate structural transformation. This growth oriented action by the government is a major way to address the `progeria` that most manufacturing industries currently suffer from.

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The Philippine Institute for Development Studies (PIDS) inaugurated yesterday, December 5, 2012, the 21st PIDS Corner at the Central Luzon State University (CLSU) Library in the City Science of Munoz, Nueva Ecija.

The PIDS Corner is one of the Institute's foremost research dissemination strategies aimed at providing reading and research materials on development-oriented topics to students, researchers, faculty, and policymakers in locations where there is a lack of such resources. The "Corner" consists of shelves containing various studies and publications produced by the Institute and its research partners. These include books, research papers, discussion papers, journals, and newsletters, among others.


The PIDS Corner at CLSU Library is the first of its kind in the Central Luzon region. Since inception in 2006, there have been 21 (10 in Luzon, 6 in Visayas, 5 in Mindanao) Corners, strategically located in provincial libraries, and public and private academic institutions all over the country.


The inauguration, attended by students, university officials and local government officials, was led by PIDS President Josef T. Yap and CLSU President Ruben C. Sevilleja through a ceremonial ribbon cutting and signing of the Memorandum of Agreement between both institutions. The signing which was witnessed by CLSU's Chief Librarian Zoraida E. Bartolome and PIDS' Director for Research Information Sheila V. Siar formalizes the partnership between PIDS and CLSU.


Speaking in Filipino, Yap underscored in his remarks the importance of the PIDS Corners as well as the Institute's partnership with universities and research institutions. He said, "Hangad din namin na mas maintindihan ng mas nakararami ang mga bagay-bagay na nangyayari sa ating ekonomiya; kaya bukod sa mga opisyal ng ating pamahalaan, ang mga pag-aaaral naming ay amin ding ibinabahagi sa mga eskuwelahan at mga pamantasan sa pamamagitan ng kanilang mga aklatan at gayun din sa ibang research institutions." (We also aim to increase the public's literacy and understanding of issues that affect our economy; hence, aside from government officials, we also share our studies with academic and research institutions through their libraries.)


Meanwhile, Sevilleja thanked the Institute for bringing its studies closer to CLSU's students and faculty members. He said that, as an institution of higher learning, it is imperative for the university to continuously enrich its knowledge materials not only for its students but also for the general public. The Corner provides a new platform for understanding how socioeconomic policies are crafted and how socioeconomic problems can be better addressed, he added.


To spur development discussions in the local area, PIDS Corner inaugurations are followed by a discussion forum on development-related topics by a PIDS senior researcher. For this occasion, Yap presented on the topic "Regional Economic Integration and Inclusive Growth: The Role of the Manufacturing Sector." In addition, Siar also took the audience composed primarily of Economics students of the university on a "tour" to the Socio-Economic Research Portal for the Philippines (SERP-P), a Web-based knowledge resource of socioeconomic studies which is being maintained by the Institute. SERP-P currently contains more than 5,000 publications conducted not only by PIDS but also by other academic and research institutions.

For more information about PIDS Corners, you may visit http://www.pids.gov.ph/ris/pidscorner.html.


PIDS President Josef T. Yap (center right) and CLSU President Ruben C. Sevilleja (center left) during the inauguration of the PIDS Corner at CLSU Library.

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On the 5th of December 1980, the UN General Assembly ratified the Set of Multilaterally Agreed Equitable Principles and Rules for the Control of Restrictive Business Practices (UN Set). Since then, every 5th of December is remembered and commemorated as World Competition Day.

In relation to this, President Benigno S. Aquino III issued a Presidential Proclamation declaring every 05th of December, as National Competition Day. (http://www.gov.ph/2012/05/18/proclamation-no-384-s-2012/) .

The Philippine Institute for Development Studies (PIDS) fully supports the observance of World Competition Day since `Competition increases consumer welfare,` said PIDS president Dr. Josef Yap.

Many countries still suffer from weak competition practices such as the prevalence of cartels. Most consumers of these countries have limited to no understanding of the harmful effects of a weak market competition. Observing World Competition Day allows for greater exchange among concerned stakeholders about the beneficial effects of competition, especially on the average consumer.

To effectively communicate to the common man the message, 'Say No to Cartels', various stakeholders such as competition agencies, CSOs, development organisations and individuals around the world are planning to organise seminars/roadshows, publish newspaper articles/press releases, hold press conference, etc to celebrate the 'World Competition Day' with the purpose of creating awareness about the importance and benefit of competition by curbing cartels.

Various countries have expressed their support to this endeavor through a letter to UNCTAD namely: Namibia, Zimbabwe, Pakistan, The Gambia, Fiji; Russia, Zambia and United Kingdom; and many more countries are in the process to send formal letter to UNCTAD.

To know more about the World Competition Day (WCD):
Please contact
Udai S. Mehta, CUTS International
usm@cuts.org; +91 98292 85926
and
Ashutosh Soni, CUTS International
ash@cuts.org; + 91 99501 77012

Visit the follow web links:
www.incsoc.net/World_Competition_Day.htm
and http://www.facebook.com/worldcompetitionday

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Some 60 participants from 33 academic and research institutions from all over the Philippines met for SERP-P`s Third Network Members` Meeting last November 20 in Makati City.

The importance of making the fruits of socioeconomic research easily available to a wide audience to promote knowledge exchange and collaboration was highlighted in the event.

The SocioEconomic Research Portal for Philippines or SERP-P is an online knowledge bank which contains completed, ongoing and pipeline research studies related to socioeconomic development and policymaking in the Philippines. Since its inception in 2000, SERP-P has grown into a network of 48 academic and research institutions from all over the country and now hosts over 5,000 studies in different formats. Studies that may be downloaded from the SERP-P include working papers, journal articles and discussion papers, to name a few. SERP-P was initiated and is being managed by the Philippine Institute for Development Studies (PIDS), a government policy think-tank based in Makati City.

In his opening statement, PIDS President Josef Yap emphasized the important role of research and analysis in policymaking. He explained that one of the core mandates of PIDS enshrined in its charter is the establishment of a repository for economic research information and other related activities. He further stressed that SERP-P is an excellent platform that serves as a portal and one-stop repository for all socioeconomic policy studies in the country. Anyone who is looking for studies related to a particular socioeconomic issue can simply go SERP-P, do a search using keywords and browse through the studies available in the database. SERP-P is a valuable tool not only for policymakers in crafting research and evidence-based policies but also for researchers and students of the social sciences who are writing their theses and dissertations. SERP-P is currently linked to the Economic Resource Base for Legislators (ERBL), a website containing major socioeconomic bills filed at the House of Representatives.

Member institutions of the SERP-P can directly upload their studies into the database, provide keywords, abstract, and even the full text of the papers. In the future, the SERP-P will include an inventory of social science experts in the country. Experts will be classified according to their fields of expertise. This experts` database is intended to promote knowledge exchange and research collaboration among social scientists in the Philippines. For the general public, a moderated forum is available so that users of the SERP-P can raise questions, interact and share information with one another.

For more information about the SERP-P, visit the website at serp-p.pids.gov.ph. Or call PIDS at tel. no. 8924059 or email info@pids.gov.ph.

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To make research studies more accessible to the public, State think tank Philippine Institute for Development Studies (PIDS) revitalized the SocioEconomic Research Portal for the Philippines or SERP-P. This online knowledge bank contains completed, ongoing and pipeline research studies related to socioeconomic development and policymaking in the Philippines. It can be accessed through the PIDS website, www.pids.gov.ph, or through its URL, serp-p.pids.gov.ph.

According to PIDS President Josef Yap, the establishment of SERP-P is in line with the Institute`s mandates of providing a common link between the government and research institutions and establishing a repository for socioeconomic research information and other related activities.

Studies that may be found in the database include not only those conducted by PIDS but also researches by other government agencies and the academe. Data available in the database include the abstracts, authors, focus of study, geographical coverage, and where the studies can be accessed. The full text of most studies, especially those by PIDS, may also be downloaded directly from the SERP-P. Researchers may search the database using keywords, or by searching authors or institutions.

SERP-P now has a new look for easier navigation. A new feature called Spotlight was also added in the SERP-P website. Spotlight highlights critical issues that may be of interest to the public. Related studies conducted within the last five years found in SERP-P about these issues are highlighted in Spotlight. At present, the focus is on climate change.

In the future, the SERP-P will include an inventory of social science experts in the country. Experts will be grouped according to social science fields and subfields. Having this inventory of experts will encourage exchange of knowledge and promote research collaboration among social scientists in the country.

Since work on the SERP-P started in 2000 and since it was launched in 2002 during the Institute`s 25th founding anniversary, the portal has steadily grown. It now has more than 5,000 studies in various formats (working paper, journal article, discussion paper, etc.) contributed by its 48 network members composed of research and academic institutions from all over the Philippines. Work is underway to invite more institutions not only those within the country but also overseas to join the SERP-P network.

Last 20 November, representatives from 33 network members participated in SERP-P's Third Network Members' Meeting wherein PIDS presented the revitalized portal. The meeting, which was held at the PIDS headquarters in Makati City, was also an opportunity for the network members to discuss ways on how SERP-P could better serve their needs and how it can be more useful as a research tool. SERP-P will greatly benefit not only policymakers in crafting research and evidence-based policies but also researchers and students of the social sciences who are writing their theses and dissertations.

For more information about the SERP-P, visit the website at serp-p.pids.gov.ph. Or you may call PIDS at tel. no. 8924059 or email info@pids.gov.ph.

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Agricultural Credit Policy Council (ACPC) Public Affairs and Information Service Director Norman William Kraft and Philippine Institute for Development Studies (PIDS) President Josef T. Yap sign the Memorandum of Agreement on strengthening institutional collaboration between PIDS and ACPC for the SocioEconomic Research Portal for the Philippines (SERP-P) on November 20, 2012 in Makati City.

SERP-P is an online knowledge bank of completed, ongoing and pipeline research studies related to socioeconomic development and policymaking in the Philippines. Witnessing the MOA signing are (from L-R), PIDS Vice President Mario C. Feranil, Former Research Information Staff Director Jennifer Liguton, ACPC Information Division Chief Emmalyn Guinto, SERP-P Coordinator Kristine Carla Oteyza, PIDS Research Information Staff Director Sheila Siar, PIDS Public Affairs Division Chief Rommel Lopez and PIDS Senior Research Fellow Aniceto C. Orbeta.

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The Philippine Institute for Development Studies (PIDS) and the House of Representatives Congressional Policy and Budget Research Department (CPBRD) are launching the revitalized Electronic Resource Base for Legislation (ERBL) Project on Wednesday, October 17, 2012.

Conceptualized in 2000, the ERBL project primarily involves the setting up of the ERBL website (http://www.pids.gov.ph/erbl/). This website is envisioned to be the primary reservoir of information for the legislators and the public by linking legislation with available research resources.

The ERBL is a web-based facility that aims to contribute to strengthening the quality of Philippine legislation in terms of substance and content.This objective will be pursued in three ways: first, by providing basic information on major economic legislation being considered in Congress; second, by directly supplying inputs from research that are relevant to these bills; and third by encouraging more discussion and debate on the bills through the posting of position papers and blogs on these bills.

These goals are derived from PIDS`and CPBRD`s respective institutional mandates. PIDS is the government`s foremost policy think tank envisioned to help government planners and policymakers in the executive and legislative branches. Its research programs and agenda are aligned with the national development plan. On the other hand, CPBRD is the research arm of the House of Representatives that provides technical service in formulating national economic, social, and fiscal policies.

Since the project`s inception, over 300 priority bills have been posted on the website. In March 2011, PIDS and CPBRD both agreed that the facility needs to be updated to keep up with the developments relating to legislative information. For one year and a half now, the teams have been working to reactivate and re-launch the ERBL facility.

The revitalized and improved ERBL website will be up in the coming days. It provides access to full textcopies of major bills filed in the congress and their status in the legislative process. In particular, the website will feature the Legislative-Executive Development Advisory Council (LEDAC) bills,the legislative agenda of the Speaker of the House, and bills in support of the Philippine Development Plan. Aside from this, the website has a link to PIDS` Socioeconomic Research Portal for the Philippines (SERP-P), a database of research studies conducted by PIDS and its collaborators. The new ERBL will also include the position papers submitted by various interest groups and stakeholders on these bills. Finally, comments on the bills can be posted by the general public through a moderated blog.

To jumpstart this renewed and improved partnership between PIDS and CPBRD, a forum will be conducted Wednesday afternoon at the House of Representatives. It will be attended by PIDS President Josef T. Yap and CPBRD Director-General Romulo E.M. Miral, Jr. Congressmen Sigfrido R. Tinga, Albert Raymond Garcia, Cesar Jalosjos, and other legislative staff and officers will participate in the forum.

In addition, the event is also organized in honor of Professor Emmanuel `Manoling` Q. Yap, the eminent nationalist who was the first head of the Congressional Economic Planning Office(CEPO), which was established on September 2, 1968 by Speaker Jose B. Laurel, Jr. The CEPO served the technical needs of both houses of the Congress of the Philippines when it was first established. Thus, the current CPBRD draws its historical origins from the CEPO.

The first death anniversary of Professor Emmanuel Yap was observed last September 26, 2012. PIDS President Josef T. Yap is a son of the late professor.

For more information on this, you may contact Ms. Christine Ruth Salazar of PIDS at 893-9585 loc. 4063 or the PIDS Public Affairs Division at 982-4059.

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3 September 2012





Ms. Maria A. Ressa
CEO and Executive Editor
Rappler.Com




Dear Ms. Ressa,




Greetings from the Philippine Institute for Development Studies (PIDS)!




I was interviewed by Ms. Cai Ordinario on August 23, 2012. The main purpose of the interview was to explain the theme of the Development Policy Research Month (DPRM), which has been observed every month of September since 2002. The theme for the 10th year is `Regional Economic Integration and Inclusive Growth: Engaging Nations, Embracing People.`




Based on this interview, two articles appeared on your website in the past two days: `Free trade agreements `more political than economic` and `Philippines may not be `ready for 2015 Asean free trade`.`

I would like to file a formal disclaimer about these articles. Please allow me to explain:

1. As I mentioned, the interview was centered on the observance of DPRM. I therefore requested that the rappler.com article be based on the write-up that PIDS prepared on the topic. Both hard and soft copies of the write-up were provided to rappler.com.

2. The main message of the write-up is that despite closer economic integration with the region and the rest of the world, economic growth in the Philippines has not been as inclusive as that of its neighbors. This can be gleaned from its relatively high poverty incidence, which even increased between 2003 and 2009.

3. One reason for the dismal record in poverty reduction is that the manufacturing sector in the Philippines stagnated while the manufacturing sector of its neighbors (especially Thailand and Malaysia) flourished with regional economic integration.

4. During the interview I then explained why the manufacturing sector stagnated: low investment, especially low foreign direct investments (FDI), poor physical infrastructure, lack of a coherent industrial policy, and weak institutions.

5. I further explained how a stagnant manufacturing sector can contribute significantly to poverty. The manufacturing sector normally provides higher productivity jobs to workers with less education. Since poverty and the level of education of the household head are directly related, then the absence of a dynamic manufacturing sector meant less high-paying jobs for the less educated.

Ms. Cai Ordinario then asked related questions including the role of free trade agreements (FTAs). I mentioned that I submitted an international trade strategy to DTI in 2010 which dealt with this topic. One of my recommendations was to prioritize supply-side constraints before venturing into other FTAs. Please note that this was discussed in the context of prioritization of strategies.

I also expounded on the need for an industrial policy. I cited the experience after we acceded to the World Trade Organization (WTO) wherein the trade regime, particularly the manufacturing sector, was liberalized too fast. I did not question the membership of the Philippines in the WTO.

The problem with the articles is that some statements were pulled together out of context and sensationalized. For example, the second paragraph of the first article states:

`In an interview with Rappler, Josef Yap, president of state-owned think tank Philippine Institute for Development Studies (PIDS), said that without a strategy in place, the Philippines was not ready for many things, including its membership to the World Trade Organization (WTO) in 1995 or various free trade agreements (FTAs) undertaken in recent years.`

The tone of the paragraph is that the Government was reckless and there were no benefits to membership in the WTO and engagement in the FTAs. What I said during the interview is that because of supply-side constraints we could not take full advantage of the opportunities provided by globalization and regional economic integration. The more logical interpretation of my statement is there were benefits to WTO membership and engagement in FTAs but these benefits were not maximized. This is altogether a different message than the one implied in the aforementioned paragraph.

There are other statements that were sensationalized:

`He said this is the reason why his advice to Trade Undersecretary Adrian Cristobal was to veer away from signing any new trade agreements, including FTAs, and focus more on the country`s supply-side constraints.

These constraints include problems with infrastructure, logistics, and firm competitiveness. Yap said focusing on resolving these issues would render far better results than changing the 60-40 rule in the constitution or granting more incentives and subsidies.

Yap said this is the reason why the PIDS is now working with the Department of Trade and Industry (DTI) in crafting an industrial masterplan that will be used until 2030.`


The two articles failed to reflect the main focus of the interview and the write-up given to the reporter. PIDS also never comes up with an institutional position on policy matters. We have always stressed that policy recommendations are those of the author(s) and not of PIDS. The articles were written in such a way that the policies seemed to be those of the Institute.

I therefore requested that the rappler.com article be based on the write-up that PIDS prepared on the topic. Both hard and soft copies of the write-up were provided to rappler.com.
Thank you for your kind attention and consideration.

Thank you for your kind attention and consideration.

