Philippine Development Plan (Optimized)

Philippine Development Plan
2011-2016
Philippine Development Plan 2011-2016 i

About the cover
The cover depicts a red and blue film strip shaped into a ribbon, with photos showing the various
sectors and stakeholders in development. The sunburst and yellow background depict the current
administrations Daylight strategy, focusing on good governance and anticorruption to achieve
inclusive growth, create employment, and reduce poverty.
SA KABU
AAN HA
IW YA
AS N
NG
AT
PA
PA
BANSANG
GPA UNLAD
PA
PAM
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PU AS
B LIK PIN
A N G PILI
2011 by National Economic and Development Authority
All rights reserved. Any part of this book may be used and reproduced,
provided proper acknowledgement is made.
This publication is printed on locally-sourced recycled paper using soy-based ink.
Philippine Development Plan 2011-2016
Published by:
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ISSN: 2243-7576
Printed in the Philippines
ii Philippine Development Plan 2011-2016

Table of Contents
Foreword viii
Preface x
Acknowledgments xii
List of Tables and Figures xiii
Chapter 1. In Pursuit of Inclusive Growth 17
What is Inclusive Growth 18
What Makes Inclusive Growth Elusive 21
How Shall We Achieve Inclusive Growth 26
How Shall We Monitor Progress Towards Inclusive Growth 32
A Window of Opportunity 32
Chapter 2. Macroeconomic Policy 35
Output and Employment 36
Economic Performance 2004-2010 36
Employment and Poverty 40
Fiscal and Monetary Sectors 45
Assessment and Challenges 45
Fiscal Sector 45
Monetary and External Sectors 50
Strategic Framework 52
Fiscal Reforms 52
Monetary Policy and External Sector Reforms 58
Chapter 3. Competitive Industry and Services Sectors 61
Competitiveness 63
Philippine Development Plan 2011-2016 iii

Exports of Goods and Services 66
Investment 71
Micro, Small and Medium Enterprises (MSMEs) 74
Employment 75
Consumer Policy 78
Vision 80
Ten-point Agenda 80
Goal 1: Create a Better Business Environment 80
Goal 2: Action Agenda to Improve Productivity and Efficiency 84
Goal 3: Action Agenda to Enhance Consumer Welfare 99
Chapter 4. Competitive and Sustainable Agriculture and Fisheries Sector 101
Assessment 102
Sector Performance 102
Challenges 108
Vision 113
Goals and Strategies 113
Goal 1: Food Security Improved and Incomes Increased 113
Goal 2. Sector Resilience to Climate Change Risks Increased 116
Goal 3. Policy Environment and Governance Enhanced 118
Legislative Agenda 119
Chapter 5. Accelerating Infrastructure Development 121
Crosscutting Strategies 122
Transport 125
Assessment, Issues, and Challenges 125
Strategic Plan and Focus 130
iv Philippine Development Plan 2011-2016

Water 133
Crosscutting Issues and Strategies in the Water Sector 134
Water Supply 136
Sanitation, Sewerage, and Septage Management 139
Irrigation 143
Flood and Drainage Management 145
Energy 148
Information and Communications Technology (ICT) Infrastructure 160
Social Infrastructure 169
Waste Management 169
Solid Waste Management 169
Health Care Wastes 172
Toxic Chemicals and Hazardous Wastes 173
Housing 174
Health Facilities 175
Education 177
Chapter 6. Towards a Resilient and Inclusive Financial System 181
Assessment 182
Current Structure of the Financial System 183
Condition and Performance 187
Challenges 190
Philippine Development Plan 2011-2016 v

Vision for the Financial Sector 192
Medium-Term Development Plan for the Financial Sector (MTDPFS) 192
Key Reform Objectives and Targets 192
Specific Reform Strategies 192
Chapter 7. Good Governance and the Rule of Law 205
Public Service Delivery 208
Integrity 210
Rule of Law 211
Citizens Participation 212
Political Processes and Systems 213
Gender Roles in Governance Structures 214
Ensure High-Quality, Effective, Efficient, Transparent, Accountable,

Economically and Physically Accessible and Nondiscriminatory
Delivery of Public Service 215
Curb Corruption Decisively 220
Strengthen the Rule of Law 225
Enhance Citizens Access to Information and Participation in Governance 229
Chapter 8. Social Development 231
Assessment 232
Challenges 252
Goals 254
Targets 254
Policies and Strategies 260

vi Philippine Development Plan 2011-2016

Chapter 9. Peace and Security 291
Section 1. Winning the Peace 294
Section 2. Ensuring National Security 298
Chapter 10. Conservation, Protection and Rehabilitation

of the Environment and Natural Resources 303
Assessment 304
State of the Environment and Natural Resources 304
Challenges 313
Policy Responses 313
Institutional Issues 320
Goal 1. Improved Conservation, Protection and Rehabilitation

of Natural Resources 323
Goal 2. Improved Environmental Quality for a Cleaner

and Healthier Environment 329
Goal 3. Enhanced Resilience of Natural Systems and Improved

Adaptive Capacities of Human Communities to Cope with
Environmental Hazards Including Climate-Related Risks 331
Crosscutting Strategies 332
List of Acronyms 338
Glossary 347
Bibliography 373
Planning Committees 385
A Social Contract with the Filipino People 396
NEDA Board and Secretariat 399
Index 403
Philippine Development Plan 2011-2016 vii

Foreword
The Philippine record of socioeconomic development has been slow and below par
in comparison with our Asian counterparts. Despite episodes of positive growth,
the benefits have yet to be felt by the majority of Filipinos. My administrations
program of government, thus, seeks to reverse this situation.
This program is grounded on transformational leadership and guided by my Social

Contract with the Filipino People where I envision a country with an organized
and widely shared rapid expansion of our economy through a government
dedicated to honing and mobilizing our peoples skills and energies as well as the
responsible harnessing of our natural resources.
Consistent with my commitment to transformational leadership, the Philippine

Development Plan 2011-2016 adopts a framework of inclusive growth, which is
high growth that is sustained, generates mass employment, and reduces poverty.
With good governance and anticorruption as the overarching theme of each and
every intervention, the Plan translates into specific goals, objectives, strategies,
programs and projects all the things that we want to accomplish in the medium
term.
Through this Plan, we intend to pursue rapid and sustainable economic growth
and development, improve the quality of life of the Filipino, empower the poor
and marginalized and enhance our social cohesion as a nation. Our strategic
development policy framework thus focuses on improving transparency and
accountability in governance, strengthening the macroeconomy, boosting the
competitiveness of our industries, facilitating infrastructure development,
strengthening the financial sector and capital mobilization, improving access to
quality social services, enhancing peace and security for development, and ensuring
ecological integrity.
The Philippine Development Plan will serve as our guide in formulating policies
and implementing development programs for the next six years. It enables us to
work systematically to give the Filipino people a better chance of finally finding
their way out of poverty, inequality, and the poor state of human development.
viii Philippine Development Plan 2011-2016

This Plan is our plan. The government, the private sector, and the civil society have all
participated in the planning process, either as part of the planning committees or as
participants during the regional and national public consultations. These consultations
enabled the various sectors of society to articulate their concerns and provide
recommendations. All of these inputs were discussed and considered in formulating
the appropriate strategies and policies. The regional consultations, in particular, have
been very useful in identifying and refining the aspirations of the various regional
stakeholders.
I, thus, urge everyone to support the implementation of the governments programs

and projects that are outlined in the Plan. I seek your cooperation to achieve the
objectives of the Plan.
BENIGNO S. AQUINO III

President
Republic of the Philippines
Philippine Development Plan 2011-2016 ix

Preface
The Philippine Development Plan 2011-2016 was formulated in accordance with
the Constitutional provision of Section 9, Article VII, directing the Governments
economic and planning agency to implement a continuing integrated and coordinated
programs and policies for national development.
Upon the assumption of President Benigno S. Aquino III of the countrys leadership, he
embarked on his program of government that is based on his Social Contract with the
Filipino People wherein he articulated a commitment to transformational leadership,
institutional reform, economic stability and inclusive growth.
On September 2, 2010, the President issued Memorandum Circular No. 3 directing

the National Economic and Development Authority (NEDA) to coordinate the
formulation of the Philippine Development Plan for 2011-2016.
In the formulation of the Plan, NEDA coordinated with all the countrys development
stakeholders in giving substance and directions to the document, based on the
program of government of the Aquino administration. Exhaustive consultations
were conducted throughout the country with the participation of various government
agencies, the regional development councils, local government units, the business sector,
nongovernment organizations, academe, and groups of well-known experts in economic
and social development.
The Social Contract envisions a country with an organized and shared rapid expansion
of our economy through a government dedicated in honing and mobilizing our peoples
skills and energies as well as the responsible harnessing of our natural resources.
With good governance and anti-corruption as an overarching theme, the Philippine
Development Plan will effectively address poverty and create massive employment
opportunities and achieve its vision of inclusive growth. It has emerged into a
comprehensive set of strategies, policies and programs and activities within a framework
of inclusive growth that will translate the administrations development agenda for the
next six years.
The Plan centers on five key strategies. First is to boost competitiveness in the
productive sectors to generate massive employment. Second is to improve access to
financing to address the evolving needs of a diverse public. Third is to invest massively
in infrastructure. Fourth is to promote transparent and responsive governance, which
is emphasized in all the chapters. And fifth, is to develop human resources through
improved social services and protection.
These strategies will be supported by complementary action programs that focuses

on achieving a stable macroeconomic environment, ensuring ecological integrity, and
advancing the peace process and guaranteeing national security.
To achieve growth that is inclusive and sustained, we want to ensure that the production
sectors are able to provide the needed employment and livelihood opportunities.
x Philippine Development Plan 2011-2016

Chapter 1, In Pursuit of Inclusive Growth, presents an overview of the Plan, detailing
the five strategies earlier listed as well as the policy directions that would ensure the
country will not fall into the path of a trickle-down jobless growth which we have seen
in the past years. Chapter 2 outlines the initiatives that will ensure the stability and
growth of a macroeconomic environment.
Chapter 3 outlines the imperatives for a globally competitive and innovative industry
and services sectors that will provide opportunity for every Filipino to pursue gainful
employment. In the same manner, Chapter 4 pushes for a competitive, sustainable, and
technology-based agriculture and fishery sector.
Chapter 5 aims to accelerate the provision of physical infrastructure to support the

economic sectors, and ensure equitable access to infrastructure services especially health,
education and housing.
A healthy, dynamic and financial system as envisioned in Chapter 6 will gainfully

contribute to sustainable and equitable growth.
Chapter 7 summarizes the strategy for greater transparency, good governance,

accountability and the pursuit of the rule of law as a precondition for national
development.
Chapter 8 translates inclusive growth by ensuring improvement in the lives of all

Filipinos through equitable access to adequate and quality social services and assets. To
ensure that every Filipino participates and benefits from socioeconomic gains, Chapter
9 advances the peace process and guarantees national security to break the vicious cycle
of conflict and underdevelopment in affected areas.
Chapter 10 envisions an environment that is healthy, ecologically balanced, sustainably

productive, climate-change resilient, and providing for the needs of the present and
future generations.
The Plan shall be accompanied by a Results Matrix which lists the specific programs and
projects against which the performance of the implementing agencies shall be graded.
A Public Investment Program (PIP) which identifies the budgetary requirements
and their sources for these programs and projects is being finalized. The PIP will also
link the Plan particularly the Results Matrix to ensure effective implementation and
monitoring of the development initiatives therein. Consequently, the various Regional
Development Offices will also roll out their individual Regional Development Plans
and Investment Programs for their respective areas.
The Philippine Development Plan provides a substantive translation of the

Administrations Social Contract. The support of all sectors of society will be crucial in
turning our aspirations for a better quality of life for all Filipinos into reality.
CAYETANO W. PADERANGA, JR.

Socioeconomic Planning Secretary and Director-General
Philippine Development Plan 2011-2016 xi

Acknowledgments
Hon. Cesar Virata
Hon. Gerardo Sicat
Emmanuel De Dios, PhD
Sixto K. Roxas, PhD
Jimmy Ayala
Ruperto P. Majuca, PhD
Roehlano M. Briones, PhD
Photo credits
Bangko Sentral ng Pilipinas (Corporate Affairs Office)

Brgy. San Antonio, Pasig City
Center for Community Transformation Credit Cooperative
Office of the Presidential Adviser on the Peace Process
PinoyME Foundation
Allan Pardico
Analiza Congallo-Claridad
Annbee Tiangson
Beloved Eliza Dawn Aberia
Benjamin Paolo Gogo
Claire Mogol
Dan Songco
Fe Dela Cruz
Ferdinand de Leon
Jenzyhow Villareal
Joselito Dela Merced
Josephine Cresencio
Lala Yaun-Salili
Lani Concepcion
Lorena Pangan
Leody Barcelon
Melvin Villaruz
Michael Lorenzo
Milke Demos
Milo Alto Paz
Roberto Sanchez
Sheryl Datinguinoo
Ted Edward Ferreras
Thomas Raymond Lising
xii Philippine Development Plan 2011-2016

List of Tables and Figures
Chapter 1. In Pursuit of Inclusive Growth
Table 1.1 Annual Average Growth Rate of Real Per Capita GDP: 1950-2009
Table 1.2 Poverty and Inequality in Selected Countries (most recently available)
Table 1.3 Transport Infrastructure Ranking of Selected Countries (out of 139)
Table 1.4 Strength of Bureaucracy and Input Costs in Selected Countries
Figure 1.1 Unemployment and Underemployment Rate: 1990 2010 (in percent)
Figure 1.2 Poverty Incidence and the Gini Ratio: 1991, 2003, 2006, 2009
Figure 1.3 Investment-to-GDP Ratios of Selected Asian Countries: 1994 2010
(in percent)
Figure 1.4 Cohort Survival and Net Enrollment Rate, Philippines: 1990 2009
(in percent)
Chapter 2. Macroeconomic Policy

Table 2.1 Philippine Key Indicators
Table 2.2 Official Poverty Statistics, Philippines: 2003, 2006 and 2009
Table 2.3 Summary of Fiscal Sector Indicators: 2004-2010 (in million PhP)
Table 2.4 Selected External Sector Accounts: 2004-2010 (in billion US$)
Table 2.5 Selected Fiscal, Monetary, and External Medium-Term Targets: 2011-2016
Figure 2.1 Contributions to Growth (Demand): 2004-2010

Figure 2.2 Contributions to Growth (Supply): 2004-2010
Figure 2.3 Contributions to Growth (Demand): Quarterly, 2008-2010
Figure 2.4 Contributions to Growth (Supply): Quarterly, 2008-2010
Figure 2.5 Philippines Unemployment Rate: 2006-2010 (in percent)
Figure 2.6 Comparative Unemployment Rates in Selected Asian Economies:
2006-2010
Figure 2.7 Employment Generated: 2005-2010 ( in 000)
Figure 2.8 Employment by Class of Worker and Underemployment Rate:
2005-2010 (in percent)
Figure 2.9 Poverty Incidence of Families by Region: 2003, 2006 and 2009 (in percent)
Figure 2.10 Year-on-Year Inflation Rate: 2004-2010
Chapter 3. Competitive Industry and Services Sectors

Table 3.1 Cost of Doing Business Indicators
Table 3.2 Export Performance: 2004-2010
Table 3.3 Percent Share of Tourism to GDP, Employment and Total Exports
Vis--vis Visitor Arrivals Globally and in the Asia Pacific: 2004-2009
Table 3.4 Visitor Arrivals to ASEAN Countries: 2004-2009 (in 000)
Philippine Development Plan 2011-2016 xiii

Table 3.5 Philippines Travel and Tourism Competitiveness in Comparison with
Selected ASEAN Countries, 2009
Table 3.6 Total Approved Investments of Foreign and Filipino Nationals by Industry:
2004 2010, (in million PhP)
Table 3.7 BOI-PEZA Approved Investments: 2009-2010
Table 3.8 Total Approved Foreign Direct Investments by Country of Investor:
Table 3.9 PEZA Operating Economic Zones: 2004 2010
Table 3.10 Micro, Small and Medium Enterprise Profile
Table 3.11 Employment per Major Industry Group
Figure 3.1 BPO/IT Outsourcing: 2004-2011

Figure 3.2 Investment by Industry Sector in PEZA Economic Zones: 1995-2010
Figure 3.3 MSME 2008 Employment Share by Sector
Figure 3.4 Strategic Framework for Industry and Services
Figure 3.5 Strategic Destination Area for Tourism
Figure 3.6 Industry Cluster Map
Chapter 4. Competitive and Sustainable Agriculture and Fisheries Sector

Table 4.1 Agriculture and Fishery (with Forestry) Performance and Contribution
to Economy: 2004-2010
Table 4.2 Contribution of Subsectors in Agriculture and Fishery Growth:
2004-2010
Table 4.3 Value of Philippine Agricultural Exports and Imports:
2004 and 2010 (in million US$)
Table 4.4 Agribusiness Lands (including Agroforestry) Developed: 2005-2010
Table 4.5 Land Acquisition and Distribution Performance: 2004-2010 (in hectares)
Table 4.6 Land Productivity in Selected Southeast Asian Countries (in MT/Hectare)
Table 4.7 Revealed Comparative Advantage (RCA) in Selected ASEAN Countries:
2007
Table 4.8 International Trade of Agricultural Products: 2000 and 2009 (in billion
US$)
Table 4.9 Inflation Rates by Commodity for All Households (in percent)
Table 4.10 Poverty Incidence and Magnitude in the Philippines: 2003, 2006 and 2009
Chapter 5. Accelerating Infrastructure Development

Table 5.1 Estimated Coverage of Access to Water: 1990-2008
Table 5.2 Levels of Access to Safe Drinking Water
Table 5.3 Estimated Coverage for Sanitation: 1990-2008
Table 5.4 Status of Irrigation Development: as of 31 December 2009
Table 5.5 Flood-Related Impacts: 1980-2005
Table 5.6 Projected Final Energy Consumption: 2009-2016
Table 5.7 Internet Connection in Public High Schools Per Region: 2009
Table 5.8 NG-LGU Cost-Sharing Framework (in percent)
Table 5.9 Summary of DOH Infrastructure and Equipment Upgrade Projects
by Region: 2007 -2010
Table 5.10 2011 DBM Budget Gaps
xiv Philippine Development Plan 2011-2016

Figure 5.1 Percentage Access to Safe Water
Figure 5.2 Percentage Access to Sanitary Toilets
Figure 5.3 Primary Energy Mix: 2009
Figure 5.4 Philippine Capacity and Gross Generation: 2009
Figure 5.5 Sectoral Oil Consumption: 2009
Figure 5.6 RE Contribution to Total Power Generating Capacity: 2009
Figure 5.7 Growth in Number of Users/Subscribers of Major ICT Services: 2006-2010
Figure 5.8 State of Web Presence among NGAs as of September 2010
Figure 5.9 New Classroom Construction and Repairs Undertaken: FY 20042010
Chapter 6. Towards a Resilient and Inclusive Financial System

Table 6.1 Comparative Market Shares of Key Banking Subgroups in the Philippines as
of end-September 2010
Table 6.2 Philippine Stock Exchange - Listed Companies as of February 25, 2011
Table 6.3 Structure of Financial Systems in ASEAN-5 (Averages: 2000-2009)
Table 6.4 Extent of Financial Access - Customer Reach: 2010
Table 6.5 Legislative and Regulatory Priorities for the Financial System
Figure 6.1 Comparative Market Share of the Insurance Industry

as of end-December 2009
Figure 6.2 Financial Deepening in ASEAN-5
Figure 6.3 Comparative Benchmark Yield Curves, ASEAN+3
Figure 6.4 Selected Performance Indicators of the Banking System
Figure 6.5 Selected Stock Market Performance Indicators
Figure 6.6 Summary of Financial Market Performance
Attachment 1 Selected Financial Stability Indicators in ASEAN-5

Attachment 2 Average Income, Expenditure, Saving and Savings Rate of Families; at
Current Prices, by Region: 2003 and 2006
Attachment 3 Regions with the Highest or Lowest Saving Rates, by FIES year
Attachment 4 Average Income, Expenditure, Saving and Saving Rate of Families at
Current Prices by Income Decile: 2006 and 2009
Attachment 5 Philippine Banking System, Deposit Mix
Chapter 7. Good Governance and the Rule of Law

Table 7.1 Status of Submission and Evaluation of Rationalization Plans as of 31
December 2010
Figure 7.1 Philippines: Worldwide Governance Indicators
Figure 7.2 Career Executive System Occupancy Data
Chapter 8. Social Development

Table 8.1 Formal Basic Education Performance Indicators, by Sex: 2004-2009
Table 8.2 Enrolment in Tertiary Level of Education, by Sex: Academic Years 2004-
2009
Table 8.3 Direct Housing Accomplishments: 2004-2010
Table 8.4 Indirect Housing Accomplishments: 2004-2010
Table 8.5 Total Housing Need: 2011-2016
Table 8.6 Proportion of Households in Informal Settlements: 2000 and 2006
Philippine Development Plan 2011-2016 xv

Table 8.7 Summary of Actual OFW Membership
Table 8.8 Health, Nutrition and Population Targets: 2011-2016
Table 8.9 Education Targets: 2011-2016
Table 8.10 Housing Targets by Program/Agency: 2011-2016
Table 8.11 Social Protection Targets: 2011-2016
Table 8.12 Agrarian Reform Targets, by Land Distribution and CARP Beneficiaries:
2011-2016
Table 8.13 Ancestral Domain and Lands Targets: 2011-2016
Table 8.14 Urban Asset Reform Targets: 2011-2016
Figure 8.1 Poverty Incidence in Southeast Asia

Figure 8.2 Share of Social Services in Total National Government Expenditures
Figure 8.3 Deployed Landbased OFWs, by Top Occupational Category: 2009
Annex 8.1 Pace of Progress of the Philippines in Terms of Attaining the MDG Targets
Annex 8.2 Regional Poverty and Subsistence Incidence and Magnitude: 2009
Annex 8.3 Provinces with High Poverty Incidence: 2009
Annex 8.4 Gini Concentration Ratios, by Region: 2006 and 2009
Annex 8.5 Income Poverty Measures, by Region: 2006 and 2009
Annex 8.6 National and Regional BDR Estimates for the Regular Benefit Package:
2008
Annex 8.7 Various Forms of Malnutrition, by Region: 2008
Annex 8.8 Poverty Estimates of the Basic Sectors: 2000, 2003 and 2006
Annex 8.9 Regions with Minimum and Maximum Poverty Incidences for Each Basic
Sector: 2006
Annex 8.10 Regions with the Most Number of Poor for Each Basic Sector: 2006
Chapter 9. Peace and Security

No tables and figures
Chapter 10. Conservation, Protection and Rehabilitation of the

Environment and Natural Resources
Table 10.1 Top 20 Provinces Susceptible to Floods
Table 10.2 Top 20 Provinces Susceptible to Landslides
Table 10.3 Hazard Susceptibility of Selected Provinces by Poverty Incidence
Table 10.4 Forest Tenurial Instruments Implemented
Figure 10.1 Philippine Forest Cover: 1934-2003

Figure 10.2 Distribution of Active Faults and Trenches
Figure 10.3 Frequency of Tropical Cyclones in the Philippines: 1948-2006
Box 10.1 Women and the Environment and Natural Resources

Box 10.2 Environmental Education
Box 10.3 Devolution of ENR Functions
xvi Philippine Development Plan 2011-2016

Pilipinas Natin campaign launch
Photo by: Ted Edward Ferreras
01 In Pursuit
of Inclusive
Growth
In Pursuit of Inclusive Growth 17
In pursuit of inclusive growth
What is Inclusive It is high growth that is
sustained
Growth?
Viewed by majority of Filipinos, the Inclusive growth means, first of all,
record of economic and social progress growth that is rapid enough to matter,
up to now has proved unsatisfactory for given the countrys large population,
three reasons: first, its pace has been slow geographical differences, and social
when measured against the achievements complexity. It is sustained growth that
of the countrys neighbors; second, the creates jobs, draws the majority into
Inclusive growth means, first benefits of that progress have not been the economic and social mainstream,
of all, growth that is rapid broadly shared; and third, issues of and continuously reduces mass
enough to matter, given the massive corruption and of questioned poverty. This is an ideal which the
countrys large population, political legitimacy have undermined country has perennially fallen short
geographical differences, and the peoples sense of ownership of and of, and this failure has had the most
social complexity. It is sustained control over public policy. Growth has far-reaching consequences, from mass
growth that creates jobs, draws not only lagged, it has failed to benefit the misery and marginalization, to an
the majority into the economic majority, who feel increasingly alienated overseas exodus of skill and talent, to
and social mainstream, and because their political institutions provide political disaffection and alienation,
continuously reduces mass little relief and have drifted beyond their leading finally to threats to the
poverty. This is an ideal which control. Growth, in short, has failed to be constitution of the state itself.
the country has perennially inclusive.
fallen short of, and this failure
has had the most far-reaching
consequences, from mass
misery and marginalization, to
an overseas exodus of skill and
talent, to political disaffection Table 1.1 Annual Average Growth Rate of Real Per Capita GDP:
and alienation, leading finally to 1950-2009 (in percent)
threats to the constitution of the
state itself.
1951-60 1961-70 1971-80 1981-90 1991-00 2001-09
Hong Kong 9.2 7.1 6.8 5.4 3.0 3.2
Singapore 5.4 7.4 7.1 5.0 4.7 2.0
Korea 5.1 5.8 5.4 7.7 5.2 3.5
Taipei, China 7.6 9.6 9.3 8.2 5.5 2.7
Malaysia 3.6 3.4 5.3 3.2 4.6 2.2
Thailand 5.7 4.8 4.3 6.3 2.4 3.1
Indonesia 4.0 2.0 5.3 4.3 2.9 3.8
Philippines 3.3 1.8 3.1 -0.6 0.9 2.3
Sources: Asian Development Bank (ADB), 2010; National Statistical Coordination Board
(NSCB)
*Average for the period 2001-2010
18 Philippine Development Plan 2011-2016

Thailand 5.7 4.8 4.3 6.3 2.4 3.1
Indonesia 4.0 2.0 5.3 4.3 2.9 3.8
Philippines 3.3 1.8 3.1 -0.6 0.9 2.3
Sources: Asian Development Bank (2010); National Statistical Coordination Board (NSCB
Figure 1.1: Unemployment and underemployment rate, 1990 - 2010

(inFigure
percent)
1.1 Unemployment and Underemployment Rate: 1990 2010 (in percent)
35.0
30.0
25.0
Unemployment
20.0
Underemployme
15.0
10.0
5.0
0.0
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008
Unemployment Rate (%) Underemployment (% of employed)
Note: Starting April 2005, the Labor Force Survey (LFS) adopts the new definition of unemployment.
Source:
Note: National
Starting Statistics
April 2005, Office (NSO)Force Survey adopts the new definition of unemployment
the Labor
Source: National Statistics Office (NSO)
Historically the Philippine economy after 2005 cannot be compared owing to
has been mired in tepid and erratic a change in the unemployment definition
growth. Since 1981, growth has adopted that year). Underemployment
averaged only 3 percent annually. This has also been widespread, with rates
is well below the postwar growth rates hovering at around 18-20 percent in the
of several high-performing Asian late 2000s. This remarkably contrasts with
economies (Table 1.1). countries such as PR China, Malaysia,
and Thailand, where unemployment has
With population still increasing at remained at 4 percent or lower over the
more than 2 percent per year, per- same period.
capita incomes have risen only 20
percent in real terms from 1981 and reduces poverty.
to 2009. Over the same period,
by comparison, per capita income Under the Millennium Development
increased four-fold in Malaysia, five- Goals (MDG), the country committed
fold in Thailand, and 11-fold in PR itself to halving extreme poverty from
China, an era in which absolute mass a 33.1 percent in 19911 to 16.6 percent
poverty was basically eradicated in by 2015. This goal can still be achieved
these countries. provided that determined efforts are
undertaken (Figure 1.2). Mass poverty
that massively creates jobs, remains the critical challenge, with the
poor accounting for more than one-fourth
Quality economic growth means (26.5%) of the population as of 2009. A
primarily that rapid output increases deep cause for concern is the fact that
are translated into employment the incidence of poverty has remained
creation. Unfortunately, rates of essentially stagnant for almost a decade
unemployment have remained high now. Given the countrys population
(Figure 1.1), averaging 10 percent in growth, this actually means that the
19902005 and 7.5 percent in 2006- number of poor families and persons has
2010, (note that the data before and been increasing through time. This again
1
This uses the revised official methodology approved on February 1, 2011 by the NSCB. Under the older
methodology, the poverty incidence for 1991 was 45.3 percent.

compares unfavorably with respect to some economic growth. This underscores
countries that have similar or lower per the need for renewed efforts
capita incomes (Table 1.2). if progress in this area is to be
sustained. For every percentage-
While poverty incidence did decline point increase in income-growth in
between 1991 and 2009, the rate of decline the Philippines, poverty incidence
has been exceedingly slow. Indeed, there falls by about 1.5 percentage points
have been periods, such as between 2003 compared with the range of 2.9 to 3.5
and 2006, when the poverty incidence for high-performing economies (PR
actually increased despite above-average
Figure
Figure 1.2Poverty
1.2: Poverty incidence
Incidence and thethe
and GiniGini
ratio: 1991,1991,
ratio: 2003, 2006,
2003,2009
2006, 2009
50
40
GIN
30 Sub
Pov
20
10
0
1991 2003 2006 2009
GINI ratio
index Subsistence Incidence Poverty Incidence
Sources:
Sources:National Statistical Coordination Board (NSCB), National Statistics Office
NSCB, NSO
Table 1.2 Poverty and Inequality in Selected Countries (most recent available)
Table 1.2: Poverty Officialand Inequality
poverty in East Share
Asia (most
of
Share of recent available) Gini Ratio
population
incidence in % below $1.25 per Day, % (2004/2005/2006/2007)1/
(2007/2008) 1/ populati
(2004/2005/2006/2007) 2/
China 4.2
on below15.9 0.415
Official poverty $1.25 per Gini
Indonesia 14.2 29.4 0.376
incidence in % Day, % Coefficient
Malaysia 3.6
(2007/2008) 1/ (2004/202.0 /2006/2007 0.379
ChinaPhilippines 26.5* 4.2 15.9 22.6 0.415 0.448**

Indonesia
Thailand 8.5 14.2 29.4 2.0 0.376 0.425
Malaysia
Vietnam 13.5 3.6 2.0 21.5 0.379 0.378
Philippines
Sources/Notes:
26.5* 22.6 0.448**
Thailand
*2009 Official Poverty Statistics, NSCB 8.5 2.0 0.425
**2009 Family Income and Expenditures Survey (FIES), NSO
Vietnam 1/ 2010 ADB Key Indicators 13.5 21.5 0.378
Sources/Notes:
2/ UN Economic and Social Commission for Asia and the Pacific (UNESCAP) 2009 Statistical Yearbook
(www.unescap.org/stat/data/syb2009/)
*2009 Official Poverty Statistics, National Statistical Coordination Board
**2009 Family Income and Expenditures Survey, National Statistics Office
1/
2010 ADB Key Indicators
20 UN Economic
2/ Philippine Development
and Social Plan 2011-2016
Commission for Asia and the Pacific (UNESCAP) 2009 Statistical Yearbook
(www.unescap.org/stat/data/syb2009/)
China, Indonesia, and Thailand)2 that the trade-off between growth and
and the 2.5 average for a set of 47 inequality that is commonly observed
developing countries3. Relative to in other countries still raises no policy
international experience, therefore, dilemma in the Philippines, where
Philippine economic growth thus, by low growth has been accompanied by
far, has largely bypassed the poor. increasing or high inequality.
A proximate factor behind the weak

response of poverty to growth is What Makes Inclusive
high inequality. Compared to other Growth Elusive?
countries in the region, income Low growth, weak employment
inequality in the Philippines is high generation, and persistently high
(Figure 1.2 and Table 1.2). The Gini inequality are the immediate reasons
ratio, a measure of inequality, is in for the failure of inclusive growth in the
the mid-40s, whereas in Indonesia country. But these in turn have deeper
and Vietnam the Gini ratio is pegged structural underpinnings.
at 38-39. Moreover, there has been
no secular tendency towards falling Inadequate infrastructure is
inequality; movements in the Gini a major constraint
ratio have been erratic at best,
declining in the early 1990s, rising First, the countrys investment record has
until 2000, then falling slightly before been poor and falling (Figure 1.3). As a
leveling off at a still-high level by share of GDP, gross domestic investment
2006. In general, it is safe to conclude peaked at about 24.8 percent, before
Figure 1.3 Investment-to-GDP Ratios of Selected Asian Countries:

1994 2010 (in percent)
Figure 1.3: Investment-to-GDP ratios of selected Asian countries: 1994-2010
(in percent)
50.0
45.0 1994 1995
Philippines 24.1 22.5
40.0
Indonesia 31.1 31.9
35.0 Malaysia 41.2 43.6
30.0 Thailand 40.3 42.1
25.0
20.0
15.0
10.0
5.0
Sources: ADB-Key Indicators 2010; Official Country Statistics websites; NSCB
0.0
Table 1.3: Transport Infrastructure ranking of selected countries (out of 139)

Road Port Air Railway
Philippines Philippines 114 131
Indonesia 112 97
Malaysia Thailand
Indonesia 84 96 69 56
Viet Nam 117 97 88 59
Source:Note: For Competitiveness
The Global 2010, available data
Report for Malaysia
2010-2011, and Thailand
World Economic are for
Q1 to Q3 only.
Forum (2010)
Sources: ADB-Asian Development Outlook; Official Country Statistics websites; NSCB
Table 1.4: Strength of Bureaucracy and Input Costs in Selected Countries
2
Cline, W.R. (2004), Technical Correction, in Trade Policy and Global Poverty, Institute
Buildingof International
Index ofEconomics,
Ease of Doing
Washington
Country DC. as cited in Balisacan, Arsenio M., 2007. Why Does Poverty Persist in the Philippines?
Public Institution Index Electricity Construction Facts, (2010
Business Fancies,
Rank
(US$/KwH) Costs (US$/sq.
and Policies. Agriculture and Development Discussion Paper Series No. 2007-1. SEARCA, March 2007, pp. 10-11.
Out of 183)
meter)
3
Ravallion, M. (2001), Growth,
2004Inequality,2009
and Poverty: Looking beyond Averages, World Development, 29: 1803-
2010
15. as cited in Balisacan, Arsenio M., 2007. Why Does Poverty Persist in the Philippines? Facts, Fancies, and Policies.
Agriculture and Development Discussion Paper Series No. 2007-1. SEARCA, March 2007, pp. 10-11.

Table 1.3 Transport Infrastructure Ranking of Selected Countries (out of 139)
Road Port Air Railway

Philippines 114 131 112 97
Indonesia 84 96 69 56
Viet Nam 117 97 88 59
Source: The Global Competitiveness Report 2010-2011, World Economic Forum (2010)
falling to just 15.6 percent in 2010. In economic goals under the Plan.
contrast, investment in Malaysia and Currently, power is already in short
Thailand soared to over 40 percent of supply and unreliable in some parts of
GDP, and although they have dipped the country.
since the Asian crisis, their levels are
still way above that of the Philippines as are major gaps and
An inefficient transport (except for Malaysia). Not only is the lapses in governance,
network and unreliable Philippines investment ratio low, it has
power supply have been also been falling since the mid-1990s, Weak institutions and governance
identified as the most down to 15.6 percent in 2010. This fall failures are the second major barriers
significant infrastructure in capital accumulation is a constraint to investment. On the positive side,
constraints on overall to long-term economic growth and with peaceful leadership-changes
growth. The percentage of employment-generation. through orderly and credible
paved roads to total roads in elections, the nation has put behind
the country remains one of Weak investment particularly in the it a period of political instability
the lowest in the Southeast face of a surfeit of national saving and deep mistrust of government
Asia. Similarly, the quality is a clear sign of a lack of productive actions, both of which were rooted
of the countrys port, air, opportunities in the economy. Inadequate in allegations of corruption in major
and railroad infrastructure infrastructure and a resulting poor economic projects and the perversion
leaves much to be desired. logistics network have been identified of vital political processes.
Unless urgent action is as among the critical constraints to
taken, the hitherto slow investment and growth (ADB, 2007). The advent of a new administration
pace of investments in Besides stimulating investment itself, is an opportunity for government
power-generation threatens infrastructure helps improve total factor to regain the citizens trust, lay bare
not only growth but also the productivity, enabling the country to the truth regarding past abuses, and
realization of many critical produce more from each amount of input, instil civic vigilance for the future.
social and economic goals effectively lowering unit-cost. But stability and a new atmosphere
under the Plan. Currently, of openness and accountability are
power is already in short An inefficient transport network and only the first steps in removing
supply and unreliable in unreliable power supply have been the governance-based fetters to
some parts of the country. identified as the most significant investment and growth. A great deal
infrastructure constraints on overall more remains to be done in creating
growth. The percentage of paved roads a governance climate that encourages
to total roads in the country remains massive investment and wins the
one of the lowest in the Southeast Asia. peoples support. The country
Similarly, the quality of the countrys continues to suffer from a reputation
port, air, and railroad infrastructure leaves for bureaucratic inefficiency, excessive
much to be desired (Table 1.3). Unless red tape, and widespread corruption.
urgent action is taken, the hitherto slow In the 2011 Doing Business ranking,
pace of investments in power-generation for example, the Philippines placed
threatens not only growth but also the 156th out of 183 countries. After three
realization of many critical social and decades of trade-policy reform, it

rated relatively well in trading across sensationally but with not less damage,
borders. It rated poorly, however, local governments impose their own
for starting a business, closing a share of arbitrary requirements and
business, dealing with construction demands for corruption rents, which take
permits, and protecting investors, a toll especially on the investment and
(156th, 153rd, 156th, and 132nd, employment decisions of many small-
respectively). and medium-scale enterprises.
The country also ranks poorly in The countrys long-standing problems

international comparisons of the with high electricity and construction
enforcement of law and contracts, costs are readily evident in global
and competition measures. At comparisons (Table 1.4). Such high
the national level, contracting costs are attributed to the lack of real
for and implementation of large competition in strategic sectors such as
public infrastructure projects are agriculture, maritime and air transport,
frequently stymied by difficult power, cement, and banking. In some
and nontransparent bidding and important cases, dominant firms and
award rules that discourage wider interests can exert enough social influence
private sector participation, promote and political clout to limit entry. Many of
collusion, encourage corruption, or these same sectors have dense backward
provoke legal and other challenges and forward linkages, so that their failure
from losing parties. Risks to large- to advance causes collateral negative
scale investments can also arise effects in productivity growth and
from the bias, incompetence, or investment in the linked sectors, such as
outright corruption on the part of manufacturing (Bocchi, 2008). The threat
some regulatory agencies and other of regulatory capture extends not only to
oversight bodies, as well as lead to a the functions of agencies in the Executive
culture of litigiousness, encouraged branch but also to those exercising
by misplaced judicial activism. Less
Table 1.4 Strength of Bureaucracy and Input Costs in Selected Countries

Public Institution Index Electricity Building Index of Ease of
Country (US$/KwH) Construction Doing Business
2004 2009 2010 Cost (US$/sq. (2010 Rank out of
Meter) 183)
Philippines 85 105 113 0.10 1022 144
PR China 0.08 97 89
Malaysia 34 30 43 0.07 282 23
Hong Kong
Indonesia 76 68 58 0.07 221 122
S. Korea
Singapore 1
Thailand 37 57 60 0.06 329 12
Vietnam 0.07 93
Sources: World Bank (WB), Doing Business 2006, 2007 and 2010 (www.doingbusiness.org)
MIGA and WB, Benchmarking FDI Competitiveness in Asia (2004)

legislative and judicial functions that emerging from a recent past marked
expand the scope of government. by public perceptions of impunity
and unresponsiveness on the part of
In agriculture, meanwhile, investment has the highest officials of the land, where
been stymied by continuing property- elections are stolen, public funds
rights problems and inconsistent policy. misappropriated, private interests
Property rights in the countryside promoted at public expense, public
are also insecure. In the remaining policy distorted to favor the few,
areas under land reform coverage, for and public officers who aggrandized
example, slow implementation creates themselves in the face of peoples
uncertainty of ownership, both on the suffering all without visible legal
The government has devoted side of traditional landowners, and the redress, social consequence, or material
considerable resources to new landowners, many of whom have recompensation. The institutions
deliver social services to those yet to receive individual titles to their meant as remedies to such conditions
lacking access to health care cultivated parcels. Likewise, private the media, the courts, the political
and education. However, poor sector investment in some key crops opposition, and the electoral process
households in isolated areas is smothered by politicized decision- were viewed as feckless, since many of
have difficulty in going to health making of marketing and regulatory them had either been cowed, co-opted,
centers and schools, even Philippines
when agencies, most prominently 85in the case of105or corrupted.
113 In such 0.10
circumstances, 1022
PRChina
services are offered for free or at rice, which falls under the purview of the it was unsurprising that0.08people felt 97
highly subsidized rates. Malaysia
Clearly, National Food Authority 34 (NFA). 30 alienated 43
from the political
0.07 process 282
poor infrastructure provision,
Hong Kong and for cynicism to overcome their
aside from being a hindrance to
Indonesia
Ultimately, however, the76cost of poor68 respect for58the law. Growth
0.07 in short 221
investment and business activity, governance cannot be simply measured was not inclusive owing to the basic
S Korea in peso terms. Its more pernicious disregard of the peoples will and the
also prevents physical access to
basic services. Singapore consequence is the weakening of the failure to render full and complete
Thailand civic spirit and the erosion 37 of trust in57 justice to all.
60 0.06 329
Vietnam the rule of law. The country is only now 0.07
Sources: World Bank, Doing Business 2006, 2007 and 2010 (www.doingbusiness.org)
MIGA and World Bank, Benchmarking FDI Competitiveness in Asia (2004)
Figure 1.4 Cohort Survival and Net Enrollment Rate, Philippines:

Figure 4: Education indicators, Philippines, 1991 2009 (%)
1990 2009 (In percent)
100.0
95.0
90.0
85.0
80.0
75.0
70.0
65.0
60.0
1991 1994 1997 2000 2003 2006 2009
Cohort Survival Rate Net Enrollment Rate
Source:Source: SY 1991-1992
SY1991-1992 to SY 1998-1999,
to SY 1998-1999 Department
- DepEd Statistical of Education (DepED) Statistical Yearbook;
Yearbook
SY
SY1999-2000
1999-2000 to to latest
latest,- Basic
BasicEducation
Education Information System (BEIS)
Information System (BEIS);/ Basic
Basic Education
Education Statistics
Statistics (Fact Sheet as
(Factsheet as of December 5, 2008); www.deped.gov.ph

inadequate levels of and business activity, also prevents
human development. physical access to basic services.
Human development, in terms Compounding the problem of access is

of adequate health, nutrition, and the propensity of poorer households for
education outcomes, has an intrinsic higher fertility rates, reducing households
benefit. But it is also a means to assets and per-capita purchasing power.
build the human capital of the poor, Parents may fail to internalize the
providing them a means to break intergenerational implications of child-
out of poverty. Hence, the MDG bearing choice. Unfortunately, in the
of universal primary education is Philippine setting, the State has typically
consistent with inclusive growth. failed in its role in promoting responsible
Unfortunately, by several yardsticks, parenthood and reproductive health.
the country has fallen short of
adequate service delivery (Figure 1.4). ...and a poor and degraded
While the net enrollment rate peaked state of environment and
at 97 percent in 1999-2000, its drop natural resources.
to 85 percent and below by the late The deteriorated state of the
2000s should be a cause for serious The deteriorated state of the countrys countrys environment and natural
concern. Worse, the cohort survival environment and natural resources is felt resources is felt most by the poor,
rate stayed in the 70 percent range most by the poor, who depend on such who depend on such resources
throughout the 1990s, only improving resources for their livelihood and are for their livelihood and are most
somewhat to the 70-75 percent range most vulnerable to the consequences of vulnerable to the consequences
in the 2000s. its degradation and depletion. Climate of its degradation and depletion.
change and risks from natural disasters Climate change and risks from
Most of the population is inadequately only amplify the association between natural disasters only amplify the
protected from shocks to their already poverty and environmental degradation. association between poverty and
meager human capital. While natural environmental degradation.
disasters can affect any population Because of continuing deforestation,
group, it is the poor who tends to be only 45 percent of classified forestlands
most vulnerable and least resilient remain. The deterioration of critical
to calamities. With respect to health watersheds is likely to affect water supply.
care, catastrophic illnesses are capable The quality of land resources has been
of wiping out livelihoods, assets, and reduced by erosion, pollution, and land
well-being of the poor and lower conversion. Although one of the worlds
middle classes. Meanwhile, chronic 18 megadiverse countries, the Philippines
illnesses (such as tuberculosis) may biodiversity resources are also among the
have less extreme impacts, but may most threatened. Coastal and marine
prevent the poor from getting and resources have been declining as a result
keeping remunerative work. of coastal development and unsustainable
fishing practices. Major urban areas, on
The government has devoted the other hand, remain polluted, as
considerable resources to deliver evidenced by poor air and water quality,
social services to those lacking and by the inability to manage waste
access to health care and education. properly and adequately.
However, poor households in isolated
areas have difficulty in going to Better environment and natural resource
health centers and schools, even management could lead to more and
when services are offered for free or better livelihood opportunities that
at highly subsidized rates. Clearly, increase the resiliency of the poor. But
poor infrastructure provision, aside this remains a challenge that must be
from being a hindrance to investment fully confronted.

How Shall We Achieve this reason, government shall rely on
Inclusive Growth? the public-private partnership (PPP)
scheme to implement the bulk of its
To recapitulate: failure of inclusive growth infrastructure program. This scheme
in the country is because of growth encourages the large-sector of private
that is low on average, and because the business, including major Filipino
benefits of such growth largely bypass conglomerates and large and reputable
the countrys poor. Low growth is due to foreign partners, to participate in
low investment and slow technological financing, construction, and operation
progress because of inadequate of key infrastructure projects. Such a
infrastructure, as well as glaring gaps in program seeks deliberately to utilize
governance. Narrow growth, meanwhile, the huge savings and capital resources
is largely attributed to lack of human in the private sector and to provide
capital formation among the poorand market-friendly channels for these to
the failure to transform output growth support national priorities.
to job creation. The following lists the
strategies and programs that shall be The provision of vital infrastructure
A big part of the solution to the pursued over the Plan period to help and the expansion of logistics chains,
governance problem however achieve inclusive growth. combined with a change in the
lies outside government itself and governance regime, is bound to elicit
involves the active participation Through massive investment a strong positive response across all
of private business, civil society in physical infrastructure classes of entrepreneurs and financiers.
and the media in governance, Immediately benefited by this will be
monitoring, and feedback. This The country urgently needs to make up its those industries in which the country
gives voice to people, enables massive infrastructure backlog. Investment already has a demonstrated global
civil society and the media to in infrastructure follows the plan detailed advantage but whose expansion is
become partners of government, in Chapter 5, which prioritizes the creation still fettered by certain infrastructure
and makes the government of integrated and multimodal national inadequacies, such as power and
more responsive to the needs transport and logistics system. The system transport. Included here are the further
of citizens. Among other steps shall connect underserved but otherwise expansion of ICT-related activities
shall be the adoption of client- productive areas and communities to such as business-process outsourcing,
satisfaction surveys at all levels markets and social services. Under this (in which the country is now the
of government. Monitoring and system, rural areas, where most of poor worlds largest employer), different
surveillance by the media, civil reside, shall receive renewed attention. branches of tourism, electronics,
society, and an engaged citizenry Property-rights issues in agriculture shall sustainable mining, housing and
shall underpin the campaign be finally resolved signalling a rebirth of construction, and agribusiness and
against corruption. This shall interest in agricultural production that will agroprocessing industries (Chapter
be facilitated by formal citizens make infrastructure-investments in that 3). This list of industries is only
representation in budgeting and sector, such as irrigation, more effective, bound to expand as distributional
procurement processes, the helping raise farmers income, improve bottlenecks across regions are cleared
disclosure of the allocation and food security, and enlarge agricultures and the countrys inherent advantages
expenditure of funds of various contribution to the economy. finally are revealed. At the same time,
agencies, the involvement of government has prepared specific
civil society in the anticorruption Hindered by a record of perennially large programs to assist micro, small, and
effort, and the provision of budget deficits, government shall generate medium enterprises (MSMEs) at the
channels for ordinary citizens to funds for infrastructure investment enterprise-level and to encourage the
report directly and anonymously through better tax collection and more formation of industry clusters to foster
to competent authorities on rational budget allocation hence the interfirm linkages.
anomalies in government fiscal and budgetary reforms discussed
functions and the state of public- in Chapter 2. Realistically, however,
service provision. government funds may not suffice, given
its need to immediately attend to social
development and poverty-alleviation. For

through transparent and of rigging bids and showing substandard
responsive governance performance shall be undertaken to show
the governments determination to clean
Underpinning inclusive growth must up procurement and bidding.
be a bedrock of sound institutions that
promote transparency, accountability, The rationalization of government
the rule of law, and effective and functions, pay, and personnel shall be
impartial performance of the continued and extended to cover not
regulatory function of government, as only the bureaucracy itself but also
discussed in Chapter 7. government-owned and controlled
corporations (GOCCs) and government
To move towards responsive financial institutions (GFIs).
governance, systems that promote
objective decision-making, The anticorruption drive shall also be
professionalism, transparency, and strengthened with the passage of the
accountability, shall be instituted and Freedom of Information Act and the
mainstreamed. Thorough reforms Whistleblowers Act, as well as the
in the budgeting process, in public revitalization of the Run-After-Tax-
procurement, and in the awarding of Evaders (RATE), Run-After-the-
major contracts are needed to restore Smugglers (RATS),and Revenue Integrity
public confidence in government Protection Service (RIPS) programs.
institutions and practices. In budget- Close collaboration, coordination, and
planning, a key reform shall be the information-exchange among various
adoption of zero-based budgeting agencies shall form the basis for the
(ZBB), under which budgets of build-up of cases against public officials
government departments and agencies and private persons involved in plunder,
are comprehensively scrutinized and corruption, tax evasion, and other crimes
justified in complete detail, from involving the misappropriation of public
a zero base, not just incrementally. resources. Strong cases, especially those
Budget releases will also henceforth involving well-known instances of
be aligned with the number of active plunder and grand corruption, shall be
personnel and the actual progress of pursued uncompromisingly, showing
programs and projects to avoid such neither fear nor favor and in line with
abuses as conversion and other kinds true and complete justice for all. As
of fund diversion. an indispensable first step, however,
the personnel of agencies that directly
In public procurement, full use involved in anticorruption efforts,
shall be made of electronic bidding especially the office of the Ombudsman,
and procurement to minimize the Department of Justice (DOJ), and the
discretion, achieve arms-length revenue agencies, must be reinvigorated
transparency, and attain cost- and rededicated.
efficiency. Terms of reference shall
be based on comprehensive technical A big part of the solution to the
specifications prior to bidding governance problem however lies outside
and contracting to facilitate close government itself and involves the active
comparability across alternatives and participation of private business, civil
to prevent arbitrary ex-post variation society and the media in governance,
orders. Clear terms and transparent monitoring, and feedback. This gives
rules are vital to the success of voice to people, enables civil society
big-ticket infrastructure projects and the media to become partners of
such as the PPP. The publication government, and makes the government
and enforcement of blacklists of more responsive to the needs of citizens.
contractors and individuals suspected Among other steps shall be the adoption

of client-satisfaction surveys at all harmonize procedures within and
levels of government. Monitoring and across government offices.
surveillance by the media, civil society,
and an engaged citizenry shall underpin A strong competition policy would
the campaign against corruption. This promote a more open environment
shall be facilitated by formal citizens for investment, innovation, and
representation in budgeting and appropriate pricing. This may be
procurement processes, the disclosure of done by strengthening regulatory
the allocation and expenditure of funds agencies and making them less
of various agencies, the involvement susceptible to regulatory capture,
of civil society in the anticorruption lobbying, and rent-seeking. The
effort, and the provision of channels for linchpin of competition policy shall
ordinary citizens to report directly and be an omnibus Competition and
anonymously to competent authorities Anti-Trust Code that operationalizes
on anomalies in government functions constitutional provisions against
and the state of public-service provision. monopolistic practices, as well
as provides a transparent and
Ultimately, however, good governance predictable framework for standards
must be founded on a cohesive society and procedures for all regulatory
and peoples trust in government. For this authorities.
reason, government will endeavor to be
transparent, communicate its intentions Human development is
clearly, and seek consensus on social key
directions. The means of development
communication and their convergence Together with physical investment,
with traditional and new mass and social investment in the countrys human
media shall be used for these higher resources is key to sustained and
purposes. broad-based growth. This requires
equitable access to basic social services,
Improving governance and strengthening as well as stronger social safety nets
weak institutions in the country carry and social protection against shocks.
tremendous potential for bringing down Concrete objectives and programs are
the cost and risks of doing business. spelled out in Chapter 8. Reaffirmed
This is evident in public sector projects here are the countrys commitments
themselves. The PPP initiatives of to the MDG, of which the terminal
government will not succeed unless point (2015) is the penultimate year
private partners are assured of unbiased of this planning period.
bid evaluations and award decisions
based on competent authority. In the The major priority reforms in
same manner, legitimate proponents of education have been spelled out in
build-and-transfer schemes will be in the Basic Education Sector Reform
short supply if their predecessors must Agenda (BESRA). Implementation
face the ordeal of official harassment of the agenda involves: school-based
and regulatory risk. Strengthening management; enhanced learning
governance, therefore, also implies efficiency, such as through the
addressing the weak rule of law, legal K+12 system; quality assurance and
uncertainty, and high costs and delays accountability; and complementary
of the legal system in the country, which learning interventions, e.g. alternative
have historically discouraged legitimate learning systems, early childhood
investments in the economy and instead education, and so on.
fomented corruption. At the same time,
there is a simple need to streamline and

The state shall ensure equitable cash transfer is, thus, linked to the poors
access to basic health care for all. investment in their own human capital
This requires strengthening the (education and health), which explains
National Health Insurance Program the programs demonstrated effectiveness
(NHIP). PhilHealth operations shall in reducing poverty both immediately
be oriented towards increasing the (through the cash transfer itself ) and
benefit delivery ratio at the national in the long run (through human capital
and regional level. Investments in formation). The provision of CCT targets
public health programs shall aim to the truly deserving, while boosting
reduce maternal and child mortality, demand for education and health services
mortality and morbidity from from poor households. In the design of
tuberculosis, dengue, and malaria, as these and other future social protection
well as prevent the spread of HIV- programs, the government shall always
AIDS. Upgrades of public health care ensure that such programs remain
facilities shall be undertaken under the accessible and attuned to the needs of
government budget as well as through vulnerable groups, particularly children
private-public sector partnerships. of both sexes, women, the elderly, and the
disabled.
Two major strategies towards asset
and human capital formation for together with employment
the poor is community-driven generation, for both wage- and
development and conditional cash self-employed
transfers. The former shall be pursued
through the Kapit-bisig Laban sa Emphasizing employment generation
Kahirapan-Comprehensive and means opening the widest legitimate
Integrated Delivery of Social Services channels for all forms of employment,
(KALAHI-CIDSS), a program for whether in the form of formal wage-
implementing small-scale projects by or self-employment, whether in firms,
barangays following their own plans, homes, or local communities, whether
priorities, and processes, with funding at home or abroad. Work arrangements
support and in-kind support from the mutually agreed upon shall also be
national and local governments. The introduced. Employment generation can
KALAHI-CIDSS has demonstrated also be pursued indirectly by supporting
its effectiveness in generating net those activities that exploit the countrys
economic returns, finding a cost- comparative advantage in more labor-
effective formula for providing intensive activities, typically involving
village infrastructure, responding products and services that are more
to community demands, and competitive in the world market.
sustaining community operations and
maintenance (Araral and Holmemo, Exports have learning-by-doing and
2007). dynamic comparative advantage aspects.
Through active trade policy, exporters
The latter social protection measures learn through time, and their skill sets have
are primarily implemented through evolved and became entrenched into more
the Pantawid Pamilyang Pilipino technologically intensive and higher skills
Program (4Ps). At the heart of the processes. Exports can become an important
4Ps is the conditional cash transfer means of obtaining technological know-
(CCT) program, which provides how and in turn generate positive spill over
direct cash transfers to the poor on effects to other sectors in the economy.
condition that: (a) their children This redounds to faster accumulation
continue to attend school; and (b) and innovation, and therefore accelerated
the family makes use of preventive growth.
health care and nutrition services. The

Wider self-employment opportunities but complementary
shall be afforded by providing credit- strategies will be essential
access to the poor through microcredit, for success
integrated in a business-service package
that includes market matching, technical The plans broad thrusts are massive
assistance, and community organizing infrastructure development, higher
where necessary. Government will direct governance standards, human
wholesale finance institutions such development and human capital
as the Peoples Credit and Finance formation, direct poverty-relief,
Corporation (PCFC), the Land Bank and employment-generation. But
of the Philippines (LBP), and the Small such initiatives cannot succeed if
Business Corporation (SBC) that complementary and strategies do not
deal with microfinance institutions to support and enhance their impact.
coordinate with Department of Trade
and Industry (DTI), Department of These strategies can prosper only
Tourism (DOT) and viable microfinance in a macroeconomic regime of
institutions (MFIs) to develop market- low inflation and sustainable fiscal
based innovative financing schemes to balances (Chapter 2). Inflation
support microenterprises. Government directly and immediately erodes
will collaborate with MFIs to use the publics purchasing power and
microfinance as a tool for inclusive growth particularly affects the poor and fixed-
by expanding access by microenterprises income earners, thus putting poverty
and poor households to credit, savings, goals in peril. On the other hand,
and other financial services. Innovative uncontrolled government debts and
market-based financing schemes deficits endanger the goals of growth
in support of microenterprises will and employment by raising borrowing
support governments goal of providing costs for public and private sectors
productive employment opportunities alike, putting a brake on all forms
to a broad cross-section of the of investment. Government shall,
population. Other channels for rapid therefore, institute fiscal reforms to
employment generation shall be opened permanently place the revenue system
through programs of community- on an even keel, primarily through
driven development (CDD), which comprehensive coverage of taxpayers
are linked to poverty-relief, and labor- and uniform coverage of commodities
intensive infrastructure projects of local and activities, higher standards of
governments. In providing opportunities performance and integrity among
for formal or self-employment or tax administrators, and prompt rate
access to credit, government shall take adjustments, as allowed by law, applied
particular cognizance of the special needs to tax and nontax revenue sources alike.
of women, whose potentially large social Expenditures shall be kept within the
contributions to social and economic bounds set by macroeconomic targets,
development are stunted by their among others, by cutting back on
domestic and other social circumstances. wasteful programs and deprioritizing
unfunded mandates, exercising tighter
internal controls, and continuing
the rationalization of the size of
government, including GFIs and
GOCCs. Many of these reforms can
become imperatives of fiscal behavior
through the enactment of a fiscal
responsibility law. Monetary policy,
on the other hand, will continue to
emphasize low and stable inflation,

with the Bangko Sentral ready to use Although it is the Plans main thrust
its tools to prevent the emergence of to raise participation and standards in
asset bubbles, whether domestic or basic education, there is no denying the
foreign. In accord with the changing important role of higher education and
strength of the countrys external science and technology in the countrys
position, foreign exchange regulations effort to attract high-quality and high-
shall be adjusted to facilitate productivity activities, such as the
payments for trade and investment greater value-added parts of business-
and, in line with the policies of other process outsourcing (BPO), tourism,
countries, to maintain the economys and some branches of industry. Through
competitiveness. a rationalization of the roles of higher-
education institutions and a finer
Ensuring ecological integrity and delineation of their roles (Chapter 8), the
mitigating the effects of climate turnout of a critical mass of scientists,
change is essential for success on engineers, and other technical personnel
several fronts. Natural disasters and shall be pursued to allow the country is to
calamities can nullify hard-won gains climb the value-added ladder in sectors
by damaging physical infrastructure, where it possesses global competitive
directly endangering human lives and potential.
health, and destroying livelihoods,
particularly among the poor and The end of armed conflict and the
vulnerable. The dismal state of the attainment of lasting peace is vital to
environment and natural resources is a breaking the vicious cycle of conflict and
major reason that rural communities, underdevelopment in affected areas that
who depend on them as primary have otherwise huge potential for social
sources of livelihood, perennially and economic development. Towards this
find themselves at the bottom rung end, the government shall pursue different
of the development ladder. The tracks to complete and implement
countrys location makes it inherently negotiated settlements with various
vulnerable to potentially destructive armed groups under a comprehensive
natural events. This is aggravated peace process. At the same time resources
by the pressure of a growing human shall be marshaled to raise the capacity of
population on environmental the armed forces and the police in dealing
resources and habitable environments decisively with criminal groups (Chapter
as well as the anticipated effects of 9). Relations with foreign nations shall be
global climate change. It shall be an actively cultivated to support sovereignty,
urgent task (Chapter 10), therefore, regional peace and security, and economic
to devise and adopt measures that cooperation based on equitable and
will improve the state of environment mutual benefit. Paramount consideration
and natural resources, enhance the shall be paid to ensure the welfare and
resilience of natural systems, and protection of the millions of Filipinos
improve the ability of communities working overseas.
to cope with environmental hazards,
including climate-related risks.
Priorities include the conservation,
protection, and rehabilitation of the
countrys natural resources, urban
renewal, measures to reduce waste
and pollution, and heightened
capacities for disaster-preparedness
and response.

How Shall We Monitor continue to be a net shedder of jobs.
Progress Towards The completion of agrarian reform,
a resolution of property rights issues
Inclusive Growth? in agriculture and implementation
Accountability requires government to of major infrastructure shall enable
make known its plans in order to afford its agriculture and agro-processing to
citizens the chance to test its assumptions come into their own again and begin
and monitor progress quantitatively and to reabsorb labor. If the labor force
in detail whenever possible. Towards grows at 2.75 percent annually, the
that end, the Plan commits itself to unemployment rate should hover
quantitatively and observable targets and at 6.8 -7.2 percent during the Plan
milestones. More detailed targets are period, although it should be noted
presented in the succeeding chapters, but these numbers do not factor in possible
the most important ones are listed below: reversals in overseas migration trends
as more domestic jobs are created.
Growth in output and
employment through higher should lead to poverty
To be sure, immediate problems investments incidence being cut by half
and obstacles remain, chief
of which are the countrys A growth in real GDP averaging 7-8 As productive employment raises
lagging rate of investment, the percent per year under the Plan period incomes, cash-transfer programs are
governments continuing fiscal shall be a major objective. This figure sustained and access to health and
constraints and heavy debt implies a tripling of per capita income to education improved, the incidence of
burden, the countrys poor quality about US$5,000 in two decades. This is poverty among the population should
of infrastructure, and stagnating a higher growth trajectory than the past decline from 33.1 percent in 1991 to
levels of human capital. But decades and shall be attained through a 16.6 percent by 2015 or less, in line
many of these phenomena have higher contribution of physical capital to with the countrys MDG commitment.
existed long before and are in GDP growth, as well as through increases Inequality can also be expected to
the nature of consequences in total factor productivity. Through decline over the medium term as
rather than causes. Undeniable massive investments in transport, water, access to development opportunities
is the fact that some hopeful energy, and other infrastructure, and are equalized across geographic areas
conditions have emerged, and through good governance, the contribution and across the different income and
that economic and political of physical capital to GDP growth is social spectrum.
opportunities now exist for a real targeted to increase. This is possible under
current conditions through a significant
change a break-away from the
cycle of mass poverty, social but still attainable increase in the share of A Window of
division, and political conflict that investment to GDP. Sustaining growth Opportunity
have been the hallmarks of the in later years, however, will require even Since more than two decades past, the
countrys recent history. higher investment ratios reaching 22 Philippines has never faced a better
percent in real terms by 2016. It is expected chance than today of finally breaking
that the investments in infrastructure and out of its perennial condition of
in education and health, improvement in poverty, inequity, and lagging human
governance, and the supporting strategies development.
(such as research and development and
science and technology policies), are In economic terms, the countrys
expected to boost total factor productivitys external payments and international
contribution to GDP growth. credit position have not been healthier
in decades for various reasons. Thanks
This annual growth target will generate an to overseas remittances, surpluses
average of some one million (1,000,000) on current account have been run
net employment annually, and these consistently since 2003. After decades
will be found primarily in industry and of trade reform, the industrial structure
services, even as the agricultural sector may is now fairly undistorted by subsidies

and heavy protection. The currency is and through government and citizens
stable and perhaps even too strong and living out and practising the countrys best
inflation has been low to moderate for civic ideals. Without the wise application
more than a decade. Lastly, the country of resources, social cohesion, and good
is emerging relatively unscathed from governance, little can come of even the
the worst global economic downturn best-laid plans, and another window
since the 1930s. of opportunity will have closed for this
generation of Filipinos.
Even politically, there have been
positive developments: the country Nor should it be forgotten that todays
has managed a peaceful constitutional chances were purchased by past sacrifices:
transition through a popularly elected by overseas workers who endured
government; financial and political separation from their families; by laborers
sovereignty vis--vis creditor and other and farmers who experienced wrenching
nations has never been greater; civil structural changes; by the middle class
liberties and political rights continue and other taxpayers who shouldered the
to be asserted and exercised even in the debt burdens of the past; by government
face of brutal assaults; agrarian reform, personnel who soldiered on professionally
the countrys most ambitious attempt despite the rot surrounding them; and
at asset reform, is due to be completed; by the brave and vigilant citizenry who
and efforts to resolve armed conflicts never lost faith in constitutional values,
finally and peacefully are under way. democratic processes, and the possibility
of an honest government.
To be sure, immediate problems
and obstacles remain, chief of Such sacrifices can be repaid only by
which are the countrys lagging rate demonstrable success in our time. Neither
of investment, the governments the past nor future generations will forgive
continuing fiscal constraints and heavy the present if it fails in its pursuit of
debt burden, the countrys poor quality inclusive growth.
of infrastructure, and stagnating levels
of human capital. But many of these
phenomena have existed long before
and are in the nature of consequences
rather than causes. Undeniable is the
fact that some hopeful conditions
have emerged, and that economic and
political opportunities now exist for a
real change a break-away from the
cycle of mass poverty, social division,
and political conflict that have been
the hallmarks of the countrys recent
history.
The true paradox is why the nation

has been unable to step forward even
under improving conditions.
This Plan is built on the conviction

that such obstacles can be cleared and
the above historic task accomplished
in this lifetime through the prudent
marshalling of available resources, the
participation and support by all sectors,

Rockwell Center, Makati City
Photo by: Leody Barcelon
02 Macroeconomic
Policy
Macroeconomic Policy 35
Macroeconomic Policy
Growing output and employment are the preconditions for progress in almost all
social and economic aspects of development. Productive employment and rising
incomes for the vast majority over a long period can do more to combat poverty
decisively than any direct assistance government can ever provide.
It is private actors from the smallest self-employed entrepreneurs to the

largest conglomerates that create productive jobs and incomes. Governments
responsibility however through fiscal and monetary policies is to create an
environment for vigorous economic activity, as well as to ensure that enough
gains from growth are set aside for larger social purposes or channelled into
social investments that facilitate future growth. These objectives are achieved by
government decisions regarding the size and direction of public spending and
taxation (fiscal policy) and by decisions regarding the control of the nations money
supply (monetary policy).
the demand side, private consumption

Output and Employment (which comprises about 70% of
GDP), grew an annual average of 5.4
Economic Performance 2004-2010 percent. Merchandise exports grew
at an average of 9.4 percent, while
GDP growth averaged 5.6 percent for the exports of non-factor services (which
period 20042006, while average GNP included BPOs such as back office
growth was higher at 5.9 percent, boosted payroll or accounting and call centers)
by transfers from overseas workers. On registered an average of 20.6 percent.
Figure 2.1 Contributions to Growth (Demand): 2004-2010

Figure 2.1 Contributions to Growth (Demand)
30.0
7.3
20.0
6.4
5.3
5.0 7.1
10.0 1.1
3.7
0.0
-10.0
2004 2005 2006 2007 2008 2009 2010
Imports Net Exports StatD Gov't Investment Private GDP
Source: NSCB
Source: National Statistical Coordination Board (NSCB

Figure 2.2 Contributions to Growth (Supply): 2004-2010
Figure 2.2. Contributions to Growth (Supply)
8.0 7.3
7.1
7.0 6.4
6.0 5.3
5.0
5.0
3.7
4.0
3.0
2.0
1.0 1.1
0.0
-1.0
2004 2005 2006 2007 2008 2009 2010
Services Industry Agriculture GDP

The economy expanded at its
Source: NSCB fastest rate in three decades in
2007, with GDP growing at 7.1
percent (and GNP growing at
Capital formation, on the other dragged down economic activities in 7.4%)
hand, averaged 1.1 percent growth
Source: National Statistical Coordination Board (NSCB 2005. Domestically, political factors
per year during the period (Table were partly responsible for compelling
2.1). Overall, consumption fuelled by the government to run under reenacted
remittances is the largest and most budgets. The relatively low inflation in
stable source of growth from the 2002-2003 was followed by upward price
demand side. The contribution of net pressures in 2004 due to geopolitical
exports (including BPO), although tensions in the Middle East and growing
volatile, was also positive. Investment resource demands from China and India,
made a small positive contribution all of which contributed to a surge in
in 2004 and 2006, but contributed world oil prices.
negatively in 2005. The contribution
of public consumption to growth has The economy expanded at its fastest
been marginal (Figure 2.1). rate in three decades in 2007, with
GDP growing at 7.1 percent (and GNP
On the supply side, the largest growing at 7.4 %). With greater fiscal
contribution to growth consistently space from the previous years tax reforms
came from the services sector, followed , and with spending ahead of national
by the industry sector. The agriculture elections, public construction rose 29.1
sector, which is vulnerable to changes percent. Private construction likewise
in weather patterns, managed to grew 13.3 percent, boosted by remittance-
make a small positive contribution fuelled residential construction as well
to growth during the period (Figure as the need for more supply of office
2.2). space. Overall, capital formation grew
12.4 percent, up from the 5.1-percent
Average growth was relatively modest, growth of a year ago and the 8.8-
owing to the economys vulnerability percent contraction two years previously.
to a number of domestic and external Likewise, private consumption, which
shocks. The continued US-led war constitutes the largest proportion of
on terrorism, accompanied by the GDP on the expenditure side, continued
escalating prices of petroleum and its stable growth at 5.9 percent, fuelled by
sluggish demand for electronics
Table 2.1 Philippine Key Indicators
Indicators 2004 2005 2006 2007 2008 2009 2010
GNP 6.9 5.4 5.4 7.5 6.4 4.0 7.2
GDP 6.4 5.0 5.3 7.1 3.7 1.1 7.3
Agriculture 5.2 2.0 3.8 4.9 3.1 0.0 -0.5
Industry 5.2 3.8 4.5 6.8 4.9 -0.9 12.1
Mining 2.6 9.3 -6.1 26.0 1.9 21.5 18.4
Manufacturing 5.8 5.3 4.2 3.3 4.2 -4.4 12.3
Construction 3.4 -5.9 9.6 21.0 7.6 9.8 10.5
Electricity, Gas & Water 4.2 2.5 6.4 6.7 7.3 -2.9 8.5
Electricity & Gas 4.3 2.5 6.2 6.7 7.6 -3.5 8.8
Services 7.7 7.0 6.5 8.1 3.1 2.8 7.1
Personal Consumption 5.9 4.8 5.5 5.8 4.7 4.1 5.3
Government Consumption 1.4 2.3 10.4 6.6 0.4 10.9 2.7
Capital Formation 7.2 -8.8 5.1 12.4 2.3 -5.7 17.0
Fixed Capital 1.3 -6.6 3.9 10.9 2.7 -0.4 17.1
Construction -0.8 -7.3 7.6 19.5 4.2 7.4 12.0
Public Construction -9.3 -18.0 31.4 29.1 -1.3 22.5 3.7
Private Construction 4.8 -1.1 -3.7 13.3 8.2 -2.8 19.1
Durable Equipment 3.2 -7.1 1.3 4.5 1.9 -8.2 25.7
Changes in Stocks -444.1 -58.1 64.1 57.5 -7.5 -139.8 -356.1
Changes in Stocks
(% of capital formation) 4.2 1.9 3.0 4.3 3.8 -1.6 -5.6
Exports 15.0 4.8 13.4 5.5 -2.0 -13.4 25.6
Merchandise Exports 12.9 4.2 11.3 4.1 -1.7 -16.8 26.0
Non-Factor Services 28.8 8.3 24.7 12.3 -3.0 2.3 24.3
Imports 5.8 2.4 1.8 -4.1 0.8 -1.9 20.7
Merchandise Imports 6.2 2.1 1.3 -5.6 0.1 -1.8 20.2
Non-Factor Services -1.4 8.5 11.0 20.9 9.9 -3.6 26.3
Unemployment (in percent) 11.8 8.7 8.0 7.3 7.4 7.5 7.3
Underemployment (in percent) 17.6 21.0 22.6 20.1 19.3 19.1 18.7
Sources: NSCB; Labor Force Statistics Yearbook; DOLE-LFS

Note: The 2005 unemployment rate data may not be consistent due to the adoption of a new unemployment definition in
the April 2005 round LFS.

remittances from overseas workers already fell 9.8% month-on-month in
(Table 2.1). January 2008 and electronic exports
contracted 6.5% in August 2008). It was
On the production side, the services not until close to the bottom of the crisis
sector continued to be the largest that policy rates were cut (on December
contributor to growth. The industry 18, 2008) and the fiscal stimulus bared (in
sector, with unprecedented growth January 2009)This, although the inflation
rates from mining (at 26.1%) had been headed down since September
and construction (21%) sectors, 2008.
contributed higher more to GDP
growth as compared with the previous Monetary and fiscal stimuli came
three years (Table 2.1 and Figure 2.2). somewhat late. Overall, there was
Agriculture, with help from the better a noticeable slowdown in private
weather compared to the past two consumption, and in government
years, also had a higher contribution construction and consumption, and a
to GDP than in the past two years contraction in exports during the year.
(Figure 2.2). On the production side, agriculture,
industry, and services all slowed down. Notwithstanding the effects of
Price pressures toward the middle the global financial crisis, GDP
part of 2008 (Figure 2.10) - on The brunt of the global crisis was in 2009 rose by 1.1 percent, a
account of rising world prices of felt in the first half of 2009 when figure within the target of 0.8-1.8
grains and petroleum, as well as the merchandise exports registered an percent, making the Philippines
global recession affecting the country average decline of 23.4 percent per one of the few economies in
through the trade channel towards quarter, caused largely by the contraction the region to register positive
the later part of the year, contributed of electronics and garments exports. performance amidst the
to the slowdown of GDP growth to Furthermore, although government recession.
3.7 percent (GNP growth was 6.4% consumption and construction increased
for the year). As early as the start in the second quarter, the effects of
of 2008, it was clear the US would the fiscal stimulus were blunted by the
experience a recession and that the impact of two typhoons that hit the
impact would reach the Philippines country in September-October 2009.
(in fact the Philippine stock index Notwithstanding the effects of the global
Figure 2.3 Contributions to Growth (Demand): Quarterly, 2008-2010

Figure 2.3 Contributions to Growth (Demand)
8.2 6.3
7.1
7.8
25.0
15.0 4.6
2.8 1.2
0.2 2.1
3.9 3.7
0.5
5.0
-5.0
-15.0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2008 2009 2010
Imports Net Exports StatD Gov't Investment Private GDP
Source: NSCB
Figure 2.4 Contributions to Growth (Supply): Quarterly, 2008-2010
Figure 2.4 Contributions to Growth (Supply)
10.0
7.8 8.2
8.0 7.1
6.3
6.0
3.9 4.6
3.7
4.0 2.8
2.1
0.2
2.0 0.5 1.2
0.0
-2.0
-4.0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2008 2009 2010
Services Industry Agriculture GDP
Source: NSCB
financial crisis, GDP in 2009 rose by 1.1 these growth rates cannot be expected
percent, a figure within the target of 0.8- to continue in 2011 and beyond without
1.8 percent, making the Philippines one of structural changes in the economy.
the few economies in the region to register Such structural changes are needed even
positive performance amidst the recession. more to achieve this Plans goal of a 7 to
GNP on the other hand, grew by 4 percent, 8-percent annual growth rate in GDP.
fuelled by robust inflows of overseas
remittances. Employment and Poverty
In 2010, coming from a low base and Increased globalization and faster
boosted by the rebound in world trade, economic growth have provided
quarterly GDP grew 7.3 percent. opportunities for Filipinos entering the
Remittance-driven consumption and the labor market. Using the old concept
pick-up in investments and net exports of unemployment on which the Plan
(from significant negative contributions in targets were based, unemployment
2009) boosted growth (Figure 2.3). On the rate improved from 11.9 percent in
supply side, the strong reversal of industrial 2004 to 11.4, 11.1 and 10.8 percent
performance (from negative contributions in 2005, 2006 and 2007, respectively,
to growth in 2009), and the continued lower than the Plan targets. Using the
significant contribution of the services new International Labor Organization
sector, drove the growth (Figure 2.4). (ILO)-based methodology recently
Higher growth, however, was constrained adopted by the country, unemployment
by the negative impact of El Nio on stood at 8 percent in 2006, 7.3 percent
agriculture and fisheries. Meanwhile, real in 2007 and 7.4 percent in 2008 (Figure
GNP expanded by 7.9 percent as growth 2.5)1. Despite these improvements,
in net factor income from abroad eased to however, unemployment remains high
10.3 percent from 31.6 percent in the same in comparison with the countrys Asian
period in 2009. A significant part of the neighbors (Figure 2.6) and meeting
high growth in 2010 was clearly due to job creation targets continued to be a
a recovery from a low base, implying that challenge.
1
The DOLE started using the ILO-based definition in the April 2005 round of the Labor Force Survey (LFS)
thus making it difficult to compute the FY2005 unemployment rate.

