Press Releases Archived (April 2015)

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The seven month-long truck ban last year in Metro Manila cost the national economy around PHP 43.85 billion. But while the country`s leaders insist that the operation has normalized in the ports since February 2015, there are complex problems with port congestion and underutilization that need urgent attention.

A recent policy note released by state think tank Philippine Institute for Development Studies (PIDS), Port Congestion and Underutilization in the Greater Capital Region: Unpacking the Issues, discusses the nature and the root of the port congestion problem and explores various policy options and alternative measures, including the revival of the Philippine National Railway (PNR), to improve current port operations. The policy note was based on a comprehensive study of the logistics chain in the Greater Capital Region.

Of the three major ports in the Greater Capital Region (Manila, Batangas, and Subic), the Port of Manila is widely used and most preferred by shippers, freight forwarders, logistics services providers, and truckers. PIDS President Gilberto Llanto and PIDS research associates Christine Ruth Salazar, Cherry Ann Madriaga, and Ma. Diyina Gem Arbo, together with PIDS consultants Epictetus E. Patalinghug, Alexis M. Fillone, and Noriel C. Tiglao, conducted a series of surveys and focus group discussions to uncover the factors that influence the sectors` choice of port.

Convenience, for example, weighs heavily. Shippers, consignees, and importers cite the proximity of the Port of Manila to their areas of operation as a deciding factor. The rates are also much more affordable, and the immediate availability of concerned government officials make transactions and release of goods much easier to carry out.

The biggest weakness with the Port of Manila, respondents complain, are `red tape` and the Bureau of Customs procedures.

In comparison, issues with the Port of Batangas pertain to the status of several services, including shipping schedules, availability of allied services providers, and cargo handling facilities. Meanwhile, the Port of Subic is cited for its poor shipping schedules and longer travel time to the port.

The authors noted that a comprehensive policy framework is necessary to solve the congestion in the Port of Manila and the underutilization of the Ports of Batangas and Subic. The truck ban revealed that volume restriction alone will not yield a catch-all solution. Considerations have to be factored in to make policies more effective.

Alongside possible incentives, like a price discount mechanism, capacity expansion has to be undertaken and nonprice service attributes such as warehouse proximity have to be counterbalanced. Volume restriction must be complemented by capacitating the other ports, `commensurate to the volume of cargo and transaction that are targeted to be diverted from the Port of Manila.

Moreover, reviving the freight train network from Bicol to La Union as an alternative cargo transport seems more problematic than promising. Not only are the train tracks deteriorating, but the researchers also conclude that the `current level of freight traffic through Batangas is too small to consider it a major source of potential base traffic for freight railway.` Even if the freight railway was restarted, it would only be able to carry a certain amount, thus having a `negligible effect` on the congestion and traffic caused and experienced by the ports.

The researchers recommend a combination of short-term, medium-term and long-term solutions.

In the short term, policymakers can introduce caps, revive the PNR freight operation, and establish 24-hour web-based booking system to facilitate the logistics chain. But these have to be carried out together with a more strategic actionthe government must invest heavily in capacity building at the ports and the train tracks, as well as rationalize future port development and investment programs in port infrastructure.

Overall, if the Philippines hopes to take full advantage of its economic growth, enhance its position as a transport hub in the region, and position Philippine ports in the global supply chain, the country must implement a strong and comprehensive national multimodal transport and logistics development plan.

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The traditional adage is that innovation optimizes the evolution of performance. But for small and medium enterprises (SMEs) to fully take advantage of the benefits of innovation, hard evidence has to link innovation with improved firm performance. More importantly, the factors that influence firms to innovate, as well as those that discourage them, must be identified and analyzed.

These were the objectives outlined in Does Innovation Mediate Good Firm Performance, a paper recently released by state think tank Philippine Institute for Development Studies (PIDS). Authors Gilberto M. Llanto, president and Fatima Lourdes Del Prado, senior research specialist, add their analysis to the growing literature on innovation in the area of policymaking and development agendas.

National development relies on innovation, and SMEs in particular are considered by the ASEAN Economic Community as vehicles for integration and inclusive growth. To create an atmosphere that allows SMEs to have greater access and financing opportunities to generate innovation, the countrys leaders must make targeted policies.