Sincerely,

Josef T. Yap
President, PIDS

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Celebrating Filipino ingenuity and inventiveness in the healthcare sector, the Philippine Institute for Development Studies (PIDS) confers the 2nd Galing Likha-Kalusugan (GLK) Awards to three outstanding innovative health program. These programs are the Surveillance in Post Extreme Emergencies and Disasters (SPEED), Mother Bles Birthing Clinics and PhilHealth Link.

In an awarding ceremony held on September 4 at the Hotel Intercontinental in Makati City, these programs were honored for their invaluable contributions in making healthcare more accessible, available and affordable to Filipinos. The event was attended by top health experts in the country led by Dr. Eduardo Banzon, President and Chief Executive Officer of PhilHealth.

The Galing Likha-Kalusugan (GLK) Award is a distinction given to public and private organizations that best exemplify the highest level of innovation in the country's health marketplace. GLK prides itself to be the first and only award that specifically honors ground-breaking and promising health programs and initiatives that have significantly solved a particular problem plaguing the country's healthcare system. As such, GLK hopes to be the stamp for excellence and innovation in the field of healthcare delivery, finance, facilitation, regulation, and promotion. In addition, it hopes to promote and encourage creative and fresh approaches in uplifting our countrymen's health.

GLK is a joint initiative of PIDS and the Center for Health Market Innovation (CHMI), an international organization devoted to identifying and replicating innovative health programs around the world. Now on its second year, the CHMI in the Philippines identified and documented 80 innovative health programs. And through a meticulous screening process conducted by the PIDS and several esteemed health experts, ten (10) of these programs were shortlisted for the award. Of these programs, three (3) emerged truly outstanding in concept, implementation, and impact and were honored and recognized as the top recipients of the first Galing Likha-Kalusugan Awards.

SPEED is an early warning disease surveillance system for post-disaster situation launched by Department of Health and World Health Organization in 2010. The aim of the system is to determine early and potential disease outbreaks and monitor disease trends. It contributes immensely in reducing preventable deaths and diseases by enabling timely and appropriate response by local government officials.Using web-based software technology which can receive data via SMS, the system enables online data validation and automatic generation of necessary reports. Thus, it makes the transmission of syndromic diseases information from barangay or evacuation centers to all levels of the health system country in a short period of time.

Mother Bles Birthing Clinics (MBBC) are networks of PhilHealth accredited birthing health facility started in Leyte Province. The program aims to provide poor pregnant women with accessible and affordable maternal and infant health care services. Ninety-five (95) percent of clients of MBBC are PhilHealth indigent members, and the remaining 5 percent are either non-PhilHealth or paying clients. The business model of Mother Bles Clinics harnesses the comparative advantages of the following sectors through private-public partnership: KaKaK Foundation Inc., private practicing midwives, municipal and provincial government.

PhilHealth LINK is a call center for PHilHealth members, a collaborative enterprise supported by provincial local government units who want to maximize reimbursement from PhilHealth so that LGU health facilities can have a steady revenue stream. This project was launched by PhilHealth Region VIII in 2010. PhilHealth LINK is particularly useful for households whose premiums are subsidized by local government units under the Sponsored Program, and who may not be fully aware of the benefits they are entitled to and how these may be availed of.

With the success of the second GLK Awards, PIDS vows to continue its search and recognition of innovative health programs in the country. In line with the global thrust for universal healthcare and the promotion and encouragement of creative and fresh approaches and solutions to the country's healthcare problems, the PIDS and its partner, the CHMI, thereby hopes to create a healthier and better nation.

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The Philippine Institute for Development Studies (PIDS)leads the country in the observance of the 10th Development Policy Research Month (DPRM) this September with the theme "Regional Economic Integration and Inclusive Growth: Engaging Nations, Embracing People".

The DPRM is a month-long celebration highlighting the importance of policy research and evidence-based policy to national development. It started with the issuance of Malacanang Proclamation No. 247 in 2002, which declared the month of September of every year as Development Policy Research Month. The Proclamation underscored the "need for promoting, enhancing, instilling, and drawing awareness and appreciation of the importance and necessity of policy research."

The PIDS, being in the forefront of policy research in the country, was designated as the overall coordinator of all the programs and activities in the yearly observance of the DPRM. As a leading think tank, PIDS conducts studies on socioeconomic issues with the aim of assisting the government in crafting sound policies for national development.

In the previous years, the thematic focus of the DPRM dealt with national issues needing utmost attention and support from the government and other sectors. These topics include education, rice and food security policy, economic competitiveness, local governance, international labor migration, climate variability and change, and poverty alleviation, among others.

This year's DPRM theme underscores the importance of regional economic integration in achieving higher and inclusive economic growth for the country. Around the world, regional economic communities have generated more trade and increased job opportunities and incomes, thereby improving people's livelihoods and living conditions. Related to this, economic integration in East Asia is on the verge of a breakthrough with the establishment of the ASEAN Economic Community (AEC) in 2015.

Harnessing the full benefits of regional economic integration entails harmonizing regional and sovereign priorities and resolving issues on trade, investment, labor and migration, among others. In the Philippines, revitalizing the manufacturing sector and keeping it robust and expanding will ensure that benefits can be availed by the poor and less-skilled members of society. Thus, the various activities lined up for the celebration of the DPRM will hopefully provide the appropriate base to better understand and resolve the issues related to these.

The PIDS, as the lead organizer and in collaboration with the members of the 2012 DPRM Steering Committee, has lined up a number of fora and symposiums that will be among the main highlights of the celebration. These include the forum on "Regional Economic Integration" on Sept. 17 which is co-sponsored by the Asian Development Bank (ADB) and the Economic Research Institute for ASEAN (ERIA), the forum on "Increasing Firm Competitiveness for Inclusive Growth" on Sept. 24, and the forum entitled "Does Economic Integration Promote Inclusiveness?" on Sept. 25. The Institute will also host a Research Fair on Sept. 24-26 to commemorate its 35th founding anniversary. This fair will feature studies and researches of some 20 research and academic institutions.

This year's DPRM Steering Committee is composed of the PIDS, Department of Foreign Affairs (DFA), Department of Trade and Industry (DTI), National Anti-Poverty Commission (NAPC), National Economic and Development Authority (NEDA), Civil Service Commission, (CSC) and the Philippine Information Agency (PIA).

For more information regarding the 10th DPRM, log on to dprm.pids.gov.ph or you may call us at 893-5705/ 892-4059 (c/o Gizelle Manuel or Gift Baroy).

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Water pollution is a major reason for the decreased availability of and access to clean potable water. This was the observation made by Philippine Institute for Development Studies (PIDS) Senior Research Fellow Dr. Danilo Israel whose review imputes poor management of freshwater water resources, particularly in the area of water pollution.

He says that while freshwater is abundant in the country, estimates show that only 39 percent of classified inland surface water bodies are potential water sources for domestic use. Based on further estimates, he also said that only 1,907 cubic meters (the second lowest among Southeast Asian countries) of freshwater are available to every Filipino annually. This predicament, according to Israel, is further exacerbated by water pollution.

Citing the Environmental Management Bureau (EMB), Israel explains that the number of monitored freshwater bodies which failed the standard in terms of Dissolved Oxygen (DO) and Biological Oxygen Demand (BOD) has been increasing significantly at average annual rates of 22.90 percent and 22.30 percent, respectively, from 2000 to 2007. Likewise, he explains that many freshwater bodies, especially those in urban areas, have been contaminated with suspended solids, heavy metals and other harmful chemicals.

Israel asserts that if this trend continues, more Filipinos will not have enough access to safe-drinking water especially since demand for clean water constantly increases with population growth. As a consequence, Israel fears that the country may not attain the Millennium Development Goal that at least 86.6 percent of the population should have adequate access to potable water by 2015.

Israel reminds policymakers and the public that clean freshwater is a vital natural resource and without its ample supply, the lives and health of people could be put to risk. Specifically, he points out that there is a positive relationship between water pollution and water-borne diseases. The World Bank, for instance, has estimated that exposure to water pollution and poor sanitation accounts for one-sixth of reported disease cases, and nearly 6,000 premature deaths per year.

Israel therefore urges the government to improve freshwater management in general and contain water pollution in particular. He suggests employing and expanding economic instruments such as pollution fines and environmental taxes to control pollutive discharges of economic activities. He likewise points out that limited law enforcement magnifies the problem on water pollution and that more steadfast implementation of water-related legislations is thus needed.

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As another school year ends this month, researchers at the state think tank Philippine Institute for Development Studies (PIDS) take a special look at the country`s education sector and present some ideas for reform. In the second issue of the PIDS Economic Policy Monitor (EPM) published in early March, a team of education experts provides an analysis of the education sector's achievement, direction and critical gaps in order to help the government and other education stakeholders craft the needed reform agenda that can ameliorate the sector and bolster its contribution to sustained and inclusive development.

The study, authored by PIDS Visiting Research Fellow Vicente Paqueo and PIDS Senior Research Fellows Aniceto Orbeta, Jr. and Jose Ramon Albert, notes that while there have been some positive developments in the education sector in recent years, their progress, however, has been distressingly sluggish and inadequate. In fact, education indicators have remained embarrassingly low. For instance, although gross enrollment rate has been remarkably high in recent years, dropout and repetition rates still remain high as reflected in the low primary education on time completion rate of 75 percent. Moreover, learning outcome continues to be alarmingly low as reflected in students` poor performance in the National Achievement Test. Functional literacy rate among ten-to-fifteen-year-old children is also low at only 62 percent. If such trends continue, the team fears that the county could fail to honor its Millennium Development Goals commitment of achieving universal primary education by 2015.

The research team also points out the proverbial fact that many Higher Education Institutions (HEIs) do not meet international and even local quality standards. Low expenditure in higher education (HE) is considered to be a major factor to HE`s deterioration and underperformance. In 2007, the Philippines spent less than 10 percent of GDP per capita on HE while Indonesia spent 20 percent and Malaysia spent a whopping 50 percent.

The study also examines the status of the technical and vocational education and training (TVET) which is an equally important cluster in the education sector. In the past decade, TVET has seen a surge in enrollment as the demand for skilled workers increased in both local and international labor markets. However, the study reveals that despite the high labor demand, only 34 percent of technical vocational institution (TVI) graduates found employment and only 26 percent consider their training useful for their job.

Meanwhile, the Aquino administration has committed itself to the improvement of the education sector and has begun implementing groundbreaking education reform policies. The Department of Education (DepEd), for instance, has received an increased budget to accelerate the implementation of the mother tongue-based multilingual education policy (MBTMLE) and the K-12 reform program. Similarly, the Commission on Higher Education (CHED) has also initiated reforms to improve tertiary education such as the rationalization of state colleges and universities (SUCs). TESDA is likewise seeking to improve its programs and strengthen its partnership with the private sector.

Despite these efforts, though, concerns still remain, especially on the rush implementation of the K-12 program which, according to the researchers, may have unintended effects on social equity if publicly funded. This stems from the fact that many poor families do not reach this level of educational attainment. Moreover, some experts have also expressed fear that the DepEd might be spreading itself too thinly and might lose administrative concentration by implementing too many reforms altogether, thereby risking similar reform failures as in the past.

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Philippine Institute for Development Studies (PIDS) President Josef Yap sees an improved and better economy in 2012. In his annual forecast of the economy, based on trends and developments in the previous year, Yap expects gross domestic production (GDP) to grow at 5.6 percent.

Although this growth forecast is still below the 7-8 percent growth target contained in the Philippine Development Plan, Yap said that it is nonetheless an auspicious outlook considering the country's dismal economic performance last year. He also said that, with appropriate policies in place, 2012 could be a transition year toward an era of higher and sustained economic growth. He urged the government to take advantage of this more favorable economic environment to implement required economic, social and political reforms to ensure that growth will equitably benefit the people.

Yap explained that GDP growth will be largely stimulated by the revival of public spending which decelerated and was a major cause of the dip last year. The implementation of the infrastructure projects of agencies like the Department of Public Works and Highways (DPWH) and the Department of Transportation and Communication (DOTC) is expected to be a key growth driver for this year.

At the same time, continued expansion of manufacturing and service sectors will drive growth this year. Manufacturing grew by 4.7 in 2011 despite export contraction, while service sector grew by a respectable 5 percent in 2011. In addition, agriculture is also expected to recover from the impact of natural calamities last year and grow by 2.5 percent this year.

Meanwhile, the government should be wary of the downside risks brought by the continued international economic crisis and rise in fuel and food prices. Yap, citing from the IMF World Economic Outlook, said that global economic growth is expected to decelerate further to 3.3 percent this year and this will have concomitant effects to our economy, particularly to the export sector.

The brewing dispute in the Middle East has resulted in the rise of fuel prices which adversely affects our fuel-dependent economy. According to www.oilprice.net, international fuel prices in February 2012 have reached $121.66/ per barrel for Brent crude oil. If this trend continues, inflationary pressures will increase because food prices are partly determined by fuel price. Yap forecasts inflation to be higher than 4 percent in 2012. He explained that the government should contain inflation because it reduces spending and curtails production.

A critical aspect that will be a major economic determinant this year will be the attainment of a favorable political situation. Hence, Yap articulated that it is an imperative to have a successful closure of the impeachment trial of the Chief Justice; otherwise, political uncertainty may ensue and may hamper investment. He further expressed that the confidence being enjoyed by the current administration is a positive attribute that can be harnessed to accelerate the economy through new businesses and stable investment inflows.

Yap`s article titled The Philippine Economy in 2011 and Prospects for 2012 appears in the January-February 2012 issue of the Development Research News. It is co-authored by PIDS Research Consultant Adoracion Navarro and will also be published in the book Economic Policy Monitor (EPM) in March. As one of the leading advocates for evidence-based policymaking in the country, PIDS publishes the EPM to analyze various development issues confronting the country and to recommend as well as analyze corresponding policies.

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Monday`s 6.9 magnitude earthquake in Negros Island as well as the recent floods in Mindanao and Central Luzon showed the importance of preparedness in dealing with both natural and man-made disasters. These recent events have also increased public discourse on disaster risk reduction and management (DRRM).

According to economist and local governance expert Gilberto Llanto, it is imperative that local communities and their governments are prepared and capable of addressing and managing the risks and ruinous effects wrought by these disasters. He said that doing this entails building local government`s DRRM capacities.

Llanto, a Senior Research Fellow at the state think tank Philippine Institute for Development Studies (PIDS), noted that the country is inherently disaster prone owing to its geographical location. It lies on the western rim of the Pacific and along the circum-Pacific seismic belt, subjecting it to typhoons, earthquakes, floods, volcanic eruptions, droughts, and other natural hazards. In fact, the country is ranked 8th by the World Bank's Natural Disaster Hotspot list of countries most exposed to multiple hazards, with 268 recorded disasters over the last three decades. In addition, Llanto said that 60 percent of the total land area of the country is exposed to multiple hazards and as a result, 74 percent of its population is at risk.

Meanwhile, DRRM has recently begun to occupy center stage in the policy space. On May 27, 2010, President Benigno S. Aquino signed into law the Philippine Disaster Risk Reduction and Management Act, a legislation that calls for the development of policies and plans in dealing with the climate change phenomenon and natural disasters.

Llanto said that it is fortunate that local officials are becoming aware of the problem and have shown enthusiasm in improving their local DRRM. He particularly commended Albay`s DRRM strategy for its efficiency and effectiveness.

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January 25, 2011--State think tank Philippine Institute for Development Studies (PIDS) and the Legislative Information Resources Management Department (LIRMD) of the House of Representatives (HRep) have signed a Memorandum of Agreement (MOA) for the launching of the PIDS Corner at the Legislative Library. PIDS Corner is a research dissemination strategy that aims to provide reading and research materials on development-related topics to policymakers and the general public. As such, the partnership between PIDS and the (HRep) augurs well toward evidence-based policymaking in the country. Shown above are PIDS President Dr. Josef T. Yap and HRep Secretary General Atty. Marilyn Barua-Yap signing the MOA in the presence of (left to right) PIDS Vice President Mario Feranil, PIDS Research Information Director Ms. Jennifer Liguton, Exec. Director Emma Rey, House Sergeant-at-Arms B/Gen. Nicasio Radovan, Jr., Director General Romulo Emmanuel Miral, Deputy Secretary General Edgardo Pangilinan, Jr, and Deputy Secretary General Arlene C. Dada-Arnaldo.

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Environment researcher Danilo Israel calls for cooperative and collective action in weather and climate-related forecasting among governments of Cambodia, Indonesia, Lao PDR, VietNam, and the Philippines. Israel, a senior research fellow at the Philippine Institute for Development Studies (PIDS), said that cooperation and coordination in weather forecasting would make disaster risk reduction and management more cost-efficient and effective considering the proximity of these five countries and similarity of their socioeconomic conditions.
Countries in Southeast Asia are frequented by weather and climate-related disasters that cut across national borders. For example, typhoons that originate in the Pacific Ocean usually traverse a westward path affecting the Philippines,and then Indonesia or then toward VietNam, Cambodia, Laos and sometimes even Taiwan, China and Japan. These typhoons result in massive flooding and landslides which, year -after-year, leave enormous socio-economic damages.

In his Policy Notes, Israel indicated an increase in the occurrence of disasters for the five countries in the last two decades. Comparing aggregate data from the five countries, Israel showed that the number of climate-related disasters was higher in the 2000s at 320 than in the 1990s at 195. Consequently, the number of people affected by these disasters has increased from 69.5 million in the 1990s to 84.3 million in the 2000s. In addition, ballpark estimates of the value of socio-economic damages wrought by these disasters would amount to US$ 25 million. This figure, as pointed out by Israel, is rather conservative and deficient as it only accounts for the direct and preliminary damages and leaves indirect and resulting damages unaccounted.