Figure 2.5 Philippines Unemployment Rate: 2006-2010 (in percent)
Figure 2.5 Philippines Unemployment Rate, 2006-2010 (in %)
8.2
8.0
7.8 8.0
7.6
7.4
7.2 7.4 7.4

7.3 7.3
7.0
6.8
2006 2007 2008 2009 2010
Sources: NSO, LFS

Figure 2.6 Comparative Unemployment Rates in Selected
Sources: National Statistics Office, Labor Force Survey
Asian Economies:
Figure 2.6 Comparative 2006-2010
Unemployment Rates in Selected Asian Economies: 2006-2010
12.0
10.0
8.0
6.0
4.0
2.0
0.0
2006 2007 2008 2009 2010*
China Indonesia South Korea Malaysia Philippines Singapore Thailand
Sources: NSO,
Sources: National LFS;
Statistics http://www.tradingeconomics.com.
Office, Labor Force Survey; http://www.tradingeconomics.com.
* * latest
latest available data
available
data
Figure 2.7 Employment

Figure 2.7 Employment Generated, 2005-2010 Generated:
( in 000 ) 2005-2010 ( in 000)
1200
1000
800
600
400
200
-200
2005 2006 2007 2008 2009 2010
Services Non-Manuf. Industry Manuf. Agriculture Total
Sources: NSO, LFS

Figure 2.8 Employment by Class of Worker and Underemployment Rate:
2005-2010 (in percent)
Figure 2.8.Employment by Class of Worker and Underemployment Rate, 2005-2010 (%)
100.0
80.0
60.0
40.0
20.0
0.0
2005 2006 2007 2008 2009 2010
Unpaid family Workers Own-accountWorkers Wage and Salary Workers Underemployment Rate
Sources: NSO; LFS

The economic slowdown in 2008 affected likewise improved to 18.7 percent
the manufacturing sector and resulted from the previous 19.1 percent.
in a net employment generation of only While the LFS results indicated an
530,000 net compared to the 771,000 improved employment situation,
yearly average for the period 2005-2007. underemployment was still relatively
The manufacturing sector in particular high. In addition, the employment
registered a negative net employment share of unpaid family workers and
generation of about 134,000. In 2009, part-time workers stood at 11.5
employment in both agriculture and percent and 35.2 percent, respectively,
manufacturing sectors remained sluggish. which suggests there is great room for
During that year, the services sector improving employment conditions in
accounted for about 94 percent of the the country.
total 972,000 new jobs generated. (Figure
2.7). Given the high underemployment
rate of about 20 percent, it is not
With strong export and industrial surprising to find a relatively high
performance in 2010, the economy percentage of own-account workers
showed some improvement on the labor (averaging 35.7%) among Filipinos.
front. In the October round of the 2010 This partly reflects the difficulty
LFS, the unemployment rate stayed at of gaining employment in the
7.1 percent, bringing the 2010 full-year formal labor market and implies a
average unemployment rate to 7.3 percent, high incidence of informal sector
lower than the 7.5 percent recorded work. In addition, the 43.2-percent
in 2009. New jobs generated for the educated unemployed out of the
year were estimated at around 983,000, total unemployed labor force is also
slightly more than in the previous year. very high, a symptom of the labor
Average underemployment in 2010 mismatch in the country and a

Table 2.2 Official Poverty Statistics, Philippines: 2000, 2003 and 2006
Year
Indicator
2003 2006 2009
A. Among Families
Poverty incidence (%) 20.0 21.1 20.9
Subsistence incidence (%) 8.2 8.7 7.9
Magnitude of poor 3,293,096 3,670,791 3,855,730
Magnitude of food poor 1,357,833 1,511,579 1,453,843
B. Among population
Poverty incidence (%) 24.9 26.4 26.5
Subsistence incidence (%) 11.1 11.7 10.8
Magnitude of poor 19,796,954 22,173,190 23,142,481
Magnitude of food poor 8,802,918 9,851,362 9,440,397
Source: NSCB
factor contributing to the growing development strategy. Qualities such as In the labor and employment
deployment of Filipino workers education, skills, health, and cognitive sector, therefore, the policy
overseas, averaging about 1.1 million abilities help determine an individuals challenge is to increase decent
per year. ability to obtain productive employment, and productive employment and
as well as expand the scope of labor to enhance inclusive job-rich
In the labor and employment sector, productivity and pace of technological growth.
therefore, the policy challenge is advancement of the country. Inclusive
to increase decent and productive growth thus requires a special focus on
employment and to enhance inclusive the working poor and the unemployed,
job-rich growth. To achieve this goal, who comprise a significant portion (43%)
the country can pursue supply-side of the labor force.
strategies (such as enhancing the
human resource base), as well as Demand-side approaches
demand-side approaches (such as
enhancing the returns to human and Earnings and employment will depend
physical or entrepreneurial capital). on the rate, quality, and distributional
aspects of economic growth. The rate of
Supply-side measures economic growth determines the extent
of employment opportunities. Inclusive
Working people are not simply the growth, in particular, must mean a
beneficiaries of growth but also its higher and broad-based demand for
creators and drivers. Just as increases labor and therefore more employment
in employment and labor productivity opportunities. This is important,
contribute to economic growth, so considering the persistent unemployment
too investments in the development and underemployment levels in the
of human resources help provide a country. The sheer volume of workers
foundation for a job-rich growth and working temporarily overseas2 indicates
2
About one million OFWs are deployed per year, with their remittances accounting for at least 9.5 percent of
GNP in 2009.
Figure 2.9 Poverty Incidence of Families by Region (in Percent): 2003 and 2006
Figure 2.9 Poverty Incidence of Families by Region (in %): 2003, 2006 and 2009
40.0
30.0
20.0
10.0
-
NCR I II III IV-A IV-B V VI VII VIII IX X XI XII CAR ARMM Caraga
2003 2006 2009
Source: NSCB
Source: National Statistical Coordination Board

the lack of employment opportunities Visayas (30.2%) also registered more
and suggests that domestic investments than 30 percent poverty incidence
and entrepreneurship are being held back. while NCR had the lowest estimated
These constraints need to be addressed poverty incidence of 2.6 percent. For
along with strategies formulated to ensure the period 2003-2009, the geographical
that the working poor and the unemployed distribution of poverty remained
can participate and benefit from the unchanged being consistent in Caraga,
development process. Zamboanga Peninsula, Bicol and
ARMM (Figure 2.9).
A lack of gainful and quality employment
opportunities is an important reason why The regional distribution poverty also
poverty incidence in 2006 went up to 21.1 highlights the large variations in family
percent from 20.0 percent in 2003 (Table income across the country. Most of
2.2) and essentially stagnated between 2006 the regions in Luzon had relatively
and 2009. lower proportion of families living
below the poverty threshold than those
Disaggregated data also shows that living in Mimaropa, Bicol, Visayas and
across the different regions of the country, Mindanao regions. The lower poverty
poverty incidence among families generally incidence in NCR and Regions 1, 2,
increased, with Regions Caraga, 9 and 8 3 and 4-A can be attributed to higher
posting more than 2 percentage points access to employment opportunities
increases between 2006-2009. The regions and basic social services, while armed
of Caraga (39.8%), ARMM (38.1%), conflict and peace and order problems
Bicol (36.0%), Eastern Visayas (33.2%), resulted in higher poverty incidence in
Northern Mindanao (32.8%), and Central Mindanao.

Fiscal and Monetary appropriate to support the continuous
Sectors expansion of economy.
Sound fiscal and monetary policies This section thus addresses the issues of
that foster macroeconomic stability are macroeconomic stabilization. Performance
crucial to achieving sustained economic and challenges in the fiscal and the monetary
growth. A sustainable fiscal balance or external sectors are first addressed.
helps the country avoid boom-bust Strategies that need to be adopted to
cycles that disrupt the pace of economic achieve macroeconomic stabilization are
growth. Appropriate levels of fiscal then outlined.
deficits also allow the government to
continuously support critical social Assessment and Challenges
programs and infrastructure projects.
Prudent and responsible monetary Fiscal Sector
policy that achieves low and stable
inflation, in turn, gives both consumers In 2004-2009, the government
and businesses a chance to plan over a implemented reforms to place the fiscal
longer time horizon. At the same time, house on a sounder footing. Major
it helps ensure that financial markets reforms to improve the revenue situation
are stable and credit conditions are during the early part of the period
Table 2.3 Summary of Fiscal Sector Indicators: 2004-2010 (in million PhP)
Particulars 2004 2005 2006 2007 2008 2009 2010

Total Revenues 706,718 816,159 979,638 1,136,560 1,202,905 1,123,211 1,207,926
Tax Revenues 604,964 705,615 859,857 932,937 1,049,179 981,631 1,093,643
BIR 470,329 542,697 652,734 713,605 778,571 750,287 822,623
BOC 127,269 154,566 198,161 209,439 260,248 220,307 259,241
Others 7,366 8,352 8,962 9,893 10,360 11,037 11,779
Non-Tax Revenues 101,754 110,544 119,781 203,623 153,726 141,580 114,283
Total Disbursements 893,776 962,938 1,044,429 1,149,001 1,271,022 1,421,743 1,522,384

Current Operating Expenditures 755,748 831,716 904,179 947,357 1,031,849 1,141,967 1,229,785
Personal Services 283,065 296,361 324,690 350,291 374,662 414,023 469,402
MOOE 83,838 84,753 99,993 128,311 138,690 176,458 182,092
Subsidy 6,926 8,151 11,884 21,686 16,982 17,438 21,005
Allocation to LGUs 114,068 122,194 136,865 149,150 170,583 203,233 216,079
Interest Payments 260,901 299,807 310,108 267,800 272,218 278,866 294,244
Capital Outlays 132,352 129,515 140,120 191,894 224,780 274,712 283,340
Net Lending 5,676 1,707 131 9,750 14,393 5,064 9,258
Fiscal (Deficit)/Surplus (187,058) (146,779) (64,791) (12,441) (68,117) (298,532) (314,458)
Sources: Bureau of Treasury (BTr), Department of Budget and Management (DBM)
Note: Table 2.3 was based on 2011 Fiscal Statistics Handbook and Cash Operations Report as of September 2010.
included the revisions of the excise tax prereform levels. Tax effort dipped to
on alcohol and tobacco, an expansion of 12.8 percent in 2009, the lowest in
the scope and an increase in the rate of the ASEAN region, where it averaged
the value-added tax (VAT), as well as 14.9 percent. In addition, several tax
the enactment of the Lateral Attrition eroding measures were enacted in
Law. As a result, tax effort rose from 2009 and 2010, which granted tax
12.5 percent in 2004 to 14.2 percent in relief to various sectors, but depleting
2008. The National Government (NG) the revenues gained from earlier tax
reduced its deficit from an average of 3.9 reforms. Revenues from taxes with
percent of GDP in 2000-2004 to a more specific rates also either remained flat
manageable 2.7 percent of GDP in 2005. or failed to rise in proportion with
This was further reduced to 1.1 percent GDP because of the failure to index
in 2006 and was almost balanced in 2007 them. The share of excise taxes on
at 0.2 percent of GDP. The improved sin products and petroleum barely
fiscal positions of the NG, the social changed during the period, from 21
security institutions, local governments, percent of total revenues in 2004 to
and the GFIs translated into a surplus in 22 percent in 2009.
Governments ability to raise the countrys consolidated public sector
additional revenues from nontax financial position amounting to PhP21.3 Governments ability to raise
sources has remained weak as billion or 0.3 percent of GDP in 2007, additional revenues from nontax
well. Part of the problem lies from a deficit of PhP235.9 billion or 5.0 sources has remained weak as
in the governance challenges percent of GDP in 2004. well. Part of the problem lies in
faced by GOCCs in their the governance challenges faced
operations. As economic activities slowed down by GOCCs in their operations.
owing to the recent global financial crisis, Foremost of these are the multiple
however, revenue collection weakened. and often conflicting mandates; the
Revenue effort dropped from 16.2 percent various levels of oversight bodies;
in 2008 to 14.6 percent in 2009, back to the need to update government
Figure 2.10 Year-on-Year Inflation Rate: 2004- 2010

Figure 2.10 Year-on-Year Inflation Rate (2004- 2010)
10.0
9.3
7.6
8.0
6.0 6.2
6.0
4.0
3.8
2.8
3.2
2.0
0.0
2004 2005 2006 2007 2008 2009 2010
Source: Bangko Sentral ng Pilipinas (BSP)

Source: Bangko Sentral ng Pilipinas (BSP)

ownership policy; the need to services which were not compensated
improve board governance; and the by the NG), while others have managed
need to strengthen transparency to exist only on the back of government
and disclosure. The exemption of subsidies.
some GOCCs, including GFIs,
from the Salary Standardization In addition, many fees and charges for
Law (SSL) granted by Congress, services have not been appropriately
has provided authority to the boards adjusted and in some cases, have even
of government corporations to been lowered on request of the private
adjust the compensation of their sector (e.g., some fees and charges which
officials without restraint. Certain affect exporters have been lowered to
GOCCs also have mandates that accommodate them). Collections from
are inconsistent with prudent fiscal this source have not risen in line with the
behavior (e.g., they are used as subsidy costs of providing the said services.
providers and conduits for social
Table 2.4 Selected External Sector Accounts: 2004-2010 (In billion US$)
2004 2005 2006 2007 2008 2009 2010
CURRENT ACCOUNT 1.6 2.0 5.3 7.1 3.6 9.4 8.5
Goods and Services -7.5 -9.1 -6.6 -6.1 -11.7 -6.7 -8.4
% of GDP 1.9 2.0 4.5 4.9 2.2 5.8 4.5
Trade in Goods -5.7 -7.8 -6.7 -8.4 -12.9 -8.8 -10.4
Trade in Services -1.8 -1.3 0.1 2.2 1.2 2.1 1.9
Income -0.1 -0.3 -1.3 -0.9 0.1 -0.2 0.3
Current Transfers 9.2 11.4 13.2 14.2 15.2 16.2 16.6
CAPITAL AND FINANCIAL ACCOUNT -1.6 2.2 0.0 3.5 -1.6 -1.6 7.9
Capital Account 0.0 0.0 0.1 0.0 0.1 0.1 0.1
Financial Account -1.6 2.2 -0.1 3.5 -1.7 -1.7 7.8
BALANCE OF PAYMENTS -0.3 2.4 3.8 8.6 0.1 6.4 14.4
OFW Remittances 8.6 10.7 12.8 14.4 16.4 17.9 19.4
Gross International Reserves (GIR) 16.2 18.5 23.0 33.8 37.6 44.2 62.4
% of short-term debt based on
original maturity 321.6 289.2 458.5 476.4 536.4 1105.5 1086.2
% of short-term debt based on
residual maturity a/ 163.0 164.6 251.3 300.7 333.2 500.5 575.1
External Debt-to-GDP 63.3 55.0 45.9 38.5 32.6 34.89 33.1 b/
Medium-to-long-term (% of total) 90.8 88.2 90.7 87.2 87.0 92.7 90.4 c/
Short-term (% of total) 9.2 11.8 9.3 12.8 12.9 7.3 9.6 c/
Source: BSP (http://www.bsp.gov.ph, updates as of March 30, 2011
a/ Refers to the adequacy of reserves to cover outstanding short-term external debt based on original maturity plus principal
payments on medium-to-long-term loans of the public and private sectors falling due within the next 12 months
b/ Outstanding external debt as of September 2010
c/ January-September 2010
As the revenue position weakened and resiliency program (ERP). As a share
given the need to for a stimulus to counter to GDP, disbursements dropped to
the continuing recessionary pressure, 17.9 percent in 2010.
the NG deficit in 2009 reached 3.9
percent of GDP while the consolidated The year 2010 was notable for the
public sector deficit was 3.3 percent expenditure controls brought back
of GDP in the same year. In 2010, the by government, which enabled an
NG deficit to GDP ratio dropped to 3.7 orderly transition from two years
percent from 3.9 percent in 2009 while of fiscal stimulus in response to the
the consolidated public sector deficit global economic crisis back to fiscal
improved to 1.6 percent of GDP. consolidation mode as the global
economic situation normalized. The
Some recent developments have been tighter prioritization of expenditures
encouraging, however. Total revenues in with the application of the ZBB
2010 rose by 7.5 percent from the previous approach, and the calibration of
year. Tax revenues were up by 11.4 allotment and cash releases in
percent due to improved performances anticipation of revenue inflows were
The year 2010 was notable for by the Bureau of Internal Revenue (BIR) particularly helpful in this transition.
the expenditure controls brought and Bureau of Customs (BoC) which But as the composition of expenditures
back by government, which had higher collections by 9.6 and 17.7 and the quality of services improve,
enabled an orderly transition percent, respectively. Notwithstanding the absorptive capacity of the agencies
from two years of fiscal these, the revenue position still remains and their capability to implement
stimulus in response to the precarious as both the BIR and the BOC projects must be strengthened to
global economic crisis back fell short of their respective targets in spur economic activity and help
to fiscal consolidation mode as 2010. The postponement of privatization create employment particularly in
the global economic situation efforts, in the expectation of better terms the countryside. The early approval
normalized. and conditions, has reduced nontax of the Fiscal Year (FY) 2011 budget,
revenues relative to the same period in the release of 100 percent of agency
2009. Dividends and interest income budgets in January 2011, as well as
have not increased sufficiently to offset measures facilitating the procurement
the lack of proceeds from sale of assets. process were all intended to provide
this spending jumpstart for the year.
Meanwhile, disbursements grew at a The closer monitoring of the rate
slower pace than revenues, increasing of agency spending and absorption
by 6.7 percent from the 2009 level issues during the year should facilitate
compared to the 7.5 percent expansion the identification of needed measures.
in revenues. The increase can be
attributed to the higher personal For the period 2004-2010,
services requirements (13%) due to the infrastructure outlays were given an
continuing implementation of the SSL increasing share of the budget, rising
3, the increased provision for the CCTs to 15.2 percent (2009), and remarkably
and the automated national and barangay higher by 4.7 percentage points than
elections, the carry-over disbursements that in 2004. In 2010, infrastructure
from last years rehabilitation and spending was 14.7 percent of
reconstruction projects, and the higher total government expenditure.
provision for Internal Revenue Allotment Similarly, the budget share of regular
(IRA) and interest payments. expenditure items necessary for more
efficient operations of government
Government spending contracted from increased by 2.6 percentage points
18.3 percent of GDP in 2004 to 17.2 from 9.4 percent in 2004 to 12 percent
percent of GDP in 2008 but has since in 2010. Meanwhile, the budgetary
increased to 18.5 percent of GDP as of requirement for interest payments
2009 given the governments economic was reduced from 29.2 percent of the

budget in 2004 to 20.7 percent in Low spending for social sectors caused
2010. As a result, greater fiscal space poor outcomes in these areas and meant
was created for capital outlays and higher costs for the population who must
other productive expenditures. spend for what government ought to have
provided. NG spending on social services
For 2010, infrastructure and other sector as a share of the budget declined
capital spending grew more slowly from 28.9 percent to 27 percent in 2004 to
by PhP6.5 billion or 3 percent year- 2007, recovering to 28.7 percent in 2009,
on-year, given the lower obligation and to 31.9 percent in 2010. Although
program for infrastructure and other spending on social services has gone up,
capital outlays in 2010 compared to the government still needs to increase its
2009. The growth is largely attributed spending on priority sectors and reduce
to the carry-over disbursements for nonpriority expenditures if it is to keep
rehabilitation and reconstruction pace with neighboring countries and
activities due to typhoon Ondoy in close the gap in public spending.
the latter part of 2009, and for other
completed projects. Thus, generating sufficient revenues
to support growth in the medium Low levels of spending
Disbursements were expanded term remains the greatest challenge on education, health and
in 2009 to counter the effects of for the fiscal sector. More effort in infrastructure largely and
the global economic slowdown revenue collection is needed so that an generally reflected the low level
and to provide additional relief, expenditure program more responsive of government public expenditure.
rehabilitation and reconstruction to growth can be undertaken without Low spending for social sectors
efforts prompted by the destructive bloating the countrys deficit and while caused poor outcomes in these
calamities that hit the country. In still keeping the debt ratio at sustainable areas and meant higher costs for
2010, total national government levels. Proactive debt management should the population who must spend for
spending for the first three quarters also continue in order to reduce the debt what government ought to have
amounted to PhP1.15 trillion, a service burden and to free up resources provided.
7.2-percent increase over that in that could otherwise be channelled to
2009. The increase stemmed largely more productive spending.
from spending on personal services,
in compliance with mandated salary While the rules governing the contracting
adjustments, and larger maintenance of debt and debt guarantees by agencies
outlays. However, interest payments have recently been streamlined, some
increased its share of the total budget have failed to adhere to best practice
from 19.6 percent to 21.2 percent and have contributed to the bloating of
after higher fiscal deficits reappeared. deficits. These instances include projects
This higher deficit scenario, coupled under build-transfer contracts whose fees
with the weaker revenue effort, has and charges were kept unduly low for
constrained budgetary allocations political reasons, those implemented and
to the economic and social sectors, funded from government-to-government
which are vital for the achievement arrangements where accusations of
of faster and more inclusive economic overpricing are still being investigated,
growth over the medium term. and automatic guarantees provided under
the charters of some GOCCs.
Low levels of spending on education,
health and infrastructure largely and GOCCs continue to be a large source
generally reflected the low level of of fiscal risk. As of end of 2008, their
government public expenditure3. total liabilities (excluding those of the
3
This is also the view of the recent Public Expenditure Review (PER) by the WB.
BSP) amounted to 36.9 percent of GDP. that led to higher domestic pump
GOCCs are frequently directed to bear prices, minimum wage adjustments
the cost of social programs that should throughout the country, hikes in
ideally be funded out of the budget. A transport fares and utility charges,
case in point is the NFA, which operates and weather-related disturbances.
on a buy-high-sell-low policy. NFAs Meanwhile, with good weather
mandate to maintain floors for farm gate conditions and a relatively firm peso,
prices while keeping retail rice prices at inflation declined to 2.8 percent in
reasonable levels virtually prevents the 2007, the lowest annual average in 21
agency from recovering its cost. Public years.
utilities like the Light Rail Transit
Authority (LRTA) also face considerable The steady decline in inflation was
financial constraints because user interrupted by sharp increases in
charges are maintained at levels that can world commodity prices, which
only be maintained through heavy public fed into a 9.3-percent inflation
subsidies. rate in 2008. Monetary authorities
responded by raising the policy rate
GOCCs continue to be a large Despite the power tariff increase in 2005 by 100 basis points for June-August
source of fiscal risk. As of end and the privatization of the generating 2008. By late 2008, the balance of risks
of 2008, their total liabilities assets and the offloading of the operation to the inflation outlook had shifted
(excluding those of the BSP) and investment responsibilities for both downwards following the easing of
amounted to 36.9 percent of the power plants and transmission commodity prices, the moderation
GDP. GOCCs are frequently assets to the private sector, the National in inflation expectations, and the
directed to bear the cost of Power Corporation (NPC) and the slowdown in economic activity. These
social programs that should Power Sector Assets and Liabilities developments provided latitude for
ideally be funded out of the Management Corporation (PSALM) monetary easing to support growth
budget. remain sources of fiscal risk. The full amidst the global financial crisis in
implementation of the universal levies, 2008-2009, including the 200-basis
provided for under the Electric Power point reduction in policy interest rates.
Industry Reform Act (EPIRA) will play Monetary authorities also adopted
a major role in mitigating the fiscal risks other crisis intervention measures at
from the power sector. the height of the global financial crisis
and smoothly disengaged from these
Monetary and External when financial conditions began to
Sectors normalize. 4
Prices The monetary policy stance remains

supportive of noninflationary
Inflation in the Consumer Price Index growth. Credit remains adequate in
(CPI) averaged 5.6 percent for the supporting economic activity. This is
period 2004-2010 with a declining trend, evident in the steady uptrend in bank
averaging 3.8 percent in 2010. From lending and smooth functioning of
2004 to 2006, much of the inflation domestic financial markets. Low and
pressure was due to supply shocks, stable inflation has also contributed
including increases in global oil prices to lower costs of funds in the
4 In addition to the 200-basis point reduction in the BSP policy rate, other measures included the: (a) opening
of US dollar repo facility; (b) increase in rediscounting budget from PhP20 billion to PhP60 billion; (c) the
reduction in banks reserve requirement by two percentage points; and (d) some easing of the loan value and
access criteria to the rediscounting facility. The BSP later disengaged from these measures. It aligned the peso
rediscount rate to the BSPs policy rate, restored the peso rediscounting budget to its precrisis level of PhP20
billion and restored the loan value and the past-due loan ratio requirements for banks availing themselves of the
rediscounting facility to their precrisis settings.

market, supporting investment and by the continued improvement in the
consumption expenditures by firms countrys external debt profile. The
and households. Philippine external debt-to-GDP
ratio was 63.3 percent in 2004. As of
External Sector September 2010, this ratio was down to
33.1 percent. The long-dated maturity
The current account balance as a structure of the countrys foreign
ratio of GDP has increased from currency debt has helped to limit rollover
1.9 percent in 2004 to 4.5 percent in and foreign exchange risks.
2010. The current account position
has shifted to structural surpluses With the strong external payments
in large part due to the resilience performance, international reserves have
of overseas remittances, increased risen, providing strong coverage for
services receipts from business process both imports and short-term external
outsourcing, and steady tourism debt. At end-December 2010, the gross
receipts. These sources of foreign international reserves (GIR) stood at
exchange inflows have been more US$62.4 billion, based on preliminary
stable than investment flows. Driven data. This level of GIR could cover 10.3 The monetary policy stance
by the surplus in the current account months of imports of goods and services, remains supportive of
and the improvement in capital and and was equivalent to 10.8 times the noninflationary growth. Credit
financial account, the balance of countrys short-term external debt based remains adequate in supporting
payments has also registered surpluses on original maturity and 5.7 times based economic activity. This is evident
since 2005. on residual maturity. The comfortable in the steady uptrend in bank
level of foreign exchange reserves lending and smooth functioning
However, merchandise exports growth provides a strong cushion that helps the of domestic financial markets.
performance was relatively volatile, economy withstand external shocks. Low and stable inflation has also
reflecting the countrys vulnerability contributed to lower costs of
to global developments. The annual As a result of the strong external liquidity funds in the market, supporting
average export growth for 2004-2010 position, the Philippine peso has investment and consumption
was 6.5 percent, which was pulled up remained broadly stable. The trends in expenditures by firms and
by the 34.8-percent growth in 2010 as the real effective exchange rate (REER) households.
the global economy began to recover. show that the peso has lost some
competitiveness against major trading
Meanwhile, the exports of services partners compared to six years ago. In
have been on an uptrend, mainly the last two years, however, the peso
on account of transportation, travel, gained competitiveness against baskets
and other business, technical, and of competitor currencies (both broad
professional services. Merchandise and narrow) owing to the narrowing of
imports outpaced exports, with more the inflation differential, which offset the
than 60 percent of total imports nominal appreciation of the peso.
consisting of raw materials and
intermediate goods, and capital goods. Challenges
Overseas Filipino (OF) remittances The Philippine economy nonetheless
have been steadily growing even when faces a number of issues and challenges
the global financial crisis broke out. that may warrant monetary policy actions.
In 2010, remittances coursed through
banks amounted to US$18.8 billion, Capital Inflows
an increase by 8.2 percent from the
level recorded in previous year. Bright prospects for emerging
economies combined with the prolonged
The countrys favorable external accommodative monetary policies in
position has also been supported advanced economies have driven large
capital inflows into emerging economies, Global Commodity Prices
including the Philippines. Foreign capital
inflows can be an important source Volatile and rising global prices of
of funds for investment expenditures key commodities can have significant
but also entail risks that need to be impact on domestic prices. While
closely monitored and addressed when these are mainly supply shocks in
warranted. Huge capital inflows can nature, they may lead to second
contribute to excessive liquidity growth, round effects that could result in
cause asset market imbalances, and lead elevated inflation expectations.
to inflation pressures that can complicate Monetary authorities will continue
monetary policy. to coordinate with other government
agencies to temper the impact of
Asset Market Imbalances global commodity price shocks on
domestic prices. Monetary authorities
Asset price dynamics are an important will remain vigilant and ready to
consideration in the pursuit of price implement timely policy adjustments
stability by monetary authorities. The in response to the emergence of
Bright prospects for emerging build-up of asset market imbalances second-round effects on inflation.
economies combined with the contributes to financial stability risks that
prolonged accommodative can harm economic activity, and in turn Strategic Framework
monetary policies in advanced affect the outlook for price developments.
economies have driven large The recent global financial crisis resulted in To achieve the overarching goal of
capital inflows into emerging a deep economic downturn which became inclusive growth, government lays
economies, including the a major source of downside risk for the down the conditions for a stable
Philippines. inflation outlook in advanced economies. macroeconomic environment that
Furthermore, financial markets provide is conducive to sustaining a higher
an avenue through which monetary growth path. For fiscal policy, the
policy actions are transmitted to the main task is to expand the narrow
real economy. Vulnerabilities stemming fiscal space and to get on a sustainable
from the financial sector as a result of revenue-and-spending path. For
asset price bubbles can complicate and monetary sector and external sector
reduce the effectiveness of monetary, policies, this means commitment to
fiscal, and regulatory policies. While low and stable inflation conducive to
monetary authorities remain focused balanced and sustainable growth and
on achieving low and stable inflation, reduced external vulnerabilities.
they will continue to be highly attentive
and alert to credit growth, asset price Fiscal Reforms
developments, and financial imbalances
which can have implications on financial One of the most important tasks that
stability and ultimately, on price stability. need to be addressed in order to achieve
Monetary authorities will also continue macroeconomic stabilization is to put
to employ macroprudential tools to help order in the fiscal house. The large
prevent overheating and undue risk- budget deficits incurred as a result of
taking in asset markets. Macroprudential the fiscal stimulus during the global
regulations already in place have thus far economic and financial crisis resulted
helped make the economy less prone to in the need for fiscal consolidation.
asset price escalations. These regulations At the same time, the reduction of
include the statutory limit on the share spending for infrastructure and social
of real estate loans to banks total loan services as a result of the governments
portfolio and the maximum loan-to- expenditure compression efforts in
value ratio for real estate loans. 2002 to 2006, has resulted in large
financing gaps in these areas. These
financing gaps, in turn, not only

constrained the countrys economic 4. Fully staffing the BIR and BOC
growth, but also limited the access of with competent and adequately
the poor to the economic gains the trained personnel;
country has achieved. The challenge
in the medium term, therefore, is 5. Formulating transparent and
one of achieving fiscal consolidation, consistent tax rulings;
while at the same time substantially
increasing the countrys investments 6. Revitalizing the RATE, RATS and
in infrastructure, health, and RIPS programs of government;
education.
7. Establishing appropriate
The overall strategy in the fiscal performance standards and evaluation;
sector in the medium term is to and
increase tax effort to 15.6 percent of
GDP. This is to be achieved through 8. Instituting a more effective system
an annual incremental 0.3 percentage of rewards and penalties under the
point annual rise in the collection Lateral Attrition Law backed up by
effort of BIR, and 0.1 percentage performance standards. The overall strategy in the fiscal
pointfor the BOC. At the same time, sector in the medium term is
nontax revenue collection would be Tax Policy Reforms to increase tax effort to 15.6
increasing equivalent to an average percent of GDP.
of 1.2 percent of GDP through To complement the efforts to improve
governance reforms. Correspondingly, tax administration and to ensure that
the NG deficit should decline to a revenues are adequately protected,
level of 2 percent of GDP by 2013 priority policy reforms need to be
and must be maintained at this level instituted, namely: the rationalization
until 2016. Also, beginning 2013, of the fiscal incentives system and the
the consolidated public sector deficit enactment of a fiscal responsibility law.
must be brought down to 1.5 percent The rationalization of fiscal incentives
of GDP. The specific strategies and will save revenues for the government by
programs designed at achieving the doing away with redundant incentives
abovementioned targets are detailed (e.g., those directed at investments that
below. would have taken place even with the
absence of such incentives). At the
Tax Administration Reforms same time, rationalization will allow
the government to direct the incentive
Before even attempting to introduce system at the export sector so that its full
structural reforms into the countrys potential can be realized.
tax system, administrative reforms
must be given priority. Numerous A fiscal responsibility law is necessary to
reform measures are being lined up hasten the fiscal consolidation process
to improve tax administration. These and enforce fiscal discipline at all levels
measures include the following: of government. The fiscal position of
government should be kept on an agreed
1. Establishing a tax registry deficit path. Such a law is also necessary to
comprehending all taxpayers; keep the countrys debt at a manageable
level.
2. Using comprehensive third-
party data to determine the With proper timing, other tax reforms
potential tax base; need to be undertaken in order to improve
the revenue take of the tax system while
3. Maintaining a transparent and promoting equity and a level playing
productive tax audit program; field for all stakeholders. Priority must be
given to adjustments in the excise tax on 8 percent, and 14 percent of GDP,
alcohol and tobacco products, as well as respectively, on public infrastructure
the excise tax on petroleum. The use of the during the last decade. Similarly,
so-called PAYGO system as a collection public spending on basic education
handle must also be maximized. was 3.4 percent of GDP in 1998,
but decreased to 2.9 percent in 2002
The distortions of the tax system caused and continued to slip reaching 2.2
by the enactment of piecemeal exemption percent in 2008. In other East Asian
laws must be corrected. A reversal countries, public expenditure on
of these unnecessary tax exemptions education averaged 3.9 percent of
must be pursued in order to restore the GDP in 2007.5
integrity of revenues and make the tax
system more efficient and equitable. In order to address this challenge, the
Plan envisions the implementation
Nontax Revenue Reforms of several major public expenditure
management reforms not only to
Fees and charges collected by government help narrow the fiscal deficit over the
The key challenge in the agencies have not been adjusted since a medium term but also ensure that
area of expenditure policy is decade ago. Consistent with the sound resources are allocated to priority
how to substantially increase principle of cost recovery, these fees investments, such as human capital
productive expenditures, such must be adjusted to cover the cost of and infrastructure. Toward this end,
as those for infrastructure and administering government services. expenditure reforms that have been
social services (e.g., education introduced in the recent years will
and health) and catch up with Government must aggessively pursue be strengthened and in some cases,
the accumulated investment the auctioning of its assets such as air revitalized, in order to improve
deficits in these areas while frequencies and permits to develop resource allocation and build results-
at the same time aggressively renewable energy resources. GOCCs orientation into the government
reducing wasteful and inefficient must also be made to contribute their service. Among these reforms are the
expenditures. fair share to the revenue effort by, among following:
others, promptly remitting dividends.
1. Medium-Term Expenditure
Expenditure Policy Reforms Framework (MTEF). The
continued adoption of the multiyear
The key challenge in the area of budgeting system (the MTEF)
expenditure policy is how to substantially will improve the predictability
increase productive expenditures, such of funding, and integrate policy
as those for infrastructure and social with resource allocation. The main
services (e.g., education and health) components of the MTEF are the
and catch up with the accumulated Paper on Budget Strategy (PBS)
investment deficits in these areas while and the Forward Estimates (FEs).
at the same time aggressively reducing
wasteful and inefficient expenditures. The Paper on Budget Strategy
Public expenditure on infrastructure, as will link budget allocation
a share of GDP, went down from an with the national agenda of
average of 2.4 percent in 1995-2000, to the government to identify the
an average of 1.8 percent in 2001-2011. priority areas for spending, and
By comparison, China, Vietnam, and to incorporate the sectoral and
Thailand spent upwards of 7 percent, regional implications in the
5
In the health sector, the countrys public expenditure per capita on health was US$39 in 2006, compared to the median
of US$88 per capita expenditures for comparable East Asian countries. Overall, the Philippine NG spending on social
safety net programs was a mere 0.3 percent of GDP in 2007 and 0.8 percent of GDP in 2008, which is less than half
of the mean expenditure on social welfare programs of 1.9 percent of GDP in a group of 87 countries.

dimension and distribution of that proposals to grant fiscal incentives
the budget; and or permanent increases in national
government expenditures must be
Forward Estimates (FEs) are offset by permanent increases in
the estimated annual costs of revenue or permanent reductions in
ongoing programs and projects. other expenditures.
These will help ensure the
continuous funding of program 4. Government Rationalization
requirements beyond a given Program (RP). Executive Order (EO)
fiscal year, and help provide No. 366 issued on October 4, 2004
a sound basis of future years aims to build a smaller bureaucracy
budget trends. In order to adopt and improve public service delivery
more rigid and realistic FEs, through the strategic review of the
the government will pursue mandates, operations, organizational
automation that is linked to structures, functions, programs and
existing budget application activities of national government
systems and to the PDP and PIP. agencies; the elimination of
overlapping or duplicating functions; The Plan envisions the
2. Organizational Performance and the focusing of government efforts implementation of several major
Indicator Framework (OPIF). and resources towards its core or vital public expenditure management
This enables the channelling functions. Given the current progress reforms not only to help narrow
of resources to where it best in rationalizing half of the agencies in the fiscal deficit over the
produces the desired results and the Executive Branch, its continuation medium term but also ensure
outcomes, as indicated by agreed is expected to lead to the elimination that resources are allocated to
upon performance indicators. The of 12,549 regular positions, saving the priority investments, such as
implementation of the OPIF will government some PhP2.4 billion in human capital and infrastructure.
be cascaded to the operating units annual salaries and compensation.
of the agency, in order to sustain
the restructuring of government 5. Procurement Reforms. Significant
expenditures to the priority progress was made in reforming the
sectors. The linking of the OPIF procurement system through the
and Performance Management passage in 2003 of Republic Act
System-Office Performance (RA) No. 9184 or the Government
Evaluation System (PMS-OPES) Procurement Reform Act. Aside from
being spearheaded by the Civil standardizing and modernizing the
Service Commission, will allow the procedures in government purchasing,
institution of a performance-based the law also requires the use of the
compensation system. Philippine Government Electronic
Procurement System (PhilGEPS) by
3. Fiscal Responsibility Bill all government entities, which serves
(FRB). The DBM and DOF shall as the sole portal hosting sources
work together to revive the FRB of information on all government
initiative dating back to 2004 and procurement. From 2011, the
shall push for its approval. The bill following functionalities in the
aims to strengthen fiscal discipline PhilGEPS will be implemented: (a)
in the public sector by prescribing virtual store for electronic purchasing;
principles of responsible fiscal (b) expanded supplier registry as a
management, establishing control centralized electronic database of all
mechanisms on spending, and manufacturers, suppliers, distributors,
adopting preventive measures contractors and consultants registered
against the erosion of the tax in the system; (c) introduction of
base of the government. One of charges and fees to sustain operations
its prominent features is ensuring and maintenance of the system; (d)
e-payment system to enhance the and the OPIF, the ZBB approach
functionality of the virtual store; is geared towards assessing the
(e) e-bid facility for electronic bid continued relevance and priority of
evaluation of all types of procurement programs; ascertaining whether the
for goods, infrastructure projects and program objectives and outcomes
consulting services; and (f ) uploading are being achieved; identifying
of the individual Annual Procurement alternative or more effective and
Plan (APP) of each government efficient ways of achieving the
procuring entity. Public procurement objectives; and guiding decisions
in the country shall continue to whether the resources for the
adapt to improvements in modern program or project should continue
technology through introduction of to be provided at present levels,
future functionalities in the PhilGEPS increased, reduced, or discontinued.
that will facilitate service delivery,
transparency and competitiveness in Initial findings and recommendations
the public procurement system from the conduct of ZBB exercises
during the preparation of the 2011
In succeeding budget 6. Stronger Internal Control System Budget include:
processes, the government (ICS). Along with procurement
shall widen the scope of reforms, the internal control system Termination of programs no
the evaluation of the major of government entities is being longer delivering intended outputs
programs or projects under strengthened to reduce waste and and outcomes;
the ZBB approach to build up corruption. The DBM, in partnership
capacity, and to institutionalize with the Office of the President-Internal Holding of the funding
program evaluation in the Audit Office has issued the National for some programs pending
government. Guidelines on Internal Control removal of bottlenecks in project
System (NGICS). The NGICS serves implementation and procurement;
as a guide to departments/agencies in
redesigning, installing, implementing Expansion of well-performing
and monitoring their respective programs to alleviate or mitigate
ICS, taking into consideration the critical gaps in social and economic
requirements of their organization and services;
operations. A government Internal
Audit Manual (PGIAM), consistent Recommendation on the
with the NGICS, will soon be finalized implementation of difficult
in order to assist the government in reforms in GOCCs;
establishing fully functioning internal
audit offices in the public sector. Stricter controls in the use of
lump-sum funds following master
The government will find more ways to plans and government priorities;
further strengthen public expenditure and
management with the following
expenditure reforms and initiatives: Deactivation of selected
agencies and GOCCs.
7. Zero-Based Budgeting (ZBB)
Approach. Anchored on the good In succeeding budget processes,
governance thrust of the Aquino the government shall widen the
administration, the Department of scope of the evaluation of the major
Budget and Management (DBM) led programs/projects under the ZBB
the review and evaluation of ongoing approach to build up capacity, and to
programs and projects through the institutionalize program evaluation in
ZBB approach in preparing the 2011 the government.
Budget. Complementing the MTEF

8. Transparency and in the PFM system will make it
Accountability Safeguards in the more transparent, accountable,
Budget Process. The overarching and performance-oriented. A
goal is to enhance transparency Memorandum of Agreement (MOA)
and enforce accountability has been executed between the DBM,
in government operations by Commission on Audit (COA) and
incorporating general and BTr to develop the GIFMIS.
special provisions in the General
Appropriations Act (GAA). Under 10. Contingent Liability
the 2011 GAA, all departments Management (CLM). Considering
and agencies, including those the fiscal impact of realized contingent
enjoying fiscal autonomy, are liabilities (CL) from existing BOT and
required to post their approved GOCC projects that are guaranteed
budgets on their websites and the by NG, a joint ICC-DBCC resolution
status of their programs/projects will be issued to strengthen CLM
starting 2011. Special provisions through the preparation of the CLM
in the budgets of agencies and Plan by implementing agencies,
GOCCs with key programs and training for value analysis/value
projects require the posting of the engineering and CL assessment,
details of program beneficiaries evaluation by the DOF of CL for
and locations of projects on their every financing/procurement option,
websites for better information and full disclosure of required budget
and appreciation of the public. for CL that will become real liabilities
This practice also allows the public and will thereby need funding.
to verify agency outputs vis--vis
targets. 11. Timely Approval of the Annual
Budget. Addressing the urgent needs
9. Public Financial Management of agencies in a timely and predictable
(PFM) and the Government manner is the main reason that the
Integrated Financial Management government pushes for the passage
Information System (GIFMIS). and approval of the GAA before
This initiative aims to harmonize the fiscal year starts. To be able to
and integrate the budgeting, do this, the government revised its
accounting, and auditing systems budget schedule in anticipation of
of the government. Reforms early budget preparation activities to
Table 2.5 Selected Fiscal, Monetary, and External Medium-Term Targets: 2011-2016
2011 2012 2013 2014 2015 2016
Fiscal Balance (% of GDP) -3.2 -2.6 -2.0 -2.0 -2.0 -2.0
Inflation rate (%) 3.0-5.0 a/ 3.0-5.0 b/ 3.0-5.0 b/ 3.0-5.0 b/ n.a. n.a.
Exports (US$Bn) c/ 55.3 55.8 62.5 71.3 81.3 94.3 109.4
Growth rate (%) 9.0 10.0 12.0 14.0 14.0 16.0 16.0
Imports (US$Bn) c/ 71.5 72.1 85.1 100.4 118.5 141.0 167.8
Growth rate (%) 17.0 18.0 18.0 18.0 18.0 19.0 19.0
a/ Approved under DBCC Resolution No. 2009-10 dated 27 November 2009.
b/ Approved under DBCC Resolution No. 2010-3 dated 09 July 2010. The BSP shifted from a variable annual
inflation target to a fixed medium-term inflation target of 4 1 for 2012-2014.
c/ Approved by the Monetary Board on 24 March 2011.
give ample time for the DBM and under GOCC charters, and under
the agencies to conduct consultations BOT or PPP arrangements, should
with sectoral groups, civil society be subject to the rigid test of project
organizations (CSOs), and Regional viability and procurement processes
Development Councils (RDCs). The and conducted with the highest
new schedule, coupled with improved standards of transparency. During
budget documents submitted to the project evaluation process, the
Congress, will facilitate the budget extent of contingent public exposure
legislation process, hence ensure to liability should be clearly identified
timely enactment of the annual and appropriate allocations in the
budget. budget should be made in future years.
12. Rationalization of GOCCs Monetary Policy and

and GFIs. To better streamline the External Sector Reforms
budgetary support given to GOCCs/
GFIs, the government has embarked Monetary policy will remain
on instituting reforms to reduce their committed to the achievement of low
Monetary policy will remain financial vulnerability and improve and stable inflation that is conducive
committed to the achievement service delivery. The DOF and the to a balanced and sustainable
of low and stable inflation that DBM are collaborating in the passage growth of output and employment.
is conducive to a balanced and of a law to strengthen oversight Monetary authorities will be alert to
sustainable growth of output and functions on GOCCs/GFIs, and signs of emerging inflation pressures
employment. to create a Government Corporate to consolidate the hard-won price
Council that will effectively manage stability that has contributed to
This stance entails continuous and supervise the operations of these policy predictability and enabled
macroeconomic surveillance entities. Administrative and legislative households and businesses to make
efforts for a more effective measures will also be proposed to better informed decisions. This stance
management of risks. At the amend or restructure GOCC charters. entails continuous macroeconomic
same time, monetary authorities A review of the compensation granted surveillance efforts for a more
will continue to improve their to board members, officers, and effective management of risks. At
communication of policy employees of GOCCs and GFIs will the same time, monetary authorities
intentions and actions. also be undertaken to control costs will continue to improve their
of personal services in GOCCs and communication of policy intentions
make compensation equitable relative and actions.
to that in the National Government.
In recent years, monetary authorities
Debt Management Reforms have implemented a number of
reforms to enhance the effectiveness
Reforms in the management of debt of the monetary policy framework. In
must also be implemented. A dedicated 2006, the way the inflation target was
unit in the DOF needs to be set up to arrived at was changed from specifying
consider more aggressive options such a range to specifying a point with a
as debt exchanges and swaps at the most tolerance interval which effectively
opportune times to optimize savings. widened the BSPs target band. A
There needs to be a greater diversification broader target band provides added
of modes, instruments used, and currency flexibility to monetary authorities in
mix, as well as more innovative terms steering inflation, particularly in the
and features. domestic setting where consumer
prices are subject to large supply
Likewise, all types of projects funded shocks because of the sizeable share
from borrowing, whether these of food items in the consumer basket.
are government-to-government The economic policymakers also
arrangements, automatically guaranteed announced in 2010 the shift to a fixed

medium term inflation target from a regulatory, and fiscal policies was critical
variable annual inflation target. The to the restoration of global financial
adoption of a fixed medium-term stability. This, in turn, paved the way
inflation target aims to promote a for business confidence to improve and
long-term view of inflation, help better ultimately, for economic recovery to take
anchor inflation expectations, and root. Interaction of different policies is
support consumption and investment likely to remain the new modus operandi
by fostering greater predictability in for economic policy markers. In this
economic decisions (Table 2.5). regard, promoting closer coordination
of macroeconomic and financial sector
The monetary authoritys reform policies could be explored, including
agenda will focus on improving the through a wider representation in the
institutional set-up and fine-tuning Financial Sector Forum (FSF) . 6
the procedures of inflation targeting.
Key measures to be pursued for On the external sector, policymakers will
more effective inflation management continue to adopt appropriate measures
include the following: that will cushion the economy from
external shocks as well as ensure the The monetary authoritys reform
a. Given the interdependent real health of the countrys external payments agenda will focus on improving
and financial markets across the position and the sustainability of its the institutional set-up and fine-
globe and the risks involved, the external debt over the medium-term. tuning the procedures of inflation
BSP shall pursue the expansion of its targeting.
monetary policy toolkit to enhance The monetary authorities will continue
the flexibility and efficiency of its to adopt a flexible exhange rate policy to
monetary operations with a view help the economy to be better insulated
to safeguarding both price and against external shocks.
financial stability.
The foreign exchange regulatory
b. Pursuant to the provisions of framework will be further reviewed to
RA 7653, the monetary authorities keep it responsive to the needs of an
will request the full capitalization expanding and increasingly integrated
of the BSP to ensure that financial economy. Since 2007, the monetary
losses from time to time do not authorities have undertaken four major
deter the BSP from fulfilling its phases of foreign exchange reforms. The
mandate of maintaining price reforms brought greater access to foreign
stability. A bigger capital base exchange resources for trade, investment
will enhance the BSPs financial and other foreign transactions. The
autonomy and credibility, giving measures also facilitate the diversification
more confidence to the market. of investment portfolios and help reduce
the economys vulnerability to shocks.
Enhancing the link to financial
stability. The economic downturn The countrys external debt shall be
resulting from the recent global maintained at more manageable and
financial crisis brought to light the sustainable levels. This shall entail
importance of policy coordination in appropriately designing the external debt
promoting macroeconomic stability. structure to minimize risks emanating
The close coordination of monetary, from currency and maturity mismatches.
6
The Financial Sector Forum (FSF) in an interagency body composed of the BSP, Securities and Exchange
Commission (SEC), Insurance Commission (IC), and the Philippine Depository Insurance Corporation
(PDIC). The FSF principally provides an institutionalized framework for coordinating the supervision and
regulation of the financial system, for strengthening the exchange of information among the different regulators,
and for the promotion of better consumer protection.
With respect to the NG, it will review
the countrys sovereign bonds and debt
profile to identify which instruments
shall be eligible for its bond exchange
program. This program aims to boost
liquidity sourced from longer-dated
securities and to provide long-term
financing for government initiatives
promoting PPP for infrastructure and
economic development.
The monetary authorities will also

endeavour to maintain the external
debt stock and the external debt service
burden at sustainable levels. This will
entail continuing the comprehensive
and regular monitoring of the level
The monetary authorities will and maturity profile of the countrys
continue to adopt a flexible external debt and the conduct of debt
exchange rate policy to help the sustainability assessments.
economy to be better insulated
against external shocks. Complementing the sound management
of external debt level, the monetary
authorities will also build cushions
against shocks by promoting an adequate
level of international reserves.
Furthermore, policymakers will need

to focus on leveraging remittances
as a tool for economic development.
While remittances are private transfers,
the government can ensure that the
policy environment is conducive to
the use of remittances for investment
in well-considered financial products,
in productive activities such as
entrepreneurial undertaking as well as in
better housing, education, and healthcare
for remitters and their beneficiaries.
Improving the financial education of
the overseas Filipino community and
implementing measures to further
promote the flow of remittances through
the financial system would help catalyze
the developmental role of remittances.

Sardines factory, Zamboanga City
Photo courtesy of: Bangko Sentral ng Pilipinas
03 Competitive
Industry &
Services
Sectors
Competitive Industry and Services Sectors 61
Competitive Industry &
Services Sectors
Several measures of competitiveness reveal fundamental weaknesses in major
development aspects compared to the rest of the world. Compared with its
neighbours, the countrys economic performance in terms of investments, exports
and competitiveness is unsatisfactory and need to be reversed. The Philippine
economy over the past years has been characterized by a reduced share of
manufacturing sector in the countrys gross domestic product (GDP) and declining
gross domestic investment rate.
Enabling the industry and services sectors to contribute significantly to economic

growth and employment requires addressing a number of constraints to their
development. Strategies shall therefore be pursued to help raise the competitiveness
of industries by improving the business environment; raising productivity and
efficiency and inculcating quality consciousness among manufacturers and
producers to offer quality goods and services comparable with global brands.
Business competitiveness will be enhanced by improving governance, strengthening

economic zones, and strengthening national brand identity/awareness. To
increase productivity and efficiency, government shall focus interventions on key
priority areas, provide firm level support to MSMEs, increase market access,
expand industry cluster development and intensify the culture of competitiveness.
Proactive measures to empower consumers, promote competition and enforce
trade regulations shall also be pursued.
By addressing the countrys problem of environment, (b) increased

low competitiveness, this Plan aims to productivity and efficiency; and (c)
promote higher growth in per capita GDP enhanced consumer welfare.
and boost employment. The focus shall be
to enable the industry and services sectors For a better business environment,
to contribute to massive job generation, government and the private sector
provide opportunities for Filipinos to shall work to improve governance,
rise above poverty, and ultimately offer a as well as investment promotion
meaningful choice for Filipinos to pursue areas and amplify a National Brand
gainful employment here or abroad. The and Identity Awareness. Business
Plan shall adopt a deliberate, focused competitiveness will be enhanced by
approach that addresses the countrys promoting a consistent, predictable,
business environment, anchored on and responsive policy environment,
investments in human capital and streamlining bureaucratic procedures
implementation characterized by a and fostering transparency,
back to basics approach coupled with promoting e-commerce and ICT-
innovation and whole of government as enabled automation, and encouraging
underlying principles. partnerships with the private sector.
The system of licensing, registration,
The chapter focuses on three medium- and issuance of permits shall be
term goals: (a) improved business improved to reduce the cost of doing

business. To promote investments, Program interventions shall be supported
government shall give priority to to develop the core values needed to form
key policy concerns, namely: labor, an enterprising nation.
telecommunications, transport
(aviation and domestic shipping), The final key strategy is inculcating
energy, peace and order and the quality-consciousness among
rule of law. A national branding or manufacturers and producers to offer
marketing awareness campaign will quality goods and services comparable
be launched to bring pride in quality with global brands. Consumer
Philippine-made products and to give expectations shall be promoted as the
a distinct identity to the country as a impetus for suppliers to deliver quality
source of products that are valued goods and services that give value for
worldwide. money. The concerns of both businesses
and consumers shall be balanced
To increase productivity and efficiency, through proactive measures to empower
government shall give priority to consumers, promote competition, and
the development of areas that have enforce trade regulations. Government
the highest growth potentials and shall: (a) promote consumer education
generate the most jobs. These include: and consumer advocacy; (b) intensify
tourism; business process outsourcing consumer protection and trade
(BPO); mining; agri-business and regulation; and (c) develop product and
forest-based industries; logistics; service standards. In addition, the entire
shipbuilding; housing; electronics; supply chain shall reduce production and
infrastructure; and other industries distribution cost particularly on basic and
with high growth potential. Likewise, prime commodities
the government will also increase its
market access and further promote
Philippine goods and services abroad. Assessment and
A culture of competitiveness shall Challenges
be intensified, whereby the countrys
human capital shall be developed Competitiveness
through market-sensitive education Competitiveness indicators have for
and training. Government shall work some time now been used to measure the
to promote mutually agreed work countrys business landscape. From 1994
arrangements between employers and to 1999, the Philippines ranked between
the labor sector and to strengthen 32 to 35 in the International Institute for
tripartite councils to achieve Management and Development (IMD)
industrial peace. More importantly, Global Competitiveness Report but
an entrepreneurial culture will be slipped to 49 from 2000 to 2007.
fostered by encouraging Filipinos to
invest in their own businesses and Several measures of competitiveness
become successful and innovative reveal weakness in major development
entrepreneurs. A two-pronged aspects compared to the rest of the world.
approach shall be adopted, consisting In the World Economic Forum (WEF)
of firm-level assistance to potential/ Global Competitiveness Index Ranking,
new and existing micro, small, and the Philippines ranked 87th out of 133
medium enterprises (MSMEs) countries, and last among the ASEAN-6
and the use of the industry-cluster subset of countries for the period
approach. Government shall promote 2009-2010. In specific categories, the
sustainable livelihood and micro Philippines ranked 113th in institutions;
enterprise development, harnessing 113th in labor market efficiency; 99th in
the Overseas Filipinos (OFs) innovation; and 98th in infrastructure.
community as a source of capital.

In 2009, the Philippines ranked 43rd out of Aside from cumbersome business
57 countries and last among five ASEAN procedures and high cost of power,
members; next to last in infrastructure; inefficient transport network raises
and 51st in economic performance in the production cost, all causing a higher
IMD Global Competitiveness Report; cost of doing business. Infrastructure
and placed 139th out of 180 countries and communication problems also
(6th among the ASEAN-6) in the hinder access to raw materials and
Transparency Internationals Corruption distribution of goods and services to
Perception Index. In 2010, the country consumers.
ranked 144th among 183 countries and
also last among the ASEAN-6 in the The Doing Business survey of the
International Finance Corporation/ IFC/WB also consistently identifies
World Banks (IFC/WB) Doing Business the high cost of doing business in
2010 Report. 1 the Philippines as a major obstacle
to competitiveness. (Table 3.1). The
Compared with its neighbors, the IFC/WB Doing Business Report
countrys economic performance in 2011, on the other hand, reported
Several measures of terms of investments, exports, and the 148th ranking of the Philippines
competitiveness reveal competitiveness is unsatisfactory and in terms of ease in doing business, a
fundamental weakness in major needs to be improved. Over the past finding related to the difficulties of
development aspects compared years, the Philippine economy has been transacting with the local government
to the rest of the world. characterized by a reduced share of the units (LGUs) and national agencies
manufacturing sector in the countrys in terms of length of time, steps,
GDP and declining gross domestic signatories, costs and other indicators.
investment rate. The country continues There is broad agreement that the
to lag behind its neighbors in terms of process of applying for a business
foreign direct investments. (FDI). The renewal registration is a long, difficult,
Arangkada Philippines 2010 report noted and tedious process. Starting a
that inflows of FDI into the Philippines business in a Philippine city involves
were lowest among six ASEAN countries, an average of 15 procedures, takes
and that many multinational firms 38 days, and costs 29.7 percent of
not already present in the Philippines income per capita. The country was
bypassed the country.2 listed among the countries with high
number of procedures for starting a
In the 2010 IMD Global business, although wide differences
Competitiveness Report, the countrys exist across different Philippine cities3.
overall infrastructure quality ranked
below that of Singapore, Malaysia, and Measured competitiveness affects
Thailand and was closer to Indonesia the countrys capacity to attract
and Vietnam. The inadequate and poor trade and investments. The economic
quality of infrastructure diminished situation remains a challenge for
the countrys overall competitiveness the Philippines, which is seen as
and its capacity to attract investments. falling short of its true potential for
1
The Annual Meeting of the Global Federation of Competitiveness Councils held in Washington D.C. in December
2010 agreed to adopt new paradigm metrics beyond the existing competitiveness reports and surveys. Metrics of
competitiveness substantially different from current indicators will be used in future surveys. The new measures, due by
the end of 2011, will focus on the creation of a sound business environment for firm-level productivity.
2
The same report notes that in the period 1970-2009, Indonesia, Malaysia, and Thailand each received twice or three times
as much FDI as the Philippines, and that only 4.5 percent of total FDI in six ASEAN countries came to the country.
3
Such variations could be due to differing procedures and practices at the local government level, differential performance
of local branches of national agencies, and variations in local taxes and fees.

Table 3.1 Cost of Doing Business Indicators
Country Number of start- Time to start a Cost to register Procedures to Time to enforce a Rigidity of
up procedures business (days) business enfore a contract contract (days) employment
index: 0 (less
rigid) to 100
(very rigid)
(% of GNI pc)
2004 2009 2004 2009 2004 2009 2004 2009 2004 2009 2004 2009
Philippines 15 15 60 52 25.4 28.2 37 37 862 842 29 29
PR China 13 14 48 37 15.9 4.9 35 34 406 406 28 31
Malaysia 9 9 30 11 25.1 11.9 30 30 600 585 10 10
Hong Kong 5 3 11 6 3.4 1.8 24 24 211 280 0 0
Indonesia 12 9 151 60 131 26 39 39 570 570 40 40
S Korea 10 8 17 14 15.7 14.7 35 35 230 230 27 38
Singapore 7 3 8 3 1 0.7 21 21 120 150 0 0
Thailand 8 7 33 32 6.7 6.3 35 35 479 479 11 11
Vietnam 11 11 56 50 30.6 13.3 34 34 356 295 33 21
Source: World Bank, Doing Business 2005 and 2010 (http://www.doingbusiness.org)
attracting both domestic and foreign and outdated or inadequate. The costs of
investment, given its human, natural, ISO certification can be borne only by
and capital endowments4. the more liquid traders and producers.
Policies that distort competition are With tariffs reduced, difficulties

the main impediments to economic experienced by manufacturers, exporters/
growth. Protectionist paradigms traders will increasingly pertain to
were embodied in flawed policies technical barriers such as standards and
manifested through market power conformity assessment. Standardization,
or the extent to which a firm can a component of the technical
influence the price of an item by infrastructure, protects consumers
exercising control over its demand, and accelerates product integration
supply or both, barriers to entry, and into the global trading system.
rent-seeking practices. Clearly, some Other components of the technical
businesses do not get level playing infrastructure, such as metrology,
fields. accreditation, certification and testing,
are dispersed with different agencies
Philippine products and services face involved in conformity assessment,
some challenges in the international spreading government resources thinly.
market. For instance, there is lack of A robust and harmonized technical
information on the standards of other infrastructure would not only help the
countries. A certification system for country overcome trading barriers and
exported products is still not fully protect the buying consumers, but also
in place. Laboratory and common cut redundant overhead costs due to
service facilities are either incomplete many regulatory bodies.
4
See, for example, the World Banks Country Assessment Report 2005.

Exports of Goods and crisis, actually contracting by 2.19
Services percent relative to 2007. As the global
recession dragged on in 2009, export
If not for the global economic crisis, the value fell drastically, contracting by
last five years would have been a favorable 16.1 percent compared to 2008. In
period for exports. The countrys exports 2010, however, exports began to
grew by an average of 10.65 percent from rise again, surging ahead with two-
2004 to 2007, supported by continued digit growth rates in line with the
strong growth in global trade. The expectations of global economic
expected negative effect of the 9/11 recovery (Table 3.2).
terrorist attacks in 2001 was mitigated by
the renewed confidence on safer trade as For 2010, merchandise exports
ensured by more stringent export regimes amounted to US$50.7 billion,
of the European Union (EU) and the growing 34.8 percent over exports in
United States (US). 2009. This was supported by increases
in exports of manufactured goods
Export growth peaked in 2006, when and total agro-based products, both
exports surpassed targets and grew by at about 36 percent. The countrys
18.3 percent, driven by rising sales to the top ten export commodities also
countrys traditional trading partners, registered increases particularly
the US and Japan, as well as China, coconut oil, communication/radar
the Netherlands, Germany, Singapore, and semiconductor devices. Exports
Malaysia and Korea. This pace could not registered positive growth with the
But for the global economic be sustained in the following years, owing recovery of global trade.
crisis, the last five years would to the slowdown in the US market, high
have been a favorable period for production costs, particularly in energy The movement of Philippine
exports. and logistics, and a strong peso. electronic exports has followed
global trends. Electronic products
In the fourth quarter of 2008 the sector still account for the bulk (61%) of
felt the effects of the global economic Philippine merchandise exports
Table 3.2 Export Performance: 2004-2010

FOB Value (US$ billion) Growth Rate (%)
2004 2005 2006 2007 2008 2009 2010 2004 2005 2006 2007 2008 2009 2010
Goods &
services
Plan target 43.1 47.4 52.3 58.2 65.4 74.3 84.3 10 10 10 11 12 12 13
Actual 42.8 44.8 52.9 59.2 57.9 48.6 63.9 10.6 4.6 18.3 11.9 -2.2 -16.1 31.5
Percent to 99.3 94.5 101.3 101.9 88.6 65.4 75.8
target (%)
Of which:
goods
Plan target 39.8 43.8 48.2 53.5 60.0 67.1 75.8 10 10 10 11 12 12 14
Actual 38.8 40.3 46.5 49.5 48.3 37.6 50.7 9.8 3.8 15.6 6.4 -2.5 -22.1 34.8
Percent to 97.5 91.9 96.5 92.5 80.4 56.1 66.9
target (%)
Source: Bangko Sentral ng Pilipinas with basic data from the National Statistics Office

during the period. Semiconductor Typical outsourced services include
shipments, making up 77 percent of the operation of human resources
electronics exports, grew 53 percent departments, telephone call centers,
in 2010. distribution centers, research needs,
computer departments or services,
The countrys traditional trading and the design and/or engineering
partners, Japan and the US, remain as of components or end-products. The
the countrys top export destinations, Philippines introduced BPO services in
followed by Singapore, China, the country through the call centers or
Hong Kong, Germany, Netherlands, voice services. However, the industry has
Republic of Korea, Thailand and evolved to higher value, non-voice BPO
Taiwan in the top ten destinations. functions such as finance & accounting,
human resource and administrative
Exports of services meanwhile grew services, and transcription services. The
by 150 percent from US$4 billion years 2007 to 2008 marked the turning
in 2004 to US$13.2 billion in 2010. point and remarkable growth in the back
Other business services, travel, and office and knowledge process outsourcing
computer and information services (KPO) such as research, analytics and The BPO industry is
account for 48 percent, 21 percent, legal services; with more than two-fold acknowledged as a driving
and 16 percent, respectively, of total growth in revenues from US$400 million force for economic growth and
services exports. to US$830 million. employment in the country.
Globally, the evolution in technology, In 2010, the BPO industry has attained
prioritization of business strategies, its US$9 billion revenue target while
migration, innovation and trends, employing about 530,000 full-time
environment-consciousness, and employees (FTEs) (Figure 3.1). The US
value for money have influenced the remains the prime source for outsourcing
emergence of technology based sectors, activities and opportunities for the
strengthened hospitality services and Philippines as well as the major supplier
increased the capability for borderless of outsource work to the European and
transactions. The Government has been Japanese companies.
vigilant in the growth of these industries,
two of which are the BPOs and tourism. Because of its ready supply of
professionals equipped with the required
Business Process Outsourcing language skills, cultural affinity with the
(BPO) US and UK markets, and strong customer
The BPO industry is acknowledged

as a driving force for economic Figure 3.1 BPO/IT Outsourcing: 2004-2011
growth and employment in the
country. Two distinct drivers largely
contributed to the growth of BPO
demand: (a) increasing globalization
which led to the lowering of barriers
to trade that allowed companies to
explore alternative locations to lower
operating costs without sacrificing
the quality of service; and (b)
advancements in information and
communication technology (ICT)
which enhanced service delivery
using the internet in a cost efficient
and timely manner. Source: Business Processing Association of the Philippines

service orientation, the Philippines has The National Capital Region
gained considerable traction as a BPO dominantly houses majority of the
destination. For the years 2007, 2008 and BPO companies in the country. In
2010, the country has been recognized by 2009, the government and the private
the National Outsourcing Association sector collaborated on a project
of UK and cited it as the Offshoring dubbed as the Next Wave Cities
Destination of the Year. wherein focus will be directed on
locations with high-growth potential
In 2010, the Philippines posted almost in the BPO services. Ten cities were
US$5.70 billion of pure voice-based identified namely: Davao; Santa Rosa,
revenues, which is even higher than Laguna; Bacolod; Iloilo City; Metro
India. Thus, in stand-alone voice Cavite (i.e. Bacoor, Dasmarias,
business, the country ranks number one Imus); Lipa, Batangas; Cagayan de
globally. However, India continues to be Oro; Malolos, Bulacan; Baguio City,
the leader in the global BPO industry and Dumaguete. In 2010, five cities
mainly with its strong presence and are being eyed as BPO-potential
capacity in information technology (IT) destinations, namely: Dagupan,
In the midst of global and such as software development. On the Legaspi, Metro Subic, Metro Naga,
national economic, political and supply side, while the country produces and General Santos.
social upheavals, the tourism 480 thousand graduates per annum,
sector remained resilient. the number of available workforce is Tourism
undersized compared to Indias 3 million
talent pool. The country would need to From 2004 to 2009, the average
enhance the capability of its professionals shares of tourism in GDP and in
in the IT sector to capture opportunities total employment were 6.12 percent
from Indias BPO market in the IT sub- and 9.68 percent, respectively. In the
sector. midst of global and national economic,
political and social upheavals, the
Aside from labor resource, the country tourism sector remained resilient.
also needs to develop suitable locations Visitor arrivals in the past six years
to ensure that BPO investments and grew at an annual average of 8.21
expansions can be accommodated. Physical percent from 2.29 million in 2004
and IT infrastructures are key solutions to to 3.01 million in 2009. The threat
address growth of the industry. of terrorism and financial crisis has
Table 3.3 Percent Share of Tourism to GDP, Employment and Total Exports
Vis--vis Visitor Arrivals Globally and in the Asia Pacific: 2004-2009
Tourism Contribution Visitor Arrivals Tourism Receipts
% Share % Share % Share to
% Share to % Share to
Year to National Growth Rate to Global Asia and the Growth Rate
GDP Total Exports
Employment Arrivals Pacific
2004 6.17 9.62 20.1 0.30 1.61 30.7 4.25
2005 6.16 9.55 14.5 0.33 1.71 12.3 3.98
2006 6.15 9.54 8.4 0.34 1.71 23.1 5.18
2007 6.18 9.66 8.7 0.34 1.70 7.4 4.31
2008 6.05 9.77 1.5 0.34 1.71 -17.87 3.62
2009 6.03 9.96 - 3.9 0.34 1.67 - 7.9 4.09
Average 6.12 9.68 8.21 0.33 1.69 7.96 4.23
Sources: National Statistical Coordination Board, Department of Tourism and World Tourism Organization

not dampened the industry as it economy grew at an annual average of
demonstrated moderate improvement 4.94 percent during the same period.
in its market share to the global and
Asia and the Pacific arrivals from 0.30 These receipts have driven private and
percent in 2004 to 0.34 percent in foreign investments in the accommodation,
2009 and from 1.61 percent in 2004 transportation, recreation, entertainment
to 1.67 percent in 2009, respectively and miscellaneous services sectors of the
(Table 3.3). tourism industry. Tourism is regarded as
the fourth largest contributor to foreign
Tourism receipts from inbound exchange receipts. The top three are
expenditure of foreign visitors from electronics and semiconductors, overseas
2004 to 2009 also expanded at an Filipino remittances, and BPO.
average of 7.96 percent from US$1.99
billion in 2004 to US$2.23 billion Outside Manila, the most frequented
in 2009. Consequently, the share of destinations visited by foreign tourists
tourism receipts to total exports in the included: Boracay Island, Tagaytay,
Table 3.4 Visitor Arrivals to ASEAN Countries: 2004-2009 (in 000)

Countries 2009 2008 2007 2006 2005 2004
Malaysia 23,646 22,052 20,973 17,547 16,431 15,703
Thailand 14,146 14,584 14,464 13,822 11,567 11,737
Singapore 7,488 7,7778 7.957 7,588 7,079 6,553
Indonesia 6,324 6,234 5,506 4,871 5,002 5,321
Vietnam 3,747 4,236 4,229 3,584 3,468 2,928
Philippines 3,017 3,139 3,092 2,843 2,623 2,291
Cambodia 2,046 2,001 1,872 1,591 1,333 987
Source: World Tourism Organization
Table 3.5 Philippines Travel and Tourism Competitiveness in comparison with selected ASEAN Countries, 2009
Country Regulatory Framework Business Environment and Infrastructure
Prevalence Property Time Cost to Quality Number of International Quality Quality of
of Foreign Rights Required Start a of Air Operating Air of Ground
Ownership to Start a Business Transport Airlines Transport Roads Transport
Business Infra Network Network
Cambodia 75 118 124 124 87 75 86 80 116
Indonesia 24 117 122 114 75 37 57 105 51
Malaysia 67 38 33 73 20 27 33 17 21
Philippines 98 92 114 94 89 48 76 94 115
Singapore 3 4 4 8 1 28 2 3 4
Thailand 89 61 90 39 28 13 26 32 31
Vietnam 104 75 112 77 92 39 91 102 58
Source: World Economic Forum, and Travel and Tourism Competitiveness Report 2009

Cebu, Laguna, Batangas, Cavite, Bohol, international chains and the network
Pampanga, Palawan and Davao. Among of accommodation operators. The
the activities undertaken by most tourists time and cost needed to start a tourism
during their visit in the country were enterprise also deserve attention.
shopping for local crafts and delicacies;
sightseeing, beach holiday, scuba diving, The Philippines contributes actively
visiting friends and relatives, honeymoon; to global policy-making as well as
attending business meetings; and looking observes and promotes international
for investment opportunities. Many agreed principles and norms in the
tourists also engaged in various cultural, domestic setting. As global and
nature and adventure experiences to regional economies become more
complement, perhaps, their medical and integrated, internal policy decisions
health activities. In 2010, foreign tourists will inevitably influence decisions and
spent an average of US$83.93 per day policies of other countries, and vice-
and stayed an average of eight nights versa. This reality enhances internal
during their visit. coordination and cooperation
mechanisms and external country-
However, the Philippines ranked only team representation protocols among
sixth in attracting foreign tourists vis-- government instrumentalities and
vis its ASEAN neighbors, whose market various stakeholders in society. An
shares have rapidly grown, while that outward-looking orientation must
of the Philippines expanded modestly. be complemented by an alignment
Visitor arrivals in Malaysia in 2009 of laws and regulations that facilitate
totaled 23 million; Thailand, 14 million; the expected benefits and lessen any
Singapore, 7.5 million; Indonesia, 6.3 adverse effects of interfacing closely
million; and Vietnam, 3.7 million. (Table with the world economy. Internal
3.4). processes and legal framework must
be strengthened to take advantage of
More work is needed to enhance the opportunities presented by the global
countrys competitiveness as a tourist economic environment. At the same
destination. The countrys attractiveness time, small and medium enterprises
hinges on the availability of support need to be informed of how these
infrastructure (air, land and water), policies will benefit them in trading
a healthy business environment, and their goods in the international
transparent and proactive rules and community.
regulations. The WEF 2009 Report
ranked the Philippines lowest among
comparable ASEAN neighbors in terms
of the number of airlines with scheduled
flights originating in the country and
the availability of good air connections
to overseas markets to provide access for
more foreign visitors. The Philippines
also lagged behind in terms of quality of
roads and ground transportation network
that offers efficient accessibility to major
tourism centers and tourist attractions
(Table 3.5).
Restrictions on foreign ownership

of companies and property rights
remained a handicap in attracting
tourism investments, especially from

Investment electricity, accounted for more than half
of the total approved investment. The top
Total approved local and foreign four sectors (manufacturing, electricity,
investments increased from 2004 to finance and real estate, and private
2008 but declined in 2009. The top services) account for 78 percent of the
two sectors, i.e. manufacturing and total (Table 3.6). In 2004, the mining
Table 3.6 Total Approved Investments of Foreign and Filipino Nationals by Industry:
2004 2010 (in million PhP)
Industry 2004 2005 2006 2007 2008 2009 2010
Agriculture 212 770 4,734 1,856 2,498 2,873 2,272
Communication - 2,079 47,042 14,222 2,186 6 -
Construction 1,140 83 3,857 14,090 216 179 1,080
Electricity 8,564 21,659 45,403 139,078 131,923 32,296 189,920*
Finance & R. Estate 7,158 10,019 28,833 54,927 114,088 89,111 72,108
Gas 106,521 269 - 561 - 17 -
Manufacturing 54,330 150,161 151,984 94,677 75,518 106,300 215,153
Mining 1,512 8,294 16,147 13,776 48,269 2,019 8,108
Private Services 41,006 15,344 29,105 37,631 71,417 29,353 40,255
Storage 388 26 35 1,340 1,059 - -
Trade 517 357 26,332 780 531 2,155 1,461
Transportation 467 22,172 3,530 10,329 16,516 3,830 12,248**
Water - - - 2,537 - 45,975 -
Total 221,815 231,233 357,002 385,804 464,221 314,114 542,605
Source: National Statistical Coordination Board
* Data lumped for Electricity, Gas and Water
**Data lumped for Transportation, Storage and Communication
Table 3.7 BOI-PEZA Approved Investments: 2009-2010

BOI PEZA TOTAL
% % %
2010 2009 2010 1/ 2009/2 2010 2009
Change Change Change
Project Cost
302,100 124,171 143.29 204,395 175,365 16.55 506,494 299,537 69.09
(P)
Foreign (P) 22,329 10,397 114.76 142,167 103,421 37.46 164,496 113,818 44.53
Local (P) 279,771 113,775 145.90 62,227 71,944 (13.51) 341,998 185,719 84.15
No. of
246 248 (0.81) 518 502 3.19 764 750 1.87
Projects
Employment 36,751 95,372 (61.47) 84,340 79,435 6.17 121,091 174,807 (30.73)
Source:
Board of Investments and Philippine Economic Zone Authority
1/ Locator investments - PhP 176.753billion; Developers - PhP 27.641 billion
2/ Locator investments - PhP 140.987billion; Developers - PhP 34.378billion

industry was revitalized as the Supreme investments in most sectors
Court ruled on the constitutionality of fluctuating annually.
the Philippine Mining Act of 1995.
From 2004 to 2009, direct investments
A review of share by sector/industry grew by 7.8 percent5, although 2009
shows no trend in increase or decrease saw investment flows decreasing by
of particular sector, with approved 32.3 percent, reflecting the effects
Electronics/Semiconductors Figure 3.2 Investment by Industry Sector in PEZA Economic

42.88%
Basic Metals (Minerals) Zones: 1995-2010 9.29%
Information Technology Services 7.69%
Transport (Shipbuilding, Car Parts, Equipment) 6.78% Other Manufactures
Chemical and Chemical
Electrical Machinery and Apparatus 5.46% Products Garments and Textiles 14.47%
Rubber and Plastic 0.76%
Tourism Products
3.31% 0.99%
Medical, Precision and Optical Instruments 1.40% 2.84%
Medical Tourism 2.11%
Fabricated
Fabricated Metal Products 2.03%
Metal Products
Rubber and Plastic Products 2.03%
Medical Tourism 1.40%
Chemical and Chemical Products 2.11% 0.99%
Garments and Textiles 0.76%
Medical, Precision and
Electronics/
Other Manufactures 14.47%
Optical Instruments
Semiconductors
2.84%
42.88%
Tourism
3.31%
(See separate .TIF file)
Electrical Machinery and
Apparatus
5.46%
Transport
(Shipbuilding, Car
Parts, Equipment)
6.78%
Information Technology
Services
7.69%
Basic Metals (Minerals)
9.29%
Source: Philippine Economic Zone Authority
Table 3.8 Total Approved Foreign Direct Investments by Country of Investor:

Country 2004 2005 2006 2007 2008 2009 2010
Japan 26,596 27,539 20,066 38,587 16,116 70,737 58,333
USA 27,108 14,913 8,199 36,089 19,721 12,947 13.159
Korea 3,260 10,828 4,327 12,076 39,954 9,624 31,182
Netherlands 1,473 19,208 188 14,401 45,354 2,070 36,784
Singapore 1,524 889 396 44,246 6,565 3,468 7,283
UK 1,683 195 5,887 10,182 25,272 3,439 1,065
China (PROC) 127 195 7,935 1,822 2,307 2,392 5,657
Br. Virgin Islands 208 658 450 670 2,111 1,176 7,654
Others 111,916 21,382 18,432 56,010 25,281 15,963 48,098
Total 173,895 95,807 65,880 214,083 182,681 121,816 196,069
Source of basic data: National Statistical Coordination Board
5
Based on compounded annual growth rate

of the global crisis, there were high in the second quarter of 2010. These
hopeful signs of a rebound. In 2010, approved investments generated 121,091
investment commitments from both jobs.
foreigners and Filipinos increased
to PhP542.6 billion compared to By country of origin, the US and Japan
PhP314.1 billion in 2009. More than have been the two top sources of FDI in
60 percent of investments approved the Philippines. In recent years investments
during the period came from Filipino from the Netherlands, the United Kingdom
investors with PhP346.5 billion and South Korea have also increased (Table
worth of pledges. 3.8).
Of the PhP542.6 billion worth of Investments with the Philippine Economic

investment pledges of both foreigners Zone Authority (PEZA) in 2009 posted an
and Filipinos in 2010, 39.7 percent increase of 13.3 percent over the previous
or PhP215.2 billion are intended for year despite the global financial crisis. Direct
projects in manufacturing. Electricity, employment in PEZA zones also grew
gas and water garnered 35.0 percent slightly (by 0.44 percent) notwithstanding
share or PhP189.9 billion, and layoffs in many business establishments in The Philippine MSME sector is
finance and real estate at 13.3 percent the country and worldwide during the same a critical driver for the countrys
or PhP72.1 billion. These industries period. economic growth. However, the
have been consistent recipients growth of the MSME sector has
of investment commitments From 1995 to 2010, investments in not been vigorous enough to
from foreign and Filipino enterprises located inside PEZA- propel the economy.
investors. Potential investments in registered economic zones came mostly
manufacturing as well as in electricity, from the electronics/semiconductor
gas and water increased significantly industry. Locators from the electronics/
compared to finance and real estate, semiconductor sector contributed 42.88
which dropped to PhP72.1 billion percent of total investments in the ecozones.
from PhP89.1 billion. Following this was the basic metal/mineral
industry (9.29%); information technology
Total BOI-PEZA-approved services (7.69%); transport (shipbuilding,
investments for 2010 amounted to car part, equipment) (6.78%) and electrical
PhP506.5 billion, a 69 percent surge machinery and apparatus (5.46%). These
over approvals in 2009 (Table 3.7). This comprise the top five sectors garnering the
was brought about by resurgent investor largest number of investments over the past
confidence, which reached an all time 15 years of PEZAs existence (Figure 3.2).
Table 3.9 PEZA Operating Economic Zones: 2004 2010

Operating Economic Zones 2004 2005 2006 2007 2008 2009 2010
Manufacturing 53 51 53 60 62 63 64
IT 16 28 37 88 112 127 148
Tourism 1 2 5 7 9 12
Medical Tourism Park 1 1 1 1
Medical Tourism Center 1 1 1
Agro-Industrial EZ 6 13
Total Operating 69 80 92 154 183 207 239
% of Growth Over Previous Year 16% 15% 67% 19% 13% 15%
Source: Philippine Economic Zone Authority