Llanto and del Prado`s paper affirms that innovation increases sales and profit, and improves labor productivity. But what kind of innovation, and how do different factors, such as firm size, age, and foreign equity, affect the impact of innovation? The authors believe that the effect of each is important to distinguish.

Two Kinds of Innovation

A review of the literature undertaken by the authors shows that there are two ways firms can change and innovate"through product innovation or the adoption of new product or service, and through process innovation or the radical changes in the management and operation of a firm.

Interestingly, the authors demonstrate that a firms ability to undertake both or either type of innovation, and the disposition of the impact on the firm`s performance, is dependent on varying factors.

Supported financially and technically by the Economic Research Institute for ASEAN and East Asia (ERIA), PIDS commissioned the National Statistics Office (NSO) to survey manufacturing firms in CALABARZON. Their statistics show that a strong relationship between innovation activities and economic performance of firms exists.

Firm size, foreign equity, and industry sectors were important considerations for SMEs to invest in changes.

"Small-sized firms or start-up companies for instance, may find it more challenging to do product innovation than process innovation while large companies could typically undertake product and process innovations as a matter of routine," the authors conclude.

Larger firms have more workers and a larger talent pool to enact both product and process innovations. But their years of experience also allow their leaders to view the importance of innovation to maintaining their market competitiveness.

Secondly, the authors affirm established literature cited in the works of Becheikh, Landry and Amara (2006) claiming that firms with foreign investors are more likely to innovate because they "supply domestic firms with scientific and non-scientific resources", making them all the more capable to change up their processes or product designs.

Thirdly, the fundamental difference between product innovation and process innovation was also evident.

Sales, profit, and labor productivity linked with process innovation show that improving the way firms run their business by changing operating, marketing, and business strategies significantly and positively affect firm performance.

The same cannot be said for product innovation. Its impact on the firms performance is smaller compared with that of process innovation, and subject to the products ability to penetrate the market.

The authors recommend that policymakers focus on enhancing SMEs to access and finance innovations. Regulations and structural barriers to foreign investment would best be eased, as foreign equity increases SMEs` likelihood to innovate their products and processes.

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The Philippine Institute for Development Studies (PIDS) continues to be recognized as one of the world`s best think tanks for its outstanding public policy research, analysis, engagement, and impact.

In the 2014 Global Go To Think Tanks Report and Policy Advice of the Think Tanks and Civil Societies Program (TTCSP) at the University of Pennsylvania, PIDS was recognized in three categories. PIDS remained the top social policy think tank in South East Asia and 37th among the top 50 in the world. It was also ranked 69th among the top 80 international development think tanks"one notch higher than its ranking in 2013. Meanwhile, the Institute is now part of the 55 top education policy think tanks in the world at 33rd place.

Other think tanks in South East Asia that made it to the list under these categories were Thailand Development Research Institute (TDRI), Singapore Institute of International Affairs (SIIA), Institute of Southeast Asian Studies (ISEAS) which is also in Singapore, and Malaysia`s Centre for Public Policy Studies (CPPS) and Third World Network. TDRI ranked 20th among the education policy think tanks and 66th in the international development think tanks category; SIIA and Third World Network ranked 70th and 72nd , respectively, among the international development think tanks; while ISEAS ranked 41st among the social policy think tanks.

The Go To Think Tanks Index is a comprehensive ranking of the world`s top think tanks and has been described as the premier database and measure of world think tanks. It aims to increase the profile, performance, and impact of think tanks, and to create a transnational and interdisciplinary network of centers of public policy excellence.

Think tanks are public-policy research analysis and engagement organizations that generate policy-oriented research, analysis, and advice on domestic and international issues, thereby enabling policymakers and the public to make informed decisions about public policy.

For its latest rankings, 6,618 think tanks from 182 countries were invited or nominated to participate in the process.

PIDS President Gilberto Llanto makes a plea for more resources and support to research institutes in the country. "Despite having only a handful of researchers compared to other better-endowed research institutes in the region and in the Philippines, the PIDS has consistently 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," he said.

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 almost 1,000 studies covering a wide range of issues that encompass macroeconomic, agricultural, trade and industrial policies, health economics, education, environment, natural resource management, urban development and social services, and governance.