Although these weather and climate-related disasters are inevitable, Israel says that there are ways in mitigating their effects such as generating timely and accurate weather forecasts and effectively communicating them to stakeholders. Israel points out that investment on national meteorological and hydrological services (NMHS) is therefore necessary. However, operating NMHS and maintaining its facilities is very pricey and unaffordable considering the limited resources of these five countries. As a solution, Israel therefore proposes the establishment of a "sub-regional integrated" approach for weather and climate forecasting.

Israel recommends that these five countries collaborate in strengthening their capabilities in forecasting natural hazards and disasters by sharing data and information and by devising a common training and development program of NHMS personnel from each respective country. This may include inter-country personnel visitation and exchange; collaborative research and development activities on trans-boundary weather and climate-related issues; and conduct of international workshops and forums to promote exchange of information and data. In addition, Israel further proposes the creation of an inter-country committee or organization for forecasting of natural hazards and disasters that would facilitate the above mentioned activities.

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The state think tank Philippine Institute for Development Studies (PIDS), in partnership with the Center for Health Market Innovations (CHMI), is launching the Galing Likha-Kalusugan Awards this November to confer distinction and honor to public and private organizations that best exemplify the highest level of innovation in the country's health marketplace.

The Galing Likha-Kalusugan Award is the first of its kind for the country's healthcare sector as it pays tribute and recognizes innovations in health market that have produced positive impacts and have helped address a particular problem or issue in the country's health system. As such, the award hopes to be the stamp for excellence and innovation in the field of healthcare delivery, finance, facilitation, regulation, and promotion. In addition, this initiative hopes to promote and encourage creative and fresh approaches and solutions to the country's healthcare problems.

CHMI is an international global network that identifies, analyzes and connects innovative health programs around the world in the hope of improving health protection for the poor and disadvantaged. Thus, the Center scouts worldwide for programs that change how transaction occurs in the health marketplace and that can be scaled up and replicated in other regions of the world. In the Philippines, CHMI has collaborated with the PIDS in setting up a local hub of researchers who will identify and document innovative health programs and policies.

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In a recently concluded forum jointly organized by the Philippine Institute for Development Studies (PIDS) and the Asian Development Bank (ADB), economist and PIDS president Dr. Josef Yap suggested that the lack of `social cohesion` exacerbates the country`s lackluster socio-economic conditions. With ADB`s downward revision of the Philippine economic outlook, Yap said that cultivating `teamwork` among the people may lead the country out of its development maze.

ADB forecasts a revised Philippine economic growth for 2011 to be 4.7 percent, from its original 5.0 percent forecast, and 5.1 percent for 2012, from 5.3 percent. Despite higher consumption and stronger private investment, the country`s economy, according to ADB, will not grow as expected since exports significantly fell with the continued economic uncertainty in major industrial countries. ADB Senior Economist Norio Usui attributes the downward revision partly to weak government spending. Nareej Jain, ADB`s Philippine country director, on the other hand, remains optimistic about the country`s economic outlook, saying that a 4.7 percent growth should not be underrated because it is still a positive indication. He noted, however, that the country needs to improve its performance, especially in social services delivery and reduction of poverty, to achieve its development goals.

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The United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) and the Philippines` think tank Philippine Institute for Development Studies (PIDS) have recently launched the country`s 2011 trade and investment report which forms part of the Asia-Pacific Trade and Investment Report (APTIR), an annual publication of the UN ESCAP. This year`s report particularly explores the country`s post-crisis trade and investment opportunities.



According to the report, the country`s trade picked up in 2010 with 26 percent in exports and 21 percent in imports. This made the country`s trade increase to 17.3 percent which is significantly higher than the Asia Pacific region`s average trade growth of 15.8 percent. The report further projects that the whole region is expected to return to historical trade growth rate of 10 percent in 2011.

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The Philippine Institute for Development Studies (PIDS), a government think tank, is launching the 9th Development Policy Research Month (DPRM) this September with the theme Back to ABCs: Education for Development.

The DPRM is a month-long celebration highlighting the vast contribution of policy research to the socioeconomic advancement of the Philippines. Its observance started with the issuance of Malacanang Proclamation No. 247 in 2002 which declared the month of September of every year as Development Policy Research Month (DPRM). The Proclamation underscored the `need for promoting, enhancing, instilling, and drawing awareness and appreciation of the importance and necessity of policy research.` Moreover, the DPRM intends to gain public support and wider understanding of the importance of policy research as a tool for national development and of the activities in line with it to advance the quality and standard of policy research in the Philippines.

The PIDS, as a leading think tank in the country, was designated as the overall coordinator of all the programs and activities in the yearly observance of DPRM. Being in the forefront of policy research in the country, PIDS conducts policy research on socioeconomic issues to assist the government in crafting sound policies for national development. In the last eight years, the celebration of the DPRM has focused on areas that are considered as primary concerns and issues that need utmost attention and support from the government and other sectors. These topics include rice and food security policy, economic competitiveness, improvement of local governance, management of international labor migration, coping with climate variability and change,and poverty alleviation, among others.

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The government must enforce regulations aimed at protecting overseas workers while at the same time ensure that increased protection does not restrict the deployment of workers.

According to a study conducted by the Scalabrini Migration Center (SMC), in collaboration with the state think tank Philippine Institute for Development Studies (PIDS), it is important to strike a balance between providing employment opportunities abroad and protecting overseas workers, in particular, overseas household service workers. The study noted that when protection restricts deployment, efforts to regulate and protect workers are usually set aside. This is simply because more deployment means more remittances for the government, more revenues for the migration industry, livelihood for households, and the availability of an occupation that is easily accessible to women migrants.

The SMC-PIDS study noted that domestic work entails risks and vulnerabilities to migrant workers, particularly to women. As such, there is a need for some protective measures to be in place. Nonetheless, the study also pointed that said risks continue to exist despite various measures to protect them at all stages of migration. For instance, the passage of the landmark Migrants Workers and Overseas Filipinos Act of 1995 and the introduction of Household Service Workers Reforms in 2006 were aimed at enhancing the protection of migrant workers. However, their potentials have not been realized because of the lack of enforcement and monitoring mechanism, the study observed.

In addition, the study also highlighted significant gaps in migrant workers` knowledge and understanding of government regulations. Based on a small survey of overseas Filipino domestic workers conducted for the study, many departing migrant workers were not aware of basic work rights and government regulations. A sizable percentage of domestic workers showed some tendency to let their employers make decisions about their work conditions, in part because of lack of information about decent work conditions.
`Knowing the right information is crucial to workers' empowerment, particularly because they will have to engage with recruiters, employers and authorities in the course of the migration process. This means that policies are not properly communicated to stakeholders, particularly to workers and prospective workers,` the study noted.

Finally, there has been increasing recognition, locally and internationally, of the need to improve domestic workers` living and working conditions. This, in fact, is one of the topics under discussion in the 100th Session of the International Labor Conference currently held in Geneva with a theme `Building the Future with Decent Work.` There are certainly more policy initiatives and measures that need to be in place towards this end. As the study recommended, information programs on migration must be strengthened to promote awareness and understanding of basic policies, rights and decent work conditions among migrant workers. Government agencies should also conduct more mass media campaigns to reach a broader audience, including underground migrants. Likewise, comprehensive reintegration programs for returnees, particularly for distressed migrant domestic workers, need to be instituted.

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Despite the proliferation of higher education institutions (HEIs) offering agriculture, forestry, and natural resources (AFNR) courses in the country, there has been a persistent decline in AFNR enrollment over the past decade. A policy research jointly undertaken by the Philippine Institute for Development Studies (PIDS) and the Philippine Council for Agriculture, Forestry, and Natural Resources Research and Development (PCARRD) has been completed to examine this alarming trend. The study also provides projections on the future of AFNR education and its graduates.

The research confirms that the enrollment decline began around SY 2002-2003. Over time, supply growth is expected to outpace growth of demand because there will be a faster growth of the AFNR workforce with limited change in AFNR labor demand. This in turn will result in a greater increase in unemployment and underemployment of AFNR graduates.

Despite impressions to the contrary, the study finds that poor quality of schooling and high cost of education are not significant factors behind this trend. At least for State Universities and Colleges (SUCs), students and employers affirm that graduates generally have the expected level of skills and proficiencies, and that AFNR education is accessible even to students from poor backgrounds. Rather, the enrollment trend is mostly explained by external factors that impact on the labor demand for AFNR graduates. In short, work opportunities in agriculture are not as attractive as other courses because the AFNR labor market is unable to absorb and accommodate all AFNR graduates, particularly graduates of traditional courses. The external factors include: declining share of agriculture in GDP and employment; rapid urbanization; increasing migration for overseas work; and the widespread availability of alternatives to traditional college schooling, such as vocational and technical education.

Upon closer inspection, the data show that the negative trend in enrollment is not spread across all AFNR courses. Traditional courses like forestry and agriculture suffered the biggest reductions in enrollment. However, some nontraditional courses like agribusiness management and food technology had steady or increasing enrollment levels. There is no decline in AFNR enrollment in regions experiencing boom in agribusiness sector like regions XI and XII. These findings are consistent with the on-going transformation of the country`s agriculture sector along agribusiness lines.

There are also internal problems inherent in the country`s higher education system that may have played a role in the decline. There are no comprehensive career counseling programs in high schools that supposedly provide dependable information and guide students in their college course choice. Most importantly, over the past few decades, there has been expansion and proliferation of HEIs, many of which offer AFNR courses, owing to political considerations rather than rational comparison of supply and demand factors.

The study therefore recommends that reforms be instituted in HEIs to address this trend. It suggests that maximizing limited state subsidy and budget allocation for SUCs entails rationalizing degree offerings and institutions.

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Philippine Institute for Development Studies, in cooperation with the Rockefeller Foundation, is conducting a two-year project that aims to identify outstanding health market innovations (HMIs) in the Philippines. These innovations cover programs being taken by both public and private sectors that intend to address quality, affordability, equity and availability of health care. To bridge information gaps about HMIs and to provide better health care and financial protection especially for the poorest and vulnerable, the HMI project engages in three core activities--information, analysis and recognition.

The project will search and recognize innovative practices that impact on the major causes of ill health among the country`s poor. This includes the preparation of a master list of all health intervention models in the Philippines. Under this study, HMIs will be grouped into five thematic areas: (1) Organizing Care Delivery or those programs that reduce fragmentation and informality of health care delivery (ex., -professional association, cooperative) ; (2) Financing Care or those initiatives that mobilize fund for health care (ex., health insurance) ; (3) Regulating and Incentivizing Performance such as those projects that set standards and give incentives to higher quality health care or increased access for target populations (ex., accreditation, pay for performance); (4) Changing Consumer and Provider behavior such as those innovations designed to change the behavior of health individuals involved in health transactions (ex., health awareness models, training) and (5) Leveraging Technology and Innovative Operational Processes or those processes, technologies or products that facilitate increased efficiency, lower costs, higher quality or improved access.

Information technology innovations without link to administrative process and service delivery, pure private profit activities such as private insurance, health- related donations and corporate social responsibility are excluded in the list. This is because the HMI project focuses on public- private partnership as well as private sector activities that are socially oriented.

From this list, 30 of the most notable schemes will be shortlisted by different stakeholders both public and private involved in the health services sector. The selection of the 30 programs/schemes to be shortlisted will be based on the following criteria. First, the innovation should have been able to overcome one or more of the institutional problems of the country`s health sector. Second, the innovation must have achieved sustainability and can be replicated or implemented on a larger scale. Third, the innovation must be pro-poor. Even purely-for-profit initiatives are eligible provided that they offer service or products that are affordable, of good quality, and have good value-for-money. Lastly, the innovation must be interesting, unique and pioneering.

Among the 30, the three most innovative programs will be selected and written as case studies to gather deeper understanding on the challenges, lessons learned and best practices of these health programs. Recognition for the identified innovative programs will be awarded during a National Conference sometime late this year, which will be attended by implementers, representatives from the public and private health sectors, donors and other stakeholders.

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Government think tank Philippine Institute for Development Studies (PIDS) strengthens its contribution to policy deliberations by releasing its first PIDS Economic Policy Monitor (EPM) starting 2011. The EPM approach is twofold: to consistently identify policy issues that need to be addressed and their corresponding policy recommendations in certain instances; and to discuss and analyze the impact or potential impact of recent policy measures.

This first issue of the PIDS Economic Policy Monitor focuses on three related issues: fiscal space, investment, and poverty alleviation.

With a 7.3 percent growth achieved in the country`s gross domestic product (GDP) in 2010, a feat that was beyond expectations of all analysts, the challenge for the government is to sustain this momentum and make economic growth more inclusive so that poverty may be reduced.

`One way to make economic growth more inclusive is to address so-called supply side constraints such as poor physical infrastructure`, according to Dr. Josef T. Yap, president of PIDS and one of the principal authors of the 2010 EPM. And supply bottlenecks can be reduced if `government has adequate fiscal space`, Yap added.

The EPM thus looks at how the government can improve its fiscal position to close the national deficit, estimated to be 3.9 percent of GDP in 2010, and have the needed resources to finance the Millennium Development Goals (MDGs) and achieve inclusive growth for the economy.

Based on the fiscal sustainability analysis presented in the EPM, national government revenues need to increase from 14.3 percent of GDP in 2009-2010 to 17.6-18.0 percent in 2012-2016 if fiscal consolidation were to be achieved while providing adequate budgetary support for the much-needed basic social services and infrastructure to achieve inclusive growth and the MDGs.

Eventually, efforts to achieve sustained economic growth must redound to addressing the poverty situation in the country. The 2010 EPM examines this issue more closely as it provides an assessment of the Philippines` poverty situation from a new perspective, looking at the factors that explain the rise in poverty incidence between the period 2003 and 2009; determining new sets of problems, if any, that cause or worsen poverty; and identifying the urgent matters that government needs to focus its attention on.

With the EPM becoming one of its regular publication series beginning in 2011, the PIDS hopes to further fulfill its mandate to help connect knowledge and policy.

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Around 3,000 to 400,000 persons use the MRT 3 a day. Apparently, MRT 3 is now at the peak of its capacity. Expansion is in order through the procurement of additional train units to be able to maximize the benefits of this urban mass transport system.

Recently, however, a major concern for the MRT 3 has stemmed from the huge amount of subsidy required for the government to cover the capital cost, aside from the operation and maintenance costs of the system. Raising the fare hike level as a way to minimize such subsidy has recently sparked debates.

In a Pulong Saliksikan held at the Carlos P. Romulo Hall of the NEDA sa Makati Building, government think tank Philippine Institute for Development Studies (PIDS) research consultant Ms. Ruzette Morales-Mariano tackled this and other related issues in a presentation of her paper titled `Policy Directions in Providing Government Subsidies for Urban Rail Systems.`

As a background, the present minimum fare for riding the MRT 3 is PHP 10.00 and the maximum is PHP 15.00 with an average of PHP 12.50. At this level, in 2006, the subsidy was PHP 47.50 per rider. For the same year, 135 million passengers rode the MRT 3. Had the average fare paid by the riders been PHP 60.00 per rider, the fare box revenue could have covered all of the project costs in that year alone.

But in this scenario, one of the main considerations is the riders` willingness to pay. At this time when Filipinos are tightening their belts to get by on a daily basis, a fare hike would be a sensitive issue. However, taken from another perspective, it is important to identify the highest level of tariff that would result in the highest fare box revenue without compromising the economic benefit that should be derived from the MRT system.

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Around 3,000 to 400,000 persons use the MRT 3 a day. Apparently, MRT 3 is now at the peak of its capacity. Expansion is in order through the procurement of additional train units to be able to maximize the benefits of this urban mass transport system.

Recently, however, a major concern for the MRT 3 has stemmed from the huge amount of subsidy required for the government to cover the capital cost, aside from the operation and maintenance costs of the system. Raising the fare hike level as a way to minimize such subsidy has recently sparked debates.

In a Pulong Saliksikan held at the Carlos P. Romulo Hall of the NEDA sa Makati Building, government think tank Philippine Institute for Development Studies (PIDS) research consultant Ms. Ruzette Morales-Mariano tackled this and other related issues in a presentation of her paper titled `Policy Directions in Providing Government Subsidies for Urban Rail Systems.`

As a background, the present minimum fare for riding the MRT 3 is PHP 10.00 and the maximum is PHP 15.00 with an average of PHP 12.50. At this level, in 2006, the subsidy was PHP 47.50 per rider. For the same year, 135 million passengers rode the MRT 3. Had the average fare paid by the riders been PHP 60.00 per rider, the fare box revenue could have covered all of the project costs in that year alone.

But in this scenario, one of the main considerations is the riders` willingness to pay. At this time when Filipinos are tightening their belts to get by on a daily basis, a fare hike would be a sensitive issue. However, taken from another perspective, it is important to identify the highest level of tariff that would result in the highest fare box revenue without compromising the economic benefit that should be derived from the MRT system.

Thus, Ms. Morales-

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Manila, Philippines, 16 September 2010--In a new study launched today, the Philippine Institute for Development Studies (PIDS) and UNICEF revealed that in 2006, 44% of all Filipino children are living in poverty, equal to 12.8 million children under the age of 15. This figure increased by almost 4 percentage points from that of 2003, with said increase equivalent to approximately one million additional poor children.