The majority of PEZA-registered Opportunities for investments also
enterprises are owned by foreign are attributed to sound policies and
nationals. The Japanese, owning 25.97 reforms to attract investors. Policies for
percent of total PEZA-registered locator investments such as exhibiting sound
enterprises in 2010, top the list of foreign incentives to distinct industry have been
owners. These are followed, in order, by unstable.
Koreans (10.62%), Americans (10.12%),
Singaporeans (3.96%), British (2.99%), Reforms are required to appropriately
Taiwanese (2.23%), Dutch (2.15%), offer incentives to investments in
Chinese (1.77%), Australian (1.69%), sectors that will have high impact
Malaysian (1.39%), German (1.35%), on employment as well as influx of
and various other nationalities (7%). reserves in the country. However, it is
also important that sectors are reviewed
In 2010, the economic zones operating and monitored to determine industry
under PEZA management totaled sectors that should be prioritized in
239 (Table 3.9). In the next six years, providing incentives. Likewise, reforms
initiatives will be pursued to enhance and are necessary to foster public and private
increase the number of economic zones partnerships in boosting investment
following the observed growth patterns. areas, programs and projects.
Efforts shall include exploration of new
areas such as agro-industrial and tourism Micro, Small and Medium
zones, opening to new markets such as Enterprises (MSMEs)
the Middle East, Germany, Australia and
New Zealand, and strengthening priority The Philippine MSME sector is a
markets of Japan, USA and Korea. critical driver for the countrys economic
growth. The sector serves not only as
Since ecozone applications are private potential supplier and subcontractor
sector initiated and market-driven, to large enterprises and exporters but
prospective locators may locate in certain is also a part of the support system for
areas for as long as they meet the criteria logistics services.
stipulated in Section 6 (Criteria for the
Establishment of Other Ecozones) of The The MSME sector accounted for 99.6
Special Economic Zone Act of 1995. percent of total establishments in the
Table 3.10 Micro, Small and Medium Enterprise Profile

Total Micro Small Medium Large MSMEs
2008 Number of 761,409 697,077 58,292 3,067 2,973 758,436
Enterprises
% Distribution 91.6 7.7 0.4 0.4 99.6
2008 Employment 554,4590 1,663,382 1,314,065 418,058 2,149,085 3,395,505
% Distribution 30.0 23.7 7.5 38.8 61.2
2006 Value Added 2,108,546 103,918 431,340 216,685 1,356,603 751,943
(in million pesos)
% Distribution 100 4.9 20.5 10.3 64.3 35.7
2006 Value added per 380,289 62,474 328,248 518,313 631,247 221,452
worker (in pesos)
% of large enterprises 9.9 52.0 82.1
Source: National Statistics Office

country, and contributed 61.2 percent duplication and nonoptimal use of limited
of the countrys total employment resources. Furthermore, lack of awareness
and 35.7 percent of total value-added. for science and technology (S&T) and
However, the growth of the MSME scarcity of S&T human resources are
sector has not been vigorous enough to limits to production optimization.
propel the economy (Table 3.10).
While the value-system of workers and
The size-distribution of firms has employees undoubtedly affects the total
changed little in the past two decades, productivity of firms, low productivity in
with the proportion accounted for by the industry and services sectors may also
medium sized enterprises remaining be due to their inflexible organizational
small. As a result, the countrys industry set-up and processes. Firms cannot easily
structure is often characterized by a adjust to the fast-changing needs and
missing or hollowed middle. demands of their clients, consequently
affecting their level of productivity.
The performance of MSMEs was In addition, the countrys domestic
constrained by various factors. These manufacturing is not strongly linked with
include high cost of doing business, its exports manufacturing compared to its
lack of access to finance and market neighboring countries.
information, and low productivity
and competitiveness. Poor business Employment
conditions are a greater challenge for
MSMEs given their limited resources. Rise in Employment in Industry and
Services
Many are unable to qualify for bank loans
for lack of the necessary track record and In 2008 the number of employed persons
collateral. The lack of credit information increased from about 31.6 million in
also makes it more difficult for banks to 2004 to around 34 million in 20086.
determine MSMEs creditworthiness. This meant almost three million persons
With limited management and financial joined the Philippine labor force over a
capabilities, many MSMEs are unable period of four years.
to respond dynamically to the domestic
and export markets. The agricultural sector continues to
play an important role in employment
MSMEs have a low ability to meet the and in jobs creation as it has employed
threat of local and global competition about 10.6 million Filipinos in 2008. In
because of lack of information needed addition, the fishing sector employed
for market access and business about 1.42 million persons in 2008. Most
environment; failure to attain scale Filipino workers therefore, are still in the
economies needed to produce quality agriculture and fishing sectors while the
goods and services; and the sectors rest are in non-agricultural sectors such
laid-back approach to seeking new as industry and services.
markets and responding to market
needs. Nonetheless, workers and employees
in the industry and services sectors
The low productivity of MSMEs combined outnumber agricultural
can be attributed to the sectors lack workers and comprise more than half of
of access to new technology, weak the employed from 2004 to 2008. The
technological capabilities, and its economic role of nonagricultural workers,
failure to engage in innovation and especially those in the services sector, is
research and development (R&D) therefore crucial, especially in the era of
activities. The result is wasteful the knowledge- and skills-based economy,
6
2009 Yearbook of Labor Statistics.

the most evident local manifestation is The MSME contribution to
the booming outsourcing industry. employment in 2008 totaled 3.4
million. Ranked by subsector,
As of 2010, a total of 38.9 million were wholesale and retail trade contributed
reported to be in the labor force from the bulk of employment at 35.1
among the 60.7 million population over percent, followed by manufacturing
15 years of age. Of the three sectors with 18.7 percent and hotels and
(i.e. Agriculture, Industry and Services), restaurants with 12.46 percent
Services accounts for the biggest share (Figure 3.3).
of total employment (Table 3.11). The
current Plan calls for total employment Among microenterprises, wholesale
to grow by six million by 2016. and retail trade contributed 47
percent of total employment,
Table 3.11 Employment per Major Industry Group

Major Industry Group 2008 2009 2010
Ave Jan Apr Jul Oct Ave Jan Apr Jul p Oct p
ALL INDUSTRIES 34,089 35,061 34,262 34,997 35,508 35,478 36,047 36,000 35,413 36,285 36,489
Agriculture 12,030 12,043 11,846 12,313 11,940 12,072 11,974 11,804 11,512 12,317 12,261
Agriculture, Hunting and 10,604 10,582 10,446 10,841 10,476 10,563 10,505 10,346 10,073 10,835 10,765
Forestry
Fishing 1,426 1,461 1,400 1,472 1,464 1,509 1,469 1,458 1,439 1,482 1,496
Industry 5,048 5,093 4,856 5,088 5,273 5,154 5,394 5,323 5,487 5,391 5,373
Mining and Quarrying 158 166 152 166 177 169 199 193 212 193 197
Manufacturing 2,926 2,894 2,849 2,841 2,947 2,937 3,031 3,009 3,063 2,995 3,057
Electricity, Gas and Water 130 142 134 130 145 160 150 157 137 140 164
Supply
Construction 1,834 1,891 1,721 1,951 2,004 1,888 2,014 1,964 2,075 2,062 1,955
Services 17,011 17,925 17,560 17,595 18,294 18,250 18,680 18,874 18,414 18,577 18,855
Wholesale & Retail Trade, 6,446 6,736 6,635 6,681 6,725 6,901 7,040 7,063 6,885 7,050 7,161
Repair of Motor Vehicles,
Motorcycles and Personal and
Household Goods
Hotels and Restaurants 953 1,010 988 976 1,064 1,012 1,063 1,104 991 1,034 1,121
Transport, Storage and 2,590 2,679 2,660 2,628 2,694 2,735 2,721 2,736 2,741 2,697 2,709
Communications
Financial Intermediation 368 369 337 389 376 375 399 384 383 419 411
Real Estate, Renting and 953 1,064 1,044 1,023 1,090 1,100 1,147 1,120 1,061 1,164 1,243
Business Activities
Public Administration & 1,676 1,749 1,659 1,794 1,772 1,771 1,846 1,823 1,959 1,831 1,771
Defense, Compulsary Social
Security
Education 1,071 1,138 1,157 1,068 1,157 1,168 1,175 1,146 1,156 1,234 1,165
Health and Social Work 392 421 435 408 428 412 450 432 447 456 464
Other Community, Social and 833 877 857 907 876 868 913 950 984 862 855
Personal Service Activities
Private Households with 1,729 1,880 1,785 1,718 2,110 1,908 1,925 2,114 1,804 1,829 1,954
Employed Persons
Extra-Territorial Organizations 1 2 3 3 2 - 2 2 3 1 1
& Bodies
Notes:
1. Details may not add up to totals due to rounding.
2. Based on past week reference period.
3. Industry classification is based on the 1994 Philippine Standard Industrial Classification
p Preliminary
Source of basic data: National Statistics Office, Labor Force Survey

followed by manufacturing with a competencies and qualifications, although
15 percent share, and hotels and two million Filipinos were unemployed.
restaurants with 13 percent. This is The 2006 National Manpower Summit
the same employment pattern for emphasized that unemployment in the
small enterprises with wholesale country arose mainly from a mismatch
and retail trade accounting for 26 between skills needed for available jobs
percent, followed by manufacturing and skills possessed by job-seekers; and a
and hotels and restaurants with geographic mismatch between locations
contributions of 19 percent and 13 of job opening and job seekers. While
percent, respectively. The pattern shortages of skills are evident in certain
is somewhat different for medium occupations and areas in the country,
enterprises, where manufacturing oversupply of other skills are likewise
makes the biggest contribution (31%) observed.
followed by wholesale and retail trade
(14%) and real estate, renting and To date, there are reported shortages in
business activities (12%). This pattern medical and health services, as Filipino
is repeated for large enterprises, nurses are in high demand abroad.
with manufacturing contributing High turnover rates and low hiring Increasing the national
almost 37 percent of employment, rates meanwhile continue to worry awareness of consumer rights,
followed by real estate, renting and stakeholders in the BPO industry. On responsibilities and options for
business activities (21%) and financial the other hand, an oversupply of skills redress encourages a vibrant
intermediation (10%. ) in certain occupations is also reported. sector that will demand better
For instance, the educational system products and services.
A survey by the Bureau of Labor continues to produce large numbers
and Employment Statistics reports of liberal-arts graduates for whom the
that employers have difficulty filling demand is either not encouraging or still
up vacancies because of a shortage to be identified.
of applicants with the right job
Wholesale and Retail Trade 35.1%

Manufacturing Figure 3.3 MSME 2008 Employment Share by Sector 18.7%
Hotels and Restaurants 12.5%
Real Estate, Renting and Business Activities 7.2%
Education Agriculture, Hunting and6.4%
Construction, Electricity, Gas and
Forestry, Water, 1.2%
Financial Intermediation 5.3% 1.25%
1.76% Fishing, 0.5%
Other Community, Social and Personal
Transport,Service
StorageActivities
and 4.5%
Health and Social Work Communications, 2.8% Mining and
2.81% Quarrying, 0.1%
Transport, Storage and Communications 2.8%
Agriculture, Hunting and Forestry Health and Social 1.8%
Construction Other Community, Work, 2.8% 1.3% Wholesale and Retail
Social and Personal
Electricity, Gas and Water 1.2% Trade, 35.1%
Service Activities,
Fishing 4.48%
0.5%
Mining and Quarrying 0.1%
Financial Intermediation,
5.27%
Education, 6.4%
Real Estate, Renting and

Business Activities, 7.2%
Hotels and
Restaurants, 12.5% Manufacturing,
18.70%

In addition, the countrys low labor c. provision of information and
productivity due to mismatched or education to facilitate sound choice
deficient skills relative to available jobs and the proper exercise of rights by
contributes to the low productivity the consumer;
in output of goods and services. This
also affects compensation, since some d. provision of adequate rights and
company owners are unable to raise means of redress; and
wages and salaries owing to missed
revenue opportunities which in turn are e. involvement of consumer
caused by low production. representatives in the formulation
of social and economic policies.
Reports during the consultations for
the DOLE Project Jobsfit 2020 also Empowered consumers are aware of
noted a concentration of hard-to-fill their rights and are informed of fair
occupations in the high-end categories, trade laws. Product quality and safety
such as accountants and engineering standards have become effective
professionals. Hard-to-fill vacancies were stimuli for manufacturers to improve
also noted for associate professionals and their products and consequently
clerks. enhance competition among firms.
Increasing the national awareness
This square pegs-round holes of consumer rights, responsibilities
phenomenon, which has affected and options for redress encourages a
efficiency in the labor market, may be vibrant sector that will demand better
aggravated by the fast-changing demand products and services.
for skills in the global labor market.
In 2007, an Awareness, Knowledge,
Consumer Policy Attitude and Practice Study was
commissioned by the Department
Consumers have a vital role in the of Trade and Industry (DTI) to
economy. When they are empowered, determine the publics concern for
consumers can improve economic their rights and responsibilities as
performance by helping drive consumers. The study showed that
competition, productivity and business half of the respondents were aware
innovation.(OECD Toolkit, 2010) of the programs for consumers and
said these were satisfactory but
In the Philippines, emphasis is made needed improvement. The study
on policies and programs that promote recommended a more creative
consumer welfare and protection. message development, coordination
Republic Act (RA) 7394 or the and closer partnerships with LGUs
Consumer Act of the Philippines states and consumer-advocates in each
the policy of the State to protect the region, strengthening the role of the
interest of the consumer, promote his /her consumer welfare desk/customer
general welfare and establish standards of service in addressing consumer
conduct for business and industry. Thus, complaints, and integration of
Government is mandated to pursue the consumerism in the schools and
following objectives: communities.
a. protection against hazards to health In 2010, consumer complaints

and safety; received by Consumer Welfare Desks
both in government field offices and
b. protection against deceptive, unfair in business establishments reached
and unconscionable sales acts and 75,000, majority of which were
practices; about consumer products and service

warranties, liabilities on products
and services, and product quality
Strategic Framework
and safety. While 99 percent of the
complaints were eventually resolved,
there is a clamor for a shorter The Plan seeks to enable the industry and
resolution period. services sectors to contribute significantly
to economic growth and employment.
Responsibility for developing and This requires interventions that address
implementing consumer policy and the countrys competitiveness by
programmes rests on the National improving the business environment;
Consumer Affairs Council composed increasing productivity and efficiency;
of the DTI, DepED, DOH, DA, and promoting a dynamic consumer
several consumer groups and business sector that demand globally competitive/
organizations, tasked to improve quality goods and services offering best
the management, coordination, and value for money.
effectiveness of consumer programs.
Figure 3.4 Strategic Framework for Industry and Services

Vision management systems throughout
the government shall be adopted.
A globally-competitive and innovative The National Government shall
industry and services sector that strengthen LGUs capacity for good
contributes significantly to inclusive governance and LGU commitment
growth and employment generation. in promoting a unified approach. To
lower transaction costs and promote
Ten-point Agenda better transaction flows, Government
shall enhance collaboration between
Clear and concrete strategies and action the public and private sectors (Refer
plans are necessary to achieve doable to Chapter 7: Governance).
goals and targets.
2. Promote a consistent, coherent,
Goal 1: Create a Better Business cohesive, predictable, and responsive
Environment policy environment
To address investor confidence and
The government shall continuously retain existing investors, government
work for an environment characterized shall give priority to key concerns,
by transparent and predictable public namely: labor, telecommunications,
policies. Processes shall be streamlined, transport (aviation and domestic
business procedures standardized; and shipping), energy, peace and order,
quality of transactions ensured. This and disaster risk-reduction programs.
competitive advantage influences the Government shall address the facts
decision to invest in the Philippines; as and the reality behind the countrys
well as raises the capability to promote lagging competitiveness indices,
and channel local products and services particularly those pertaining to:
in various global markets. Thus, to (a) international investments; (b)
ensure a better business environment, basic infrastructure; (c) scientific
the government shall aim to be in the infrastructure; (d) education; (e)
upper third in the global competitiveness business legislation; (f ) energy; (g)
ranking (i.e. IFC/WB Doing Business exports; (h) ethics; (i) labor; and (j)
Report). barriers to entry and exit.
Improve Governance As the world recovers from the global
economic crisis, competition for
1. Streamline bureaucratic procedures and
foster transparency opportunities is bound to tighten. The
Philippines is among nations vying for
Improvements in the Business a strategic place in the global market.
Registration/Permits and Licensing Considerable challenges confront
System (BPLS) shall be pursued both the countrys efforts to compete for
at the national and local government tourists, capital, entrepreneurship, and
levels. The BPLS will help standardize links to global supply chains.
the procedures for acquiring permits and
licenses to operate new business. It will In the medium term, the following
not only reduce the time to secure permits policy reforms shall be pursued:
but also eliminate corruption by limiting
face-to-face contacts between the Amendments to Executive
applicant and regulator. The government Order (EO) No. 226 or the
will implement a customer-oriented Omnibus Investment Code
approach to policies, rules and regulations of 1987- to strengthen the
on procedures. Public service quality investment promotion and
standards for all frontline services of industrial development functions
the government and international-based of the Board of Investment (BOI).

Enactment of an Anti-Trust/ Amendments to the Labor Code-
Competition Law - to level to address labor-related issues, and
the business playing field by harmonize and strengthen labor
strengthening the legal and force and management and ensure
institutional framework to combat that countrys labor policies is aligned
unfair trade practices, prohibit with international treaties and ratified
cartels and monopolies and International Labor Organization
sanction key officials of companies Convention.
that violate fair competition.
Reforms in public research and
Amendments to the Export development (R&D) prioritization
Development Act - to incorporate and funding system and full
significant changes in the global implementation of the Technology
trading environment as well as Transfer Act of 2009 (RA 10055)-
establish lasting solutions to to ensure social return on public
recurring export development R&D investments. Measures to
issues, with emphasis on sanctions, be considered include a systematic
enforcement, and the privatization national research inventory; a
of export promotion functions. clearinghouse for new major research
investments; and a systematic effort
Reforms in the Aviation to translate outputs of completed
Sector- full implementation of research into actionable policy
EO 219 providing for an open measures or into potential product
and competitive international developments or innovations.
aviation sector that allows local
and foreign air carriers to expand Reform of the R&D tax incentive
their operations, maintain a strong under RA 8424- to encourage
aviation industry, and ensure innovative and collaborative behavior
international connectivity. among private firms.
Land Use Plan - to provide Amendments to the Intellectual

a sound basis for the local Property Code- to serve the needs
tourism development, including of the copyright-based industries as
the designation of tourism well as strengthen the enforcement
enterprise zones by the Tourism capability of the Intellectual Property
Infrastructure and Enterprise Office.
Zone Authority (TIEZA).
Passage of the Data Privacy and
Amendments to the Tariff Anti-Cybercrime Bills- to ensure the
and Customs Code of the security, integrity, and dependability
Philippines- to support fair trade of the countrys information and
and oppose all unfair trade policies communications structure.
and practices, especially on
smuggling and to be compliant Amendments to the
to the international standards on Standardization Law- to strengthen
customs procedures under the the national standards body.
Revised Kyoto Convention to
which the Philippines acceded. Amendments to the Barangay
Micro Business Enterprises
Amendments to the Local (BMBEs) Act- to support the growth
Government Code- to provide and development of microenterprises.
an environment conducive to
business.

Amending and transferring Establishing compliance
the function and mandate of the mechanisms for business sector
Philippine Council on ASEAN and on DRR standards.
APEC Cooperation to the Philippine
Council on Regional Cooperation. Strengthening implementation
of or reform existing laws on
Government shall formulate a land-use and related laws such as
comprehensive national industrial building code for disaster-resilient
strategy that spells out opportunities, industry and service sectors.
coordinates and promotes the growth of
forward and backward linkages in priority Assessing the level of DRR
areas and high-potential growth sectors awareness and activities among
as well as prepares other industries to the private sector and disseminate
attract investments and generate jobs. information, education and
This plan entails a regular review of campaign (IEC) materials on
national investment incentives to examine DRR to ensure their support,
their thrust, adequacy, and consistency participation and cooperation
The Philippines needs to be with local regulations especially those
known as a country offering pertaining to priority sectors i.e., mining, The following programs will also be
vast opportunities for trade and tourism, agribusiness and BPO-IT. The pursued to support DRR and CCA:
tourism and will be promoted as government shall include programs to
a conducive investment haven implement disaster-mitigating measures, Develop and operate
that is now open for business. sustain socio-political stability, and innovative financing schemes
create necessary conditions to ensure safe to secure sustainable financing
and peaceful business environment for for programs on climate
investors. change. This can take the
form of payment for ecosystem
Furthermore, government shall support services including collection of
policies and legislation that shall: fees for water consumption by
industries and fees from tour
a. promote a working balance between organizers, lodging and other
the interests of labor and capital as well tourist facilities for ecotourism.
as provide avenues for dialogue and
cooperation based on mutual benefit; Design and implement DRR
and CCA measures for mining
b. pursue anticorruption, anti-red companies. Areas suitable for
tape, antismuggling and integrity mineral resources development
initiatives; shall be defined based on
scientific information on climate
c. provide a fertile landscape for change risks and vulnerability of
Philippine domestic and foreign ecosystems and communities.
investments (i.e. power regulation,
cabotage principle, etc.). The problem Develop synergy between
of high cost energy must be addressed small, medium and large-
by achieving a price range comparable scale mining operations taking
to energy costs among ASEAN climate change and prudent
peers (i.e., Indonesia, Vietnam and mineral resources development
Malaysia); and into consideration.
d. mainstream Disaster Risk reduction

(DRR) and Climate Change
Adaptation (CCA) in industry and
services sectors by:

3. Promote e-commerce and ICT- such areas. The development of economic
enabled automation zones generates employment and
Automation and computerization business opportunities by establishing
of government processes shall be linkages among industries in and around
pursued to reduce transaction costs the economic zones.
and make public service more efficient.
The e-Commerce Law shall be fully In addition, the government shall pursue
integrated in the policy environment the issuance and full implementation
for business. of the rules and regulations for the
designation of tourism enterprise zones,
4. Encourage Public-Private envisioned to expand the current room
Partnership (PPP) capacities and diversify products in
The government shall provide an tourist destinations.
enabling business environment
for private sector investments and Strengthen National Brand/Identity
partnerships by pursuing a stable Awareness
macroeconomy and sound public Government will initiate and implement
policies. Government shall recognize a national branding and marketing The government shall pursue
the essential role of the private campaign to promote the Philippines innovation as an essential
sector as the engine of the countrys not only as an investment site and tourist factor in harnessing culture of
growth and development. The destination but as producer and supplier of competitiveness.
government shall provide for the quality world-class products and services.
transparent bidding of PPP projects The Philippines needs to be known as a
for the period 2011-2014. It shall country offering vast opportunities for
also promote the Philippines as an trade and tourism and will be promoted
ideal partner in PPP-infrastructure as a conducive investment haven, now
development; and closely monitor open for business.
and ensure transparency in the
management of PPP projects. The Plan intends to pursue the
Planning, implementation, financial development and promotion of Brand
accountability, and evaluation shall Philippines. The aim is to achieve among
ensure that such investments are global buyers a Philippine First mindset
safeguarded. by creating a distinct Philippines brand
widely accepted and recognized in the
Strengthen Economic Zones global export market connoting quality,
The government shall continue the value and reliability. Moreover, to be
promotion of private sector-led known as Asias trendsetter in export
development of economic investment products and services, and setting the
promotion areas by both foreign and highest standards of creativity, innovation
local investors. Moreover, government and excellence.
shall also provide the needed support
in the setting up of investment A new tourism marketing campaign/
locations. branding shall be developed in consonance
with the countrys international image and
Economic zones shall be promoted trade promotion thrust, with emphasis
and special economic zones shall given to our countrys vast retirement
be strengthened. Experience has potential and epicurean attractions.
shown that facilitating economic
zone development by the private Moreover, judicious selection and
sector is effective in attracting programming shall be undertaken in
export enterprises to locate in said mounting a compelling and meaningful
zones, given the support facilities, Philippine participation in various
infrastructure and services available in cultural, tourism, fairs and trade

expositions worldwide with preference for of customer-service standards sets
those sanctioned by foreign governments, the norms. Incentives, recognition
global associations and inter-government schemes and quality awards can
organizations. serve as rewards and inducements to
high-performing, customer-focused
Goal 2: Action Agenda to Improve organizations.
Productivity and Efficiency
In addition, the government shall
Higher productivity and efficiency pursue innovation as an essential
of industry and services sector must factor in harnessing culture of
be manifested in increased levels of competitiveness. Along these lines
exports, investments, tourism revenues, government shall: (a) review the
and entrepreneurship. By 2016, the role of higher education institutions
following targets are laid down: (a) in the countrys innovative system;
US$91.5 billion in annual merchandise (b) review investments in science,
exports; (b) US$28.9 billion in annual technology and innovation (STI)
services exports; (c) PhP3,796.47 billion human resources to directly link
With its limited resources, in cumulative approved investments (d) them with strategies in retaining the
Government shall focus its a doubling of annual visitor arrivals to best and brightest Filipino STI
interventions on key areas that six million by 2016; (e) US$4.5 billion talents; and (c) promote a culture
are job generating, where the in annual tourist receipts by 2016; of multi-disciplinary collaboration,
country enjoys comparative (f ) a national goal of six million jobs knowledge sharing, open dialogue
advantage, and with high growth cumulatively generated by 2016, about and cross-fertilization of ideas as
potential. 4.6 million of which will come from extremely relevant and important in
industry and services. Of these, two the emerging global competitiveness
million will come from MSMEs. environment.
Intensify the Culture of Government shall promote a national
Competitivenenss culture of competitiveness by
A culture of competitiveness pursues the instilling customer focus and a sense
development of a positive, innovative, of pride in job well done. A culture of
and creative mindset through training, competitiveness is a national psyche
paving avenues for enhancements, toward achieving excellence in the
reinforcement of shared values, and delivery of products and services
emphasis on linkages of skills and that respond to the needs of the
development as contributor to economic customers. Embodying a culture
growth. It will make the fullest use of of competitiveness requires the
PPP wherein results directly impact on following initiatives:
competitiveness. Efforts shall be pursued
to instill a national consciousness that 1. Developing Human Resources
appreciates the significance of achieving Government shall develop human
competitiveness in process and quality. resources that instill a national culture
of excellence by developing and
Because the delivery of any product harnessing a broad range of vocational,
or service should respond above all to clerical, technical, managerial and
the needs of the customers, policies entrepreneurial skills, propagating
that foster a customer-centric business firm-level productivity and boosting
environment will be given close attention. competitiveness awareness.
An aggressive education and information Harnessing skills and human capital
campaign through productivity and as asset, propagating firm-level
quality-related training, seminars, and productivity and competitiveness shall
promotional materials, in print and be promoted in line with full human
mass media, are necessary. Development development. Program interventions

shall be pursued to develop the core and manufacturing, shall be developed
values for an entrepreneurial mindset. to complement the employment
requirements. In cooperation with
Such a mindset is one that will bolster higher education institutions and the
for an enterprising mindset and a private sector, niches shall be identified
proactive attitude will be pursued. and matched with the employment needs
This mindset leads to constant and strategic positioning of local firms
improvement and innovation, and industries.
creativity in offerings and processes
and therefore becoming competitive 2. Mutually agreed-upon working
at all times. Individuals become self- arrangements
driven, resourceful, always positive Mutually agreed-upon working
and optimistic, opportunities and arrangements increase efficiency and
solution-oriented. streamline operation.Thus, they are essential
for the competitiveness of enterprises.These
To ensure market-responsive must be consistent with the promotion of
education and training, the supply employment and protection of basic rights
side of the labor equation should of workers accompanied by adequate social
be addressed through quality safety nets to protect the vulnerable workers.
education/training and effective The government shall establish facilitation
assessment and certification systems. mechanisms and services accessible to
The government shall undertake workers and enterprises alike.
and maximize capacity-building
programs with the support of foreign 3. Strengthen existing Tripartite
governments and intra-government Industrial Peace Councils
organizations under the framework In line with democratic institutions and
of various bilateral and multilateral traditions, policies should encourage
engagements. Likewise, linkages the strengthening and reactivation or
among Filipino skilled workers and creation of more industry tripartite
their business network, technical councils nationwide and firm-based
experts and Filipinos involved in dispute settlement schemes that are
epistemic communities abroad shall geared toward self-regulation governed
pursue various multi-stakeholder by voluntary codes of good labor-
talent-sharing and brain-gain and management practices. In addition, the
skills enhancement initiatives (e.g. government will adopt conciliation-
Science and Technology Advisory mediation and alternative dispute
Council, the Balik-Scientist Program resolution mechanisms at different
and ERDT). levels (LGU, industry, and national);
implement a less than 30-day mandatory
In addition, sunrise industrial or conciliation-mediation of all labor
service activities with global potential cases under the single-entry approach;
shall be identified by roadmaps that and campaign for less industry-based
forecast and prepare initiatives for voluntary code of good practices.
skills requirements on employment
needs. From 2007 to 2010, four Focus Interventions To Increase
roadmaps were developed for such Exports/ Investments/ Tourism
industries: (a) electronics; (b) BPO/ With its limited resources, Government
IT enabled-services; (c) medical shall focus its interventions on key areas
tourism; and (d) health and wellness that are job generating, where the country
(including the retirement) sectors. By enjoys comparative advantage, and with
2016, roadmaps for the remaining high growth potential.
sunrise industries namely agribusiness,
ecomining, value chain materials,

1. Investment promotion, industry consumption is boosted by higher
development in job-generating areas purchasing power from a vibrant
To increase exports and encourage economy. With the fundamentals in
foreign and domestic investments, place, this whole process becomes
the government shall pursue intensive a cycle that leads to growth. To
promotion and industry development as maximize the gains from targeted and
well as offer a more focused incentives holistic interventions, the following
package to stimulate the economy key areas will be pursued in the
and allow all development partners an medium term:
opportunity to take advantage of the
gains from increased economic activities. a. Tourism
The Philippine Export Development Tourism is a powerful driver for
Plan 2011-2013 and 2014-2016 shall economic growth, infrastructure
provide detailed strategies to implement modernization, local area development,
the over-arching strategy of Moving and employment generation. The
Up the Value Chain to Double Exports. increase in visitor expenditure and
With more investments pouring in and investment arising from tourism
more revenues from exports and tourism, activities create livelihood and jobs in
Figure 3.5 Strategic Destination Area for Tourism
Source: Department of Tourism and Japan Bank for International Cooperation- Sustainable Management Plan for Central Philippines.

many local communities, which helps international comparability of the
reduce poverty. countrys tourism products.
Tourism development will be Formulate a national tourism

pursued in a sustainable manner to development plan (NTDP) as the
continuously create jobs and livelihood framework for the identification of
for local communities and generate tourism destinations and products,
foreign exchange for the economy domestic and international markets,
while ensuring a high level of visitor marketing and promotion as well as
satisfaction. Adherence to sound and prioritization of tourism infrastructure
manageable environmental practices requirements by the Department of
in the development and promotion Public Works and Highways and the
of tourist destinations as well as Department of Transportation and
enhancement of tourism products and Communications, and designation
services will serve as cornerstones for of TEZs by the TIEZA. This will
planning, product development, human also provide the basis for LGUs to
resources development, and marketing. subsequently formulate their local
Aiming to make the Philippines a tourism development plans (Figure
destination of choice for tourism in the 3.5).
Asia-Pacific region, the government
shall take the following measures: Encourage LGUs to develop
tourism related-products and
Encourage the diversification services using the community-
of existing destinations, and based and ecotourism approaches
creation of new tourism areas and as implemented by innovative and
products including the expansion entrepreneurial local governments in
in room capacities through the Bohol, Palawan, and Bicol, and have
implementation of the rules and contributed to poverty reduction,
regulations for the designation protection of the environment, and
of Tourism Enterprises Zones gender equality in local areas. To this
(TEZs). end, LGUs can seek the assistance
of capable public and private higher
Mobilize the enormous education institutions in their areas,
capacity of the countrys LGUs at whose academic, research and
the provincial, city and municipal extension programs in tourism-
levels by strengthening their relevant disciplines and technical
capacity to plan, regulate and expertise can be tapped for local
guide tourism development tourism/culture planning, tour guide
so that it is environmentally services, standards-setting and quality
and socially sustainable as well assurance for the hospitality sector, site
as economically inclusive and and institutional development, and
viable. Moreover, increase the the showcasing of cultural heritage.
competitiveness of the countrys
tourism enterprises and products Undertake a focused and sustained
by implementing partnership international and domestic tourism
with the LGUs and the private promotion campaign and programs
sector to implement a mandatory using both traditional and the new
system for the accreditation of social networking media targeting
tourism enterprises, including the existing and new markets as well as
formulation of a national standards OFs.
and certification program for
tourism facilities and services to Launch focused and sustained
ensure the highest quality and international and domestic tourism

programs using the new media with the tourism sector achieve its goals
the support of OFs. Likewise, the and objectives in the medium
support and cooperation mechanism term. The Tourism Coordinating
for private sector and nongovernment Council shall be the vehicle to
organizations participation shall be strengthen such partnerships.
enhanced. Efficient intra-government
coordination system shall be put b. Business Process Outsourcing
into practice in tourism promotional The Philippines is now the second-
and planning activities. These shall largest destination for outsourcing
involve the Tourism Promotions and is soon expected to lead the global
Board (as mandated by the Tourism industry in terms of revenue earnings
Act of 2009) and the respective in voice/call center operations. The
tourism related promotional units of Philippines is projected by foreign
the Department of Foreign Affairs analysts to lead in all aspect of BPO
(DFA), Department of Health operations worldwide in the next five
(DOH), Philippine Retirement years. Thus, it is imperative to build
Authority (PRA), BOI, DTI, the right value proposition to sustain
Department of Environment and both prevailing and prospective global
Natural Resources (DENR), National positions.
Commission for Culture and the Arts
(NCCA), and the various agencies and BPO, IT and IT related
councils supporting culture and the services comprise both voice
arts (i.e. CCA, FDCP, and so forth). (e.g., call centers) and nonvoice
The entry of tourists under thematic (e.g., back office/knowledge
programs (e.g. health and wellness process outsourcing (KPO),
and employment generation) shall IT outsourcing, Engineering
be further facilitated in coordination Services Outsourcing (ESO)
with the DFA, Department of Justice and design process delivery,
(DOJ) and the BOI. Such a multi- transcription, animation, and
dimensional stakeholder approach game development. Even as
shall maximize the promotion the Philippines takes the top
of medical tourism; retirement; position in the contact-center
meetings, incentives, conventions segment of the BPO industry,
and exhibitions (MICE); adventure there is a need to nurture the
and ecotourism; film production, growth in the KPO segment
and Philippine cultural and culinary of the BPO industry, further
diversity. enhance wage and work
conditions, and strengthen
Develop and implement a new the multi-stakeholder support
tourism marketing campaign/ framework. Thus, an average
branding in consonance with the annual export growth of 20
countrys international image and percent shall be achieved from
trade promotion thrust. the following strategies: (a)
development of a sustained data
Promote public- private-sector collection system for the services
partnerships both in infrastructure sector; (b) implementation of a
development and capacity comprehensive export branding
expansion and modernization in program; and (c) legislation
the accommodation and recreation for data privacy and against
sectors, among others. The private cybercrime in order to reduce
sector will be engaged in extensive risk perception of Philippine
consultation to identify gaps, policy
reforms and programs that will assist

BPO services as well as pursue Expand the development of
legislation of the Magna Carta Next Wave Cities in partnership
for Call Centers Workers. with private sector.
In addition to BPO, Services c. Electronics

and Creative Industries shall The electronics sector is a major driving
be promoted and enhanced. force of the Philippine economy and
This will include other services has consistently been a source of high-
such as accounting (professional value, high-impact investments preferred
services and outsourcing), Original Design Manufacturer (ODM)
education, engineering, and Original Equipment Manufacturer
franchising, interactive media (OEM). Likewise, the country also
with focus on animation, and houses some of the worlds top electronic
gaming, health and wellness, and companies. There are two major players
shipcrewing/ship management. in the electronic components sector:
the third-party subcontractors, which
To support the industry, there is are mainly Filipino-owned, and the
a need to nurture the talent pool, multinational plants which cater to the
develop the infrastructure and requirements of their parent companies.
regulatory support, and improve the
socioeconomic environment. To this The electronics industry will continue
end, government shall: to be the driver of growth of Philippine
merchandise exports. Shipments are
Enhance investment foreseen to exceed US$30 billion by
promotion and industry 2010. At an annual growth rate of 10
development strategies by percent, electronics exports are expected
synergizing initiatives and to hit more than US$50 billion by 2016.
programs of the government
and private sector to maximize The priority sub-sectors for promotion for
resources; electronics are: (a) components/devices
(semiconductors); (b) electronic data
Harmonize the educational processing; (c) automotive electronics;
system with the changing needs and (d) solar power or photovoltaic cells.
of the industry;
To show the reliability of Philippine
Advocate talent development electronics and increase exports, country
through training and image branding and investment are
opportunity building, creating significant. Likewise, this would entail
awareness that BPO provides aggressive promotion by: targeting
high-paying jobs/careers, and emerging markets; conduct of high-level
focusing on expanding the investment missions; integration of the
talent pool; electronics industry; establishment of
human competencies throughout the
Sustain government value chain such as continuously growing
commitment thru fiscal and talent pools in MS and PhD levels as long
nonfiscal incentives and facilitate term strategy; and attract new players in
the conduct of industry-focused potentially competitive subindustries
road shows overseas; such as solar cells, growing capacity in IC
design and the countrys collaboration
Improve the long-term risk with Taiwan.
perception and overall business
environment; and

d. Mining in sync and focused on promoting
The Philippines is situated along a well- mining and mineral processing to
defined belt of volcanoes called the establish industrial zones in identified
Circum-Pacific Rim of Fire making it areas with substantial mineral
one of the most mineralized countries in deposits.
the world.
In the short term, investment
The Mines and Geosciences Bureau promotion activities of the BOI, DFA
(MGB) estimates that some nine million (and its Foreign Service Posts), and
hectares of the Philippine total land area DTI (and its Foreign Trade Service
of 30 million hectares are geologically Corp) may focus on preidentified
prospective for metallic minerals. mining projects determined by both
Some of these areas may be developed the BOI and the MGB as problem-
further, particularly large ore bodies free in terms of mining permits, in
and linked with downstream processing collaboration with the LGUs, and in
industries. The operation of processing consultation with local community.
plants and value-adding activities which Other recommendations to further
have a demand-pull effect on primary increase the sectors competitiveness
production will serve as a catalyst for and contribution to economic
the development of other industries and development are the following:
sectors generating economic activities.
The multiplier effects of these industries Develop the framework for the
will foster the growth of the mining industrialization of the Philippine
industry throughout the country. Mining/Mineral Industry to
support the countrys export
The Philippine Mining Act is regarded activities and vertical integration
as among the first worldwide to mandate to stimulate downstream and
corporate social responsibility in mining upstream industries and encourage
projects and activities. domestic processing of minerals
for the export markets;
The current export oriented mining
industry should aim at producing Strictly enforce compliance
manufactured goods and industrial with environmental and social
products based on an industrialization development commitments;
framework and supported by a strong
R&D program on efficient and state Cleanse inactive mining
of the art technologies. For instance, applications and nonperforming
copper production should be linked mining contracts;
with smelting and refining operations
down to the manufacture of cable wires Continue public information
and other high value finished products. campaigns and increase dialogues
The Iron and Steel Industry should be with concerned groups. Inform the
rationalized to address not only the local public about responsible mining
requirements but should also compete in that minimizes environmental
the export market. impact;
Generation of more investments in Harmonize national and

mining and mineral processing and local government policies,
mineral based manufacturing industries goals, objectives, strategies and
is the key to doubling exports by the programs; and
sector by 2016. Policies, goals, objectives,
strategies and programs of both national
and local government entities need to be

Ensure international linkages Among agro-based products exported
to relevant global sustainable by the Philippines, the exports of fresh
extractive industry standards and and processed foods are seen growing at
best practices and benchmarks 10 percent annually, a performance that
(e.g. Extractive Industries will come mainly from fresh fruits such
Transparency Initiative or EITI). as banana, pineapple, mango, papaya,
and okra; preserved fruits; beverages;
e. Housing and processed marine products (e.g.
Investing in mass and socialized housing tuna, shrimps, etc.). Markets of these
will enable investors to enjoy incentives, products shall be expanded and
as the government seeks to address the diversified through international
housing gap of 5.8 million units from promotional events, inbound business
2010 to 2016 or about 800,000 units per matching and addressing the market
year. The government has also increased access issues resulting from new
the target number of housing loans requirements of target and growth
from 75,000 to 150,000 housing units. markets. Government shall strengthen
This is in line with the governments the certification system for Good
thrust of facilitating access to a variety Manufacturing Practices (GMP),
of housing options that are decent, Hazard Analysis Critical Control
affordable, and responsive to the diverse Point (HACPP), and ISO 22000 as
and changing needs of the people by well as halal and kosher food standards
providing incentives to low-cost mass and certifications. The DOST and
housing developers. DTI shall assist food processors in
improving the packaging of food
f. Agribusiness/Forest-based Industries products.
As one of the identified priority areas,
market-driven and competitiveness-led The DA shall ensure the production
agribusiness/forest-based and livestock of specific varieties required by the
industries shall be continuously market and other agriproducts which
promoted in both inbound and are raw materials for processed food,
outbound investment missions, and e.g. allocation of sugar. Moreover,
shall be included in promotional new Free Trade Agreements (FTAs)
activities such as business matching and will be utilized to increase Philippine
investment briefings. agricultural exports.
To further raise investment in Coconut, which is widely available in

agrobased industries, the government the country, is an immense source for
shall provide incentives as well as food and nonfood products. Nonfood-
identify lands that are adequate for based products such as coconut oil
certain agricultural products. These account for a significant portion of
lands should have already been covered Philippine exports of coconut products
by agrarian reform and the agrobased with crude coconut oil accounting
industries will respect the security for most of coconut oil exports. To
of tenure of the agrarian reform double exports of coconut products
beneficiaries (ARBs) and will work by 2016, value-added products such
to improve the income and livelihood as refined coco oil, coco biodiesel
of the ARBs. The domestic economy and oleochemicals shall be promoted.
shall be strengthened through asset Technology shall be developed
reforms, development of agriculture to collect coconut water from the
and promotion of industrialization. production of coconut oil. It is also
(See Chapter 4: Competitive and imperative that supply of coconut
Sustainable Agriculture and Fisheries) should be available to processors.

Refined coco oil is used for both food Furthermore, the government shall
and industrial/external applications. To review and develop/reform policies
promote the use of refined, bleached and rules, such as customs practices;
and deodorized (RBD) coco oil in the transshipment of cargoes in various
international food processing market, the modes (i.e. air-air, sea-air, and air-sea);
government shall help in information and foreign shipping services along
campaigns to counter the negative the entire multimodal transportation
publicity about coco oil (allegedly chain.
perpetuated by producers of competing
products), and create an awareness of h. Shipbuilding
coconut oils health benefits. The Philippine shipbuilding sector,
which now ranks fifth in the industry,
The Philippines already figures covers building, ship repair and
prominently in almost all categories shipbreaking, and accounts for two
and products of the worldwide coconut percent of the total world market.
industry, but efforts shall be undertaken By 2014, investments are expected to
to further develop the coco-coir and grow by PhP93 billion. Investment
coco-peat segments to export higher growth will be focused on serving
value products such as geotextile for soil identified markets, such as South
erosion control or green architecture Korea and Japan, although other
projects, rubberized coir products for markets opportunities will also be
car seats, mats, bed mattresses, air filters, considered.
among others. Investments in technology
shall be promoted and issues concerning In addition, support for shipbuilding
material supply aggregation and shall also come from promoting
consolidation shall be addressed. the countrys human capital and
continuously providing enhancement
Through a trilateral undertaking, the programs.
DA, DFA and the DTI, shall continue
to source breeders for cattle and water The export market, which is
buffalo in order to enhance the supply of dominated by three foreign
beef and milk products in the market. shipbuilders, accounts for more than
98 percent of the total turnover, with
g. Logistics the number expected to increase.
The Philippines international logistics Under good management and with
activity is relatively small compared to skilled human resources matched by
nearby countries. Together with the capital, technology and global market
growing MSMEs potentials and global opportunities, the industry is moving
supply chain relations, this low base forward to make the Philippines the
indicates a potential for high growth for fourth largest shipbuilding nation in
logistics and supply chain activities. the world in the next five to ten years.
To expand the sector, the government i. Infrastructure

shall encourage investments in the Infrastructure plays a vital part in the
development and expansion of logistics countrys economic development and
infrastructure in the international market. growth. Investment shall be directed
It will also promote other existing ports towards the development of air and
such as those located in Batangas and sea ports; roads; agricultural support
Subic not only to decongest the Manila facilities such as irrigation systems and
port but also to open opportunities to systems for water supply; commercial
worldwide shipping in the new areas. infrastructure for trade and exposition;
waste management systems (i.e.
solid and liquid waste); and energy

source facilities for power supply. Motor Vehicle Parts and Components.
(Refer to Chapter 5: Accelerating This industry targets an average annual
Infrastructure Development). export growth of 12 percent for parts
and components and up to 5 percent
j. Other High-potential Industries for completely-built up (CBU) exports.
Wiring harness exports, driven by rising
While there are priority areas that global market demand, are expected to
will be focused on, the government grow in volume by 97 percent through
will also be vigilant in nurturing more efficient operations, or almost US$
industries that post potential in (a) 24 million in additional annual export
domestic and export market demand; earnings. Earnings are also expected
(b) job generation; (c) utilization of beginning 2012-2013 from projects
local talents and creativity; and (d) with the US, Korea, Thailand, UK and
maximization of the total value chain. Australia.
Prospective areas perceived as high-
growth potential include: homestyle To attain the targets for CBU exports,
products; wearables; motor vehicle government and the private sector
parts and components; garments; and shall aggressively encourage global car
construction and related materials, manufacturers to assign specific car
among others. models to be supplied by Philippine
original equipment automotive parts
Homestyle Products. Annual growth of manufacturers/exporters.
7 percent is targeted in the design-
driven homestyle products, which The Replacement Parts Market will
includes furniture and furnishings, be tapped in addition to the original
holiday dcor, houseware and equipment parts market. Products with
ceramics, woodcraft, giftware high potential are: electric fuel system
(excluding toys), shellcraft, and parts; substrates for catalytic converters,
basketwork. The booming outdoor antilock brake system, leafsprings,
market in China and India and non- radiators, exhaust system and mufflers,
traditional markets such as South automotive rubber parts, alternators,
America (Brazil), Eastern Europe automotive carpets, tempered safety
and the Middle East shall be the glass, windscreen, weatherstrips,
target markets. Aggressive export automotive plastic parts, nuts and bolts,
promotion through international and aluminum alloy wheels.
trade fairs shall be pursued. The
strong design capability of exporters, Subcontracting for customized orders
capitalizing on the mixed-media of various automotive metal and plastic
furniture, shall be continuously fabrications such as casting, forging,
developed and sustained. stamping, machining, and tooling will be
pursued.
Wearables. Fine jewelry is the major
export product of this industry. It Garments. The garments industry is one
also covers costume jewelry, fashion of the countrys foreign exchange earners,
accessories such as headgear, scarves, exporting a total of US$1.67 billion in
gloves, belts and bags. To attain the 2009. Top export markets include the
10 percent annual growth target, the US, Japan, Great Britain, Germany and
government shall help the industry Canada. For 2011, exports are estimated
gain international exposure through to increase by as much as US$2 billion.
trade fairs and shall put in place Employment in the industry, currently at
uncomplicated export and import 150,000 workers, is foreseen to increase
policies and regulations. considerably over the next five years.

Construction and Related Materials. The implemented at the initiative of the
construction sector consists of (a) wood- DFA, DTI, DOT, DA, pooling
their resources with other relevant
based products (e.g. doors, windows, stakeholders.
plywood and veneer, joineries/moldings);
(b) metal-based products such as 6. Industry and services shall be
iron and steel, aluminum and copper induced to ascend the value chain
products; (c) nonmetal-based products to develop higher local value-added
(except marble); and (d) chemical-based products and services through a
products (e.g. PVC plastic, vinyl, paints well-conceived and comprehensive
and varnish). By 2013, the construction industrial strategy.
industry is expected to reach a total of
US$1.37 billion in export sales, with a 12 Market diversification shall be
percent annual growth. achieved by: targeting high-economic
growth markets such as China and
The formulation of a Construction India, participating in global supply
Industry Strategic Plan for the 21st chains with ASEAN; maximizing
Century or CI21 is intended to provide a the benefits existing Free Trade
The government shall continue framework for the industrys accelerated Agreements; and strengthening our
to implement the national growth. international trade policy negotiation
innovation strategy called structures.
Filipinnovation. 2. Development and implementation of
programs that will enhance productivity Provide Firm-Level Support To
and efficiency through green programs Potential, New, And Existing Micro,
and sustainable consumption and Small And Medium Enterprises.
production patterns.
1. Facilitate access to BDS
Programs will include PPP initiatives;
projects in the countryside such as Government shall create a favorable
ecoefficiency and ecodesign programs environment for MSMEs to thrive
(i.e. Bayong Development, Bamboo and ease their access to financing,
and coconut, among others); advocacy facilitate their entry to larger markets
programs that will be enhanced and increase their productivity and
through LGU, community, and media efficiency. Almost half of MSMEs are
partnerships; and funding of projects and engaged in wholesale and retail trade.
programs through international grants Given this large number, government
shall be explored. Domestic efforts shall shall carry out programs to maximize
include the granting of incentives (i.e. their participation in supply and
through the BOI Investments Priorities distribution systems within value
Plan or IPP) to green projects and chains for identified industry clusters.
programs. Business development services
(BDS), including enhancements
3. Development and implementation needed to boost productivity, will be
of technology development projects in provided for promising MSMEs. The
various priority areas/sectors to boost government shall also build on existing
its innovativeness and competitiveness
(i.e. the design of an ICT-based English programs, specifically the One Town,
language learning to increase the human One Product (OTOP) Program,
resource uptake of call centers). information campaigns, provincial
caravans, and SME Centers.
4. Review indicators on the number of
new technology-based firms created. In addition, government shall
encourage the formation of new
5. An integrated high-impact export MSMEs. LGUs shall facilitate
promotion program that will enhance business registration, provide enabling
country branding will be adopted and
environment in support of enterprise

development, and fully implement providing business development and
MSME-related laws (e.g. Magna productivity enhancement services to
Carta for MSMEs, BMBE Law). existing livelihood projects. With closer
collaboration between DTI and DOT,
To complement the existing community-based and ecotourism
strategies identified under the SME projects will be implemented to provide
development plan, four thematic alternative and supplemental livelihood
areas shall be adopted: corporate for local communities as well as help in
social responsibility, climate change, poverty reduction, raise family income,
gender, and migration. This approach and promote a better quality of life in
shall also foster economic activity the rural and far-flung areas, which are
in the countryside. Government considered desirable tourism destinations.
shall also assist in the development
of programs that will encourage 4. Promote Entrepreneurship among
MSMEs to produce green products, OFs
and use environment-friendly A more aggressive campaign to tap OFs
processes. Business development as sources of capital shall be pursued.
services will maximize the use of Government shall utilize media and The industry clustering strategy
local and sustainable sources such as various forums, including presidential is vital for linking manufacturing
waterlily, bamboo, coconut among and official trips, in encouraging with other sectors.
others, and utilize materials in entrepreneurship among OFs and/or
producing and marketing domestic their dependents. DTI and DOLE shall
and exportable products from these review and strengthen existing programs
resources. Likewise, BDS will also and consider ways to maximize the
educate MSMEs in processes that are brain gain derived by OFs from foreign
non-threatening to the environment. deployment. The DFA, DOLE, DOF,
Commission on Filipinos Overseas,
2. Improve access to financing and the Bangko Sentral shall conduct
Government Financial Institutions financial literacy campaign overseas to
such as the Peoples Credit and educate and orient OFs regarding their
Finance Corporation, Land Bank investment and remittance options which
of the Philippines, and the Small may include special bond issuances and
Business Corporation the main related financial instruments.
wholesale finance institutions
catering to microfinance institutions 5. Advancing through Science,
(MFIs) shall collaborate with DTI, Technology and Innovation (STI)
DOT and viable MFIs in developing A whole-of-government approach will
innovative market-based financing be pursued to achieve competitiveness.
schemes to support microenterprises. Thus, the government will strengthen
Government will collaborate with vital factors that highly contribute to the
MFIs to use microfinance as a tool advancement, distinction, satisfaction and
for inclusive growth by expanding demands in the domestic and international
access by microenterprises and poor markets Science, Technology and
households to credit, savings, and Innovation (STI), and Quality.
other financial services.
a. The government shall continue to
3. Develop livelihood programs for implement the national innovation
sustainable micro-enterprise strategy called Filipinnovation. This
Government shall support the will enable the country to achieve (a)
transformation of livelihood a competitive and multidisciplinary
activities of the poor into sustainable work force competent in producing
microenterprises. To this end, DTI value-added knowledge-based services
and DSWD shall collaborate in of global standards; (b) competitive

Figure 3.6 Industry Cluster Map
The government shall pursue

market access through effective
bilateral, multilateral and
regional engagements and
representation, and maximize local firms driven by or borne out of international markets through
opportunities offered by existing constant innovations brought about by quality certification.
trade agreements. increased R&D; and (c) a public policy
environment that ensures continuous c. STI, a crucial factor for
innovation not only through executive, productivity, competitiveness, job
legislative and judicial initiatives but creation, sustainable development
through local government programs. It and poverty alleviation will also
will promote the usage of Information pursue R&D initiatives:
and Communications Technology
(ICT) in enterprises. Filipinnovation Address opportunities for
focuses on: (a) strengthening human STI professionals;
capital investments for STI; (b)
stimulating STI; (c) enhancing Address structural gaps in
management of the STI system; and the STI and R&D sectors such
(d) upgrading the Filipino mindset as inefficiencies in the structure
in S&T. Since the strategy/policy of incentives and allocation
imperatives are interconnected, it shall of R&D resources that are
be coordinated and harmonized to obstacles to new programs and
create necessary conditions to deepen activities which could help
and consolidate STI capacity. attain STI and R&D goals;
b. The government shall set up a Facilitate new STI policies

National Quality Infrastructure needed to boost productivity,
to integrate and coordinate series economic growth and job
of activities involving metrology, creation through increased
standardization, testing, and knowledge-intensive economic
accreditation and certification. It activities while maintaining
will provide procedural landscape for social cohesion;
products and services of enterprises,
particularly SMEs, to meet quality Foster tie-ups between
requirements. It will guarantee industry and the higher
competitiveness in the national and education institutions to

strengthen the effective transfer sustainable economic growth. The
of appropriate technology and industry clustering strategy is vital
advanced skills needed by the for linking manufacturing with other
industry and for the production sectors (e.g. mining, agriculture,
of higher value goods and tourism, construction, etc.), particularly
services; as these affect raw material needs of
manufacturing and the manufactured-
Facilitate and utilize product requirements of other sectors
sufficient information on the (Figure 3.6).
scientific and technological
experiences and know-how of Industry clusters provide benefits such as:
other countries;
Maximizes capacity through
Establish e-centers to shared hard and soft infrastructure,
enhance access to knowledge human resources, R&D and safety
and technology, particularly in standards;
rural and remote areas;
Provides access to all players, Proactive measures to
Implement programs and attracting expertise and local empower consumers, promote
tools to support and respond suppliers; competition, and enforce trade
to climate change and disaster regulations shall be pursued.
risks incidents especially for Ensures that top export products
fishers and agri/marine farmers; or revenue streams are sustained
and through the development of its value
chains down to the provinces and
Policy backup and municipalities;
enforcement mechanisms for
existing laws require bolstering Offers a focus to attract new
and institutionalizing investments, encourage local
in close collaboration with expansion and stimulate start-up of
neighborhoods. new companies;
Cluster Development Promotes horizontal
In developing identified industries, collaboration and strategic
government shall pursue an industry partnership;
cluster program to foster inter-
enterprise linkages among MSMEs Enhances productivity by
and strengthen collaborative providing firms access to specialized
networks. inputs and skills, as well as unique
information, knowledge and
Industry Clusters are geographic technology; and
concentrations of competing,
collaborating and interdependent Promotes product
businesses, working on a similar complementation that enables longer
regional infrastructure and creating visitor stay and higher expenditure
wealth of regions through exports. It in tourism destinations.
fosters the transfer and adoption of
new technologies, creates risk capital, The government shall maximize PPP as
and attracts foreign investment a strategy in industry clustering. On a
larger scale, growth centers or regional
It breaks down organizational, hubs shall be identified to synchronize
geographical and sector boundaries, the mobilization of public and private
all needed for creating a cycle of resources. These hubs shall unlock

productive capacity in the countryside Preferential Trade Agreements
by providing a critical mass of resources (PTAs) contribute to the
in support of private businesses even competitiveness of Philippine export
outside the capital. The integrated products and services. The low
international air and sea connectivity utilization rate of these agreements in
of Clark-Subic, Cebu, Cagayan de Oro the country shows the need to conduct
(with the upcoming PPP project for the the orientation and capacity-building
Laguindingan airport), and Davao shall workshops for manufacturers,
be highlighted to enhance the profile of enterprises, and service providers
these growth centers among foreign and to enhance their capability to avail
local investors. themselves of the benefits of these
PTAs. The government shall therefore
For IT-enabled clusters such as initiate the following programs and
technology business incubators, activities:
technology parks and clusters of
knowledge-based industries, the International trade strategy
creation of shared infrastructure and the The government shall pursue the
The entire supply chain shall be provision of business support services for following programs to complement
improved to reduce production innovators and developing entrepreneurs its international trade strategies and
and distribution cost of basic shall be promoted. The establishment of provide more opportunities for market
and prime commodities technology business incubators across access: (a) National Single Window
the country will be pursued, taking into will be opened to improve trade
consideration commercial sustainability, facilitations and logistics; (b) support
careful matching of target markets with shall be afforded to infrastructure
the strengths and ambitions of potential and quality of trade facilitations to
firms, and proximity and linkages to improve the efficiency of logistics
research institutes and universities. The services; (c) to further assist MSMEs
provision of business support services integrate into global production
shall be private sector-led and demand- networks, government shall formulate
driven. The clustering of knowledge- and implement an industrial strategy,
based industries through science and as well as enhance SMEs capabilities;
technology parks shall be stimulated and (d) the negotiation process
shall be reviewed and enhanced
Global And Regional Integration through reforms of trade policies,
(Increase Market Access) the formulation of a negotiation
The government shall pursue market process, and capacity building of the
access through effective bilateral, Committee on Tariff and Related
multilateral and regional engagements Matters, and trade-negotiators. Best-
and representation, and maximize practice models shall be adopted for
opportunities offered by existing trade trade analysis to get more robust cost-
agreements. The government commits benefit analyses of proposed measures
to engage all possible stakeholders in and reforms.
undertaking proactive participation in
international engagements geared at Economic diplomacy and
keeping the country in the radar screen of consular commercial and economic
international business. This initiative will representation overseas
particularly benefit and maximize trading The coming years will see the
potential of MSMEs. redefinition of globalization, as the
global economic system continues to
integrate with the domestic economy.

The government will therefore: (a) Goal 3: Action agenda to enhance
maintain and safeguard economic consumer welfare
security in multilateral, regional, and
bilateral economic engagements; (b) A consumer sector that is vibrant and
maintain and safeguard national and dynamic demand better products and
economic security through strategic services and encourages the production
partnerships within the Asian region of high quality products and services
to ensure that Philippine foreign that are globally competitive. It shall
policy decisions are taken in the be a key strategy under the Plan to raise
context of Asian Regionalism and consumers consciousness of their rights
Asian Community; (c) continuously and responsibilities, and their options
evaluate multilateralism and the for redress. The objective is to intensify
stability of international organizations; consumer education, starting from the
and (d) work to attain the Millennium young. Hence by 2016, the Plan envisions
Development Goals (MDG) targets 100 percent integration of consumer
by 2015 and reduce poverty through welfare in the education curriculum; and
intensified international cooperation. resolution period of consumer complaints
reduced by half.
In line with the ASEAN Tourism
Strategic Plan and the Multilateral Encourage Consumer Products And
Agreement on Full Implementation Services Satisfaction.
of Passenger Air Services, greater To encourage the production of competitive
collaboration will be undertaken to products and services, government shall
realize the potential of the ASEAN encourage a consumer sector that is vibrant
region as a source market for tourism. and dynamic and demands better products
In addition, tour programs shall and services.
be developed through twinning
and dual destination with other 1. Intensive consumer education and advocacy
ASEAN countries, attracting more An informed consumer is an empowered
international tourists and foreign consumer; hence, government shall intensify
direct investments in tourism. its consumer advocacy efforts through a
more aggressive awareness and information
To inform the public including campaign. The government shall pursue
private industries/firms engaged and/ consumer education by integrating product
or potentially capable to trade outside quality and safety based on internationally
the country, the government will accepted standards in the high school
continue its information, education curricula as well as in alternative learning
and communication campaigns on systems. Likewise, the government shall
PTAs. The information campaign expand its links with media and utilize
sessions will be conducted in 12 key available media channels such as radio, print,
cities nationwide to cover discussions television, and out-of-home advertising
of the benefits of the agreements as and tools, as well as actively network with
well as administrative procedures various organizations. Also, it will advocate
for availment. The sessions will also consumer programs that will merit public
feature businesses, which have so far and private satisfaction.
benefited from a PTA to entice and
encourage others to leverage said 2. Consumer protection and trade regulation
agreements to their advantage. Using The government shall help maintain
mass and digital media as a tool, each reasonable prices and availability of
information session will be supported supply of basic and prime commodities.
by campaigns such as press releases To achieve this, the government will
and radio and television coverage. intensify and expand programs that will
address affordability of basic necessities

and prime commodities. To address Under the Plan, government will
consumer concerns, a sustained mechanism intensify and expand programs that
for speedy resolutions of complaints will will maintain the affordability of basic
be implemented in collaboration with necessities and prime commodities.
the private sector. The government shall A review of the supply chain will
work at the development of a national be implemented to determine
comprehensive competition policy, pursue effective points of interventions
the legislative agenda on competition law, to make enhancements and
product liability and other consumer related eliminate deficiencies. This requires
laws. infrastructure support and logistics
mechanisms that shall result in
3. Development of products and services lowering of price with the elimination
standards of middlemen and other barriers to
bring the goods and services to the
The government shall encourage the market. Producers, manufacturers,
manufacture of products to conform to traders, retailers, and consumer
internationally accepted standards. By 2016, organizations shall be consulted
an additional 2,000 Philippine National so that the supply chains of basic
Standards will be developed, adopted and goods and services may be improved,
harmonized, while 100-percent compliance reducing costs in production and
by companies on standards that are distribution and thereby checking
developed for mandatory certification will rise in prices.
be enforced.
Improve Supply Chains Of Basic And
Prime Commodities
The Price Act of the Philippines declares the
policy of the State to ensure the availability
of basic necessities and price commodities
at reasonable prices at all times without
denying legitimate business a fair return on
investment. It is also a declared policy of
the State to provide effective and sufficient
protection to consumers against hoarding,
profiteering and cartels with respect to the
supply, distribution, marketing and pricing
of said goods, especially during periods of
calamity, emergency, widespread illegal price
manipulation and other similar situations.
In this regard, government is mandated to:
(a) develop, adopt and promulgate measures
to promote productivity in basic necessities
and prime commodities; (b) develop an
improved and efficient transport and
distribution system; and (c) develop, adopt
and promulgate measures to stabilize prices
at reasonable levels.

Organic balangon bananas,
Tupi, South Cotabato
Photo by: Milo Alto Paz
04 Competitive
and
Sustainable
Agriculture
and Fisheries
Sector
Competitive and Sustainable Agriculture and Fisheries Sector 101
Competitive & Sustainable
Agriculture & Fisheries Sector
The agriculture and fisheries sector provides food and vital raw materials for the rest
of the economy. It is itself a significant market for the products and services of the non-
agricultural economy. As the sector grows and modernizes, it releases surplus labor to
the industry and services sectors. Rising productivity and efficiency in the sector are
critical in maintaining the affordability of food and purchasing power, especially among
the poor. The sectors development is therefore vital in achieving inclusive growth and
poverty reduction as well as attaining the targets under the MDGs.
The country, however, exhibits a slower structural transformation than other East Asian
countries. The shares of agriculture in GDP and total employment have continued to
decline, but the transfer of the labor released from this sector to higher-productivity
jobs in industry and services has lagged owing to low skill levels among agricultural
workers and distortions in other economic sectors.
Increasing demands on the sectors output have also put pressure on its natural
resource base. Unsustainable practices employed to improve yields have resulted in
land degradation and problems of water availability. Climate change has exarcebated
the inherent vulnerabilities of the sector. Development efforts need to focus on
transforming the sector into one that is not only highly productive but also climate-
resilient, environment-friendly, and sustainable.
employed an average of 11.8 million

Assessment people. These account for almost 35.1
percent of the total work force (Table
4.1). If the whole agriculture value
Sector Performance chain is considered, the contribution
to GDP and total employment would
The sector remains an important reach 35 percent and 50 percent,
part of and contributor to the respectively.
economy.
Contribution of subsectors. The sectors
Contribution to output and employment. growth was driven primarily by
From 2004 to 2010, agriculture and fishery (1.21%), palay (0.40%), corn
fisheries contributed an average of 18.4 (0.31%), banana (0.22%) and poultry
percent to GDP and the sector grew at (0.22%) as shown in Table 4.2 in the
an average rate of 2.6 percent annually. next page.1 Growth in the fisheries
This performance was significantly below sector is partly due to the expansion
the target of the previous Plan. Among of aquaculture and robust demand for
the regions, the top contributors in 2009 commodities such as seaweeds. The
have been Region 4-A (12.1%) followed productivity of municipal fisheries,
by Region 3 (11%), Region 6 (10%), such as small-scale capture fisheries
Region 10 (8.2%) and Region 12 (8.0%). (less than 3 gross ton boats), has
In terms of employment, the sector
1
The values in parenthesis reflect growth rate as weighted against commodity share in the Agriculture, Fishery and Forestry
(AFF) gross value added.

Table 4.1 Agriculture and Fishery (with Forestry) Performance and Contribution
to Economy: 2004-2010
AFF Sector 2004 2005 2006 2007 2008 2009 2010 Average
Performance (in %)
MTPDP Target 4.0 - 5.0 4.2 - 5.2 4.2 - 5.2 4.0 - 5.0 4.3 - 5.2 5.1 - 6.2 5.2 - 6.2 4.4 - 5.4
Actual Growth 5.2 2.0 3.8 4.9 3.1 0.01 (0.5) 2.6
Agri Gross Value 226,417 230,954 239,777 251,495 259,410 259,424 258,081 246,508
Added (in Php M)
% share to GDP 19.6 19.1 18.8 18.4 18.3 18.1 16.8 18.4
Agri Employment (in
11,381 11,628 11,682 11,785 12,030 12,043 11,974 11,789
'000 persons)
% share to total
36.0 36.0 35.8 35.1 35.3 34.3 33.2 35.1
employment
Source: BAS, NSCB, 2011
Note: Revised growth target for 2008 and 2009 based on August 2008 DBCC Meeting
Table 4.2 Contribution of Sub-Sectors in Agriculture and Fishery Growth: 2004-2010

% contribution to growth
Sector Average
2004 2005 2006 2007 2008 2009 2010
Palay 1.3 0.1 0.8 1.0 0.6 (0.5) (0.5) 0.40
Corn 1.0 (0.2) 1.0 0.7 0.2 0.1 (0.6) 0.31
Coconut 0.0 0.1 0.0 (0.0) 0.1 0.1 (0.0) (0.02)
Sugarcane 0.2 (0.2) 0.2 (0.2) 0.5 (0.2) (0.4) (0.02)
Banana 0.1 0.3 0.2 0.3 0.5 0.1 0.0 0.22
Other crops 0.1 0.2 (0.02) 1.3 (0.3) (0.4) 0.4 0.16
Livestock (0.1) 0.3 0.3 0.3 (0.1) 0.1 0.2 0.13
Poultry 0.5 0.0 (0.0) 0.0 0.5 0.2 0.4 0.22
Agricultural Activities 0.2 0.1 0.2 0.2 0.1 0.1 (0.1) 0.11
Fishery 1.9 1.3 1.3 1.6 1.3 0.6 0.4 1.21
Source: BAS, 2011
been declining, however. This can be Contribution to global trade. Between

partly attributed to overfishing and 2004 and 2010, agriculture and fisheries
poor enforcement of fishery laws. sector exports rose from US$2.5 billion
The national stock assessment of to US$4.1 billion. The top agricultural
the Bureau of Fisheries and Aquatic exports, in terms of value are coconut oil,
Resources (BFAR) suggests that two- fresh banana, tuna, pineapple, tobacco,
thirds of the 12 major fishing bays in and seaweeds. The overall balance of trade
the country are already overfished. in agriculture has become increasingly
passive, with the deficit widening from
The positive performance of palay and US$837 million in 2004 to US$3.2
corn is due to the use of quality seeds, billion in 2010. The country recorded a
increase in yield, and rehabilitation favorable trade balance in some items,
of irrigation facilities. For banana, however, namely, vegetable and fruits
this is due to an expansion in area, an (US$634 million), fishery products
increase in yield, and good demand in (US$497 million), and crude rubber
the local and export markets. (US$31.7 million) in 2010 (Table 4.3).
There was no significant change in the
structure of exports in the period.

Share to total land area and number of Agribusiness land development.
farmers. In terms of land area, a total Through the efforts of three rural
of 4.8 million agricultural farms in the development agencies, namely the DA,
country occupy 9.7 million hectares (2002 DAR and DENR, under the National
Census of Agriculture and Fisheries). Convergence Initiative (NCI), over
These account for almost 32 percent of 1.83 million hectares of land have been
the total land area of the country. The top developed for agribusiness, generating
four crops with the highest hectarage are about 2.67 million jobs between 2005
coconut (3.33 million hectares), followed and 2010 (Table 4.4).
by rice (2.47 million hectares), corn (1.35
million hectares), and sugarcane (0.36 The NCI is a strategic development
million hectares). In terms of number of approach that can contribute to
farmers and fisherfolk, about 1.61 million sustainable development in the
farmers are engaged in fishing (25.1%), countryside through complementation
1.4 million are in coconut (21.7%), 1.35 of efforts in the rural sector. In
million in rice (21.0%), 0.68 million in December 2010, the three agencies
corn (10.6%), 0.07 million in sugarcane signed the Joint Memorandum Circular
(1.0%) and around 1.32 million in other ( JMC) adopting a shared Policy and
commodities (20.6%). Implementation Framework for the
Table 4.3 Value of Philippine Agricultural Exports and Imports: 2004 and 2010 (in million $US)
2004 2010*
Item Export Import Trade Balance Export Import Trade Balance
Meat and Meat Preparations 4.3 150.9 (146.5) 39.4 381.6 (342.3)
Dairy Products and Bird's Eggs 75.1 482.5 (407.4) 142.1 743.7 (601.6)
Fish and Fish Preparations 413.4 37.0 376.4 633.8 136.8 497.0
Cereal and Cereal Preparations 44.5 659.2 (614.7) 98.5 2,446.3 (2,347.8)
Vegetables and Fruits 783.4 102.9 680.5 916.6 282.7 633.9
Sugar and Sugar Preparations 102.3 70.2 32.1 105.1 369.5 (264.4)
Coffee, Tea, Cocoa, Spices 14.1 90.0 (75.9) 13.0 237.6 (224.7)
Crude Rubber 36.1 31.9 4.1 55.9 24.2 31.7
Fixed Vegetable Oils and Fats 581.3 71.0 510.2 1,269.8 39.1 1,230.7
Others (e.g., tobacco, fertilizer, machinery etc.) 452.1 1,647.7 (1,195.6) 823.6 2,669.6 (1,846.0)
Total Agricultural Exports/Imports 2,506.7 3,343.5 (836.8) 4,097.6 7,331.2 (3,233.6)
Source: BAS, 2011
Note: *2010 figures are preliminary
Table 4.4 Agribusiness Lands (including Agroforestry) Developed: 2005-2010
2005-2007 2008 2009 2010 Total
Agency Jobs Jobs Jobs Jobs Jobs
Areas Generated Areas Generated Areas Generated Areas Generated Areas Generated
DA 812,096 1,334,678 335,948 479,747 295,524 436,677 30,408 52,767 1,473,976 2,303,869
DAR 247,493 237,387 19,579 27,492 31,605 41,981 2,106 2,106 300,783 308,966
DENR 8,759 8,759 1,967 1,967 50,024 50,024 - - 60,750 60,750
TOTAL 1,068,348 1,580,824 357,494 509,206 377,153 528,682 32,513 54,873 1,835,508 2,673,585
Source: National Convergence Initiative Secretariat, December 2010

Table 4.5 Land Acquisition and Distribution Performance: 2004-2010
Accomplishment
MTPDP Funded in %
Year Target Target*
Hectares No. of ARBs
(in ha) (in ha) Per MTPDP PerTarget
Funded
2004 212,121 110,046 104,069 71,682 49 95

2005 122,931 130,000 131,069 88,152 107 101
2006 214,000 130,000 125,177 72,280 58 96
2007 214,000 130,000 134,041 94,807 63 103
2008 220,453 130,000 146,275 90,738 66 113
Sub-total 983,505 630,046 640,631 417,659 65 102
2009 - 85,764 59,488 43,792 - 69
2010 - 200,000 107,179 63,298 - 54
Total 915,810 807,298 524,749 88
Source: DAR, 2011
Note: *Targets based on approved/reenacted budgets
Enhanced National Convergence 1998. This time, no second extension law

Initiative among DA, DAR, and was passed by Congress after the 10-year
DENR. extension period. From July 1, 2008 to
June 30, 2009, CARP continued to be
Extension of land reform. The implemented only under a Joint House-
accomplishment of land acquisition Senate Resolution. On August 7, 2009,
and distribution (LAD) for the RA 9700, otherwise known as the CARP
period 2004-2010 compared to the Extension with Reforms or CARPer, was During the period 2004-2010, the
funded target is at 88 percent. On signed into law mandating the completion average growth, while positive at
the other hand, the accomplishment of land distribution in five years. It also 2.6 percent annually, has been
in terms of the previous Medium provided an additional appropriation of below the target of the previous
Term Philippine Development Plan PhP150 billion for the implementation Plan, which is a sustained growth
(MTPDP) 2004-2010 target is of the major components of CARP. of 4.4 percent to 5.4 percent. The
around 65 percent (Table 4.5). The occurrence of the global financial
target projection in the previous Plan Gains in the sector have been crisis, a fuel price spike in 2008,
states the commitment to finish land achieved, but its full potential is and climate-related events in
distribution by the end of 2008, the last unrealized. 2009 (e.g., El Nio, typhoons) all
year of the 10-year extension provided contributed to the non-attainment
under the Comprehensive Agrarian Growth below target. During the period of the target.
Reform Program (CARP). A total of 2004-2010, the average growth, while
807,298 hectares were distributed to positive at 2.6 percent annually, has
524,749 agrarian reform beneficiaries been below the target of the previous
(ARBs) during the period. From Plan, which is a sustained growth of 4.4
1987, the cumulative area distributed percent to 5.4 percent. The occurrence
has now reached 4,113,347 hectares. of the global financial crisis, a fuel price
spike in 2008, and climate-related events
Extending the CARP for the second in 2009 (e.g., El Nio, typhoons) all
time was a challenge unlike the first contributed to the nonattainment of the
when RA 8532 was passed by the target. The devastation from the typhoons
legislative branch before the Ramos Ondoy and Pepeng resulted in damage
Administration ended on June 30, to agriculture and fisheries estimated at

Table 4.6 Land Productivity in Selected Southeast Asian Countries
Land Productivity, 2009 (in mt/hectare)
Commodity
Indonesia Malaysia Philippines Thailand Vietnam
Rice (paddy) 5.0 3.7 3.6 2.9 5.2
Corn 4.2 5.6 2.6 4.2 4.0
Coffee (green) 0.7* 0.6* 0.8 1.0 2.2*
Banana 59.7 21.8 20.2 13.6 14.3*
Coconut 6.6* 2.8 4.6 5.8 7.9*
Mango, mangosteen & guava 11.6 4.1 4.1 8.0 7.1
Abaca 1.0* no data 0.5 no data no data
Papaya 85.1 10.0 19.6 17.0 no data
Pineapple 74.2 34.7 37.4 20.9 13.0
Sugarcane 63.1 46.7 56.8 71.7 58.6
Vegetables (fresh) 10.6 13.2 8.0 8.4 12.6
Source: Food and Agriculture Organization Corporate Statistical Database
Note: *2008 data; 2009 is preliminary data
Table 4.7 Revealed Comparative Advantage (RCA) in Selected ASEAN Countries: 2007
RCA in 2007
Commodity
Indonesia Malaysia Philippines Thailand Vietnam
Rice (milled) 0.002 0.000 0.001 23.423 37.510
Corn 0.117 0.002 0.010 0.507 0.003
Coffee (green) 4.173 0.005 0.002 0.085 30.556
Banana 0.011 0.035 26.329 0.082 0.039
Coconut (desiccated) 11.618 0.472 66.303 0.033 0.000
Fruits (dried) 0.458 0.038 0.372 10.716 2.759
Tropical fruits (dried) 0.000 0.000 251.868 0.000 0.000
Mango, mangosteen & guava 0.145 0.058 11.972 3.834 0.162
Abaca 0.155 0.000 30.805 0.000 0.000
Papaya 0.007 1.754 7.417 0.157 0.000
Pineapple 0.050 0.241 47.533 0.628 0.038
Sugar (raw) 0.000 0.000 2.220 5.453 0.204
Vegetables (fresh) 0.110 0.807 1.598 5.163 0.504
Total Agri Products 2.393 1.003 0.975 1.880 1.854
Source: Habito et al., 2010
PhP24.7 billion in 2009 pulling down The Philippines ranked fourth in rice,
the sectors growth to only one-tenth of coconut, sugarcane and fifth in corn
a percent in the same year. out of five ASEAN countries namely
Indonesia, Malaysia, Philippines,
Declining productivity and competitiveness. Thailand and Vietnam (Table 4.6).
While the productivity of the agricultural In terms of price (producer price),
workforce has increased annually by an rice in the Philippines is the most
average of 1.66 percent from PhP19,894 expensive (US$318.8/MT), which
in 2004 to PhP21,553 in 2010, land can be attributed to the lack of factor
productivity in terms of yields of endowments such as a contiguous
traditional crops (e.g., rice, corn, sugarcane land area and big river systems.
and coconut) has stagnated or declined. Furthermore, the growth of total

factor productivity (TFP) growth urea. The value of agricultural exports The country actually has a
in agriculture has remained at a low in 2009 for the Philippines was only revealed comparative advantage
level in the Philippines, namely 0.2 US$3.2 billion3 (WTO, 2010). This is (RCA) not only in its lead
percent per year over the past two small compared to those of Indonesia, exports such as coconut,
decades, compared to 1.0 percent per Malaysia and Thailand which had over banana, mango, pineapple,
year in Thailand, 1.5 percent per year US$20 billion each. but also in sugar, abaca,
in Indonesia, and 4.7 percent in China papaya, dried tropical fruit,
(WB, 2010). Elusive rice self-sufficiency. For the period fresh fruit and fresh vegetables.
2004-2010, domestic rice production has Despite the export potential of
Comparative advantage not fully met only 84.71 percent of the countrys these commodities, however,
exploited. The country actually has annual average rice requirements, particularly the emerging
a revealed comparative advantage notwithstanding substantial public crops, the countrys share
(RCA)2 not only in its lead exports such investments in the rice sector (DA, 2011). (8.3%) and value of agricultural
as coconut, banana, mango, pineapple, During the global food crisis in 2008, the products (US$3.2 billion) to total
but also in sugar, abaca, papaya, dried Philippines imported some 2.4 million exports is among the lowest in
tropical fruit, fresh fruit and fresh MT of rice valued at US$1.9 billion to comparable ASEAN countries.
vegetables (Table 4.7). Despite the supplement its domestic rice stocks.
export potential of these commodities,
however, particularly the emerging Increase in food commodities prices. The
crops, the countrys share (8.3%) and average increase in the prices of rice
value of agricultural products (US$3.2 and corn were the highest among basic
billion) to total exports is among commodities for the period 2004-2010, at For the period 2004-2010,
the lowest in comparable ASEAN 7.8 percent and 7.5 percent, respectively domestic rice production has
countries. (Table 4.9). This is largely due to the met only 84.71 percent of the
global food crisis in 2008 which saw countrys annual average rice
The country also continues to be the the retail price of rice increased by as requirements, notwithstanding
only agricultural net-importer among much as 29.1 percent. The 6.4-percent substantial public investments
comparable ASEAN members, inflation in selected food commodities in the rice sector. During the
with an agricultural trade deficit prices is higher compared to the national global food crisis in 2008, the
of US$2.4 billion in 2009 (Table headline inflation rate of 5.6 percent. Philippines imported some 2.4
4.8). The total value of agricultural Higher prices of food commodities erode million MT of rice valued at
imports amounted to US$5.6 billion, purchasing power, especially among the US$1.9 billion to supplement its
the top six agricultural imports being poor, and highlight the grave threats domestic rice stocks.
rice, wheat, soya bean products, milk to food security due to extreme shocks,
and cream products, tobacco, and affecting not only production, but also
marketing systems.
Table 4.8 International Trade of Agricultural Products: 2000 and 2009

Export Import Trade
Country Value 2009 % Share Value 2009 % Share Balance
(in US $ B) 2000 2009 (in US $ B) 2000 2009 2009
Indonesia 25.3 11.9 21.1 11.4 13.1 12.4 13.9
Malaysia 20.9 8.2 13.3 12.3 5.6 10.0 8.5
Philippines 3.2 5.1 8.3 5.6 8.4 12.2 (2.4)
Thailand 28.0 17.7 18.4 9.4 7.2 7.0 18.6
Vietnam 10.7 27.3 18.7 9.3 8.1 13.2 1.4
Source: World Trade Organization
2
RCA is the share of a product in total Philippine exports as a ratio of the share of the same product in total world exports.
3
This is slightly higher than the value of exports in Table 4.8 since WTO category is broader than the figures released by NSO.