Established in 1989, the TTCSP aims to acknowledge the important contributions and emerging global trends of think tanks worldwide. Often referred to as the think tanks` think tank, the program maintains a database and network of more than 6,600 think tanks in 182 countries.

"In a world filled with tweets and sound bites that are often superficial and politically charged," said James McGann, director of the TTCSP, "it is critical to know where to turn for sound policy proposals that address our complex policy issues. This independent Index is designed to help identify and recognize the leading centers of excellence in public policy research around the world."

To view the complete list of ranking, kindly go to this link: http://bit.ly/1E6bjMP

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Amid the apprehension of some sectors and leaders over the viability of the K to12, state think tank Philippine Institute for Development Studies (PIDS) released a timely policy note offering possible solutions to some of the challenges cited by the reform program`s critics.

Dr. Rosario G. Manasan, a PIDS senior research fellow, recommends that higher education institutes (HEI) offer their `excess capacity`, referring to the available classrooms and the teachers who will be underutilized when HEIs receive no enrollees in school year (SY) 2016/2017.

Manasan stated this recommendation in her policy note titled `K to 12 reform: Implications of adding Grades 11 and 12 on the higher education subsector`, which assesses the effect of the demands of the K to 12 program on the supply capacities of secondary schools and higher education institutes.

The Senior High School Absorptive Capacity Study, conducted by the Asian Development Bank (ADB), found that to accommodate all the students who are expected to enter public senior high school (SHS), the Department of Education (DepEd) must be able to build 27,000 new classrooms by SY 2016/2017, and 23,812 additional classrooms by SY 2017/2018. DepEd would also need to hire more teachers"46,000 by 2016 and 38,700 by the following school year.

These exact demands have caused critics to be wary that the program will only create newer problems, as well as exacerbate the same old and unaddressed issues such as inadequate infrastructure, underpaid teacher salaries, and underfunded school materials.

But the government has remained steadfast that the reform program is long overdue, and that the K to 12 shift is essential to increasing the competitiveness of the Philippine education system.

Manasan`s recommendations are an addition to the government`s response through the education cluster and coordinating agencies, including the Commission on Higher Education and the Department of Labor and Employment, to explore comprehensive and supplementary action, including schools applying to open secondary high schools.

Though Manasan admits there are logistical concerns, such as uneven geographic distribution of available spaces, she still considers the scenario a `win-win` scenario.

`If all the available places in HEIs arising from the missing cohorts were made available to the SHS program, the total classroom requirement for the SHS program in public schools would drop by 57 percent from 26,955 with pure DepEd provision to 11,572 in SY 2016/2017.`

Furthermore, HEIs and the DepEd can use the opportunity to gauge the real demand for SHS facilities and adjust the infrastructure budget, and HEIs will not have to retrench faculty members during the transition period.
To make these possible, the countrys leaders need to create a policy environment that will make it easy for the HEIs to cooperate, and consider mechanisms and programs like education service contracting, concession arrangements, and credit windows for classroom construction.

This press release is based on a policy note "`K to 12 reform: Implications of adding Grades 11 and 12 on the higher education subsector". You may download a copy of this publication here: http://dirp4.pids.gov.ph/webportal/CDN/PUBLICATIONS/pidspn1506.pdf

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As the country observes Women`s Month this March, state think tank Philippine Institute for Development Studies released two timely policy notes on women entrepreneurs as outputs of the APEC 2015 Research Project commissioned by the Department of Foreign Affairs. The author and PIDS consultant, Lucita Lazo, explores the different obstacles women entrepreneurs face in the Philippines. Her policy notes outline challenges and opportunities for policymakers to help women entrepreneurs scale up their business ventures in the backdrop of the ASEAN integration and freer trade.

Even with the Philippines coming ahead in international gender indices and local literacy rate surveys, affirming that Filipino women outperform Filipino men, experts say that translating these capabilities into business and leadership opportunities is still a work in progress.

There are more educated Filipino women, yet men`s employment still exceeds women`s significantly. The Philippines boasts of having the highest ratio of female-to-male business leaders, yet experts believe that opportunities for women continue to be held back by oppressive conditions, and most of all, by persistent economic inequality.