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Research plays a major role in the crafting and implementation of government`s poverty reduction programs. Especially since the 2015 deadline for the achievement of the UN Millennium Development Goals (MDGs) is fast approaching, there is a need to assess the Philippine government`s progress in achieving the goal of poverty reduction based on careful study and active interaction and collaboration among different sectors of society.

This is the reason behind the choice of the theme, `Pananaliksik at Talakayan tungo sa Pag-ahon mula sa Kahirapan` for this year`s celebration of the Development Policy Research Month (DPRM). The DPRM, with its broad-based and nationwide outlets for discussion, hopes to present the opportunity to discuss the important issues relating to poverty reduction. The various studies and activities to be presented and organized during the month-long celebration of the DPRM will hopefully provide the appropriate base and support in crafting a roadmap for economic development and poverty reduction for the new administration.

Under the MDGs, the Philippines is targeting to reduce the 1991 poverty incidence of 45.3 percent by half by 2015. According to the National Statistical Coordination Board, poverty incidence or the proportion of people whose income is less than the poverty line was 32.9 percent in 2006.

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In the last three decades, international labor migration has helped shape the Philippine economy. It is considered an enduring feature of Philippine development.

In their study titled Philippine International Labor Migration in the Past 30 Years: Trends and Prospects, Philippine Institute for Development Studies (PIDS) Senior Research Fellow Dr. Aniceto C. Orbeta, Jr. and Research Analyst Mr. Michael Ralph Abrigo said that the drivers and prospects both in the local economy and in the major destination countries will define the future of migration streams in the country.

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Growth alone is not enough for developing Asia. To achieve economic stability, the region needs an inclusive strategy driven by structural change that results in the full employment of the labor force.

In his book Inclusive Growth, Full Employment, and Structural Change. Implications and Policies for Developing Asia (London: Anthem Press), Asian Development Bank Principal Economist Dr. Jesus Felipe proposes an inclusive strategy to achieve the full employment.

According to Dr. Felipe, the empirical evidence indicates that despite the fast growth achieved by many countries across developing Asia (e.g., China, India, Pakistan, Bangladesh, Indonesia, Philippines) in the past decades, the region is still home to about 500 million people who are currently unemployed and/or underemployed.

Unemployment and underemployment are the major cause of poverty in developing Asia. However, policymakers have not taken unemployment and underemployment as the number one problem across the region.

In the Philippines, for example, unemployment is a `time bomb`. Between 2005 and 2030, the labor force will increase by about 50 percent, that is, the number of people looking for a job will increase from about 34 million to 52 million. The question for the Philippines is: will the economy be able to provide jobs for all these people?

Skills mismatch and the lack of human capital are the most commonly cited reasons of unemployment. In reality, however, it is the systemic failure of the economy to create enough jobs which is the main cause of massive unemployment. Employment is a basic right and full employment should be the primary objective of economic policy in the developing Asia.

`Nobody who is willing and ready to work for a just wage should be without a job. Society must be able to provide jobs for all those willing to work. And they should be able to provide jobs for the workers they have and not for the workers they wish they had,` Dr. Felipe added.

A full employment economy offers a great number of advantages. At the individual level, the best way for an individual to participate in society is through a productive and decent employment.

For society as a whole, it results in a reduced need for social safety nets; in lower social costs; and in higher political stability.

In the case of the Philippines, immediate policy priorities to achieve full employment should be population management and job guarantee programs.

Industrialization policies are also crucial. Education does matter for long-term growth but it is not a key constraint now and, as noted above, society should be able to provide jobs for all its citizens. Individuals cannot be left out and stigmatized for being `uneducated`.

For decades, growth and low inflation were thought to lead to job creation. Policymakers have been concerned with controlling inflation and the fiscal deficit which, in turn, were thought to create stability and employment. Dr. Felipe`s book argues that this approach is incorrect. Citing the Philippine situation, he emphasized that the issue is not about slashing budget deficits to control inflation. Rather, it is about redirecting fiscal and monetary policies to achieve full employment with price stability.

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ARANGAYS, being the closest level of government to the people, should play a crucial role in the economic development of the Philippines.However, a recently concluded a study conducted by the Philippine Institute for Development Studies (PIDS) and United Nations Children`s Fund (UNICEF) found that barangays in the country have not been hitting the mark.

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At a time when Filipino families are still reeling from the effects of the Global Financial and Economic Crisis and natural calamities and bracing for yet another round of oil price increases, National Anti-Poverty Commission (NAPC) Lead Convenor Domingo F. Panganiban will address the importance of a community-based monitoring system as a tool for monitoring and mapping poverty, formulating local development plans, improving local governance and localizing the Millennium Development Goals (MDGs) at the 6th National Conference on Community-Based Monitoring System (CBMS) on December 8-10, 2009 at the Manila Diamond Hotel.

The CBMS is an organized way of collecting information at the local level for use of local government units, national government agencies, non-government organizations, and civil society for planning, program implementation and monitoring. The data collected from the community are reported to the next higher geopolitical level for immediate intervention and ultimately made available to macroeconomic planners to influence policy reforms. The CBMS was developed to address the lack of disaggregated data for planning, program formulation, policy impact assessment and poverty monitoring. At the same time, there was also a need to come up with support mechanisms for the implementation of the decentralization policy that was implemented in the early 1990s.

The CBMS is currently being implemented in 59 provinces (31 of which are implementing the CBMS province-wide) covering a total of 17,244 barangays in 667 municipalities and 41 cities all over the country.

The three-day conference will convene policymakers, program implementers and other CBMS practitioners at the local and national level to share recent developments in the implementation and use of CBMS for planning, program design and impact monitoring among others. In particular, there will be sessions on the use of CBMS for (i) Disaster Risk Management, (ii) Monitoring the Impacts of the Global Financial and Economic Crisis on Poverty, and for (iii) Monitoring Progress Towards the Millennium Development Goals at the Local Level.

Confirmed presentors include Governor Vilma Santos-Recto of Batangas, Governor Valentina Plaza of Agusan del Sur, Governor Jose Antonio Carrion of Marinduque, several mayors, city and municipal planning officers as well as members of the academe and research community.

The implementation of the CBMS in the Philippines is a joint undertaking of the PEP-CBMS Network Coordinating Team of the Angelo King Institute for Economic and Business Studies of the De La Salle University-Manila and various local government units.

The CBMS initiative is also being implemented in Africa (Benin, Burkina Faso, Ghana, Kenya, Nigeria, Tanzania and Zambia), Asia (Cambodia, Indonesia, Lao PDR, Viet Nam and the Philippines) and Latin America (Peru) in collaboration with various government, research and academic institutions. Work in these countries is being coordinated by the PEP-CBMS Network Coordinating Team with the aid of a grant from the International Development Research Centre (IDRC) of Canada and the Canadian International Development Agency (CIDA).

For more information on the event, contact the conference secretariat at (632) 526.2067.

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The CBMS Network Coordinating Team announced today that a total of 59 provinces covering 17,244 barangays located in 667 municipalities and 41 cities in the country have joined the CBMS bandwagon and are at varying stages in implementing the Community-Based Monitoring System.

`We are overwhelmed with this groundswelling of support from local government units (LGUs)` said Dr. Celia Reyes, CBMS Network Leader and Senior Research Fellow at the Philippine Institute for Development Studies (PIDS).

Designed by a group of researchers at the Angelo King Institute for Economic and Business Studies of the De La Salle University-Manila, the CBMS intends to fill information gaps for diagnosing the extent of poverty at the local level, determining the causes of poverty, formulating policies and programs, identifying eligible program beneficiaries, and assessing the impact of policies and programs.

In particular, the CBMS has a core set of indicators which include child and maternal mortality rates, malnutrition rate, access to safe water and sanitary toilet facilities, employment and household income, that are being measured to determine the welfare status of the population. These indicators capture the multidimensional aspects of poverty and have been confined to output and impact indicators.

`The exuberance with which the LGUs have embraced CBMS is a glowing testament that they have seen first-hand the usefulness of the system and could herald a dramatic turnaround from traditional development planning and project formulation to a more evidence-based policy on social programs,`added Dr. Reyes.

According to her, one the most common dilemmas faced by local chief executives is how to efficiently and effectively use and manage their meager financial resources given the many competing projects and programs that need to be delivered to their constituents. The CBMS can minimize leakage and wastage of these resources by using sector-specific indicators generated by CBMS in identifying eligible beneficiaries. For instance, households with malnourished children should be the beneficiaries of supplemental feeding programs.

On the other hand, composite indicators (combining the different indicators using statistical techniques) can be used to rank the poorest households in the barangay or municipality. This will be particularly useful in identifying eligible beneficiaries for programs such as the Sponsored Philhealth Program and scholarship programs for the poorest families.

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Access to information and technical institutions are the most important factors in helping people cope with the impact of climate variations and change.

This is the reason behind the choice of the theme, `Coping with Climate variability and Change` for this year`s celebration of the Development Policy Research Month (DPRM). By coordinating studies and activities related to climate variations and change, the organizers of the 2009 DPRM celebration hope to raise the awareness of people about the important issues relating to climate variability and change. Specifically, the celebration hopes to serve as a venue for discussion, interaction and collaboration among the different sectors to come up with strategic risk-mitigation programs and measures to mitigate adverse effects of climate variations and change.

DPRM is an annual celebration mandated by Malacanang Proclamation 247, signed by President Arroyo in 2002. The observance of the Month is meant to elevate people`s awareness and appreciation of the value and importance of policy research in nation building. The Philippine Institute for Development Studies (PIDS) is the agency designated to lead and coordinate the activities for the annual observance of the DPRM. Activities lined up for this year`s DPRM celebration include consultative meetings, workshops and discussion forums, preparation and presentation of policy papers, production of posters and banners that can be displayed in institutions and agencies of government and the private sector.

`We cannot prevent climate variability and change - they are inevitable. What we can do is to reduce the risk and take advantage of the opportunities brought about by climate variability,` said Dr. Josef Yap, PIDS president and chair of the 2009 DPRM Steering Committee.

Everyone is affected by the impacts from climate variability and change. However, ordinary people are the most affected by these phenomena because they are more vulnerable to climate variability and change impacts given their limited resources and available adaptation options.

Thus, ordinary people should be involved in identifying mitigation and adaptation options appropriate for their situations. In addition, they could also participate in identifying alternative designs or management practices that may enable them to better cope with climate variability such as extended droughts, floods and conditions resulting from periodic El Nino and La Nina events. These disruptions can take a major toll on a country`s economy if a significant part of economic activity such as agriculture is sensitive to the weather and climate. Thus, it is important to have the necessary mitigation and adaptation measures to address them.

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The Philippines is unlikely to achieve its goal on two key international commitments for the achievement of education for everyone--the Millennium Development Goals (MDGs) on Education and the Education for All (EFA) Initiative.

Based on a study done by Dr. Dalisay Maligalig, senior statistician at the Asian Development Bank, and Dr. Jose Ramon Albert, senior research fellow at the state think tank Philippine Institute for Development Studies, a closer look at the figures would show that the country may be at risk of not achieving its goal of achieving universal primary education by 2015.

This is despite of the 94 percent net enrolment ratio and the 95 percent literacy rate for the youth in 2000-2004 that it achieved in 2004.

For one, compared to the 1991 figures where both net enrolment ratio and youth literacy rate registered at 97 percent, there has been a slight decline in said indicators in recent years. In addition, the proportion of pupils who started Grade 1 and reached Grade 5 has remained almost at the same level, i.e., 74 percent for the 1991 baseline and 75 percent for 2004. Hence, hardly any improvement has been registered in this aspect.

For the MDG target of eliminating gender disparity in primary and secondary education, meanwhile, the study pointed out that education indicators show that at all levels--primary, secondary, and tertiary--females are at an advantage over males, with the differences growing as the level of education increases. This suggests that a new set of disparities between sexes may be in the offing.

The two experts also feared that the current and continuing increase in food prices, especially rice, the staple food of most Filipinos, will further contribute to the decline in school participation. Based on the Annual Poverty Indicator Survey (APIS) conducted by the NSO, it was found out that Filipino families spends more on food and utilities over education and health.

Given the current situation, Maligalig and Albert suggested that the government should intensify its efforts in improving basic education by having evidence-based policies and actions. In particular, they noted that the Department of Education (DepEd) should be required to have a sound monitoring and evaluation system to regularly assess the conditions of basic education.

Statistics on education can be a powerful instrument to get the attention of policymakers and the public regarding the state of basic education. It is therefore essential that the set of indicators for the EFA 2015 such as literacy rate, proportion of pupils who started Grade 1 and reached Grade 5, and net enrolment ratio, be reviewed in order that each development milestone is represented, the authors emphasized. Likewise, they suggested that issues such as incomplete coverage because of the noncompliance of the private schools to report timely data due to the lack of information about children who have not been part of the education system, must be addressed by carefully studying the proposed set of indicators.

Comparable measures across time and space will help assist policymakers see linkages in policy actions. To judge the soundness of policies, one would ideally like to monitor their effects and evaluate the outcomes based on comparable statistics. Rigorous analysis of this kind is needed to improve the design of projects and programs and to weed out interventions that are not working, the experts concluded.

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Government think tank Philippine Institute for Development Studies (PIDS), the lead agency for the celebration of the Development Policy Research Month (DPRM) this September, is embarking on a number of activities and programs for local government units (LGUs) to highlight this year's observation of the DPRM and the celebration of its 30th founding anniversary.

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Government think tank Philippine Institute for Development Studies (PIDS), the lead agency for the celebration of the Development Policy Research Month (DPRM), is celebrating the 5th DPRM this September.

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E-commerce has definitely come of age. Unfortunately, not yet for the Philippines.
According to a study by Dr. Gloria Pasadilla, senior research fellow at the Philippine Institute for Development Studies (PIDS) and her associate April Lacson, the Philippines has been left behind by its Asian neighbors in e-commerce activity, ranking even lower in a number of areas than Thailand and Indonesia, which started using the Internet at around the same time or even much later than the Philippines.

"Ever since the dot-com boom, the Internet has been said to be a great equalizer as it provides more access to information and income generation opportunities. Unfortunately, it has failed still many Filipinos, with only 25% of an Internet population of 11 million, being able to buy products and services online, and most of these from e-retailers based in the US such as Amazon and eBay," they said.

The rest, according to the authors, are wallowing in not being able to do e-commerce as they do not have credit cards or do not trust credit cards, and are limited to bank-to-bank transfers, cash on deliveries (CODs), mobile cash, or just plain hand-over-the-cash-to-the-cashier.

"Most Filipinos cannot make payments online when they want to buy a product from any web site here and abroad. Many also would like to tap the opportunities to be able to sell products and accept payments online, but are unable to do so because of the high cost of putting up an e-commerce website," they lamented.

Pasadilla and Lacson thus argued that for the Philippines to achieve its vision of becoming Asia`s knowledge center and e-services hub, it needs to improve the access to telecommunications infrastructure of the large majority of the population and at the same time fill the gaps in legal and regulatory framework.

The study pointed out that the capacity and knowledge of domestic small and medium enterprises (SMEs) to effectively utilize e-commerce is still underdeveloped. Most SMEs lack the capital and human resources to launch their own websites or maximize their use.

In addition, Pasadilla and Lacson noted that the E-commerce Law is silent with regards to domain names, intellectual property rights, and a host of other security issues, effectively discouraging many entrepreneurs and even consumers to engage in e-commerce.

Likewise, they cited the absence of a more comprehensive set of indicators for measuring usage, readiness, and the impact of e-commerce in the Philippines.

Lastly, they commented that while the infrastructure exists, telephone density and Internet and personal computer (PC) penetration in the country are not as high as in other countries.

Thus, Pasadilla and Lacson cautioned that unless immediate and appropriate measures are undertaken to address these shortcomings, the Philippines will continue to linger at the bottom of the e-commerce economy. They further commented that the low e-commerce transactions in the country translates to trade losses that the Philippine economy could have captured had it been more swift, focused, and aggressive in improving its technical and human capacities.

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China has emerged to be a world economic giant, ranking second next to the United States in terms of gross domestic product (GDP) in 2005. China`s economic leap has dramatically shaped the entire Southeast Asian economy including the Philippines. Economic expert and Philippine Institute for Development Studies (PIDS) President Dr. Josef T. Yap emphasizes that China`s economic escalation has adverse effects to be mitigated, and at the same time, benefits to be maximized by the Philippines.

According to Dr. Yap, the 3 main reasons why China maybe a threat to the Philippines are the strong inflow of cheap Chinese products in the Philippine market, resulting in the weakening of local firms and loss of employment opportunities; direct competition of lower-priced Chinese commodities with Philippine goods in the international market; and China being a favored destination among developing economies of foreign direct investments (FDIs).

On the other hand, Dr. Yap also specified that such threats can be looked into rather as opportunities to be utilized by the Philippines to improve its economy, most especially, in the competition between Chinese products and Philippine exports. Reports indicate that the top two export commodities of the Philippines as of 2003 electronic microassemblies and monolithic integrated circuits are not being exported by China. This is the industrial area wherein the Philippines could take advantage and develop more since China has yet to develop a more sophisticated industrial structure of their own.

In addition, `the literature points to the following factors as some of the most important determinants of FDI--market and political factors like market size and level of real income, worker skill levels, availability of infrastructure and other resources that facilitate efficient specialization of production, trade policies, and political and macroeconomic stability.` The Philippines needs to strictly monitor the above determinants.