Table 4.9 Inflation Rates by Commodity for All Households (in percent)
Country 2004 2005 2006 2007 2008 2009 2010 Average
Rice 2.6 7.0 3.7 3.4 29.1 7.5 1.1 7.8
Corn 10.7 5.5 4.7 4.4 23.2 6.1 -1.8 7.5
Eggs 5.4 3.5 5.6 6.8 6.9 6.8 2.7 5.4
Fish 8.0 6.6 5.2 3.3 9.1 6.1 3.1 5.9
Fruits and Vegetables 6.0 5.0 8.8 2.9 11.7t 5.9 0.5 5.8
Meat 13.0 5.9 2.4 2.6 8.9 5.4 4.1 6.0
Average 7.6 5.6 5.1 3.9 14.8 6.3 1.6 6.4
Philippines (headline
6.0 7.6 6.2 2.8 9.3 3.3 3.8 5.6
inflation)
Source: NSO, 2011
Table 4.10 Poverty Incidence and Magnitude in the Philippines: 2003, 2006 and 2009
Poverty Incidence (%) Magnitude of Poor (in M) Change in Average Real
Item Income (bottom 30%)
2003 2006 2009 2003 2006 2009 2009 vs. 2006
Families 20.0 21.1 20.9 3.3 3.7 3.9 8.3
Population 24.9 26.4 26.5 19.8 22.2 23.1 no data
Source: NSO, 2011
Stagnant poverty headcount. Despite percent. As such, any variability in

positive growth and gains in productivity prices directly translates to an increase
in some subsectors, there has been almost or decrease in the prices of agricultural
no change in the welfare of almost 6.4 commodities, especially at the farm
million farmers, fisherfolk and other level. The increase in international
workers dependent on the sector. The prices of commodities and the fuel
poverty incidence of families has changed price spike in 2008 contributed to
Despite positive growth and slightly between 2003 and 2009 at 20.0 the high prices of domestic fertilizer
gains in productivity in some percent and 20.9 percent, respectively and corn. The price of fertilizer rose
sub-sectors, there has been (Table 4.10), while poverty in terms by as much as 135 percent in 2008
almost no change in the welfare of population has increased from 24.9 compared to 2007 and contributed
of almost 6.4 million farmers, percent to 26.5 percent, respectively. This to a decrease of 2.2 percent in palay
fisherfolk and other workers is despite an increase in average income production in the fourth quarter of
dependent on the sector. of the bottom 30 percent of families of 2008.
8.3 percent in real terms from 2006 to
2009.4 Inefficient Supply Chain and
Logistics Systems
Challenges Inefficiencies along the agricultural
supply chain result in postharvest
Growth in production and losses, higher transaction and
productivity faces formidable distribution costs, and lower
constraints. productivity. The Philippine logistics
system has been characterized as
High Cost of Production Inputs being cost-inefficient, unresponsive to
customers and market requirements,
Inputs such as fertilizers and pesticides and unreliable. Compared to
typically account for 20-30 percent of developed countries, distribution and
total production cost while livestock and processing costs in the country are 20-
poultry feeds account for as much as 70 30 percent higher with logistics costs
4
The poverty estimation methodology was refined by the NSCB in February 1, 2011. However, urban-rural
disaggregation is not yet available when the official poverty statistics was released last February 8, 2011.

accounting for almost 30-40 percent Low Rate of Adoption of
of total marketing costs (NEDA- Technologies, Including
UNDP, 2005). Mechanization
The ineffective logistics services Despite the availability of science and
coupled with inappropriate postharvest technology packages and products
handling have, likewise, resulted in huge such as organic fertilizer, high-yielding
postharvest losses. For rice and corn, varieties, cost-reducing farming practices,
about 14.75 percent and 7.2 percent and value-adding technologies, adoption
of the total production are lost during by farmers has been slow because of:
postharvest operations, respectively. (a) weak links between technology
Losses are even higher in horticultural producers and extension workers and
crops: losses in fruits range from 5 to farmers/fisherfolk; (b) lack of media and
48 percent, while losses in vegetables public awareness of the benefits of the
range from 16 to 40 percent. These technologies; and (c) financial or capacity
postharvest losses, when translated into constraints of intended users.
monetary values, sizeably reduce the
income of farmers and their households Similarly, the use of mechanization in Inefficiencies along the
(BPRE, 2010). Philippine agriculture has been low. The agricultural supply chain result
current mechanization level of the sector, in postharvest losses, higher
Inadequate Provision of which is 1.68 horsepower (hp)/hectare, is transaction and distribution
Irrigation Infrastructure far below other Asian countries such as costs, and lower productivity.
Korea (4.11 hp/hectare) and China (3.88
As of 2009, the total area provided hp/hectare). Among rice and corn farmers,
with irrigation service is 1.54 million only 21.7 percent have mechanized while
hectares wherein 765,000 hectares are the rest continue to use manual labor
under the National Irrigation Systems and farm animals in production activities
(NIS). Communal Irrigation Systems (UPLB, 2009).The inadequacy of aftersales
(CIS) cover around 558,000 hectares. service, substandard machinery, and the
The total service area represents 49 sporadic, fragmented and disorganized
percent of the potential irrigable area implementation of agricultural and fishery
of 3.126 million hectares. However, mechanization have contributed to low
the pace of irrigation development in mechanization in the sector.
the country has been estimated at less
than 1 percent per year. While quick- Limited Access to Formal Credit
gestating irrigation development and Financing
activities such as rehabilitation and
improvement of existing systems and From 2004-2009, the annual proportion
facilities were envisioned to fasttrack of agrifishery and forestry (AFF) loans to
irrigation development, the sector total loans granted by banks was at a low
remains hampered by lack of funds to average of 2.5 percent. The limited access
sustainably operate and maintain these to credit by small farmers and fisherfolk,
irrigation systems, inadequate technical despite the banking sectors reported large
capacity of Irrigators Associations amount of funds available for lending, has
(IA) and the National Irrigation been due to: (a) the lack of track record
Authority (NIA) field personnel, as among farmers; (b) lack of knowledge
well as inadequate water supply. The on accessing formal or bank financing,
succeeding Chapter 5, Infrastructure particularly putting together the required
Development, offers a detailed documents; (c) lack of acceptable
assessment of rural infrastructure, collateral; delayed release of loans; and
particularly irrigation bottlenecks (d) numerous documentary requirements
and narrates strategic directions to that formal lending institutions require
overcome these bottlenecks. from farmers upon commencement of

transactions. On the part of the banks, expected to increase in all parts of the
their aversion to high-risk and low- country in 2020 and 2050. Projected
income agricultural projects, the high cost seasonal mean temperatures in the
of administering small loans, and poor Philippines are expected to rise by
repayment performance of agricultural about 0.5-0.9 C for 2020 and 1.2- 2.0
loans, among others, have constrained C by 2050. Extreme rainfall is also
the provision of credit to farmers and projected to increase in Luzon and
fisherfolk (ACPC, 2010). the Visayas while a decreasing trend
is projected in Mindanao (MDGF-
Competing uses of agricultural lands. 1656, 2010).
Agriculture, together with the natural
resource sector, has been adversely These changes bring further pressures
affected by shifts towards competing on agricultural production, which
uses. Particularly sensitive for its is already stressed by other resource
implication for food security is the scarcities and economic challenges.
conversion of prime agricultural lands Changing rainfall patterns, rising
to nonagricultural uses (i.e., residential, temperatures, increasing frequency and
commercial and institutional) and the intensity of typhoons and dry spells,
rising demand for industrial crops (e.g., and sea level rise are expected as a result
biofuel). Alternative land use activities of climate change. These impacts will
have also encroached upon ecologically spell a difference in terms of cropping
fragile lands. These point to the need calendars, unpredictability of yields,
The Philippines has long been for a national land use policy that will pest pressures, crop losses, livestock and
vulnerable to weather risks, rationalize the optimal allocation of land fisheries production, and damages to
a fact exacerbated by climate among competing uses. existing infrastructure. Sea level rise is
change. Since the 1980s, the already being experienced in parts of the
growth in agricultural gross Households dependent on country, reducing the productive coastal
value-added (GVA) has been agriculture are especially areas for agriculture and fisheries. Salt
erratic partly owing to the vulnerable to climate water intrusion in the lowlands and in
impact of severe weather risks variability and extreme aquifers for irrigation and domestic uses
and the periodic occurrence events. is also already being experienced.
of the El Nio and La Nia
phenomena. Aside from Climate Change Environmental Degradation
typhoons Ondoy and Pepeng,
the El Nio in 2010 caused The Philippines has long been vulnerable Of the countrys total land area, 5.2
damages to agriculture and to weather risks, a fact exacerbated by million hectares (about 17%) are
fishery estimated at PhP8.4 climate change. Since the 1980s, the severely eroded and another 8.34
billion over a total area of growth in agricultural gross value-added million hectares (27.3%) are vulnerable
355,986 hectares. (GVA) has been erratic partly owing to to drought, alternating with floods
the impact of severe weather risks and and typhoons on an annual basis.
the periodic occurrence of the El Nio In the lowlands, continued use of
and La Nia phenomena. Aside from unsustainable production practices
typhoons Ondoy and Pepeng, the El Nio such as the extensive use of chemical
in 2010 caused damages to agriculture inputs, expansion of grazing lands, slash
and fishery estimated at PhP8.4 billion and burn practices, and deforestation
over a total area of 355,986 hectares. especially in watershed areas have
resulted in land degradation (i.e.,erosion,
The DOST-PAGASA scenarios for 2020 declining soil fertility) and problems of
and 2050 project widespread warming in water quality and availability. In the
most parts of the country. Longer hot upland ecosystem, climatic drivers and
days and shorter cold days are expected. human-induced activities have resulted
The number of days with maximum not only in land degradation but also in
temperature of more than 35 C is the loss of biodiversity (BSWM, 2004).

Agricultural development The NFA support price has on average
is also undermined by led to an increase in consumer prices
flawed policies and in ten regions of the country and
institutions. contributed little to price stabilization
(Purdue University, 2005). It is worth
Weak Agricultural Extension noting that among NFA rice consumers,
Service only 46.6 percent are considered poor. In
addition, among all poor households who
Devolution of agricultural support are supposed to benefit from NFA rice,
services and extension, beset by only 24 percent have been able to access
lack of LGUs absorptive capacities, them (Reyes et al., 2009).
has resulted in weak extension
services. The decentralization of the Incomplete Implementation of
agricultural extension service was Asset Reforms
pursued on the premise that the
constraints to production and service The long period of implementation and
requirements of farmers and fisherfolk pending completion of the CARP has
would be best addressed through an resulted in underinvestment in the sector, The current spending on
LGU-led, NG-supported agriculture largely owing to the uncertainty faced by agricultural research and
service system. The devolution, landowners. Landowners are reluctant to development, a public good
however, has been beleaguered with invest while their farms are undergoing of demonstrated benefits,
poor absorptive capacities of LGUs acquisition processing. On the other hand, is a mere 0.10 percent of
to take on the task of extension for lands that have been awarded, support agriculture GVA. This is
service provision. With the social, services to the ARBs are insufficient to one-tenth of the 1.0 percent
infrastructure, and economic sectors, improve productivity. The implementation benchmark suggested by
agriculture has been less prioritized of asset reforms must therefore be international practice.
in the development agenda of many completed in the next five years as provided
LGUs. Hence, funding allocation is in RA 9700, including the allocation and
minimal and often times dependent release of the PhP150 billion budget for
on the support of the DA. This has the program. The full implementation of
resulted in inadequate manpower the CARPer will facilitate asset reform
and weak extension services of and serve as an incentive to farmers and
local agriculture offices, both at other stakeholders to invest in rural areas
the provincial and municipal levels (Habito & Briones, 2005).
(Balisacan, 2006).
Limited Investments in Public
Contradictory Rice Policy Goods
Vested with the function of stabilizing Public goods are important because their
the supply and prices of rice, the benefits are shared by the community;
countrys staple, the NFAs operations they yield high social returns on
aim to raise farmgate prices to secure investment and have long-term impacts,
farmers profit, and at the same time, and they are not readily provided by the
maintain retail prices at an affordable private sector but important to society
level for consumers. Government as a whole. On the other hand, other
intervention on both sides of the interventions, such as subsidies on
market has led to huge public losses, fertilizer have benefits limited to target
increased the volatility of domestic groups, have impacts which are short-run,
prices, reduced the welfare of both are costly to government, and do compete
consumers and producers, and with or crowd out the private sector. The
discouraged the private sector from current spending on agricultural research
investing in distribution and storage and development (R&D), a public good
facilities (Balisacan et al., 2006). of demonstrated benefits, is a mere 0.10

percent of agriculture GVA. This is one- The opportunity cost of underinvesting
tenth of the 1.0 percent benchmark in other commodities is therefore
suggested by international practice. very high. Focusing on commodities
In the case of rice (which is indicative where we have comparative advantage
of the pattern for other products), the will not only result in increasing
contribution of R&D, infrastructure and income but also improving access to
extension to rice production is estimated food, higher purchasing power, and
at 2.5 percent, 40 percent, and 15 percent enhanced overall welfare of the rural
respectively, while returns on investments sector.
are: (a) 77.1 percent for R&D; (b) 80
percent for extension; and (c) 18 percent Incomplete Implementation of
for irrigation (Balisacan, 2006). the Strategic Agriculture and
Fishery Development Zones
Public good provision must consider (SAFDZs) and Preparation of
quality. Many infrastructure and Integrated Development Plans
postharvest facilities deteriorate rapidly. (IDPs)
Field reports document the poor
quality of flat bed dryers and rice straw The identification of SAFDZs as
choppers for organic fertilizers. Graft provided under AFMA has not
and corruption eat up a large part of the been fully implemented (AFMA
outlays. Review, 2007). Programs in the
sector should also focus on areas of
Food security exists when In 2004-2010, funds allocated for high agriculture potential to avoid
all people, at all times, have marketing assistance accounted for spreading investments too thinly
physical and economic access only 1.1 percent of the average annual resulting in small impact in the
to sufficient, safe and nutritious budget of the DA. This is 7 percent rural areas. The SAFDZs will also
food that meets their dietary lower than the prescribed allocation facilitate prioritization of investment
needs and food preferences for under the AFMA of 1997. The timely programming in the sector. The
an active and healthy life. access and dissemination of market and identification of these areas should
market-related information is critical to be initiated by LGUs, with technical
making optimal business decisions that support from the DA and DENR to
in turn impact on revenue, consumer ensure that priorities are consistent
prices, and supply conditions. Likewise, with local development thrusts and
the availability of real-time market strategies, as well as aligned with the
intelligence is useful in identifying national policies.
potential markets as well as information
on supply requirements. Delay in the Implementation of
Rationalization Plans
Limited Investments on
Commodities with Comparative Efficient and effective institutions and
Advantage bureaucracy are essential to creating an
enabling environment that encourages
While public investment for the rice private, LGU and foreign investments
sector has been substantial in the past in the economy. However, the countrys
years, amounting to almost 60 percent agricultural bureaucracy is continuously
(PhP22.56 billion) of the 2009 AFMA beset with problems related to
fund, the allocations for high value and overcentralization, fragmentation
export commodities such as fruit trees, of agencies, weak coordination,
vegetables, tree crops and fisheries have overlapping of functions, politicization
been inadequate. Net returns from and corruption, making it ineffective
vegetable and fruit tree production are in spurring growth and development
higher than from rice production by a for the sector (Habito and Briones,
range of PhP5,000-100,000 (BAS, 2009). 2005). At the national level, there is a

need to rationalize the DA to focus For the sector to fulfill its role in reducing
its core functions on public goods and rural poverty and to achieve food security
services, such as R&D extension, and in the long term, increased incomes,
regulation; and maintain its steering productivity and production shall be
role in the development of the sector. prioritized. Increased investments and
employment are to be fostered and ARBs
transformed into profitable entrepreneurs.
Strategic Framework
Strategy 1.1 Raise productivity5 and
Vision incomes of agriculture and fishery-based
households and enterprises.
The Plans vision is a competitive,
sustainable and technology-based Raising productivity and incomes is an
agriculture and fisheries sector, driven important first step towards modernizing
by productive and progressive farmers the sector. Productivity enhancements will
and fisherfolk, supported by efficient make agriculture and fishery products more
value chains and well-integrated in the competitive, contributing to the growth of
domestic and international markets, the other economic sectors. Chapter 3 on Raising productivity and
contributing to inclusive growth and Competitive Industry and Services Sectors incomes is an important first
poverty reduction. further reinforces the important linkage step towards modernizing
between the agriculture and non-agriculture the sector. Productivity
Goals and Strategies sector, especially in the promotion of enhancements will make
agribusiness and exports. The increased agriculture and fishery
Within six years, through prudent use income of agriculture and fishery-based products more competitive,
of resources, the agriculture and fisheries households and enterprises shall lead to contributing to the growth of
sector shall have attained the following: the improvement of the quality of lives the other economic sectors.
(a) improved food security and increased and capital accumulation for investments.
rural incomes; (b) increased sector Below are the measures that shall be taken
resilience to climate change risks; and to implement the above strategy:
(c) enhanced policy environment and
governance. a) Diversify production:
Goal 1: Food Security Improved Facilitate and promote diversification

and Incomes Increased of production and livelihood options;
This Plan takes the view that food Update SAFDZs as bases for
security exists when all people, at all identifying investment areas;
times, have physical and economic access
to sufficient, safe and nutritious food b) Complete the delineation of municipal
that meets their dietary needs and food waters for better fishery resource
preferences for an active and healthy life management;
(FAO, 2002).
c) Improve rural infrastructure and
This goal will be further fleshed out facilities:
with the release of the Food Staples
Self-Sufficiency Roadmap (FSSR) Establish climate-resilient agriculture
2011-2016. The FSSR aims to attain infrastructure through enhanced
self-sufficiency in staples by focusing on technical design of irrigation and
irrigation and instituting reforms in the drainage systems and facilities, farm-
NFA. to-market roads (FMRs), postharvest
5
Productivity refers to land, labor and capital.

facilities (PHF), trading posts, among Sharpen regulatory competence
others; through technical and legal
training, improvements in
Provide irrigation services and laboratories and equipment,
facilities focusing on rehabilitation and alignment of domestic with
and restoration of national irrigation internationally accepted standards,
systems; maintain existing systems and including those for organic inputs,
establishment of small scale irrigation food, and Halal certification;
systems; enhance cost-sharing/
counterpart mechanisms for financing e) Strengthen Research, Development
with LGUs; and adopt an integrated and Extension (RD&E):
water resource management approach
to ensure water supply; Update databases and information
systems for the formulation of a
Increase the effectiveness6 and reliable and responsive National
efficiency of the rural infrastructure RD&E agenda;
system, including agricultural
logistics and various facilities such Increase investments in integrated
as farm-to-market roads (FMR), RD&E programs that promote
postharvest and information systems productivity enhancement,
(see also Chapter 5: Infrastructure develop environment-friendly and
Development); based on a master efficient technologies throughout
plan, identify priority FMR projects the value chain, in partnership
that strategically link production and with selected higher education
consumption areas; and institutions, LGUs, private and
business sector;
Tap private sector participation
in the construction of the needed Harmonize all agricultural and
support infrastructure for the sector; fisheries mechanization programs
and projects of all concerned
d) Develop markets and sharpen national government agencies,
regulatory competence: LGUs, and higher education
institutions;
Provide effective market assistance,
marketing support and information Rationalize and strengthen the
systems, product development, extension system to improve
market intelligence, and encourage complementation of national, local
participation in product promotion and private sector entities along
activities, both in the domestic and the value chain in the provision of
international markets; extension services;
Provide trade facilitation, including Expand and sustain the sectors

provision of trade and fiscal incentives human resource base (see also
to encourage participation and Chapter 8: Social Development);
investments from the private sector. and
This will, likewise, entail reforms and
law enforcement of agriculture trade Encourage the participation
policies, and strengthen market access of farmers, fisherfolk and their
initiatives and technical assistance organizations in research and
to SMEs and cooperatives, among promotion activities;
others; and
6
Effectiveness refers to cost effectiveness, applicability in the area or suitability with the needs of end-users.

f ) Improve the sectors credit access: Optimize productivity in mariculture
parks and broaden the aquaculture
Form stronger partnerships base;
between government and private
financial institutions; Transform the NFA into an agency New investments are
focused on addressing extreme shocks particularly important since
Strengthen the AFMA- to food supply and prices, while the sector employs a large
mandated Agro-Industry maintaining a predictable regulatory share of the labor force and
Modernization Credit Financing environment for rice trade; and accounts for a majority of the
Program (AMCFP); poor population.
Management of consumption and
Implement capacity building diversification of staples.
programs to improve the credit-
worthiness of farmers, fisherfolk Strategy 1.2 Increase investments and
and their organizations; employment across an efficient value
chain.
Promote long-term financing
for long-gestating crops such as New investments are particularly
coconut, rubber, oil palm, coffee, important since the sector employs a
cacao and fruit trees similar to large share of the labor force and accounts
Indonesia, Malaysia and Thailand; for a majority of the poor population.
Making the sector competitive and
Develop and pilot test innovative modern, however, may render some
financing schemes that would workers redundant, as in the case of
target farmer and fisherfolk who mechanization. For the released rural
have no collateral and credit track workers to find gainful employment in
record; and the industry and services sector, capital
accumulation must rise sufficiently such
Intensify information as in agroindustries and agricultural
dissemination of credit, guarantee services (e.g., marketing and logistics).
and insurance programs. In addition, complementary education
and training can make rural workers
g) Secure food availability and more adaptable and flexible. Expanding
affordability: the markets of agriculture and fishery
products through value-adding and
Ensure the availability of food scaling-up of operations can also provide
staples (rice, white corn, and additional employment opportunities.
other starchy food) at reasonable
prices at all times; a) Create job opportunities by expanding
existing markets, aggressively
Focus on long-term productivity- exploring new markets and promoting
enhancing measures for private investments on agroindustries,
agriculture and fisheries such as agriservices (i.e., custom-hiring),
irrigation, R&D and extension agroforestry and fisheries, in both PPP
services instead of short-term and private sector-led modes;
interventions (i.e., direct input
subsidies); b) Localize agricultural promotion
and development in accord with
Engage proactively with LGUs the subsidiarity principle. Regional
and the private sector to strategies must take precedence in
provide strategic agricultural championing local commodities and
infrastructure and services; promoting sector competitiveness;

c) Promote more value-adding into (CLOA) or at least through
products and develop the capacities collective CLOA;
of stakeholders for value-chain
management; b) Strengthen the organizational
capacity of ARBs and ARB
d) Promote vertical and horizontal organizations to develop and
integration of input, production, manage agrienterprises;
and marketing (e.g., agroindustry
clustering); c) Scale-up microenterprises
into formal and viable SMEs
e) Strengthen the countrys agricultural through the clustering of ARCs
exports by focusing resources on high- and establishing networks of
value crops (fruits and vegetables, enterprises;
ornamentals, rubber, oil palm, coffee,
coconut, etc.) and fishery products d) Liberalize access to credit by
(e.g., grouper, seabass, seaweeds, etc.), ARBs;7
where comparative advantage is high;
It is important to strengthen and e) Provide enterprise-based legal
ARBs capacities for support for ARBs and ARB
agricultural production f ) Expand investments in aquaculture organizations to strengthen their
and transform them into and other food production areas. structures and mechanisms; and
entrepreneurs capable of
improving the productivity of Strategy 1.3 Transform agrarian f ) Establish physical infrastructure
the awarded lands, adding reform beneficiaries (ARBs) into viable (FMR, irrigation systems and
substantial value to their entrepreneurs. postharvest facilities, among
produce, engaging in off-farm others) in strategic ARCs and
endeavors, and improving The CARP intends to improve the clusters.
their access to the markets. living conditions and wellbeing of
the ARBs, lifting them out of poverty Goal 2. Sector Resilience
and empowering them to improve to Climate Change Risks
their socioeconomic future. Awarded Increased
agricultural lands, the ARBs basic
input for their economic activities, must The resiliency of the countrys
therefore be harnessed for this purpose, agriculture sector is threatened by
taking into consideration ecological climate change and extreme weather
sustainability and gender equality/equity. events. Damage to rural infrastructure
It is important to strengthen ARBs and losses to crops, livestock and
capacities for agricultural production fishing grounds, water allocation
and transform them into entrepreneurs and the competing priorities in
capable of improving the productivity the use of water supply are a few
of the awarded lands, adding substantial emerging problems that should be
value to their produce, engaging in off- dealt expediently. Sound scientific
farm endeavors, and improving their advice is needed regarding appropriate
access to the markets: crop varieties, cropping patterns,
and climate-vulnerable structures,
a) Achieve land tenure stability of including irrigation systems.
the ARBs in the CARP-awarded
lands, preferably through individual
certificates of land ownership award
7
In compliance with Section 14 of Republic Act 9700

Strategy 2.1 Reduce climate to temperature increase, drought-
change-related risks and the tolerant, resistant to stresses such as
vulnerability of natural ecosystems water logging and pests);
and biodiversity through ecosystem-
based management approaches, b) Promote viable and competitive crop,
conservation efforts, and sustainable livestock and fishery varieties that can
environment and natural resources- tolerate climate variability;
based economic endeavors such as
agri-ecotourism. c) Establish climate-resilient agriculture
infrastructure through enhanced
a) Adopt Integrated Water Resource technical design of irrigation facilities,
Management (IWRM) and FMR, PHF, etc. that take climate
Sustainable Land Management risks and extreme climate events into
(SLM) Technologies in the account; and
development of water, land, and
related resources; d) Strengthen agricultural extension
and support services to raise farmers
b) Promote environment-friendly knowledge and capacity to adopt The NCI is a multisectoral and
and sustainable production climate-sensitive farming and fishing integrated planning approach
systems that use the farming technologies. adopted by the DA, DAR,
systems approach, employ good and the DENR towards more
agriculture/aquaculture practices, Strategy 2.3 Strengthen the agriculture efficient use of resources.
and promote organic agriculture, and fisheries insurance system as an Through the NCI, the three
as embodied in RA10068 or the important risk sharing mechanism. rural development agencies
Organic Agriculture Act of 2010; undertake joint planning,
a) Improve risk-reducing mechanisms programming and budgeting
c) Improve the climate change (i.e., guarantee, insurance) to as well as monitoring and
resilience of fisheries through the encourage more banks and other evaluation in the achievement
restoration of fishing grounds, lending conduits such as cooperatives of the sectoral goals and
stocks and habitats and through and NGOs to lend to agriculture and targets of the Plan.
investment in sustainable and fisheries; and
climate change-responsive fishing
technologies and products; and b) Introduce innovative risk-transfer
mechanisms such as weather-based/
d) Strengthen sustainable, index insurance systems.
multisectoral and community-
based resource management Strategy 2.4 Incorporate natural
mechanisms. hazards and climate risk in the
agricultural land use plan or the
Strategy 2.2 Increase the resilience Comprehensive Land Use Plan (CLUP)
of agriculture communities through
the development of climate change- a) Pursue the passage of a National Land
sensitive technologies, establishment Use Law as a basis for effective land
of climate-resilient agricultural use policy and planning; and
infrastructure and climate-
responsive food production systems, b) Use land use planning at national
and provision of support services to and local levels to identify hazardous
the most vulnerable communities. areas and as a basis for implementing
adaptation and mitigating measures in
a) Strengthen R&D for the climate risk- and disaster-prone areas.
improvement of crop, livestock
and fishery varieties (i.e., resistant

Strategy 2.5 Strengthen the capacity of sectoral goals and targets of the Plan.
communities to respond effectively to The objectives of the NCI include:
climate risks and natural hazards.
a) Accelerating the completion of the
a) Conduct IEC campaigns and capacity CARPer up to 2014;
building activities for the purpose at
the local level; and b) Rationalizing land use policies
and strengthen the system of land
b) Establish community-based early property rights;
warning systems, agrometeorology
stations, automatic weather stations c) Promoting sustainable agriculture
(AWS) and climate field schools. and preserve the land resource base;
Strategy 2.6 Continue vulnerability d) Enhancing the investment and

and adaptation assessments especially in opportunity climate for agribusiness;
food production areas.
e) Promoting sustainable upland
a) Produce updated weather-based development and forest management;
dynamic cropping calendars to address and
the irregularity of wet and dry seasons,
and develop optimal planting windows f ) Initiating CCA and mitigation
based on medium-range weather measures.
forecasts; and
Strategy 3.2 Adopt Managing for
b) Undertake a study to assess Development Results (MfDR) as
groundwater resources availability and a common approach among rural
vulnerability to ensure food security development agencies.
during period of drought.
MfDR is a management strategy that
Goal 3. Policy Environment and focuses on development performance
Governance Enhanced and sustainable improvements in
outcomes, providing both framework
As a complement to the preceding goals, and practical tools for strategic planning,
the policy environment and governance risk management, progress monitoring,
shall be enhanced through: (a) the NCI; and outcome evaluation (OECD Policy
(b) the use of an effective common Brief, March 2009). By focusing on clear
management strategy among agencies and measurable results, government
concerned; (c) budgetary reforms; (d) resources are translated into programs
PPP; and (e) a review of laws and policy and projects that deliver development
issuances. outcomes.
Strategy 3.1 Reaffirm the mechanisms Strategy 3.3. Implement budgetary

and objectives of the National reforms.
Convergence Initiative (NCI).
The current budget system for the
The NCI is a multisectoral and integrated sector is commodity- and production-
planning approach adopted by the DA, oriented and is not geared to promoting
DAR, and the DENR towards more competitiveness. Funding for key
efficient use of resources. Through the functional areas under the AFMA, such
NCI, the three rural development agencies as market and information services,
undertake joint planning, programming regulatory functions, research, etc.,
and budgeting as well as monitoring and is currently allocated to commodity
evaluation in the achievement of the programs, which are centrally managed

and lack the ability to prioritize
strategically across the entire sector. Legislative Agenda
A revised budget format shall correct Pursue the Passage of a
this shortcoming by introducing a National Land Use Law
system based on priorities, functional
responsibilities and market needs, The passage of the bill, pending for two
consistent with the AFMAs goals. The decades now, is expected to provide legal and
revised format will also provide for a other mechanisms not only for land reform
greater alignment between the planning areas, but also zoned areas for water and
and budget processes. This budgetary water uses, especially for agriculture. This is
reform is also inherently linked with the especially important in anticipation of the
MfDR strategy. end of the agrarian reform program and
the subsequent opening of the land market.
Strategy 3.4 Pursue PPP especially Further, it is envisioned that the policy shall
for infrastructure and value chain serve as guide to the optimum allocation
development. of land among competing uses within the
framework of sustainable development.
The private sector will be tapped to It shall also provide a mechanism for
participate in governments efforts in resolving land use policy conflicts taking
delivering immediately the needed into consideration the principles of social
infrastructure and services in the equity and economic efficiency.
agricultural and fisheries sectors. Among
the projects that may be eligible under Institute Reforms in the NFA
PPP include irrigation infrastructure,
food supply chain and postharvest The NFA Reorganization Act will further
services (i.e., bulk handling facilities, rationalize grains-sector trading. It
food/grains terminals and processing, restructures the agency by separating its
storage, handling and port/transport regulatory and proprietary functions. The
facilities), production centers for various NFA shall grant import permits for rice
farm inputs, fish farming infrastructure, to all applicants as a ministerial function,
and market and trading centers. subject to the payment of applicable taxes,
duties, and service fees. The quantitative
Strategy 3.5 Review critical legislation restriction on rice must be reviewed in
(i.e., AFMA, Fisheries Code) and light of the WTO exemption that expires
policy issuances (i.e., sugar trade). in 2012. The proposed law enables NFA
to engage in activities consistent with its
A review of laws and policies shall renewed mandate.
be a continuing activity to ensure the
responsiveness of such issuances to Rationalize DA, DAR and DENR
current developments in the sector. The
AFMA of 1997 and Fisheries Code The agriculture bureaucracy should be
of 1998, mandates a mandatory review rationalized through the efficient and
every five years. Corn and sugar trade effective convergence and complementation
policies will also be reviewed, to take of the agriculture, agrarian reform and
into account the latest global trends natural resources (AARNR) service
and market forces, and to ensure supply agencies and related offices by taking
adequacy supply, price stability, and measures to sort out institutional overlaps.
affordability. The convergence effort will operationalize
sustainable development by integrating
the social, economic, and environmental
aspects of rural development. The proposed
legislation will rationalize and strengthen

the provision of extension services towards
improving national, local and private sector
complementation.
Work for the Accelerated

Irrigation Act
Under this law, the NIA shall undertake a
six-year accelerated irrigation program to
construct irrigation projects in the remaining
unproductive but potentially irrigable lands
nationwide to an extent to be determined
in a full inventory of potential areas for
irrigation, and of potential irrigation projects
in accordance with technical, economic, and
environmental criteria.
Work for a Food Safety and

Food Labelling Law
This measure puts in place a coordinated
food safety and certification system, clearly
defining the functions and mandates of
the agencies concerned; establishing a
system for public laboratories to ensure the
credibility of test results; and strengthening
the participation of food supply industries
in the global food trade, among others.
Consumers right to information should also
be protected through proper labelling of raw
materials and ingredients of processed food
products, including those sourced from
genetically-modified organisms.

Construction of the MRT-3 extension
Photo by: Leody Barcelon
05 Accelerating
Infrastructure
Development
Accelerating Infrastructure Development 121
Accelerating Infrastructure
Development
The Plans infrastructure development program aims to contribute to inclusive growth
and poverty reduction. It will support the performance of the countrys economic
sectors and ensure equitable access to infrastructure services, especially as these
affect the peoples health, education, and housing. Toward these ends, the government
will accelerate the provision of safe, efficient, reliable, costeffective, and sustainable
infrastructure.
Crosscutting Strategies fiscal space discussed in Chapter 2,

the following strategies need to be
Low levels of investment in The countrys inadequate infrastructure implemented to make the most of
infrastructure are directly caused has been identified as a critical constraint available resources and investments in
by the countrys tight fiscal to economic growth1. This inadequacy, infrastructure:
situation. in both quantity and quality, is the result
of low levels of public and private sector Improve Project Preparation,
Inadequate project preparation, investments in infrastructure, which fall Development, and
poor project quality-at-entry, and short of the requirements of a progressive Implementation
poor project execution cause economy and a growing population.
delays and changes in project Moreover, inequitable access to basic Inadequate project preparation, poor
scope and raises costs in the infrastructure services has also become an project quality-at-entry, and poor
course of implementation. obstacle to poverty reduction and, more project execution cause delays and
generally, to inclusive growth because it changes in project scope and raises costs
limits the opportunities for economic in the course of implementation. All of
and social advancement available to these significantly reduce the projects
marginalized sectors. value and hamper the attainment of
project objectives.
To accelerate infrastructure development
and offer equitable access to infrastructure To address this problem, the following
services, the following objectives and policy reforms2 shall be implemented:
strategies shall be pursued across all
infrastructure subsectors: Strengthening the capacity of
NEDA and other government
To Optimize Resources and agencies in Value Engineering/
Investments Value Analysis (VE/VA) and
Risk Analysis and Management
Low levels of investment in infrastructure to ensure that infrastructure
are directly caused by the countrys projects are not overdesigned
tight fiscal situation. Notwithstanding or overspecified and to
the measures to address the narrow minimize cost-overruns, project

1
See ADB. Philippines: Critical Development Constraints, ADB Publications, December 2007, p.1-62 and C.F.
Habito. An Agenda for High Inclusive Growth in the Philippines. ADB Publications 2010, p. 1-61.
2
These reforms were recommended under the 2009 Philippines-Australia Partnership for Economic Governance
Reforms (PEGR)-funded Reform Agenda 006-07 on Institution Strengthening of the NEDA and other oversight
agencies on value engineering, contract preparation, and performance monitoring of infrastructure projects

implementation delays, and Synchronize Planning and
changes in scope of works; Budgeting
Incorporation of VE/VA and The MTEF and the OPIF represent
Risk Analysis in the guidelines substantial progress in ensuring the
and processes of the NEDA consistency and responsiveness of the
Investment Coordination expenditure program with the national
Committee (ICC); development agenda of the government.
Despite these, there is still a need to
Development of Model guarantee that only those infrastructure
Transaction Documents/ programs and projects that will generate
Contracts that may be uniformly genuine economic benefits and are
applied to PPP projects of national consistent with established development
government agencies (NGAs) plans will be adequately funded for timely
and LGUs3; and implementation.
Monitoring, management, By synchronizing the prioritization of

and evaluation (MME) of PPP programs and projects on one hand and Development initiatives across
projects for the immediate allocating appropriate funding across infrastructure subsectors shall
mitigation of potential problems government agencies on the other, the be coordinated and integrated.
during contract implementation, government ensures that only programs Intended outcomes are better
while maintaining clear lines and projects that are strategic and critical realized if there is a coordinated
of accountability between to the realization of developmental goals and integrated strategy for
contracting parties and the shall be prioritized for funding. As a prior infrastructure initiatives.
oversight agency. step, however, government agencies must
demonstrate that proposed projects indeed
To assist agencies in project preparation, make positive net contributions to national
a fund to support the conduct of economic and social welfare.
feasibility studies may be established.
This fund will ensure that feasibility Coordinate and Integrate
studies are undertaken in a timely and Infrastructure Initiatives
correct manner.
Development initiatives across
With regard to PPP projects, NEDA- infrastructure subsectors shall be
ICC approval of business cases shall coordinated and integrated. This ensures
be secured before proceeding to full that the requirements of these subsectors
feasibility studies to save on project are addressed within the fundamental levels
preparation costs. This shall include the of the infrastructure sector and that their
go or no-go decision on a project at an contributions are fully utilized. Intended
early stage and shall be required of all outcomes are better realized if there is a
PPP projects irrespective of modality. coordinated and integrated strategy for
infrastructure initiatives.
LGUs play a key role in infrastructure

development. While local autonomy is
duly recognized, the financial and technical
3
Specific BOT/PPP model transaction documents/contracts have already been developed for four subsectors
namely: (a) urban mass rail; (b) bulk water supply; (c) solid waste management (SWM); and (d) ICT. A contract
drafting tool which aims to encompass all other projects and sectors not covered by the four model contracts has
also been developed. The model contracts and the contract drafting tool are both posted on the NEDA website
under the Programs and Projects section.

capacity of LGUs must be enhanced if they b. the establishment of an
are to become more effective development independent body that consolidates
partners. Their capacity for planning must in itself all regulatory functions
also be improved so that local and national to support the provision of public
plans can be harmonized. infrastructure services in subsectors
with multiple regulators;
To aid planning and project development,
the collection, management, and integration c. the creation of a regulatory
of key infrastructure and related data both framework where this is lacking and
at the national and local levels will be necessary; and
improved.
d. the strengthening of regulatory
To attract Investments in institutions through capacity building
Infrastructure and reinforced independence.
Improving investor confidence is Regulatory agencies should pay special

necessary in order to generate additional attention to vertical integration trends
financing and attract service providers. in supply and distribution utilities.
Both, in turn, ease the burden of These may facilitate transfer-pricing and
government in providing infrastructure. result in inefficiencies from the supply
The following strategies aim to make side to the distribution side. This issue
the country an attractive destination becomes critical in sectors where natural
for investments by establishing a stable, monopolies are present, such as energy
consistent, and transparent policy and water, where returns on investment
environment and by reducing the money- are guaranteed and where distribution is
and time-cost of doing business: regulated while supply is not.
Improve the Institutional and Encourage PPPs

Regulatory Environment of the
Infrastructure sector The huge investment requirements of
the infrastructure sector, coupled with
Regulatory agencies play a vital role the governments need to observe fiscal
in infrastructure development since discipline, means that government
they strongly influence, for good or ill, shall tap the private sector for the
the provision of existing infrastructure financing, construction, operation,
services and the levels of forthcoming maintenance, and rehabilitation of
investments. They also affect the major infrastructure in high-priority
accessibility of such services, particularly areas, such as transportation, power and
the rates at which these are made water.
available.
To this end, the environment for the
Improving the regulatory environment implementation of PPPs shall be
for infrastructure therefore becomes improved by revisiting the following
contingent on institutional reforms, guidelines and policies:
which will involve:
a. RA 7718 and its Implementing
a. the separation of operation and Rules and Regulations (IRR);
regulatory functions of agencies in
order to remove conflicts of interest b. Guidelines and Procedures for
that arise naturally when such entering into Joint Venture ( JV)
functions are performed by a single Agreements between Government
entity; and Private Entities; and

c. RA 9184 or the General and help mitigate the adverse impacts
Procurement Reform Act. of climate change. LGUs should also
incorporate CCA and DRRM strategies
The objective of the review shall be into their respective plans, programs and
to clarify ambiguous provisions and budgets to allow timely, efficient and
streamline the procedures and processes effective mitigation and disaster response
of project approval and implementation. at the local level.
Experience during the global financial
crisis and constraints encountered by To Provide Productive Employment
concerned agencies in processing and Opportunities
implementing PPP projects will also be
considered to make these guidelines and Adopt a Labor-Intensive Scheme
policies more responsive and attractive Where Applicable
to the private sector.
Infrastructure can contribute significantly
To Foster Transparency and to local employment generation and can
Accountability in Infrastructure harness skills and technical expertise of
Development the workforce. To provide productive The impacts of climate change
employment opportunities that will and natural disasters add to the
Encourage Stakeholder contribute to inclusive growth, the countrys infrastructure problems
Participation infrastructure sector shall adopt an and hamper resolution of the
employmentintensive or laborbased constraints earlier discussed.
Government shall encourage the active scheme whenever it is most optimal in Hence, CCA and DRRM will be
participation of the public and civil infrastructure development. Safety and institutionalized in infrastructure
society in governance, monitoring, health in public works undertakings shall development.
and feedback. Transparency and be ensured at all times.
accountability are integral to a
predictable policy environment
conducive for investment. Infrastructure Subsectors
To Adapt to Climate Change Transport
and Mitigate the Impacts of
Natural Disasters Assessment, Issues, and
Challenges4
Institutionalize CCA and
DRRM in Infrastructure In the MTPDP 20042010, the
Development. development of the countrys transport
infrastructure was principally aimed
The impacts of climate change and at the decentralization of progress and
natural disasters add to the countrys development by providing opportunities
infrastructure problems and for growth, especially in regions and areas
hamper resolution of the constraints adjacent to Metro Manila. Towards that
earlier discussed. Hence, CCA and end, the following major thematic areas
DRRM will be institutionalized in in transport were pursued and became
infrastructure development. the primary focus of both public and
private investment: (a) the development
Plans and designs should include the of the nautical highway system and
possible effects of climate change and road-roll-on/roll-off (RORO) terminal
natural disasters in order to develop system linking the entire country; (b) the
disasterresilient infrastructure development of tourism infrastructure
4
Source: Updated MTPDP 20082010

to provide access to major tourism national roads had been paved, of which
destinations; (c) the affirmative action for of 13,525 km. were national arterial
peace and development in Mindanao and roads and 8,943 km. national secondary
other deeply impoverished areas; and (d) roads. Meanwhile 93 percent of the
the decongestion of Metro Manila and total 314,456 linear meters of national
the spread of development to adjacent bridges have been made permanent. As
regions. for local roads, of the 30,924.76 km. of
existing provincial roads, 30.2 percent
Facilities for RORO have been built or 9,345.15 km. have been paved, while
or rehabilitated in 22 ports identified 69.5 percent, or 21,464.50 km, are
under the Strong Republic Nautical unpaved, with 0.4 percent or 115.11
Highway (SRNH), with 42 RORO km. of still undetermined condition. Of
ships operating in the identified SRNH the 14,810.44 km. of city roads, 61.7
routes run by 25 shipping operators as of percent, or 9,138.348 km. have been
the end of 2009. Economic gains have paved and 35.8 percent, or 5,308.220
been recorded in connection with the km, are unpaved, with 2.5 percent or
intermodal road-RORO terminal system 363.872 km. of undetermined quality.
(RRTS) connecting Mindanao, Visayas,
and Luzon, with a reduction in travel Major tourist destinations identified
time by around 12 hours and a reduction in the previous Plan included Cebu
of transport cost by 37-43 percent for BoholCamiguin, ClarkSubic,
passengers and 24-34 percent for cargo. Cordillera, Davao, Ilocos, Boracay, and
The Subic Bay Port Development Project Palawan, among others. To serve Panay
was also completed and was expected Island and its immediate environs, the
to generate significant benefits with the New Iloilo Airport was completed in
increase in the ports container capacity June 2007. The New Bacolod (Silay)
from 100,000 to 600,000 TEUs (20-foot Airport for Negros Island destinations
equivalent units). was inaugurated and opened for
operations on January 18, 2008. The
The SubicClarkTarlac Expressway Caticlan Airport is currently being
(SCTEx), linked to the existing North rehabilitated, and the Kalibo Airports
Luzon Expressway (NLEX), was also terminal building was initially expanded
completed and has been operational, to cater to the increasing visitor traffic to
reducing travel time from Subic to Manila Boracay Island and nearby destinations.
and from Tarlac to Manila. The construction To serve the Cordillera area, the
of the Tarlac-Pangasinan-La Union Toll facilities of the San Fernando Airport
Expressway (TPLEx) extending the SCTEx in La Union were upgraded, while the
from Tarlac to La Union is ongoing and is first phase of improvements on the
expected to relieve traffic congestion along Busuanga (Coron) Airport in Palawan
the existing Manila North Road. In the was substantially completed.
Southern Luzon Corridor, the completion
of the Batangas Port Development Project On the goal of developing SubicClark
and the Southern Tagalog Arterial Road as an Asian logistics center, the Civil
(STAR) Expressway will pave the way for Aeronautics Board (CAB) approved
the development of the industrial belt south and published the IRR of EO 253
of Metro Manila. expanding air services at Diosdado
Macapagal International Airport
With respect to roads and bridges, the (DMIA) and Subic Bay International
completion of substantial improvement Airport (SBIA). Developments at
and rehabilitation is expected to reduce DMIA include the expansion and
transport costs and induce economic rehabilitation of the existing passenger
activities, particularly in the rural areas. As of terminal and the installation of radar
December 2009, 22,468 km. (75.15%) of all equipment to enhance the safety of

flights, as well as to ensure round- installation of adequate traffic lights, and
the-clock airport operations even in road safety and pollution monitoring
adverse weather. The CAB and the devices) had been undertaken in the last few
RP Air Panel negotiated air services years using revenues from the Motor Vehicle
agreements (ASAs) from 2006 to 2010 Users Charge (MVUC). Objectivity in the
with Singapore, Turkey, Oman, Russia, prioritization and allocation of resources
Libya, Cambodia, United Kingdom, for national road maintenance was also
Spain, Brunei, Australia, Kuwait, UAE, enhanced using a computerized system
Qatar, Malaysia, Finland, Iran, Thailand, with comprehensive and up-to-date
Netherlands, Hong Kong, Canada, technical and economic criteria and data.
Macau, Palau, Bahrain, Peoples For local roads, an incentive-based policy
Republic of China, India, Japan, reform program is currently underway. This
Republic of Korea, Nepal, and New uses incentives or grants to finance road
Zealand. These agreements resulted maintenance and rehabilitation to motivate
in increases in capacity entitlements, LGUs to institute policy reforms in local
new routes, more access points, government systems and processes, and
multiple airline designation, and airline improve performance in road rehabilitation
cooperative arrangements. The CAB and maintenance and other service delivery.
was able to negotiate an average of 200
300 tons capacity per week for cargo, Despite notable accomplishments in the
which covers Manila, Subic, Clark, and transport sector, the institutional and
other points in the Philippines. bureaucratic reforms proposed under
the previous Plan seeking to separate
While there are completed and ongoing the operation and regulation functions
transport projects implemented of transport agencies have not been
through PPP under the BOT Law, achieved. This notwithstanding, the civil
private-sector participation in transport aviation subsector underwent a degree
infrastructure development has been of reorganization with the enactment of
continually enhanced to augment the RA 9497 on March 4, 2008 creating the
governments budgetary support for Civil Aviation Authority of the Philippines
capital investment. This effort included (CAAP). RA 9497 grants the new body
the development and construction of fiscal autonomy through the corporatization
expressways, railways, and airports; of the preceding civil aviation agency, while
the privatization of individual ports retaining its technical regulation functions
or groups of ports; and the operation over the civil aviation industry. The
and maintenance of transport facilities. economic regulation functions meanwhile
For the roads subsector, the JICA- rest with the CAB. There is a need to pursue
assisted Master Plan on High Standard a full restructuring of the air transport
Highway Network Development, which organizations as well as those for the ports
identified a long list of potential PPP and for rail transport.
expressway projects, was completed in
July 2010. In addition, the Preparatory To become globally competitive and address
Survey for PPP Infrastructure safety issues, especially those raised by civil
Development Project, which aims to aviation stakeholders, the government
identify bottlenecks in PPP project is implementing the Communications
implementation and select priority Navigation Surveillance/Air Traffic
infrastructure projects, is underway and Management (CNS/ATM) system
close to completion. in accordance with International Civil
Aviation Organization (ICAO) standards.
Some of the maintenance of land A similar project was completed in 2004
transport assets (i.e., maintenance of the Nationwide Air Navigation Facilities
national, provincial, and city roads Modernization Project (Phase 3)to
nationwide; improvement of drainage; replace ageing air navigation equipment.

Likewise, maritime safety measures have program, MARINA entered into a
been pursued in domestic shipping in MOA with the Development Bank
compliance with International Safety of the Philippines (DBP) Maritime
Management (ISM) and National Safety Leasing Corporation (now, DBP
Management (NSM) codes and the Leasing Corporation) on June 2, 2008.
Maritime Industry Authority (MARINA) The aim is to provide loan facilities to
Ship Safety Inspection System. Ship qualified ship owners or operators who
inspection has also been enhanced through are interested in the acquisition of RORO
the Japan International Cooperation ships to be deployed in SRNH routes.
Agency ( JICA)-assisted Project on the As of June 2010, seven companies have
Enhancement of Ship Inspection completed availed of the said facility involving the
in 2005. A MOA between MARINA acquisition of 12 RORO ships. EO 588,
and the Philippine Coast Guard (PCG) entitled Strengthening the Philippine
to implement ship safety inspection was Shipbuilding and Ship Repair Sector
signed on September 14, 2005. To strictly and Instituting Measures to Promote Its
monitor compliance by ships and to enforce Growth and Development, was issued
maritime safety rules and regulations by on December 8, 2006. This mandated
deputized maritime enforcers, MARINA, the formulation of a Comprehensive
on March 16, 2009, signed a memorandum Development Plan for the Philippine
of understanding (MOU) with the PCG, Shipbuilding and Ship Repair Industry
Philippine National Police-Maritime that was completed on October 16, 2007
Group (PNP-MG), the Union of Local and subsequently endorsed to the Office
Authorities of the Philippines (ULAP), and of the President on December 3, 2007
the Liga ng mga Barangay (LNB). In 2010, together with the draft memorandum
a total of 356,831 mandatory predeparture circular directing the implementation of
inspections (MPDI), 992 port state control the Plan.
inspections, and 5,476 Safety of Life at Sea
(SOLAS) compliance inspections were To further promote the development
conducted by the PCG. of domestic shipping, RA 9295 entitled
an Act Promoting the Development
Compliance with international maritime of Philippine Domestic Shipping,
security standards has been implemented Shipbuilding, Ship Repair and Ship
through the adoption of the International Breaking, Ordaining Reforms in
Ship and Port Facility Security (ISPS) Government Policies towards Shipping
Code. Vessel Traffic Management Systems in the Philippines and for Other
(VTMS) have been installed in the Port Purposes was enacted on May 3,
of Manila, Corregidor Island, and the 2004. The law deregulated the domestic
Port of Batangas following the security shipping industry by allowing domestic
provisions of the Code. There are plans for operators to set their own passenger
the installation of similar standards in other or cargo rates, hence promoting
major ports. investments in the industry.
In 2005, the Study on Wooden-Hulled Notwithstanding the accomplishments

Ships (WHS) recommended standards, in the transport sector, several issues and
rules, and regulations for the continued challenges still remain to be addressed,
operation of existing wooden-hulled ships, such as the following:
and the construction, safety, and operation
of new ones. On October 27, 2010, the Lack of Integrated and
Rulebook on the Construction and Repair Coordinated Transport
of Wooden-Hulled Ships and Wooden- Network
Hulled Boats with Outriggers was approved
by the MARINA Board. As part of the A major shortcoming of the sector is
domestic shipping fleet modernization the absence of an integrated and well-

coordinated national transport plan that Corridor handles more than 80 percent of
will guide the prioritized funding and the volume of the national cargo throughput,
implementation of transport projects, but its potential is constrained by inefficient
as well as the physical planning and logistics operations and infrastructure
intermodality of transport infrastructure. support. This has primarily resulted in high
This situation is likely a consequence transport costs of goods and services that has
of the current institutional setup made the corridor less competitive. What is
characterized by weak coordination, needed is a seamless multimodal logistics
regulation, and oversight for transport system along the SCMB Corridor to
policies and plans. support intraregional trade and investment,
an increase in the level of services of an
The lack of integration between integrated transport system, and an efficient
national and local government plans flow of commodities, supplies, and inputs
and programs/projects is also a major to tourism areas and various economic
problem that results in gaps in the and industrial zones. Other strategic
transport network, contributing logistics corridors need to be identified and
to the low capacity and quality of developed in a similar manner.
infrastructure facilities. This is partly a
consequence of the insufficient capacity Overlapping and Conflicting
of LGUs to finance and manage local Functions of Transport and Other
projects, particularly roads, and the Concerned Agencies
lack of national government funds to
maintain the existing national transport The institutional structure of the transport
infrastructure base. sector needs to be studied thoroughly to
determine the most efficient institutional
Global assessments of the countrys setup and the corresponding institutional
transport infrastructure network indicate reforms to improve the quality of transport
that its quality and capacity remain low. service, and to prevent conflicts between
These deficiencies stem mainly from different modes of transport that serve the
inadequate and unreliable funding same purpose. A requisite, however, is a
for construction and development of long-term policy framework to achieve an
transport infrastructure, as well as for integrated and well-coordinated national
the management and maintenance of transport plan. This policy framework
existing transport infrastructure assets. would also address governance issues in the
sector by raising the level of accountability
To promote productivity and trade of decision-makers and serve as the basis
competitiveness, seamless multimodal for a multimodal transport plan to guide
transport networks and logistics investment planning, programming, and
systems are needed. The MTPDP prioritization, among others. Specific
20042010 recognized the need for policies related to governance may be
a transport logistics system that will included in the policy framework to ensure
decongest Metro Manila by ensuring that the public sector is performance-
efficient linkages between its business oriented and that outcome-based services
centers and nearby provinces. In 2007, are promptly delivered.
the SubicClarkManilaBatangas
(SCMB) Corridor, which connects the Transport Safety and Security
three regions accounting for two-thirds Concerns
of the countrys GDP, was envisioned
as a major transshipment and logistics Road accidents are now the fourth leading
hub in the Asian region following the cause of death in the Philippines according
creation of the Luzon Urban Beltway to the DOH. The ADB Regional Safety
(LUB) Super Region. The SCMB Program published in 2005 estimated the
national cost of traffic accidents for the

Philippines at US$1.9 billion (or roughly 2.8 is a safe, secure, efficient, viable,
% of GDP). In addition, truck overloading competitive, dependable, integrated,
continues to be a problem. According to a environmentally sustainable,
JICA-DPWH axle load survey in 2004 and and people-oriented Philippine
a DPWH survey in 2005, about 11 percent transportation system that will focus
of the 3-axle trucks and 12 percent of the the sectors development objectives
4-axle semitrailers were overloaded. and strategies on resolving identified
issues and challenges.
On the other hand, the maritime subsectors
record in the area of safety is alarmingly To Ensure an Integrated
bad, with an average of more than 160 and Coordinated Transport
accidents per year over the last decade. Network
Maritime accidents are a major problem
owing to a combination of factors such as: 1. Adopt a comprehensive long-
(a) a mostly retro-fitted and aging fleet; term National Transport Policy
(b) underappreciation of cargo balancing (NTP)
on-board vessels; (c) loss of experienced
A safe, secure, efficient, viable, crews to foreign shipping; and (d) natural To guide the accomplishment of
competitive, dependable, disturbances. transport objectives and goals and to
integrated, environmentally improve governance in the sector, a
sustainable, and people-oriented Additionally, the Federal Aviation Authority comprehensive long-term NTP must
Philippine transportation system. (FAA) of the US has downgraded the be put in place. This will guide the
category of the Philippines aviation restructuring of the transport sector
capability in providing safety certification into a well-coordinated and integrated
and oversight for international carriers, multimodal transport system. The NTP
citing technical and regulatory deficiencies, should clearly establish the governments
among others. policies in the areas of resource
generation and allocation; the criteria
Underdeveloped Transport for the preparation of agency plans,
Facilities in Conflict-Affected and programs and projects; cost recovery
Impoverished Areas and subsidies; regulations for passenger
transport services; urban transport and
As a result of armed conflict and inequity in settlements; transport logistics; and
the distribution of income, economic activity governance. In the interim, the NTP
and investments have been constrained shall be operationalized through an
in some areas of the country. In particular, executive order, and in the medium-
conflict-ridden areas have experienced term, through a legislative enactment.
damages in their transportation network The NTP would eliminate uncertainty
and have suffered from the disrupted and lend predictability and consistency
delivery of basic services, thereby adversely to government decisions, thereby
affecting the peoples welfare and the quality promoting accountability.
of life.
With regard to PPP project
Strategic Plan and Focus implementation, policies related to risk
allocation (e.g., allocation of regulatory
The current state and performance risk), delivery of ROW, and government
of the transport sector indicates financial support for viability gap
gaps and bottlenecks that need to be funding of transport projects will be
addressed to support the governments established. Additionally, the NTP
thrust toward competitiveness and its will institutionalize CCA and DRR
development goals. What is envisioned strategies in recognition of the major
impacts of environmental, geologic,
and meteorological hazards on the

development and preservation of into account. For rail transport, the quality
transport infrastructure. It will also of the existing railroad tracks and services
promote a people-oriented transport must be upgraded.
system that mainstreams gender
considerations. In the allocation of resources, higher
priority shall be given to asset preservation
The roles of the private sector vis-- or maintenance and rehabilitation of
vis those of government agencies and the existing transport infrastructure
other authorities as well as LGUs network rather than new construction or
in the development, operation and development.
management of various transport
infrastructures will be defined in The user-pays principle shall be applied
conjunction with the crafting of a at the very least for the purpose of asset
NTP. For rail transport, for example, preservation. This principle may be invoked
the government can be the primary whenever pricing of the service is possible
developer of the railway infrastructure, and potential users unwilling to pay for the
while the private sector can be service can be excluded. The same argument
responsible for the operations and may be invoked for full investment-cost The user-pays principle shall be
maintenance of the facility including recovery. The focus shall be the upgrading applied at the very least for the
the provision of rolling stock. of the quality and capacity of existing ports, purpose of asset preservation.
roads, airports, and rail lines.
Likewise, the NTP shall consider The SCMB Corridor and other
the definition of the roles of national Additional funding for maintenance should strategic logistics corridors
government entities and LGUs in be provided to heighten and effectively must be developed to become
transport infrastructure development maintain existing infrastructure assets. The seamless intermodal logistics
and management (e.g., cost sharing previous annual appropriation of PhP4 corridors.
policy/subsidy), notwithstanding billion for road maintenance on top of the
the Local Government Code of Road Fund should be reinstated. Budgetary
1991, including scope of duties and allocation may be further augmented
responsibilities, as well as the linking through the GAA. The government shall
of national and local plans, and budget also enhance a user-pays culture in
allocation. infrastructure management. As proposed
under the previous Plan, RA 8794 (An
The government will also address Act Imposing a Vehicle Users Charge on
the inadequate linkage between the Owners of All Types of Motor Vehicles and
planning and budgeting processes to for Other Purposes) may be amended to
ensure that resources are allocated to include a fuel levy or some other form of
their most important uses for transport road user contribution in order to expand
infrastructure and management. the Road Fund. For long-term sustainability,
the stability of available and adequate
2. Develop strategic transport maintenance funds shall be ensured. To
infrastructure and maintain/manage ascertain the sustainability of local transport
transport infrastructure assets networks, an incentives-based reform
agenda for LGUs shall be put in place, where
a. Prioritize asset preservation applicable, to help LGUs improve their
performance in transport infrastructure
While transport connectivity is of management and maintenance.
utmost importance, the upgrading of the
quality and capacity of existing transport b. Provide access to major and strategic tourism
infrastructure will be prioritized before destinations and production areas
expanding the coverage of the networks.
The latter will be based on a strategic Dependable transport access will be
plan that takes modal complementation facilitated in coordination with LGUs

to support major and strategic tourism The extension of the SCMB logistics
destinations. National and local corridor farther to the north and to the
coordination will be fostered to provide the south will also be pursued. To support
necessary transport infrastructure to link this, the viability of establishing an
production and agricultural areas to major efficient long-distance, high-speed
roads leading to markets and population mass rail transit system, integrated with
centers. the mass transit commuter rail system
in Metro Manila, shall be explored
c. Promote environmentally sustainable and alongside the rationalization of the
people-oriented transport roles of various government agencies
and entities concerned with mass rail
The government will continue to promote transport development. The feasibility
an environmentally sustainable and people- of freight-rail services for all strategic
oriented transport system. The shift from logistics corridors will also be considered.
the use of fossil fuel to renewable energy
sources to power vehicles shall be pursued. b. Improve the RRTS
Non-motorized transport facilities such
The dual roles of agencies, as sidewalks, footbridges, underground Interisland logistics shall be enhanced by
and government entities that walkways, and bicycle ways will be further developing the RRTS. Studies
simultaneously serve as provided to ensure safety of pedestrians and on the domestic shipping industry shall
regulators and operators shall bicycle users. Transportation design and also be undertaken to identify concrete
be addressed by establishing systems shall consider the frail, elderly and measures to lower interisland shipping
a separate and independent differentlyabled persons, among others. costs. Where needed, the maritime
regulator (or regulators) regulator shall intervene to ensure
3. Develop an integrated multimodal competition in the industry pursuant
logistics and transport system to RA 9295. Efforts to improve
performance and efficiency in port
a. Identify and develop strategic logistics corridors operations shall likewise be pursued.
based on a National Logistics Master Plan
c. Explore ASEAN connectivity through sea
The SCMB Corridor and other strategic linkages
logistics corridors must be developed to
become seamless intermodal logistics The Philippine archipelagos proximity
corridors. In support of this, a Logistics to other Asian countries is an obvious
Master Plan shall be completed to guide reason to explore the establishment
overall development. This plan shall of an ASEAN RORO Network, a
consider the intermodality of the transport Philippine initiative adopted as one of
network system, the industrial and area the flagship programs in the ASEAN
development plans and the identification Connectivity Masterplan during the
of the necessary initiatives, programs, 17th ASEAN Summit in Ha Noi,
and projects. It will promote subregional Viet Nam. In support of this initiative,
economic-cum-logistics cooperation and the government shall study the
will fully utilize the logistics systems that development of existing RORO ports
link the regions traversed by the logistics to accommodate international RORO
corridor (e.g., Central Luzon, Metro ships as well as the necessary regulatory
Manila, and Southern Tagalog for the framework to promote such service. The
SCMB corridor). The aim shall be an development of port facilities through
economic corridor where development PPP to cater to cruise tourism, both
benefits not only large cities but also smaller servicing interisland and international
towns and rural areas along the corridor.5 cruise vessels, may also be explored.
5
National Competitiveness Council (NCC)

d. Expand the Air Services rail regulator. To encourage private sector
participation, ROW acquisition and
Full implementation of EO 219 shall infrastructure shall be subsidized by national
be pursued. The Philippines shall allow government appropriations, while private
airlines from foreign countries to fly concessionaires provide the rail services.
to any airport in the country except
Ninoy Aquino International Airport To ensure transport safety and
(NAIA), which is currently congested. security
The Government shall ensure that
each participating foreign country 5. Comply with safety and security
shall reciprocate by allowing airlines standards
from the Philippines to fly to any of
its airports. Each foreign country may Standards on safety and security shall
also exclude one of their major airports be regularly upgraded and updated in
during the period of exclusion of NAIA. keeping with international standards and
(Please refer to Chapter 2: Competitive practices and strictly implemented and
Industry and Services Sectors). enforced. Maritime safety and security
will be enhanced through the ratification Water is a basic need and
To address the overlapping and of maritime safety and security-related everyone has the right to be
conflicting functions of transport conventions. Road safety will be promoted provided with access to basic
and other concerned agencies through the implementation of the Road services related to water. In
Safety Action Plan. addition, economic growth itself
4. Separate the regulatory and must be supported, specifically
operation functions of transport and To promote development of by meeting the needs of priority
other concerned agencies conflict-affected and highly growth and production centers
impoverished areas for water supply, sewerage,
In line with the goal of separating the sanitation, irrigation and flood
operation and regulation functions of 6. Provide linkages to bring communities management.
transport agencies, the port, rail and into the mainstream of progress and
air transport organizations shall be development
restructured. The dual roles of air, water,
and rail transport sector agencies, as well Transport networks in underdeveloped
as other government entities involved in regions and conflict-affected areas shall
the provision of transport infrastructure be improved to open up economic
and services that simultaneously serve opportunities and help solve peace and
as regulators and operators shall be order problems.
addressed by establishing a separate and
independent regulator (or regulators) Water
with jurisdiction over all airports, ports,
or railways. Water is a basic need and everyone has
the right to be provided with access to
In rail transport, the policy, planning, basic services related to water. In addition,
and regulation functions shall be economic growth itself must be supported,
separated from the delivery of train specifically by meeting the needs of priority
services, which also serves to allow growth and production centers for water
private sector participation. In the supply, sewerage, sanitation, irrigation
previous plan, the interim institutional and flood management. The water sectors
strategy for the rail subsector was to greatest challenge is to balance equity and
establish a Strategic Rail Authority in efficiency in the management of water
the Department of Transportation and resources to ensure adequate, safe and
Communications (DOTC) for policy,
strategy, and regulation. However, the
long-term plan calls for an independent

sustainable water for all. Efficient and watershed management, financing,
effective management of water resources policy formulation and coordination,
is fundamental to achieving inclusive among others. This situation presents
economic growth while ensuring a difficulties for effective coordination
sustainable environment. and implementation of projects and
programs to sustainably meet water
Crosscutting Issues and use and management. (e.g., in meeting
Strategies in the Water Sector the needs of competing users of water;
linking water service provision with
Assessment, issues, and basic sanitation services; and ensuring
challenges effective and efficient flood risk
reduction and management).
Access to potable water and basic
sanitation While the National Water Resources
Board (NWRB) has the legal mandate
MDG 7 commits the country to halving the for water governance, its existing
number of people without access to water structure and budget limit the exercise
The absence of a single lead and basic sanitation by 2015. Meeting this of its functions. To address the existing
agency to coordinate development target is a major challenge for a number of leadership gaps, the mandate of the
in the water sector is one of the reasons. One, the lack of sector data presents Subcommittee on Water Resources
major hurdles to the efficient a logistical challenge in the determination of (SCWR), initially created under
implementation of strategic priority waterless areas. Two, investments in the Committee on Infrastructure
water infrastructure. There are water supply and sanitation have also been (INFRACOM) to ensure the
at least 30 agencies involved in significantly low relative to overall public implementation of the Philippine Water
the water sector, with specific but spending (World Bank 2005), which may Supply Sector Roadmap, was expanded
often overlapping or conflicting be due to the lack of a coherent financing to become the key policy coordination
mandates for water supply, framework in the sector. Three, public body for the water sector. 6 Despite this,
irrigation, flood management, infrastructure spending by the national however, the sector remains weak in
pollution control, watershed government shows a bias for Metro Manila terms of regulation and allocation of
management, financing, policy and other urban areas, including spending water resources.
formulation and coordination for water supply, sewerage and septage
management. And four, the absence of a Furthermore, effective planning,
clear monitoring system makes it difficult target-setting, monitoring and
to assess and address the sustainability of implementation are impeded by
developed infrastructure. the lack of up-to-date, integrated,
harmonized and comprehensive data
Inefficient and insufficient support on the sector. Such data is significant
for growth and production centers in the development of new water
sources; and in the design of CCA and
The absence of a single lead agency to DRRM mechanisms. But initiatives
coordinate development in the water to establish a knowledge-sharing
sector is one of the major hurdles to the network among stakeholders in water
efficient implementation of strategic have so far proved unsustainable
water infrastructure. There are at least 30 since there is no clear framework and
agencies involved in the water sector, with reliable financing for the continuous
specific but often overlapping or conflicting updating and improvement of access
mandates for water supply, irrigation, to information.
flood management, pollution control,
6
The SCWR is an interagency committee for the Water Resources Sector established through NEDA Board
Committee on Infrastructure Resolution No. 2, Series of 2008 composed of representatives from key national
government agencies, leagues of cities and municipalities, academe and civil society. Its key function is to advise
the NEDA Board and INFRACOM on policies and issues related to the Water Sector.

Strategic Plan and Focus planning and implementation. Data
collection methodologies have to be
To address issues on equity and synchronized to support planning and
efficiency of access to water budgeting of key programs and projects.
Mechanisms that allow consistent
1. Practice Integrated Water updating and harmonization of raw data
Resources Management (IWRM) in should be put in place alongside the
the sector sharing of such data among the relevant
stakeholders, project developers, and key
IWRM7 has been identified as the policy-makers.
overall strategy for: (a) the effective
protection and regulation of water 2. Rationalize financing in the water
for security and ecosystem health; (b) sector to fulfill MDG commitments
the provision of responsive services
for present and future needs; (c) the The low level of investments in the
improved effectiveness, accountability water supply and sanitation sector
and synergy among water-related hinder the achievement of the MDGs
institutions and stakeholders; and (d) of the sector. The lack of a coherent
adaptive and proactive responses to financing framework must be addressed
emerging as well as future challenges, by rationalizing financing in the water
such as CCA and DRRM. While sector to make the fullest use of limited
the concept is widely accepted, public funds and encourage concessional
however, IWRM practices have not financing, and private sector investments.
been mainstreamed in policies, plans
and programs. Similarly, integrating 3. Work towards a lead agency for the
the ecoefficient approach8 to the water sector
development of water infrastructure to
support the desired transgenerational A lead agency for the entire water sector
outcomes in the sector has yet to be should be ultimately developed. The lead
realized. The experience of numerous agency should be able to assume the
recent instances of disasters, functions of policy making, coordination,
nonetheless, has raised awareness and resource regulation for the sector. It
and increased the acknowledgement shall be provided with sufficient capacity
of the benefits of IWRM. Now is and authority to implement key policies,
an opportune time, therefore, to plans, and projects in the water resources
implement coordinated activities sector. In the meantime, NWRB should
to mainstream IWRM practices be strengthened so it can continue its
and promote the development of function as the sectors overall economic
ecoefficient water infrastructure. and resource regulator.
Because of the fragmented nature of

the water sector, the establishment
of a comprehensive and accessible
information management system
is necessary to ensure coordinated
7
IWRM promotes the coordinated development and management of water, land and related resources in order
to maximize the resultant economic and social welfare in an equitable manner without compromising the
sustainability of vital ecosystems.
8
Ecoefficiency is having more value with less impact on the environment; it emphasizes monitoring of material
and energy flows of stocks and life cycle assessment. While ecoefficiency has been successfully integrated in
industrial and business processes, its application in water infrastructure development will require the establishment
of both physical and nonphysical infrastructures (i.e., policies, institutional framework, financing, etc).

4. Develop capacities of NGAs, LGUs, a decline in access to improved water
and water-service providers (WSPs) for the services from the late 1990s to 2002.
sustainable management of infrastructure The 2010 Report of the WHO/
and better service provision UNICEF Joint Monitoring Program
on the MDGs10 observed minimal
The capacities of planning and implementing increases in coverage over the past two
institutions must be developed to improve decades, particularly in urban areas.
the performance of various structural and Moreover, there is a wide disparity
nonstructural infrastructures for the water in coverage between urban and rural
sector. NGAs and LGUs should enhance areas (see Table 5.1). Regional data
their capacities in effective water governance, further reveals a broad inequity of
sustainable use of water resources,and planning access even among rural areas.
for CCA, among others. LGUs and WSPs
should be assisted in developing relevant, The Philippines Progress Report on
practical, and up-to-date management tools the MDG 2010, on the other hand,
that support integrated water resources suggests that the sector is on track
management and technologies. Service to attain its MDG commitment
providers should likewise be capacitated in (Figure 5.1). Nonetheless, achieving
plan development, budgeting and operations, 100-percent coverage remains a
among others, in order to improve coverage, challenge, since 15.73 million people
efficiency and sustainability of infrastructure. continue to have no access to a safe
water supply.
Water Supply
Data on the number of service
Assessment, Issues, Challenges providers remain inconsistent
and have not been consolidated.
Limited Access 9 Notwithstanding this, Table 5.2
shows the approximate proportion of
Most assessments show a limited overall the population with access to clean
coverage and low level of access to safe drinking water within the scope
drinking water in many areas of the country. of certain groups of formal service
Among others, the World Bank (2005) noted providers. Approximately 20 percent
Table 5.1 Estimated Coverage of Access to Water: 1990-2008

URBAN AREAS (in %) RURAL AREAS (in %)
Year Household Household
Total Connections Total Connections
1990 93 40 76 8
1995 93 46 79 13
2000 93 51 82 18
2005 93 57 85 23
2008 93 60 87 25
Source: WHO/UNICEF JMP 2010 Report
9
Reasonable Access availability of at least 20 liters per day from a source within 1 kilometer of the dwelling (World
Bank and UNICEF Joint Measurement Programme: www.wssinfo.org, accessed 22 November 2010)
10
The WHO/UNICEF Joint Monitoring Programme ( JMP) for Water Supply and Sanitation is the official United
Nations mechanism tasked with monitoring progress towards MDG-7 or halving the proportion of the population
without access to water and basic sanitation.

ercentage Access to Safe Water
eries 1
73.8
Figure 5.1 Percentage Access to Safe Water
77.5 PERCENTAGE ACCESS TO SAFE WATER
76.7
77.9 90
PERCENTAGE (%)
79.1 85
78.7
79.7 80
79.1 75
77.9
80.6 70
81.5 1990 1995 2000 2005 2010 2015
81.4 YEAR
85.9
Source: Philippines Progress Report on the Millennium Development Goals 2010
Table 5.2 Levels of Access to Safe Drinking Water

Access to formal levels of service/a Informal Access
Level 3: Level 2: Level 1: Self-provision through private
45% 10% 25% wells, tanked or vended water
supply or piped supply provided
WDs: P O s : LGUs and LGUs and CBOs: by SSIPs
20% 5% CBOs: 20% 35%
Note:
WDs: Water Districts
PO: Private Operators (e.g., concessionaires, private developers, etc.)
CBOs: Community-based Organizations (e.g., rural or barangay water service associations, cooperatives, etc.)
SSIPs: Small Scale Independent Providers
Source: WB Report, Philippines: Meeting Infrastructure Challenges, 2005, as quoted in the NEDA Philippine Water Supply Sector Roadmap,
2010
(Footnotes)
/a As defined in NEDA Board Resolution No. 12, Series of 1995: Level I (point source) - a protected well or developed spring system without
a distribution system; Level II (communal faucet system or standpost) - a system composed of a source, reservoir, distribution system and
communal faucets; and Level III (waterworks system or individual household connections) - a system composed of a source, reservoir, piped
distribution system and household taps
continue to rely on informal access, exercise primary regulatory functions; The Philippines Progress Report
which are generally not considered and (b) specialized regulatory bodies such on the MDG 2010 suggests that
sustainable. as the Subic Bay Regulatory Board and the sector is on track to attain its
Metropolitan Waterworks and Sewerage MDG commitment. Nonetheless,
Low Investment Levels SystemRegulatory Office (MWSS- achieving 100-percent coverage
and Lack of Financing for RO). These institutions have different remains a challenge, since 15.73
Waterless Areas regulatory practices, processes, tariff-setting million people continue to have no
methodologies, and more importantly, access to a safe water supply.
Investment levels are too low to meet the overlapping functions or jurisdictions,
growing demand for water. Among the resulting in variances in regulatory rules
key constraints to expanded coverage and enforcement across types of service
and improved quality of service are the providers. The lack of a single independent
low tariffs which hinder cost recovery regulator for the water supply sector is a
and prevent the accumulation of funds major reason for the absence of a clear
for new capital expenditures. While regulatory framework with a credible and
cost recovery has been identified as a effective tariff methodology that is shielded
principle of regulatory policy, there has from political intrusion, founded on
been minimal progress to achieve it. accountability to consumers, and conducive
Regulatory oversight has been highly to new investments to meet supply needs.
fragmented, as exemplified by the
existence of: (a) three entitiesNWRB, The program for waterless areas, which aims
LWUA and the different LGUsthat to provide water to 212 waterless barangays

in Metro Manila and 432 waterless means there is a good opportunity
municipalities outside Metro Manila, has for the private sector to be engaged in
been allotted an annual budget of PhP1.5 source development.
billion. Because the administration of the
funds was largely discretionary, 40 percent Strategic Plan and Focus
(212 municipalities) of 432 municipalities
To Address Equitable
identified as beneficiaries of the fund were
not even part of the original list.Provision of Water Supply and
The rapid increase in population to Ensure Timely Provision of
resulting in the pollution of water Moreover, there is no clear policy Water to Key Growth Centers
systems and, in some areas, framework to guide the financing of water
the exhaustion of groundwater supply programs and projects. Currently, The following strategies11 will be
reserves has quickly widened the financing originates from a variety of pursued:
gap between supply and demand sources. National government financing is
for potable water, especially in primarily administered through LWUA 1. Strengthen Economic Regulation
tourism destinations, industrial and MWSS or onlent through GFIs or
areas and highly urbanized cities. the Municipal Development Fund Office The creation of a single, independent
(MDFO). Additionally, congressional funds economic regulator for water supply
for water supply projects are significant but services is a priority strategy to address
uncoordinated and largely allocated to areas institutional fragmentation and the
based on political considerations. Local low level of investments in the sector.
government funding, on the other hand, has Legislative action is required to resolve
mostly been for operation and maintenance the conflicting mandates of various
rather than capital expenditures. (World agencies involved in the regulation of
Bank 2005) Private-sector financing has water services. Pending positive action
been skewed towards Metro Manila, and, from Congress, however, NWRB
there has been limited private investment must be strengthened to allow partial
by water utilities and private households resolution to the current situation. This
outside Metro Manila. interim action must also be supported
by the formulation of a National Water
Lack of New Water Sources to Meet Resources Policy (NWRP) to provide
Existing and Future Demand in a policy framework for both economic
Growth Centers and resource regulation in the water
supply subsector.
The rapid increase in population resulting
in the pollution of water systems and, in 2. Implement a priority program for
some areas, the exhaustion of groundwater waterless areas
reserves has quickly widened the gap
between supply and demand for potable Consultations with stakeholders affirm
water, especially in tourism destinations, the need for a specific program that will
industrial areas and highly urbanized ensure the achievement of MDG 7 by
cities. Furthermore, extended dry seasons 2015 and continuing 100-percent access
as a result of climate change are expected to water in the medium term. Critical
to exacerbate the demand for water. New to the new program for water supply,
water sources must be identified and however, is identifying key beneficiaries
developed to address this gap. The existence based on an updated assessment and
of financially viable areas for water supply identification of remaining waterless
11
The strategies herein identified are consistent with the Philippine Water Supply Sector Roadmap (PWSSR).
The PWSSR is the water supply sector plan and guide with long-term development outcomes supported by
medium-term strategies and annual operational plans formulated and subscribed to by the different national
government agencies, along with other stakeholders. Implementation of the strategies stated therein is crucial
to achievement of the development goal to provide access to safe, adequate and sustainable water supply for all.

municipalities in the Philippines and PWSSR and the MDG. This should help
ensuring sustainability of water service harmonize and operationalize programs to
provision. address existing implementation issues and
ensure the sustainable and efficient delivery
3. Develop sustainable new water of water supply to waterless and remote
sources to meet demand areas.
A comprehensive approach, adhering to Sanitation, Sewerage, and

the IWRM framework for projecting the Septage Management
demand-supply gaps across the country
and for planning the development of Assessment, Issues, and
new water sources should be developed Challenges
not only to support the growing
population, but also economic activity Weak Sanitation Governance
in growth centers -based on a viable
national land-use plan. Extended dry Many institutions are armed with
seasons because of climate change would sanitation-related mandates, but not
further exacerbate the demand for one of them takes the lead in pushing Many institutions are armed with
water, so that new water sources must be for reforms in the sector. Although the sanitation-related mandates, but
developed in a timely manner to ensure DOH plays a key role due to the impacts not one of them takes the lead in
domestic water supply. This may adopt of poor sanitation on health, only a small pushing for reforms in the sector.
ecoefficient12 measures, including the unit in the agency is concerned with Although the DOH plays a key
reuse of excessive rainwater and recycled sanitation. Its role is limited to policy role due to the impacts of poor
wastewater for nonhousehold purposes formulation, thereby causing significant sanitation on health, only a small
to rationalize water distribution. gaps between policy implementation unit in the agency is concerned
and enforcement. In particular there with sanitation. Its role is limited to
Resourceregulationshallbestrengthened is an inability to deliver commitments policy formulation, thereby causing
to ensure that surface and ground water made under existing laws. Moreover, significant gaps between policy
supply sources are sustainably developed the Sanitation Code formulated in 1975 implementation and enforcement.
and utilized. Alternatives should also may no longer be appropriate for the
be identified and prioritized based requirements of a rapidly urbanizing
on a value-engineering perspective, population, particularly increasing
which optimizes options and timing of population densities. The said code
development to provide value for money also does not consider the anticipated
and minimize cost to consumers. complications caused by climate change.
Inequitable Access to Basic

4. Localize national policies to support
Sanitation Facilities and Sewerage
sustainable extension of water services
and Septage Management
Since LGUs are on the frontline in Services
the provision of services each local
government should be able to develop As in the water supply subsector, statistics
its own local plans, strategies and on sanitation are uncoordinated and
corresponding budget allotments, conflicting. This notwithstanding, WHO/
consistent with national policies and UNICEF JMP on the MDGs show a
targets, including those identified in the general trend of improving13 coverage
12
Ecoefficiency is having more value with less impact on the environment; it emphasizes monitoring of material and
energy flows of stocks and life cycle assessment. While eco-efficiency has been successfully integrated in industrial and
business processes, its application in water infrastructure development will require the establishment of both physical and
non-physical infrastructures (i.e., policies, institutional framework, financing, etc).
13
For MDG monitoring, an improved sanitation facility is defined as one that hygienically separates human excreta
from human contact.

