Press Releases Archived (February 2017)

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A recent paper released by state think tank Philippine Institute for Development Studies (PIDS) recommends the setting up of a dedicated organization that will oversee the development of policies and implementation of strategies regarding catastrophic health.

At present, various forms of financing for catastrophic expenditures are being provided by different public and private institutions, each of them having its own rules and procedures on how to avail them. The Philippine Health Insurance Corporation (PhilHealth), Philippine Charity Sweepstakes Office (PCSO), Department of Social Welfare and Development, Philippine Gaming Corp., and some members of Congress are among the government entities that provide financial support to patients faced with catastrophic health problems.

The Department of Health (DOH) defines catastrophic health expenditures as out-of-pocket spending on health that can drive patients and their families to or further into poverty.

Alvin Caballes, author of the PIDS study, said the proposed organization may be organically within the DOH or a semi-autonomous body. Such unit, he said, may create a comprehensive benefits program for patients and families. It should also coordinate with regulatory offices to ensure that improved financing is complemented by readily available and quality health services.

However, should the government choose to retain the existing structure, Caballes maintained there should be at least a common definition for catastrophic health expenditures so that institutions will have a unifying concept to base their policies and strategies on.

At present, each financing institution has its own definition of catastrophic health expenditures anchored on its organizational mandate and operational capacities. This, according to the study, leads to discrepancy between what patients perceive as a severely distressing situation and what most institutions consider as merely usual. Thus, the timeliness of response provided by financing institutions oftentimes do not match patients' urgency of need.

Caballes also pointed out there is no systematic documentation of how these agencies actually select and support their beneficiaries. He highlighted the importance of looking into whether these agencies can effectively and equitably address catastrophic health expenditures or not.

Likewise, the paper highlighted the varying amount and timing of financial support across different agencies.

For example, in terms of magnitude, PhilHealth and PCSO are providing more substantial support, although the former can be accessed only at the end of a hospital confinement while the latter can be expected earlier, as enabled by guarantee letters, the author explained.

The PIDS paper also pointed that the documentary and procedural requirements for availing of financial assistance are not uniform across agencies. This problem is exacerbated by the limited awareness of patients about these requirements and their incapacity to readily comply.

In conclusion, the study described the existing institutional responses to catastrophic health expenditures in the country as disparate and inadequate.

The burden to seek help from one financing source to another is on patients and families, despite the serious illnesses and social costs they are already shouldering. The enhancements proposed by the PIDS study are aimed to improve this scenario.

If you wish to know more about this study, download a copy of the Policy Note from this page: http://dirp3.pids.gov.ph/websitecms/CDN/PUBLICATIONS/pidspn1623.pdf.

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

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

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

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

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

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

If you wish to know more about the study, you may download a copy of the Discussion Paper from this page: http://www.pids.gov.ph/dp.php?id=5744 and pubyear=2016

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

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

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

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

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

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

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

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

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

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

If you wish to know more about this study, download a copy of the Policy Note from this page: http://www.pids.gov.ph/dp.php?id=5781 and pubyear=2017

Photo Credit: www.valenzuela.gov.ph





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

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

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

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

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

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

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

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In a position paper submitted to Executive Secretary Salvador Medialdea, the country's economic managers argued against a proposed policy to provide free tuition to all undergraduates enrolled in state universities and colleges (SUCs). Secretaries Ernesto Pernia, Carlos Dominguez, and Benjamin Diokno noted that a wiser approach would be to fully finance the Unified Student Financial Assistance System for Tertiary Education (UNFAST) law. This alternative, they emphasized, is aligned with the position of senior researchers of state think tank Philippine Institute for Development Studies (PIDS).

In a recent policy note released by PIDS, Aniceto Orbeta and Vicente Paqueo outlined the disadvantages of supporting the free tuition fee policy.

Established in 2014, the UNIFAST is designed to "unify and harmonize all modalities of publicly-funded student financial assistance programs such as scholarships, grants-in-aid, and student loans for tertiary education".

Consistent with the views of Orbeta and Paqueo, the economic managers all agreed that the UNIFAST's design provides a more comprehensive alternative for enabling poor households to access higher education in SUCs.

UNIFAST provides full financing through the three types of financial assistance, which are applicable to both SUCs and private higher education Institutions. Entry would be determined by student test scores, assuring taxpayers that grants are only given to hardworking students who deserve it, and compliance with acceptable standards defined by the Commission on Higher Education.

In contrast, the free tuition policy fails to capture the complexity of higher education, and may result in unintended consequences.

"While we commit to the constitutional provision mandating the State to protect and promote the right of all citizens to quality education and to make such education available to all, we do not agree that providing an across-the-board free tuition for all undergraduate students in all SUCs is the best way to achieve this mandate," said Pernia, Dominguez, and Diokno in their statement.

Iterating points from the PIDS study, they pointed out several weaknesses of the free tuition scheme.

First, the cost of tuition covers only a third of what an average student needs to get through college each year. This will likely result in the unintended consequence of benefiting the "nonpoor students" attending SUCs.

"Only 12 percent of the students attending SUCs belong to the bottom 20 percent of the family income classification based on the Annual Poverty Indicators Survey," said the managers.

Orbeta and Pacqueo said this measly share of poor students in the SUC population has not changed, "despite the expansion of enrollment in public HEIs from 35 percent in 19990 to 52 percent in 2014".

In other words, the free tuition scheme is only going to benefit the children who already have access to SUCs. Those who do not have access will have to shoulder the bigger chunk of the costs of higher education, including living expenses and instructional materials.

Another unintended consequence would be the flight of richer students from HEIs to SUCs, which is bound to trigger a domino effect on faculty retrenchment, threaten the existence of HEIs, and ultimately result in the decline in 'overall quality of graduates'.

The managers pointed out: "Using government funds for tuition subsidy will effectively transfer the financial burden of free college education to the poor, given the regressive nature of the countrys overall tax incidence."

Lastly, the scheme is unsustainable. For 2017, the General Appropriations Act allocated PHP 8 billion for SUCs undergraduate enrollees. There are 1.4 million students enrolled in SUCs. The country would have to spend 28 PHP billion to cover the PHP 20,000 budget per head per annum.

In conclusion, the economic managers deemed the full financing of UNIFAST as a more targeted, more comprehensive alternative to the free tuition scheme.

If you wish to learn more about the policy note, you may download a copy here http://www.pids.gov.ph/policynotes.php?id=5785 and pubyear=2017