The economic threat of China could in fact be an aid to develop ASEAN countries. Two-way trade in manufactures, growth of global product sharing and the expansion in product range, quality and markets by the developing countries are the three recent developments in present trading. Aside from trade, ASEAN countries could also benefit from the area of investment. In the case of the Philippines, `Filipino investments are contracted in China specifically in the areas of real estate which includes resorts, shops, and villas; commerce such as shopping malls; and manufacturing such as brewerage, glass, and chemical fiber. Investments in financial services are similarly expanding with the establishment of the Philippine Metro Bank in Xiamen and Beijing.`

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Government think tank Philippine Institute for Development Studies (PIDS) has identified local government units (LGUs) as key players in promoting economic progress in the country by strengthening their capabilities to do research-based planning and policymaking.

According to its president, Dr. Josef Yap, the PIDS intends to bring its research outputs to the local level to back up LGUs' own analyses of the different issues affecting local policies. In so doing, he believes that the capabilities of LGUs to conduct analysis of these issues will be strengthened.

"Policymaking is a crucial task of government as policies direct a country's development path. As such, it becomes imperative for policymakers to make informed choices from a number of policy alternatives," Yap added.

Meanwhile, the PIDS is developing a template or framework that LGUs may use as guide for their own analyses using local data and information that may have been derived from their own surveys and field experiences. In doing so, the PIDS hopes to help LGUs come out with quality policies that are responsive to local needs.

This proposal of PIDS will be presented in a forum on "Crafting Good Policies for Sustainable Upland Development at the Local Level" which will be held on September 26 at the Grand Boulevard Hotel in Manila. Speakers from the various local levels, in particular, Mayor Givel Mamaril of Malalag, Davao del Sur and Congressman Rodolfo Agbayani, former governor of Nueva Vizcaya, will present some of their experiences in terms of best practices and good policies that their local governments have crafted to support sustainable upland development in their jurisdiction.

In His keynote address, National Economic and Development Authority (NEDA) Deputy Director General Augusto Santos is also expected to present some of the planning guidelines for governments developed by the NEDA.

The forum is the highlight of this year`s celebration of the Development Policy Research Month (DPRM), which has the theme, "Pananaliksik sa Pagpapaunlad ng Pamamahalang Lokal". The celebration of the DPRM every September is based on Proclamation No. 247 of Pres. Gloria Macapagal-Arroyo in recognition of the role of policy research in the decisionmaking and nation-building processes in the country. The Philippine Institute for Development Studies (PIDS) is the designated lead agency in the annual DPRM celebration.

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Ending the longstanding armed conflicts in the country does not only entail peace talks. It also requires an understanding of the factors that give rise to the conflict.

A recent paper published by the state think tank Philippine Institute for Development Studies (PIDS) titled "Extracting the Root to Reap the Fruit: Searching for a Possible End to Armed Conflict" pointed out that government policies on peace and income redistribution are, by far, the most significant determinant of incidence of conflict in the Philippines.

Rosemarie Edillon, vice president and executive director of the Asia-Pacific Policy Center (APPC) and author of the paper that was originally part of the Philippine Human Development Report study, said that adopting policies regarding peace similar to those during the Ramos Administration will have a "radical" positive impact. She emphasized that by using the same approach, the probability of bringing down the number of encounters to zero is very high.

Based on the figures gathered by the same study on the incidence of conflict by political administration from 1986 to 2004, it was during the Ramos administration when the country experienced a period of peace. The average number of encounter per province during the Aquino administration, for instance, was 0.86. This dramatically declined to 0.04 during the Ramos administration, affecting only nine of the country's 74 provinces. This figure unfortunately shot up again during Estrada's time to 0.93 encounter per province and increased further to 1.45 per province during the present Arroyo Administration, affecting 64 out of 74 provinces.

Thus, it was recommended that the government should focus on policies that address relative deprivation especially in terms of access to and provision of safe water and electricity, as well as settlement of land disputes by pursuing the Comprehensive Agrarian Reform Program (CARP).

"Programs that improve adult education should be actively pursued as they are worthwhile investments in achieving peace in the future. Likewise, efforts to bring the government closer to the minority groups through the provision, for instance, of easy access to information for them should be strengthened," Edillon suggested.

Finally, the paper calls for policies that would lead to economic growth. However the author cautioned that the economic growth must be adequate to increase incomes of the middle class. By doing so, would-be followers would be discouraged from supporting the struggle`s cause.

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At the rate that the business process outsourcing (BPO) sector is growing, it may indeed be the next big thing in this country. However, doubts about the sustainability of this hyper-growth situation are increasingly being felt.


This was surmised by Prof. Ceferino Rodolfo of the University of Asia and the Pacific in "Sustaining Philippine advantage in business process outsourcing," one of the studies on the services sector commissioned by the Philippine Institute for Development Studies (PIDS).

BPO encompasses several sub-sectors which include contact call centers, medical transcription, animation, shared services, and software development and other outsourced service-type activities that are information technology intensive.

Over the past five years, the BPO sector has grown tremendously, fueled primarily
by strong global demands. In 2004, the sector reached a size of about $1.65 billion from just about $350 million in 2001, the Department of Trade and Industry (DTI) reported.

The DTI predicts bright prospects in five BPO subsectors: customer care, medical transcription, software development, animation, and shared services. All registered cumulative growth rates of above 25 percent from 2001 to 2004, with medical transcription as the fastest growing at 130 percent, followed by call centers at 50 percent, software development at 30 percent, and animation at 25 percent.

The Philippines is widely recognized as the emerging best location for call centers, posing serious competition to Australia, India, and China. The country currently stands fourth to these countries in terms of industry size. The opportunities for the Philippines, however, remain strong as offshoring is predicted to gain momentum in the coming years, the PIDS study indicated.

The Philippines continues to be an attractive location for offshore BPO services due to its supply of qualified English-speaking professionals, low cost of labor, and availability of a good telecommunications infrastructure.

But while the Philippines fares favorably in all these aspects, there is admittedly much to be improved, according to Rodolfo. The fluid political situation, intermittent threats to physical security, and increasing reports of graft and corruption are factors that often discourage BPO investors, he noted.

"Efforts should be done to improve the general business environment particularly by creating a stable political condition. Though not often cited, the high power rate is also a source of disadvantage for BPO companies as most of them operate all day, seven days a week, at climate-controlled environment. The Philippines has one of the highest tariffs for electricity rates in Asia," Rodolfo said.

Additionally, the sourcing of qualified BPO professionals is increasingly becoming a problem, something that is predicted to worsen in the long term as the quality of the country's educational system further deteriorates.

The government--primarily through the DTI--and the industry are already addressing this problem by partnering with educational institutions. These
partnerships, at present, include offering BPO-related courses in selected colleges and universities to provide critical skills to prospective BPO professionals while they are still in college.

Rodolfo, however, cautioned that these initiatives should be complemented by improving the quality of education, especially for critical subjects such as English, Math and Science.

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The Philippine Institute for Development Studies and the World Bank is jointly sponsoring a roundtable discussion (RTD) on Infrastructure as Building Blocks to Development on May 16, 2006 at the EDSA Shangri-la Hotel in Mandaluyong City.

Having identified the lack of infrastructure as the culprit to economic growth and poverty reduction in the Philippines, the RTD hopes to solicit new insights and perspectives on the infrastructure challenges that need to be further looked into and how best to meet them.

Though the Philippines has relatively high access levels to water, sanitation and electricity, service levels have failed to keep up with rapid population growth and urbanization. High access rates mask the low quality of infrastructure services. Poor business environment; weakness in planning, coordination and financing; and, a decrease in private sector involvement are some of the reasons cited behind the inadequate provision of infrastructure in the Philippines.

Leading the RTD is a group of multisectoral experts composed of UP Economics Professor and former NEDA Director-General Felipe Medalla, Congressman Joey Salceda, Dr. Ming Zhang of the World Bank, Mr. Donald Dee of the Philippine Chamber of Commerce and Industry, Mr. Ruben Reinoso of the NEDA, and Assistant Secretary Austere Panadero of the DILG.

In particular, Congressman Salceda will talk about the bill amending the Build-Operate-Transfer policy of the government that he authored and which is currently pending in the House of Representatives. Others speakers are expected to dwell on infrastructure issues that affect their respective sectors.

Representatives from the academe, business, government and NGOs are expected to attend and actively participate in the forum. Information about the event may be coursed through the PIDS at telephone number 892-4059.

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Policymakers in the Philippines should realize that free trade agreements (FTAs) are neither necessary nor sufficient for economic growth.

This was the reaction of Dr. Josef T. Yap, president of the government think tank Philippine Institute for Development Studies, to the government`s initiative to negotiate FTAs, most of which, he said, are knee-jerk reactions to the initiatives of other countries.

In a study titled, "The boom in FTAs: let prudence reign," Yap emphasized that the unimpressive economic growth of the country is largely due to internal factors such as the lack of a modernized agriculture sector, weak institutions and inequitable distribution of income, among others.

Thus, he suggested that instead of finalizing the Japan-Philippines Economic Partnership Agreement, negotiating the China-ASEAN Free Trade Agreement, or pursuing an FTA with the US and other countries, economic resources would be better allocated if these were channeled to agricultural productivity, improving governance and strengthening institutions.

Yap commented that countries in East Asia which experienced high rates of economic growth did so without the benefit of an FTA. "China was not even a signatory of the General Agreement on Tariffs and Trade (GATT) or an original member of the World Trade Organization (WTO)", he noted.

Meanwhile, Yap suggested that FTAs could still be pursued by countries despite the drawbacks surrounding them. However, he cautioned that given the resources required for FTA negotiations, developing countries such as the Philippines should be aware of the actual benefits of FTAs in order to determine the extent of negotiations.

He pointed out that these benefits are primarily political in nature and the economic consequences--good or bad--are just side effects of the political payoff.

"Entering into formal arrangements enhances regional peace and security. The China-ASEAN FTA for example should pave the way for a faster resolution of the Spratlys issue. FTA will also boost the political bargaining power of the countries involved by signaling their agreement to bond together to pursue common interests," he stated.

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The lack of strong competition in the Philippines is discouraging the growth of new businesses and small and medium enterprises (SMEs) in the country. The more than 20 years of trade liberalization in the manufacturing sector has not resulted in any significant increase in competition, preventing the economy from reaping more of the benefits of trade liberalization. This is the gist of a paper prepared by Rafaelita Aldaba, Research Associate at the Philippine Institute for Development Studies (PIDS).

In her recent presentation at PIDS, Aldaba explained that competition is one of the major channels through which trade liberalization affects the economy. Competition is important in fostering innovation and technology adoption which leads to increases in competitiveness, productivity, and growth that could have large consequences for poverty and inequality reduction in the Philippines.

A culture of competition is characterized by the efficient allocation of resources and production processes, competition among firms in both price and quality, innovation of new products, and consumers being able to benefit from the resulting efficiency. However, evidence shows that most of these characteristics are absent indicating that competition in the country has remained weak.

Since the early 1980s, the Philippines has implemented market-oriented reforms that were intended to stimulate competition, induce firm efficiency, and introduce technological change through new investment. The last twenty years of trade liberalization considerably reduced high rates of effective protection in the country. Nevertheless, the protection structure continues to be uneven, with some sectors receiving relatively higher levels of protection than others. Petrochemicals, float glass, and steel are prominent examples of raw materials receiving higher duties than their finished products.

"Our trade liberalization process has been reversed many times in the past due to the intense lobbying by strong interest groups for higher protection; hence, a policy of selective protection emerged causing tremendous distortions in our trade and economic structure. Tariffs have been changed on an ad hoc basis without taking efficiency considerations into account," Aldaba noted. "The protection that emerges, however, becomes incompatible with the country's stated development objectives and continues to provide incentives for more lobbying activities," she added.

Continuous distortions in tariff in the country have given way to favoring highly protected sectors like agriculture and manufacturing importables as against exportable goods, thereby leading to a worsening of competitiveness. The high cost of sugar, for instance, is brought about by a 65% tariff that continues to affect the competitiveness of the country's fruit processing sector.

Other indicators like average labor productivity have also remained low in the 1980s and have even declined in the 1990s. Total factor productivity, a measure of the efficiency with which inputs of capital and labor are used, has also been generally low indicating that firms have not adopted technological changes.

Aldaba said, "our experience shows that trade liberalization, while necessary, is not a sufficient condition to promote competition, it is also important that firms change their behavior and adjust to the new market environment."

The strength of competition is a function not only of the behavior of firms but also of the external environment within which firms compete. This includes both physical and institutional infrastructures like the state of transport and communications, framework of laws and regulations, effectiveness of the financial system in matching investment resources with entrepreneurial opportunities, as well as information available to consumers. When this competitive infrastructure is inadequate, competition becomes weak.

"Business firms will not venture into the unknown and uncertain unless the government program for implementing policy reforms is credible; policy reversals, delays in timetable, lack of infrastructure and inconsistent decision-making can undermine the success of entrepreneurship that could be had from the government's liberalization policy," Aldaba concluded.

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On the occasion of the celebration of the 3rd Development Policy Research Month (DPRM), the Agricultural Credit Policy Council (ACPC), in partnership with the Philippine Institute for Development Studies (PIDS), will launch the book, "Rural Finance in the Philippines: Issues and Policy Challenges," on September 29, 2005, 11:00 a.m., at the Century Park Sheraton Hotel, Manila.

A research undertaking of the ACPC, the book covers the last 15 years of rural finance development in the Philippines and puts together recent studies and statistics for an analysis of the current state of rural finance in the country, underscoring recent government efforts in rural financing, developments in Philippine rural financial markets, as well as the rural finance experiences of selected Asian countries, particularly the Grameen Bank of Bangladesh, the Bimas Rice Intensification unit desas (BRI-UD) program of Indonesia and the Bank for Agriculture and Agricultural Cooperatives (BAAC) of Thailand.

The book is authored by PIDS Senior Research Fellow, Dr. Gilberto Llanto, one of the country`s foremost experts in rural finance policy research. It is a co-publication of the ACPC and PIDS and is being launched to coincide with this year`s celebration of the DPRM to draw nationwide awareness and appreciation of the importance and necessity of policy research as a tool for national socioeconomic development that includes rural finance.

"I am quite sure that this book will help policymakers, practitioners, academicians, and consultants better understand the history and types of interventions that the ACPC and other rural finance institutions have made in the past," says ACPC Executive Director Jovita Corpuz.

The book launch will be held on the last day of the "Planning Workshop on Integrating Training Interventions with Other Developmental Initiatives" of the Asia-Pacific Rural and Agricultural Credit Association (APRACA), another activity included in the DPRM`s calendar of events. The APRACA planning workshop will be held on September 27-30, 2005 in the same venue. The activity is also spearheaded by the ACPC, together with the APRACA`s Center for Training and Research in Agricultural Banking (CENTRAB). ACPC Executive Director Jovita Corpuz is concurrently the President of the Board of APRACA CENTRAB.

Participants in the workshop and the book launch will include representatives from some of APRACA`s 62 member institutions in 23 different countries in the Asia-Pacific region, namely, Australia, Azerbaijan, Bangladesh, Cambodia, China, India, Indonesia, Iran, Japan, Korea, Kyrgyztan, Malaysia, Mongolia, Myanmar, Nepal, Pakistan, Philippines, Solomon Islands, Sri Lanka, Thailand, Timor Leste, Uzbekistan, and Vietnam.

Queries concerning the book launch may be addressed to Norman William S. Kraft, Director II, Agricultural Credit Policy Council, tel. no. (632) 634-3320 to 21 loc. 120, or Adona M. Hamto, Public Affairs and Information Services Staff, tel no. (632) 634-3320 to 21 local 116, fax no. (632) 634-3319 or email adonai276@yahoo.com. ACPC is located at the 3rd floor, Agustin 1 Bldg., Emerald Avenue, Ortigas Center, Pasig City.

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There is an urgent need to improve the country's educational system if the Philippines were to maintain its present lead in service exports.
According to researchers from the government think tank Philippine Institute for Development Studies (PIDS), the quality of human resources, which is determined by the kind of training that the educational system provides, is important since services sector is very labor-intensive.
The studies commissioned by PIDS, which focus on information and communication technologies (ICT), business process outsourcing (BPO), medical services, audio-visual services and educational services, aim to elicit a deeper understanding of this fast-growing part of the economy. In addition, the findings of these studies would be helpful in the formulation of policies to promote and enhance this sector.
The services sector, which has been the main growth driver of the economy during the past few years and now its biggest employer, outpacing agriculture and manufacturing industry, is also the highlight of this year's celebration of the Development Policy Research Month (DPRM). Among the activities lined up for the DPRM celebration is seminar on September 27 and 28 to be held at the Dusit Hotel Nikko in Makati City in collaboration with the German Technical Cooperation office to discuss the findings of the studies on services.
The celebration of the DPRM every September is based on Proclamation 247 issued by Pres. Gloria Arroyo in 2002 which is geared toward promoting the importance of policy research in policy formulation, planning and decisionmaking process in the country.
Queries concerning the Development Policy Research Month and the seminar on services may be addressed to the PIDS Public Affairs Division at tel. nos. 8924059/ 8935705, fax number 8939589 or email address inquiries@pidsnet.pids.gov.ph.

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To increase awareness of the general public on the importance of policy research in the policy formulation, planning and decisionmaking process, the month of September every year is being observed in the country as Development Policy Research Month (DPRM).