Challenges

In the first policy note, "Challenges in the economic participation of women as entrepreneurs", Lazo cites a survey by the Department of Trade and Industry (DTI) in 2009 showing that women make up 54 percent of small and medium enterprises (SMEs), which are known to be the foremost economic vehicle for generating employment. She also cites the Global Entrepreneurship Monitor Survey in 2006-2007 ranking the Philippines second highest for having entrepreneurially active women.

Lazo warns that the growth of these positive recognitions are hindered by several factors, namely, access to resources; the sustainability of their businesses; lack of a business discipline, preparation and readiness for changing economic outlooks; lack of women representatives on decision making levels; lack of access to health and socio-legal protection; and a simple lack of information for a nuanced understanding on the part of leaders and policymakers.

Despite all the government projects targeted to provide information, service facilities, technology, and innovation to women in SMEs and microenterprises, access is weakened by a network of problems.

Women are most vulnerable to cultural and economic hindrances that often force them to choose their families over their businesses. Their independent access to finance is restricted without their husband`s consent, as indicated by the Family Code. More women register businesses, according to the DTI citation, but more men renew licenses. Women`s decision are affected the most by health risks, economic instabilities and catastrophes, making them altogether less able to sustain their businesses.

The lack of organization and representation of women entrepreneurs and bureaucratic firewalls only exacerbate the situation.

Recommendations

Lazo presents her policy recommendations for both the national and regional level in a follow-up policy note titled "Promoting women`s participation in the APEC economies: some recommendations". She argues that merit often predominates all other judgment, and purveyors don a "blind" attitude toward gender issues.

"Where agency heads perceive gender as inconsequential or unrelated to their respective agency mandates, the talk of gender will not walk far enough to reach the frontlines where it matters," says Lazo. "If policymakers see the link between gender and national productivity and wealth creation, the case for gender will become a more attractive position."

Lazo identified three goals for policymaking at the national level: empowerment, enhancing competitiveness, and ensuring sustainability and resilience.

Leaders can empower women entrepreneurs by eliminating barriers to accessing resources, skills, protection, and other opportunities that allow women to build up the readiness, sustainability, and competitiveness of their businesses. Local leaders play an important role if they can provide services such as financial services, counseling, and strengthening linkages through trade fairs and training seminars.

Getting women entrepreneurs organized is essential, not only to help them share the wisdom and knowledge of doing business with other women in their category, but also making it easier to inform each other of the opportunities and challenges affecting them. Lazo specifically recommends incentivizing business registration with access to "the supply chain of government procurement programs".

It is also worth globalizing wome`s business outlook, by making them aware of the economic and geopolitical environment in which they operate. Standardizing the quality of their output through information campaigns and service provisions will enable women to make their goods more competitive in the national and international market.

On the matter of enhancing competitiveness, leaders must also tap information and communication technologies as part of a comprehensive capacity development. Lazo also highlights the need to inculcate business discipline, ingenuity, and creativity in women entrepreneurs--values essential to remain competitive.

Last but not least, national policymakers have to create social safety nets, such as improving access to credit and healthcare, to encourage women to sustain their business ventures and withstand threats of instability and catastrophes.

At the regional level, the Asia-Pacific Economic Cooperation (APEC) has set programs in place, such as the APEC Women in Transportation, which aims to identify barriers to women`s entry in the transportation industry and focuses on "key areas of the career continuum", namely, education, access to job opportunities, and leadership development. On top of these initiatives, Lazo recommends that the regional business sector be continuously educated, to remind it that the region`s business climate relies on women`s increased access to productivity.

Lazo encourages an informed and dynamic dialogue and research, especially with regard to monitoring the effect of APEC free trade on women entrepreneurs. The effects will be different between men and women in the different levels and sectors of society, but women are always most likely to be negatively affected given their traditional roles in ASEAN and Filipino societies.

In summary, the author concludes that the economic contributions of Filipino women are not being harnessed to the fullest because of cultural and economic setbacks.

The rate of women who leave the country seeking better jobs for their family offsets the notion that the Philippines is a progressively equal opportunities country. Women often take on the lowest paying jobs with the lowest security, not just in terms of employment continuity but also in terms of health and wellbeing.