Figure 2. Percentage Access to Sanitary Toilets
Column1 Column2
1991 71.8
1994 74.9 Figure 5.2PERCENTAGE
Percentage Access to Sanitary
ACCESS TO Toilets
SANITARY TOILETS
1997 77.3
90
1998 80.4
1999 82.3
PERCENTAGE (%)
85
2000 82.9
2002 86 80
2003 81.7
2004 85.4 75
2006 84.2 70
2007 87.9
1990 1995 2000 2005 2010 2015
2008 88.6
2015 86.9 YEAR
Source: Philippines Progress Report on the Millennium Development Goals 2010
Table 5.3 Estimated Coverage for Sanitation: 1990-2008

URBAN AREAS (in %) RURAL AREAS (in %)
Year
Improved Open Defecation Improved Open Defecation
1990 70 8 46 23
1995 73 7 52 21
2000 76 6 59 18
2005 78 5 65 15
2008 80 4 69 14
Source: WB/UNDP JMP 2010 Report
from 1990 to 2008, with corresponding For sanitation facilities to be

reductions in open defecation. From sustainable and make an impact on
a 1990 baseline coverage of about 55 health outcomes, sewerage or septage
The Philippines is on track to percent, the MDG target is to increase management support is required.
meeting its MDG target for coverage to 84 percent by 2015. The Unfortunately, there have been
sanitation. Data from the DOH DOH, however, sets a higher national few investments in proper sewage
and 2010 Progress Report on target of 91 percent, with 96 percent for collection and treatment, especially
MDGs, however, show fluctuating urban areas and 86 percent for rural areas. outside Metro Manila. Less than 10
year-on-year coverage due to low Similar to access to water supply, access percent of the population has access
investment levels, combined with to sanitation is much lower in rural areas to sewerage services. Outside Metro
a rapidly increasing population compared to urban areas with a visible Manila, selected highly urbanized
and the increasing frequency of disparity amongst regions as well. cities (HUCs) provide services to
natural disasters that affect the less than 3 percent of their respective
sustained operations of existing Based on WHO/UNICEF JMP area populations (WB 2005). This
facilities. estimates, the Philippines is on track to situation poses major health and
meeting its MDG target for sanitation. environmental problems, especially
Data from the DOH and 2010 Progress in HUCs and during or after natural
Report on MDGs, however, show disasters (i.e., at evacuation centers
fluctuating year-on-year coverage due to and during rehabilitation of affected
low investment levels, combined with a areas).
rapidly increasing population and the
increasing frequency of natural disasters
that affect the sustained operations of
existing facilities.

Low Investment and Financing sanitation, septage and sewerage services
because the benefits are indirect at
Despite several national sewerage and best. The low demand for sanitation at
sanitation policies like the Sanitation local levels also extends to wastewater
Code of 1975 and the Clean Water collection and treatment, thus further
Act, demand for sanitation, sewerage deferring the development of necessary
and septage facilities, as well as infrastructure.
related investments, remain low.
Open defecation is still practiced Furthermore, research on innovative
in many areas, especially is highly technologies to provide economically
populated ones, resulting in polluted and ecologically efficient sanitation,
waterways and the spread of fatal and sewerage and septage facilities is lacking.
infectious diseases. Only 3 percent of Technical capacity to plan, implement,
public investments in water supply operate, and maintain these facilities is
are used for sanitation. (PSSR 2010) also limited both at national and local
Investments, by LGUs are limited levels. Capacities to monitor the extent
since few of them have the capacity and level of service are likewise limited
to implement, operate and maintain thereby adversely affecting effective Only 3 percent of public
these systems. Low investment is planning and budgeting for the subsector. investments in water supply
also due in part to the low demand, are used for sanitation. Low
which arose from a lack of popular Strategic Plan and Focus investment is also due in part to
understanding on the dangers of open the low demand, which arose from
defecation and open sewers. Official To Improve Health Outcomes a lack of popular understanding
development assistance (ODA) for and Effect a Sustainable on the dangers of open defecation
sanitation, septage and sewerage is Environment through Improved and open sewers.Without a
largely administered by DPWH, Sanitation, Septage, and Sewerage strong regulator for water,
DENR or MWSS for Metro Manila. Provision sanitation, sewerage and septage
Private sector investments are likewise management services, there is no
limited because sanitation, sewerage The following strategies14 will be pursued: imperative or incentive for water
and septage are perceived to be service providers to extend the
nonrevenue services, with high capital 1. Develop effective national leadership coverage of sewerage services.
requirements relative to any projected and sanitation governance
returns. Ideally, these services should Most LGUs accord the lowest
be linked to revenue-generating water An empowered lead entity at the national priority and allot only minimal
service provision to facilitate cost level must be established to ensure that budgets for sanitation, septage
recovery. Without a strong regulator sanitation, sewerage and septage targets and sewerage services because
for water, sanitation, sewerage and and plans are met and that critical policies, the benefits are indirect at best.
septage management services, there including the National Sanitation Code,
is no imperative or incentive for are strictly implemented.
water service providers to extend the
coverage of sewerage services. Furthermore, necessary reforms are
needed to pull in investments in
Lack of Awareness of the Value sanitation, sewerage and septage facilities
of Sanitation and its Services throughout the country, especially in
highly urbanized cities (HUCs). Thus,
Most LGUs accord the lowest priority any amendment or revision to existing
and allot only minimal budgets for national policies should articulate specific
14
The strategies herein identified are consistent with the Philippine Sustainable Sanitation Roadmap (PSSR),
Similar to the PWSSR, the PSSR was developed and subscribed to by the different national government agencies,
along with other stakeholders. It presents the plan and guide with long-term development outcomes supported
by medium-term strategies and annual operational plans to be able to provide safe and adequate sustainable
sanitation for all and ensuring a clean and healthy Philippines.

national targets and detailed strategies envisioned outcomes. This includes
that can eliminate open defecation as well the incorporation of sanitation
as facilitate local planning and budgeting measures in the design of significant
for expansion of coverage, among others. infrastructure, such as school
This could be accompanied by legislative buildings and housing structures.
action, if required.
4. Mainstream sanitation in
2. Develop a regulatory framework emergency/disaster response
A single, independent economic regulator Water-induced or related calamities

for water supply, sewerage and septage resulting from climate change increase
management should be established to the vulnerability of communities
ensure the following: (a) accountability that lack proper sanitation facilities.
of service-providers to their customers; Hygiene promotion, coupled with
(b) sustainability of facilities through sanitation response measures, should
improved tariff methodologies; and (c) be mainstreamed in disaster relief and
increased coverage through the provision rehabilitation efforts.
of incentives and impetus for expansion
of services within their areas. (See also 5. Improve service delivery through
strategies for water supply). vigorous communication
3. Rationalize investments and To increase the effectiveness of

financing to provide infrastructure in national policies, a comprehensive
strategic areas. and vigorous communication strategy
must be undertaken to educate
Because of the high capital requirements the public and decision-makers
of sewerage and septage management and increase demand for these
projects, government intervention is services. Information, education, and
needed to support the private sector communication (IEC) campaigns
in increasing service (septage and among others, are to be developed.
sewerage) coverage. Thus, a financing This includes dissemination of
framework should be developed to information on sanitation technology
support sustainably the expected increase options and standards among LGUs
in demand for sanitation, septage and and service providers.These campaigns
sewerage. Alternative PPP packages may aim to change behaviors towards
be considered, among others. proper hygiene in order to increase
utilization of household sanitation
In the light of current constraints, it is infrastructure, such as sanitary
necessary to be deliberate, especially latrines and septage collection tanks.
in the implementation of septage and Development planners and managers
sewerage programs and projects including should also be provided similar IEC
the development of septage/sewerage materials with added information on
treatment plants. Highly vulnerable areas wastewater treatment and disposal
such as HUCs, which are population- methodologies.
dense and susceptible to sanitation
problems, should be prioritized. However,
it would also be advantageous to include
priority tourism spots given their
potential for economic development.
The PSSR requires the formulation

of programs by other key NGAs and
LGUs to support the achievement of the

Irrigation its total approved appropriations for the
same period. Despite this, only less than
Assessment, Issues and half of the total potential productive areas
Challenges have been irrigated (see Table 5.4).
Inadequate Provision of While over 1.6 million hectares remain

Irrigation undeveloped for agriculture, these same Irrigation plays a vital role in the
areas are threatened by ongoing changes development of agriculture as
Irrigation plays a vital role in the in land use (e.g., conversion into housing well as in the attainment of food
development of agriculture as well as developments, golf courses, etc.). It sufficiency.
in the attainment of food sufficiency. is unclear whether such conversions
As of the end of 2009, irrigated are warranted by real long-term Irrigation is the largest use of
agriculture comprised about 1.54 development trends or these are merely water in the country, a primary
million hectares of land or about 49 responses to the artificially repressed concern should be to optimize the
percent of the estimated irrigable state of agriculture and the protractedly productive use of water in irrigated
area of 3.126 million hectares. unsettled status of property rights in agriculture to attain its full benefits
Around 765,000 hectares are served agricultural land. Therefore, it may be a and minimize waste.
by national irrigation systems prudent course to protect productive land
(NISs), while communal irrigation from rapid and irreversible conversions to
systems (CISs) and private irrigation nonagricultural uses.
systems (PISs) serve around 558,000
and 217,000 hectares, respectively. Unsustainable Use of Irrigation
According to the National Irrigation Water
Authority (NIA), it spent about
PhP119 billion from 1983 to 2009, Because irrigation is the largest use of
representing around 78 percent of water in the country, a primary concern
Table 5.4 Status of Irrigation Development as of 31 December 2009
Estimated Service Area (ha) Remaining

Total Potential
Region National Communal Private Irrigation Area to be
Irrigable Irrigation Irrigation Irrigation Total Devt Developed
Area (ha) System System System (%) (ha)
CAR 99,650 22,622 35,351 22,912 80,885 81 18,765
1 277,180 57,567 96,654 27,329 181,550 65 95,630
2 472,640 142,530 41,775 23,095 207,400 44 265,240
3 498,860 202,311 78,008 20,555 300,874 60 197,986
4 246,960 53,146 53,133 17,962 124,241 50 122,719
5 239,660 20,530 70,050 29,484 120,064 50 119,596
6 197,250 53,191 20,372 5,499 79,062 40 118,188
7 50,740 10,040 22,529 2,539 35,108 69 15,632
8 84,380 19,104 29,748 4,466 53,318 63 31,062
9 76,080 15,162 19,739 1,972 36,873 48 39,207
10 120,700 26,419 23,564 14,764 64,747 54 55,953
11 149,610 33,971 15,639 25,915 75,525 50 74,085
12 293,610 62,437 22,255 17,296 101,988 35 191,622
ARMM 156,720 16,520 7,095 225 23,840 15 133,440
CARAGA 162,300 29,427 21,719 3,316 54,462 34 107,838
TOTAL 3,126,340 764,977 557,631 217,329 1,539,937 49 1,586,963
Source: NIA as of June 2010

should be to optimize the productive use Weak Performance of
of water in irrigated agriculture to attain Irrigation Systems
its full benefits and minimize waste. There
is currently no incentive to conserve The performance of most of the
irrigation water, although payments are NISs and CISs has remained poor.
made on a per-hectare basis regardless of Causes include inadequate O&M,
the actual water consumption needs of the lack of routine repair and ineffective
crops. Subsidies disguise the true cost of management of available irrigation
providing irrigation services. In order to water sources due to financial,
The performance of most of the promote conservation and the sustainable technical and institutional deficiencies.
NISs and CISs has remained use, treating water as an economic good Irrigated cropping intensity of NISs
poor. Causes include inadequate provides the basis for putting into place nationwide averaged far less than the
O&M, lack of routine repair mechanisms that capture its economic 200-percent target applied in project
and ineffective management of value, since water is a finite and limited preparation. In addition, most of the
available irrigation water sources resource with competing uses and users. service areas are dysfunctional and
due to financial, technical and badly need rehabilitation.
institutional deficiencies. NIAs Delicate System and
Financial Performance Strategic Plan and Focus
NIAs operation has rarely been profitable To Provide Basic Support
as the agencys operating expenses far Services and Infrastructure as
exceed its operating income. In order well as Critical Governance
to improve the agencys fiscal position, Reforms in Shaping a Sector
strategies to increase collection efficiency Responsive to the Challenge
of irrigation service fees (ISFs)15 were of Ensuring Food Security for
implemented, particularly instituting Filipinos across Generations
incentive policies on ISF back-account
collections. The net effect of such The following strategies will be
schemes resulted in a steady increase in pursued:
NIAs corporate income, and although
the agency still runs annual net deficits 1. Rehabilitate existing irrigation
(cash and noncash expenses), the deficits systems and construct new small-
decreased from PhP648 million in 2000 scale systems
to only PhP24 million in 2009.
Support services and infrastructure shall
With respect to the agencys be geared towards the rehabilitation,
organizational restructuring, the DBM- repair and maintenance of existing
approved Rationalization Plan is in irrigations systems. A rationalized fund
its third year of implementation (part mechanism should be implemented,
of a five-year phased implementation specifically for the immediate
period). This saw the gradual turnover rehabilitation of damaged irrigation
of operation and maintenance (O&M) facilities and systems, over and above
activities, partially or wholly, from NIA the allocation intended for regular
to irrigators associations (IAs). Despite maintenance activities. Funding
significant achievements over the years, mechanisms envisioned shall include
NIA still has to maintain momentum a National Irrigation Management
in order to achieve the sustainable fiscal Fund (NIMF), a Communal Irrigation
stability needed to perform its mandate.
15
ISF is a means to generate revenues to cover operations and maintenance (O&M) costs. Personnel costs
account for around 80 percent of NIAs operating expenses. Substantial staff resources (up to 40 percent of field
staff time) are spent on collecting ISF from individual farmers.

Development Fund (CIDF) and a greater contract assurances for service
Patubigayan Trust Fund (PTF). These delivery by the water supplier/s to the IAs
shall serve as repositories of irrigation ;and (b) incentive to properly maintain the
funds intended for repair, rehabilitation distribution system, improve the equity
and improvement as well as extended of head- and tail-end distribution and
financial assistance to the irrigation conserve water resources. Pilot-testing of
sector. For immediate rehabilitation volumetric pricing has revealed constraints
works resulting from disasters, calamity to implementation for open canals, as such,
funds as a part of NIAs appropriations therefore, this will initially be introduced in
may also be considered for national NISs where secondary irrigation facilities
systems. or its components have been fully turned
over to IAs through the IMT program. In
Construction of new infrastructure the interim, NIA may adopt and improve
shall focus on small-scale irrigation socially-acceptable demand-management
and water impounding systems (except strategies.
multipurpose systems) based on a viable
national land use plan. These systems 4. Implement irrigation management
are easier to implement and are more transfer (IMT) The country devotes a substantial
cost-efficient than large irrigation portion of its resources in the
systems (except multipurpose systems). IMT aims to transfer to IAs the complete recovery efforts from the effects
The determination of locations for new O&M responsibility on secondary canals of flooding. The cumulative
irrigation systems also factor in CCA and on-farm structures in larger systems, impact of floods on the loss of
and DRRM considerations. and of entire systems covering more than lives and damage to properties
3,000 hectares. Under such a scheme, it and livelihood results in a
2. Protect irrigated and potential is estimated that the NIA will be left to deceleration, if not a setback, of
irrigable lands manage less than 10 percent of the total NIS social progress and economic
area, which should substantially reduce the activity in affected areas.
With the governments thrust to subsidies/operational costs extended by the
ensure food sufficiency as well as the government. IMT facilitates stakeholder
recognition of the alarming rate of participation in decision-making and
depletion of irrigable lands due to planning, provides better access to services
conversion, a review of government and training for its members, produces
policies protecting productive land shall some income from ISF shares and ensures
be undertaken. To complement such the equitability of irrigation water delivery
initiative and to clearly identify gaps, and distribution, among others.
land-use mapping indicating the extent
of irrigable areas vis--vis irrigated Flood and Drainage Management
areas is required. (Cross reference with
Agriculture Chapter.) Assessment, Issues, and
Challenges
3. Develop a volume-based pricing
mechanism Inadequate disaster mitigation and
response
As part of a long-term strategy to
ensure its efficient use, wholesaling of The country devotes a substantial portion of
water at the resource at the headgate to its resources in the recovery efforts from the
IAs is expected to drastically cut down effects of flooding. The cumulative impact
collection expenses. This would entail of floods on the loss of lives and damage
IAs paying only a single fee, with the IAs to properties and livelihood (see Table 5.5)
taking responsibility for collecting ISF results in a deceleration, if not a setback,
from its members. Volumetric (volume- of social progress and economic activity in
based) pricing at the headgate enhances affected areas.
accountability, since it provides: (a)

Furthermore, the countrys archipelagic
character, with many small islands, makes
Table 5.5 Flood-related Impacts: 1980-2005 it highly vulnerable to the effects of climate
Casualties** change. Climate data for the past 50 years
Year Damage Value* shows rising temperatures trends, changing
Dead Missing Injured (PhP M) changes in rainfall patterns, and an increasing
1980 36 4 55 1,472 number of extreme climate events like cyclones,
flooding, and drought. (Philippine Strategy on
1981 484 264 1,922 1,273 Climate Change Adaptation 2010)
1982 337 223 347 1,754
Recent events like typhoons Ondoy and
1983 126 168 28 523 Pepeng in 2009 which resulted in massive
1984 1,979 4,426 732 416 damage to lives and properties were wrought by
unpredictable weather patterns resulting from
1985 211 300 17 3 climate change.Existing flood control structures
1986 171 43 155 1,838 in identified high-risk areas nationwide have
proved inadequate in handling the unexpected
1987 1,020 213 1,455 8,763 increase in stormwater discharge, which often
1988 429 195 468 8,675 results in massive flooding both in HUCs and
rural areas.
1989 382 89 1,088 4,494
1990 676 262 1,392 11,713 Lack of Financing
1991 5,201 4,278 357 74 DPWH has identified several critical flood
1992 145 95 51 7,359 control projects nationwide which, owing to
insufficient funds, cannot be immediately
1993 814 214 1,637 25,038 implemented. This perennial funding problem
1994 266 54 260 3,401 not only affects the implementation of the
hard infrastructure component of projects, but
1995 1,255 669 3,027 57,781 also affects the inherent activities such as the
1996 124 49 97 10,109 relocation of informal settlers and the acquisition
of ROW. This also affects the implementation
1997 199 28 66 4,842 of complementary nonstructural measures
1998 498 116 873 17,823 such as flood forecasting, warning, and
monitoring systems, evacuation plan, hazard
1999 56 3 25 1,555 mapping and watershed management
2000 338 59 370 7,217 activities. Additionally, O&M spending that
depends heavily on government allocation are
2001 431 134 418 6,924 not exempt from funding constraints.
2002 169 33 71 829
LGUs and other implementing agencies also
2003 139 28 182 4,567 lack funds for regular O&M of existing flood
2004** 1,046 437 836 7,679 control programs. Since flood structures are
exposed annually to the brunt of typhoons,
2005** 62 36 51 2,487 regular maintenance works have to be carried
Total 16,594 12,420 15,980 198,609 out to maintain optimal capacities of said
structures.
Source: Flood Risk Management Project Along Selected Principal Rivers,
Implementation Program, DPWH, September 2010
*Total damages in infrastructure, agriculture and private property in million pesos.
**Department of Social Welfare and Development (DSWD) data.

Unsustainable Operations and 2. Apply CCA and DRRM strategies in the
Maintenance of Structural and planning and design of flood management
Nonstructural Infrastructures structures
Coordination among government Recognizing the effects of climate change on

agencies and LGUs is a problem that the frequency of storms and rainfall intensity,
affects the implementation, operation design criteria for flood control structures
and maintenance of flood control should be revisited to ensure that capacities
structures. Once completed, flood control of structures are adequate to handle the
structures should ideally be managed expected increase in floodwater volume.
and maintained by the LGUs, and for Protocols on dam-water release during
the case of Metro Manila, MMDA, typhoons should also be reviewed. Moreover,
who have territorial jurisdiction over the downstream interventions will have to be
project, since these directly benefit from complemented by upstream activities such as
them. However, owing to inadequate watershed management to minimize siltation
financial support and capacity to which significantly reduces effectiveness of
conduct O&M, not all LGUs and flood control structures, especially when left
even MMDA can fully commit to this unabated.
responsibility. The actual mandate for
O&M also remains unclear since no The adoption and mainstreaming of the eco-
law or guideline exists that lays down efficiency concept in water infrastructure is an
the sharing of responsibility between the example of such an adaptation strategy. Excess
LGUs and government agencies. water during rainy seasons can be impounded,
stored and then released for future use in
Strategic Plan and Focus sectors such as irrigation and water supply.
To Reduce Adverse Effects of Equally important are immediate post-

Flooding Occurrences by Maintaining disaster response and interventions. LGUs and
Watersheds and Providing Efficient implementing agencies alike are encouraged
and Adequate Infrastructure to adopt a proactive approach in the conduct
of DRRM. Emphasis shall be given to
The following strategies will be pursued: preventive measures and structures as well
as in raising disaster-preparedness among
1. Prioritize the construction of flood stakeholders to minimize damage to lives
management structures in highly and properties should a natural disaster occur.
vulnerable areas Furthermore, nonstructural measures such
as flood forecasting and warning systems as
Available financing for disaster well as LGU preparedness plans, should be
risk reduction and management of developed accordingly.
infrastructure in the event of floods
must be optimized. This involves the 3. Develop a mechanism to expedite
development of hazard maps so that immediate financing for the rehabilitation
vulnerable areas with high population of flood management structures
concentrations and important economic
and agricultural activities can be A hindrance to prompt response is the slow
prioritized in the provision of flood disbursement of funding to implement
management infrastructure. immediate measures. To expedite the
process, it may be prudent to provide annual
appropriations within DPWHs budget.
Likewise, DPWH and affected LGUs may
opt to avail of various financing mechanisms
and instruments designed especially for
post-disaster rehabilitation and repair work.

4. Increase local government and For 2009, oil accounted for the biggest
community participation share of 34.0 percent in the energy
supply mix, followed by geothermal
Since flood-related risks and damages are energy with its share of 22.4 percent.
the immediate concern of local communities, Coal contributed 15.3 percent, while
their cooperation and participation in biomass added 13.59 percent. The
O&M of flood management structures and remaining shares in TPES were
measures as well as disaster response should divided between natural gas, hydro,
be enhanced. Programs should incorporate wind, ethanol and CME.
the participation of stakeholders and the
identification of their corresponding roles On the demand side, total final
in watershed protection, flood mitigation energy consumption (TFEC) will
and disaster preparedness and response grow to 24.9 MTOE by 2013 and
measures. With advocacy and capacity- 27.7 MTOE by the end of 2016
building assistance from the DILG, from the 2009 demand level of 23.6
LGUs are expected at the forefront of MTOE. TFEC for the period 2009-
implementing localized CCA and DRRM 2016 is expected to grow annually at
plans. The government would be required 2.3 percent on average.
to appropriate the resources needed for both
manpower and funding to facilitate smoother The transport sector accounts for the
operationalization. Financing frameworks highest share of the total demand,
should also be developed to provide for the with an average of 36.5 percent in
necessary capacity development programs 2009, while the industry sector is
as well as O&M activities of flood control projected to grow the fastest at an
structures and facilities. annual average growth rate (AAGR)
of 5.1 percent as reflected in Table 5.6.
Finally, the responsibilities among
stakeholders should be clearly defined Power Generation
to promote greater coordination among
implementing agencies and LGUs, As of December 2009, the countrys
particularly during the implementation and installed capacity stood at 15,610
O&M phases of flood control projects, and megawatts (MW). Fossil-fuel power
to enhance accountabilities. plants, mostly located in the Luzon
grid, are still the dominant source. The
Energy Mindanao grid is heavily dependent on
hydroelectric power plants. Coal-fired
As of December 2009, the Assessment, Issues, and Challenges power plants contributed 27.40 percent,
countrys installed capacity stood followed by oil-based ones with 20.46
at 15,610 MW. On Energy Security percent and those on natural gas, 18.14
percent. The installed capacity from
The Mindanao grid is heavily Total primary energy supply (TPES) in 2009 renewable energy increased slightly
dependent on hydroelectric power reached 39.6 million tons of oil equivalent with an additional 8 MW expansion of
plants. (MTOE), with the production of indigenous Northwind Power Phase II in Bangui,
energy (oil, coal, natural gas, geothermal, Ilocos Norte, which became operational
hydro, wind, solar, biomass, coco-methyl in September 2008; the 2.5 MW Sevilla
ester [CME] and ethanol) increasing by 2.0 minihydro in Bohol commissioned in
percent from levels of 2008. The countrys November 2008; and the two biomass
self-sufficiency16 level thus increased from plants in Negros Occidental with an
56.7 percent in 2008 to 59.2 percent in 2009. aggregate capacity of 29.3 MW. Total
16
Self-sufficiency level refers to the use of indigenous energy composed of oil, coal, natural gas, geothermal,
hydro, wind, solar, biomass, Coco-Methyl Ester (CME) and ethanol

al Gas 8.11%
6.24%
o 6.15%
hermal 22.40%
ass 13.59%
/Solar 0.01%
els 0.30%
Figure 5.3 Primary Energy Mix: 2009
Imported Coal,
9.06%
Imported Oil, 2.43%

Biofuels, 0.10%
Natural Gas, 8.11%
Coal, 6.24%
Hydro, 6.15%
Indigenous Energy,
Imported Oil, 59.23%
Geothermal, 22.40%
31.61%
Biomass, 13.59%
Wind/Solar, 0.01%
Biofuels, 0.30%
Table 5.6 Projected Final Energy Consumption: 2009-2016 The countrys total demand for
Sector 2009-2016 (%) AAGR (%) petroleum products in 2009 rose
6 percent from 101,199 million
Transport 36.5 2.1 barrels (MB) in 2008 to 107,299
Industry 28.1 5.1 MB, with diesel accounting for the
largest share with 40.7 percent of
Residential 24.1 -0.2 demand mix.
Commercial 9.7 1.4
The transport sector accounts
Agriculture, fishery and forestry (AFF) 1.6 3.4 for the highest share of the total
demand, with an average of 36.5
dependable capacity of the entire grid Nio and preventive maintenance schedule percent in 2009, while the industry
was at 13,319 MW, or 85.32 percent of of some power plants. sector is projected to grow the
the total installed capacity. fastest at an annual average
Petroleum products growth rate of 5.1 percent
Gross power generation in 2009
reached 61,934 gigawatt-hours (GWh), The countrys total demand for petroleum
1.83 percent higher than 2008 level products in 2009 rose 6 percent from
of 60,821 GWh17. Natural gas-fired 101,199 million barrels (MB) in 2008
power plants remain the top producer of to 107,299 MB, with diesel accounting
electricity, accounting for 32.11 percent for the largest share with 40.7 percent
of the countrys total gross generation. of demand mix. The transport sector is
Coal-fired plants are second, with 26.60 the highest petroleum product consumer
percent share of the mix. Oil-based followed by industry, as shown in Figure
generation only accounted for 8.69 5.6. To lessen the dependence on imported
percent of the total gross generation in petroleum products, government has been
2009. continuously promoting the development
and utilization of alternative fuels.
In mid-2010, the country was again hit
by several hours of rotating brown-outs Alternative Fuels
because of a power supply shortage
equivalent to 185 MW.The supply deficit Biofuels Program. As of the first half 2010,the
was due to the decrease in dependable DOE had accredited 14 biofuel producers
capacities of hydro plants caused by El (12 for biodiesel and 2 for bioethanol). The
17
GWh converted in MW is multiplied by the following factor: (1000)*(1/24)*(1/365)

Figure 4. 2009 Philippine Capacity and Gross Generation, in MW
Figure 5.4 Philippine Capacity and Gross Generation: 2009
ColumInstalled Capacity
Wind 0.21% INSTALLED CAPACITY GROSS GENERATION
Solar 0.01% Wind Solar Solar
Biomass Wind
0.21% 0.01% 0.01% Biomass
Bioma 0.19% 0.19% 0.10% 0.02%
Coal 27.40%
Oil-ba 20.46% Hydro
Hydro
Natur 18.14% 21.09% Coal 15.80%
27.40% Coal
Geoth 12.51%
26.60%
Hydro 21.09%
Geothermal
16.67%
Geothermal
13% Oil-based
8.69%
Oil-based
Natural Gas 20.46%
Natural Gas
18.14%
32.11%
15,610 MW 7,070.10 MW
Includes embedded generator (61,934 GWh)
Includes off-grid generation
12 biodiesel producers have a combined and development support, the DOE

production capacity of 395.6 million liters provided counterpart funding of
per year. The total sales of biodiesel (CME) PhP50 million for the establishment
blend was 130.9 million liters in 2009 and of a vehicle-testing facility located
54.2 million liters in 2010. Actual diesel at the Department of Mechanical
fuel displacement from biodiesel in 2009 Engineering Laboratory, UP-Diliman.
translates to an equivalent foreign exchange
savings of US$34.9 million. Auto-LPG Program. In support of the
governments Auto-LPG Program, the
On the other hand, Leyte Agri Development Bank of the Philippines
Corporation, the countrys first ethanol (DBP) has included the auto-LPG
facility, and San Carlos Bioenergy initiative in its Clean Alternative
Inc., Southeast Asias first dedicated Transport Fuel Financing Program,
ethanol distillery with an integrated co- which provides reasonable financing
generation power plant, have a combined packages for auto-LPG related activities
production capacity of around 49 such as acquisition of auto-LPG vehicles.
million liters of ethanol annually. Both The Land Transportation Franchising
plants together sold 23.1 million liters Regulatory Board (LTFRB) also
in 2009, equivalent to foreign exchange extended by two years the franchise of
savings of US$10.1 million from gasoline taxis that converted to auto-LPG. These
displacement. In the first half of 2010, schemes promote large-scale conversion
9.2 million liters of ethanol were sold of taxi fleets and encourage new player
to oil companies. By end-2010, Roxol participation in the program.
Bioenergys ethanol plant would have
provided an additional capacity of 30 million As of first half of 2010, there were about
liters per year, bringing total annual ethanol 18,731 converted vehicles nationwide
production to about 79 million liters. running on LPG and 217 auto-LPG
dispensing stations (72 garage-based).
To meet the technical requirements of the The sales growth of auto-LPG products
program and ensure continuous research registered an equivalent reduction of

Figure 5.5 Sectoral Oil Consumption: 2009
Figure 5. 2009 Sectoral Oil Consumption, in KTOE
CONSUMPTION
SECTOR % share
(KTOE)
Industry 1,359.40 10.17%
Transport 8,749.50 65.45%
Residential 937.6 7.01%
Commercial 826.4 6.18%
Agriculture 204.8 1.53%
Non-energy use 111.6 0.83%
Power Generation 1,177.90 8.81%
TOTAL 13,367.20
Industry Transport Residential

Commercial Agriculture Non-energy use
Power Generation
CO2 emissions by 214,664 metric tons The said Institute is envisioned to develop As of end-2009, total installed
(MT) and 48,789 MT for 2009 and the industry and enhance local capacity to capacity from RE stood at 5,309
the first quarter of 2010, respectively. support the emerging natural gas industry MW. Total dependable capacity
Moreover, the 293 LPG-converted and provide the necessary capacity building from RE resources for ongrid
tricycles nationwide have an equivalent needs of the industry. areas stood at 4,278 MW.
reduction of 495,521 kilograms (kg.) of
carbon dioxide. Renewable energy The goal of reducing fossil fuel
consumption and promoting the
Natural Gas Vehicle Program for Public The Renewable Energy Act of 2008, (RA development and utilization of
Transport (NGVPPT). The alternative 9513) sought to accelerate the exploration renewable energy remains a
use of natural gas in the transport and development of the countrys renewable major challenge.
sector is being pursued through the energy (RE) sources. It also seeks to
NGVPPT. From a minimal volume strengthen the DOE policies on renewable
of CNG utilization in 2007 following energy programs and expand the provision of
the inauguration of the pilot mother fiscal and nonfiscal incentives to encourage
and daughter refueling system, the private sector investment in the renewable
total consumption of natural gas for energy industry. The Implementing Rules
the transport sector already reached and Regulations (IRR) was signed on
18.1 Million Standard Cubic Feet May 25, 2009. Consequently, the National
(MMSCF) in 2009. Renewable Energy Board (NREB) was
convened pursuant to Section 27 of RA
As of first half of 2010, there were 7 9513 to promulgate the said law and other
accredited bus operators and 34 CNG related policy and regulatory mechanisms
buses plying the routes of Southern such as the Renewable Portfolio Standard
Luzon and Metro Manila. An (RPS), Feed-in Tariff (FiT) System and
additional 27 buses are under testing the National Renewable Energy Program
and evaluation. The CNG daughter (NREP).
refueling station operates in Barangay
Sto. Tomas, Bian, Laguna. As of end-2009, total installed capacity from
RE stood at 5,309 MW. Figure 5.6 shows
To sustain developments in the industry, the breakdown of the RE contribution to
a joint undertaking with the Polytechnic total power-generating capacity for on-grid
University of the Philippines (PUP) areas. Total dependable capacity from RE
was initiated to establish the first resources for ongrid areas stood at 4,278
Natural Gas Institute in the country. MW.

Figure 6. RE Contribution to Total Power Generating Capacity
Figure 5.6 RE Contribution to Total Power Generating Capacity: 2009
Sales
Natural Gas 2831
Oil 3193
Coal 4277
Geothermal 1953
Coal
Hydro 3291 4,277 MW Geothermal
Biomass 30 (27.40%) 1,953 MW(12.51%)
Wind 33
Solar 1
Renewable
Energy Hydro
5,309 MW 3,291 MW (21.08%)
Oil (34.01%)
3,193 MW
(20.46%)
Biomass
Natural Gas 30 MW (0.19%)
2,831 MW Wind
NOTE: (18.14%) 33 MW (0.21%)
Solar
The above graph should look like this >>> 1MW (0.01%)
If it does not, try reselecting the data

in the table above. Just click&drag.
RE technologies are relatively expensive capabilities of stakeholders and
Thanks. for local investors/developers. On the other potential developers;
Electricity rates in the Philippines hand, foreign investments have been slow
are deemed among the highest to take up the slack because of the issue of d. need for stronger R&D on RE;
in Asia. project ownership, which is by law, stipulates
majority Filipino ownership. e. limited infrastructure support (i.e.,
transmission lines and submarine
The goal of reducing fossil fuel consumption cables);
and promoting the development and
utilization of renewable energy remains f. limited information and education
a major challenge. To benefit fully from campaign activities on RE that
RA 9513, government must institute includes advocacy on its benefits;
certain changes, create new and additional
units of infrastructure, and introduce new g. absence of direct policy linkages
systems. Among the crosscutting issues with grassroots groups; and
raised on renewable energy development
during various energy consultations are the h. dependence on government
following: initiative and resources for the
development of energy projects.
a. high cost of RE development due to
limited number of local manufacturers, Fossil fuels
fabricators and suppliers of RE
equipment and components which are Oil and Gas. The country has 16
mainly imported; sedimentary basins with a combined
potential of 4,777 million barrels of fuel
b. limited options to optimize the oil equivalent (MMBFOE) or 689.8
development of resources because of a MTOE of oil and gas reserves.
lack of an up-to-date database on RE
resources; An additional 150 billion cubic feet
(BCF) of gas have been recovered from
c. lack of capacity-building and training the seventh well of the Malampaya
opportunities to enhance technical which could fuel a 300 MW natural

gas power plant for a period of 12 years. in the annual average growth rate of -0.4
Existing oil and gas fields yielded an percent of electricity to GDP18 from 1999
output of 2.92 MMB of oil coming to 2009.
mostly from the Galoc Field, which
began producing in October 2008. Power demand and supply
With two production wells, Galoc
Field has an average daily production of With peak demand assumed to grow
14,000 barrels. Production for the first annually at 4.5 percent for the planning
semester of 2010 was registered at 1.75 period 2009-2030, a total of 11,900 MW
MB of oil, 56.51 million standard cubic is needed for the Luzon grid; 2,150 MW
feet (MMSCF) of gas and 2.16 MB of for the Visayas grid; and 2,500 MW for
condensate. the Mindanao grid.
Despite a favorable business experience The liberalized and market-based power

in the upstream energy sector, the social industry put in place by EPIRA relies on
acceptability of these projects still needs the private sector to construct generation
to be addressed. plants to meet demand. Private sector
investments in power generation, A total of 11,900 MW is needed
Coal. The Philippines currently has however, have been lower than expected for the Luzon grid; 2,150 MW for
13 coal basins with a total resource vis-a-vis projected energy demand. the Visayas grid; and 2,500 MW
potential of 2.4 billion metric tons Moreover, the usual gestation period to for the Mindanao grid.
(BMT). Indigenous coal production in build new electric power plants is three
2009 reached 4.7 million metric tons to five years.
(MMMT or 10,000 BTU/lb), a 29.9
percent increase over the 3.6 MMMT A 60-percent level in energy
produced in 2008. This is due to the independence is conservative given the
robust output of Semirara Mining countrys natural resource endowments.
Corporation, which contributed 4.36 Electricity generated from indigenous
MMMT or 93.1 percent of the total and renewable energy sources, however,
coal production. As of the first half of is more expensive despite being accorded
2010, coal production had reached priorities in light of their environmentally
3.6 MMMT, which was 38.2 percent benign characteristics.
higher than the coal output during the
same period in 2009. Establishment of the Wholesale
Electricity Spot Market (WESM)
Social acceptability, environmental
sustainability, and the countrys low- The WESM began commercial operations
grade coal are challenges that need to be in Luzon on June 26, 2006 to create
addressed. a competitive electric power industry
for better and more efficient electric
On Power service at a reasonable cost to consumers.
To date, 13 generating companies
Electricity participate directly in the WESM with
11 distribution utilities (DUs) and five
Electricity rates in the Philippines are registered direct suppliers. WESM
deemed among the highest in Asia. operations in the Visayas region, while
Economic growth has been impeded by hindered by inadequate capacity in both
an unreliable power supply as indicated transmission and generation facilities,
18
Electricity to GDP (watt-hour/Php) is an Intensity Indicator

nonetheless commenced in December Divestment of Transcos
2010. Market rules for Mindanao have subtransmission assets
yet to be laid down.
The sale of TransCos subtransmission
Privatization of at least 70 percent of assets involves some 131 sale packages
NPC generating assets in Luzon and covering 107 interested DUs, mostly
Visayas. electric cooperatives. In cases where
more than one DU is connected to a
As of June 2010, the government was transmission line, the connected and
able to privatize 26 of its generating or qualified DUs must form a consortium
operating plants and four decommissioned to buy and thereafter operate the
assets. 20 of these assets comprise 91.7 asset. These subtransmission assets
percent of PSALM-owned capacities in include about 6,200 circuit kilometers
the Luzon and Visayas, thus surpassing (ckt) comprising mostly 69kV
the 70-percent condition for open transmission lines and 1,600 MVA
access and retail competition. The latest of substation capacity. The cost of
successful bid was of the 150-MW Bac- these assets is placed at about PhP7.6
As of June 2010, actual Man geothermal power plant. billion (based on December 31, 2007
privatization proceeds collected net book values).
by PSALM from the sale of Transfer of management and control of
generation and transmission at least 70 percent of total energy output As of October 31, 2010, TransCo
assets has amounted to US$4.42 of power plants under contract with had divested itself of PhP3.55
billion. NPC to Independent Power Producer billion (69 sale packages) worth of
(IPP) Administrators subtransmission assets including 325
MVA transformers in favor of 57
The government successfully bid out DUs. Included in the sale packages are
3,345.75 MW of NPC-contracted 40 Lease Purchase Agreements with
capacities to IPP Administrators, 32 cooperatives under concessional
equivalent to US$3.228 billion in terms amounting to about PhP2.4
proceeds. This amounts to a cumulative billion. The balance of over PhP1.150
68.22 percent of total capacities billion represents sales to private
privatized, towards the 70 percent distribution utilities. Thirty-three sale
required for the start of open access. contracts have been approved by the
ERC amounting to PhP1.75 billion
Privatization of the National as of October 31, 2010.
Transmission Corporation (TransCo)
Use of privatization proceeds to
The government on January 15, 2009 reduce borrowings
formally turned over the 25-year
concession of the National Transmission As of June 2010, actual privatization
Corporation (TransCo) to the NGCP. proceeds collected by PSALM
The NGCP remitted US$987.5 million from the sale of generation and
to PSALM as its upfront payment for transmission assets has amounted to
the operation of the transmission system US$4.42 billion. This includes other
and in compliance with the provisions of privatization-related fees such as lease
the sale transaction. This amount is 25 rental, assignment of ROW, purchase
percent of the US$3.95 billion purchase price for land, and forfeiture of bonds.
price paid for the concession contract.
This concessionaire of TransCo is in The proceeds from the sale of
charge of development, upgrading, and National Power assets are used to
rehabilitation of the electricity grid. service the financial obligations of

National Power (e.g., prepayments Regulation
of maturing debts, regular National
Power debt servicing, servicing of As stipulated in the EPIRA, members
IPP obligations).Of the privatization of the Energy Regulatory Commission
proceeds collected so far, PSALM (ERC) are appointed by political
has utilized US$4.089 billion for the authorities. This arrangement, however,
following (as of June 30, 2010): has brought up issues of transparency
and independence. The previous Plan
Prepayments US$1.297 billion (2004-2010) already contained a planned
Regular NPC Debt US$1.600 billion reassessment of the ERCs performance
Servicing and processes, suggesting the creation of
an independent search committee as a
Servicing of IPP US$1.095 billion mechanism for ERC appointments. To
Obligations
date, no such assessment and evaluation
Privatization US$0.097 billion of the ERC has been conducted. An
Related Expenses independent monitor of the regulatory
Total US$4.089 billion setup of the sector is necessary as part of a
system of checks and balances, especially The delay in implementation
once the generation and transmission was due to limited funds, ROW
Condonation of loans sectors are privatized. problems for transmission and
substation projects, deferment of
The national government, through On Electrification T/L and S/S projects since NPPs
PSALM, condoned the loans of preferred distributed generation,
electric cooperatives (ECs) used for Electric Cooperatives are private entities and failed biddings for the
electrification purposes amounting but receive sizeable government subsidies. purchase of equipment.
to PhP18.1 billion. This resulted in a Some provisions of the Magna Carta
reduction in ECs rates in the range for Residential Electricity Consumers
of PhP0.0578/KWh to PhP1.3507/ have weakened the implementation
KWh. As of October 31, 2010, of the Anti-Pilferage Law, leading
the government through PSALM to an increase in system losses and
had paid a total of PhP10.696 inefficiencies among ECs. An example is
billion worth of financial obligations Article 19 of the Magna Carta, giving the
to LGUs and other government consumer the right to tender payment at
agencies. the point of disconnection or provide
a deposit representing the differential
Mandatory Rate Reduction billing. Article 20, moreover, obliges
the utility to continue providing service
From January to March 2010, NPC despite arrears of previous occupants of a
granted a total of PhP358.1 million building/dwelling place. Parts of Articles
for the Mandatory Rate Reduction 16-25 give the consumer a reprieve from
(MRR), in which the Luzon disconnection during holidays, funerals,
residential customers accounted for 27 or if the consumer is sick.
percent. Residential customers of the
Manila Electric Company (Meralco) As of December 2010, the ERC has
account for 20 percent. From 2001 to been in the final stages of amending
March 2010, NPC has already spent both the Magna Carta for Residential
a total cost PhP25.65 billion for the Electricity Consumers and the IRR of
grant of MRR. the Anti-Pilferage Act. Earlier in 2009,
the ERC had issued the Rules to reduce
systems losses of ECs from 14 percent
to 13 percent, and of private distribution

utilities (PDUs) from 9.5 percent to Likewise, no substation was put
8.5 percent. The Rules for Setting EC up in 2009. As for remote area
Wheeling Rates (RSEC-WR) were electrification, 130 of 133 areas were
issued to encourage efficiency and provide electrified, an accomplishment of
incentives for the ECs performance. 97.74 percent.
Barangays. As of July 31, 2010, 99.87 The delay in implementation was due
percent of all barangays were electrified, to limited funds, ROW problems for
up from 99.39 percent in 2009 leaving transmission and substation projects,
only 54 barangays programmed for deferment of T/L and S/S projects
electrification until the end of 2010. since NPPs preferred distributed
From January 2009 to July 2010, the generation, and failed biddings for
ECs provided electricity to 847 rural the purchase of equipment.
barangays. The 119 ECs in the country
have achieved 99.94 percent energization The NPC Main Grid is no longer
relative to their respective franchise areas. able to advance funds to finance
The Mearlco and private investor-owned the operations of SPUG, including
The Energy Reform Agenda for utilities (PIOUs), together with LGUs, project implementation, since the
2010-2016 is guided by the vision have 27 and 7 remaining unenergized main grid plants were already sold.
of Energy access for more. barangays, respectively. SPUGs funds come from its revenues
and the UCME subsidy. In 2009, the
Accelerate exploration and Households. As of July 2010, the household UCME was approved only on the
development contracts through connection level in the country had latter part of the year and was used for
the Philippine Energy Contracting reached 74.0 percent. This means 14.204 SPUGs operations and payments for
Round million out of a total 17.534 million the subsidies of New Power Providers
households19 have electricity connections. (NPPs).
Intensify development and
utilization of renewable energy Missionary areas. Large portions of Of the latest approved UCME
and environmentfriendly the remaining unenergized barangays equivalent to PhP2.7 billion for each
alternative energy resources/ are mostly remote and with dispersed year from 2010-2013, only PhP533
technologies households that are difficult to energize, million is allotted for capital spending.
requiring extensive resources, time This amount is not enough to fund
and effort. Electrification in some all projects and additional funding is
barangays, particularly those covered by required. SPUG is now looking for
solar projects, was found to be short- other sources of funds.
lived owing to the absence of a strong
sustainable mechanism. Under Rule 13 of the EPIRA-
IRR, the DOE in coordination
Based on the 2009 Missionary with NPC, NEA, NPPs, DUs and
Electrification Development Plan QTPs has prepared the MEDP
(MEDP), the total projected capacity 2011 with two major components,
addition for Small Power Utilities Group namely, missionary generation and
(SPUG) areas was 26.69 MW, of which remote area electrification, which
only 6.61 MW was added in 2009. For includes the barangay and household
transmission and substation projects, a electrification. This outlines the
total of 226.01 km. of 69kV transmission governments plan to implement
lines and 50-MVA substations were policies and programs that will sustain
projected. However, only 22.41 km. the provision of adequate, reliable,
transmission lines were put up while and efficient supply of electricity in
the rest were in preconstruction stages. missionary or offgrid and remote areas
19
Total number of households is based on 2000 Census

and to enable these communities to from the technical and financial support of
receive the benefits of electrification. its partners in the private sector, including
businesses, investors, and nongovernment
SPUG covers 284 plants in 214 areas, organizations (NGOs). PPPs will cover
with 14 areas being candidates for all phases of energy development and
privatization. Of these 14 areas, the utilization.
generation function of two areas
was successfully taken over by private To ensure energy security
parties.
Accelerate exploration and development
Missionary generation. Missionary contracts through the Philippine Energy
generation includes the existing Contracting Round (PECR)
generation and associated delivery
systems being managed by SPUG, First launched in 2006, the PECR shall
NPPs and QTPs in small islands and be continued. Aggressive promotion of
isolated grids. The program involves indigenous oil and gas resources and coal
improving reliability and efficiency prospect areas via competitive contracting
through the replacement of old scheme under the PECR will be pursued. Increase utilization of alternative
generating units and limiting the fuels.
rental of units during emergency. Through PECR, the oil and gas sector is
expected to yield an additional 23 Service Implement higher biofuels blend
Remote area electrification. Consistent Contracts (SCs) and drilling of 35 wells from B2 to B5 to diesel, and E10
with the overall objective of by end of 2016. From 2010 to 2016, to all gasoline and corresponding
total barangay electrification production targets for the oil and gas fields standards in phases subject to
and household electrification, all are projected at 36.3 MMB of oil, 1,029.5 availability of supply.
remaining unelectrified barangays BCF of gas and 37.8 MMB of condensate.
in small islands and isolated grids The biggest contribution will be provided
will be provided with electricity by the Malampaya oil and gas fields, which
service. A total of 1,760 households will contribute 23.1 MMB of oil, 1,022
are programmed for remote area BCF of gas and 37.2 MMB of condensate.
electrification amounting to New geophysical data will also be acquired
PhP169.714 million for the different to cover a total of 18,550 line/km. and
missionary areas. 3,750 sq./km. of 2D and 3D seismic data,
respectively, by the end of 2016.
Strategic Plan and Focus
Intensify development and utilization
The Energy Reform Agenda (ERA) of renewable energy (RE) and
for 2010-2016 is guided by the environmentfriendly alternative energy
vision of Energy access for more. resources/technologies
Governments key priority is to ensure
sustainable, diverse and reliable energy RE development is targeted with the
sources through consultation and the government gearing to be the world
participation of multiple stakeholders. leader in geothermal energy, the largest
Increased economic efficiency in the producer of wind power, and the solar
use and distribution of energy services manufacturing hub in Southeast Asia. In
is critical to achieving energy access for addition, the harnessing of the countrys
the majority at competitive rates. hydropower and biomass energy
potentials shall be continued.
The ERA will utilize PPPs to implement
critical infrastructure projects of the The National Renewable Energy
government that will address the Program (NREP), to be drawn by DOE
growing energy needs of the country. in consultation with other concerned
Through PPPs, the DOE can benefit stakeholders, will provide the overall

strategic policy directions in the RE Increase utilization of alternative fuels
industry.
The governments policies and programs
The government will pursue the research on alternative energy are geared towards
and development of untapped RE available reducing the countrys dependence
such as ocean thermal energy conversion on price-volatile oil imports and
(OTEC). To date, the countrys potential diversifying from conventional fuels
sites for deep-ocean power consist of 910 towards indigenous renewable and
blocks equivalent to 73,710 hectares. Deep environment-friendly energy resources.
Ocean Power Philippines, Inc. (DOPPI) The development of other feedstocks for
has already filed its application for OTEC biodiesel and bioethanol (i.e., jatropha)
Pre-Development Contract for 36 areas. is also encouraged through research and
commercial production. It is important
Existing RE-based power generation to develop alternative energy sources,
capacities shall be increasingly utilized. especially indigenous and renewable
From the generation expansion exercises forms, with an end view of providing
used in the formulation of the countrys security of supply as well as realizing
Conduct RD for other nonfood power development program, out of savings from importation.
feedstock in coordination with the 8,156.7 MW of total RE potential,
concerned agencies, academe & 4,701.96 MW is expected to come in the a. Implement higher biofuels blend from B2
research institutions. next 30 years, broken down as follows: to B5 to diesel, and E10 to all gasoline and
(a) hydropower with 2,113.1 MW; (b) corresponding standards in phases subject to
Continuously promote the use of geothermal with 1,475 MW; (c) wind with availability of supply20
alternative fuels (i.e compressed 930 MW; (d) biomass with 112.8 MW; and
natural gas, auto liquefied (e) solar with 71 MW. Of these capacities, The National Biofuels Board (NBB) is
petroleum gas) as well as other around 57 MW is expected in the short set to recommend the levels of biofuel
emerging energy technologies term, 130 MW in the mediumterm; around blends based on supply availability,
such as electric vehicles in the 775 MW is expected to come in between price and quality of biodiesel, including
transport sector. 2014 and 2016. The remaining capacity blending infrastructure and logistics.
is expected beyond 2016 and up to 2030.
The committed capacities expected to be b. Conduct RD for other nonfood feedstock in
commercially operated within the short coordination with concerned agencies, academe
term are: (a) 70 MW from geothermal; (b) & research institutions
50.5 MW from hydro; and (c) 17.5 MW
from biomass. The government will broaden the
coverage of the Biofuels Program to
Harmonization is a critical factor in the identify other feedstocks. Techno-
exploration and development of geothermal economic studies on palm and algae as
resources, especially those located inside potential biodiesel feedstocks will be
protected areas, hence the need to unify pursued, while cellulosic technologies
provisions of RA 7586 (National Integrated will be used to produce bioethanol.
Protected Areas System [NIPAS] of 1992)
and RA 8371 (Indigenous Peoples Rights The academe and other research
Act [IPRA] of 1997), with relevant energy institutions, which are among the
policies and programs for an integrated partners in research and study by the
response to environmental and sociocultural DOE, shall be encouraged to continue
concerns. their undertakings on nonfood feedstock
R&D activities.
20
B2: 2% bio-diesel (coco-methyl ester [CME]) blend; B5: 5% bio-diesel (CME)blend; E10: 10% bio-ethanol

c. Continuously promote the use of Pursue the enactment of a law on energy
alternative fuels (i.e compressed natural efficiency and conservation
gas, auto liquefied petroleum gas) as well as
other emerging energy technologies such as An Energy Efficiency and Conservation
electric vehicles in the transport sector Law is a critical measure to economize
the energy requirements of growth. The
The promotion of natural gas use in proposed legislation should incorporate
industrial, commercial, residential policies and measures to develop local
and agricultural sectors will continue energy auditors and energy managers,
to be encouraged. The conversion develop the ESCO industry, encourage
of existing and decommissioned the development of energy-efficient
power plants to natural gas shall be technologies/ buildings and provide
pursued. Active interaction with the incentives for the effective promotion of
downstream energy sector shall be efficiency initiatives in the energy market
prioritized through gas-to-market sector.
projects. The use of CNG in vehicles
will also be encouraged. To achieve a reliable and secure
supply of electric power Pursue the enactment of a
Given the benefits of CNG and law on energy efficiency and
LPG over fossil fuels, the DOE will The government shall pursue the conservation
also renew its efforts to promote the following strategies:
former in the transport sector. The To achieve a reliable and secure
DOE will facilitate the required policy 1. Diversify the countrys power sources, supply of electric power.
support as well as the availability of especially in Mindanao, to address the
critical supply infrastructure and susceptibility of hydro power plants to Achieve 90 percent household
facilities. The infrastructure of major climate-change impacts; connection by 2017
gas pipeline networks needs to be
strengthened and expanded to reach 2. Study alternative technologies in
commercial establishments and power generation;
households.
3. Assess the vulnerability of energy
DOE will work with the 15th facilities to climate change and natural
Congress for the passage of the disasters (e.g. El Nio and La Nia);
Natural Gas Bill. With regard to
auto-LPG conversion, the DOE will 4. Conduct a comparative study of
conduct technology validation for dual similar or related energy policies in the
fuel jeepneys and other motorized ASEAN;
diesel/gas engines and conduct
capability building for regulators and 5. Focus on demand aggregation and
implementers to develop available contracting from Electric Cooperatives;
manpower expertise. Studies will be
conducted to determine the viability 6. Implement the Transmission
of expanding the use of auto-LPG Development Plan (TDP);
to other types of engines, together
with studies on the necessary safety 7. Revisit EPIRA and its IRR (e.g. the
standards. possibility of recommissioning of power

plants under preservation, lifeline rates ICT as a means to interconnect the
and cross subsidies among others; and country, even out social opportunities,
raise overall living standards and
8. Establish triggers to allow attain global competitiveness.
government to build power plants in
face of weak private sector interest. The growth and dynamism of the
ICT sector has accommodated the
To expand the governments existence of 7 mobile operators, 73
electrification program local-exchange carriers, 14 intercarrier
service providers, 11 international
The following strategies shall be pursued: gateway facility (IGF) operators,
and 471 value-added service (VAS)
1. Pursue higher household providers21. The availability of ICT
electrification. The government intends services has facilitated development
to achieve 90 percent household through more efficient and effective
connection by 2017 through the delivery of both existing and
expanded rural electrification program novel applications in business and
using RE Systems. commercial transactions, general
government, education and health
2. Rationalize the Universal Charge for services, among others.
Missionary Electrification (UCME)
rates approved by ERC in order to cover Current State of ICT
missionary electrification; Deployment and Use
3. Engage LGU support for the Service Coverage
missionary areas; and
The scope of ICT technologies
4. Strengthen LGU capacity in power and services in the country
project development and in accessing includes fixed telephone lines,
available funds (i.e., ER 194). wireless communications, and
broadband Internet, among others.
Information And Cellular mobile telephone service
Communications (CMTS) is by far the dominant
Technology (ICT) telecommunications service in the
Infrastructure market, covering 94.7 percent22 of
total municipalities, as compared
Assessment, Issues, and with 53.9 percent23 coverage for fixed
Challenges telephone lines. Despite the continued
expansion and success in CMTS, a
Technological innovations and number of unserved municipalities
commercial developments have expanded still exist. Coverage gaps need to be
growth opportunities in the ICT sector, addressed to achieve universal access
with private sector players continuing to and service for telephony.
invest in developing the countrys ICT
infrastructure. The government, for its Meanwhile, the countrys fiber-
part, has been promoting the spread of based backbone network provides for
21
Source: National Telecommunications Commission (NTC), figures as of end of 2009
22
Source: COMELEC data, used as of last 2010 Automated Election, where 5.26 percent of municipalities were
identified to have not been covered by any mobile network service. It should be noted however that CMTS coverage in
some municipalities may only be referring to the town centers, with remote barangays and schools of such municipalities
still having no connection yet.
23
Source: NTC, 2009
24
Source: CICT

Figure 7. Growth in Number of User/Subscribers of Major ICT Services, 2006-2010
CMTS (mobile Household with access to

Internet Users Fixed telephone line
telephony) broadband service
2006 42.869 8.105 0.397 3.617
2007 57.345 13.706 0.774 3.633
2008 68.095 14.000 1.775 3.742
2009 77.043 24.000 3.600 3.850
2010 Figure 5.7.89.324
Growth in Number 32.779 of Users/Subscribers
7.301 of Major ICT 3.982 Services:
2006-2010
100.000
90.000
User/Subscribers, in millions
80.000
70.000
60.000
50.000
40.000
30.000
20.000
10.000
0.000
2006 2007 2008 2009 2010
CMTS (mobile telephony) Internet Users

Household with access to broadband service Fixed telephone line
Source: CICT, NTC
domestic and international broadband which were rolled out in 2004 and 2006.
connectivity with about 63 provinces The greater challenge, however, is for
(79%) in the country having fiber- Internet, particularly broadband access
based infrastructure. Further, at least and subscription, to also catch up and
761 cities and municipalities (about achieve the same level of service with
50%) are considered to be covered with that of mobile telephony, be it through
fixed or mobile broadband Internet wired (e.g., Digital Subscriber Line Based on the concept of shared
services.24 However, the presence and connection) or wireless broadband access facility, the national government,
geographic reach of mobile broadband (e.g., 3G/ High Speed Packet Access in collaboration with LGUs
(usually 3G wireless technology) in technology). Figure 5.7 shows signs has established the Philippine
said areas is still very limited and only of market concentration in the sector Community e-Center Program,
covers urban centers and boundaries. with the continuous growth in mobile which to date has successfully
telephony services, leaving other forms connected over 1,200
ICT Penetration (Access and of ICTs such as Internet and broadband communities to the Internet.
Subscription) access far behind.
The increase in the number of CMTS In terms of Internet connection speed, a

subscribers has been phenomenal, recent global broadband speed analysis
especially as the short messaging test shows that the Philippines average
service (SMS) or more popularly download speed (i.e, the speed at which
known in the country as text data is sent from the Internet to your
messaging,has become a way of life for computer) is at 2.34 megabits per second
many Filipinos. Over two billion text (Mbps), while the average upload speed
messages (sending and receiving) are (i.e., the speed at which data is sent from
being handled daily by cellular mobile your computer to the Internet) is at
operators. More advanced services 0.65Mpbs.25 This ranks the Philippines at
are also becoming prevalent, such as 72nd in worldwide download speed and
the multimedia messaging service 65th in worldwide upload speed.
(MMS) and the third generation (3G)
mobile communication technology,
25
Source: Speedtest.net, 200

At present, penetration of personal high cost of setting up infrastructure,
computers (PC) in the country is still especially over difficult terrain
considered low, especially in rural or geographical locations. Many
areas, which may be attributable to unconnected public high schools
infrastructure limitations, availability of are also located in areas not served
electricity access, and cost of ownership by private telecommunications
or household financial constraints. Since companies (telcos), which could
many Filipinos still do not own PCs, indicate the digital divide between
other alternative places such as Internet urban and rural areas across regions.
cafes, WiFi hotspots, offices, and schools,
among others, serve as common Internet Broadcast Communications
access points. There are currently some
30,000 to 40,000 registered Internet As of end 2009, the broadcast sector
cafes and an estimate of 2,000 WiFi comprised 306 television (TV)
hotspots throughout the country. The stations, 905 cable television (CATV)
increase in number of Internet cafes and operators, 386 AM stations, 676 FM
the availability of free WiFi access in stations, and 5 direct-to-user (DTU)
public spaces has led to competition and satellite providers.
cheaper rates. Although PC ownership
levels are quite low, utilization rates At present, the transition from
are much higher considering that the the traditional analogue to digital
countrys social networking penetration television broadcasting is already
rate is at 83.1 percent, which is higher progressing in many developed
than the global average of 57.5 percent.26 nations, or is otherwise being carefully
studied in many other countries all
The use of shared access facilities has over the world. To facilitate growth
also helped increase Internet usage, in the broadcast sector, the country
and made access to Internet services is planning and preparing for the
more affordable, especially in poor and entry of Digital Terrestrial Television
underserved communities. Based on the (DTT) broadcasting. In 2010, the
concept of shared facility, the national National Telecommunications
government, in collaboration with Commission (NTC) released
LGUs has established the Philippine Memorandum Circular No. 02-06-
Community e-Center (CeC) Program, 2010 that issued the adoption of the
which to date has successfully connected Japanese digital broadcast standard
over 1,200 communities to the Internet. called Integrated Services Digital
The CeCs also serve as common access Broadcast Terrestrial (ISDB-T) for
points for e-Government services. the countrys impending migration to
DTT broadcasting.
Internet Connection in Public High
Schools e-Government Systems
As of 2009, only 29 percent of the Current advancements in ICT

countrys public high schools had an services and applications have driven
Internet connection. Table 5.8 shows a trend towards new ways to link the
that the least number of connected public government and its citizens. This has
high schools are in the Cordillera (CAR), opened opportunities to improve the
Cagayan Valley (Region II) and Bicol sharing of public information and
(Region V) regions. This can be largely to enhance the delivery of public
attributed to budgetary constraints or the services.
26
Source: Universal Mccann International Social Media Research Wave 3, March 2008

As an indispensable step, various Issues, Gaps, and Challenges
government agencies have been
developing and enhancing their Despite the significant progress in terms
accessibility in the Internet, among of wider access and availability of ICT
others. As of September 2010, 304 or services, a number of perennial issues
93.8 percent of NGAs had established and problems continue to affect the
their own websites or portals and were Philippine ICT sector.
in various stages of enhancing their
web-presence (see Figure 5.8). A 1. Gaps in communications and
total of 14 NGAs (4.3%) are in Stage information access/services, particularly,
4 characterized as government portals low coverage, penetration, and uptake of
allowing for two-way transactional Internet and broadband
interactions; 93 NGAs (28.7%),
Stage 3 (with interactive features on Despite growth in the ICT sector, the
the website, including downloadable pattern of this growth, particularly the
forms); 150 NGAs (46.3 percent) are rate of catch-up, differs among the types
at Stage 2, with frequently updated of ICT services and their deployment
or dynamic websites; and 47 NGAs across the regions. Among the available
(14.5%) are at Stage 1 (comprises ICT services in the market, CMTS
of only an official website or static has the biggest advantage in terms of
websites). coverage and subscription, while Internet,
especially broadband access, still lags.
Table 5.7 Internet Connection in Public High Schools per Region: 2009
TOTAL NO. OF CONNECTED WITHOUT CONNECTION
REGION PUBLIC HS No. of HS % Connected w/in Telco area out of Telco area % Unconnected
National 6650 1936 29.1 1150 3564 70.9
NCR 220 157 71.4 63 0 28.6
CAR 243 7 2.9 46 190 97.1
I 461 81 17.6 101 279 82.4
II 350 26 7.4 33 291 92.6
III 502 115 22.9 81 306 77.1
IV-A 578 214 37 118 246 63
IV-B 340 34 10 39 267 90
V 582 38 6.5 78 466 93.5
VI 603 139 23.1 185 279 76.9
VII 610 298 48.9 107 205 51.1
VIII 397 70 17.6 88 239 82.4
IX 330 144 43.6 21 165 56.4
X 278 154 55.4 55 69 44.6
XI 279 61 21.9 76 142 78.1
XII 332 233 70.2 16 83 29.8
XIII 297 64 21.5 34 199 78.5
ARMM 248 101 40.7 9 138 59.3
Source: Japan International Cooperation Agency ( JICA) Study

Column1
Stage 4: Transactional Web Presence 4.30%
Stage 3: Interactive Web Presence 28.70%
Stage 2: Enhanced Web Presence 46.30%
Stage 1: Emerging Presence 14.50%
Without Web Presence 6.20%
Figure 5.8 State of Web Presence among NGAs/a as of September 2010
Stage 4: Transactional Web Presence

14.5%
Stage 3: Interactive Web Presence
6.2%
46.3% Stage 2: Enhanced Web Presence
4.3%
Stage 1: Emerging Presence
28.7% Without Web Presence
Source: National Computer Center (NCC)

/a
Stages of Web presence based on the United Nations and the American Society of Public Administration
(UN-ASPA) standards
A wide disparity in the availability The current infrastructure (backbone education, age, gender, disabilities,
and level of ICT infrastructure network) already connects most of the ethnicity, income and those who live
and services, especially between Philippines, but there are still gaps in in remote regions.
major urban centers and rural connecting a significant number of end
areas. users, such as communities, households, The growth in the countrys population
schools, as well as local units and agencies has also driven an increasing demand
While the ICT sector is and should of government, especially in the rural for high-speed bandwidth and high-
be private sector-led, government areas. This suggests a wide disparity capacity application.
must continue to cultivate an in the availability and level of ICT
enabling regulatory environment infrastructure and services, especially 2. The legal and regulatory
that ensures competition and a between major urban centers and rural environment may not be as
level playing field for the provision areas. Profitability issues and situations in conducive for investments in ICT
of ICT infrastructure and services. sparsely populated rural areas, including infrastructure
lack of important infrastructure support
There are still a number of (e.g., availability of electricity and There is a need to pursue various legal
issues and inadequacies in the transport system) and possible risks and regulatory reforms to ensure that
current structure of government of lower demand and subscriber base, these do not bar nor impede improved
information network and state of preclude the entry of private operators. private sector investments in ICT.
e-government system. Furthermore, institutional reforms
It is recognized that the task of developing require that the policy and regulatory
the countrys ICT infrastructure bodies of the government be
primarily resides with the private sector. If strengthened and their independence
broadband connectivity, however, is fully and autonomy, including provision
left to market mechanisms, it likely will of well defined qualifications and
be deployed by the private sector to urban fixed term of the commissioner, be
centers only, with very limited roll-out in reinforced as in the case of NTC.
rural areas. Moreover, there is also a need
to ensure that the benefits of the Internet While the ICT sector is and should
and related technologies, including be private sector-led, government
participation in ICT investment and must continue to cultivate an
opportunities, is made available into all enabling regulatory environment
segments of the population, including that ensures competition and a level
those who are disadvantaged due to playing field for the provision of

ICT infrastructure and services. The Strategic Plan and Focus
growing popularity and importance
of Internet and broadband has also Developing the ICT infrastructure is
driven increased competition and significant to support the socioeconomic
thus, poses a greater challenge on how growth requirements and opportunities
to make these services accessible to a of the county. Under the current
larger market base. framework, ICT infrastructure and
services are primarily provided by private
There is also lack of Green ICT telecommunications operators, driven
policies and initiatives to help manage mainly by user demand. There are areas,
the effects of ICT on the environment however, that are too remote or difficult
and climate change. With the rapid for private sector players to enter. Thus,
pace of technology adoption, the while private sector investments will
practice of green ICT should be more remain the key enabler, the governments
strongly instituted in all sectors, not role is equally important in ensuring
only in ICT. provision of ICT access and services
for all, and in facilitating an enabling
3. Inadequate infrastructure support environment through appropriate policy While private sector investments
for e-Government system measures and regulatory reforms to help will remain the key enabler, the
sustain and further encourage private governments role is equally
Despite previous e-government sector initiatives. important in ensuring provision
initiatives undertaken by the of ICT access and services for
government, there are still a number of To provide fast, reliable all, and in facilitating an enabling
issues and inadequacies in the current and affordable access to environment through appropriate
structure of government information communications services and policy measures and regulatory
network and state of e-government information reforms to help sustain and
system. While web presence among further encourage private sector
NGAs are continuously evolving Driven by the increasing demand for initiatives.
through establishment of web portals, high-speed and high capacity voice,
LGUs especially in the local areas video, and data services and applications, Since telephony, particularly
are limited by lack of appropriate the private sector will continue to play though CMTS, has achieved a
infrastructure, technical features and a major role in the sectoral growth. It greater advantage in terms of
interface. For a developing country will still provide the bulk of investments access and usage, there is now
that has a low level of Internet and towards the build-up and expansion of a stronger focus on achieving
broadband access, the substantial the ICT infrastructure networks and universal access and service
benefits of true e-government system offer better and innovative services to the for Internet and broadband,
would still be difficult to capture. public. Equally important government especially for providing digital
interventions will include ensuring opportunities in the unserved and
Furthermore, various government that digital opportunities from ICT are rural areas.
bodies are currently developing enjoyed by all Filipinos in both urban
and maintaining individual and rural areas alike. Since telephony,
telecommunications networks, particularly though CMTS, has achieved
resulting in seemingly fragmented a greater advantage in terms of access
development of government ICT and usage, there is now a stronger focus
applications. The bigger challenge on achieving universal access and service
is to develop a more integrated for Internet and broadband, especially
government communications for providing digital opportunities in
network that allows for connecting the unserved and rural areas. Hence, the
and accessing ICT systems of following strategies will be pursued:
various regional, provincial and LGU
government offices nationwide.

1. Provide incentives to facilitate ICT is an example of a self-sustaining
infrastructure investments, particularly shared facility providing affordable
in the rural and unserved areas access to ICT-enabled services and
relevant content. While a number
Providing universal access to areas not of CeCs have been successfully
considered viable by the private sector established across the country, the
is not a new challenge. In these areas government shall further support
therefore, the government can play a more their sustainability and further
active role in supporting and encouraging expand to other access points, with
private initiatives. the objective of establishing a CeC
in every barangay. The government
Create a Universal Access and Service Fund will also push for capacity building
utilizing spectrum user fees (SUF) programs for CeC workers to develop
their business and entrepreneurial
The NTC already collects SUFs, which skills in maintaining the facilities as
telecommunications operators pass well as aggregating CeC needs and
on to consumers through service fees services to increase awareness and
The CeC is an example of a self- (about PhP2 billion collected annually private sector interest.
sustaining shared facility providing and remitted to the National Treasury).
affordable access to ICT-enabled These funds can be used to build 3. Implement measures to ensure
services and relevant content. ICT infrastructure in rural areas by security and privacy of data in
institutionalizing the use of SUFs to a network and the transmission
The government shall further create a Universal Access and Service infrastructure
support their sustainability and Fund (UASF).
further expand to other access With the rising number of people,
points, with the objective of Part of the UASF may be allocated institutions and organizations linked
establishing a CeC in every for providing smart subsidies27 to online, as well as the increasing
barangay. aid prospective private operators in number of ways by which people
investing in the rural and unserved utilize the Internet, safety, security
areas of the country. The fund may and privacy issues become of utmost
also be used in developing various importance. Hence, the following
broadband requirements of the public, shall be pursued:
particularly in education, health and
for ICT awareness and capacity- a. Improve the countrys
building activities. In this initiative, cybersecurity threat prevention,
mechanisms to ensure transparency detection and response capabilities
and accountability, preferably with for critical infrastructure, including
multisectoral participation, would have reliability and robustness to
to be institutionalized. withstand threats and damages
caused by natural disasters,
2. Establish sustainable Community terrorism, and other threats
e-Center (CeC) Program
b. Constant audit of computer
With the currently low level of broadband systems and resources that
coverage and PC penetration, the should be made mandatory by all
government can support establishment institutions using ICT;
of shared access facilities to cater for
rural and unserved areas. The CeC c. Issuance of technical guidelines,
advisories and bulletins on the
27
Smart Subsidies are one-time financial incentives intended to help kick-start rural telecommunications roll-
out. It is not meant to cover the full cost of infrastructure roll-out, but rather to merely support investment,
without creating subsidy dependency.

protection of computer systems 1. Pursue legal, regulatory and policy
from hacking and unauthorized reforms
access, among others; and
The following proposed legislations and
d. Maintain a pool of cybersecurity other regulatory and policy reforms shall
experts in government agencies be pursued:
to extend emergency technical
assistance to solve reconstruction a. Establish the Department of
of damaged data/systems and Information and Communications
possible reconstruction to prevent Technology (DICT) (via the DICT
recurrence of cybersecurity-related Bill).The DICT shall be established
events. to coordinate and implement the
national ICT development agenda,
To cultivate an enabling policies, programs and projects.
environment to further Transforming the CICT into the
attract and sustain private DICT should result in a thorough
sector investments in ICT implementation of the national
infrastructure development e-strategies cutting across other Creating a legal and regulatory
critical sectors such as e-education environment that is more
Creating a legal and regulatory and e-health, and the countrys consistent, transparent and
environment that is more consistent, representation in international and conducive for investment will
transparent and conducive for regional ICT bodies. sustain current efforts in spurring
investment will sustain current efforts economic growth and availing of
in spurring economic growth and b. Strengthening of the National digital opportunities in the country.
availing of digital opportunities in the Telecommunications Commission (NTC)
country. through the NTC Reorganization
Bill. The NTC shall be strengthened
Consistency, transparency, and by making its charter responsive to
predictability of rules encourage technological and market changes .
investments that are critical in
sustaining the efforts to deploy It will also be strengthened by setting
and promote ICTs for economic fixed terms for qualified members of the
growth. Regulatory reform will also collegial body, vesting each member with
help engage the private sector, and authority independent of any political
enhance the prospects for financial and personal influence during their term
sustainability and viability of ICT of office. The bodys fiscal autonomy in
access points. the implementation of sector plans and
programs shall also be secured.
The regulatory environment should
facilitate a level playing field through clear c. Competition Policy for the ICT Sector.
and updated policies, including review A competitive market is said to be
of existing regulations on frequency and the most efficient mechanism for
proper spectrum allocation/distribution, developing a modern, ubiquitous, and
to further promote competition for affordable information infrastructure. A
existing operators and new entrants. The competition policy framework for the
following strategies will be pursued to ICT Sector shall be developed under
this end: the leadership of CICT and with the full
participation and support of the sector
stakeholders. This framework can be
used to correct the flaws in the regulatory
environment that restrain competition
and prevent markets from functioning
efficiently.