The celebration of the DPRM is based on Proclamation No. 247 issued by Pres. Gloria Macapagal-Arroyo in September 2002.
In Proclamation 247, Pres. Arroyo noted that the observance of the DPRM will provide the means for promoting, enhancing, instilling and drawing nationwide awareness and appreciation of the importance and necessity of policy research as a tool for national socio-economic development. This will also ensure the support of the public for all activities aimed at advancing the quality and standard of policy research in the country.


As the government's policy development think tank, the Philippine Institute for Development Studies (PIDS) oversees and coordinates all programmed activities to mark and celebrate the DPRM each year.


Recognizing the vital role of the services sector in the economy, this year's celebration carries the theme, "Services Industry: Growth Driver for Economic Competitiveness." Among the activities lined up is a two-day seminar series on the services sector, particularly in the areas of educational, medical, audio-visual, information and communication technology, and business process outsourcing services. Very few studies or none so far for some have been conducted on these topics and thus, PIDS and its seminar co-sponsor, the German Technical Cooperation, feel that the findings would be very useful in the formulation of relevant policies to promote and enhance these services.


Additionally, the DRPM celebration will highlight the activities prepared by other agencies involved in policy research. The calendar of activities for the observance of the Development Policy Research Month can be viewed at http://dirp3.pids.gov.ph/dprm3/events.
Queries concerning the "Development Policy Research Month" may be addressed to the PIDS Public Affairs Division at tel. nos. 8924059/ 8935705, fax number 8939589 or e-mail address ggizelle@pidsnet.pids.gov.ph.

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The governments of Australia and the Philippines have started the implementation of a project that focuses on the use of seasonal climate forecasts (SCFs) as a key factor for improving the agricultural productivity in both countries.

Dubbed as "Bridging the Gap Between Seasonal Climate Forecasts and Decisionmakers in Agriculture," the four-year project aims to look into and close the gap between the potential value of SCFs, particularly those looking at the El Nino Southern Oscillation (ENSO) phenomenon, and their actual use and application in the risk-management decisions of farmers at the farm level and policymakers at the macro level.

In order to raise awareness of the project, a project launch will be held on July 27at the Dusit Hotel Nikko in Makati City. The launch primarily aims to introduce to the public-- especially to the major stakeholders of the results of the project--the thrusts and direction of the project, its objectives, the various research and case studies to be undertaken, the various activities and expected outputs, and the institutions/individuals involved.

The launch will also include presentations of the issues, both in the Philippines and in Australia, that the project intends to effectively address.

The Philippine Council for Agriculture, Forestry and Natural Resources Research and Development (PCARRD) and the Australian Centre for International Agricultural Research (ACIAR) signed a Memorandum of Subsidiary Arrangement in October 2004 for the undertaking of this project. Implementing institutions for the Philippines are the Philippine Atmospheric, Geophysical and Astronomical Services Administration (PAGASA), the Philippine Institute for Development Studies (PIDS) and the Leyte State University (LSU) while for Australia, the key institutions involved are South Australian Research and Development Institute (SARDI), New South Wales Department of Primary Industries (NSW/DPI), and University of Sydney.

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The government think tank, Philippine Institute for Development Studies (PIDS), has named Josef T. Yap as president of the Institute effective April 1. He will replace Mario B. Lamberte whose term as president ends on March 31.

Prior to his appointment, Dr. Yap was senior research fellow at PIDS, specializing in econometric modeling and macroeconomic policy. He prepares the annual outlook on Philippine economy for the institute and maintains the PIDS annual macro econometric model, among others. He is also the research manager of the upcoming first Southeast Asia Human Development Report.

Dr. Yap has a bachelor of science in industrial engineering degree (cum laude) from the University of the Philippines-Diliman. He also earned his master's and doctorate degree in economics from the same university. He did his post-graduate studies at the University of Pennsylvania in the US.

In November of last year, President Gloria Macapagal-Arroyo appointed Dr. Yap as acting member of the Committee on Social and Human Sciences to the UNESCO National Commission of the Philippines. ###

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"There is a water crisis, which is aggravated by a flawed governance of water resources."

Thus argue researchers from the Philippine Institute for Development Studies (PIDS), UP System and De La Salle University (DLSU) in a book titled, "Winning the Water War: Watersheds, Water Policies and Water Institutions."

The book, which is a compilation of studies conducted under the auspices of the Sustainable Agriculture and Natural Resource Management Collaborative Research Support Program for Southeast Asia (SANREM-CRSP/SEA), stresses the need to empower local government units and communities to solve the water crisis.

To solve this problem, the book offers an integrated approach that looks at the problem of water from both the supply and demand aspects. It espouses the adoption of the watershed-based approach to water resources management since the effects of human interactions on the environment can be analyzed through this framework. Land-use activities, water uses, and other upland disturbances often result in a chain of environmental impacts that can readily be examined within the watershed if managed as a unit.
The book, which is published by the PIDS and the Philippine Council for Agriculture, Forestry and Natural Resources Research and Development (PCARRD), is priced at P295.00 each and is available and can be purchased at the PIDS Office, NEDA Makati Building, 106 Amorsolo Street, Legaspi Village, Makati City. Interested parties may also inquire at the PIDS Publication and Circulation Division (tel. nos. 8924059, email: publications@pidsnet.pids.gov.ph.

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In support of the International Year of Rice, this year's celebration of the Development Policy Research Month in September will focus on the importance of rice to Filipinos.
With the theme, "Policy Research: Helping Provide Affordable Rice to Filipinos," the celebration is based on Proclamation 247 issued by Pres. Gloria Macapagal-Arroyo in September 2002.
In Proclamation 247, Pres. Arroyo noted that the observance of Development Policy Research Month every September of every year will provide the means for promoting, enhancing, instilling and drawing nationwide awareness and appreciation of the importance and necessity of policy research as a tool for national socio-economic development. This will also ensure the support of the public for all activities aimed at advancing the quality and standard of policy research in the country.
The Philippine Institute for Development Studies (PIDS), being the agency designated to oversee and coordinate the Development Policy Research Month celebration, has lined up a number of activities related to rice research in the country.
One of the main events is the three-day exhibit on rice at the NEDA sa Makati Bldg. in Makati. This is co-sponsored by Philippine Rice Research Institute (PhilRice).
The PIDS and PhilRice also collaborated in conducting a seminar series on "Rice and the Filipinos: The last 100 Years." Part of the celebration is the conduct of a forum on September 21. Two papers titled "Philippine Hybrid Rice: Will it Succeed?" and "Rice and Philippine Politics" will be presented by two noted economists.

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"Rice is not only food but also art and culture to the Asian peoples, in particular, the Filipinos", stressed noted scientist and former president of the University of the Philippines system, Dr. Emilio Javier, in his opening address delivered during the second in the series of seminars being jointly sponsored by the Philippine Rice Research Institute (PhilRice), Philippine Institute for Development Studies (PIDS), and Bureau of Plant Industry (BPI) on "Rice and the Filipinos: The Last 100 Years".

Javier, who is currently the chair of the Asia Rice Foundation, pointed out how various Asian societies, where rice is a common denominator, seem to have built their respective cultures around rice. Thus, we not only see festivals, songs, dances and religious customs with themes based on rice and its role in the people's everyday activities but we also witness rice as an integral part of the very way of life of most Asian peoples, including the Filipinos.

This is, of course, evident in rice being a staple in the Asian daily diet. For Filipinos, in particular, especially for the poor, rice is a basic source of calorie. In this regard, Javier also encourages the eating of brown rice or the unpolished rice because its bran - rich source of vitamins and minerals - has not been removed, thereby further increasing its nutritional value.

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From tall with drooping leaves to short or semi-dwarf with straight leaves - this basically describes the evolution in the characteristics of the different rice varieties in the Philippines from the pre-World War II period to the present. What factors led to these changes in physical characteristics of our various rice varieties?

Speaking at the recently held inaugural session of the seminar series on "Rice and the Filipinos: The Last 100 Years" which is being jointly sponsored by the Philippine Rice Research Institute (PhilRice), the Philippine Institute for Development Studies (PIDS) and the Bureau of Plant Industry (BPI) in observance of the "International Year of Rice" this year, 3 respected rice scientists in the Philippines traced the reasons and developments that brought about the discovery of the different rice varieties in the country with their respective plant characteristics.

Citing the search for more improved and superior varieties as a logical response to address the need for an increased productivity level and a more secured per capita food consumption of a growing population, Dr. John de Leon of the PhilRice stressed that the new rice varieties developed after WWII were answers to the inadequacies of the traditional rice varieties.

This was confirmed by noted rice scientists, Dr. Tomas Masajo of PhilRice and Dr. Fernando Bernardo formerly of the International Rice Research Institute (IRRI).

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"Your work does not end in the publication of a research paper; rather, it is just the beginning", was how Agriculture Secretary Luis Lorenzo began his challenge to plant breeders/scientists during the recent opening of the seminar series on "Rice and the Filipinos: The Last 100 Years" held at the Bureau of Plant Industry (BPI) Compound in Quezon City.

Sponsored and organized by the Philippine Rice Research Institute, the Philippine Institute for Development Studies, and the BPI of the Department of Agriculture, the seminar series is being held in observance of the "International Year of Rice" this year.

In his keynote address, Secretary Lorenzo acknowledged the work of rice scientists and institutions in doing rice research and in coming up with various varieties of rice. However, he noted that scientists must also help in developing technologies for rice that could improve the welfare of rice farmers in terms of enabling them to be involved in agri-business ventures.
Secretary Lorenzo specifically cited the developments of the past 3 years where breakthroughs have taken place not only in rice production and harvesting, with the development of the hybrid rice using biotechnology, but also in new processes whereby by-products of rice have been utilized and marketed for other uses. He also pointed out that science and technological knowledge in the rice industry should evolve from increased yields to sustainability of yields to marketability of rice products to export of high-value rice varieties.

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While there is a general recognition by the Department of Environment and Natural Resources (DENR) that there is indeed a need to adopt the watershed as the relevant planning unit for the management of the country's water resources, the full adoption of this approach within DENR has yet to be institutionalized.
A study conducted by a team of researchers from the Philippine Institute for Development Studies (PIDS), UP System and De La Salle University (DLSU) attributed this problem to the absence of a watershed management program within the DENR and the lack of appropriate funding support from the national government.
"Not unless this funding appropriation is made possible to boost the capacity and capability at the DENR at all levels, will the operationalization of this concept on a bigger scale be realized," said Dr. Herminia Francisco, professor at the College of Economics and Management, UP Los Banos and member of the study team.
The study team likewise noted that even the recently signed Philippine Clean Water Act does not specifically require the use of the watershed approach in managing pollution in water bodies. Nevertheless, it hopes that the watershed approach to water resources management may be more explicitly mentioned in the Act's Implementing Rules and Regulations.

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In light of a looming water shortage, a study conducted by a team of researchers from the Philippine Institute for Development Studies (PIDS), UP System and De La Salle University (DLSU) has suggested that the government should adopt a water pricing policy that reflects the full economic cost of water production and distribution to encourage consumers to conserve and use water wisely.
Presented by Dr. Antonio P. Contreras, dean of the college of liberal arts at the DLSU and member of the study team, in a recent forum sponsored by the PIDS and the Congressional Planning and Budget Department at the House of Representatives in Quezon City, the study notes that water should be treated not only as a social good but more importantly as an economic good. In his presentation, Dr. Contreras explained that water should be regarded as a commodity that is assessed for its scarcity value and whose distribution exists in the context of market processes, even as it is balanced by the view that water is a basic need.
The study's recommendations confirm earlier findings and suggestions by PIDS economist, Dr. Cristina David, for one, and jibe with the policy statements made during the recently held National Water Forum.
Currently, water charges in Metro Manila do not include the cost of raw water coming from the dams in Angat, Ipo and La Mesa. Water charges cover only the basic charge (actual consumption), environmental charge, maintenance, currency adjustments, sewerage (in some areas) and the value-added tax.

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The Philippine government should push for the inclusion of a bilateral open skies deal in the ongoing talks for a free trade agreement with Japan.

Winston Padojinog and Cherry Lyn Rodolfo, professors at the University of Asia and the Pacific, argued in their study for the Philippine APEC Study Center Network (PASCN) and the Philippine Institute for Development Studies (PIDS), that opening up air traffic routes between the two countries would encourage more Japanese to visit the Philippines.

Japan is a country with a total population of 126 million and with a GDP of US$4.2 trillion, seven times that of China and twice that of all the rest of Asia put together. Per capita income is US$33,333. It has a relatively large number of households earning above US$50,000 per annum.

However, the study noted that the Philippines has not been as competitive as other Southeast Asian countries in attracting the Japanese market.

"Arrivals to Thailand, which is seven hours away from Japan, for instance, are almost four times than what the Philippines has captured from the 20 million Japanese outbound travel to Asia Pacific," the researchers stated.

Padojinog and Rodolfo pointed out that apart from marketing and promotions and peace and order, infrastructure is another area that needs improvement.

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Firms, particularly small and medium enterprises (SMEs), should adapt to new technologies and be quick to anticipate new opportunities for diversification in order to become competitive in the international market.

This was the recommendation of Royce Elvin Escolar, Program Manager at the Asian Institute of Management's Policy Center, in his study with the Philippine APEC Study Center Network (PASCN) and Philippine Institute for Development Studies (PIDS) titled, "An Analysis of Industry Specific and Sector-Specific Impacts of a Japan-Philippines Economic Partnership Agreement."

According to Escolar, the hesitancy to use new technology is prominent in the SME sector. Bureau of Domestic Trade Director Meynardo Orbeta was quoted as saying, "the initiatives of the Department of Trade and Industry (DTI) to assist SMEs to set up online catalogues received a lukewarm response from SMEs based in the provinces for fear that exposing their products and designs to global market will result in someone stealing their designs."

"Thus, sustained education is needed in this sector on the areas of intellectual property protection and benefits of information technology (IT) for SMEs particularly in e-commerce," Escolar suggested.

The researcher also cited that most Filipino exporters utilize the internet only for communication purposes and not for business transactions such as online biddings. He also noted that the lack of infrastructure support in terms of availability of Internet service providers (ISPs) and applications is also deterrent to SME adoption of e-commerce.

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For Philippine exporters to benefit from the economic partnership between the Philippines and Japan, Philippine negotiators should push for the inclusion of agricultural and processed food sectors in the proposed agreement.
Thus recommends Dr. Rosalina Palanca-Tan, professor at the Ateneo De Manila University, in her study with the Philippine APEC Study Center Network (PASCN) and the Philippine Institute for Development Studies (PIDS) titled "Prospects and Problems of Expanding Trade With Japan: A Survey of Philippine Exporters."
"Since majority of Philippine agricultural exports which include tropical fruits like banana, pineapples, mangoes and papayas are not cultivated in Japan, there is no reason why the Japanese agricultural sector needs to be protected from Philippine exporters," Tan argues.
She notes that even with the General System of Preference (GSP), in which industrialized economies are directed to grant duty-free treatment to specified products from designated developing countries, Japan's tariff rates on agricultural products are still high. Moreover, Japan imposes quantitative restrictions on fisheries products. Thus, Tan recommends that zero percent GSP for all Philippine fresh fruits and vegetables should be a key item in the Philippines' wish list in the negotiation.

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The Philippines should push for the liberalization of the Japanese health care industry in negotiating for a bilateral economic agreement with Japan.
This was suggested by Dr. Tereso S. Tullao, professor at the De La Salle University and his associate, Michael Angelo Cortez, in their study with the Philippine APEC Study Center Network (PASCN) and the Philippine Institute for Development Studies (PIDS) titled "Movement of Natural Persons Between the Philippines and Japan: Issues and Prospects."
According to Tullao and Cortez, there is a need to restructure the composition of Filipino workers in Japan beyond entertainers who stay in Japan for a six-month contract. They suggested that one alternative is to push Japan to open its health care sector to foreign workers, particularly for Filipinos.
"It will be of mutual interest to both countries if entry of Filipino caregivers is liberalized given the ageing population in Japan, on one hand, and the ability of the Philippines human resource development institutions to train workers, on the other hand," they maintained.
Thus, Tullao and Cortez recommended that the Philippine government should examine how Filipino caregivers and other health professionals including doctors, nurses, dentists and physical therapists can enter the Japanese health care sector. Subsequently, it should work out a mutual recognition agreement with Japan on educational qualifications, professional requirements and other technical standards so that the qualifications of Filipino health professionals can be comparable and recognized in Japan.

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The proposed Philippine-Japan free trade agreement (FTA) can boost the export competitiveness of the Philippines since the bilateral agreement can be viewed as an extension of the overall tariff reduction program in the manufacturing sector.
Dr. Caesar Cororaton, senior research fellow at the Philippine Institute for Development Studies (PIDS), explained in his study "Philippine-Japan Bilateral Agreements: Analysis of Possible Effects on Unemployment, Distribution and Poverty in the Philippines Using CGE-Microsimulation Approach" that tariff cut increases the country's export competitiveness because it results in the lowering of the local cost of production.
However, since the manufacturing industry dominates the country's export sector, Cororaton cautioned that the effect of the possible agreement is an expansion in the manufacturing sector and a contraction in the agricultural sector.
"This could worsen the income inequality problem since the expansion of the industry could result in an increase in wages and other factor prices in manufacturing and a decline in wages and other factor prices in agriculture," Cororaton argued.
Nevertheless, Cororaton said that tariff reduction reduces consumer prices significantly. In fact, he noted that the reduction in consumer prices offsets the negative effects of the contraction of agriculture on household income. Thus, he concluded that the overall result of the FTA is a reduction in poverty incidence.