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The Philippine Statistics Authority (PSA), in its official estimated poverty figures for the first half of 2013, reported that 24.9 percent of Filipinos were poor in the first semester of 2013 based on the 2013 Annual Poverty Indicator Survey (APIS).

Using these official poverty estimates, government officials suggested that the welfare conditions in the country are improving, and even attributed the reduction in poverty to the impact of the government`s version of the conditional cash transfer program, Pantawid Pamilyang Pilipino Program. Even the World Bank, in its August 2014 issue of the Philippine Economic Update, similarly described improving poverty conditions.

However, in a policy note released by state think tank Philippine Institute for Development Studies (PIDS), its authors argued that while these descriptions of poverty are based on official statistics released by the Philippine Statistics Authority (PSA), the April 2014 press release of the PSA did not actually report a drop in poverty incidence from 2012 to 2013.

"PSA mentioned that 24.9 percent of Filipinos were poor in the first semester of 2013, and that in the same period in 2012, poverty incidence among Filipinos based on the 2012 Family Income and Expenditure Survey (FIES), was recorded at 27.9 percent," explained PIDS Senior Research Fellow Jose Ramon Albert and co-author Arturo Martinez in "Is poverty really decreasing? And if not, Why not?"

But isn`t 24.9 percent a decline from 27.9 percent?

"Seemingly, yes, but in this case, no. To compare statistics, their methodologies should be equivalent," Albert explained.

The PSA`s technical notes stated that the source of poverty data on the first half of 2013 is the 2013 Annual Poverty Indicator Survey (APIS), a nationwide sample survey designed to provide information on the different indicators related to poverty and uses a different questionnaire from that of the 2012 FIES.

Albert and Martinez explained that although the 2013 APIS used more questions on income (than it used to) with its 19-page questionnaire, the 2012 FIES income module used 24 pages of questions. And even if APIS 2013 made use of the 24-page income module of FIES 2012, this would still not make poverty data from the APIS and FIES comparable since FIES also asks households detailed information on their expenditures before income questions are asked using a total of 78 pages of questions. The FIES interview could take an average interview time of five hours.

The APIS 2013 questionnaire had six pages of questions on expenditure, aside from 19 pages of income questions, and several pages of other questions, which, overall, took three hours to accomplish.

We therefore do not have clear evidence to suggest a reduction in poverty from the first half of 2012 to the first semester of 2013. To get definitive recent trends on income poverty, we have to await the results of the 2014 APIS, Albert and Martinez contended.

Historically, however, poverty rates have been unchanged. Based on the latest available figures from FIES, the researchers observed three clear trends on poverty conditions. First, poverty rates have been unchanged in the first semester periods from 2006 to 2012, since minute differences in estimates are within margins of error. Secondly, poverty rates also have been unchanged in the full year periods from 2006 to 2012, and thirdly, estimates of the proportion of Filipinos who are poor are lower in the full year, compared with first-semester figures, on account of extra income received from thirteenth month wages and bonuses, and other income received in the second semester.

Since poverty rates are unchanged, the number of poor Filipinos is increasing on account of population growth, the researchers noted.

Furthermore, they pointed out a barely changing income inequality, a pattern that could mean that the new opportunities created by economic growth do not allow the income of the poor to catch up with the rest.
They also pointed out that although poor Filipinos were more likely to experience higher income growth, some nonpoor also have been vulnerable to slide into poverty. Thus, they noted that the government should not only be concerned with the poor, but also with the nonpoor who are plagued by economic risks, in designing the countrys social protection infrastructure.

Policymakers should need to develop policies for risk management such as adequate social insurance and social protection coverage. It is also important to monitor and evaluate the effectiveness of these programs because if left unaddressed, income shocks may hamper the thrust for inclusive growth and for sustained prospects of the countrys development, they concluded.

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The Department of Education`s (DepEd) School-Based Feeding Program (SBFP) is a "well-managed" program according to a study recently released by state think-tank Philippine Institute for Development Studies (PIDS). However, study authors of the study have also identified vital areas that require improvement. Authors Dr. Jose Ramon G. Albert, Ana Maria L. Tabunda and Imelda Angeles-Agdeppa, PIDS senior research fellow, chief research fellow at Pulse Asia, and scientist at the Department of Science and Technology, respectively, recommend that the government address important implementation challenges, which include increasing the budget per child and for administrative and monitoring purposes.