This framework, moreover, will guide future and transparency in spectrum
initiatives and decisions of both the regulator regulation and allocation to better
and the private sector as they contemplate aid the private sector efforts in
competition-related issues. It will also guide providing ICT infrastructure and
the NTC in the exercise of its regulatory services, particularly in unserved and
functions and as it attempts to balance underserved areas. This would also
various public goals, including achieving help facilitate allocating frequencies
universal service by making affordable ICT for players that would be interested in
services available to all citizens, ensuring providing broadband (e.g., WiMAX)
that consumers have access to high-quality and other wireless technologies in
products and services, and preventing the unserved communities.
exercise of undue market power by firms.
g. Intellectual Property Rights (IPR)
d. Reassessment of Republic Act No. 7925 Reform. A strong and demonstrated
or the Public Telecommunications Policy commitment to protect Intellectual
Act of the Philippines, 1995. While RA Property Rights will enhance national
7925, which currently governs the ICT competitiveness and encourage the
Adequate and efficient sector, is rightly credited with fostering development of local innovations
infrastructure support must competition and accelerating investments and technologies. Efforts shall be
be provided to enhance an in the sector, it has become superannuated undertaken to enhance protection for
e-government system that will owing to new technologies (such as intellectual property thru antipiracy
allow more effective exchange the Internet and Voice over Internet campaigns and amendments to the
and processing of data Protocol) and business models that were Copyright Law and the IP code.
across NGAs and to enhance not anticipated at the time the law was Such laws and campaigns will also
governments capability to deliver passed. Other laws are similarly outdated. provide for parallel support and
services electronically directly to The Radio Law (RA 3846), for example, initiatives to ensure universal access to
citizens. constrains the NTC in the issuance of and deployment of new technologies,
licenses and assignment of radio spectra applications and knowledge.
that could otherwise help bridge the last
mile in rural and unserved areas. There h. Digital Terrestrial Television
is also a need to revisit pre-Internet laws (DTT) Broadcasting switchover.
that, in the face of rapid and continuing Subsequent to the recent adoption of
technological change, now handicaps the the ISDB-T standard for the country,
NTC as it struggles to respond to the the government, in coordination
sectors needs and the public demand for with the broadcast industry and
competitively priced and a wider choice concerned stakeholders, will embark
of ICT goods and services. on DTT broadcasting migration,
guided by the issuance of the
e. Convergence Bill / Information and implementing rules and regulations
Communications Policy Act. The passage for the digital switchover. The
of a Convergence bill must be pursued digital transition is expected to help
in order to rationalize all pertinent laws; facilitate growth in the broadcast
provide a technology-neutral legal basis sector through improved quality of
and tool to encourage investment into television broadcast systems and
the ICT sector and the deployment of programming, as well as for a more
infrastructure and services to the rural efficient utilization of the broadcast
and unserved areas; permit the continued frequency spectrum.
development of new technlogies; and
criminalize cable theft, including theft of i. Green ICT Policies. The adoption
cable TV signals and other infrastructure. of Green IT as a technology will
reduce the ill-effects of unregulated
f. Frequency Spectrum Management. ICT particularly to human health
There is a need for greater efficiency and the environment. This includes

exploring how ICT applications can property, business permitting, treasury and
be used in such a way as to conserve accounting, and other applications would be
and optimize energy use. For instance, used by all LGUs to provide better services
it uses computers that require lower to their constituents and increase their
power input thereby producing revenues.
less radiation to the user and to the
environment. Green IT also deals Interoperability of information systems
with the proper disposal of obsolete across government bodies will also be
computers and IT equipment, and pursued, by adopting standards and
pushes for a paperless society. policies for interoperability and integration
strategies. This will enable easier, more
Thus, crafting appropriate guidelines efficient exchanging and processing of data
and policies to address the negative across NGAs applications. (Please refer to
impacts of ICT infrastructures will be Chapter 7, Good Governance and Rule of
pursued, addressing appropriate disposal Law for a more comprehensive discussion
of ICT equipment, among others. on good governance).
To achieve increased Social Infrastructure Compliance with the ESWMA,

transparency, efficiency and however, has been weak and the
trust in Government through Waste Management targets set therein have yet to be
enhancement of egovernment attained.
systems Solid Waste Management
EGovernment systems serve as Assessment, Issues and
important mechanisms for increased Challenges
transparency, efficiency and trust in
government. Thus, the following will be In the pursuit of sustainable development,
pursued: the protection of public health and the
environment should not be neglected.
Provide adequate and efficient The proper management of waste is
infrastructure support to enhance meant to safeguard resources. To improve
e-government systems its management of solid waste, the
Philippines enacted RA 9003, otherwise
Adequate and efficient infrastructure known as the Philippine Ecological Solid
support must be provided to enhance Waste Management Act (ESWMA) of
an e-government system that will 2000, which enunciates the governments
allow more effective exchange and policy of adopt[ing] a systematic,
processing of data across NGAs and comprehensive and ecological program
to enhance governments capability to of solid waste management program.
deliver services electronically directly to Some of the salient provisions of the
citizens. This involves further enhancing Implementing Rules and Regulations
e-government portals including the (IRR) of the ESWMA pertain to the
online payment facility. A secured data following:
center and public key infrastructure
(PKI) system for government a. The creation of Solid Waste
transactions would also need to be Management (SWM) Board in Metro
established to encourage the use of the Manila, every province, city and
e-government Portal towards seamless municipality and a SWM Committee
transaction across agencies. in every barangay;
E-government applications in the b. The formulation of a National

LGU level should be promoted so Waste Management Framework;
that applications such as those for real

c. Submission of Local Government in Payatas scheduled for closure
Solid Waste Management Plans; by the end of 2010; the other is a
sanitary landfill in Navotas. Most
d. Conversion of open dumpsites into Metro Manila LGUs dispose of their
controlled dumpsites; residual wastes in sanitary landfills
outside the metropolitan area.
e. Conversion of controlled dumpsites
into sanitary landfills; and Each Filipino generates between 0.30
and 0.684 kg. of solid waste daily,
f. Establishment of a National Solid depending on where this occurs. NCR
Waste Management Fund. posted the highest waste generation rate
of about 0.7 kg per capita per day, while
The National Solid Waste Management ARMM is the lowest with 0.30 kg per
Framework provides for the reduction, capita per day. Total waste generation
reuse, and recycling (3Rs) of municipal is 35,154 tons per day, or 12.83 million
solid wastes and treatment of the tons every year.
hazardous components and residual
The limited investment capacity waste management through sanitary Upfront capital costs of SWM are high,
of LGUs and the perceived low landfills or the use of alternative thus limiting the financial capacity of
willingness of LGU constituents to technologies to process and or treat the LGUs to invest in such projects. The
pay for SWM services have been waste. The policy is people-centered, limited investment capacity of LGUs
considered as the main reasons where citizens are expected to play a and the perceived low willingness of
for the underperformance in major role in segregating solid waste at LGU constituents to pay for SWM
achieving the ESWMA targets. source (household level). services have been considered as the
main reasons for the underperformance
Compliance with the ESWMA, however, in achieving the ESWMA targets.
has been weak and the targets set therein
have yet to be attained: To augment the financial capability of
LGUs, the revised NG-LGU Cost-
a. Only 338 LGUs have completed Sharing Framework for SWM was
their Solid Waste Management Plans approved in 2009 allowing NG to
or 20.9 percent of the 1,610 cities and provide grants to LGUs of up to 40
municipalities have completed their percent of the total cost of a SWM
Solid Waste Management Plans. In project. Table 5.8 shows the NG-LGU
Metro Manila, only eight out of 17 cost-sharing framework.
cities and municipalities (47 percent)
have complete plans; Issues and Challenges
b. Nationwide, only 7,680 out of Notwithstanding various initiatives in
42,000 barangays are covered by the sector, several issues and challenges
Materials Recovery Facilities (MRFs) still remain to be addressed, notably the
for a compliance rate of 18.28 percent. following:
In Metro Manila, 685 out of 897
barangays are covered by MRFs, or a a. the slow progress in the
compliance rate of 76 percent; and implementation of the ESWMA;
c. Of 1,205 disposal facilities in the b. the lack of short- and long-

country, 1,172 are open and controlled term solutions to properly address
dumpsites, and only 33 are sanitary problems on SWM;
landfills serving 75 LGUs nationwide,
for a compliance rate of only 2.7 percent. c. overlapping national and local
In Metro Manila, there are two disposal policies;
facilities. There is a controlled dumpsite

Table 5.8 NGLGU CostSharing Framework (in percent)
Municipalities and Provinces Cities
LGU Income Class
NG Grant LGU Share NG Grant LGU Share
1st and 2nd 20 80 40 60
3rd and 4th 40 60 25 75
5th and 6th 50 50 20 80
d. the need for massive the establishment of more MRFs and
implementation of 3Rs at the materials recovery systems (MRS);
Household and Barangay level;
Assist LGUs in formulating their
e. the need to improve and upgrade respective 10-year SWM Plans; and
the national database for SWM;
Establish a start-up fund to accelerate
f. the lack of sufficient trained the implementation of the ESWMA. Pursue the closure and
personnel at the national and local National funds are needed to start rehabilitation of all open/controlled
level; and the different tasks of the NEC and to dumpsites and the construction
implement the SWM approaches. of sanitary landfills to increase
g. the need to fully utilize the service coverage to more LGUs;
National Ecology Center (NEC) Generate basic information for SWM
and the Regional Ecology Centers that can be used in different programs
(RECs). and projects to properly implement the
provisions of RA 9003
Develop a framework for setting-up
To implement the provisions of RA baseline data/indicators on SWM at
9003, there is a need to address waste the LGU level. These shall include
problems/issues holistically. Each the establishment of a monitoring
concerned area should develop a concrete and evaluation system through the
action plan to address the challenges of development of an accessible database
the sector, provide the necessary funds on waste characteristics, diversion
for the operation of SWM facilities, rate, LGU compliance, alternative
and educate the public on the impact of technologies and other parameters that
SWM not only as a means to protect the will foster better information exchange;
environment, but also as a way to sustain and
and support social development.
Fully utilize NEC and RECs to act as
To ensure suitable/sustainable hubs for information, networking, and
SWM technology showcasing and advocacy.
Fully implement the ESWMA (Other detailed strategies are discussed

in Chapter 10 on the Conservation,
Pursue the closure and rehabilitation Protection, and Rehabilitation of
of all open/controlled dumpsites Ensuring Ecological Integrity Towards
and the construction of sanitary Sustainable Development.)
landfills to increase service coverage
to more LGUs;
Support the massive

implementation of the 3Rs through

Health Care Wastes Since the Clean Air Act (RA 8749) of
1999 and its IRRs were issued, the health
Assessment, Issues, and sector has been limited to nonburn
Challenges technologies for the treatment of
HCW, such as wet thermal disinfection
There are around 2,100 public and private or autoclaving, microwave, chemical
hospitals nationwide with an approximate disinfection and the biological process.
capacity of 96,000 beds, generating 28,000 The first two technologies are largely
kg. of health care wastes (HCW) per day imported and usually costly.
at an average of 0.30 kg. per bed capacity
per day. On the other hand, there are around Hospitals must determine which
680 public hospitals with an approximate technology best meets the needs of
capacity of 44,000 beds generating 13,200 HCW management while minimizing
kg. of HCW per day. The NCR has the impact to the environment and
the largest bed capacity (approximately enhancing the safety of the hospitals
30,000 beds) which can generate 9,000 and the general public.
kg. of HCW per day. The volume does not
At present, there are 10 include the amount of wastes from small Public and private hospitals in the
accredited TSD facility operators clinics, stand-alone laboratories, research NCR contract out the treatment and
serving public and private laboratories, municipal health centers and final disposal of their HCW to private
hospitals in the NCR and nearby barangay health stations, which generate companies called Transport, Storage,
regions. Elsewhere in the country, mostly general or domestic health care Disposal (TSD) facility operators.
however, TSD facility operators wastes. At present, there are 10 accredited
are nonexistent and public and TSD facility operators serving public
private hospitals must rely on The general distribution of health care wastes and private hospitals in the NCR
inhouse options and technology is as follows: general or domestic wastes and nearby regions. Elsewhere in the
for waste treatment and disposal. (80%); pathological and infectious wastes country, however, TSD facility operators
(15%); chemical and pharmaceutical wastes are nonexistent and public and private
There are some 111 TSD facilities (3% percent); sharps (1%); radioactive hospitals must rely on inhouse options
nationwide, most of which are wastes, cystostatic wastes, pressurized and technology for waste treatment and
in Luzon. Other urban and containers, broken thermometers and used disposal.
industrialized regions have only a batteries (less than 1%).
limited capacity for treatment and Of the 72 hospitals managed by the
disposal of hazardous wastes, As the lead government agency in the DOH, 30 percent are located mostly
hence the problem of their formulation of national guidelines for in Metro Manila and contract out
disposal. health care waste management, the DOH their waste treatment and disposal
requires all health facilities to follow correct requirements. Most use chemical
Develop an interactive database procedures in the five-stage process of disinfection for waste treatment and
to track chemicals and hazardous health care waste management: (a) waste have limited or no access to a sanitary
wastes. minimization and segregation; (b) waste landfill for the final disposal of treated
handling and collection; (c) waste internal wastes. Of these same 72 hospitals
transport and temporary storage; (d) waste managed by the DOH, 90 percent have
treatment; and (e) final disposal. existing sewage treatment plants or are
currently in the process of installing
Complying with the five-stage process these facilities.
is a responsibility of HCW sources or
generators themselves, consisting mostly
of private and public hospitals. Private
hospitals are responsible for their own
investments in equipment operations and
personnel for HCW management. Public
hospitals, on the other hand, need to justify
and apply for an annual budget for HCW.

Strategic Plan and Focus Toxic Chemicals and
Hazardous Wastes
To ensure hygienic/sanitary
disposal of health care waste Assessment, Issues, and
Challenges
1. Minimize the spread of health
care wastes at the source The DENR through the EMB regulates the
movement and disposal of toxic chemicals
Institutionalize HCW management and hazardous wastes in the country. There
system in health facilities through are 46,823 existing chemicals in the country
investment in training and in the updated Philippine Inventory of
communications. Schools that include Chemicals and Chemical Substances
HCW management processes in their (PICCS) and 48 toxic chemicals are not
technical curricula should be given included in the Priority Chemical List
incentives; and (PCL) for strict monitoring.
Ensure that mercury and other There are about 11,162 registered
harmful metals are not released to the hazardous waste generators (HWGs) and The magnitude of housing need,
environment through the elimination 262 registered transporters. The top three defined as the housing backlog
of the use of mercury-based medical hazardous wastes generated are putrescible/ plus new households, is enormous
equipment and devices. organic wastes, waste oil, and wastes with and is estimated to reach about
cyanide. Based on export clearances issued 5.8 million housing units in 2016.
2. Enhance access of hospitals and by EMB, approximately forty percent of
health facilities to technologies, those exported hazardous wastes were Accelerate mass housing
products and services to assure sludge that contain copper, silver, etc. There programs with alternative housing
compliance with health care waste are some 111 TSD facilities nationwide, technologies, schemes and
management guidelines most of which are in Luzon. Other urban approaches to ensure decent and
and industrialized regions have only a affordable homes.
Engage LGUs in PPP options limited capacity for treatment and disposal
and financial schemes for the of hazardous wastes, hence the problem of Integrate basic infrastructure
establishment of large-scale waste their disposal. support to resettlement sites and
treatment technologies. The emerging regional sustainable
development of BOT projects The key challenge is how to properly track communities, such as provision of
for cooperative waste treatment and monitor the handling and disposal of potable water, safe and sufficient
facilities and sanitary landfills is a toxic chemicals and hazardous wastes. electricity, access roads to the
viable option; nearest commercial centers, and
Strategic Plan and Focus ICT, among others;
Provide incentives to private
investment for the promotion To ensure proper and sustainable
of research, development and disposal of toxic chemicals and
manufacture of nonmercury-based hazardous waste
devices and technologies used in
health facilities and for health care; 1. Improve the hazardous waste
and management of industries/establishments
and increase compliance with regulatory
Encourage the development and policies pertaining to the importation
manufacturing of local waste of toxic chemicals and substances and the
treatment technology and ensure transportation, storage, handling and disposal
their availability in the market. of hazardous wastes
Strengthen the enforcement and

implementation of RA 6969 on
the control of toxic chemicals and

hazardous wastes through survey and settlements in the urban areas. Recent
monitoring activities; and estimates show that more than a third of
urban populations are slum dwellers. In
Develop an interactive database to Metro Manila there were about 581,059
track chemicals and hazardous wastes. informal settlers (data from HUDCC as
of July 26, 2010). These communities are
2. Minimize chemical-related incidents and characterized by unsanitary conditions,
the risks to the environment and to public congestion, and limited access to basic
health posed by improper management of urban services (e.g., health centers,
hazardous wastes by industries schools, waste disposal, safe water
supply). Resettlement and relocation
Develop a national plan for programs have been implemented
chemical incident prevention; and but have attained limited success in
providing employment, livelihood
Embark on a massive information opportunities, and adequate services to
and education campaign and many of the relocatees.
continuously coordinate with LGUs
and other government agencies and Government has allocated less than
1.0 percent of the total government
Housing expenditures for the housing sector
in recent years, or less than one-tenth
Assessment, Issues and of a percent of GDP on the average.
Challenges This makes Philippine public spending
on housing one of the lowest in Asia.
The National Urban Development and (Habito, 2009)28
Housing Framework (NUDHF) 2009-
2016 finds the housing problem to be The role of government in providing
serious and is a largely urban phenomenon. access to housing opportunities and
The magnitude of housing need, defined as services must be clarified. In the last four
the housing backlog plus new households, decades, government response to the
is enormous and is estimated to reach about housing problem has failed to rectify the
5.8 million housing units in 2016 (Chapter fundamental issues of providing shelter,
on Social Development). In Metro Manila, especially for the poor.
the total backlog has been projected to reach
496,928 housing units. Innovative and high- Strategic Plan and Focus
density housing strategies are required if the
housing deficit is to be effectively addressed. The housing sector is guided by the
theme: Gaganda ang buhay kung may
Beyond the public sector providing housing bahay at hanap-buhay (Life will improve
and the auxiliary services, new approaches with housing and livelihood.) The
are needed in the face of continuing rural- vision is to provide a holistic framework
urban migration that is bound to exacerbate of a home and eventually a harmonious
the housing problem. The affordability community through provision of
of and access to government housing housing infrastructure, integration of
programs by the poor will also continue to basic services, and implementation
pose a major challenge in the near future. of appropriate housing/construction
standards. It targets the provision of
The housing problem is evident in the some 1.47 million housing units for the
proliferation of slums and informal Plan period 2011-2016.29
28
This is based on Habitos 2009 paper for the Asian Development Bank (ADB).
29
See Table 8.10 under Housing section of Chapter 7: Social Development.

To address the housing needs d. Develop a financing framework for
and gaps in basic services, relocation and resettlement, including
especially for the poor and workable PPP schemes for socialized
marginalized housing development; and
a. Accelerate mass housing programs e. Support LGUs efforts to develop

with alternative housing technologies, a system of land inventory to better
schemes and approaches to ensure identify areas for urban growth and
decent and affordable homes. In planned areas for human settlements
relation to this, the following will also through their Comprehensive Land Use
be undertaken: Plans (CLUPs).
Employ labor-intensive Health Facilities

method in the implementation of
housing projects wherever feasible Assessment, Issues and
to generate employment in the Challenges
beneficiary communities;
Although health facilities have become Invest in the Health Facility
Develop and implement the available and accessible in most Enhancement Program that
appropriate standards in the communities, many remain unaware of the defines a unified and rationalized
construction of the housing units services offered and consequently seek more health facility blueprint covering
to incorporate DRRM and CCA; specialized care in hospitals rather than their both public and private health
Rural Health Units (RHUs) or Barangay facilities.
Explore vertical expansion in Health Stations (BHS). Government
the construction of housing units primary health facilities are conveniently Increase public investment
taking into consideration the located, with 94 percent of households for health and rationalize the
basic geographical location, soil being within 15-minute walking distance use of all sources of funds for
quality and other environmental to an RHU or BHS. Such facilities are health, including the national
considerations; and frequently bypassed, however, for more and local government budgets
specialized care. RHU resources remain and resources from Philippine
Explore the use of indigenous underutilized, while higher level facilities Amusement and Gaming
and recyclable materials as are overcrowded, unnecessarily causing a Corporation, Philippine Charity
environment-friendly alternatives state of inaccessibility. Sweepstakes Office and other
to reduce cost in building houses. extra-budgetary resources for
In terms of health facility utilization, health.
b. Integrate basic infrastructure the Filipino Report Card on Pro-Poor
support to resettlement sites and Services in 2000 showed that 77 percent of
emerging regional sustainable households surveyed used health facilities of
communities, such as provision of one type or another. Compared with rural
potable water, safe and sufficient households, urban households tended to use
electricity, access roads to the nearest health facility services more. Because of the
commercial centers, and ICT, among lower cost of health services, patients more
others; frequently utilized government facilities
than private facilities. Rich households and
c. Ensure that all government urban dwellers were the predominant users
infrastructure projects integrate of private facilities.
the relocation and resettlement
requirements of affected families From 2007 to 2010, the government
into their plans and costing in allotted PhP8.43 Billion to upgrade around
collaboration with other concerned 1,176 health facilities nationwide.
agencies;

Issues and Challenges
Table 5.9 Summary of DOH Infrastructure and Equipment: 2007-2010 For 2011, infrastructure in
the health sector will require
RHU-BHS Level 1 Level 2 Level 3 Level 4 Others TOTAL % additional funding because of
limited funds for health facilities
NCR 0 1 8 1 5 3 18 1.5 such as Basic and Comprehensive
Emergency Obstretic and
CHD 1 21 9 6 1 1 1 39 3.3 Neonatal Care (B/CEmONC)
CHD 2 102 11 10 0 1 2 126 10.7 facilities, in addition to the
DOH-retained and -maintained
CAR 112 10 14 0 1 0 137 11.6 hospitals.
CHD 3 3 5 46 1 4 0 59 5.0
CHD 4A 14 3 10 1 2 0 30 2.6
CHD 4B 82 14 14 0 0 0 110 9.4 To improve access to and
quality of health facilities
CHD 5 5 16 15 3 1 0 40 3.4
CHD 6 76 8 29 2 2 0 117 9.9 1. Ensure coordinated and
appropriate planning and
CHD 7 17 10 14 1 2 1 45 3.8 development
CHD 8 42 14 20 2 0 1 79 6.7
Invest in the Health Facility
CHD 9 33 10 9 0 2 0 54 4.6 Enhancement Program
CHD 10 36 20 11 2 1 1 71 6.0 (HFEP) that defines a unified
and rationalized health facility
CHD 11 53 15 7 2 2 1 80 6.8 blueprint covering both public
CHD 12 64 17 9 1 1 0 92 7.8 and private health facilities;
CARAGA 9 8 2 2 0 2 23 2.0 Link provincial or city plans
ARMM 27 12 5 0 0 0 44 3.7 to the national allocation of
investments for health, including
MM HOSP 0 0 1 0 9 2 12 1.0 acquisition of ROW and lands
TOTAL 696 183 230 19 34 14 1176 100.0 set aside for the construction of
health facilities;
Source: DOH
Table 5.10 2011 DBM Budget Gaps Improve access to specialized

services in subnational health
Purpose DOH Request DBMApproved GAP facilities and enhance the quality-
(Required for MDGs) (within DOH ceiling (in PhP assurance system for public
(in PhP Billion) for 2011) (in PhP Billion) health facilities like the RHUs
Billion) and BHSs. Provision of necessary
BEmONC, 2754 access road to the RHUs and
9.6 5.75 3.85 BHSs, especially in the remote
units
areas, must be considered in the
CEmONC, 300 9 0 9 planning and development of
units health facilities;
DOH Hospital
Upgrading (66 9.6 1.39 8.21
Hospitals)
28.2 7.14 21.06

Increase the percentage of 3. Improve project implementation and
public and private hospitals encourage the use of alternative materials
for Continuous Quality and technologies
Improvement (CQI);
Explore the use of indigenous
Strengthen the gate-keeping and recyclable materials that are
function of lower level facilities; environment-friendly to reduce costs
and and incorporate DRRM and CCA
concepts in building health facilities;
Integrate the provision of
proper waste-management Employ labor-intensive methods
systems (e.g., hospital, toxic in implementing health infrastructure
and solid waste) in the plans of projects as a means to generate
all proposed and existing health employment in the beneficiary
facilities. communities; and
2. Facilitate project/program financing Explore the possibilities of entering

into PPPs in the construction, The problem of shortage is
Increase public investment structural retrofitting, rehabilitation, exacerbated by damage to school
for health and rationalize the use maintenance and management of buildings wrought by typhoons
of all sources of funds for health, health facilities. and other disasters.
including the national and local
government budgets and resources Education
from Philippine Amusement
and Gaming Corporation Assessment, Issues and
(PAGCOR), Philippine Charity Challenges
Sweepstakes Office (PCSO) and
other extra-budgetary resources The country is exerting all efforts to attain
for health. These resources should its education targets under the MDGs
be utilized to ensure that available to improve quality, access and efficiency
accredited facilities are accessible of education. Even as education has
to each Filipino family while been identified as the central strategy for
improving the health service investing in people, reducing poverty, and
packages provided to them, building national competitiveness, the
including catastrophic spending; country has been cited as a particularly
and striking example of under-performance in
educational reforms in the 2010 Education
Enforce fiscal and For All (EFA) Global Monitoring Report.
administrative autonomy in Current policies have been cited as failing
all DOH-retained facilities in to make a difference in improving the
exchange for capital outlay support education of the poorest Filipinos.
and progressive and well-calibrated
reallocation of hospital budgets to Among its other challenges, the
public health priorities. This will Department of Education (DepEd) has
promote efficiency and improve perennially confronted the problem of
healthcare services as well as secure classroom shortage. In SY 2009-2010 alone,
investments. This can be achieved the Department has a total of 18.2 million
at the national level by pursuing
corporate-style management in
DOH-retained hospitals and
promoting income retention at the
LGU hospitals.

enrollees but was deficient by more than has been the use of alternative delivery
100,000 classrooms in both elementary and modes (ADM) of education, such as the
secondary public schools. Budget allocations use of ICT. The availability of a database
for classroom construction have never fully on ADM (e.g., the share of ADM to
covered the needs of an increasing school the total number of all learning delivery
population. The problem of shortage is modes) will facilitate in determining the
exacerbated by damage to school buildings number of classroom required.
wrought by typhoons and other disasters.
Despite continuing efforts to build As the DepEd intensifies its campaign Despite continuing efforts to build new
new schools and make the most to enroll all school-age children, in line schools and make the most of what is
of what is present, the shortage with its commitment to achieve universal present, the shortage persists. This is
persists. participation, classroom requirements will especially true in far-flung and remote
rise even more. An additional challenge areas. The total classroom requirement
Closing the classroom gap is the prospective passage of the bill on is 152,569 for all levels. For next school
and improving the quality of mandatory preschool education, which year, the estimated requirement for
educational facilities will not only will require the construction of even more public schools is some 113,000 new
provide learners with the needed classrooms to accommodate incoming classrooms, with an estimated cost
infrastructure for education, but learners. of over PhP77 billion. This does not
also a conducive and suitable include the need for major repairs on 14
learning environment that will Issues and Challenges percent of existing classrooms estimated
enhance the teaching-learning to cost PhP14 billion in 2011. The large
process, contributing to the Adequate classrooms are necessary for demand for new classrooms makes
improvement of their academic quality education. Several means have been the need for innovative approaches to
performance. employed to address this concern, but with the provision of classrooms even more
a fast-growing population, shortages have urgent.
never been eradicated. Since 2004, a total
of 76,710 classrooms (elementary and high The damage caused by various
school9.combined)
Figure have been
New Classroom put up. This
Construction and calamities hitting the country
Repairs Undertaken, present
FY 2004-2010
was achieved through the combined efforts a further challenge to maintaining an
of DepEd, DPWH, the local governments, adequate number of classrooms. This is
private sector donors, school principalsNo.
and also related
of inputs to for
provided thethe
typical use of public
shortages
members of Congress. Another response schools as temporary shelters for
2004 2005 2006 2007 2008 those
2009 2010
to Construction
New reduce the pressure12,490
on infrastructure
9,407 affected by15,215
14,887 disasters. 9,835 13,750 4,343
Repairs Undertaken 1,130 5,800 15,832 5,097 5,909 1,900
Figure 5.9 New Classroom Construction and Repairs Undertaken:
FY 20042010
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
2004 2005 2006 2007 2008 2009 2010
New Construction Repairs Undertaken

To date, not all schools have adequate by NG in a certain area will be
sanitation facilities, a fact that may lead matched by the concerned LGU with
to the degradation of students health. the same number;
This, in turn, may adversely affect the
academic performance of students. Maximize classroom use of
through class-shifts. The adoption
Closing the classroom gap and of double-shift classes must be
improving the quality of educational continued as long as it is needed in
facilities will not only provide learners order to alleviate overcrowding in
with the needed infrastructure for classrooms and to support efforts at
education, but also a conducive and addressing the classroom gap; and
suitable learning environment that will
enhance the teaching-learning process, Explore the use of indigenous and
contributing to the improvement of recyclable materials as environment-
their academic performance. Through friendly alternatives to reduce the cost
this indirect but obvious way, addressing of building classrooms.
the infrastructure deficits in education
contributes to economic growth and 2. Improve the quality of educational
social development. facilities
Strategic Plans and Focus Pursue the construction of

disaster-resilient classrooms. It will
To ensure adequate and be ensured that classrooms in areas
equitable provision of quality prone to typhoons, earthquakes, and
educational facilities other natural hazards will be specially
designed to withstand such calamities.
1. Close the classroom gap This will minimize the need to
rebuild and rehabilitate damaged
Sustain the DepEd School classrooms, saving resources for other
Building Program through expenditures. In addition, schools
the Basic Education Facilities are often used as temporary shelter
Fund under the GAA and other for displaced, thus there is a need to
funding sources. strengthen and improve their design.
School buildings shall be designed not
Provide continuing financial only to be disaster-resilient but also
support for the construction of so that these can be used as adequate
schoolbuildings in areas with acute evacuation centers to support the
shortages and for other programs defense policy of providing tents and
under the Basic Education mobile trucks during calamities; and
Facilities Fund; dilapidated or
unusable school buildings, and Provide for sufficient water
those damaged by fire and other and sanitation facilities in school
natural hazards, should also be construction. The recent outbreak of
rebuilt; several diseases shows the need to
focus on promoting proper hygiene
Explore various procurement and sanitation in schools. Schools
modalities under the governments should include adequate water and
PPP Program; sanitation facilities to protect the
health of children and teachers.
Explore NG-LGU matching Additional funding will be allotted
schemes for school building for this purpose.
construction. Under this scheme,
every school building constructed

Microfinance/fellowship meeting, Brgy. Parola, Tondo, Manila
Photo courtesy of: Center for Community Transformation Credit Cooperative
06 Towards a
Resilient
& Inclusive
Financial
Sector
Towards a Resilient and Inclusive Financial Sector 181
Towards a Resilient and
Inclusive Financial Sector
The financial sector intermediates claims between savings and investors. The
credibility and stability of financial institutions and the relative attractiveness
of various financial instruments to borrowers and lenders alike determine how
much saving will mobilized, how much it stays in the country to be invested, and
how this is to be allocated among the various firms and industries. Together with
the state of confidence and long-term expectation, therefore, the stability and
performance of financial institutions such as banks, equity and bonds markets,
insurance companies, and other financial entities have an indirect but vital bearing
on investment and the growth of output and employment in the country.
Assessment management and strengthening

the supervisory oversight of
The Philippine financial system financial regulators1 in the early
manifested its strength over the past 2000s. Together with improved
The Philippine financial system decade, including the period of recent macroeconomic conditions, the steady
manifested its strength with global financial crisis. After significant inflow of remittances from OFWs,
a steady improvement in the dislocations in prior crises in the 1980s a minimal investment exposure to
balance sheet of the banking and 1990s as well as the 1997 Asian foreign structured products and a low
industry, the issuance and Financial Crisis, the system saw a steady dependence on exports, these reforms
listing of corporate bonds, and improvement in the balance sheet of the allowed the financial system to avoid
the underwriting of insurance banking industry, the issuance and listing the worst difficulties encountered by
contracts. of corporate bonds, and the underwriting other economies during the 2007-
of insurance contracts. Moving forward, 2008 financial crisis.
however, the system will need to address
concerns about the sustainability of The financial systems performance
its performance if it is to contribute has been positively reviewed by third
significantly to development. parties.2 Stress tests conducted on
banks also confirm the strength of
Parallel to these, policymakers pursued the banking systems capitalization
broad-based financial sector reforms even with extreme test parameters.
centered on restructuring the banking For inclusive finance advocacy,
sector, institutionalizing corporate local supervisory initiatives have
governance reforms, improving risk also been repeatedly acknowledged
1
These include the re-establishment Bangko Sentral ng Pilipinas (General Banking Law of 2000 or RA 8791)
as the supervisor of the banking sector, Securities and Exchange Commission (Securities Regulation Code of
2001 or RA 8799, as amended) as the supervisor of the corporate sector and domestic capital market, Insurance
Commission (PD 612) as the supervisor of the insurance and pre-need industries and Cooperative Development
Authority (RA 6939) as the supervisor of cooperatives in the Philippines. The CDA Charter was enacted on
March 10, 1990 and subsequent enhancements were similarly pursued in early 2000s but amendments of the
Charter are still pending in Congress.
2
This is evident from the Financial Sector Assessment Program (FSAP) report of the International Monetary
Fund (IMF) in early 2010.

by international institutions.3 accounts of the banking system on account
These external validations of the of their market maturity, branch network
improvements in the financial sector and capitalization. The comparative
culminated in the sovereign ratings market shares of key banking groups are
or outlook upgrades from some the summarized in Table 6.1.
major ratings firms.
Meanwhile, the market share of nonbank
Current Structure of the financial institutions remains relatively
Financial System small, accounting for about 18 percent The Philippine financial system
of total assets of the financial system is primarily bank-based rather
The Philippine financial system is and 17 percent of economic output in than capital market-based.
primarily bank-based rather than 2010. The Insurance Commission (IC),
capital market-based. The banking for instance, reports that only 13.9
sector, whose total assets accounted percent of the Philippine population has
for more than 80 percent of the total private life insurance coverage. In 2008,
resources of the financial system4 and the private insurers penetration rate or
of GDP in 2010, plays the primary the proportion of the premiums to the
role in financial intermediation and countrys GDP was only 1.1 percent.
is the main source of credit in the Among the reasons cited for the low
economy. insurance coverage is the lack of priority
being placed on insurance products by the
Across banking groups, universal and citizenry and the low financial literacy
commercial banks continued to hold level among low income households
the lions share of key balance sheet including the informal sector.
Table 6.1 Comparative Market Shares of Key Banking Subgroups in the Philippines as
of end-September 2010*
Selected Performance Indicators Physical Composition
Core Loans
Period Bank Category (TLP, net of
Assets Deposits Capital Net Profit Head Office Branches Total
IBL and RRP
with BSP)
Universal and
End-September
88.5 83.8 88.2 86.8 91.3 4.8 57.3 52.4

Commercial Banks
Thrift Banks 8.7 11.6 9.2 9.2 3.3 9.2 16.1 15.4
2009
Rural and 2.8 4.6 2.5 4.0 5.4 86.1 26.6 32.2
Cooperative Banks
All Banks 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Universal and
End-September
88.3 83.8 87.8 87.9 90.2 5.0 57.4 52.8

Commercial Banks
2010*
Thrift Banks 9.0 11.9 9.6 8.5 5.7 9.6 16.6 16.0
Rural and 2.7 4.3 2.5 3.6 4.1 85.5 26.0 31.2
Cooperative Banks
All Banks 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
*Preliminary data; as of End-September 2010
3
The Economist Intelligence Unit (EIU), for example, has ranked the countrys inclusive finance policy
framework as the best worldwide.
4
Excludes the assets of BSP. Likewise, other nonbank financial institutions not under BSP supervision such as
investment houses and financing companies without quasi-banking functions and/or trust authorities or are not
subsidiaries or affiliates of banks and quasi-banks, lending investors, insurance companies and other government
financial institutions (GFI) such as the Social Security System (SSS) and Government Service Insurance System
(GSIS) are excluded in the computation of total assets of the financial system due to data constraints.

Figure 6.1 Comparative Market Share of the Insurance Industry as of end-
December 2009
The insurance industrys total assets Mutual funds, with market size
reached P528.2 billion as of end- likewise smallest in Asia,5 are managed
December 2009 with 122 market by broker-dealers and investment
players. Life insurers captured the bulk companies where largest of them
of the insurance market at 79% while in terms of asset size are either
nonlife insurers at 19% and professional subsidiaries or affiliates of banks.
reinsurers at 2 percent.
In view of this unbalanced development
Meanwhile, the number of of the financial sector, the countrys
companies listed in the Philippine M2-to-GDP ratio6 of less than 50
Stock Exchange (PSE) grew to 259 percent over the last decade has been
companies in 2011 from just 12 below the ASEAN-5 average and
companies in 2003. Despite the rise second lowest to Indonesia since 2006
in the number of listed companies, (Figure 6.2). Meanwhile, Malaysia and
market capitalization as a percentage Thailand have financial depth ratios of
of economic output remained small more than 100 percent.
(except Indonesia) compared to other
ASEAN-5 economies. In 2009, market The domestic capital market and
capitalization dropped to 45.8 percent non-bank sector composed of
of GDP from 54 percent in 2002. This investment houses, securities brokers
reflects that the market remains illiquid or dealers, financing companies and
and the free float of listed companies in insurance companies also remain
the PSE still limited. small compared to regional peers.
5
Cf: April 2010 FSAP Report: An Update on the Philippines
6
This refers to the measure of broad money which consists of currency in circulation, peso demand deposits or
M1 and peso savings and time deposits. This is the ratio of which over economic output is a common measure
of financial depth.

Table 6.2 Philippine Stock Exchange-
Listed Companies as of February 25, 2011
Total No. of Foreign participation in the financial

Company Group Firms per
system remains limited. The banking Foreign participation in the
Sector
sector was liberalized and opened to financial system remains limited.
Banks 16 foreign participation following the
Chemicals 8 enactment of the Foreign Banks Law
Construction, infrastructure 16 or RA 7721 in 1994. Since then foreign
& allied services banks have been allowed in principle
Diversified industrials 10 to establish branches with full banking
Diversified services 10 authority, to invest in up to 60 percent
Education 3 of the voting stock of a new banking
Electricity, energy, power 13 subsidiary, or to invest in up to 60 percent
& water of the voting stock of an existing domestic
Food, beverage & tobacco 23 bank.7 The first mode of entry has been
Holding firms 41 closed, however, while the second is also
Hotel & leisure 8
suspended pending a moratorium on the
establishment of new banks, except for
Information Technology 11
those engaged primarily in microfinance.
Media 5
In practice, foreign banks may only
Mining 17 pursue the third route of foreign entry,
Oil 5 which is the acquisition of 60 percent
Other financial institutions 14 voting interest in an existing domestic
Preferred 1 bank. Notwithstanding the liberalization
Property 41 of the banking sector, foreign banks to
SMEs 2 date account for only 11.9 percent of the
Telecoms 6 banking systems total assets8 although
Transport 9
they have a stronger foothold in countrys
credit card business.
Total 259
Source: Philippine Stock Exchange
Figure 6.2 Financial Deepening in ASEAN-5
Source: IMF Statistics, NSCB

7
Article 99, Chapter XIII of the Cooperative Code of the Philippines (RA 6938) limits the ownership of a cooperative
bank to duly established and registered cooperatives in the Philippines, including another cooperative bank.
8
Section 3 of the Foreign Banks Law or RA 7721 limits the aggregate share of foreign banks to 30 percent of banking
systems total assets.

Table 6.3 Structure of Financial Systems in ASEAN-5 (Averages: 2000-2009)
Domestic Credit Equity Market Foreign Currency
Economy Provided by Capitalization Bonds Outstanding
Banking Sector (% GDP)
Indonesia 54.0 26.6 2.0
Malaysia 129.6 135.7 16.2
Philippines 56.9 45.8 25.9
Singapore 91.0 182.2 25.3
Thailand 130.2 55.8 6.1
Source: IMF, World Bank and Asian Bonds Online
Table 6.4 Extent of Bank Access Customer Reach: 2010

Deposit accounts per ATMs per 100,000 Branches per
Country 100,000 people people 100,000 people
Indonesia 504.7 14.4 7.7
Malaysia 2,063.3 54.0 11.4
Singapore 2,236.3 49.8 10.5
Thailand 1,448.8 71.3 11
Source: World Bank
The current geographical distribution of The agenda to develop a robust

The current geographical financial service providers shows a growing capital market is of long standing,
distribution of financial concentration in the high-income and and has been previously analyzed
service providers shows a urbanized areas of NCR, Central Luzon extensively, yet many of the critical
growing concentration in the and CALABARZON (Cavite, Laguna, components remain unresolved. To
high-income and urbanized Batangas, Rizal and Quezon). Bank attain the objective of a regionally-
areas of NCR, Central Luzon density is heavily skewed towards these responsive development-oriented
and CALABARZON. three regions and the nationwide density financial system, there must be a clear
ratio of five banks per city or municipality acceptance that a thriving capital
has been largely unchanged for the last market is not an optional appendage
decade. Consequently, about 37 percent9 but a crucial complement to the
of municipalities in the Philippines do traditional bank deposit-loan market.
not even have a banking office and can be The local bond market continues
considered either unserved or underserved to be dominated by government
with respect to a broad range of critical securities and is largely fragmented,
financial services such as credit, savings, with the presence of too many
payment transfers, remittances and tenor buckets and a longer maturity
insurance. Compared to the ASEAN-5, profile10 compared to other ASEAN
the Philippines lags behind in terms of economies (Figure 6.3).
customer reach (Table 6.4).
9
The ratio may be lower if the client reach of non-bank microfinance institutions (MFI) and non-government
organization/civil society organization (NGO/CSO)-oriented cooperatives are included.
10
Largely used as a debt management tool of the government to ensure liquidity for its deficit financing needs.

Condition and Performance Key performance indicators (Figure
6.4) showed steady growth in assets,
Banking Sector lending, deposits and capital accounts.
The Philippine banking system, While credit expansion has been
which remains the core of the modest, averaging 6 percent in over The Philippine banking
financial system and primary source a decade, this was due less to a lack of system continues to manifest
of credit for the economy, continues liquidity in the system and more to sustained resilience for the
to manifest sustained resilience for the developments in the capital market that last decade at par with its
last decade at par with its ASEAN-5 allowed some highly rated companies ASEAN-5 neighbors.
neighbors.11 to tap alternative funding. Alongside
this, credit underwriting standards were
strengthened, which ultimately allowed
Figure 6.3 Comparative Benchmark Yield Curves, ASEAN+3
Source: Bloomberg, Asian Bonds Online
11
Cf: Attachment 1

Figure 6.4 Selected Performance Indicators of the Banking System
Source: Bangko Sentral ng Pilipinas

banks to improve their asset quality and particularly during the worst period
maintain prudent loan-to-deposit ratios. of the U.S. subprime crisis in 2008.
Bank solvency remains above the BSP The Philippine Stock Exchange index
regulatory requirement of 10 percent and (PSEi) surged 37.6 percent to close
the international standard of 8 percent; at 4,201 points at end-year 2010,
the country fully adopted the risk-based the fourth biggest annual percentage
capital adequacy framework12 under Basel increase in the last ten years.
II in 2007. Core earnings grew together
with modest, credit expansion and a For its performance in 2010 alone,
The countrys stock market general improvement in asset quality. the PSEi advanced by 1,148 points
also showed signs of year-on-year from its level of 3,053
recovering from depressed Equities Market in 2009. During this period, the PSEi
global market sentiments in peaked at 4,413 points on November
2007-2009. The countrys stock market also showed 5, 2010 while its lowest level was
signs of recovering from depressed recorded at 2,788 on February 9,
global market sentiments in 2007-2009 2010. The broader All-Shares index
12
Prior to the banking systems adoption of Basel 1, Philippine banks were required to maintain a net worth-
to-risk assets (NWRA) ratio of at least 10%. On July 1, 2001, the NWRA ratio was replaced by a 10 percent
BIS-type risk weighted capital ratio when the banking system adopted the Basel 1 framework for bank capital
(BSP Circular No. 280)

Figure 6.5 Selected Stock Market Performance Indicators
NET FOREIGN TRANSACTIONS AND STOCK MARKET CAPITALIZATION MARKET TURNOVER AND P/E RATIO
(For End-Periods Indicated In Billion Pesos) (For End-Periods Indicated In Billion Pesos)
Source: Philippine Stock Exchange
also rose by 56.7 percent to 3,006 PhP53.8 billion (daily average) in its
points in 2010 from the previous years five-year history.
1,910. All sector specific indices also
increased, led by the Holding Firms However, government securities
index followed by the Industrials, accounted for 99.2 percent of all fixed
Property, Financials, Mining and Oil, income instruments in the FIE. It is
and Services, in declining order. composed of treasury bills (8.9%), fixed
income notes (78.8%), retail treasury
Other stock market indicators bonds (11.5%), zero coupon13 bonds The domestic financial market
similarly showed positive sentiments and special purpose treasury bonds.14 has started to realize gains
on the local bourse with an uptrend Meanwhile, corporate bonds made up from improving market and
in overall stock market capitalization the remaining 0.8 percent. investor sentiments. The peso
and average price per earnings ratio. strengthened against the US
Foreign Exchange and Bond Dollar while sovereign credit
Fixed Income Market Markets spreads tightened.
Total volume traded at the Philippine
Dealing and Exchange Corporation Overall, the domestic financial market
(PDEx) for 2010 amounted to remains generally stable and has started
PhP5.4 trillion year-to-date (YTD), to realize gains from improving market
more than double its previous YTDs and investor sentiments. The peso
level of P2.6 trillion. This is composed strengthened against the US Dollar while
of treasury bills, fixed income notes, sovereign credit spreads tightened during
retail treasury bonds, zero coupon this period (Figure 6.6).
bonds and special purpose treasury
bonds. Also, Figure 6.6 summarizes the
performance of Philippine financial
On March 16, 2010, PDEx trading markets post crisis and improved investor
volume reached an all time high of sentiment as evidenced by the general
13
Negligible share
14
Negligible share

Figure 6.6 Summary of Financial Market Performance
Source: Bangko Sentral ng Pilipinas, Bloomberg and Philippine Stock Exchange
strengthening of the peso against the

Institutionalized Generation
US dollar, rebound of the domestic
of Savings and Mobilization of
equities market and tightening of
Resources
sovereign debt spreads. As an archipelago the country must live
with demographic and economic diversity
across regions.15 To nurture a thriving
Challenges financial system, the challenge is to mobilize
Notwithstanding the improvements local saving and deploy the resources as
To nurture a thriving financial previously cited, some policy and may be needed throughout the archipelago.
system, the challenge is to structural issues continue to deter the This provides for a regionally-responsive,
mobilize local saving and further development of the financial development-oriented financial system
deploy the resources as may system. If the financial system must that nurtures saving at its source while
be needed throughout the positioned to serve the current and recognizing how some regions may have
archipelago. future needs of the public, these issues greater credit needs than others. Further
must be resolved: strengthening the financial inclusion
framework and its infrastructure support
are key elements in providing the necessary
financial services and in bridging the spatial
gaps between regions.
15
Attachment 2

Available Savings are and supervisory authorities must ensure
Primarily Lodged in Short- that their mandates are aligned with
Term Instruments international best-practice and standards
applicable in a domestic context. In the
Economic priorities and projects current regime of multiple regulators,
normally require long-term funds the authorities must ensure consistency
but available savings is placed mostly and comparability across their respective
in short-term instruments such as governance frameworks. Some of these
savings deposits16 and treasury bills. will require legislative intervention while
This tenor gap cannot be addressed the rest will depend heavily on the working
by a simple pricing solution. There is a relationship between regulators and
need to develop an outright long-term regulated entities.
funds market. Put differently, savers
must be provided the opportunity to FIs Concentration in Urban
become investors, and this will require Areas
an enabling environment that includes
prudential guidelines, infrastructure The uneven distribution of regional
support, a robust capital market and a income and savings has led to the
national financial education program. concentration of financial institutions
and delivery of financial services in high-
Lack of a Thriving Capital income and urbanized areas. Bank density,
Market for instance, has remained at five banking
offices per city or municipality for the last
The business of finance is impossible decade, leaving some 37 percent17 of the
without the dynamics of trading. countrys municipalities either unserved
To establish an outright long-term or underserved.
funds market, the capital market must
undergo fundamental changes. This Need for Legislative Support in
includes defining a credible valuation Critical Reform Areas
benchmark, providing for forward
markets, strengthening the cash market, Critical financial sector reforms cannot
and addressing the fragmentation of be implemented by financial supervisors
the government securities market. alone. Legislative support is necessary to
The latter raises the inherent tension provide for the required legal and regulatory
between the market development environment for these reform objectives.
function of government securities versus Close coordination with Congress as well as
the mandate to minimize the cost of active participation in the legislative process
government debt financing. remain pivotal.
Improving the Financial These policy and structural issues are
Governance Framework known to most stakeholders. What is
missing, however, is a holistic framework
Rapidly changing market conditions that ties them into a common strategic and
and the publics evolving requirements tactical plan. This is ultimately a challenge
increase the pressure on the governance of orderly execution and the need for an
structure of the market. The supervisory uncompromising commitment among
framework must proactively stay ahead stakeholders to adhere to the plan.
of these market pressures. Regulatory
16
Attachment 3
17
Exclusive of client reach of non-bank MFIs and NGO/CSO-oriented cooperatives.

Strategic Framework In line with the national agenda
and with Plan targets, a broad range
Vision for the Financial of financial sector reforms will be
Sector pursued to further deepen the financial
system and enable it to contribute
A regionally responsive, development- to sustainable and inclusive growth.
oriented and inclusive financial system This shall be achieved by effectively
which provides for the evolving needs mobilizing and intermediating
of its diverse public. It is guided by the funds within a framework of
following precepts: inclusive finance to best address the
evolving needs of all constituents.
Bottom-up development Key reforms will focus on: (a)
promoting savings generation at the
Top-down infrastructure support regional level but institutionalizing
deployment of resources at national
Prices that fully reflect relevant level; (b) developing an enabling
information environment for long-term savings;
In line with the national (c) strengthening the governance
agenda and with Plan targets, Enabling environment for the effective framework of the financial system in
a broad range of financial management of risks line with international standards and
sector reforms will be pursued best practices, and (d) establishing a
to further deepen the financial Medium-Term Development strong legal framework for financial
system and enable it to Plan for the Financial Sector sector development.
contribute to sustainable and (MTDPFS)
inclusive growth. Specific Reform Strategies
An array of reforms in the domestic
financial system will be pursued to A. Promote a regionally responsive
and inclusive financial system
further deepen the financial system through institutionalized
through a balanced development of the savings generation and resource
banking system and capital market. These mobilization.
shall be anchored on a conducive policy
and regulatory environment, progressive The high-growth trajectory set for
adoption of international standards and the macroeconomy puts pressure
best practices,18 good governance, and on the financial system to generate
transparency for the effective delivery of the necessary resources to support
financial services. heightened economic activity.
Key Reform Objectives and This provides the strongest justification
Targets for positioning the financial system
to be regionally-responsive and
Over the medium term, the government development-oriented.
aims to (a) achieve a 7 to 8 percent
growth in the countrys economic output In order to engender sustainable
beginning 2011, with a minimum of 5 and equitable growth, those in the
percent growth annually for six years, (b) margins of society must be part
increase per capita income to US$3,000 and take benefit from the nation
over the six-year period and (c) reduce building process. As things stand,
poverty incidence by 10 percent per year. their access to financial services has
18
With prior consideration to applicability on domestic conditions.

been limited by physical incapacity,19 1. Establish a conducive and regulatory
geographic distance, high cost of environment that balances financial
inclusion objectives with financial stability
credit and stringent documentary goals.
requirements. Consequently, these
sectors remain vulnerable and their a) Institutionalize market-based policy
need for consumption smoothing through issuance of law anchored
persists. on the greater role of the private
sector in the provision of financial
One way to address this is through services and market-oriented interest
the promotion of inclusive finance rates with the National Strategy for
wherein everyone has access to all Microfinance as a foundation.
financial services including, but not
limited to deposit account services, b) Craft a national financial inclusion
credit services, remittances, and strategy20 that officially defines
insurance services. financial inclusion, the medium-term
strategies to be undertaken and the
To this end, the Philippines has responsibilities or accountabilities
already made great strides in its effort of all stakeholders both government
to make financial services available and private.
to everyone not only through
banks and insurance firms but also 2. Promote the use of alternative products
through other institutions such and delivery of financial services in
as cooperatives and microfinance underserved and unserved areas of the
nongovernment organizations. country such as:
Moreover, technological innovation
in mobile and electronic delivery a) Microinsurance21
channels has also helped in improving
efficiency and availability of financial The promotion of microinsurance
services. All these have been made products and services, for instance,
possible through the establishment aims to expand the delivery of
of an enabling policy and regulatory simple and affordable risk protection
environment that encourages a oriented financial products to the less
market-oriented approach to the privileged and the informal sector
provision of financial services to against financial distress and other
previously excluded segments of the unfortunate events i.e., typhoon
population like the enterprising poor. devastation on crops.
These notwithstanding, there remains Specific action plans include the

to be room for improvement for following:
Philippine financial inclusion and the
following reform strategies shall be Formulate performance standards
pursued to attain this: for microinsurance;
19
Refers to persons with disability (PWD)
20
National Strategy for Microfinance was formulated in 1998 and initiatives to institutionalize
microentrepreneurship for poverty reduction and inclusive economic development were reemphasized as a policy
statement in the latest speech of President Benigno S. Aquino III before the PinoyME People Powered Markets
on 22 February 2011.
21
The Microinsurance Regulatory Framework (MRF) was launched in January 2010 to provide a policy and
regulatory environment that will facilitate the participation of the private sector in providing risk protection for
the poor and ensure that the rights and priveleges of the poor are protected.

Foster public-private partnership to promote evidence-based policy
on microinsurance product making and impact measurement by
development; and establishing a systematic method of
collection, monitoring and analysis
Institutionalize microinsurance of financial inclusion related data to
financial literacy program. address the need for accurate, reliable,
and consolidated statistical data on
b) Credit Surety Fund Program (CSF) various financial inclusion issues
and required innovations. This shall
The CSF is a program that involves the integrate existing financial inclusion
creation of a trust fund contributed statistics as well as address gaps in
by cooperatives from a province and the current statistical environment
its provincial government intended through information exchange and
primarily to make micro, small cooperative arrangements with other
and medium enterprises (MSME) concerned agencies.22
bankable by giving them access to
formal sources of financing by means 4. Adopt a holistic approach to
of a surety cover as a substitute for financial literacy and consumer
collateral. education.
5. Encourage the continuing
c) Microhousing development of new loan products and
other banking services aimed to address
According to data from the the special needs of the poor, women
Housing and Urban Development and persons with disability (PWDs).
Coordinating Council (HUDCC),
the projected housing needs of the Unlike other borrowers, the target
Philippines plus projected new market for microfinance products23
households by 2010 is 655,821. such as those belonging to the
agriculture sector might have cash
It used to be that banks are not able flows that are different from those
to compete with the rates provided observed from the usual borrower.
by government housing programs Likewise, there is a wide variety in
because they are subsidized, but lately, the purpose of their loan application:
the government has been trying consumption smoothing, financing
to shift towards a market-oriented for educational needs and funds for
housing finance system. Thus, the migration purposes such as placement
development of micro-housing fees, document processing fees.
finance schemes could help alleviate Hence, these warrant the introduction
the situation of the homeless poor. of financial products specifically
designed for this group of borrowers.
3. Explore other facets of inclusive finance
framework such as agent banking and In terms of the delivery of financial
use of nonbank financial institutions as services, the need to expand the
delivery channels.
number of ATMs and other banking
In pursuit of this specific reform products including announcements or
objective, there is a prior requirement
22
These include the National Confederation of Cooperatives (NATCCO), CDA, APPEND and other
microfinance or cooperative related organizations involved in the inclusive finance agenda.
23
Based on existing laws and BSP regulations, microfinance loans are those granted to farmer-peasants,
artisanal fisherfolk, workers in the informal sector, migrant workers, indigenous groups of people and
cultural communities, differently-abled persons, senior citizens, victims of calamities and disasters, youth
and students, children and urban poor.

financial literacy materials in Braille24 end, there is a need to develop auxiliary
to cater to the unique requirements market through forwards and cash
of the blind remains a going concern. markets.
At present, most ATMs have a dot
on the number 5 digit (middle Specific reform shall be pursued to:
digit in a 3x3 matrix consisting of
nine numbers) of the ATM console a. Institutionalize repurchase
to guide the visually impaired and agreements (repos) and securities
only a small number of ATMS has lending and borrowing (SLB) as a
the digits 1-9 in complete Braille. second-layer platform for the trading
There is also a need for bank forms of government securities (GS). Repos
to be available in Braille or to be read and SLBs provide another means for
aloud by a dedicated staff to a blind short-term financing and can provide
client. For the physically challenged, the inventory of GS to avoid failed
greater compliance of institutions, trades. Putting this in place would
including banks to install facilities require an efficient infrastructure
and devices within their premises that that would ensure proper tagging of
enhances the mobility of disabled securities (i.e., once used in a repo or
persons pursuant to Batas Pambansa SLB, it cannot be used for subsequent
Bilang (BP) 344 needs to be ensured. transactions unless released by the
This includes the installation of contracting parties) and would need
appropriate ramps and lowering the common ground rules to govern the
keypad console of ATM machines to securities trading.
aid the access of depositors who are in
wheelchair. b. Develop a derivative forwards market
to formalize the mechanism for
B. Develop an enabling environment investors to hedge their investments
for long-term investments. and manage their risk exposures.
In order to encourage long-term With the presence of a derivatives
savings and investment, the following market, the volatility currently
specific reform strategies shall be generated by abrupt spot trades can
pursued: be addressed and provide the market
with the necessary time to adjust to
1. Develop auxiliary markets through the required future volumes while
forwards and cash markets. using the forward rates as a valuation
The development of the domestic guide.
capital market cannot be fully
consummated only by the presence 2. Establish a reliable capital market
of liquidity and higher investor infrastructure
participation reflected in the volume The flow of resources from those with
of transactions. A capital market that excess funds to those with better use for
promotes price discovery mechanism, funds will not be fully consummated in
that allows investors to manage the absence or the lack of infrastructure
resources efficiently, and that provides that would ensure the sanctity of
the avenue to protect investments, is transactions, the protection of capital
the necessary infrastructure to provide as well as encourage their economic
alternative financing to the countrys use. It is therefore desirable to set in
economic development. Toward this place a reliable market infrastructure as
24
The Braille system, developed by a blind Frenchman Louis Braille in 1825, is a widely used method of reading
and writing for the blind.

foundation for saving and investment. (1) Continue the assessment and
This would require the development formulation of measures or
of legal and regulatory frameworks to regulations in the Philippines
govern the exchange of capital which for foreign direct and portfolio
entails crafting of appropriate enabling investments as well as other
laws to encourage savings, disseminate foreign exchange flows.
credit information, strengthen regulatory This will further removal of
supervision and protect the rights of restrictions in inward and
investors. outward capital flows while
ensuring consistency with
As an archipelago, a market infrastructure member countries national
that can integrate the physically agenda and readiness of
segregated markets across regions is the economy and allowing
important. Technology is available to adequate safeguards against
allow for a central board that can present potential macroeconomic
a uniform price for an issue regardless of instability and systemic risk
the location of the purchaser. that may arise from the
liberalization process; and
Thus, reforms shall be undertaken to
create a market infrastructure that (2) Participate in the mutual
provides for the following: (a) default assessment process,
arrangement; (b) elimination of clearing identification and formulation
and settlement risks; and (c) availability of measures or rules to
of access to other retail clearing or promote freer flow of foreign
settlement processes. direct investments, portfolio
investments and other foreign
3. Support faster integration of the exchange flows, including the
financial system into the ASEAN region. strengthening of monitoring
Increased exposure to the Asian- and oversight systems to
wide financial markets can serve as improve the management of
an additional momentum to further large and volatile capital flows
deepen the domestic financial markets. under the ASEAN Finance
It can also encourage the rapid growth Process.
of the countrys economy by improving
the efficiency of savings allocation and c) Support the regional capital
providing additional financing to the market development through the
domestic industries and businesses. following:
Specific reform strategies on ASEAN (1) Participate in the region-wide

financial integration shall be pursued to: capacity building initiatives26
to collectively enhance
a) Liberalize financial products and liquidity and efficiency in
services; Asian capital markets.
b) Further liberalize capital account25: (2) Further develop long-term

capital market infrastructure
25
Cf: eStandards Forum: Business Indicator Report (August, 2010). In its Country Commercial Guide, the US
Department of Commerce describes the Philippines as open to portfolio investment.
26
Participation in regional negotiations should be supported by regular consultations with domestic stakeholders
such as the National Government, the private sector and non-government organizations.

comparable and attuned with Specific reforms are to:
those in other Asian countries.
1. Pursue sustained capacity building for
(3) Enhance capital market financial regulators.
access, linkages and liquidity
by participating in proposed This shall be done together with the
regional initiatives such as the passage of amendments to strengthen the
ASEAN Exchange linkages legislative mandates of the BSP, SEC, IC
and Bond Market linkages. and CDA charters.
(4) Promote credit ratings 2. Harmonize regulatory and supervisory

comparability between oversight through cooperative arrangements
domestic and international among domestic and international financial
credit rating agencies. regulators.
d) Harmonize payment and 3. Promote mechanisms and processes

settlement system. such as stronger cooperative arrangements
among domestic and international
This specifically includes regulators of the financial system to address
participation in the the growth of financial conglomerates.28
harmonization of the payment
and settlement systems in the 4. Develop the risk-based capital adequacy
region to facilitate efficient, (RBCA) framework for providers of
secure and reliable cross border financial services and products under SEC
transactions. and IC regulation and supervision.
e) Strengthen regional monitoring Risk-sensitive approaches for determining

and surveillance initiatives. minimum capital requirements for non-
bank financial institutions will afford
This generally aims to support stronger protection to clients, and induce
the strengthening of regional providers to better manage risk.
monitoring and surveillance
initiatives within existing 5. Promote market discipline and price
regional arrangements through discovery through effective corporate
the ASEAN Economic governance framework for all supervised
Community Blueprint27 to boost and regulated financial institutions.
resilience against external shocks.
a) Expand the scope of duties and
C. Strengthen the governance responsibilities of the Board
framework of the financial system in of Directors and officers of
line with best practices and standards. supervised and regulated financial
Since the global financial crisis, there institutions of BSP, SEC, IC
has been a growing consensus on the and CDA to make them fully
importance of international standards accountable to shareholders and
and codes, particularly on elements the public for their decision-
of good governance for financial making processes.
regulators.
27
Cf: www.aseansec.org
28
In its 2010 FSAP Report, the IMF cites financial conglomerates as an important feature of the Philippine economy.
About 60 percent of bank assets and 75 percent of effective market capitalization of listed companies belong to
conglomerates. Cf: International Monetary Fund (April, 2010). Philippines: Financial System Stability Assessment
Update. IMF Country Report 10/90. Washington, D.C.: International Monetary Fund

Table 6.5 Legislative and Regulatory Priorities for the Financial System
Phase 1 Phase 2 Phase 3

(2011-2012) (2011-2014) (2011-2016)
Cooperative Code BSP Charter Financial Stability Framework
CISA Securities Regulation Code Financial Sector Neutrality
CIMS IC Charter Tax
PERA CDA Charter Payment System Act
REIT Corporation Code CISL
MSME Chattel Mortgage Law
Agri-Agra Central Registry for Movable
FRIA Assets
b) Reinforce the proper rules D. Establish a strong legal framework

governing the selection and for financial sector development.
appointment of officers, trustees
and members of the Board of all An enabling regulatory and legal
supervised and regulated financial environment for financial sector
institutions of BSP, SEC, IC development must give priority
and CDA to effectively deal to financial stability, supervisory
with interlocking directorships oversight, inclusive finance and capital
and connected party lending at market development. These reform
the onset of increasing cross- priorities, however, require legislative
ownership and growth of support, which can be achieved only
financial conglomerates in the through close coordination with both
Philippines. For government houses of Congress and through active
pension funds,29 adopt a merit participation in the legislative process.
system including a clear and de-
politicized appointment process Reform priorities shall be phased in
for the boards of directors of every two years based on the following
these funds; considerations:
c) Continuously align local Phase 1 - Legislative and regulatory

accounting and reporting reforms with existing legal and
standards30 with international regulatory framework but saddled
standards and best practices; and with some implementations issues
between 2011 and 2012;
d) Extend the use of corporate
governance scorecard to all Phase 2 - Legislative and
supervised and regulated regulatory reforms in the process of
financial institutions in the implementation or enacted between
Philippines to promote a deeper 2011 and 2014; and
culture of fairness, accountability
and transparency in financial Phase 3 - Legislative and regulatory
transactions and reporting. reforms in the early developmental
stage between 2011 and 2016.
29
Refers to the GSIS and SSS
30
The Philippines aligned its accounting and reporting practices with international accounting standards and
international financial reporting standards with the adoption of Philippine accounting standards and Philippine
financial reporting standards in 2005.

1. Establish a framework for financial are the active use of online surveys
stability to limit the costs of financial in-between examinations for macro
and micro economic and financial
distress to the economy in times of crisis variables, and the pursuit of new
by adopting a macro-micro approach to information-sharing agreements
supervision. with knowledge-based participants
such as the nonbank sector such as
Reforms shall be pursued to: cooperative, CSO,31 NGO, informal,
services and other corporate sectors,
a) Include an explicit financial including inputs from national
stability objective in the consultations.
charters of financial sector
supervisors. This will set a d) Continue to align the existing
coordinated objective and shared regulatory and supervisory
responsibility among supervisors framework with international
and regulators of the financial standards and practices. In the
sector to keep the domestic banking sector, elements of
financial system in good shape. Basel II that have not been fully
implemented, including features
b) Adopt a macro and micro of the recently released Basel III
prudential approach to reform package, should be adopted
supervision. The existing to promote convergence with the
microprudential approach global regulatory framework for a
needs to be supplemented more resilient banking system.
with macroprudential policies
to ensure the resilience e) Provide institutional support for
of the financial system. A financial stability. Exchange of
consolidated and risk-based information and coordination
approach to supervision should among domestic and overseas
be implemented to effectively regulators should be strengthened.
supervise financial institutions Projects formulated by Financial
and the financial system as a Sector Forum members should
whole. be reinforced. These measures will
ensure harmonized regulation
c) Improve existing macro and throughout the system. The
micro surveillance tools and establishment of a more permanent
technology. There is a need and dedicated institutional support
to upgrade examination for financial stability shall be
approaches, revise or update explored.
rating systems of financial
institutions, and implement f ) Strengthen financial safety nets,
necessary infrastructure such as the establishment of a
for data and information crisis management framework
warehousing. Technology for the financial system. A crisis
must be harnessed to improve management framework that is
micro and macrosurveillance of anchored on crisis prevention and
financial sector developments crisis resolution is essential. This
and other financial stability should provide liquidity and restore
issues. Some innovations that
can be immediately explored
31
Refers to civic-oriented organizations.

normality in the most expedient and mortgages, chattel mortgages
transparent manner during a crisis. and quedans.
2. Strengthen the supervisory oversight of
financial regulators to enable them to keep c) Review the rules on other
pace with the increasing sophistication of collateral items such as quedan.
the global financial services industry.
4. Provide an adequate legal
Specific reforms shall be pursued to: framework to encourage greater investor
participation, address financial taxation
and effective oversight of the national
a) Strengthen BSPs role as a supervisor payments systems.
of the financial system primarily
through the amendment the BSP Specific reform strategies are primarily
Charter (RA 7653). geared at expanding non-bank
initiatives through the passage of some
b) Reinforce the SECs role as capital important capital market development
market regulator primarily through bills such as:
the amendment of the Securities
Regulation Code (RA 8799); a) A Collective Investment Schemes
Law (CISL) to broaden investor
c) Strengthen the IC as an independent participation in the securities
and effective regulator of the market, including participation
insurance industry. An amendment by Overseas Filipinos;
of the Insurance Code (PD 1460, as
amended); and b) A Financial Sector Tax
Neutrality Act (FinTax) to
d) Strengthen the organization and minimize distortion costs in
regulatory or supervisory functions financial transactions; and
of the CDA to cover cooperatives
engaged in savings and credit c) A Payment System Act (PSA)
operations. This will be accomplished for the effective oversight of the
by amending the CDAs Charter countrys national payment and
(RA 6939, as amended). settlement system.
3. Provide a legal framework for the 5. Create an environment for the
acceptance of movable assets as collateral. efficient operations of cooperatives in
Specific reforms shall be pursued to: the Philippines following the enactment
of the Cooperative Code (RA 9520) on
February 17, 2009.
a) Review and amend the more than
century-old Chattel Mortgage Law The cooperative sector together with
in the Philippines.32 nonbank microfinance institutions33
has been involved in grassroots
b) Establish a central registry of development and financial inclusion
moveable assets offered as collateral, in the Philippines for the past decade.
which are currently recorded in There is a lack of an effective legal
separate registries for real estate framework and supervisory oversight.
However, has led to the fragmentation
of developmental efforts and a poor
32
The countrys Chattel Mortgage Law or Act No. 1508 was enacted on July, 1906. The law defines chattel mortgage asa
conditional sale of personal property as security for the payment of a debt, or the performance of some other obligation, the
condition being that the sale shall be void upon the seller paying to the purchaser a sum of money or doing some other act
named. If the condition is perfomed according to its terms, the mortgage and sale immediately become void and the mortgagee
is thereby divested of his title.
33
Microfinance NGOs and microfinance-oriented banks offer loans, savings facilities, housing, community development projects
e.g., insurance products in partnership with license insurance companies to less privileged Filipinos particularly in depressed and
remote areas in the countryside.

database on the actual performance Law (RA 9505) enacted on August
and contribution of the sector. 22, 2008.
6. Empower the IC to effectively b) Address the needs of the resurgent

supervise and regulate pre-need real estate industry by providing
companies, including, among others, funds for infrastructure projects,
reviewing the management of pre-need widening access to investment in
companies for better protection of plan real estate projects, broadening the
holders and beneficiaries following the participation of the public, including
enactment of the Pre-Need Code (RA OFs, in the ownership of real estate,
9829). and protecting the investing public
from abuses of real estate investment
7. Address funding and other trusts pursuant to provisions of the
operational requirements for the Real Estate Investment Trust or
establishment of the Central Credit REIT Act of 2009 (RA 9856).
Information Corporation to improve the
ability of financial institutions to access 9. Establish a policy framework in support
credit history data for debtors, thereby of the governments social agenda of
bringing down the money and time reducing poverty through mandated credit
cost of loan underwriting following to certain sectors of the economy such as
the signing into law of the Credit MSMEs and the agriculture sector.
Information System Act (RA 9510) on
October 31, 2008. Specific reform strategies shall be pursued
to:
Alongside this, there is a need to
develop a system to monitor, control a) Strengthen and encourage the growth
and manage collaterals submitted by and development of micro, small, and
banks and other financial institutions medium-sized enterprises (MSMEs) in
as security for their loans. One example all productive sectors of the economy,
of such system is the Collateral particularly rural and agrobased
Information and Management enterprises, through the effective
System (CIMS) to be implemented implementation of the Magna Carta for
within the BSP, which should allow MSMEs (RA 6977, as amended).
authorized users to obtain information
electronically on the status of collateral b) Enhance the access of the rural
documents, particularly the collateral agricultural sector to financial
positions of borrower banks and end- services and programs that increase
borrowers. market efficiency and promote
modernization in the rural
8. Introduce alternative savings agricultural sector through the
and investment products through the implementation of the Agri-Agra
following specific reforms: Reform Credit Act of 2009 (RA
a) Encourage voluntary personal
savings and investments through
the establishment of a multi-
pillar retirement income structure
as embodied in the provisions of
Personal Equity and Retirement
Account Act of 2008 or PERA

10000), passed into law on February
23, 2010.
10. Expand investor and creditor

protection mechanisms cognizant of recent
demands of modern banking and finance
standards through the following specific
reform measures:
a) Introduce improvements in company

registration and monitoring rules
or procedures, including the
institution of stiffer penalties for
corporate malfeasance through the
amendment of the Corporation
Code of the Philippines (BP 68);
and
b) Ensure an effective and efficient

rehabilitation of liquidation of
debtors as embodied in the Financial
Rehabilitation and Insolvency Act
(FRIA) of 2010 or RA 10142 which
was lapsed34 into law on July 19,
2010.
11. Empowerment of Filipino

consumers through strong consumer
protection mechanisms and financial
literacy or education programs.
a) Promote greater financial literacy

of the population, including those
in the countryside and OFW-rich
areas abroad by encouraging the
participation of nongovernment
and private sector organizations in
the delivery of financial education
programs; and
b) Strengthen consumer protection by

improving the implementation of
existing consumer protection laws
and regulations on transparency,
disclosure, consumer assistance and
redress or grievance mechanisms.
34
Op.cit.

Attachment 1 Selected Financial Stability Indicators in ASEAN-5
Consolidated Capital Adequacy Non-performing Loan (NPL)

Country Ratio (CAR) Ratio of Commercial Banks
Indonesia 8.91/ 3.21/
Malaysia 14.4 1.91/
Philippines 16.03/ 3.34/
Singapore 16.71/ 4.4
Thailand 16.52/ 2.32/
Source: Asian Regional Integration Center, IMF and Central Bank websites
1/
May 2010; 2/December 2009; 3/As of March 2010; 4/June 2010
Attachment 2 Average Income, Expenditure, Saving and Savings Rate of Families, at Current Prices by Region:
2003 and 2006
2003 (in billions) 2006 (in billions)
Region Income Expenditure Saving Saving Rate Income Expenditure Saving Saving Rate
Philippines 148 124 24 16.2 173 147 26 15.0
NCR 266 218 48 18.1 311 258 53 17.0
CAR 152 126 26 17.1 192 151 42 21.9
I 124 102 22 17.7 142 124 19 13.4
II 126 99 27 21.4 143 118 25 17.5
III 160 138 22 13.8 198 170 27 13.6
IV-A 184 158 26 14.1 210 186 23 11.0
IV-B 103 84 19 18.4 109 93 16 14.7
V 109 94 15 13.8 125 110 15 12.0
VI 111 98 14 12.6 130 116 14 10.8
VII 121 102 19 15.7 144 124 21 14.6
VIII 103 84 19 18.4 126 104 22 17.5
IX 93 75 18 19.4 125 99 27 21.6
X 109 91 18 16.5 142 117 25 17.6
XI 117 100 18 15.4 135 115 19 14.1
XII 113 85 28 24.8 114 96 18 15.8
XIII 90 78 12 13.3 118 100 18 15.3
ARMM 83 67 16 19.3 89 75 14 15.7

Attachment 3 Regions with the Highest or Lowest Saving Rates, by FIES year
FIES Year Highest Saving Region Lowest Saving Region

Rate Rate
1991 25.7 CAR 10.6 Western Visayas
1994 24.8 Eastern Visayas 9.7 Western Visayas
1997 22.9 Western Mindanao* 9.4 Western Visayas
2000 21.2 Eastern Visayas* 13.4 Bicol**
2003 21.5 Cagayan Valley 12.3 Western Visayas
2006 21.9 CAR 10.8 Western Visayas
Notes: *The saving rates of CAR in 1997 and 2000 were close to the highest rate.
**The saving rate of Western Visayas is hardly differed from the lowest rate.
Source: For 1991-2003, Bersales and Mapa (2006); for 2006, FIES data.
Attachment 4 Average Income, Expenditure, Saving and Saving Rate of Families at Current Prices by Income Decile:
2006 and 2009
2006 (in billion pesos) 2009 (in billion pesos)
Income Expenditure Saving Saving Rate Income Expenditure Saving Saving Rate
Philippines 173 147 26 14.8 206 176 31 14.9
First Decile 32 35 -3 -8.9 41 43 -3 -6.7
Second Decile 51 52 -2 -3.4 64 66 -2 -3.4
Third Decile 65 66 (*) -0.9 81 81 (*) 0.0
Fourth Decile 81 79 2 2.1 100 97 3 2.7
Fifth Decile 100 95 5 4.6 122 116 6 4.4
Sixth Decile 124 116 8 6.1 150 139 11 7.2
Seventh Decile 156 143 13 8.5 189 171 18 9.2
Eighth Decile 205 181 24 11.5 244 216 28 11.5
Ninth Decile 292 244 47 16.1 342 288 53 15.7
Tenth Decile 622 460 162 26.1 728 535 193 26.5
Bottom 30% 49 51 -2 -0.0 62 64 -2 -0.0

Upper 70% 226 188 38 0.2 268 224 44 0.2
Source: National Statistics Office, 2009 FIES Preliminary Results
Attachment 5 Philippine Banking System, Deposit Mix

PESO DEPOSITS FOREIGN CURRENCY DEPOSITS
Deposit Liabilities End-June End-June
2010 2009 2010 2009 2010 2009 2010 2009
Total 3,609.2 3,263.3 100.0% 100.0% 1,144.8 1,055.5 100.0% 100.0%
Time Deposits 1,015.6 999.9 28.1% 30.6% 672.9 649.2 58.8% 61.5%
Demand, NOW & 2,593.5 2,263.3 71.9% 69.4% 472.0 406.2 41.2% 38.5%
Savings Deposits
Source: Bangko Sentral ng Pilipinas

Emergency Response/Rescue Program Command Center
07
Brgy. San Antonio, Pasig City
Good
Governance
and the Rule
of Law Good Governance and the Rule of Law 205
Good Governance and
the Rule of Law
Good governance sets the normative standards of development. It fosters
participation, ensures transparency, demands accountability, promotes efficiency,
and upholds the rule of law in economic, political and administrative institutions and
processes. It is a hallmark of political maturity but also a requisite for growth and
poverty reduction, for there are irreducible minimum levels of governance needed
for large-scale investment to occur and for social programs to be supported.
A cornerstone of good governance is adherence to the rule of law, that is, the
impersonal and impartial application of stable and predictable laws, statutes, rules,
and regulations, without regard for social status or political considerations.
This chapter assesses the quality of governance in the country and identifies key
governance challenges that constrain development. It then lays down corresponding
strategies to achieve good governance anchored on the rule of law, and provide an
enabling environment for national development.
Assessment and credibility of the nations institutions.

Challenges But they are not enough.
The countrys recent history has been Efforts until now have at best
plagued by questions of legitimacy, created islands of good governance1
accountability, and allegations of grand in certain sectors, some national
corruption. The 1986 EDSA revolution agencies, and LGUs. But these have
established a framework of constitutional failed to translate into improvements
democracy and civil rights, but deep social in the countrys overall state of
and political divisions have persisted governance, nor have any significant
Efforts until now have at alongside problems of inefficiency and social impact.These islandsare easily
best created islands of corruption in government. The failure to swamped by high tides of impunity
good governance in certain address governance issues has given rise in and venality. The overall miserable
sectors, some national recent years to marked political instability, state of governance in the country
agencies, and some local bordering on threats to constitutional was attested by different measures.
government units. But these government, and a deepening cynicism The countrys percentile rank in the
have failed to translate into and mistrust of formal political six dimensions of governance in the
improvements in the countrys institutions. Political instability and Worldwide Governance Indicators
overall state of governance, widespread corruption have also had (WGI) until 2009 remained
nor have any significant social serious repercussions on the investment mostly within the lower half. The
impact. climate. The successful and credible worst performance was in political
transfer of power in 2010 through the stability, as the conduct and results
prescribed constitutional processes and a of previous national elections were
renewed public concern for government sharply contested amid allegations
accountability and transparency are of corruption. The result was an
important first steps in restoring the alienation of the people from their
1
A phrase used by a former World Bank country director in an article of September 5, 2007.