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Reversing the present policy of the government on tariff reduction will make local industries more inefficient, a study by government think tank Philippine Institute for Development Studies (PIDS) says.
According to Dr. Erlinda Medalla, PIDS senior research fellow and her associate, Ms. Rafaelita Aldaba in their paper, "Backsliding in Tariff Policy Can Do More Harm than Good," reversing tariff reform at this time when firms have already started to respond to reforms will create a lot of uncertainty and instability that can easily swamp the gains earned from previous reforms.
"Allowing the possibility of providing protection amidst the transition process thus send a signal to firms that the government will not commit itself to a given policy reform. This can negatively affect the performance of firms and can lead to so-called time-inconsistency problems. The firms do not adjust because they expect to obtain further protection in the future and it may not be politically optimal for the government not to grant such protection," the researchers explained.
Particularly damaging, they said, would be the high inflation and low growth. "Increasing tariff rates will lead to a large degree of variability in relative prices that goes hand in hand with high inflation. With low growth, the firms' ability to adjust to changes in relative prices diminishes," they argued
In addition, the researchers suggested that a policy reversal could reduce the government's credibility that will make investors and lending institutions doubt government's commitment to render well-meaning reforms.

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Reversing the present policy of the government on tariff reduction will make local industries more inefficient, a study by government think tank Philippine Institute for Development Studies (PIDS) says.
According to Dr. Erlinda Medalla, PIDS senior research fellow and her associate, Ms. Rafaelita Aldaba in their paper, "Backsliding in Tariff Policy Can Do More Harm than Good," reversing tariff reform at this time when firms have already started to respond to reforms will create a lot of uncertainty and instability that can easily swamp the gains earned from previous reforms.
"Allowing the possibility of providing protection amidst the transition process thus send a signal to firms that the government will not commit itself to a given policy reform. This can negatively affect the performance of firms and can lead to so-called time-inconsistency problems. The firms do not adjust because they expect to obtain further protection in the future and it may not be politically optimal for the government not to grant such protection," the researchers explained.
Particularly damaging, they said, would be the high inflation and low growth. "Increasing tariff rates will lead to a large degree of variability in relative prices that goes hand in hand with high inflation. With low growth, the firms' ability to adjust to changes in relative prices diminishes," they argued
In addition, the researchers suggested that a policy reversal could reduce the government's credibility that will make investors and lending institutions doubt government's commitment to render well-meaning reforms.

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The proposed bilateral free trade agreement (FTA) between the Philippines and Japan will have positive impact on the Philippine economy.
In a series of studies conducted by the Philippine APEC Study Center Network (PASCN), whose lead convenor is the Philippine Institute for Development Studies (PIDS), it was found out that the Philippines would enjoy slight improvements in the GDP growth, trade and domestic prices should the bilateral trade agreement with Japan succeed.
The studies also indicated that there would be a positive poverty alleviation effect, particularly in the urban areas such as the National Capital Region, where most industries are located.
According to Dr. Erlinda Medalla, project director of the PASCN and senior research fellow at PIDS, a bilateral agreement with Japan would provide net positive impact on the economy if the Philippines' agenda and objectives of reforms, namely, global competitiveness, sustainable growth, efficiency in allocation and poverty alleviation, are taken into consideration.
She also rationalized that a bilateral economic partnership with Japan is crucial considering that Japan is the second largest trading partner of the Philippines after the U.S. and a main source of official assistance of the Philippines. In addition, she pointed out that an FTA with Japan would benefit the almost 78,000 overseas Filipinos who are currently employed in Japan, mostly as production and related workers, transport equipment operators and laborers.

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While regionalism and bilateralism are fast becoming an obsession at the moment, a multilateral system like the World Trade Organization (WTO) which is based on rules will still serve the interest of the Philippines and other developing countries, an economist with the Philippine Institute for Development Studies (PIDS) said.
According to Rafaelita Aldaba, PIDS research associate, the WTO still provides the best solution despite its weaknesses.
"There is always the danger that regionalism might give rise to substantial trade diversion while under bilateralism, small countries have hardly any say and concessions can easily be withdrawn," she warned.
Thus she advised that cooperation among powerful countries like the US and the European Union (EU) and the weaker countries is critical to bring the WTO negotiations back on track. She cautioned that developing countries should recognize that they have the most to lose if the talks collapse.
"Countries should commit to more meaningful reforms. The US and the EU should go beyond their earlier proposal on agriculture subsidies while the more advanced developing countries should pursue reforms to reduce their own trade restrictions. Currently, uncertainty still looms as the US 2004 election and the EU enlargement might dampen their interest in trade talks," Aldaba explained.
On the part of the Philippine negotiators, she advised that they go beyond the rhetoric that no deal is better than a bad deal.

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The policy loan granted to local government units (LGUs) by the Department of Finance's Municipal Development Fund Office (MDFO) could be an effective tool for implementing policy and institutional reforms at the local level.

Thus stated Philippine Institute for Development Studies Vice-President Gilberto M. Llanto in his paper, "Policy Lending for LGUs: An innovative Financing Instrument for Local Governments."
According to Llanto, the policy lending is an innovative way to influence policy reforms since it is not as limiting as the existing project-based lending where the project objectives and scope are more focused and time-bound.

"The local program or policy loans of the MDFO are funds which are lent out for the purpose of assisting the local governments to attain or achieve certain policy targets or reform objectives. It may be used for budgetary support or for the implementation of an activity such as reform in local procurement. The end result of which is improved local fiscal performance or other reforms at the local level," Llanto explained.

The MDFO's policy loans are funded from the second-generation funds of the Municipal Development Fund (MDF). The MDF provides loans to local governments to finance revenue generating, infrastructure and social and environmental projects of local governments. The loan repayments have accumulated through the years into a "second generation fund."
Llanto suggested that apart from the local policy program, the fund could also be used as a leverage to draw more funding for local projects without the need for more foreign loans.

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A study by the state development think tank Philippine Institute for Development Studies PIDS) warned against moves to raise the value of East Asian currencies.

Dr. Josef Yap, PIDS senior research fellow, noted that most of East Asian currencies have appreciated considerably compared to the minimum levels that were attained. He explained that this indicator, along with the level of accumulated reserves in these countries, does not support the argument for the need for these currencies to appreciate sharply, that is in the neighborhood of 15 to 20 percent.

Calls have been made by some quarters for the revaluation of the Chinese yuan and other East Asian currencies given China's huge trade surplus with the United States. A revaluation or appreciation of the Chinese yuan, which means that the exchange rate against the dollar will decrease, will make China's exports more expensive and imports into China cheaper thereby reducing its trade surplus with the US.

There are also debates that the revaluation of the yuan should be accompanied by an appreciation of other currencies in East Asia since focusing on the yuan alone makes little economic sense because the trade deficit of the US is with the entire region.

Meanwhile, the Philippine peso remains to be one of the most undervalued currencies in the region.

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A study by the state development think tank Philippine Institute for Development Studies PIDS) warned against moves to raise the value of East Asian currencies.

Dr. Josef Yap, PIDS senior research fellow, noted that most of East Asian currencies have appreciated considerably compared to the minimum levels that were attained. He explained that this indicator, along with the level of accumulated reserves in these countries, does not support the argument for the need for these currencies to appreciate sharply, that is in the neighborhood of 15 to 20 percent.

Calls have been made by some quarters for the revaluation of the Chinese yuan and other East Asian currencies given China's huge trade surplus with the United States. A revaluation or appreciation of the Chinese yuan, which means that the exchange rate against the dollar will decrease, will make China's exports more expensive and imports into China cheaper thereby reducing its trade surplus with the US.

There are also debates that the revaluation of the yuan should be accompanied by an appreciation of other currencies in East Asia since focusing on the yuan alone makes little economic sense because the trade deficit of the US is with the entire region.

Meanwhile, the Philippine peso remains to be one of the most undervalued currencies in the region.

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A study by the government think tank Philippine Institute for Development Studies (PIDS) warns against any attempt to adopt populist credit programs because it may reverse the recent successes of market-based microfinance in the country.
PIDS Vice President Gilberto Llanto noted in his study, "A Microfinance Promise: To Provide the Poor Access to Finance Services" that making microfinance accessible to as many poor people as possible without considering the possible implication on the sustainability of microfinance institutions (MFIs) and borrower discipline should be avoided.
Dr. Llanto specifically identified the reported plan to revoke Executive Order 138, which mandated the adoption of market-based financial credit policies, and the passing of Section 9 of RA 9178, otherwise known as the "Barangay Micro Business Enterprises Act of 2002" as the pitfalls that policymakers face in their desire to support microfinance.
"The plan to revoke EO 138 will restore subsidized credit programs to benefit target beneficiaries. In effect, this will reverse the market-oriented policy thrusts of the government on microfinance that have achieved significant results in a relatively short period of time," Llanto explained.

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The Philippines should strengthen its bilateral trade and investment relationship with Latin American countries amidst the growing regionalism and globalization to take advantage of the potential benefits that may arise from such linkages.
This was suggested by Alexander Michael Palma in his paper with the state think tank Philippine Institute for Development Studies (PIDS) titled, "Strengthening Bilateral Trade and Investment Relationship Between Latin America and The Philippines: Beyond Economic Diplomacy."
According to Palma, the modest trade relationship between the Philippines and Latin American countries exhibits great promise. His observation is based on the positive outcome of the country's existing bilateral trade and investment agreements with Chile and Argentina.
Futhermore, he suggested that the present magnitude of trade and extent of economic integration between Latin America and the ASEAN-5, composed of the Philippines, Singapore, Malaysia, Indonesia and Thailand, also provide a basis for exploring prospects of trade cooperation between the two sub-regional groupings.
Palma's findings revealed that Filipino exporters of manufactured items and transport equipment will benefit greatly if the Philippines decides to enter into trade agreements with more Latin American countries.
"There is a good market for manufactured articles such as shirts, dresses, jackets and footwear and transport equipment, as these items comprised the bulk 93 percent of total exports to Latin American countries in 2000," Palma cited.

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The studies conducted by the state development think tank Philippine Institute for Development Studies (PIDS) for the past 25 years are now available in compact disks (CD).

Dr. Mario Lamberte, president of the PIDS, said the availability of the studies in CDs will further promote the dissemination and utilization of the policy research outputs of the Institute. The PIDS, since its inception in 1977, has carried on its thrust of providing clear analyses of development issues and concerns to help in the formulation of national policies, legislation, and macrolevel decisionmaking.

The five-volume set of CDs contain all the studies by PIDS conducted either individually or in collaboration with other researchers, local and foreign, from 1979 to middle of 2002.

"Readers can leaf through more than 800 publication titles dating back to 1979. It is interesting to note that from a modest number of three publications in 1979, PIDS studies have multiplied over the years and as of mid-2002, it has produced a total of 884 publications in various formats," Dr. Lamberte noted.

The studies are grouped according to the type of publication where a given study appeared and each CD contains a combination of these types of publications. For example, books, research papers and Policy Notes are contained in disk 1 while the journal and the newsletter, among others, are found in disk 2, etc.

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To increase awareness of the general public on the importance of policy research in the policy formulation, planning and decisionmaking process, the month of September every year will be observed in the country as the Development Policy Research Month.

This year's celebration, which carries the theme, "Policy Research: Instrument for More Responsive Policymaking," is based on Proclamation 247 issued by Pres. Gloria Macapagal-Arroyo in September 2002.

In Proclamation 247, Pres. Arroyo noted that the observance of Development Policy Research Month will provide the means for promoting, enhancing, instilling and drawing nationwide awareness and appreciation of the importance and necessity of policy research as a tool for national socio-economic development. This will also ensure the support of the public for all activities aimed at advancing the quality and standard of policy research in the country.



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Is it feasible for the Philippines to enter into a bilateral economic partnership with Japan? What are the issues as well as the challenges and opportunities in pursuing a trading arrangement with Japan?

Economic experts from the government, academe and private sector will try to answer these critical questions in a forum series that the Philippine Institute for Development Studies (PIDS), the Philippine APEC Study Center Network (PASCN) and the Department of Trade and Industry, in cooperation with the Japan International Cooperation Agency (JICA) and the Ministry of Economic Trade and Industry of Japan, will hold in August and September.

In the first forum to be held on August 29, Dr. Erlinda Medalla and Dr. Caesar Cororaton, senior research fellows at PIDS, will present their findings on the potential impact of the proposed partnership with Japan on the whole economy. Dr. Medalla will provide a situationer on the current economic relationship between Japan and the Philippines. She will also discuss the issues as well as challenges and opportunities in entering into a bilateral trading arrangement with Japan. Dr. Cororaton, meanwhile, will provide a quantitative analysis to determine the impact of various scenarios regarding a bilateral agreement between the Philippines and Japan.

The succeeding fora will focus on the impact of the proposed Philippine-Japan free trade partnership on specific sectors such as investment, human resource development, agriculture, export industry, small and medium enterprises, real estate, tourism and hospital care services, among others

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Given the controversial nature of the issue of population growth, there is a need for the government to state clearly its position with respect to family planning alternatives and its role in fertility decisionmaking of couples.

Dr. Alejandro Herrin, professor at the UP School of Economics, stated in a Policy Note with the Philippine Institute for Development Studies (PIDS) titled "Lack of Consensus Characterizes Philippine Population Policy" that the lack of stable consensus on Philippine government's policy on population control during the past three decades has been the reason behind the country's high population growth.

He noted that compared to neighboring countries like South Korea and Thailand, the country's fertility decline has been the slowest. As a result, the Philippines did not have the advantage of a more favorable age distribution that these countries had which contributed to their sustained economic growth and higher standards of living.

Herrin explained that from the Marcos Administration in 1967 to President Arroyo's Administration , the national population program has been characterized by shifting objectives of fertility reduction, upholding of reproductive rights and promoting maternal health.

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Although the government cannot expect the Catholic Church hierarchy to promote artificial contraception, there are opportunities for working closely in the areas of population policy and family planning.

This was suggested by Dr. Alejandro Herrin, professor at the UP School of Economics, in his paper with the Philippine Institute for Development Studies (PIDS) titled "Lack of Consensus Characterizes Philippine Population Policy."

According to Herrin, it is possible for the government and the Catholic Church Church to work together in promoting social and economic policies that can influence fertility indirectly in the long run.

Herrin alluded to the Pastoral Letter by Bishop Antonio J. Ledesma entitled "Natural Family Planning--A Pastoral Approach" as an indication that a church-government collaboration on family planning is workable. Bishop Ledesma suggested the possibility of moving from the Church's earlier position of critical noncollaboration with the government to one of principled collaboration with respect to family planning.

"The other area wherein the Church and the government could work together is in promoting modern natural family planning methods, the only methods that the Catholic Church hierarchy considers as morally acceptable," Herrin noted

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"The lack of clear and consistent population policy starkly sets the Philippines apart from the rest of East and Southeast Asia and partly explains its anemic economic growth and persistent mass poverty."
This was the major observation of Dr. Ernesto M. Pernia, lead economist at the Asian Development Bank, in his policy paper with the Philippine Institute for Development Studies (PIDS) titled " Population: Does it Matter--Revisiting an Old Issue." Pernia added that given its soft state and hard church, the Philippines has neglected the population problem, practically just sweeping it under the rug.
Maintaining that the single most important challenge for the Philippines has been and continues to be high poverty incidence, Pernia noted that while some observers may point to problems of poor governance, corruption and political economy or to the shocks brought about by trade liberalization and WTO rules as the culprit for this high poverty incidence, a counterargument that may be cited is why other Asian economies, similarly beset by the same problems or circumstances, have nonetheless managed to consistently perform better than the Philippines.
He then explained that in other East and Southeast Asian countries, sharp reductions in poverty have occurred as a result of rapid and sustained growth, attributable to sound economic policies coupled with a strong population policy. These countries, he said, have been benefiting from a demographic bonus resulting from an increasing share of workers relative to young dependents.

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The Bangko Sentral ng Pilipinas (BSP) should reconsider its policy of general moratorium on bank branching in order to enhance the efficiency and sustainability of microfinance institutions (MFIs).

Dr. Mario Lamberte, president of the Philippine Institute for Development Studies (PIDS), stated in his study entitled, "Effecting Efficiency to Sustain MFIs: The Case of Cooperative Rural Banks," that limiting entry of microfinance-oriented banks, which is the current policy of BSP, failed to make cooperative rural banks (CRBs) more efficient. He explained that CRBs have a tendency to be more cost-efficient in a more competitive environment, that is, where bank density is high.

More specifically, the study found out that CRBs operating in a province where bank density is low tended to be less cost-efficient. "It appears that lack of competition does not motivate CRBs to improve their efficiency," Lamberte pointed out.

Aside from implementing a more comprehensive liberal bank entry and branching, the study also recommends that the BSP should play a more active role in monitoring MFIs that have greater diffusion of ownership because agency problem is likely to occur in these institutions.

"Concentration of ownership induces managers to be more efficient since major stakeholders have stronger negotiating power when they face managers and have better incentives to keep track of decisions made by the latter. Conversely, widely diffused ownership of an institution such as a CRB could induce managers to become inefficient," Lamberte stated.

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The Bangko Sentral ng Pilipinas (BSP) should reconsider its policy of general moratorium on bank branching in order to enhance the efficiency and sustainability of microfinance institutions (MFIs).