The program`s short history has seen moderate success to develop the learning capabilities of malnourished young children by improving their health and nutrition. The initial results of the study were discussed by a panel of DepED officers and PIDS researchers at a seminar held at PIDS recently.

Most of the discussions revolved around the finer details of the SBFP such as the budget and time constraints on the program, which the authors included in their observations.

Beyond implementation and budget increase recommendations, the attendees agreed that the SBFP would benefit greatly from strengthening the links of interagency cooperation. Efforts of local government units and other stakeholders should converge to complement SBFP with community-based activities.

According to the World Food Programme, food for education (FFE) programs like SBFP in the Philippines is adopted across developing countries "as a mechanism to accelerate the achievements of some of the Millennium Development Goals, particularly those on hunger and poverty (MDG 1), education (MDG 2), and gender equality (MDG 3)".

Although considered a temporary fix to address large social problems, the SBFP works on the premise that there exists a strong correlation between health, nutrition, and school performance. Tracing its roots to the 1997 FFE blueprint to address short-term hunger, the SBFP goal has evolved "to rehabilitate severely wasted children to normal nutrition status and improve their classroom attendance".

Albert and his co-researchers reviewed the conduct of the SBFP in eight schools across the country during school year 2013-2014. They analyzed the results against the program`s objectives: (1) that 70 percent of the beneficiaries must have been rehabilitated at the end of the 100-120 day feeding program, (2) that 85-100 percent of the beneficiaries attend school, and (3) that there is observable improvement in health, nutrition values, and behavior.

The researchers interviewed the team of school parents, teachers, parent volunteers, and DepED staff who together handle the procurement of supplies and finances, and conduct deworming and other complementary programs that enhance the results, which include waste management, in-house gardening, and health monitoring. They were interviewed about the program's procedures, issues, challenges and lessons, the performance of the children, and how they perceived the implementation and management of the SBFP.

The researchers found out that beneficiaries and stakeholders laud the program.

The hands-on attitude of the DepED provincial division staff made it easy for the schools to implement the SBFP, especially where it concerned financial and procurement procedures. The division staff also made it clear to the beneficiary parents that it is important to ensure proper nutrition in their own households to sustain their children`s nutritional progress.

As a result, the health, class attendance and performance, and social behavior of the students improved. The program, the researchers noted, also helped cultivate "a culture of care and active participation among all stakeholders".

Amid all the success, however, the researchers point out important challenges, starting with data gathering inconsistences and the lack of standard weighing measurement.

"Clearly, any encoding and measurement errors on the nutrition status data have implications on the targeting accuracy of the program as well as on correct assessment as to whether stated goals are attained (or not)," according to the study.

This threatens to misclassify the nutrition status of children, which may cause fundamental problems for the program. Classification not only determines the effectivity of the program, but is also crucial to building the database of identified malnourished children.

Furthermore, issues with procurement and liquidation procedures resulted in delays and sometimes discontinuation of the program. Difficulty and unfamiliarity with bureaucratic processes hindered the program to meet its objectives.

Lastly, the researchers recommend that the budget of 16 pesos per beneficiary for food be reviewed and augmented.

These findings concur with experts` views that while the SBFP can help meet MDG targets, it is not enough to end hunger, especially not for those who are already in the most vulnerable bracket and are experiencing chronic poverty. Policymaking must be complementary and comprehensive.

Several bills have already been filed to institutionalize the school feeding program. Senator Sonny Angara's Senate Bill No. 2020 and Senator Grace Poe's Senate Bill No. 79 generally try to address the budgeting challenges.

But as the study shows, focusing on improving the logistics of how the SBFP is implemented and carried out is just as crucial to meeting the program`s objectives and improving the nutrition and education of the country`s most vulnerable young children.

You may download a copy of the study by clicking this link: http://dirp3.pids.gov.ph/webportal/CDN/PUBLICATIONS/pidspn1501.pdf

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