Figure 7.1 Philippines: Worldwide Governance Indicators
Source: World Bank (http://info.worldbank.org/governance/wgi/sc_chart.asp)
government and an open invitation inefficient government bureaucracy as

to several extra-constitutional the top two most problematic factors
attempts to seize power. for doing business in the Philippines.
The countrys corruption problem
The country also failed to hurdle is again highlighted in the 2010
major indicators under the Corruption Perception Index where the
Millennium Challenge Corporation Philippines ranked below 75 percent of
(MCC), which relies on the WGI all the countries surveyed (134th out
for measuring policy improvements of 178 countries)4 and last among the
in three dimensions of governance.2 ASEAN-6.The countrys standing from
This picture is repeated in the Global all these measures signals the need for
Competitiveness Index (GCI), more substantial actions to strengthen
where the country was ranked 87th governance in the country. This only
in 2009-2010 and 85th in 2010- shows that good governance cannot
2011.3 Even though the countrys be achieved partially or piecemeal,
competitiveness slightly improved but must be attained decisively and
from last year, the country continues systematically.
to lag behind most Southeast
Asian neighbors. The Global Political instability, corruption, and weak
Competitiveness Index Report for rule of law have had severe negative
2010-2011 listed corruption and effects on investment,5 which partly
2
The MCC is a bilateral grant program of the US. Eligibility criteria include 17 different governance measures,
among which, however, the control of corruption is the only hard or strictly binding condition. When the
Philippines transited from the low-income to lower-middle-income category in 2010, it fell below the threshold
of the corruption indicator appropriate for the new peer group, with a 26th percentile ranking.
3
The Global Competitiveness Report 2010-2011 (World Economic Forum)
4
The Corruption Perception Index is a composite Report prepared by Transparency International which
measures the perceived level of public sector corruption in 178 countries and territories based on 13 expert and
business surveys.
5
Philippines: Critical Development Constraints (ADB)
Good Governance and the Rule of Law 207

Cumbersome government explains the countrys low rate of capital Public Service Delivery
procedures slow down the formation. Public investment is stymied
delivery of public service and when corruption in revenue-collection The delivery of public services must
increase transaction costs. The efforts deprives the government of needed be prompt and adequate to citizens
same arduous government funds. Overpricing and funds-diversion in needs. Cumbersome government
processes also provide the spending distort priorities and wastes public procedures slow down the delivery of
venues for corruption, given resources. But even private investment public service and increase transaction
the natural tendency to avoid is affected; first, by the uncertainty of costs. The same arduous government
the bureaucratic red tape. administrations whose legitimacy is processes also provide the venues for
questioned, and second, by the prospect and corruption, given the natural tendency
reality of biased rules and extortive practices, to avoid the bureaucratic red tape. The
which raise the costs of doing business Anti-Red Tape Act (ARTA) of 2007
and discourage new business entrants already requires national departments,
and contract-bidders from providing real agencies, and LGUs to set up their
competition. In the end, the resulting respective service standards known
poor growth and fiscal inability to support as Citizens Charters (CCs), to
social programs severely impair poverty- simplify procedures, and to facilitate
reduction programs. Corruption and lack transactions. As of August 30, 2010,
of transparency are major constraints to the 74 percent of agencies (4,253 of
achievement of the MDGs.6 To say that 5,716) nationwide had complied with
corruption and poor governance abet and the drafting and promulgation of
worsen poverty is no exaggeration. Kung CCs. As a means to develop citizens
walang corrupt, walang mahirap. awareness of their rights vis--vis
government and encouraging citizens
criticisms when aggrieved, this is one
Figure 7.2 Career Executive System (CES) Occupancy Data step towards cutting red tape and
reducing corruption. However, This is
unlikely to be sufficient.
Impersonal online services can

reduce the face-to-face transactions
that typically provide the occasion
for extortion and corruption, and
some agencies have provided such
services. These include the Land
Transportation Office (LTO),
the Securities and Exchange
Commission (SEC), the Bureau of
Internal Revenue (BIR), and the
Government Service Insurance
System (GSIS). The government has
also selected 120 LGUs to become
Sparkplugs for Governance and
Economic Development by, among
others, streamlining their business
permit and licensing system to reduce
opportunities for bribery and other
forms of corruption.7 These reforms
Source: CESB need to be harmonized and well-
6
Philippine Progress Report on the Millennium Development Goals 2010
7
Philippines Policy Improvement Process Plan of Action 2010

established, however, for significant The integrity of the civil service has been
results to be achieved. Moreover, in the perennially undermined by appointments
Ease of Doing Business index, the based on political accommodation rather
Philippines remained in the bottom than on merit and fitness, a phenomenon
fifth of the economies surveyed (rank that is partly an offshoot of the presidents
148 out of 183 economies surveyed).8 vast powers of appointment and
discretion. This is true across the board
Various initiatives have also been but particularly in third-level positions
undertaken to provide a more and in the appointment of teachers,
competitive compensation system police, and treasurers. The eligibility
in the government to improve the requirement is only weakly enforced in
economic wellbeing of civil servants the career executive service, in which 47
and raise their morale, with a view percent of the occupied positions are held
to better service provision. The pay by noneligible individuals.
of government personnel covered
by the Compensation and Position Local governments confront rising public
Classification under RA 6758, as expectations regarding the delivery of
amended, was adjusted in 2007 and services. Despite almost two decades
2008 through an additional 10 percent of implementation of the 1991 Local
increase in basic monthly salaries. Government Code (LGC), however, local
governments still face various challenges
To rationalize the Government in the exercise of their devolved service
Compensation and Position delivery functions. Foremost among
Classification System, a Joint these is the raising of sufficient funds
Resolution of Congress was passed for local development. A majority of the
in 2009 increasing the salaries of local governments still lack the ability or
government workers by an average of the will to raise adequate local revenues.
50 percent over four years. Increases in LGUs have become unduly dependent
compensation were implemented to on Internal Revenue Allotment (IRA)
continually uplift the living standards transfers from the national government
and welfare of government employees. and have failed to manage their financial
The new pay package aims to attract resources effectively and sustainably. These
more qualified and upright people persistent issues are a significant hurdle
to work for government, address the in the realization of the goals of local
compensation gap between the public autonomy and devolution through good
and private sectors, and encourage local governance and effective service
qualified incumbents to stay longer delivery. Owing to loopholes in the
in public service. It puts a premium LGC, as well as the lack of capacities of
on positions with more complex local governments in assuming devolved
and difficult tasks and greater functions, national government agencies
responsibilities. It also eliminates (NGAs) continue to deliver certain
the overlapping of salaries between services despite the transfer of these
consecutive salary grades. Meanwhile, services to the local governments. The
this effort is always threatened and confused and overlapping performance
undermined by legislation seeking of functions compromises the lines of
to provide higher pay for specific accountability for local services.
agencies.
8
Doing Business 2011 (IFC and WB); The Ease of Doing Business index measures business regulation relevant
to the life of a domestic small to medium-sized firm: starting a business; dealing with construction permits;
employing workers; registering property; getting credit; protecting investors; paying taxes; trading across borders;
enforcing contracts; and closing a business. The Philippine ranking is based on the experience of firms dealing
with Manila City Government on three dimensions starting a business, dealing with construction permits, and
registering property. The 2011 edition refers to the period June 2009 to May 2010.

The size and scope of the bureaucracy Integrity
has expanded through time and has
led to overlaps and redundancies in The law assigns the Office of the
functions and operations of departments/ Ombudsman (OMB) a pivotal role
agencies. The executive branch pursued a in ensuring integrity and deterring
rationalization program in 2004, but this corruption in the public sector. The
remains uncompleted. As of December 31, threat of prosecution and conviction
2010, 177 (82%) of the 216 departments/ of public wrong-doers is a potent
agencies, other executive offices (OEOs) sanction against corruption. This will
and GOCCs have submitted their not be regarded as a credible threat
Rationalization Plans (RPs) to the DBM, without a reliable and effective OMB
of which 85 have been approved. The that demonstrates credible leadership
abolition of 15,485 regular, contractual, and publicly measurable success in a
or casual positions has resulted in savings sustained anticorruption effort.
in Personal Services (PS) amounting to
PhP2.39 billion annually, while on the The OMB has far spearheaded the
other hand incentives and terminal-leave National Anticorruption Plan of
benefits paid to those retiring or separated Action (NACPA), the collective
from government service amounted to response of different sectors to the
PhP1.396 billion. problem of corruption, integrating
and strengthening the anticorruption
As long as staffing in some agencies is initiatives and commitments of the
excessive and redundant, and the quality OMB itself,other constitutional bodies,
of existing personnel is poor, there will be the three branches of government,
political resistance and public cynicism LGUs, civil society, the business sector,
about across-the-board attempts to non-government professional groups,
improve the pay and morale of the civil and the foreign donor community.
service. On the other hand, RPs need Its five programme components
to consider the real needs of front-line consist of: (a) public policy advocacy;
agencies especially in promoting the rule (b) convergence development and
of law. While a scrap and build policy management; (c) performance
is sensible for addressing the internal measurement and management; (d)
structure, it cannot address the emerging knowledge management and capacity-
personnel resource gaps to respond to building; and (e) resource mobilization.
increasing population and demand for The NACPA is implemented through
higher-quality service delivery. the Multi-Sectoral Anticorruption
Council (MSACC), a multisectoral
mechanism chaired by the OMB.9
Table 7.1 Status of Submission and Evaluation of Rationalization Plans as of December 31 2010
No. of No. of RPs No. of RPs No. of No. of RPs Not

Organizations Approved Returned for RPs Being Yet Submitted
Revision Evaluated
Departments/Agencies 134 47 7 71 9
OEOs 25 17 3 4 1
GOCCs 57 21 0 17 19
Total 216 85 10 92 29
Source: DBM
9
These include, among others, the Concerned Citizens of Abra for Good Government, Inc., the Northern Luzon
Coalition for Good Governance, the Evelio B. Javier Foundation, Inc., Moral Recovery Officers Foundation, Inc.,
the Federation of Filipino Chinese Chamber of Commerce and Industry, and the Employers Confederation of
the Philippines.

Priority NACPA programmes Index, the Philippines ranked 134
and projects include enhancing out of 178 countries in 2010. Investors
the framework of legislation and have pointed to corruption as the most
local policies against corruption, problematic factor for doing business.11
the adoption and customization of In the 2008 Global Integrity Report, the Investors have pointed
the APEC Code of Conduct for Philippines received a moderate overall to corruption as the most
Business, an integrity development ranking, gaining a score of 71 points in problematic factor for doing
review of LGUs, capacity-building its Integrity Indicator Scorecard, only business in the Philippines.
on UNCAC-compliant investigative four points better than its 2007 standing.
techniques, anticorruption planning Its lowest scores were in Elections
workshops for professional groups, (59), Civil Society, Public Information
including accountants and engineers, and Media (68), and Government
and the establishment of the Centre Accountability (70).12
for Asian Integrity, an anticorruption
learning center. A massive rethinking and renewal of
effort by all agencies involved in the fight
Such important efforts against corruption is clearly needed if any
notwithstanding, the bureaucracys real progress is to be made in this aspect.
vulnerability to corruption appears only
to have increased. The Commission on Rule of Law
Audit (COA) in 2009 noted a rising
incidence of irregular, illegal, wasteful Justice is no less important a public good
and anomalous disbursements of huge than basic education and primary health
amounts of public funds and disposal care.The framework of the rule of law serves
of public property that it reinstituted as the foundation for a democratic society.
the selective preaudit on government Its effect on economic performance, social
transactions.10 Public clamor has also development and integrity infrastructure
been loud and insistent for a speedy of the country is pervasive. Otherwise
resolution and closure in a growing stated, the rule of law is a cornerstone to
number of highly-visible cases of the improvement of public health, the
grand corruption involving high- safeguarding of citizens participation, of
level politicians and bureaucrats. This security and of the fight against poverty13
public sentiment has had political and (World Justice Project). According to the
electoral repercussions and cannot be World Justice Project Rule of Law Index
ignored. 2010, however, the Philippines ranked
last or close to the bottom among seven
The deterioration is also evident in indexed Asian countries. The country
cross-country comparisons. Of six ranked last in such factors such as order
governance dimensions in the WGI, and security, fundamental rights, and
the countrys score in control of effective criminal justice; it was second
corruption has consistently been to the last in the absence of corruption,
the second lowest, next only to clear, publicized and stable laws,
political instability. In Transparency regulatory enforcement, and access to
Internationals Corruption Perception civil justice.14
10
COA Circular No. 2009-002
11
Global Competitiveness Report 2010-2011 (World Economic Forum)
12
The Global Integrity Report is a tool for understanding governance and anticorruption mechanisms at the
national level. It is generated by local researchers and journalists. The scorecard contains various points that
extensively measure the effectiveness of local policies and implementations.
13
World Justice Project Rule of Law Index 2010
14
Even the Philippines best score in open government, which is fifth of seven, was unremarkable and below
expectations of one of the oldest democracies in the region.

The weak rule of law and an In an attempt to reduce the load of
unresponsive justice system hinder the courts, the Alternative Dispute
economic development. Delays in Resolution (ADR) Act (RA 9285)
resolving corruption cases, the high was passed in 2004. However, there
cost of litigation, and the long and is a need to continuously encourage
arduous legal process have resulted and actively promote the use of ADR
in the diminution of public trust and for it to live up to its promise as an
confidence in government and the important means to achieve speedy
justice system. Another factor affecting and efficient resolution of disputes.16
investors confidence pertains to
disputes arising from unmet contractual Citizens Participation
obligations and the proper enforcement
of property rights, including those of Citizens participation has been one of
foreigners.15 Major reasons for the lack the strengths of Philippine governance.
of responsiveness of the justice system Partnerships between government and
include its fragmentation, the presence CSOs facilitate the promotion of good
of archaic laws and rules, and low governance. The OMB collaborates
funding support. with the Concerned Citizens of Abra
for Good Governance and Government
The first order of business must be Watch for anticorruption efforts in
to address resource constraints. High government procurement and project
vacancy rates persist in law enforcement, monitoring; and with the Society
prosecution, public defense despite of Jesus for the conduct of integrity
efforts to increase compensation. seminars. The government also partners
Low salaries coupled with unrealistic with CSOs in promoting transparency,
The government also partners qualification standards result in funded accountability and public participation in
with CSOs in promoting but unfilled positions. There is frequently the preparation, authorization, execution
transparency, accountability no recourse but to hire casual and and monitoring of the national budget.
and public participation in the contractual employees who cannot be These efforts must be sustained and, in
preparation, authorization, held accountable and do not benefit some cases, deepened. It is also noted
execution and monitoring of from the continuous training programs that while citizens participation in local
the national budget. These which are required and essential. Huge development councils and special bodies
efforts must be sustained and, case backlogs and high case loads is mandated, CSOs claim that most of
in some cases, deepened. are direct consequences. Moreover these are either inoperative or nominal.17
facilities for justice-sector agencies and
the courts are dispersed, inadequately While the country is famous for the large
staffed and supplied, and beset at times number of CSOs that could, in principle,
by cumbersome rules. Reforms in play a leading role in anticorruption
organization and logistics chains are efforts, such organizations themselves
needed to strengthen the support to are heterogeneous and face various
regional or local offices, agencies, and hindrances that affect and challenge
courts, where the first line of defence is their development effectiveness.
drawn. Internal challenges include capacity-
building, shortage of funds for CSOs
15
The country, for instance, has been in the US watch list of countries that inadequately protect intellectual
property rights, a fact that has potential implications for the continued favorable treatment of Philippine exports
to the US under the Generalized System of Preferences (Arangkada Philippines 2010: A Business Perspective,
Joint Foreign Chamber of the Philippines, published by The American Chamber of Commerce of the Philippines,
December 2010).
16
Section 2, RA 9285
17
Citizens Roadmap for Poverty Reduction and Achieving the MDGs, 2010 (CODE-NGO, FDC and UNDP)

continuous operation and sustainability the absence of political parties that exact
of programs, ensuring priority and accountability from individual politicians
reach of sectors most in need. There is based on principled party platforms; (c)
also a need for lifestyle check as well as the weakness and subservience of the
drawing lessons on the best practices bureaucracy relative to the political class; (d) The problems of lack of
where other CSOs can learn from. the unprecedented power and discretion of accountability and corruption
External challenges include: (a) conflicts the executive branch that encourages both in governance are ultimately
of policies and laws with actual practice; patronage politics and grand corruption; traceable to the countrys
(b) weak human rights protection and and (e) the corruption of elections through historically evolved political
culture of impunity; (c) intervention patronage and money politics. As the processes and traditions.
of some local government units in President stated in his Social Contract, it
CSO affairs; and (d) the threatening would appear that the country has no vision
presence of military that deters peoples of governance beyond political survival and
participation to their own programs and self-enrichment, which is why the country
CSO initiatives.18 is in need of transformational change.
Although citizens have a legal right of But while constitutional changes to institute
access to communication, there is no crucial political and economic reforms may
established legal route for citizens to be in order, it is inadvisable to do so in an
petition to obtain government records. atmosphere of public mistrust and suspicion
The actual practice of many citizens that such changes will be self-serving to the
testifies to the highly uneven willingness incumbents. As the government performs
or preparedness of government offices to creditably, the matter of constitutional
provide information as well as the poor reform may be taken up. Even short of
quality of the information provided, if at constitutional change, however, important
all. This is also seen from the countrys reforms should be put in place by statute. A
low score for the 2008 Global Integrity first priority must be to restore and maintain
Report under the category of Civil the record of peaceful, efficient, and credible
Society, Public Information and Media popular elections, which already happened
category, which even dropped one point in 2010. Legislation to encourage the
from the 2007 score of 69. The proposed formation of stable political parties and
Freedom of Information Act is an organizations may also be considered,
important step towards addressing this including campaign-finance reforms
problem. and stricter minimum formal numerical
and reportorial requirements for political
Political Processes and accreditation. Reforms in the disbursement
Systems of discretionary funds of both Congress and
the executive can help weaken the culture of
Various scholars and other impartial patronage. A reform of the internal revenue
observers19 have long observed that the allotment (IRA) scheme which is currently
problems of lack of accountability and a very passive and automatic mechanism,
corruption in governance are ultimately to elicit greater local revenue effort among
traceable to the countrys historically local governments will also help reduce
evolved political processes and traditions. fiscal mendicancy among local leaders, and
These include: (a) the dominance of make them more accountable to their own
elite interests both local and national constituents instead.
in politics and political contests; (b)
18
Report of the Philippine Open Forum on CSO Development Effectiveness, August 2010
19
For a recent example of such an assessment, see Philippines Country Report (2009) Gtersloh: Bertelsmann
Stiftung. See also B. Anderson (1988) Cacique Democracy in the Philippines, New Left Review 3-31; P. Hutchcroft
(1995) Booty capitalism. Ateneo de Manila Press; and E. de Dios (2007) Local Politics, Local Economy, in A.
Balisacan and H. Hill. The Dynamics of Regional Development. Edward Elgar.

Gender Roles in Governance Women continue to be burdened by
Structures the debilitating impact of poverty and
the lingering economic crisis and out-
The fact that women remain politically migration among women remains
marginalized is both an indicator of their high, with many in service and
failure to advance as well as a reason domestic occupations. The challenge
for it (UNDP 2000). For the ability to remains for government to ensure
claim entitlements and exercise rights is that statutory mandates relating to
itself based on gender roles and relations gender and development concerns are
of unequal power. Womens gendered observed and implemented efficiently
interests (for example health needs, the and effectively by all concerned
raising of children, and the prevention of sectors.
domestic violence) cannot be interpreted
generically as the community or nations This assessment of governance and
common good but as issues arising the rule of law easily yields a wide-
from the specific inequality of power ranging and disparate set of issues
between men and women (Sever 2005).20 and concerns. How these challenges
These needs and deprivations cannot be are to be met and addressed requires a
addressed therefore without redressing governance framework and a plan of
gender inequality itself. action for the rule of law.
The Philippines has made some progress

in reducing gender inequality, particularly Strategic Framework
with the passage of RA 7192 or the Women In response to these challenges,
in Nation Building Act of 1992, which set this Plan aims to promote effective
forth the indispensable role of women and honest governance to create an
in all aspects of national development enabling environment for citizens
and asserted the fundamental equality of and the private sector to reach their
women and men. With the enactment of full potential. Effective and honest
the Magna Carta of Women (RA 9710) in governance will be promoted and
August 2009, the gender and development practised through the following four
(GAD) budget became a key institutional strategies:
mechanism to mainstream gender and
promote womens human rights, and 1. Ensure high-quality, efficient,
eliminate gender discrimination. The transparent, accountable, financially
same law requires monitoring and and physically accessible and
evaluation of GAD programs through nondiscriminatory delivery of public
annual audit by COA. service;
Major progress has been slow, however, 2. Curb both bureaucratic and
as seen in more recent international political corruption;
gender assessments. The Gender
Development Index in the 2009 Human 3. Strengthen the rule of law; and
Development Report of the UNDP
and the Country Gender Assessment 4. Enhance citizens access to
of the ADB in 2008 showed similar information and participation in
findings that the Philippines workforce governance.
continues to be dominated by males,
despite increasing numbers of women The delivery of public goods
having higher educational attainment. and services essential to citizens
20
The Gender, Poverty, Governance Nexus: Key issues and current debates, Charlie Sever, BRIDGE, September 2005

development will be enhanced in terms obligations shall be pursued to enhance
of physical and economic accessibility, the business and investment climate.
availability, acceptability, quality and
safety, and without discrimination. Citizens access to information and
This will be done by: (a) integrating participation in governance will be
services according to the needs of enhanced by creating space for free, active,
the citizens; (b) professionalizing voluntary and genuine participation
the bureaucracy as duty-bearers; in policy making, decision making
(c) enhancing the transparency and development planning. Towards
of government transactions; (d) this end, efforts will be focused on: (a)
making government focus on its pursuing the passage of the Freedom
core functions; (e) standardizing the of Information Bill; (b) ensuring open
quality of public service delivery; (f ) and transparent search process in the
devising a common measurement selection of appointees in independent
tool and methodology to solicit bodies; (c) promoting and implementing
citizens feedback; and (g) improving multisectoral NACPA programmes
the financial management system in and projects; and (d) ensuring budget
government. transparency.
Corruption will be curbed to ensure There will be an accessible and

that resources are effectively and transparent mechanism for redress and
efficiently used for priority public accountability, including fair, prompt and
goods and services. To achieve this, the immediate investigation of violation of
government will: (a) intensify efforts right to equal access to public service and
to detect and prevent corruption; (b) equal access to justice.
resolve pending corruption cases with
dispatch; (c) adopt a comprehensive Ensure High-Quality,
anticorruption program; (d) enhance Effective, Efficient,
the legal and policy framework for Transparent, Accountable,
corruption prevention; (e) strengthen
integrity mechanisms and control
Economically and
structures; (f ) enhance partnership Physically Accessible and
structures and mechanisms and Nondiscriminatory Delivery
international linkages; and (g) of Public Service
conduct anticorruption advocacy
campaigns. 1. Improve Public Services Access
and Delivery through Connected
The rule of law shall be reinforced Government
to ensure the impartial protection Citizens and their needs shall be the
of rights and enforcement of focus of government, particularly the
obligations. Policies will be delivery of public services and the publics
instituted to curb or discourage other transactions with government
influence-peddling. Disputes must (e.g., applications for birth certificates,
be impartially resolved based on facts passports, police clearances, and tax-
and existing laws, free from influence filing).
or pressure. The strict and impartial
enforcement of laws, rules and public Agencies need to overcome bureaucratic
policies will safeguard the rights turfing and fragmentation to deliver
of the citizens and will ensure that public services more efficiently, quickly,
public interest will be upheld at all and flexibly. Efforts must go beyond the
times. A swift and efficient system past desultory and sporadic efforts at
of resolving cases involving issues one-stop shops for certain transactions
of property rights and contractual and must give way to a systematic

horizontal integration of related services government service (based on
based on a studied assessments of the Competency Needs Assessment).The
flow of citizens needs. government should devise a more
comprehensive, programmatic
Government services should cluster and integrated HRD program to
around the business life-cycle (from start raise the level of professionalism,
up to closing of business) and the life- competence, commitment
cycle of citizens (from birth to death), and to service, and integrity of
establish corresponding single-window government personnel. This
service channels. medium-term strategy should
include an Induction Program
Government processes should be at entry level, Workplace Basics
reviewed, coordinated, and simplified for the rank and file, Functional
in order to reduce processing time and Competency Development
to make it easier for citizens to transact for specialists, Supervisory
with government. To achieve this, Development for supervisors,
government should use information and Executive Development and
communications technology (ICT) to Strategic Management for career
the fullest, to facilitate electronic access executives, Governance and
to public services. Virtual single-windows Public Leadership for senior
can be provided via the Internet by officials. To ensure progression
interconnecting online public services of and full coverage, a ladderized
government. Such virtual coordination HRD program should be
must be underpinned, however, by real established with certification and
coordination, information-sharing, and links to promotion. A percentage
cross-checking among various agencies of the government budget should
of government as citizens complete their ideally be set aside for the purpose.
transactions. This HRD program may be
implemented through the Civil
This should lead to the elimination of Service Academy. Human-rights
redundant and repetitive information education shall also be integrated
requirements in government forms, in the HRD program at all levels.
among others.
b) Pursue the passage of the Career
2. Professionalize the Bureaucracy to Executive System (CES) bill. The
become Duty-Bearers CES bill seeks to strengthen
Competence, professionalism, and professionalism in the executive
integrity in the civil service can be raised and managerial levels and in
if appointments are depoliticized, and a highly specialized and technical
purposive, program-based and integrated positions in the government. It
professional development for career identifies career and noncareer
executives and personnel is implemented. positions and provides transparent
This is in line with the vision of public performance-based promotions
service values, and thrust of the and appointments, balancing the
Philippine government, as captured in exercise of presidential appointing
the phrase Gawing lingkod-bayani ang power with the preservation of
bawat kawani. meritocracy in the civil service.
Its aim is a unified bureaucracy
a) Formulate a Strategic and Integrated in which the first, second and
HRD Program for the Philippine third levels are under the Civil
bureaucracy from entry to exit from Service Commission as the central
personnel agency.

c) Align individual performance force, forensics and medico-legal,
with organizational performance. legal services, and social work services.
Organizational and individual
performance goals must be 3. Enhance the Transparency of
aligned. Employees should Government-to-Business and
appreciate the significance of their Government-to-Citizen Transactions
contribution to their organizations a) Enforce full compliance with the
performance before they find provisions of the Anti-Red Tape Act
satisfaction in what they do. Thus, including the formulation, adoption and
the linkage and government- effective implementation of Citizens
wide implementation of the Charters in all government agencies
Organizational Performance and LGUs. In line with the Anti-
Indicators Framework (OPIF) and Red Tape Act (ARTA) of 2007 (RA
the Performance Management 9485), all government entities with
System (PMS) need to be frontline services shall have developed
pursued. This seeks to align the their Citizens Charter which serve
programs, projects and activities as a service charter or pledge that
of the departments or agencies describes the step-by-step procedure
with the desired objectives or for availing of a particular service, and
goals of the government, and the the guaranteed performance level that
individual performance goals with the public may expect for that service.
the organizations strategic vision Information such as procedures
and goals. This will also ensure to avail of the service, responsible
organizational effectiveness person/office, processing time,
by cascading institutional documentary requirements, applicable
accountabilities to the various fees or charges, and procedures for
levels of the organizations filing complaints are reflected in the
hierarchy, and have a performance CC. Despite the September 2009
management linked to rewards deadline set by ARTA, more than a
and incentives, among others. thousand entities, particularly local
governments, still have to comply with
The PMS of the government the law. ARTA mandates the review
institutions shall be reviewed and reengineering of frontline services
and reformulated to establish to cut red tape and enhance efficiency,
clear performance objectives transparency, and accountability in the
and standards and to promote a delivery of public services. It requires
culture where the performance the formulation and publication of
and contribution of the employees CCs and the establishment of Public
are recognized and rewarded Assistance Desks to receive feedback
accurately and fairly. The Balanced and handle complaints from the
Scorecard is one PMS platform or transacting public. In order to remain
approach that has been proven to responsive to the need of citizens,
create an effective alignment. agencies must continually improve
their systems and standards through
d) Pursue the effective implementation the publication and implementation
of the Magna Carta of Women, of Citizens Charters, Citizens
particularly the targeting of 50 Feedback Surveys, and Transactions
percent of women in third level Reengineering.
positions. All concerned agencies
of government should ensure b) Create a single website/portal for
that there shall be an incremental government information. To facilitate
increase in the recruitment and access to government information and
training of women in the police services, a common website/portal

should be established where citizens of law-abiding citizens and
can obtain vital information and organizations against potential
services from different government abuses of governments police
agencies. This portal should also serve and intelligence-gathering
as a channel for citizens to report powers (already partly affirmed
incidents or provide feedback on the through the writ of amparo). A
performance of government agencies, future law must stipulate how
including complaints against erring these aims are to be achieved
officials and employees. maximally while recognizing the
states legitimate right to reserve
LGUs must develop and expand information affecting national
the e-governance services available security.
on their websites, from providing
general information to discharging 4. Focus Government Efforts on
routine transactions, and encourage its Vital Functions and Eliminate
transparency by making information Redundancies, and Overlaps in
Functions and Operations
on budgets and procurement
available. A common basic template a) Complete the implementation of the
should be followed by all LGUs Rationalization Program (RP). The
so that a minimum set of common completion of the implementation
information and services is provided of the RP, as mandated under
on their portals. EO 366, s. 2004, will be pursued
to: focus efforts on governments
The government will set up a vital/core functions and priority
communication plan. Through programs and projects, and
faster communications technology, channel resources to these core
bureaucracies must be able to public services; and improve
adopt and evolve into listening and service delivery by cutting red tape
communicating organizations. Press through systems and organizational
officers and official spokespersons will improvements, and elimination
be adequately equipped to counter of redundancies and overlaps in
negative or malicious information functions and operations. In
and to constructively engage media transforming the Executive
partners. A simple yet comprehensive Branch, government offices need
communication plan is a cornerstone to complete a strategic review of
of getting the message of governance their respective operations and
across. organization and implement their
RP upon approval of the DBM.
c) Pursue the passage of a Freedom of
Information Act. A law on freedom b) Institute zero-based budgeting
of information is a cornerstone (ZBB) in program evaluation.
of transparent and accountable To attain the administrations
governance. Its intent is to provide commitment to lift the nation
the citizenry, especially media, with from poverty, instituting ZBB
access to information pertaining to approach to program evaluation is
all transactions and communications vital. The ZBB approach involves
that are of legitimate public interest. the review of ongoing major
Its existence should encourage programs and projects by different
probity and prudence in all national offices in order to: (a) establish the
and local government negotiations continued relevance of program
relating to loans, treaties, service objectives given the current
contracts, and similar transactions. It developments; (b) assess whether
also seeks to protect the civil rights or not the program objectives

are being achieved; (c) ascertain GQMP. In the pursuit of this program,
alternative or more effective and the ISO 9001:2008 QMS shall be
efficient ways of achieving the adopted in the delivery of priority
objectives; and (d) guide decision- government services.
makers on whether or not the
resources for the programs should b) Refine the Government Quality
continue at its present level, or be Management Systems Standards
increased, reduced or discontinued. (GQMSS) to become consistent with
ISO 9001:2008 QMS for the use of the
Under this initiative, government different departments and agencies of
shall terminate or cut back on the Executive Branch. The GQMSS
programs that have been inefficient consistent with ISO 9001:2008
or ineffective in delivering QMS shall likewise be refined
outcomes, or withhold funding for the use of different Executive
for others pending reforms in Branch departments and agencies.
implementation and procurement. QMS processes shall be installed
More importantly, it allows the in certain critical government-to-
expansion of the implementation business, government-to-citizens,
of the well-performing programs LGU-to-business, LGU-to-citizen,
that address critical gaps. and government-to-government
transactions.
c) Review the extent of devolution
of services to LGUs. The extent c) Activate Quality Class category of the
of power devolution as well PQA for the Public Sector. The PQA
as the transfer of assets and for the Public Sector (mandated per
resources to local governments RA 9013) provides a framework for
from national government public service excellence. Global
agencies in consonance with benchmarks on public service
the Local Government Code excellence like Canada, Singapore,
shall be reviewed. The review and even Malaysia, succeeded in
must yield appropriate policy building a culture of service excellence
recommendations to eliminate through the wide-scale adoption of
confusing or unnecessary overlaps business excellence models such as
in the service-delivery functions the PQA. The PQA Quality Class
across levels of government. will encourage self-assessment vis-a-
vis the PQA performance excellence
5. Enhance and Standardize the framework and promote improvement
Quality of Public Service Delivery of processes to achieve excellence in
to become Consistent with the public service delivery. This will boost
International Organization for
Standardization (ISO) Quality the countrys competitiveness.
Management System (QMS) 6. Citizen-Centered Government
a) Adopt the ISO 9001:2008 The bottom line for government is the
QMS in the delivery of priority welfare and satisfaction of its citizens.
government services. Government Government shall devise a common
processes, systems, and operations measuring tool and methodology to solicit
shall be made consistent with feedback from the citizens and determine
the ISO QMS through the their requirements. A National Citizen
continual institutionalization Satisfaction Index (NCIS) should be
of the Government Quality developed that will serve as common
Management Program (GQMP) measuring tool of efficiency, effectiveness,
in all departments and agencies of accessibility, integrity, transparency and
government, spearheaded by the

accountability of government agencies in recommendations will be provided
the delivery of public services. to ensure that LGU needs are
met and there is no reversal of
7. Improve the Financial Management decentralization.
System in Government
a) Develop a Government Integrated Efforts to enhance the capacities
Financial Management Information of LGUs shall be intensified to
System (GIFMIS). A vital reform improve their ability to deliver
initiative is the strengthening of public services. The capacity
the public financial management needs of LGUs shall be identified
(PFM) system. PFM is a system of and appropriate interventions
rules, procedures and practices for provided. Knowledge management
government to manage its public activities, including the sharing of
finances. PFM includes not only good practices in local governance,
sound budgeting but also management shall be undertaken to enhance
of public debt, assets, and revenues, information-sharing among
fiscal relations between levels of localities and help improve LGU
government or between government performance.
and public enterprises, and a system
of public reporting on the public c) Enhance LGU accountability
sectors financial operations. mechanisms. Improved
accountability of local officials
A major undertaking will be the induces responsible leadership
development and installation of a and ensures that efficient and
GIFMIS, an application that shall responsive services are delivered.
automate routine financial operations In promoting local government
and reporting of the national accountability, the following
government, particularly financial strategies shall be undertaken:
planning and budgeting, treasury,
and accounting functions. The Implementation of systems
GIFMIS will link budget preparation to determine performance
and execution to accounting, of LGUs in terms of their
cash management, reporting, and state of local governance and
auditing. Once installed, it will compliance with policies;
enable the government to implement
improved systems for public financial Public disclosure of LGU
management. performance; and
b) Empower LGUs and promote public Institution of performance-

accountability. Policy reforms based LGU incentives or
to advance local autonomy and awards.
decentralization shall be pursued.
Service delivery functions have been Curb Corruption Decisively
vested in LGUs on the premise that
they would respond better to diverse A comprehensive and integrated
and changing local conditions, and Anticorruption Framework and
thus more effectively meet the needs Program will be an essential part of the
of their constituents. Emerging administrations commitment to fight
issues and needs of LGUs related corruption. This framework shall be
to their devolved service delivery the anchor of the strategic objectives
functions shall be continuously identified in this section and provide
identified. Proposed legislation shall focus and direction in achieving the
likewise be reviewed and appropriate vision that the administration has

committed for its people. It will The legal and policy framework
contain key result packages with the for corruption prevention will be
corresponding set of anticorruption enhanced through compliance with
projects and implementation the United Nations Convention
mechanisms to ensure success. As a against Corruption (UNCAC)
starting point, a comprehensive and and other international standards.
integrated anticorruption program Anticorruption advocacy campaigns
will be established for the prosecution will be conducted through the
of corrupt officials, beginning rollout of an integrated integrity and
with case build-up all the way up anticorruption promotion program.
to conviction, including ancillary This will also include monitoring in
remedies (i.e., freezing of assets) and the implementation of anticorruption
recovery of property. Corrupt officials programs, projects and activities;
shall be prosecuted and dismissed,
with the highest priority accorded to c) Strengthen information-exchange
high-profile cases. among all government agencies to prevent
corruption and private-public sector
1. Intensify Corruption Prevention collusion. Data possessed by revenue
a) Honestly reassess the progress, agencies, line agencies involved in
priorities, and capacities of the contracting (e.g., DPWH, DOTC),
main anticorruption agencies. All local governments (residences and
government agencies involved business permits), and the AMLAC,
in anticorruption efforts, can be potentially assembled and
beginning with the Office of the mined to build anticorruption
Ombudsman, need to reexamine cases based on lifestyle-checks and
whether their track records match possibly fraudulent tax returns. The
public expectations and the scale availability of such information
of the problem of corruption. serves as a powerful deterrent against
Shortfalls and inadequacies in corruption involving collusion
personnel and strategies must be between private persons and public
urgently addressed if any further officials;
progress is to be made. The results
of such reassessments should be d) Support private sector initiatives to
made public in the interest of police its own ranks and discourage
transparency; corrupt relations with government
agencies in revenue collection and
b) Strictly enforce and observe procurement. The Compliance and
anticorruption laws and policies. Integrity Programs for Business
These include the Anti- (CIPB) are an initiative of the Joint
Graft and Corrupt Practices Foreign Chambers of the Philippines
Act; the Anti-Red Tape Act; to ensure the pledge of their members
National Guidelines on Internal not to bribe public officials, to report
Control System (NGICS); corruption, and to embed standard
the Procurement law (RA corporate practice. The private sector
9184); mandatory provisions of has also committed to intensify
UNCAC; the Code of Conduct its efforts to improve corporate
and Ethical Standards for Public governance through training of
Officials and Employees (RA directors and requiring compliance
6713); and the Anti-Money with higher standards of corporate
Laundering Act (AMLA). governance;

e) Implement fundamental reforms in large service-organizations such
public procurement and in budget as the military and the police;
releases to close off opportunities for
corruption and to promote transparency, Prevent the conversion of
competition, and cost-effectiveness MOOE and CO outlays by
through the following measures: standardizing and disclosing
MOOE and CO requirements
Roll out an enhanced Philippine including those of military
Government Electronic Procurement camps and other facilities;
System (PhilGEPS) in order to
minimize discretion and intervention Conduct technical visits to
in procurement. The new PhilGEPS validate the budgetary status of
features shall include: (a) a virtual programs, projects and activities;
store; (b) an expanded supplier
registry; (c) an electronic payment f ) Invite the participation and
facility; (d) a facility for electronic scrutiny of CSOs and individual
bid submissions to the virtual store; citizens with respect to government
and (e) annual procurement plans; performance through institutional
means and through the provision
Expand the use of the PhilGEPS of information. This will cover the
E-Bidding system to improve following measures:
the efficiency and transparency of
government agencies procurement Expand the pool of CSOs that
activities, government contracts, serve as observers in the bids
and other procurement related and awards committees (BACs)
electronic transactions, thereby of various agencies to ensure
reducing spending on print media civil society representation;
advertisements;
Invite the regular participation
Review the guidelines for blacklisting of citizen groups in the
unscrupulous contractors and budget-preparation process
suppliers. The Government for the evaluation of existing
Procurement Policy Board (GPPB) government programs and for
shall streamline procedures and them to provide inputs to ZBB;
strengthen policies to facilitate and
the collection and presentation of
evidence of bid-rigging, overpricing, Make available to the public
and underprovision against corrupt the accountability reports of all
contractors and suppliers for agencies, including the DND
blacklisting; and the AFP, on the DBM
website.
Create an independent body to
review appeals filed by bidders. An g) Empower citizens to directly
independent body, composed of and confidentially report either
procurement and legal experts shall exemplary performance or corrupt
be formed by the GPPB to review practices of employees through
and resolve protests and appeals filed dedicated portals, such as the DOFs
by participating bidders; Pera ng Bayan website (http://
perangbayan.com), which also
Prevent the diversion of unspent entertains information regarding
funds from vacated positions by tax evaders and smugglers.
releasing PS allotments only for filled
positions, with special attention to

2. Speedy Resolution of Corruption d) Amend the COA Charter to provide
Cases, with Special Cases of Grand for the recovery of illegally-disbursed
Corruption
public funds. The COA Charter21
Laws and rules provide reglementary amendments must solve the problem
periods to be observed in the filing of issuance of writ of execution
and prosecution of corruption cases. of decisions rendered final and
The strict observance of these rules executory by the Supreme Court in
will highly contribute to the speedy cases on notice of disallowances for
resolution of corruption cases and illegal or irregular disbursements or
serve as a deterrent and a proof of notice of charge for under collection
the governments sincerity in its or underassessment of revenues
commitment to fight corruption. applying to natural or juridical
persons. Under the Constitution,
a) Review policies and procedures on COA decisions are directly
speedy disposition of cases. Courts appealable to the Supreme Court.
are required to submit their However, the COA Charter, Rules
decisions within 90-calendar of Procedures and other issuances do
days from the time the case was not contain any provision on how to
submitted for resolution. This execute these decisions and collect
period excludes litigation proper COA disallowances and charges
where delays are common. Thus, from private persons or entities.
it is suggested that a review of Alternatively, Supreme Court
existing laws and rules be done to rules of procedures in execution of
address the problem; judgments on COA appealed cases
may be reviewed;
b) Strictly implement the reglementary
period provided for by laws and e) Nationwide implementation of the
rules for the immediate resolution of case tracking monitoring system. All
administrative and corruption cases. justice sector agencies should be
After the policies and procedures interconnected through the National
on the speedy disposition of cases Justice Information System;
has been reviewed and improved,
strict compliance with the periods f ) Pursue the enactment of a Whistleblower
set forth by laws and rules must Protection Law. A credible means to
be ensured; protect key informants is urgent,
particularly when the impartiality of
c) Pursue corruption cases resolutely judicial and law enforcement agents
based on principle and to set a public is in question; and
example. Especially in well-
known cases of grand corruption, g) Pursue the enactment of a law on
the government shall use all campaign finance reform regulating
instrumentalities to ensure campaign contributions. There
that solid evidence is gathered, should be a law limiting campaign
prepared, and preserved so that contributions. Unregulated
cases are not compromised but campaign funds often results in the
rather pursued in accordance corrupting influence of campaign
with the full force of the law. As contributors to an elected candidate.
a result, this may serve as serious Current election laws impose limits
deterrents to future grafters; on the amount and type of campaign
21
P.D. No. 1445, Government Auditing Code of the Philippines.

expenditures, and candidates are a) Expand the Integrity Development
required to report all contributions Review;
but there is nothing that regulates
the excess contribution. b) Institute a public reporting
mechanism on adherence to
3. Adopt a Comprehensive anticorruption policies. This
Anticorruption Program will be achieved by creating an
The tedious process of getting a final independent joint NG and NGO
resolution is a major obstacle to people Committee with appropriate
filing complaints against corruption. A human capital and financial
single window for filing and monitoring support; and
corruption cases, lodged in a credible
agency, will encourage people to file c) Execute memoranda of agreement
complaints against erring officials and for partnerships in transparency and
employees, and eventually help curtail accountability in LGUs. Parties to
corruption. This will also promote the these memoranda should include
seamless coordination of investigation, LGUs themselves, national
prosecution and other bodies in the government agencies and CSOs.
expeditious resolution of corruption cases.
6. Enhance Partnership Structures
a) Review rules of procedure on and Mechanisms and International
administrative/civil/criminal actions Linkages
on corruption-related cases. Due to a) Expand CSO and private sector
the relatively low conviction rate in participation in the Multi-Sectoral
corruption cases, existing procedures Anticorruption Council (MSACC);
should be reviewed and evaluated
to determine the need for further b) Strengthen interagency coordination;
refinements in the procedures and
applicable to corruption-related cases
and make them more effective; and c) Comply with international and
regional commitments (e.g.,
b) Review policies and procedures on case UNCAC, ADB-OECD
monitoring and records management. Anticorruption Initiative for
Existing policies and procedures Asia and the Pacific, APEC
for monitoring of cases and records Anticorruption Plan of Action).
management should be reviewed
and, if necessary, revised to adapt to 7. Conduct anticorruption advocacy
the present condition. Monitoring of campaigns
cases from filing up to the execution a) Roll-out an integrated promotion
of decisions/judgments is important program for integrity and against
to verify if justice has been fully anticorruption;
served.
b) Enhance values formation and moral
4. Enhance the Legal and Policy recovery for all government officials
Framework for Corruption Prevention and employees in close collaboration
Comply with the UNCAC on corruption with CSOs; and
prevention and other international
standards. c) Wage a massive educational
campaign on the law, rules,
5. Strengthen Integrity Mechanisms and regulations relating to good
and Control Structures governance.

Strengthen the Rule of Law dramatically. A greater availability
of science-based evidence from
The strict implementation of the rule law enforcers can only enhance the
of law indicates the governments quality of final judicial outcomes.
seriousness in carrying out its This will be attained through the
responsibilities and obligations in establishment of world-class forensic
a democratic environment, while laboratories in major regional centers
extracting from the citizens the needed and cities;
cooperation through compliance with
existing laws and public policies. b) Rules for preliminary investigation
reviewed and codified. The rules on
1. Strengthen the Oversight Bodies preliminary investigation shall be
a) Expand OMB powers. The powers restudied and codified to consider
of the OMB shall be expanded the expeditious resolution of cases;
to include examination of bank
accounts, and the establishment c) Establish policy and guidelines in
of witness protection and benefits the determination of probable cause.
program under the office. The The policy and guidelines on the
compensation and benefits for elements and parameters of probable
OMB employees themselves cause should be issued based on
should likewise be enhanced, laws and jurisprudence to avoid the
specifically, their exemption frivolous filing of cases and to reduce
from the salary standardization the currently high rate of dismissed
law, ranking, retirement benefits cases. In this way, courts can focus
(survivorship), and special on resolving high-impact cases while
allowances for lawyers; and avoiding delays;
b) Pursue the passage of a charter for d) Strictly implement the reglementary

the Commission on Human Rights period provided for by the rules for
(CHR). Enable CHR to perform the resolution of cases. Timelines
its comprehensive monitoring in the disposition of cases should
function independently,which will be defined, strictly monitored and
contribute to the strengthening complied with. Delayed resolution
of the rule of law, government of cases does not only wastes limited
accountability and transparency. government resources but also harms
Examining performance of the interest of all parties involved in
the executive, legislative and the dispute;
judicial, and other government
functions against international e) Establish a case-monitoring system
norms and standards will lead to covering the entire justice system.
reforms and changes in policies, A justice system infrastructure
programs, and actions consistent should be established to be able
with international human rights to comprehensively monitor the
instruments. progress of cases from one agency to
another. The system will interconnect
2. Effective and Speedy Resolution existing case-monitoring systems
of Cases in Courts and Quasi- for efficient and effective case
Judicial Bodies management such as the Warrant
a) Improve investigative abilities of Arrest Information System
of law enforcement agencies. The (WAIS) of the PNP; the CDIS of
investigative capacity of law the NBI; the electronic Prosecution
enforcement units, especially Case Management of the DOJ; the
the NBI, needs to be raised Judiciary Case Management System

( JCMS) of the Supreme Court; and laws, and public interest. The
the Inmate Information System issuance of legal opinions by the
of the Bureau of Corrections, the Legal Staff and the Office of the
Board of Pardons and Parole, and the Government Corporate Counsel
Parole and Probation Administration. of the DOJ should be free from
An effective monitoring system political interference and should
enforces accountability among service be reviewed in accordance with
providers and thus encourage them to domestic laws and public policies;
resolve their cases within the timelines and
provided by existing rules; and
b) Review and ensure that FTAs are
f ) Complete APJR projects on docket consistent with national laws and
decongestion and judicial systems and public interest. These FTAs will be
procedures. The Supreme Court must disseminated through a massive
complete its APJR project on docket information campaign.
decongestion and judicial systems
and procedures, e.g., the Expansion 5. Enhance the Integrity and
of Court-Annexed Mediation; Competence of Justices, Judges,
Expansion of e-JOW ( Justice on Court Personnel and all other Officers
of the Judiciary and Quasi-Judicial
Wheels Project); diminish caseload Bodies
for each Court of Appeals (CA)
Justice (Zero Backlog Project); To reaffirm the peoples faith in the
nationwide implementation of the judiciary, there is a need to enhance the
Enhanced Case Flow Management integrity and competence of justices,
(eCFM) System which monitors judges, court personnel and all other
the status of the cases to see whether officers of the judiciary and quasi-
they are proceeding as scheduled; judicial bodies by:
full computerization of courts from
Bangued, Abra to Tacurong, Sultan a) Weeding out the undesirables, both
Kudarat; Pending integration of from the Bench and the Bar. To
eCFM with Court Administration maintain public confidence in
Management Information System the competence and integrity
(CAMIS); full coordination of all of members of the judiciary, the
three CMIS stations of the CA; government will intensify its efforts
capacity building to enable electronic to weed out misfit and undesirable
filing; Enhancement and expansion of officials and personnel who fail to
the Case Management Information uphold the dignity and integrity of
System (CMIS) project. the legal profession;
3. Reduce the Cost of Litigation b) Continuing the Court Cleansing
a) Study the reduction of filing fees for cases; Initiative. The continuance of
and the court cleansing initiative will
further strengthen the integrity of
b) Adopt a standard format of transcript the judiciary and hopefully achieve
of stenographic notes (TSNs) to reduce an ethical judiciary that is above
the cost of litigation. This reduces the suspicion as envisioned by the
discretion of stenographers in the Supreme Court;
length of the transcripts.
c) Strengthening the Integrity of
4. Avoid Law Suits Involving the Judiciary and the Integrity
Government Contracts Development Review. Besides
a) Government contracts should be consistent adjudicating cases and
with international instruments, existing promulgating rules, the Supreme

Court also has the power of maintain a competent workforce in
administrative supervision over government service.
all courts and their personnel,
including the power to take 6. Increase Resources for Justice Sector
disciplinary action against them Agencies and Quasi-Judicial Bodies
when warranted. (CONST., Art. a) Renew efforts to address the human
VIII, sec. 6). In 2009, it disciplined capital shortage. A proactive and
66 Regional Trial Court judges; enhanced recruitment program shall
27 Metropolitan Trial Court, be developed to attract brilliant young
Municipal Trial Court in Cities, lawyers to justice sector agencies;
Municipal Trial Court, and
Municipal Circuit Trial Court b) Implement continued capacity-building
judges; and 181 first and second- and updating of skills of law enforcers,
level court personnel. Nor has prosecutors, public defenders and judges,
the Supreme Court spared the and corrections officers. The government
rod in its own ranks. In 2009 it will complement the continued influx
administratively disciplined 19 of knowledge and information with
SC employees and dropped three a sturdy policy of skills-enhancement
others from the roll for being and capacity-building of the members
absent without leave. of our law enforcement units and the
justice sector; and
In an unprecedented and
unanimous per curiam decision, c) Modernize and upgrade facilities for law
the Supreme Court also imposed enforcers such as the PNP and the NBI
a PhP500,000 fine on a retired crime laboratories, forensic investigation
SC justice for grave misconduct facilities and equipment. Improve
for leaking a confidential internal capacities of prosecutors and law
document of the Court (AM No. enforcers particularly NBI agents in
09-2-19-SC, In Re: Undated the investigation and prosecution of
Letter of Mr. Louis C. Biraogo, special cases involving economic or
February 24, 2009). white-collar crimes such as money
laundering, tax evasion, smuggling,
The SC has also disciplined 129 human trafficking, violations of
members of the Bar for various intellectual property rights and
administrative offenses. In response antitrust laws, illegal drugs and even
to the pervasive drug menace, it cases involving extralegal killings and
has approved mandatory drug other human rights violations as well
testing for all Judiciary employees as violation of environmental laws.
as recommended by its Committee
on Security (AM No. 09-3013- 7. Improve Access to Justice of All
SC, Mandatory Drug Testing of Sectors of Society particularly the
All Supreme Court Employees, Vulnerable Groups
March 24, 2009. Information Citizens should be made aware of their
lifted from the 2009 Supreme fundamental rights and be taught on
Court Annual Report); and how to access the services of government
institutions involved in justice delivery
d) Strictly implement agency-specific when their rights are violated or when the
Codes of Conduct for law enforcers, enforcement of these rights are sought.
prosecutors and judges. The specific This is the essence of democracy and good
administrative rules of conduct and governance when people are empowered
behavior for various government to exercise their rights and attain the
agencies will be strictly enforced to progressive fulfilment of their needs.

a) Make full use of the services of government a) Disseminate information on ADR.
lawyers by deputizing them. Lawyers ADR will also develop potential
employed in various government active citizens participation since
agencies and instrumentalities will be most ADR institutions are private-
imbued with the necessary authority to led. They promote the culture of
defend public interests in congruence peaceful negotiation and resolution
with the functions of the OSG; of disputes by discouraging the
adversarial manner of resolving
b) Provide tax credits for lawyers conflicts such as court litigation;
representing IPs and other vulnerable
groups. Tax incentives will be provided b) Strengthen and support institutions
for lawyers representing societys involving ADR. Efforts should be
vulnerable groups to encourage them stepped up to communicate and
to render adequate legal assistance and disseminate information about
at the same time, promote equal access ADR as well as strengthen and
in the justice system; support institutions involved;
c) Strengthen the Katarungang c) Strengthen DOJ-OADR. The

Pambarangay Law to resolve cases at Office of Alternative Dispute
the local level. The strengthening of Resolution (OADR), an agency
the Katarungang Pambarangay Law recently created under the DOJ,
will result in the speedy resolution of shall be strengthened to be able
cases at the local level without going to monitor and assess existing
through the rigors of court processes. ADR mechanisms in the country
This will substantially improve the and ensure that ADR programs
delivery of justice and facilitate the conform with international
declogging of court dockets; and standards and best practices. With
an effective and efficient ADR
d) Conduct training among judges, court mechanism in place, the country
personnel, prosecutors, public defenders can join countries like Singapore
and other pillars of the justice system in as an arbitration hub in the region;
handling gender-sensitive cases, especially and
those involving violence against women
and children (VAWC). d) Establishment of prosecution-
level mediation. Resolving cases
8. Promote the Use of Alternative subject to ADR can help declog
Dispute Resolution (ADR) prosecution and court dockets
The government shall encourage and as cases will be resolved before
actively promote the use of ADR. information is filed in court.
Resorting to ADR could help decongest
both court and prosecution dockets of 9. Institutionalize Existing Justice
cases which may be subject of ADR and Sector Coordinating Mechanisms
allow the courts and the prosecution Justice sector coordinating mechanisms
to dedicate their resources in resolving such as the Judiciary, Executive and
equally important cases brought before Legislative Advisory & Consultative
them. It will also spare both the parties Council ( JELACC) and the Justice
and the government from litigation costs Sector Coordinating Council ( JSCC)
and the tedious judicial and administrative shall be institutionalized.
processes thus helping the parties achieve
speedy and impartial justice.

The JELACC serves as a forum for the 4. Promote and Implement the NACPA
discussion of issues relating to resource In order to push forward the national
needs, recognizing the fact that anticorruption agenda and contribute
there is a need to dialogue on cross- towards the attainment of sustainable and
cutting issues relating to justice sector inclusive growth, the OMB and its partners
performance. from the MSACC, should continue
to pursue its priority programmes and
On the other hand, the JSCC, which projects under the NACPA. These include
is composed of the Supreme Court, the enhancement of the anticorruption
DOJ, DILG, PNP, BJMP and the legislative framework and local policies,
DBM, is another forum for dialogue adoption and customization of the APEC
and preparation of joint justice sector Code of Conduct for Business, integrity
reform programs and initiatives. development review of LGUs, capacity-
building on the UNCAC, anticorruption
Enhance Citizens Access workshops for professional groups,
to Information and including engineers and accounts, for
Participation in Governance assistance in case build-up and prosecution.
1. Pursue the Passage of the Freedom 5. Intensify Peoples Engagement in

of Information Bill Local Governance
Increasing participation of CSOs in
The Freedom of Information Bill is local development processes reinforces
intended to give the citizenry access to responsiveness and accountability
information by allowing full disclosure among local officials. Local governments
of all transactions which are of public will therefore be encouraged to create
interest. It aims to institute transparency opportunities for citizens to continuously
in the national and local governments engage with them in an inclusionary and
undertakings relative to loans, treaties, participatory manner. Representation
contacts and other similar transactions. of CSOs in the Local Special Bodies in
accordance with the Local Government
2. Issue an Executive-Wide Policy Code will be strictly enforced. Likewise,
on Public Access to Information the forging of LGU-CSO/Private
Pending the Passing of the Right to Sector partnership will be promoted. By
Information Act
collaborating with CSOs and the private
3. Ensure Open and Transparent sector in the implementation of local
Search Process in the Selection governments development projects, not
of Appointees in Constitutional only are financial resources shared, but
Commissions, Regulatory Bodies and also knowledge and experiences, which
other Independent Bodies (e.g., CSC, increases the chances for local development.
CHR, JBC etc.)
6. Ensure Budget Transparency
A credible multisectoral committee a) Mandatory publication in agency
should be engaged in the nomination or department websites of major
and appointment of members of information on budgets, finance, and
constitutional commissions, regulatory performance indicators. A strategic
bodies, independent commissions and program to restore public trust and to
other oversight bodies. The criteria for enhance disbursement of funds and
the selection, the candidates and their their utilization is the establishment
qualifications and those endorsing of transparency and accountability
them, should be made public. The requirements in the budget. Specific
feedback of the public should also be budget provisions shall require DBM
considered. and other agencies to publish in their
websites detailed information on the

allocation, disbursement and status of A communication and advocacy
programs and projects, including the plan will be developed to ensure
following: that all stakeholders understand
the budget process and pertinent
approved budgets; budgetary information. Training
performance measures and targets; will also be conducted to facilitate
major programs/projects a fuller understanding of budget
implemented/to be pursued; documents among legislators and
annual procurement plan; legislative staff. Finally, a healthy
contracts awarded and the name of relationship between government
contractors/suppliers/consultants; and media shall be maintained
targeted and actual beneficiaries; to ensure continuous public
status of implementation and discussion regarding governments
fund utilization; and programs and projects.
program/project evaluation and/
or assessment reports; 7. Full Disclosure of Local Budget
and Finances, and Bids and Public
b) Posting of fund releases on the DBM Offerings
website. Information technology will The declared policy of promoting good
be leveraged to achieve transparency local governance calls for the posting
and accountability. This facilitates the of budgets, expenditures, contracts and
process of fund release and strengthens loans, and procurement plans of LGUs
security while promoting transparency in conspicuous places within public
and accountability. Fund releases (e.g., buildings in the locality, on the web,
congressional allocations chargeable and in print media with local or general
against priority development circulation, specifically including the
assistance fund, financial assistance to following:
LGUs, school building program, and
internal revenue allotment) and other annual budgets;
pertinent budgetary releases shall be quarterly statements of cash
posted on the DBM website; and flows;
statements of receipts and
c) Constructively engaging CSOs in the expenditures;
budget process.The involvement of CSOs trust fund (PDAF) utilization;
in the budget process is being pursued Special Education Fund
to institutionalize greater transparency utilization;
and accountability in government and utilization of the 20
enhance participatory governance. The percent Development Fund
government and concerned CSOs component of the IRA;
shall have a constructive engagement Gender and Development
to advocate good governance in Fund Utilization;
the government budgeting process. statement of debt service;
This partnership aims to promote annual procurement plan and
transparency, accountability, and procurement list;
public participation in the preparation, items to bid;
authorization, execution and bid results on civil works and
monitoring of the national budget. goods and services; and
This effort allows the public full access abstract of bids as calculated.
to government budget information,
thereby increasing their capacity to
understand the budget process and
analyze its policy implications.

Prenatal checkup at Brgy. San Antonio Health Center
Photo courtesy of: Brgy. San Antonio, Pasig City
08 Social
Development
Social Development 231
Social Development
Social development has improved the access of Filipinos to quality basic social
service delivery in education, training and culture; health and nutrition; population
and development; housing; social protection; and asset reform. The country is on
track in pursuing the Millennium Development Goals (MDGs) on poverty, gender
and equality, child health, disease control and sanitation. However, the country
lags in achieving universal primary education, improving maternal health, and
combating HIV/AIDS. Moreover, large discrepancies across regions need to be
addressed by the social development sector in the next six years.
The social development sector shall focus on ensuring an enabling policy

environment for inclusive growth, poverty reduction, convergence of service
delivery, maximized synergies and active multistakeholder participation. Priority
strategies include: (a) attaining the MDGs; (b) providing direct conditional cash
transfers (CCT) to the poor; (c) achieving universal coverage in health and basic
education; (d) adopting the community-driven development (CDD) approach; (e)
converging social protection programs for priority beneficiaries and target areas;
(f) accelerating asset reform; (g) mainstreaming climate change adaptation and
disaster risk reduction in social development; (h) mainstreaming gender and
development; (i) strengthening civil society-basic sector participation and public-
private partnership; (j) adopting volunteerism; and (k) developing and enhancing
competence of the bureaucracy and institutions.
The Plan translates the Presidents Social Contract with the Filipinos in ensuring
inclusive growth and equitable access to quality basic social services, especially
by the poor and vulnerable.
Assessment and health, and combating HIV/AIDS.

Moreover, large discrepancies across
Challenges regions need to be addressed in the
next six years.
Assessment
The poverty incidence of families
The social development sector has slightly decreased from 21.1 percent in
generally shown improved access to 2006 to 20.9 percent in 2009, or from
quality service delivery in health, nutrition 26.4 percent of the population in 2006
and population; education, training and to 26.5 percent in 2009. However, this
culture; housing; social protection; and improvement is limited, considering
asset reform efforts and initiatives. The the slow growth of incomes, increase in
Philippines is on track in meeting the household formation, natural disasters
MDGs on food poverty, gender equality and inflationary pressures mainly from
in education, child mortality, malaria, rising fuel and food prices. In 2009,
tuberculosis, and access to sanitary more than a quarter of the 23.1 million
toilet facilities (Annex 8.1). However, poor Filipinos lived in four regions
the country lags in achieving universal (Annex 8.2). While only one-third of
primary education, improving maternal poor Filipinos came from Mindanao,

Figure 8.1 Poverty Incidence in Southeast Asia
Poverty Incidence (in %)
Source: ADB, 2009

more than half of the provinces in the income are Regions 7, 8, 9, 10 and 13
bottom cluster are located in the island (CARAGA), as these regions have Gini
group (Annex 8.3). This situation can ratios higher than 0.45 (Annex 8.4).
be attributed to the armed conflict and
unsettled peace and order situation. Trends in the Human Development Index
(HDI)2 showed slight improvements. The
Using the US$1.25-a-day poverty HDI for the Philippines rose from 0.744
threshold (at 2005 prices), the in 2005 to 0.751 in 2007, placing the
Philippines, with a headcount poverty country in the medium-HDI category
index of 22.6 percent (adjusted for (i.e., HDI values between 0.50 and 0.80).
2005 purchasing power parity), ranked The Philippines ranked 105th among 182
better than Cambodia (40.2%), Lao countries. However, the countrys Gender
PDR (35.7%) and Vietnam (22.8%), Development Index (GDI) decreased
but trailed behind Indonesia (21.4%), from 0.768 in 2005 to 0.748 in 2007.
Malaysia (0.5%) and Thailand (0.4%) Likewise, the Gender Empowerment
(Figure 8.1). Measure (GEM) fell from 0.590 in
2005 to 0.560 in 2007 (United Nations
Income inequality remains high. The Development Programme, 2007, 2009).
Gini concentration ratios1 showed
only slight and slow improvements, Income gap3, poverty gap4, and severity
from 0.4605 in 2003 to 0.4580 in of poverty5 varied in a narrow range from
2006 and 0.4484 in 2009. The regions 2006 to 2009. In 2009, Region 9 recorded
with the most unequally distributed the highest income gap at 30.8 percent,
1
The Gini concentration ratio measures the inequality in income distribution, where zero means perfect equality
and a value of 1 implies perfect inequality.
2
The HDI measures quality of life or wellbeing in terms of health, education and income.
3
Income gap refers to the average income shortfall expressed as a proportion to the poverty line of families with
income below the poverty threshold.
4
Poverty gap is the total income shortfall of families with income below the poverty threshold, divided by the
number of families.
5
Severity of poverty measure is the total of the squared income shortfall of families with income below the
poverty threshold, divided by the total number of families.

Figure 8.2 Share of Social Services in Total National Government Expenditures
Percentage Share
Year
Source: DBM
with National Capital Region (NCR) Health, Nutrition and Population
the lowest at 16.9 percent. The NCR also
had the lowest gap at 0.4 percent, with The countrys health status is best
CARAGA the highest at 12.1 percent summarized in the progress towards
While the Philippines is on (Annex 8.5). the MDGs. While the Philippines is
target for most of its MDGs, it on target for most of its MDGs, it lags
lags behind in terms of reducing It has been estimated that the national behind in terms of reducing the maternal
the maternal mortality ratio. government and the LGUs must boost mortality ratio (MMR). The decline in
their budget for basic education and neonatal mortality has also been very
health by PhP348.9 billion (or 0.45% of slow, as neonatal deaths comprise the
GDP) and PhP45.0 billion (or 0.04% majority of infant deaths. The MMR
of GDP), respectively, if the MDG and infant mortality rate (IMR) were
targets are to be met by 2015 (Manasan, still at 95 to 163 per 100,000 live births
2009). This implies a huge financial in 20106, and 25 per 1,000 live births in
requirement that should be allocated 2008 (National Statistics Office, 2008),
by the government, if it is to invest in as against the MDG targets of 52 and
the two most important human capital 19, respectively.
forming subsectors.
For communicable diseases, the target for
The slow rate of progress in the social the tuberculosis (TB) case detection rate
sector may be partly attributed to the has been met, while a total of 22 provinces
compression of expenditure at the were declared malaria-free in 2008. The
national level in previous years, in prevalence of HIV and AIDS remains
response to balancing the budget due to below one percent of total population,
declining revenue efforts. The combined although the number of HIV cases has
share of social services in total national been increasing annually. As in previous
government expenditures exhibited a years, most of the ten leading causes of
well defined downtrend from 1998 to morbidity in 2008 were communicable
2005 (Figure 8.2). diseases; in contrast, the leading causes
of mortality in the country have mainly
been noncommunicable diseases. There
is a wide variance in the outcomes and
6
NSCB Resolution No. 11, Series of 2010 - Adopting the Interim Estimation Methodology Used in Generating
National-Level Estimates of Maternal Mortality Ratios for 1990 and 2000-2010.

program performance of priority public program is lowest among member groups.
health programs, due to demand side To date, the nationwide benefit delivery
problems related to health care access ratio (BDR)7 is only 8 percent (Annex 8.6).
especially by the poor, such as geographical
barriers, financial constraints, and limited Public hospitals and primary health facilities
information on family health risks. cannot provide adequate services and quality
care. Recent data show that only 977 out of
While it is urgent to address the slow 1,073 of DOH-licensed private hospitals
progress in meeting MDGs, the (91%) and 631 out of 711 of DOH-licensed
health sector also needs to focus on the government hospitals (88%) are accredited
prevention and treatment of chronic by PHIC. These ratios are expected to
and degenerative diseases and traumatic decline once PhilHealth raises accreditation
injuries, which are now the fourth standards to globally competitive levels.
leading cause of mortality. Many such The deterioration and poor quality of
deaths are untimely and financially many government health facilities, which is
catastrophic, affecting mostly the particularly disadvantageous to the poor, is
working-age population and causing due to: (a) backlogs in upgrading of existing 54 percent of the total health
large intergenerational effects. facilities, including those required to make expenditure comprised out-
public hospitals safe from disasters; and (b) of-pocket expenses, and only
In health care financing, the 2007 the inability of the total capacity of public 9 percent from social health
Philippine National Health Accounts health facilities to meet demands from an insurance.
(PNHA) revealed that 54 percent of increasing population base.
the total health expenditure comprised
out-of-pocket expenses, and only 9 While the Philippines produces a globally-
percent from social health insurance. competitive medical and allied health
Total health expenditure was only workforce, many parts of the country,
PhP234.3 billion, or 3.2 percent of the especially far-flung and depressed areas,
GDP, which is below the World Health remain underserved. Human resources in
Organizations (WHO) benchmark the health sector are concentrated in urban
of 5 percent of GDP for developing areas, with fast staff turnover and oversupply
countries. of personnel.
High out-of-pocket expenses and On nutrition, underweight, stunting,

low prepayment schemes reflect an wasting and thinness continue to be serious
unevenness, if not an inequity, in health problems. The proportion of underweight
care financing. The results of the Benefit children under-five decreased from 27.3
Delivery Review by the Department percent in 1990 to 20.6 percent in 2008, or an
of Health (DOH) and Philippine average annual percentage point reduction
Health Insurance Corporation (PHIC) of 0.352. However, this is only 67.2 percent
highlighted the need for PHIC to of the desired rate of decline to achieve
increase its enrolment coverage, improve the MDG of 13.7 percent. In addition,
the availment of its benefits and increase stunting8 among under-fives (32.2%) and
the support value for its claims, for the wasting9 (7.5%) are at high levels. Thinness
National Health Insurance Program is also prevalent among school-age children
(NHIP) to provide Filipinos with (8.1%). About 26.3 percent of pregnant
financial risk protection. Moreover, women are nutritionally at-risk, with low
benefit delivery for the sponsored weight-for-height levels.
7
BDR refers to the cumulative likelihood that any Filipino is (a) eligible to claim; (b) aware of entitlements and
is able to access and avail of health services from accredited providers; and (c) is fully reimbursed by PHIC as far
as total health care expenditures are concerned.
8
Stunting is an indication of prolonged deprivation of food and frequent bouts of infections.
9
Wasting is an indication of lack of food or infection in the immediate past.

Overweight and obesity is prevalent every year. At this rate, the population
among adults, at 26.6 percent based on will double in 34 years. This has also
the National Nutrition Survey of 2008 contributed to the high dependency
(Annex 8.7).The prevalence of overweight ratio of 69 percent as of 2000, with
and obesity among children less than a youth dependency ratio at 62.6
five years old has increased three-fold percent and an elderly dependency
between 1990 (1.1%) and 2008 (3.5%). ratio of 6.5 percent. This means that
Among children aged 6-10 years old, every 100 persons in the working age
overweight and obesity increased from group (15-64 years) have to support
0.1 percent to 1.1 percent in 2008 (based about 63 young dependents and about
on International Reference Standards). six elderly dependents. Dependency
reduces growth in savings and
Micronutrient deficiencies continue to be funds for investment in productive
a public health concern, especially among capacity. In turn, underinvestment
young children and pregnant women. reduces overall economic growth and
About 15.2 percent of children 6 months prospects for poverty reduction.11
to 5 years old were vitamin A-deficient
(Food and Nutrition Research Institute, The actual fertility rate of 3.3
2008). Iron deficiency anemia among children is one child higher than
various groups remains very high (based on the desired fertility rate of 2.4. The
WHO classification), specifically among biggest difference between actual
infants 6-11 months old (55.7%); children and wanted fertility is most evident
12-23 months old (41.0%); and pregnant among women with lower education
women (42.5%). Iodine deficiency is achievement and incomes. Based on
another public health problem among the 2008 National Demographic and
pregnant and lactating women, with Health Survey (NDHS), the countrys
the average of 105 ug/L median urinary contraceptive prevalence rate (CPR)
iodine excretion not reaching the WHO- was only 51 percent. It is a source of
recommended level of 150 ug/L. concern that the level of unmet need
has increased from 17 percent in 2003
Hunger is another serious concern. While to 22 percent in 2008.
the percentage of Filipino households
with inadequate caloric intake decreased Although the DOH has continued
from 69.4 percent in 1990 to 66.9 to implement reforms, more effective
percent in 2008, quarterly surveys on mechanisms are needed to further
hunger by the Social Weather Stations enhance the health system. Areas
The countrys current population (SWS) since 1998 showed that the needing improvements include health
growth rate of 2.04 percent hunger situation has been volatile within financing in local health facilities
remains high and means an a year, characterized by spikes and dips. and medical centers, and preventive
additional 1.8 million Filipinos However, the subsistence incidence10 of measures to reduce noncommunicable
every year. families decreased from 8.7 percent in diseases, such as diabetes mellitus,
2006 to 7.9 percent in 2009, or from 11.7 hypertension and trauma. Moreover,
percent of the population in 2006 to 10.8 the health information system,
percent in 2009. including research, should be
strengthened, in order to ensure that
The current population growth rate policies and programs are based on
(PGR) of 2.04 percent remains high and evidence and limited resources are
means 1.8 million Filipinos are added used effectively and efficiently.
10
Subsistence incidence refers to the proportion of families (or population) with per capita income less than the
per capita food threshold to the total number of families (population). (NSCB)
11
See The Population-Poverty Nexus by Balisacan, Mapa & Tubianosa, 2004.

Education, Training and Culture a substantial improvement from a mean
percentage score (MPS) of 58.7 in 2004 to Based on the 2008 Functional
Based on the 2008 Functional Literacy, 68.0 in 2009. In contrast, the NAT MPS in Literacy, Education and Mass
Education and Mass Media Survey high school declined slightly from 46.8 to Media Survey, about 58 million
(FLEMMS), about 58 million out of the 45.6 during the same period. out of the estimated 67 million
estimated 67 million Filipinos aged 10 Filipinos aged 10 to 64 years
to 64 years old (86.4%) are functionally A total of 76,710 new classrooms were old (86.4%) are functionally
literate. This is a slight increase from constructed from 2004 to 2010, exceeding literate. This is a slight increase
84.1 percent in 2003. Basic literacy, on the yearly minimum target of 6,000. from 84.1 percent in 2003. Basic
the other hand was estimated at 95.6 However, classroom gaps still persist literacy, on the other hand was
percent. Literacy is much higher among due to the increasing student population estimated at 95.6 percent.
those in the highest income stratum and damages caused by natural disasters.
and who have completed high school Classroom shortage in 2011 is estimated
or higher education. Some Filipinos at 113,000. Moreover, there were wide
who have little or no formal schooling, disparities in classroom-student ratios across
however, may have also gained regions, with a 1:78 ratio in elementary
functional literacy through alternative in NCR and 1:82 in high school in the
learning sources, such as the media. Autonomous Region in Muslim Mindanao
in SY 2009-2010. The national average of
Despite past efforts to increase access teacher-student ratios in SY 2009-2010
to formal basic education, the country stood at 1:36 for elementary and 1:38 for
continues to confront the challenge secondary levels, but wide disparities again
of ensuring greater participation of all existed across schools.
school-aged children, especially in the
elementary level. In school year (SY) The number of barangays without access to
2009-2010, the Net Enrolment Rates elementary school was reduced significantly
(NER) at the elementary and secondary from 1,617 in 2001 to only 227 in 2008.
levels were 85.0 percent and 62.4 Access also improved dure to more high
percent, respectively, which is far below school students benefitting from the
the MDG and Education For All Education Service Contracting scheme
(EFA) targets. The cohort survival rate and the Education Voucher System. Of the
reached 74.4 percent for elementary 250,000 target beneficiaries for the period
and 78.5 percent for secondary in 2009, of 2004 to 2009, a total of 153,694 grantees
with completion rates recorded at 72.2 (62%) benefited from these programs.
percent for elementary and 73.7 percent
for secondary education In line with the institutionalization of the
Early Childhood Care and Development
The elementary completion rate level (ECCD) Law, 99 percent of provinces
was still far from the EFA target of and all cities already implemented ECCD
81.0 percent in 2015, but the secondary in varying degrees. However, the actual
completion rate almost reached the gross enrolment rate in public and private
2015 EFA target of 75.27 percent. preschools for 4-5 years old reached only
The drop-out rate, on the other hand, 24.69 percent in 2008, up from 19.23
was still a high of 6.3 percent for the percent in 2004. The Department of
elementary level and 8.0 percent for Education (DepEd), for its part, provided
high school, despite free provision preschool education to around 1.4 million
of education at those levels. This was children. Over the same period, the
due to poverty, poor health, peace and percentage of Grade 1 pupils with ECCD
order problems in some areas, and the experience improved from 55.98 percent to
prevalence of child labor. 64.62 percent.
The National Achievement Test (NAT) There was a steady increase in the number
results for the elementary level showed of learners served by both the DepEd and

Table 8.1 Formal Basic Education Performance Indicators, by Sex: 2004-2009
Indicators 2004 2005 2006 2007 2008 2009

ELEMENTARY
Net Intake Rate in Grade 1 41.3 36.6 39.7 45.6 48.4 56.3
Male 37.5 33 36.2 43.4 46.4 54.6
Female 45.3 40.5 43.5 48.0 50.5 58.0
Gross Enrolment Rate 104.2 101.1 99.9 102 102.1 100.8
Male 104.9 101.9 100.7 102.9 103.3 102.1
Female 103.5 100.3 99.0 101.1 100.8 99.5
Net Enrolment Ratio 87.1 84.4 83.2 84.8 85.1 85
Male 86.17 83.56 82.39 84.01 84.86 85.0
Female 88.08 85.35 84.08 85.72 85.71 85.0
Cohort Survival Rate 71.3 70 73.4 75.3 75.4 74.4
Male 66.1 65.5 68.8 70.9 71.5 69.9
Female 77.2 75.0 78.6 80.1 79.7 79.4
Completion Rate 69.1 68.1 71.7 73.1 73.3 72.2
Male 63.6 63.3 67.3 68.4 69.1 67.4
Female 75.2 73.5 76.7 78.3 77.9 77.5
Dropout Rate (School Leaver) 7 7.3 6.4 6 6 6.3
Male 8.4 8.6 7.6 7.2 7.1 7.5
Female 5.4 6 5 4.7 4.9 4.9
Achievement Rate (Grade 6 NAT MPS ) 58.73 54.66 59.94 64.81 66.33 68.00
Male 57.10 52.89 58.59 63.73 64.38 66.65
Female 60.29 56.58 61.81 65.87 66.72 69.36
SECONDARY
Gross Enrolment Rate 83.9 80.5 79.5 81.4 82.9 82.2
Male 80.2 77.0 76.4 78.7 80.6 80.2
Female 87.8 84.1 82.6 84.2 85.3 84.1
Net Enrolment Ratio 60 58.5 58.6 61.9 60.7 62.4
Male 55.0 53.7 53.9 57.4 56.4 57.9
Female 65.0 63.5 63.4 66.6 65.2 67.0
Cohort Survival Rate 78.1 67.3 77.3 79.9 79.7 78.5
Male 73.3 61.5 72.7 75.21 75.5 74.2
Female 82.8 73.0 81.8 84.5 83.9 82.8
Completion Rate 72.4 61.7 72.1 78.7 75.2 73.7
Male 66.9 55.1 67.2 71.6 70.4 69.1
Female 77.8 68.1 77.0 86.0 79.9 78.3
Dropout Rate (School Leaver) 8 12.5 6.6 7.5 7.5 8.0
Male 9.9 15 7.5 9.3 9.1 9.7
Female 6.1 10.1 5.9 5.6 5.8 6.2
Achievement Rate (Year II NAT MPS)* 46.80 46.97 46.64 49.26 47.4 45.55
Male 45.83 45.44 44.81 47.84 44.89 43.95
Female 47.61 48.31 48.29 50.45 48.32 46.98
Source: DepEd;
*Administered to 4th year students in 2004

various alternative learning system enrolment in higher education rose
(ALS) providers. From 2005 to 2009, moderately from 2.40 million in 2004
631,914 and 418,108 enrollees were to 2.62 million in 2009. The number of
recorded under the DepEd-delivered graduates across all disciplines likewise
and DepEd-procured ALS programs, increased from 409,628 to around 469,654
respectively. However, only 74 percent in the same period, or by 14.65 percent.
of these enrollees completed the
DepEd-delivered and 72 percent the Based on the 2008 Impact Evaluation
DepEd-procured ALS programs. Study (IES) commissioned by TESDA,
Despite its vast potential, the ALS has the absorption rate12 of TVET graduates
yet to maximize the full potential of (as a percentage of the labor force) was 55.1
nonschool-based learning schemes in percent, which is less than the 2005 figure of
universalizing functional literacy. 64.6 percent. The decline can be attributed,
among others, to the effects of the global
In culture and the arts, the National financial crisis that slowed down economic
Heritage Act (RA 10066) was enacted activities and resulted in job losses, skills
in 2009 to protect, preserve, conserve and mismatch between the requirements of
promote the nations cultural heritage, the available jobs and the skills possessed
its property and histories, and the by workers, and geographical mismatch
ethnicity of local communities; establish between locations of job opening and job
and strengthen cultural institutions; seekers.
protect cultural workers and ensure their
professional development and wellbeing. Increased access to higher education and
Moreover, more than 2,000 projects middle-level skills development was made
nationwide were approved to be funded possible through the provision of various
by the National Endowment Fund for scholarships and student financial assistance
Culture and the Arts (NEFCA) from programs by CHED and TESDA, such as
2007 to 2010. the Private Education Student Financial
Assistance Program (PESFA), ADB-
In sports, the Short-Term Philippine assisted Technical Education and Skills
Sports Development Plan: 2008-2010 Development Program (TESDP),President
was formulated to carry out systemic Gloria Scholarship (PGS) Program and
institutional reforms that rationalized Ladderized Education Program (LEP).
resource allocation. While the Plan
was approved through Resolution No. The PGS, a scholarship program intended
2, Series of 2008 by the NEDA-Social to provide interventions to meet the need for
Development Committee, most of the critical skills and drive TVET provision to
envisioned institutional reforms have highly in-demand jobs, reached more than
not been implemented due to changes one million scholars from 2006 to 2009. The
in leadership. program was provided an increased budget
of PhP5.6 billion in 2009, in view of the
Enrolment in middle-level human governments commitment to job generation
resource development via technical through skills enhancement and investment
and vocational education and training in human capital. However, the PGS had
(TVET) increased by 27.38 percent, its own share of operational problems and
from 1.68 million in 2004 to 2.14 drawbacks, ranging from increased dropout
million in 2007. However, it declined rate and low employment of graduates.
to 2 million in 2008 and 1.98 million There is a need to introduce reforms in the
in 2009, as a result of efforts to improve targeting and selection of beneficiaries, fund
quality assurance. On the other hand, disbursement, accountability and program
management.
12
Absorption rate refers to the ratio of employed and the total number of TVET graduates.