Dr. Mario Lamberte, president of the Philippine Institute for Development Studies (PIDS), stated in his study entitled, "Effecting Efficiency to Sustain MFIs: The Case of Cooperative Rural Banks," that limiting entry of microfinance-oriented banks, which is the current policy of BSP, failed to make cooperative rural banks (CRBs) more efficient. He explained that CRBs have a tendency to be more cost-efficient in a more competitive environment, that is, where bank density is high.

More specifically, the study found out that CRBs operating in a province where bank density is low tended to be less cost-efficient. "It appears that lack of competition does not motivate CRBs to improve their efficiency," Lamberte pointed out.

Aside from implementing a more comprehensive liberal bank entry and branching, the study also recommends that the BSP should play a more active role in monitoring MFIs that have greater diffusion of ownership because agency problem is likely to occur in these institutions.

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Faced with high unemployment and underemployment rates of educated workers, there is an ongoing debate on whether better matching can be achieved by education planning.

Dr. Aniceto Orbeta, senior research fellow at the Philippine Institute for Development Studies (PIDS), said education planning is commonly justified by the high unemployment rates of educated workers. The unemployment rates, he pointed out, are taken as an indication of the mismatch between what is produced by the education sector and what is needed by the labor market.


Dr. Orbeta`s study on "Education, Labor Market and Development" noted a drastic decline in the proportion of college graduates in the professional and technical category and a rise in the proportion in sales, service, agriculture and production occupations.

"Thus, overall quality of jobs held by college graduates has deteriorated. There is not much shift in the proportion of college graduates in employment across industries. Among the discernable movements are increases in proportion in manufacturing, finance, insurance and real estate, and wholesale and retail trade sectors.Community and personal services, however, are the heavy losers of college graduates. Likewise, there is a decline in proportion of college graduates among the wage and salary workers, particularly government agencies and corporations, and a rise among self-employed workers," Orbeta explained.


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Providing information on the implications of high fertility and family planning services should be an integral component of any poverty alleviation package.

Thus advised Dr. Aniceto C. Orbeta, senior research fellow at the Philippine Institute for Development Studies (PIDS), in his paper, "Population and Poverty: A Review of Links, Evidence and Implications for the Philippines.

Orbeta stressed that while it has been argued that it is the rational choice of the poor to have a larger family size, there are indications that make this claim difficult to believe in the case of the Philippines.

The study pointed out that the poor do not have better control over their fertility as clearly indicated by the lower contraceptive prevalence rates, higher unwanted fertility and higher unmet need for family planning among them. Such situation results from their limited access to family planning and allied services.

"Only when we have a better understanding of fertility preferences, which can come only with good family planning services, can we better target to influence those preferences," Orbeta explained.

Likewise, Orbeta warned that fertility choices do not only have current effects but also have intergenerational impact.

"There is overwhelming evidence that high fertility leads to decreased investments in human capital. This has been identified as the main cause of the transmission of poverty from one generation to another," Orbeta noted.

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The Department of Health (DOH) has begun implementing the health reforms under its Health Sector Reform Agenda (HSRA) in selected cities and provinces in the country.

The HSRA is the framework of the major strategies, organization and policy changes, and public investments to improve the country's hospital systems, public health programs, local health systems, health regulatory systems and health financing systems.

Considering that the overall reform process which covers a comprehensive agenda such as the HSRA takes some time to be fully implemented at a national scale, the DOH set up so-called convergence sites. The convergence sites were chosen based on the strong interest of local executives and their level of commitment on health, particularly in establishing dynamic health systems. Their number was defined by the capacity of the DOH and PhilHealth to provide enabling resources.

The first batch of convergence sites are located in Pangasinan, Nueva Vizcaya, Bulacan, Pasay City, Capiz, Negros Oriental, South Cotabato, Misamis Occidental, Palawan, Southern Leyte, Agusan del Sur, Baguio City and Ifugao. In addition, sixty-four more convergence sites were identified.

The reforms being implemented in convergence sites cover various aspects of the five key areas identified in the HSRA. For instance, the hospitals in the convergence sites are now implementing programs to improve management systems and quality of services. They are also pursuing measures to increase and retain revenues they generate to augment their budgets.

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The health of Filipinos has significantly improved over the last 50 years. However, many challenges still remain for the health sector to effect further health gains.

Infant and maternal mortality rates in the Philippines remained high in the last decade compared to that of the other ASEAN countries. In addition, the threat from infectious diseases and the burden of degenerative conditions have also been rising. On top of these, emerging health problems brought about by environmental and work-related factors also remain unattended.

There is also the large variation in health status across population groups, income classes and geographic areas. Those who live in rural and isolated communities receive less and lower quality health services. Even in places where facilities are present, people are unable to receive appropriate care because services are unaffordable. While quality of healthcare is wanting in most areas, costs continue to rise, putting appropriate care beyond the reach of ordinary people. For the poorest of the poor, this means dying without even seeing a doctor.
To address these problems, the agenda for health sector reforms have been developed by the Department of Health (DOH). The Health Sector Reform Agenda (HSRA) describes the policies, public investments, and organizational changes needed to improve the way health care is delivered, regulated, and financed in the country.
Specifically, the HSRA seeks to undertake the following:


Provide fiscal autonomy to government hospitals . The conversion of government hospitals into corporate entities will promote fiscal autonomy by allowing them to collect socialized user fees. This move will take a great chunk off the DOH's yearly appropriation for hospital operations. Thus, the DOH could use this savings to finance preventive public health programs. However, there is a need to enhance the capacities of government hospitals such as their diagnostic equipment, laboratory and medical staff to effectively exercise fiscal autonomy. Such investment must be cognizant of complimentary capacity provided by public-private networks. Most importantly, safety measures shall be carefully put into place to protect the interest of the indigents such as enrolling them in the National Health Insurance Program.


Secure funding for priority public health programs. Budget on a multi-year basis must be provided to eliminate or significantly reduce the incidence of infectious diseases. The government should also allocate funds to effectively address emerging health concerns and to advance health promotion and prevention programs. At the same time, the management capacity and infrastructure of public health programs must be upgraded to ensure that these investments are effectively utilized. Capacity building is likewise required for these programs to provide technical leadership over local health systems.

Promote the development of local health systems and ensure their effective performance. Local government units must enter into cooperative and cost-sharing arrangements to improve local health services. Funds must be secured to upgrade local health facilities and build local human resource capacities. For more effective performance, participation of the private sector and volunteer groups must also be tapped. Lastly, appropriate mechanisms for sustainability and continued delivery of quality care must be developed and institutionalized.


Strengthen the capacities of health regulatory agencies. Health regulatory agencies, namely, the Bureau of Food and Drug (BFAD), the Bureau of Health Devices and Technology (BHDT), the Bureau of Health Facilities and Services (BHFS), and the Bureau of Quarantine and International Health Surveillance (BQIHS) must be strengthened to ensure the safety, quality, accessibility and affordability of health services and products. Public investments must be made to upgrade the facilities and manpower capability of these agencies, particularly in standards development, technology assessment and enforcement. To achieve all these, amendments to the laws governing these agencies are called for.


Expand the coverage of the National Health Insurance Program (NHIP) . Social health insurance must be expanded to widen its reach. Health insurance benefits must be improved to make the program more attractive to members. As membership expands and benefit spending increases, appropriate mechanisms to ensure quality and cost effective services must be developed and introduced. Capacities and new administrative structures must also be developed to allow the Philippine Health Insurance Corporation (PhilHealth) to effectively service more members and manage increased benefit spending.
These five reform areas are highly interdependent, complementary and therefore should be implemented as a package. Health financing reforms through NHIP expansion will make hospital autonomy viable and will ensure that the poor remains protected. Hospital reforms, in turn will free up resources for investments in public health program, and health regulation at the national and local levels. Effective public health programs and local health systems will relieve the NHIP from paying for hospitalizations that should otherwise have been prevented or better handled at primary care facilities.

Implementation of the HSRA demands public investments, policy and organizational changes. The HSRA will require public investments estimated to amount to P112 billion within a five-year period. It will also require effective implementation of existing laws and policies like the National Health Insurance Act, the National Drug Policy and the Local Government Code. The organizational changes needed include the continuing re-engineering of the DOH and PhilHealth and the formation of inter-local health zones.

Ultimately, HSRA aims to: improve the health status of the people through greater and more effective coverage of national and local public health programs; increase access to health services especially by the poor; and reduce financial burden on individual families. It shall be the catalyst that will bring the country toward the realization of a shared vision of health for all Filipinos.

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A national body, either in the form of a Water Commission or a National Water Resources Authority, could be established in order to integrate the efforts of the national government to manage the dwindling water resources in the country.

This was suggested by Dr. Antonio Contreras, associate professor at the Department of Political Science of the De La Salle University, in his paper "Water Policy Agenda for the Philippines: Is There Still A Need to Legislate?" The said paper was presented at a policy forum on Water Resource Management held in Makati City and organized by the Philippine Institute for Development Studies (PIDS), Sustainable Agriculture and Natural Resource Management Collaborative Research Support Program for Southeast Asia (SANREM-CRSP/SEA), Philippine Council for Agriculture, Forestry and Natural Resources Research and Development (PCARRD) and the University of the Philippines at Los Banos (UPLB).

Contreras noted that the proposed national water body would oversee the integration of all efforts of the government in the implementation of existing laws such as the Water Code, National Integrated Protected Areas Systems, Local Government Code and the Water Crisis Act.

On the other hand, he also recommended that instead of setting up a national water body, another option is for the government to lodge the function of overseeing all matters pertaining to water resource management to the Department of Environment and Natural Resources (DENR).

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Despite the presence of state-of-the-art facilities and use of high-tech equipment in nursing and maritime education institutions in other APEC economies, Philippine colleges and universities prove to have certain comparative advantages.



Thus concluded Dr. Veronica E. Ramirez, professor at the School of Education of the University of Asia and the Pacific, in her study with the Philippine APEC Study Center Network, whose lead convenor is the Philippine Institute for Development Studies. Dr. Ramirez?s study is titled ?Philippine Maritime and Nursing Education: Benchmarking With APEC Best Practices.?



Dr. Ramirez explained that the four-year curriculum for BS Nursing in the Philippines offers much more than what a skills-based program offered in other APEC educational institutions does because the former is a combination of competency-based and community-oriented courses. She noted that the two-year general program under such curriculum grounded in liberal arts strengthens the character and values of a person as a caregiver.



?Moreover, the medium of instruction in all local nursing institutions is English. Filipino nurses? skills, competence and confidence in the use of the English language does not only prepare them for international licensure examinations but also allows them to participate in research in nursing and other health sciences,? Ramirez added.



She maintained that the 3-1 bachelor?s degree program of local maritime schools, which consists of general education, specialization courses and one-year apprenticeship, is also an advantage.



?General education strengthens the character and values necessary for students who serve locally and internationally. The emphasis on discipline, hard work and team work are essential characteristics of servicemen in

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Is the decision of the Bangko Sentral ng Pilipinas (BSP) to shift from money targeting to inflation targeting as its monetary framework a wise move?



Dr. Mario B. Lamberte, president of the Philippine Institute for Development Studies (PIDS), in his paper, ?Central Banking in the Philippines: Then, Now and the Future,? said that the BSP?s adoption of inflation targeting in January 2002 is significant from the perspective of monetary policy. However, the public has hardly noticed it because it was approached in a gradual manner and implemented at a time when actual inflation rates were going down.



He validated BSP?s claims that it has already met most of the requirements for the successful adoption of inflation targeting. These include BSP?s fiscal and administrative independence, commitment to maintain price stability, good forecasting ability, transparency, accountability and sound financial system.



Thus, Lamberte noted that as the inflation rate stabilizes at low levels as a result of BSP?s inflation targeting scheme, improvement in measuring the consumer price index (CPI) also becomes more urgent.



?This may also be the right time for BSP to switch from headline inflation to core inflation as the operating target variable. The switch should be accompanied by a well-orchestrated information campaign since core inflation indices will likely be less understood by the general public than the commodity price index (CPI). Likewise, core inflation indices do not include commodity items that matter most to consumers,? Lamberte explained.



On the other hand, Lamberte cautioned that the persistently high budget deficit and huge external debts could easily destabilize the economy and ultimately undermine the effectiveness of BSP?s monetary policy.



?These problems have recently emerged and the BSP must use all instruments available to give advice to the government on budget deficit and the best means to finance it. The New central Bank Act spells out BSP?s function as a financial advisor of the government,? he emphasized.



Likewise, he advised the BSP to take deviation from the inflation target symmetrically and avoid falling into a liquidity trap that would render monetary policy ineffective.



Dr. Lamberte?s perspective paper on Central Banking in the Philippines is part of the Perspective Paper Symposium Series that the PIDS is conducting from August 15 until September 12, 2002 in celebration of its 25th founding anniversary. The topics of other perspective papers are on infrastructure and privatization, poverty alleviation, environment, agriculture and rural development, science and technology, human resource development and labor markets, competition policy, trade and regional integration and housing development. The papers will be presented by PIDS research fellows, with eminent social scientists as discussants.



Meanwhile, a free admission-research fair where various PIDS and other research institutions? studies are to be exhibited will be held on September 18-20 at the AIM Conference Center in Makati City. The occasion will serve as a culminating activity of the PIDS anniversary celebration.



Queries concerning the PIDS anniversary activities may be addressed to the PIDS Public Affairs Division at tel nos. 8924059/ 8935705, fax number 8939589 or e-mail address ggizelle@pidsnet.pids.gov.ph.

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It is not enough for the gross national product (GNP) to grow at a high rate in order for the government to succeed in fighting poverty. It is important that the poor benefit from this growth.



Thus stated Dr. Celia M. Reyes, a senior research fellow at the Philippine Institute for Development Studies (PIDS) in a perspective paper, ?The Poverty Fight: Have We Made an Impact??



Data from the National Statistics Office (NSO) indicate that the proportion of the population who are poor has steadily declined from 49.2% in 1985 to 36.9% in 1997. However, the crisis in 1997-1998 caused poverty incidence to go up to 39.5% in 2000. In terms of magnitude, the number of poor has increased from 26.7 million in 1985 to 26.8 million in 1997. This went up further to 30.8 million in 2000.



Dr. Reyes noted that the poverty reduction was due mainly to economic growth and not to distribution.



?Economic growth resulted to an increase in per capita income, thereby reducing the incidence of poverty. However, the inequitable distribution of income prevented the poor from benefiting fully from this growth,? Reyes explained.



Given this condition, Reyes suggested that it is imperative that the country has programs directed at the poor. Otherwise, she cautioned that it is possible that even if the Philippines experiences growth, it would not make significant progress in its fight against poverty. Likewise, she pointed out the importance of the role of government bodies like the National Anti-Poverty Commission in overseeing the poverty reduction programs.



Dr. Reyes? perspective paper on poverty is part of the Perspective Paper Symposium Series that the PIDS is conducting beginning August 15 until September 12, 2002 in celebration of its 25th founding anniversary. The topics of other perspective papers are on public finance, infrastructure and privatization, banking and finance, environment, agriculture and rural development, science and technology, human resource development and labor markets, competition policy, trade and regional integration and housing development. The papers will be presented by PIDS research fellows, with eminent social scientists as discussants.



Meanwhile, a free admission-research fair where various PIDS and other research institutions? studies are to be exhibited will be held on September 18-20 at the AIM Conference Center in Makati City. The occasion will serve as a culminating activity of the PIDS anniversary celebration.



Queries concerning the PIDS anniversary activities may be addressed to the PIDS Public Affairs Division at tel nos. 8924059/ 8935705, fax number 8939589 or e-mail address ggizelle@pidsnet.pids.gov.ph.

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Pres. Gloria Macapagal-Arroyo has declared the month of September of every year as Development Policy Research Month.

This is to recognize the importance of policy research in the policy formulation, planning and decisionmaking regarding socio-economic development activities.

In Proclamation 247, Pres. Arroyo stressed that the observance of Policy Research Month will provide the means for promoting, enhancing, instilling and drawing nationwide awareness and appreciation of the importance and necessity of policy research as a tool for national socio-economic development. This will also ensure the support of the public for all activities aimed at advancing the quality and standard of policy research in the country.

As the government's policy development think tank, the Philippine Institute for Development Studies (PIDS) has been designated to oversee and coordinate all programmed activities lined up to mark and celebrate the Policy Research Month.

Likewise, she called on all departments, agencies and instrumentalities of the national government, local government units, government-owned or controlled corporations, the private sector and the public at large to support the activities and programs for Development Policy Research Month.

The President's proclamation coincides with the celebration of PIDS' 25th anniversary. As part of the celebration, the Institute has lined up a number of activities.

Starting August 15 until September 12, the PIDS has held the Perspective Paper Symposium Series. The topics of the perspective papers are on public finance, infrastructure and privatization, banking and finance, environment, agriculture and rural development, poverty alleviation, human resource development and labor markets, science and technology, competition policy, trade and regional integration and housing development. The papers are presented by PIDS research fellows, with eminent social scientists as discussants.

Likewise, the PIDS, in cooperation with the Philippine Economic Society (PES) conducted a lecture series on political reforms, exchange rate policy, and inflation and tuition fees in Philippine colleges and universities.

An international conference on trade and development in the Pacific on competition policy will be held on September 16-18,2002 at the AIM Conference Center in Makati City. Fora on Sustainable Tourism and Philippine Agricultural System will also be conducted at the AIM Conference Center on September 19 and 20, respectively.

The activities will culminate with a free admission-research fair on September 18-20 at the AIM Conference Center in Makati City where various PIDS and other research institutions studies are to be exhibited.