Table 8.2 Enrolment in Tertiary Level of Education, by Sex: Academic Years 2004-2009
Year 2005 2006 2007 2008 2009
TESDA Male 673,353 694,745 856,965 805,567 893,091
Female 1,010,029 1,042,120 1,315,449 1,208,353 1,091,555
Total Enrolees 1,683,382 1,736,865 2,142,414 2,013,920 1,982,435
Graduates 1,154,333 1,340,620 1,702,307 1,812,528 1,903,793
Academic Year 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009
CHED Male 1,100,199 1,130,360 1,194,701 1,211,108 1,199,247
Female 1,302,116 1,352,914 1,409,748 1,443,186 1,426,138
Total Enrolees 2,402,315 2,483,274 2,604,449 2,654,294 2,625,385
Graduates 409,628 421,444 444,427 444,815 469,654
Sources: TESDA, CHED
Another major accomplishment in the According to the 2007 Annual

subsector is the institutionalization of Poverty Indicators Survey (APIS), the
the ladderized system between TVET proportion of dropouts was worst at the
and higher education through EO 358 in tertiary level, or among the 16-24 age
2005. The LEP covered 1,330 ladderized group, particularly in degree programs,
education programs in eight priority at 65.8 percent. This was mainly due to
disciplines (information technology, the high cost of education that had to
hotel and restaurant management and be fully shouldered by the households.
tourism, engineering, health, education, Access to tertiary education for students
maritime, agriculture, and criminology). from poor families was possible through
Complementing this is the DOST-SEI, publicly-funded scholarships and other
which administered demand-oriented student financial assistance programs.
science and technology (S&T) scholarships
through their Merit Scholarship and The challenge for the tertiary education
financial assistance programs. The latter is not just broadening but rationalizing
supports the education of poor, talented the access of the economically and
and deserving students in the priority socially-disadvantaged and potentially-
degree courses of basic and applied sciences, restive population. The CHED
engineering and science teaching. In recently rationalized and streamlined
2009, about 4,257 scholarship qualifiers the guidelines of its student financial
nationwide were announced, thus increasing assistance programs (StuFAPs).
the number to a total of 11,428 scholars. However,these guidelines only subsumed
Faced with the challenge CHED-administered StuFAPs, and
of competitiveness and the To ensure a competent workforce do not substantially address major
diversifying industry needs, responsive to the quality standards of government-wide scholarship issues.
the government continuously industries, the TVET subsector through Particularly, the efficacy, usefulness and
instituted programs and TESDA implemented quality assurance viability of student loan programs have
provided the critical resources measures through a mandatory assessment not improved remarkably through the
for skills upgrading and of TVET graduates in programs covered years.
intensification in both high- by the promulgated training regulations.
and middle-level professions. The number of trainees who underwent Significantly, the need to produce
competency assessment and certification enough competent and skilled workforce
peaked to 836,131 in 2009. Of these, a total that will match domestic needs has
of 690,836 workers were certified across all become much more compelling. Faced
occupations, representing a certification rate with the challenge of competitiveness
of 82.62 percent. and the diversifying industry needs, the
government continuously instituted

programs and provided the critical skills mismatches, owing to low quality
resources for skills upgrading and and relevance of education and training
intensification in both high- and programs, alongside lower absorptive
middle-level professions. Post-basic capacity of the economy.
education funding has pointed to the
need for students to be channeled to Housing and Urban Development
fields that have clear local demand, such
as emerging and critical S&T fields. With an enormous total housing need of
3.7 million as of 2010, a total of 812,463
The education and training sector housing and shelter security units (i.e.,
remains confronted with the following house and/or lot) were provided from 2004
issues and challenges: (a) limited to 2010.
participation of the industry sector in
developing competency standards and Indirect housing assistance (i.e., provision
curricula; (b) societal bias against TVET of retail and developmental guaranties,
and insufficient social marketing, issuance of licenses to sell and assistance in
particularly among basic education comprehensive land use planning) delivered
students and their parents; (c) the both modest and better-than-expected
need to upgrade the quality of higher outputs. Against a target of 275,649 retail
education programs, including S&T and developmental guaranties, the HGC
courses, and make them internationally guaranteed a total of 168,347 housing
comparable; and (d) continuing job- loans for an accomplishment rate of 61
Table 8.3 Direct Housing Accomplishments: 2004-2010

Program Year
(in households assisted) Agency 2004 2005 2006 2007 2008 2009 2010 Total
Direct Housing Provision
1. NHA Housing Production NHA 20,180 39,786 37,601 41,528 47,112 29,413 23,276 238,896
Resettlement 11,760 16,960 15,390 28,655 36,830 22,044 18,740 150,379
Slum Upgrading 1,395 4,136 1,338 3,707 6,231 2,187 2,068 21,062
Sites and Services 2,036 1,192 2,061 4,036 1,361 1,463 1,142 13,291
Core Housing 2,871 1,033 927 721 41 456 572 6,621
Medium-Rise Housing 0 0 105 60 0 0 0 165
Other Housing Assistance 2,118 16,465 17,780 4,349 2,649 3,263 754 47,378
2. Community Mortgage
SHFC 14,129 14,199 13,783 11,819 9,169 10,022 7,109 80,230
Program (CMP)
3. Retail and Developmental
44,614 39,138 33,427 48,020 62,846 75,328 118,785 422,158
Financing
End-User Financing HDMF 39,562 37,175 33,066 47,367 62,507 74,973 56,696 351,346
GFIs End-User Financing
LBP 78 37 65 103 186 281 243 993
SSS 187 91 47 37 62 74 50 548
DBP 66 0 0 220 16 0 11,300 11,602
GSIS 4,721 1,835 249 293 75 0 50,496 57,669
4. Provision of Secure
Tenure
Proclamations HUDCC 44,248 11,784 15,082 51,668 6,504 5,286 100 134,672
Total Direct Housing
123,171 104,907 99,893 153,035 125,631 120,049 149,270 875,956
Provision
Source: HUDCC

percent. The HLURB issued a total of reform measures: (a) loan interest-
1,294,985 licenses-to-sell exceeding rate reductions that brought down the
its target of 1,028,853 licenses for an lowest socialized housing package to
accomplishment rate of 126 percent which 3 percent per annum; (b) extension of
indicates a robust housing construction and payment terms for all housing loans
completion of housing units. Moreover, from 25 up to 30 years; (c) reduction of
the HLURB provided assistance to 419 loan requirements from 15 to eight; and
LGUs in updating and formulating their (d) reduction of loan processing time
Comprehensive Land Use Plans (CLUPs) from three months to seven working
against a target of 432. (Table 8.4). days for developer accounts with buy-
back guarantee, and 30 days for retail
The government provided housing and developer accounts without buy-
tenure assistance through the following back guarantee.
Table 8.4 Indirect Housing Accomplishments : 2004-2010

Program Year
Agency
(in households assisted) 2004 2005 2006 2007 2008 2009 2010 Total
Indirect Housing Provision
1. Home Guaranty Corporation
Retail Guaranty HGC 5,493 12,536 16,282 15,680 12,089 15,709 77,609 155,218
Developmental Guaranty 157 32 5,217 925 311 17 6,470 13,129
Securization 24,678
2. Housing and Land Use Regulatory Board
License To Sell HLURB 172,883 167,229 187,001 172,967 220,756 200,124 174,025 1,294,985
CLUP Assistance (LGUs) 123 104 106 102 104 103 110 752
Source: HUDCC
Table 8.5 Total Housing Need: 2011-2016
Year
Region Total
2011 2012 2013 2014 2015 2016
Philippines 1,380,537 1,173,456 997,438 847,822 720,649 612,552 5,732,454
NCR 418,328 355,579 302,242 256,906 218,370 185,614 1,737,039
CAR 10,035 8,530 7,250 6,163 5,238 4,453 41,669
I Ilocos 48,323 41,075 34,913 29,676 25,225 21,441 200,653
II Cagayan Valley 29,582 25,145 21,373 18,167 15,442 13,126 122,834
III Central Luzon 112,675 95,774 81,408 69,197 58,817 49,994 467,865
IV-A CALABARZON 158,723 134,915 114,677 97,476 82,854 70,426 659,071
IV-B MIMAROPA 27,696 23,542 20,010 17,009 14,457 12,289 115,003
V Bicol 66,307 56,361 47,907 40,721 34,613 29,421 275,329
VI Western Visayas 90,111 76,594 65,105 55,339 47,039 39,983 374,171
VII Central Visayas 78,934 67,094 57,030 48,475 41,204 35,023 327,761
VIII Eastern Visayas 44,759 38,045 32,338 27,488 23,364 19,860 185,854
IX Zamboanga Peninsula 30,199 25,669 21,819 18,546 15,764 13,399 125,396
X Northern Mindanao 54,446 46,279 39,337 33,437 28,421 24,158 226,078
XI Davao 67,911 57,724 49,066 41,706 35,450 30,132 281,989
XII SOCCSKARGEN 47,291 40,197 34,168 29,043 24,686 20,983 196,368
XIII CARAGA 38,025 32,321 27,473 23,352 19,849 16,872 157,893
ARMM 57,191 48,612 41,320 35,122 29,854 25,376 237,476
Source: HUDCC

Table 8.6 Proportion of Households in Informal Settlements: 2010 and 2006
2000 2006 Growth (in %)

All Households
Urban 3.48 5.65 62.35
Metro Manila 5.30 9.60 81.13
Sources: FIES, NSO
The housing sector, however, confronts Strained Basic Shelter, and Urban
the following key challenges: Services and Fiscal Constraints
Meeting the Enormous Housing The phenomenon of urban slums

Need and Demand and informal settlements have been
characterized by unsanitary conditions,
Total housing need, which includes congestion and limited access to basic
housing backlog and housing for new urban services, like health centers, schools,
households, is estimated to reach about waste disposal and safe water supply.
5.8 million units by 2016 (Table 8.5). While the housing sector is expected
The National Urban Development to contribute in attaining the MDG
and Housing Framework (NUDHF) target on improving the lives of at least
2009-2016 indicates that Regions 3, 100 million slum dwellers worldwide by
4B and NCR account for about half 2020, the formulation of the National
of the total housing need. Slum Upgrading Strategy and the setting
of national targets for urban renewal and
Rapid Growth of Informal slum upgrading efforts should allow a
Households and Settlements more systematic and detailed assessment
of the Philippines contribution to the
Informal settlements have grown by global goal in the coming years.
leaps and bounds. In Metro Manila,
households in informal settlements The annual public expenditure for
increased by more than 81 percent housing in the Philippines, which is
between 2000 and 2006. With approximately less than 1 percent of the
rural-urban migration expected to total government expenditures, accounts
continue, and six out of ten Filipinos for less than 0.1 percent of GDP, which
living in urban areas, addressing the is one of the lowest in Asia (Habito,
housing problem must be embedded 2009). The limited budget, unclear
within a larger urban development compliance of the provision of the Urban
framework for environmental Development and Housing Act (i.e.,
sustainability. While the MDGs allocation of at least 20 percent of total
on access to safe drinking water project cost in every housing development
and sanitary toilets have already for socialized housing finance), and
been achieved, land use and green reliance to the social insurance system
technology for housing construction to finance housing needs effectively
have can be tackled only within limit the access of the poor to housing
an action plan for climate change assistance. Government shelter strategies
adaptation including disaster risk are focused on increasing housing
management. production either by direct provision
of housing units/loans or by giving
incentives to developers who cater mainly
to the formal sector and the middle/high-

income households. These approaches do Wide disparities across regions were
not address the fundamental issues of also evident. Among regions, ARMM
land supply constraints and financing, had the highest poverty incidence in
weak institutional mechanisms in 2006 according to six basic sector
housing construction and the financial categories, namely children, farmers,
environment, and unclear focus on youth, urban population, and senior
poverty reduction (Ballesteros, 2010). citizens. CARAGA had the highest
poverty incidence under fisherfolk
The HGC must be strengthened through and migrant and formal sectors
equity infusion from the government to (Annex 8.9). Meanwhile, NCR
establish a stronger guaranty system that posted the lowest poverty incidence in
will encourage the funding of socialized five sectors, namely children, women,
and low-cost housing projects by the youth, senior citizens and migrant and
private sector and housing developers. formal sector workers (NSCB, 2006).
Funds for housing can be secured and
sustained, only if there is a viable system In terms of number, the children,
of guarantees for both the government women and urban sectors headed
and private financial institutions that cater the list of poor basic sectors (Annex
to the funding requirements of housing 8.10). Disparities across regions were
production and end-user financing. The also evident. Region 5 had the most
HGC can guaranty loans granted by number of poor children and women;
financial institutions and developers for ARMM had the most number of poor
housing up to 20 times its net worth. farmers and fisherfolk; Region 6 had
the most number of poor youth and
Social Protection migrant and formal workers; NCR
had the most number of urban poor;
The number of poor Filipinos increased and Region 7 had the most number
from 22.2 million in 2006 to 23.1 million of poor senior citizens. Meanwhile,
in 2009. Filipinos unable to meet their CAR had the least number of poor
daily dietary requirements slightly children, women, youth and urban
decreased from 9.9 million in 2006 to 9.4 poor.
million in 2009. The poverty incidence
and the number of the poor from all The increase in poverty incidence
sectors increased between 2003 and 2006 was accompanied by the rise in the
(Annex 8.8). percentage of vulnerable households13
The slow rate of poverty (Albert & Ramos, 2010). The
reduction drew greater attention Fisherfolk, farmers and children were the percentage of the population
to the need to protect the poor three poorest population subcategories belonging to highly vulnerable
and vulnerable. in 2006, with poverty incidences of 49.9 households rose from 36.21 percent
percent, 44 percent and 40.8 percent, in 2003 to 50.70 percent in 2006.
respectively. Children and women Conversely, the percentage who were
accounted for the largest number of the not vulnerable declined sharply from
poor, at 14.4 and 12.8 million respectively 31.44 percent in 2003 to 18.99 percent
in 2006 (Annex 8.8). The slow rate of in 2006. This trend implies that
poverty reduction drew greater attention individuals and households, whether
to the need to protect the poor and poor or nonpoor, face various social
vulnerable. risks and vulnerabilities (e.g., loss
of income, unemployment, natural
disaster, among others), especially
13
Households are classified as vulnerable if the probability of their becoming poor is greater than the national
poverty incidence. The vulnerable are further categorized into highly vulnerable if the probability of their being
poor is greater 50 percent and relatively vulnerable otherwise.

during economic downturns and Existing social protection programs
crises that can push them down to are inadequate in terms of coverage.
poverty. Owing to the lack or absence While partnership with nongovernment
of appropriate social protection organizations (NGOs) and other
intervention, households resorted to stakeholders have succeeded in making
coping strategies that tend to erode social services accessible to the poor,
human capital, such as reducing food NGOs tend to flock to selected advocacies
consumption, withdrawing children like childrens causes, leaving behind other
from school, reducing health care sectors, such as the disabled and elderly
investments, selling assets and using wanting (ADB, 2009).
up savings, among others (Ahmed, et
al., 2004). Moreover, impact assessment of many
programs is difficult, due to their lack
The current social protection system is of built-in monitoring and evaluation
characterized by a series of fragmented components. There is a dearth of up-to-
and uncoordinated programs. date and disaggregated data on vulnerable
The multiplicity of programs and groups, often making them invisible in
government agencies involved statistics.
often result in poor coordination,
redundancy in providing services or The industrial and occupational
overlapping of program beneficiaries. adjustments necessitated by industrial
For example, 21 agencies were restructuring, the globalized system
involved in the implementation of of production, various international
65 social protection programs and agreements, and the damage wrought
projects (Development Academy on incomes and livelihoods by natural
of the Philippines, 2009). Social calamities highlight the need to protect
protection programs were found to those in contractual employment,
be inadequately funded, and most in seasonal work, and at risk from
are short-lived (Manasan, 2009). displacement or facing potential income
The countrys national government losses. The limited coverage of the social
spending on social protection was security schemes (i.e., Government
much lower (0.8% of GDP in 2007) Service Insurance System, Social
than the mean spending of 87 Security System or SSS) means that the The bigger challenge is the
developing and transition countries larger part of the workforce found in the expansion of the CCT to make
on safety nets (1.9% of their GDP informal and vulnerable occupations are it the core program in the
from 1996-2006) (Weigand & Grosh marginalized. Although there have been convergence of social protection
Survey, 2008). attempts by PhilHealth to cover the poor initiatives to ensure sustainability
and unemployed, as well as workers in the of beneficiaries gains.
The benefits of existing social informal sector (IS) and those working
protection programs are compromised overseas, universal membership has yet
by weak targeting systems resulting to be achieved. Social welfare and safety
in high leakage to the nonpoor, nets also need to improve programs and
undercoverage of the poor, low services standards, and focus on the
program impact and wastage of scarce poorest among the basic sectors.
resources. For example, the National
Food Authority (NFA) rice price To improve the effectiveness and efficiency
subsidy showed a high leakage rate of of the social protection interventions,
71 percent, because it is an untargeted the government launched the CCT
program that benefits all households program called the Pantawid Pamilyang
(Manasan, 20). Pilipino Program. Further work is
needed, however, to consolidate social
protection programs and complement
these with the CCT. The bigger challenge

is the expansion of the CCT to make it and legislation), they also suffer
the core program in the convergence of from domestic violence, economic
social protection initiatives to ensure disadvantages, discrimination at the
sustainability of beneficiaries gains. workplace, exploitation as migrant
workers and prostituted women,
Children and displacement brought about by
the intermittent wars in conflict-
Children accounted for the largest affected areas. In general, women
number of poor persons among the basic are in disadvantaged position due to
sectors, at 13.4 million in 2003 and 14.4 differences in gender roles that limit
million in 2006. The proportion of poor their access to productive resources and
children living in rural areas was twice basic services.
as much as those living in urban areas.
The Child Development Index (CDI)14 The number of employed women (13.3
fell from 0.779 in 2003 to 0.729 in 2006 million) was lower than that of men
(NSCB). Children in especially difficult (21.3 million) in the 2009 Labor Force
circumstances include street children, Survey. There was an increasing trend of
victims of child abuse and commercial unpaid workers, 55.8 percent of whom
sexual exploitation, child victims of were women. In 2008, 54.7 percent
prostitution and pornography, children of the total number of female OFWs
in conflict with the law, children in were laborers and unskilled workers,
situations of armed conflict, children including domestic helpers, cleaners, and
with disabilities, child victims of illegal manufacturing laborers. Remittances
recruitment and trafficking, and child from female OFWs worldwide were
laborers. relatively lower than from their male
counterparts.
Working children are a significant portion
of the Filipino workforce. There are about Around 18 percent of elected posts in
2.1 million economically active children 2010 were won by women candidates.
in the Philippines, aged 5-17 years old, However, in the judiciary, only 20 percent
majority of whom were males between of total incumbent judges were women.
15-17 years old (DOLE-BLES). Across While women were predominant in the
industries, 55.6 percent of the working government bureaucracy, these occupied
children were engaged in agriculture, mostly the technical or second-level
hunting and forestry. A significant positions.
portion numbering around 201,000
were employed in private household, a Regarding violence against women
majority of them working as laborers and (VAW), the number of cases reported
unskilled workers. Child work affects to the police rose 37.4 percent from
the performance of children in school 2008 to 2009 (Philippine Commission
resulting in low grades, absenteeism, on Women, 2010). While there was
tardiness, and lack of interest. a decreasing trend in reported cases
from 2001 to 2006, the number rose
Women from 2007 to 2009, with 10,440 VAW
cases occurring in 2009. The increase
While Filipino women may be considered in reported cases may be attributed to
as relatively advanced vis-a-vis women in more women having been emboldened
other developing countries (e.g., in the to report, due to the passage of laws
areas of education, profession, politics that address sexual and gender-based
14
The CDI is a composite index measuring average achievement in the three basic dimensions captured in the
human development index, adjusted to account inequalities between women and men (UNICEF, 2010).

violence. Still, it should be noted that Table 8.7 Summary of Actual OFW Membership
the data reflect only what is reported to
the PNP, and there could still be other Institution Number of OFW
unreported cases.
SSS 184,000 (2009)
The incidence of physical injuries and/
or wife battering reported to the PNP OWWA 2.2 million (November 2010)
has been decreasing since its peak in
2001, with 5,668 reported cases. The PHIC 2.1 million (2009)
decrease may be partly attributed to Sources: SSS, OWWA, PHIC
the enactment of RA 9262, which
penalizes abusive husbands and live-in to the mainstream labor market because
partners. Data on the number of women they are disproportionately undereducated,
in extremely difficult circumstances untrained, and socially excluded.
(WEDC) served by DSWD also show
a downward direction, from 7,763 cases Workers in the Informal Sector (IS) 15
in 1999 to 5,549 cases in 2007.However,
this may have been due to a decrease The IS comprises a major portion of the
in the budget of DWSD for WEDC countrys labor force and is recognized as
rather than an improvement in the major contributor to the economy. Over
plight of WEDC. the years, however, the informal sector
has constantly been confronted with
Elderly issues. In 2001, the Department of Labor
and Employment (DOLE) through, its
In 2003 and 2006, the number of elderly program entitled Support for Policy
people in the Philippines was estimated and Programme Development (SPPD),
at about 5.2 million and 6.3 million, identified strategic issues confronting
respectively. Some of the risks and the IS. These are the: (a) invisibility
vulnerabilities of the elderly included of the IS in government statistics and
loss of income as a result of retirement, representation in policy-making bodies;
disability and impairment of functions (b) lack of access to health and other
affecting their quality of life, lack of social protection interventions; (c) lack
or inadequate health care insurance of access to productive resources; and
and lack of adequate living conditions (d) the need to be organized.
for those who live alone. There was
also a rise in the number of elderly Overseas Filipino Workers (OFWs) There is, therefore, a need to
persons who were victims of violence review the viability of current
and abandonment due to in and out Social security and protection of OFWs social security and welfare fund
migration of younger family members. are growing concerns, given the limited schemes
coverage of the SSS, PHIC and Overseas
Persons with Disability Workers Welfare Administration
(OWWA). Out of 8.6 million overseas
There were about one million persons Filipinos (OFs) in 2009, 4 million are
with disability (PWDs) or 1.23 percent permanent migrants, 3.9 million are
of the total 88 million population in 2007 temporary OFWs and 658,370 are
(NSO, 2007). Of these, 50.24 percent irregular migrants. Table 8.7 summarizes
were females. It was also estimated that the actual OFW membership to
30 to 40 percent of PWDs were children. institutions that provide social security
PWDs remain among the poorest of benefits.
the poor. They have insufficient access
15
Informal sector refers to unincorporated household enterprises, consisting of both informal own-account and
enterprises of informal employers (NSCB, 2002).

Source: Overseas Employment Statistics, Philippine Overseas Employment Administration
Deployed Landbased OFWs by Top Occupational

Category,
Figure 8.3 Deployed Landbased OFWs, 2009Category: 2009
by Top Occupational
Household Service Workers 71

Nurse Professional 13465
Waiters, Bartenders 11977
Charworkers, Cleaners 10056
Wiremen Electrical 9752
Caregivers and Caretakers 9228
Laborers/Helpers General 8099
Plumbers and Pipe Fitter 7722
Welders and Flame-cutters 5910
Housekeeping and related 5127

There is, therefore, a need to review Workers with HIV and AIDS
the viability of current social security
and welfare fund schemes, given the From 1984 to January 2011, there
limited capacity and resources of the were 6,167 reported HIV Ab sero-
countrys social security and welfare fund positive cases in the country based
institutions. Another challenge is the on the DOH National HIV and
exclusion of domestic workers, the top AIDS Registry. The 25-29 age group
occupational category with respect to registered the most number of cases at
Natural and man-made disasters deployment of landbased OFWs, in most 25 percent. Statistics also showed that
are major causes of poverty and of the social security laws particularly in 25 percent, or 1,539 of those listed in
vulnerability in the country. top destination countries (see Figure 8.3). the registry are OFWs, of which 267
were full-blown AIDS cases. This is
Displaced Workers an indication that HIV and AIDS
might be a biomedical problem that
In 2007 and 2008, around 52,000 has both social and labor implications,
workers were permanently displaced particularly because they affect the
due to economic shocks (DOLE- most productive segment of the labor
BLES). About 213,417 workers were force.
retrenched by 1,836 firms as a result
of the global financial crisis, with Victims of Disasters
58.1 percent (124,006) being placed
under flexible work arrangements, 18.1 Natural and man-made disasters
percent (38,556) temporarily laid off, are major causes of poverty and
and 23.8 percent (50,855) permanently vulnerability in the country. An
terminated. average of 20 typhoons visit the
country a year, owing to climate
While the global financial crisis had change the effects have become more
a minimal impact on the deployment devastating. The most vulnerable areas
of OFWs, OWWA and POEA data of the country are Eastern Visayas,
indicated that 6,957 workers in 327 and Southern, Central and Northern
companies lost their jobs mostly from Luzon. Victims of disasters, mostly
factories in Taiwan and South Korea. Of from typhoons and floods, doubled
this number, nearly two-thirds (4,495) from an average of four million in
returned to the Philippines (See also 1994-1996 to eight million in 2004-
Chapter 2). 2006, most of them in rural areas
(ADB, 2007).

Indigenous Peoples retention16 to be distributed in five years
starting from July 2009. At least 40
In 2009, there were about 110 ethno- percent of the said amount has been set
linguistic groups in the Philippines aside for the delivery of support services
consisting of approximately 14 to the beneficiaries. The CARPer Law
million indigenous people (IP). also stipulates that support services,
IPs are among the discriminated, agrarian justice delivery, and operational
vulnerable, and marginalized groups, requirements of CARP implementing
a fact not only seen from various agencies (CIAs) shall be continued even
smaller studies but also suggested by after completion of the LAD component
the correlation between low human of the CARP.
development indicators and high
concentration of IPs (Stavenhagen, From 2004 to 2008, the Department
2002). The National Commission of Agrarian Reforms (DAR) average
on Indigenous Peoples (NCIP) annual LAD accomplishment rate hit
reported that provinces with most 102 percent against its funded target.
IPs have high poverty incidence. The In 2009, only 69 percent of the reduced
lack of power and access to decision annual LAD target of 85,764 hectares
making and management processes was accomplished.
contribute to the impoverishment of
IPs, who mostly live in mountains Operational bottlenecks were
and have limited access to sustainable encountered, including longer processing
livelihood and basic services. They are due to compliance with the new
often victims of armed conflict and acquisition requirements imposed under
human rights abuse. CARPer. Such requirements include
landowners attestation, Barangay
Asset Reform Agrarian Reform Committee (BARC)
certification, and oath-taking before the
Land Acquisition and Distribution City/Municipal Court Judge. The need
to intensify the synergy among CIAs in
Performance in land tenure delivering land distribution commitments
improvement (LTI) took an uncertain continues to be an issue.
turn due to the national governments
successive budget reenactments Related to LAD is the delivery of agrarian
and the lapse of the appropriation justice, which involves the adjudication
cover provided under RA 8532 or of agrarian cases and representation of
the Act Strengthening Further the Agrarian Reform Beneficiaries (ARBs)
Comprehensive Agrarian Reform before quasi-judicial bodies and regular
Program (CARP) Law of 1988. The courts. The performance of DARs
declaration of over one million hectares delivery of agrarian justice during the
of the land acquisition and distribution past years has been commendable in
(LAD) balance provided policy shifts terms of solving cases on coverage,
in the CARP implementation for the land use conversions, land exemptions
next five years. With the signing of or exclusions, installation of ARBs
the CARP Extension with Reforms to awarded lands, and provision of
(CARPer) Law in 2009, an additional legal assistance to ARBs despite some
PhP150 billion has been appropriated challenges, such as lack of personnel,
for the completion of CARPers LAD resolution of backlog cases, and budgetary
balance of 1,034,661 hectares net of constraints.
16
PARC Executive Committee Resolution No. SP-2010-04, establishing and firming up the CARPER gross
land acquisition and distribute balance at 1,281,033 hectares of which 1,034,661 is estimated to be net of retention

Studies have confirmed that ARBs (ADSDPP) is a long-term
are more productive and better off comprehensive spatial and development
than non-ARBs.17 Agrarian reform plan with identifiesd programs and
communities (ARCs), when properly projects that strengthen self-governance,
established and supported, improved build lasting peace and genuine
their economic conditions, social capital, development within ancestral domains
civic entrepreneurship and democratic of particular ICCs or IP groups. It
participation. Furthermore, the study of serves as the community development
Habito, et. al. (2010)18 confirmed that framework that ensures a participatory
consolidation of output does not require process of mainstreaming IP issues and
consolidation of ownership in order to concerns. However, the ICCs/IPs still
realize economic gains from processing need technical and financial assistance
or marketing. Institutional arrangements in the formulation of the ADSDPPs
through tie-ups with collective and their integration in the CLUPs and
organizations of farmer-beneficiaries are local development plans. The NCIP
viable alternatives. had already assisted 87 ICCs/IPs in the
formulation of their ADSDPPs.
Ancestral Domains and Lands
The NCIP also formulated and
In 1997, the Indigenous Peoples Rights Act implemented the guidelines on the
(IPRA) was passed, embodying the rights Free, Prior and Informed Consent
and aspirations of Indigenous Peoples (IPs) (FPIC). FPIC refers to the consensus
and providing the legal framework for the of all concerned members of the ICCs/
protection and development of Indigenous IPs that is determined in accordance
Cultural Communities (ICCs). Among with their respective customary laws
the rights sought by IPs is the recognition and practices free from any external
of their ancestral domains (ADs) through manipulation, interference and coercion
the issuance of the certificates of ancestral and obtained after fully disclosing the
domain titles (CADTs) and certificate of intent and scope of the project. To date,
ancestral land titles (CALTs). CADTs are the NCIP has issued a total of 296
titles that formally recognize the rights of Certificates of Compliance and 1,368
possession and ownership of ICCs/IPs Certificates without Overlap (CEB/
over their ancestral domains as identified Certificates of Non-Overlap) related to
and delineated in accordance with this FPIC. Concerns exist, however, over the
law, while CALTs refer to titles formally duration of the FPIC process, as well as
recognizing the rights of indigenous the internal conflicts within the ICCs
cultural communities (ICCs)/IPs over their utilization of royalties, and the non-
ancestral lands. implementation by companies operating
within ADs of the terms indicated in
As of July 2010, 156 out of 286 CADT the memorandum of agreement with
applications have been approved by the the ICCs.
NCIP, while 130 are still in various stages of
the titling process. The NCIP also approved Further, NCIP is mandated to provide
258 CALTs with 8,609 right holders. legal assistance to enforce the right of
IPs to resolve conflicts in accordance
The Ancestral Domain Sustainable with their customary laws pertaining
Development and Protection Plan to property rights, claims, ownership,
17
These include the CARP-Impact Assessment Study (Phase I) conducted in 2000, a re-validation of the said
study under CARP-Impact Assessment Study (Phase II), the DAR-German Technical Cooperation (GTZ)
Study on Post-LAD Scenarios in 2006, the Asset Reform CARD Study by Dr. Cielito Habito in 2008, and the
CIRDAP study on Access to Land and Rural Development in the Philippines
18
A Comprehensive Study on the Appropriate Economically Viable Land Size by Type of Crop Category Under Varying
Bio-Climatic Zones and Technological Conditions, led by Dr. Cielito Habito.

hereditary succession and settlement of There is also a need for a more updated and
land disputes within ancestral domains/ disaggregated data on IPs that can serve as
lands. NCIP handled 8,767 legal basis in the formulation of more appropriate,
assistance to ICCs/IPs before judicial targeted and updated policies and programs
and quasi-judicial bodies since 2004. for IPs.
There are still 265 cases pending before
the NCIP regional hearing officers. Coastal and Marine Settlement
Basic services for IPs within their Based on the 2009 data of the National
ancestral domains were delivered Mapping and Resource Information
in accordance with their rights and Authority (NAMRIA), more than 900
entitlements. These covered educational coastal municipalities completed their
assistance; strengthening IP education municipal water delineation. Unfortunately,
starting with indigenization of only 30 of these municipalities passed
curriculum and learning materials, ordinances on municipal water delineation.
as well as cultural sensitivity training Thus, the delineation of municipal waters,
for teachers; assistance to IP-serving as stipulated under the Fisheries Code, has
community schools; traditional crafts; still not been implemented in most coastal
livelihood and entrepreneurship; municipalities 12 years after its enactment.
support to cultural festivals/congresses; In areas where municipal waters have been
medical missions and referral system; delineated, marked improvements in fish
assistance in emergency situations; catch and small fishers income and illegal
and documentation of activities for fishing apprehension have been observed.
traditional knowledge and traditional Furthermore, the delineation process
cultural expressions, customary laws and facilitated the resolution of boundary
children in armed conflict (CIAC).The conflicts among contiguous municipalities,
delivery of these socioeconomic services which in turn improved resource
was anchored on indigenous knowledge management.
systems and practices (IKSPs) and
based on the principles of human rights, The National Anti-Poverty Commission
cultural sensitivity, gender equality, (NAPC) previously advocated the signing
people empowerment, and sustainable of an Executive Order (EO) establishing
development. a task force on fisherfolk settlement, to
address the sectors need for decent human
Most IPs/ICCs, however, still lack settlement. This was endorsed by the
adequate access to social protection and National Agriculture and Fishery Council-
basic services within their localities and Committee on Fisheries and Aquaculture
among their particular tribal groups. (NAFC-CFA), a private-sector led
They also need the negotiation skills consultative arm of DA. However, the said
and technical know-how on risk and EO was not issued.
impact assessments, to ensure equitable Urban asset reform deals with
access-benefit sharing agreements, and It is widely acknowledged that climate the provision of security of
the necessary funds for the management change will accentuate the damage in land tenure to the poor and
and preservation of their ancestral low lying coastal communities, as strong vulnerable including informal
domains. typhoons become more frequent and settler families in urban areas.
dangerous. The Fourth Assessment
The representation of IPs in various Report of the Inter-governmental Panel
legislative bodies and other special for Climate Change (IPCC) predicts that
bodies, as provided under the IPRA, as low lying regions, particularly in tropical
well as the convening and sustainability and coastal communities, are likely to be
of their multilevel consultative bodies, adversely affected by the sea-level rise
are priority concerns that still need to be and temperature increase attributed to
fully addressed. climate change. The privatization and

commercialization of foreshore areas and zones), paving the way for development
the indiscriminate designation of freeports of new transport systems and to provide
and economic zones adds pressure on safer and better homes.
the coastal communitys productivity and
social cohesion, which dislocates small Challenges
fishing settlements. The government needs
data to anticipate adverse consequences Against this backdrop, the Philippines
and minimize the damage brought faces the following challenges in the
about by natural disasters. The absence of social development sector:
mechanisms addressing both the productive
and reproductive needs of women fisherfolk Unsustained Poverty Reduction.
is also a concern. While the Philippines was able to
reduce poverty from 1991 to 1997,
The lack of financial resources and progress from 1997 to 2009 was
manpower also poses a constraint in the sluggish and erratic. From 2006
development of the fishery industry, despite to 2009, poverty incidence among
the industrys significant contribution to families decreased from 21.1 to 20.9
agricultures gross value added. percent. In the same period, poverty
incidence among population rose
Urban Asset Reform slightly from 26.4 to 26.5 percent.
This outcome is attributed to the
Urban asset reform deals with the provision slow growth of incomes, increase
of security of land tenure to the poor and in household formation, natural
vulnerable including informal settler disasters and inflationary pressures
families in urban areas. These interventions mainly from rising fuel and food
include presidential proclamations of sites prices. Moreover, wide disparities
for socialized housing, onsite development across regions, provinces and
and services, and resettlement, among municipalities continue to exist.
others. Presidential proclamations identify There is a need to enhance the
and proclaim idle government lands as governments overall antipoverty
socialized housing sites for disposition framework and strategy to ensure
to qualified beneficiaries. Since 2001, the complementation and synergy of
government, through the Housing and antipoverty programs and projects,
Urban Development Coordinating Council and to put in place a unified
(HUDCC), has issued 113 proclamations targeting system that would result
covering 27,000 hectares, providing security in greater impact.
of tenure to about 280,000 informal settler
families. Slow Progress towards the Attainment
of the MDGs. There are still huge gaps
In resettlement, the overriding policy is in terms of achieving the MDGs.
to improve the quality of life of informal The Philippines lags in achieving
settlers while ensuring maximum retention universal primary education,
and minimum dislocation. The national improving maternal health and
government has implemented a number combating HIV and AIDS. At
of resettlement programs, namely the the national level, the Philippines
North and South Rail Project, the North is on track to meet the targets on
Luzon ExpresswayC5South Luzon food poverty, gender equality in
Expressway, and the relocation of typhoon- education, reducing child mortality,
related victims. As of November 2010, the reversing the incidence of and
government has relocated almost 88,000 death rate associated with malaria;
families, or 93 percent of total families detection, treatment success and
living along the rail rights-of-way in North cure rates of tuberculosis cases; and
Luzon and South Luzon (which are danger access to sanitary toilet facilities.

Inadequate Financing for Social generation of an increasing number of
Services. The share of the social highly productive and quality jobs and
development in the governments entrepreneurial opportunities needs to
expenditure increased slightly be sustained.
from 28.9 percent in 2004 to 31.71
percent in 2009. Through the years, Adverse Effects of Disasters and Shocks.
education has received the bulk The confluence of natural and man-
of the share, although it has not made disasters and calamities reverse
satisfactorily met the requirements the pace of development and require The theme Gaganda ang
of access and quality. Meanwhile, the allocation of more resources for buhay kung may bahay at
the housing sector had less than relief and rehabilitation efforts. Natural hanapbuhay emphasizes the
one percent of the national budget. disasters (e.g., typhoons, earthquakes, need for security of tenure
Competing claims within the social volcanic eruptions) and the onslaught and livelihood opportunities in
sector also require more rigorous of extreme weather conditions (e.g., El human settlements.
prioritization and efficient resource Nio and La Nia) caused by global
utilization for equitable access to warming and climate change, coupled
social services and assets that will with man-made conflicts fueled by
contribute to poverty reduction, job insurgency and unpeace, disrupt the
creation and inclusive growth. socioeconomic progress in conflict-
stricken areas of the country.
High Population Growth Rate.
Although the average annual
population growth rate of the
country from 2000-2007 decreased
to 2.04 percent from 2.34 percent
in 1990-2000, the population is
still expected to double in 34 years.
Such a high population growth is
likely to worsen existing poverty
by absorbing scarce resources that
might otherwise be directed to
investment and productive activities.
The limited government may
encounter increasing difficulties in
raising the quality of basic services
provision, when its resources are
already strained to cover a rapidly
growing population.
Lack of Access to Productive Resources

and Employment Opportunities.
Poverty is largely caused by the lack
of access to productive resources,
employment and livelihood
opportunities. From a double-digit
unemployment rate of 11.9 percent
in 2004, the unemployment rate
declined to 7.1 percent in October
2010. The underemployment rate
has also slightly improved from
19.0 percent in 2009 to 18.5 percent
in July 2010. To effectively reduce
poverty and inequality, however,

the lives of at least 100 million slum
Strategic Framework dwellers worldwide by 2020. With
the formulation of the National Slum
Goals Upgrading Strategy, a systematic
focusing of programs and coordination
The overriding goal of social development is of efforts is expected to be realized.
to improve the quality of life of all Filipinos.
In pursuit of the MDGs, the social sector The goal of social protection is to
shall seek to reduce poverty and inequality, empower and protect the poor,vulnerable
universalize elementary education and and disadvantaged individuals, families
health care, achieve gender equality, ensure and communities from individual life
environmental sustainability, and foster a cycle, economic, environmental and
global partnership for development. social risks.
Universal Health Care shall be directed Finally, the goal of asset reform is to
towards ensuring the achievement of better recognize, protect and empower ICCs/
health outcomes, fair health financing and IPs rights and welfare, as well as to
responsive health system that provide all improve and guarantee the security of
The social protection sector shall Filipinos, especially the disadvantaged land tenure of ARBs.
ensure the empowerment and groups, with equitable access to quality
protection of the poor, vulnerable health care. Targets
and disadvantaged individuals
from all types of risks. The goals of education, training and cultural Health, Nutrition and Population
development are to: (a) make every Filipino
functionally literate both through the This Philippine Development Plan
schools and non-school learning modalities; affirms the governments commitment
(b) achieve a higher level of productivity, to attain the MDGs. One of the main
international competitiveness, industry thrusts of the Universal Health Care
relevance and social responsiveness in the approach is geared towards this end,
development of both middle-level skills and including program targets on lifestyle-
the high-level professions; and (c) develop, related diseases. Other targets pertain to
promote and inculcate a strong sense of programs on health insurance, nutrition
nationalism by utilizing the media, arts and reproductive health.
and sports in strengthening ownership of
cultural heritage and tradition. Education, Training and Culture
Housing and urban development envisions By 2016, the country shall achieve
to provide families not just with the a universal and at least a 93 percent
infrastructure of a house, but the framework participation or net enrolment rate in
of a home; to build not just a neighborhood, the elementary and secondary levels,
but a real harmonious community. The respectively. A gender parity index (GPI)
theme Gaganda ang buhay kung may of 1 shall be targeted in basic education
bahay at hanapbuhay emphasizes the indicators. Likewise, TVET and higher
need for security of tenure and livelihood education subsector shall also increase
opportunities in human settlements. The enrolment and graduation rate by 2016.
promotion of local shelter development
and strengthening of public-private
partnerships (PPPs) are expected to help
achieve sustainable communities, urban
competitiveness, housing affordability,
effective governance and poverty reduction.
Moreover, the housing sector aims to achieve
the MDG of significantly improving

Table 8.8 Health, Nutrition and Population Targets: 2011-2016
Indicators Baseline 2011 2012 2013 2014 2015 2016

MDG Indicators
Prevalence of underweight children under five years
of age (in %) 20.6 (2008) 17.6 16.6 15.6 14.6 13.7 12.7
Proportion of households with per capita intake
below 100% dietary energy requirement (in %) 66.9 (2008) 54.1 49.9 45.6 41.4 37.1 32.8
Under 5 mortality rate
(per 1,000 live births) 34 (2008) 31.6 30.4 29.2 28 26.7 25.5
Infant mortality rate
(per 1,000 live births) 25 (2008) 23 22 21 20 19.0 17
Maternal mortality ratio 95-163 97 84 70 61 52 50
(per 100,000 live births) (2010, NSCB)
Contraceptive Prevalence Rate
(all methods) 51 (2008) 56.2 57.9 59.7 61.4 63
Proportion of births attended by a health professional
(in %) 62 (2008) 69 72 75 80 85 90
Proportion of births delivered in health facilities (in %) 44 (2008) 69 72 75 80 85 90
HIV Prevalence* Less than 1% <1% <1% <1% <1% <1% <1%
(2009)
Malaria morbidity rate per 100,000 22 (2009) 16.9 14.3 11.8 9.2 6.6 4
Malaria mortality rate 0.03 (2009) <.03 <.03 <.03 <.03 <.03 <.03
TB prevalence rate per 100,000 486 (2008) 446 434 422 410 398 387
TB mortality rate per 100,000 41 (2007) 36 35 35 34 33 33
TB case detection rate 73 (2008) 79 81 83 84 85 85
TB cure rate 79 (2008) 82 83 83 84 85 85
Proportion of population with access to safe water 82.3 (FHSIS
83 84 85 86 86.9 88
(households) (in %) 2008)
Proportion of population with access to sanitary toilet 76.8 (FHSIS
79 81 83 84 85.9 88
facilities (households) (in %) 2008)
Population with access to affordable essential drugs
73 (2009) 75 78 82 84 85 95
(in %)
Other Indicators
2.04 (2000-
Population Growth Rate 1.48-1.82
2007)
Total Fertility Rate 3.3 (2008) 2.4-2.96
Percentage of out of pocket payment from total
54.3 (2007) 41 35
health care expenditure
Benefit Delivery Rate (NHIP) 7.7 (2008) 15 30
National Health Insurance Program (NHIP) Coverage 53 (2008) 70 85 100 100 100 100
NHIP Enrollment rate 74 (2010) 85 90 100 100 100 100
Ratio of accredited health facilities to total number of
90 (2010) 95 95 95 95 95 95
licensed health facilities
Mortality rate from lifestyle related and non 2% ann. 2% ann. 2% ann. 2% ann. 2% ann. 2% ann.
communicable diseases (in %) reduction reduction reduction reduction reduction reduction
Prevalence (in %) of stunted under-five children 32.2 (2008) 28.0 26.6 25.2 23.8 22.3 20.9
Prevalence (in %) of wasted under-five children 7.5 (2008) 6.5 6.2 5.9 5.6 5.2 <5
Prevalence (in %) of thin children 6-10 years old 8.1 (2008) 6.9 6.5 6.1 5.7 5.3 <5
Percent of pregnant women who are nutritionally-
26.3 (2008) 24.8 24.3 23.9 23.4 22.9 22.4
at-risk
Sources: DOH, NNC, POPCOM and NSCB

*For the specific annual targets, please refer to the 5th AIDS Medium Term Plan (AMTP). The 5th AMTP goal states that by 2016, the
country will maintain the prevalence of less than 66 HIV cases per 100,000 population.

Table 8.9 Education Targets: 2011-2016

Literacy
Simple Literacy Rate (10 yrs. old and above)a/ 95.6 (2008) 98.1
Functional Literacy Rate (10-64 yrs. old)a/
86.4 (2008) 90.1
Early Childhood Education
Gross Enrolment Rate of 3-4 years old children in Day
Care Service 19.45 20.00 30.00 40.00 50.00 60.00 70.00
Gross Enrolment Rate - Kindergartenb/ c/ 68.41 74.73 81.05 87.36 93.68 100.00 100.00
Net Enrolment Rate - Kindergarten (5 yrs. old) b/ c/ 48.23 58.58 68.94 79.29 89.65 100.00 100.00
Percentage of Grade 1 entrants with ECE experience 67.40 73.92 80.44 86.96 93.48 100.00 100.00
Elementary
Net Intake Rate in Grade 1b/ 58.61 65.89 73.17 80.44 87.72 95.00 100.00
Gross Enrolment Rateb/ 105.37 108.30 111.22 114.15 117.07 120.00 122.93
Net Enrolment Rate b/
88.09 90.09 92.09 94.10 96.10 98.10 100.00
Cohort Survival Rate 74.38 76.45 78.51 80.57 82.64 84.67 86.76
Completion Rated/ 72.18 75.13 76.61 78.09 79.56 81.04 82.52
Achievement Rate (Grade 6 NAT MPS ) 68.0 70.9 71.7 72.5 73.3 74.2 75.0
Secondary
Gross Enrolment Rateb/ 81.03 86.83 92.62 98.41 104.21 110.00 115.79
Net Enrolment Rateb/ 59.52 65.16 70.79 76.43 82.06 87.70 93.34
Cohort Survival Rate 78.44 79.35 80.27 81.18 82.09 83.00 83.91
Completion Rated/ 73.74 74.25 74.51 74.76 75.02 75.27 75.53
Achievement Rate (Year II NAT MPS) 45.6 54.6 58.7 62.7 66.8 70.9 75.0
TVET
Enrolment 1,568,617* 1,100,000 1,210,000 1,331,000 1,464,000 1,610,510 1,771,560
Male 893,091 531,300 586,850 649,528 720,288 805,255 885,780
Female 1,091,555 568,700 623,150 681,472 743,712 805,255 885,780
Graduates 1,344,371* 1,000,000 1,100,000 1,210,000 1,331,000 1,464,100 1,610,510
Male 856,708 494,000 545,600 602,580 664,169 732,050 805,255
Female 1,047,085 506,000 554,400 607,420 666,831 732,050 805,255
No. of Persons Assessed 772,670* 600,000 660,000 726,000 798,600 878,460 966,306
636,689*
No. of Persons Certified 510,000 564,300 624,360 690,789 764,260 845,518
(2010)
Certification Rate (%) 82.40* 85.00 85.50 86.00 86.50 87.00 87.50
Private Education Students Financial Assistance
13,406 15,000 15,000 15,000 15,000 15,000 15,000
(PESFA) Number of TVET beneficiaries
Higher Education
Enrolment 2,770,965 2,881,352 2,955,949 3,021,059 3,080,827 3,155,616 3,220,987
Male 1,255,839 1,305,170 1,335,880 1,361,395 1,388,337 1,418,062 1,445,247
Female 1,515,126 1,576,182 1,620,069 1,659,664 1,692,490 1,737,554 1,775,740
Graduates 481,026 509,707 524,054 538,397 552,735 567,083 581,425
Male 206,015 219,503 226,249 232,994 239,737 246,482 253,228
Female 275,011 290,204 297,805 305,403 312,998 320,601 328,197
Faculty Qualification
% Masters Degree 35.04 40 45 50 55 60 65
% Doctorate Degree 9.69 10 13 16 20 25 30

Table 8.9 Education Targets: 2011-2016 (contd.)

Accreditation
Percent of higher education institutions with
20 20 23 26 29 32 35
accredited programs
Expanded Tertiary Accreditation and Equivalency
200 800 800 800 800 800 800
Program (ETEEAP) Graduates
Student Financial Assistance Programs
42,000 44,000 44,000 44,000 44,000 44,000 44,000
(STUFAPs) Number of HE beneficiaries
Percent of higher education institutions with
34 (2008) 30 32 34 36 38 40
Ladderized Education Program (LEP)
National Passing Percentage in Licensure Exams 36.26 45.84 47.04 48.39 49.72 50.94 52.53
* 2010 data
Sources: DepEd, TESDA, CHED, NSO and the ECCD Council
a/ Data from the FLEMMS conducted by the NSO every five years
b/ Based on the 2000 Census of Population using the growth rate of the 2007 Census which is 2.04%
c/ Excludes preschool enrolment in summer classes
d/ The definition and formula for completion rate is currently being reviewed
Table 8.10 Housing Targets by Program/Agency: 2011-2016

Program Baseline Year
Total
(in households assisted) 2010 2011 2012 2013 2014 2015 2016
1. NHA Housing Production 20,003 70,000 70,000 70,000 72,000 73,000 75,000 430,000
Resettlement 18,740 42,000 46,000 58,000 58,000 58,000 70,000 332,000
Slum Upgrading 2,068 20,000 10,000 10,000 10,000 10,000 -- 60,000
Sites and Services 1,142 -- -- -- -- -- -- --
Local Housing -- 8,000 12,000 -- -- -- -- 20,000
I. Direct Housing Provision
Core Housing 572 -- 1,000 1,000 2,000 3,000 3,000 10,000

Medium-Rise Housing -- -- 1,000 1,000 2,000 2,000 2,000 8,000
2. SHFC Community Mortgage Program 7,109 20,000 25,000 30,000 40,000 40,000 40,000 195,000
3. Retail & Developmental Financing 120,465 100,000 150,000 150,000 150,000 150,000 150,000 850,000
HDMF End-User Financing 56,696 100,000 150,000 150,000 150,000 150,000 150,000 850,000
GFIs End-User Financing 63,769
LBP 243
SSS 50
DBP 11,300
GSIS 50,496
Total Direct Housing Provision 147,577 190,000 245,000 250,000 262,000 263,000 265,000 1,475,000
1. HGC 50,500 57,065 64,484 72,866 82,339 93,044 420,298
Retail Guaranty 15,709
II. Indirect Housing Provision
Development Guaranty 17
Securitization 24,678
2. HLURB
License to Sell 174,025 166,500 167,000 167,500 168,000 168,500 169,000 1,005,300
CLUP Assistance (LGUs) 110 111 111 113 113 115 115 678
3. NHMFC
Purchase of Mortgages 930 820 2,433 2,267 3,267 2,838 12,555
4. HUDCC
Pre-Proclamations 5,000 5,000 5,000 5,000 5,000 5,000 30,000
Source: HUDCC

Table 8.11 Social Protection Targets: 2011-2016

No. of Pantawid Pamilya household 1.0 million (2010)
2.3 3.0 3.7 4.0 3.5
2.9 million7
beneficiaries reached1 million2 million3 million4 million5 million6
1,197,720
No. of KALAHI-CIDSS household Households 571,7258 382,9508 323,3258 323,3258 274,2758
beneficiaries reached
(2009)
No. of families provided with capital
seed fund (SEA-K)
151,454
Level I (2009)
16,2908 17,9108 19,6958 21,6608 23,8208 26,2058
7,532
Level II 1,7608 1,8408 1,9208 2,0008 2,1208 2,2408
(2009)
National Health Insurance Coverage See targets on health section
Source: DSWD
1
Total number of beneficiaries per year. The declining number is due to the expected graduation of beneficiaries after 5 years.
2
Includes Sets 1, 2, 3 and 4.
3
Additional 0.7 million target HHs in 2012 (Set 5)
4
Additional 0.7 million target HHs in 2012 (Set 6); Additional 0.7 million target HHs in 2013 (Set 7); the combined total target of Sets 1,
2, 3, 4, 5, 6 and 7 will reach 4.3 million HHs (to include the 320,411 HH beneficiaries graduated in 2013)
5
By 2014, Sets 1,2 and part of Set 3 with a total of 435,718 HH beneficiaries would have completed the 5-year program
6
By 2015, Set 3 remaining HHs and part of Set 4 with a total of 613,439 HH beneficiaries would have completed the 5-year program
7
By 2016, Set 4 remaining HHs and Set 5 HH beneficiaries with a total of 1,677,152 HHs would have completed the 5-year program
8
Additional beneficiaries per year
Table 8.12 Agrarian Reform Targets, by Land Distribution and CARP Beneficiaries: 2011-2016
DAR DENR Total
Year No. of Hectares No. of No. of Hectares No. of No. of Hectares No. of
Beneficiaries Beneficiaries Beneficiaries
2011 200,000 121,070 100,000 129,747 300,000 250,817
2012 240,274 141,322 100,000 129,747 340,247 271,069
2013 334,928 197,016 100,000 129,747 434,928 326,763
2014 326,920 192,306 97,461 126,455 429,476 325,496
Total 1,102,095 651,714 397,461 515,696 1,504,651 1,174,145
Source: Revised CARP Targets 2011-2014 under RA 9700 as presented to PARC Executive Committee on March 31, 2011
Table 8.13 Ancestral Domain and Lands Targets: 2011-2016

Baseline 2011 2012 2013 2014 2015 2016 Total
12 (250,000 12 (250,000 12 (250,000 12 (250,000 48 (1 million
No. of CADTs issued hectares hectares hectares hectares - - hectares
covered) covered) covered) covered) covered)
12 (250,000 12 (250,000 12 (250,000 12 (250,000 48 (1 million
No. of CALTs issued hectares hectares hectares hectares - - hectares
covered) covered) covered) covered) covered)
No. of ADSDPPs
1 1 1 1 1 1 6
formulated
Source: NCIP

Table 8.14 Urban Asset Reform Targets: 2011-2016
Program Baseline Year
Total
(in households assisted) 2010 2011 2012 2013 2014 2015 2016
Provision of Secure Tenure
1. SHFC Community Mortgage 7,109 20,000 25,000 30,000 40,000 40,000 40,000 195,000
Program (CMP)
2. HUDCC Pre-Proclamations 5,000 5,000 5,000 5,000 5,000 5,000 30,000
Source: HUDCC
Housing and Urban Development Self-Employment AssistanceKaunlaran

(SEA-K) shall cover 53 provinces, while
The housing sector targets the provision the National Household Targeting
of 1.47 million units of direct housing System for Poverty Reduction (NHTS-
assistance from 2011 to 2016. This target PR) shall update its database by 2014
for direct and indirect housing provision in identifying at least 5.6 million poor
is identified in Table 8.10. households. Other targets are listed in
Table 8.11.
The global MDG on ensuring
environmental sustainability aims to Asset Reform
achieve significant improvement in the
lives of at least 100 million slum dwellers DAR and DENR shall effectively
worldwide by 2020. This will guide the synchronize the targets of the land
plans and programs on urban renewal acquisition and distribution component of
or slum upgrading, which is a key the CARP. It shall distribute an estimated
component of the socialized housing 1.5 million hectares to about 1.1 million
program. beneficiaries from 2011 to 2014.
The identification and development CARPs target has been revised based on
of new relocation/resettlement sites the updated database as of December 2010.
for the marginalized and vulnerable It shall be noted that the remaining balance
sectors will be adopted, and program of 1,102,095 hectares represent the gross
targets will likewise be set. The National landholdings that shall be covered by DAR.
Slum Upgrading Strategy that will be The gross area includes the retention areas
formulated will identify the national of the landowners, since it is impossible to
targets for the programs addressing the identify specific landholdings for retention,
needs of slum dwellers. unless petitioned for retention while
landholding is in the process of coverage.
Social Protection Targets for 2013 and 2014 are still very
high, since RA 9700 mandates that Phase
The social protection sector shall 3A lands (above 10 hectares) can only be
ensure the empowerment and covered starting July 2012 and Phase 3B
protection of the poor, vulnerable lands (above 5 hectares) starting July 2013.
and disadvantaged individuals from
all types of risks. The convergence DARs commitment to provide legal
of Pantawid Pamilyang Pilipino assistance to agrarian reform beneficiaries
Program, the Kapit-Bisig Laban shall continue to be prioritized. The aim is
sa KahirapanComprehensive to resolve 70,941 cases under adjudication
and Integrated Delivery of Social of agrarian cases, provide legal assistance
Services (KALAHI-CIDSS) and services in 45,487 cases filed at the judicial

and quasi-judicial courts, and mediate Providing Direct CCTs to the Poor
and conciliate 131,099 agrarian-related
conflicts. Direct CCTs to the poor through the
Pantawid Pamilyang Pilipino Program
From 2011 to 2016, DAR shall provide legal shall be the cornerstone of the
assistance to agrarian reform beneficiaries, governments strategy to fight poverty
with 780,000 targeted cases to be resolved, and attain the MDGs. Regular school
disposed or submitted for resolution. These attendance of children, health visits
cases include those for adjudication, on and immunizations shall be the
agrarian law implementation, filed at the conditions for the continuing direct
judicial and quasi-judicial courts, and for cash assistance. Such transfers are
mediation and conciliation. not doles, as they are based on poor
families fulfillment of responsibility
Meanwhile, the NCIP shall issue 48 of investing in their childrens health
CADTs and 48 CALTs until 2014 covering and education. The direct nature
one million hectares. It will also formulate of such transfers will minimize
one ADSDPP each year until 2016. administrative costs and corruption,
and fulfill the governments thrust
The housing sector, led by the Housing and of transparency and efficiency.
Urban Development Coordinating Council Similarly, the integrity and political
(HUDCC) and key shelter agencies, targets independence of the NHTS used
the provision of security of tenure to to identify CCT beneficiaries shall
informal settlers as listed in Table 8.14. be safeguarded at all times and its
technical and professional capabilities
Policies and Strategies constantly upgraded.
Crosscutting Policies and Achieving Universal Coverage in

Strategies Health and Basic Education
The social development sector shall Universal Health Care shall be

focus its efforts on ensuring an enabling adopted as the approach to improve,
policy environment for inclusive growth, streamline, and scale up the health
poverty reduction, convergence of sector reform strategies. This shall
service delivery, maximized synergies, address inequities in health outcomes
and active and strategic participation of by ensuring that all Filipinos,
stakeholders. The following policies and especially the poor, have equitable
strategies that cut across the social sector access to quality health care. No
shall be given priority: Filipino will be denied health care,
even those without the means to pay.
Attaining the MDGs
The National Health Insurance
The government is committed to attain Program (NHIP) shall be
the MDGs by 2015 through accelerated strengthened as the prime mover in
programs and affirmative action in improving financial risk protection,
education, health, nutrition, gender generating resources to modernize and
and development, housing, and social sustain health facilities, improving the
protection interventions. It shall be provision of health services to achieve
the priority consideration in planning, the MDGs, and reducing the risks of
policy formulation and programming lifestyle-related illnesses. The NHIPs
of programs, activities, projects in the limited resources shall be augmented
social sector, with particular emphasis on through PPPs.
MDGs where the country is lagging.

To attain universal participation in this convergence, with complementation
primary education, the government from other social protection programs
shall provide adequate basic that ensure job generation, livelihood/
educational inputs, expand alternative microfinance, CDD and asset reform.
learning systems (ALS) and alternative
delivery modes (ADM), and improve Accelerating Asset Reform in the
facilities. Alongside efforts that Agrarian, Ancestral Domain, Coastal
address disparities in access and Marine and Settlement, and Urban
equity, gaps in quality shall be closed Sectors
by enhancing learning efficiency
through strong partnership with The government shall complete the
various stakeholders. A convergence CARP, as amended by CARPer, by 2014.
of efforts shall be ensured. Large tracts of private agricultural lands
shall be prioritized, with the government
The CCT program shall be a crucial improving its efficiency in resolving
component of the strategy for cases, hastening land distribution and
universal health care and education ensuring equity. IPRA shall be fully
for all. Providing incentives to families implemented, ensuring IPs ownership
to keep their children in school and and priori rights to their ancestral
to seek regular health care creates domains and access to basic services. The
the demand for the social services government shall ensure the effective
government provides. implementation of policies and laws
concerning fisherfolk, and their coastal
Adopting the CDD approach and marine settlement. Stakeholder
engagement and convergence of efforts
Wherever applicable, social shall be emphasized in asset reform.
development programs shall adopt
the CDD approach, wherein local Urban asset reform shall be strengthened
communities take control in the through the utilization of idle and
planning, implementing and resource underutilized government lands and
investments. CDD ensures that the expedited issuance of land titles to
programs integrate the principles of intended beneficiaries in all housing
local empowerment, participatory proclamation projects. New sustainable
governance, demand-responsiveness, communities or townsites shall be created
administrative autonomy, greater to de-crowd the urban population.
downward accountability, and Extensive slum upgrading will be pursued
enhanced local capacity. Programs as a strategy, with a holistic perspective
adopting this approach, such as the in relation to basic elements such as
KALAHI-CIDSS, have been found relocation, resettlement, livelihood, and
to be more responsive to the needs of financing for slum communities.
the poor and the vulnerable.
Mainstreaming Climate Change
Converging Social Protection Adaptation and Disaster Risk Reduction
Programs for Priority Beneficiaries in Social Development Interventions
and Target Areas
The frequency of natural disasters in
Social protection programs shall the Philippines makes such events
converge in terms of strategies, target a question of survival not only for
beneficiaries and geographic areas, the poor but for all Filipinos. The
to fully maximize resources and mainstreaming of climate change
create more impact to beneficiaries. adaptation and disaster risk reduction
The Pantawid Pamilyang Pilipino in social development interventions will
Program shall form the backbone of proceed from ongoing research on the

impact of climate change on diseases, upgrade public health facilities,
like dengue. Responses to climate and to encourage existing private
change shall be introduced in the school facilities and providers to address the
curricula, alongside the promotion of needs of underserved populations.
green technology in constructing houses National health budgets and subsidies
and social infrastructure and social can promote PPP for health by:
safety nets for vulnerable groups, like (a) increasing value for money of
farmers dependent on agriculture. PhilHealth premium subsidies; (b)
using national to local transfers to
Mainstreaming Gender in the Social leverage PPP at the local health
Development Process system level; and (c) providing
direct incentives for private sector
The government shall mainstream gender participation. In addition, the DOH
and development concerns in planning, shall expand partnerships with private
policy formulation, program and project tertiary medical centers through
development and implementation, and the Philippine Medical Tourism
monitoring and evaluation. It shall Program (PMTP). A percentage of
address the differentiated needs of women income from medical tourism shall
and men, so they can equally participate be channeled as benefits for the
in and benefit from the development poor through a fund that subsidizes
process. insurance premiums.
The implementation of the
Universal Health Care (UHC) Strengthening Civil Society-Basic In the housing sector, an investment-
shall ensure better health Sector Participation and PPP friendly environment shall be created
conditions, fair financing and a through PPPs, even as tax and fiscal
responsive health system. In education, partnerships with the incentives to private developers or
private sector, particularly with industry investors are rationalized. The private
chambers, employers associations, sector shall be encouraged to develop
technical panels and other relevant ecofriendly, socially and economically
bodies shall be strengthened. Such viable land for new communities.
partnerships shall work on developing Social protection schemes involving
standards and curricula, monitoring PPPs that reduce poverty and
indicators, and providing relevant vulnerability of workers shall likewise
hands-on education and training that be developed.
are up to international standards. This
will help close gaps in access and quality Adopting Volunteerism
across regions, between urban and rural
areas, between girls and boys, and among The government shall reinforce
the vulnerable groups. The PPP and the the practice of volunteerism in the
national-local government collaboration delivery of social services, provision
shall be encouraged in addressing critical of technical assistance, responding
and basic educational inputs. These to disasters, and undertaking
include the outsourced delivery of basic humanitarian efforts, especially in the
education services through instructional remote and unserved areas. The sector
and other management services by shall mobilize the talents, expertise,
qualified private providers, in order to time and energies of volunteers from
improve access, efficiency and student the academe, corporate sector, NGOs,
achievement and to promote education government and foreign volunteer
fiscal reform. organizations.
In health, adequate incentives and

regulations shall be put in place to
attract private investments needed to

Developing and Enhancing the The implementation of the Universal
Competence of the Bureaucracy and Health Care (UHC) shall ensure better
Institutions, to Improve Quality and health conditions, fair financing and a
Equitable Access to Social Services responsive health system. The objective
UHC is to promote equity in health
Capacity development shall be through the provision of full financial
intensified at all levels of government, protection and improvement of access
especially among LGU officials to priority public health programs and
and staffs across the gamut of social quality hospital care, especially for the
sector activities, such as planning, poor. Its strategic thrusts are as follows:
programming, coordination,
monitoring and evaluation. Targeting 1. Protect the poor from the financial
and delivery shall be improved to burden of health care use by improving
achieve the needed synergy and the BDR of the National Health
optimal results. At the same time, Insurance Program (NHIP):
the sector and its institutions shall
ensure optimized and judicious use a) Redirect PhilHealth operations
of available resources the government towards the improvement of the
and development partners through national and regional BDRs;
fiscal reforms and participatory local
processes. b) Attain and sustain universal coverage
of NHIP (expansion of coverage to
Sectoral Policies and Strategies include the poor and the informal
sector);
Health, Nutrition and Population
c) Promote availment of quality
Health outpatient and inpatient services at
accredited facilities through reformed
Achieving universal health care shall capitation, with no balance billing or
be pursued under the Aquino Health zero co-payment arrangements for
Agenda (AHA). This aims to improve, sponsored members; and
streamline, and scale up reform
interventions espoused in the Health d) Increase the support value of health
Sector Reform Agenda (HSRA) and insurance for the poor through ICT
implemented under FOURmula One upgrading to fast track Philhealth
(F1) for health, with particular focus claims processing.
on the poor. This will ensure that as
health reforms move forward, the 2. Improve access to quality hospitals
poor are not left behind. The successful and health care facilities by upgrading
implementation of the AHA will or expanding government-owned and
restructure the following health -operated hospitals and health facilities as
system components: good leadership well as providing quality services to help
and governance practices; accurate attain the MDGs; attending to traumatic
and timely information and feedback injuries and other types of emergencies;
on performance; financing that and managing noncommunicable
reduces the burden of health spending diseases and their complications:
especially among the poorest, the
marginalized IS and the middle class; a a) Enhance targeted health facility
well-performing workforce; affordable programs that shall leverage funds
and high quality medical products to improve facility preparedness for
and technologies; and appropriately trauma and the most common causes
delivered essential services. of mortality and morbidity;

b) Provide grant mechanisms from To achieve the above strategic thrusts,
PPPs to support immediate repair the following instruments shall be
and rehabilitation of selected priority utilized:
facilities;
1. Health Financing. This increases
c) Promote fiscal autonomy and income resources for health that will be
retention schemes for government effectively allocated and utilized to
hospitals and health facilities; improve the financial risk protection
of the poor and the vulnerable
d) Unify and streamline DOH licensing sectors. Strategies and activities
and PhilHealth accreditation for include achieving universal health
hospitals and facilities; and insurance coverage, increasing public
investments for health, allocating
e) Cluster referral networks by region to health resources to appropriate
address the fragmentation of services. financing agent, and securing fiscal
autonomy of government health
3. Attain the MDGs for health by focusing facilities and shifting to new provider
public health programs on maternal and payment mechanism.
child mortality; morbidity and mortality
from TB, dengue and malaria, and the 2. Service Delivery. This seeks to
prevalence of HIV-AIDS, in addition to transform the health service delivery
emerging diseases; and prevention and structure to address variations in
control of noncommunicable diseases, health service utilization and health
particularly cardiovascular diseases, cancer, outcomes across socioeconomic
diabetes mellitus, and end-stage renal variables and across geographic
disease. boundaries. Strategies and activities
will aim to ensure that appropriate
a) Deploy Community Health Teams to health services are available at all levels
actively assist families in assessing and of health care by:
acting on their health needs;
a) Transforming the health service
b) Utilize the life-cycle approach when delivery system from providing
providing needed services, such several individual health providers
as family planning, antenatal care, or facilities to service delivery
delivery in health facilities, essential network;
newborn care, immediate postpartum
care, and Garantisadong Pambata b) Enhancing the service packages
package for children 0-14 years of age; delivered by the service
delivery network to achieve the
c) Aggressively promote healthy countrys MDG commitments,
lifestyle changes to minimize eliminate endemic diseases as
noncommunicable diseases; public health threats, intensify
disease prevention and control
d) Ensure adequate surveillance and for both communicable and
preparedness for emerging diseases; noncommunicable diseases, and
and manage health emergencies and
disasters; and
e) Harness the strengths of interagency
and intersectoral approaches to health. c) Investing in a health facility
enhancement program that defines
a unified and rationalized health

facility blueprint; strengthening linking the PhP100 Program with
the gate-keeping function of PhilHealth benefit package in all
lower level facilities; increasing the levels of care; and promoting generics;
capacities of centers of excellence
for specialty hospitals; enhancing b) Monitoring and boosting the
the quality assurance system for rational use of drugs and technology
public outpatient facilities like through implementation of clinical
rural health units (RHU)s and practice guidelines; regulating over-
barangay health stations (BHS); the-counter nonessential drugs,
ensuring that hospitals are safe nutraceuticals and alternative health
from disasters; and providing services; and regulating product and
incentives to promote PPP health service advertisements, to
ranging from investments for reduce the risk of misleading and
tertiary care to involving private biased promotional information
practice midwives in the delivery reaching the consumers and
of primary services; professionals;
3. Human Resources for Health. This c) Ensuring the quality of essential

will ensure that all Filipinos have medicines, food, technology and
access to professional health care services by strengthening regulatory
providers to meet their health needs at agencies of DOH, such as the Food
the appropriate level of care. Strategies and Drug Administration (FDA)
include ensuring that each family has and the Bureau of Health Facilities
assigned competent primary health and Services (BHFS), and the post-
care providers and producing health marketing surveillance system;
professionals responsive to the current
needs of the health sector. To address d) Strengthening the regulatory
distribution concerns of health human functions of DOH agencies
resources, the following strategies standards and processes for licensing,
will be pursued: providing incentives certification and accreditation of
for deployment in underserved areas; public and private health facilities,
using ICT to direct health workers to such as lying-in clinics, Basic
local job offerings; and using of global Emergency Obstetric and Neonatal
market forces like medical tourism to Care (BEmONC), Comprehensive
keep highly-trained health workers Emergency Obstetric and Neonatal
and reduce turnover rates. Care (CEmONC) and hospitals; and
4) Policy, Standards and Regulation. e) Reviewing and updating the laws

These instruments aim to ensure and guidelines governing practice by
equitable access to essential medicines, health professionals to allow flexibility
health services and technologies of in the delivery of health services,
good quality, availability and safety. especially in resource-poor areas (e.g.,
Strategies include: performance of lifesaving functions
by midwives).
a) Increasing the availability of
cheaper quality medicines through 5. Governance for Health. This establishes
efficient and reliable procurement the mechanisms for efficiency,
and distribution systems; transparency and accountability, thus
improving the affordability of preventing fraud. Under this instrument,
essential medicines through initiatives shall be undertaken towards
assured delivery of entitlements enhancing the health system to better
to specific treatment packages; respond to inequities in health. The
institutionalization of the Sector-wide

Development Approach for Health health services, health financing,
(SDAH) systems shall also be undertaken leadership and governance; and
aside from strengthening the governance
structures for managing the health sector c) To create and sustain a critical
at the national and local levels. Better mass of researchers and mentors,
performance, accountability and internal capacity-building programs that
management control mechanisms and involve local and international
stronger client-centered services shall scholarships, fellowships, training
also be undertaken. and twinning arrangements shall
be continued and enhanced.
6. Health Information. The instrument to These shall focus on expertise
establish a modern information system in the research continuum, from
that will provide evidence for policy conceptualization and stakeholder
and program development to improve engagement, to writing,
performance levels, distribution and implementation, dissemination of
equity, and support for immediate and research results, and technology
efficient provision of health care and commercialization, where
management of province-wide health applicable, in order to increase
systems. ICT shall be used to implement research relevance and visibility,
UHC, together with reliable and timely and translate results into policies
data. Investments on the automation of and actions.
health information in all health facilities
shall be encouraged. Nutrition
To support the Health Information 1. Reduce disparities in nutrition by

System, core agencies and partners of focusing on population groups and
the Philippine National Health Research areas highly affected by or at risk of
System (PNHRS) shall share their malnutrition, specifically pregnant
resources and mutually complement women, infants, children 1-2 years
their health research. The following old, underweight children 0-5 years
specific strategies shall be adopted by the old, and LGUs with high levels of
PNHRS: child undernutrition or at risk of
undernutrition.
a) The science community shall
address the gaps in the access 2. Devote more resources to
to essential medical products, interventions with a greater impact
vaccines and technology, and the on undernutrition among children
health information system. Health underfive, including the following:
technology development shall focus
on diagnostics, vaccines, drugs, use a) Optimum infant feeding and
of ICT in health care (telehealth), young-child feeding practices
and traditional and alternative health anchored on breastfeeding during
care. For health information systems, the first six months of life;
the science community shall focus
on building information content and b) Calorie-, nutrient-dense and
providing access to relevant, current, safe solid and semi-solid foods
and accurate health information; (complementary foods) from the
sixth month of life onward, with
b) CHED shall focus on education- continued breastfeeding up to
related research to produce competent two years of age;
health workforce, while the DOH
will focus on health systems and
operations research, to address

c) Sanitary practices, including term goal is to contribute to improving
personal hygiene and the quality of life of all Filipinos through
handwashing; responsible parenting, and outcomes in
health, education, and population that
d) Supplementation with Vitamin are in harmony with available resources
A, zinc for diarrhea management, and sustainable environment conditions,
iron for pregnant women and thus reducing poverty and inequalities in
infants, and iodine in areas where human development opportunities.
iodine deficiency disorders are
endemic; The following objectives support this
long-term goal:
e) Deworming;
Help couples and parents exercise
f ) Appropriate medical and responsible parenting to achieve the
dietary management of acute desired number, timing and spacing
malnutrition; and of children and improve maternal,
neonatal and child health, and
g) Iron fortification of rice and flour, nutrition status;
iodization of salt, and Vitamin A
fortification of other staples. Help adolescents and youth avoid
premarital sex, teenage pregnancies,
3. Revive, identify, adopt, and early marriages, sexually transmitted
propagate good practices and models infections and other psychosocial
for nutrition improvement; concerns; and
4. Increase food supply at Contribute to policies, plans and

the community level through programs to attain population growth
food production programs and and distribution consistent with
development and the maintenance of economic activities and sustainable
facilities to allow efficient distribution development.
of food (refer also to Chapter 4);
The following major strategies shall be
5. Improve access to food by undertaken:
generating employment and building Reaffirm the highest priority
capacities for higher employability; 1. Work for universal access (accessibility, for basic education as a right
availability, and affordability) of all that should be enjoyed by all
6. Protect the vulnerable from food medically, ethically, and legally approved Filipinos
insecurity through food-based safety family planning methods and services to
nets, e.g. direct distribution of rice, help parents plan their families consistent
emergency employment; and with their plans and decisions;
7. Strengthen and nurture 2. Promote male responsibility in

interagency structures for integrated Responsible Parenting and Family
and coordinated implementation Planning (RP/FP) programs, in the
of nutrition and related services at context of gender equality and equity;
national and local levels.
3. Continue to utilize community
Population organizing and participatory strategies
(e.g., Responsible Parenting Movement,
The Directional Plan for Population community-based volunteerism) to
2011-2016 addresses the challenge of sustain and broaden the acceptance of
poverty alleviation, as this is affected by responsible parenting as a social norm;
fertility and parenting choices. Its long

4. Provide age- and culture-appropriate 3. Make education and training truly
and gender-responsive human sexuality inclusive and expand opportunities
education for the youth through the formal for lifelong learning through: (a)
and nonformal educational systems; and better and broader provision of basic
educate parents in appropriate skills and educational inputs, especially in
information regarding adolescent health traditionally lagging areas by using
and human concerns; ADMs in formal education and ALS
for out-of-school youths and adults;
5. Intensify communication, education, (b) maximal learning opportunities for
and advocacy campaigns for population mentally challenged individuals (e.g.
and development and RP/FP programs by autistic, attention deficit hyperactivity
broadening alliances and strengthening disorder, etc.) by providing special
networks with program stakeholders, instructional services and facilities; (c)
LGUs, NGOs, business community, improved and safe school buildings
the academe, the media and faith-based and facilities, to ensure accessibility of
organizations, among others; and PWDs and consider disaster risks; and
(d) strengthened Madrasah, education
6. Advocate increased investment in of IPs, and other vulnerable groups;
the population program by the national
government, and coordinate with LGUs 4. Accelerate the implementation of
to mobilize support for the population the Basic Education Sector Reform
program through ordinances, executive Agendas five key reform areas towards
issuances, and budgetary allocations that the attainment of the goals of EFA
strengthen local population and RP/FP and the MDGs: (a) school-based
programs. management (SBM); (b) national
learning strategies; (c) quality assurance
Education, Training and Culture and accountability; (d) complementary
interventions; and (e) institutional
With the slow decline in population culture change. The SBM system shall
growth, the country must contend with be fully operationalized to ensure direct
continually rising demands for educational access to resources of public schools
and employment opportunities, other as a means of achieving educational
basic human rights-based entitlements, devolution and decentralization;
and a more extensive participation in
the era of internationally-shared human 5. Enhance learning efficiency in
resources. The national education and the early grades through the use of
other learning systems must respond to the mother tongue as the language
the above challenges, even as it attends of learning, and improve student
to the socioeconomic requirements of retention, completion and achievement
a peaceful and progressive nation and a rates, with strong support from parents,
globally competitive economy. the community, and civil society;
The following policies and strategies shall 6. Pursue a focused program for the
be pursued: health, nutritional and physical well-
being of learners as the foundation of
1. Reaffirm the highest priority for improved attendance and performance,
basic education as a right that should be in coordination with the expanded
enjoyed by all Filipinos; CCT Program;
2. Harness private-sector resources in 7. Align the pedagogy of science

the delivery and monitoring of, social and mathematics education with
marketing and advocacy for education, the requirements of the global
especially higher education; environment; strike a strong balance

between technology and livelihood attractive remuneration and professional
education on both elementary and growth, alongside awards, incentives
secondary levels; and expand the use and recognition that may be provided
of ICT in technology-based student through PPPs;
learning packages to enhance the
teaching-learning approach in basic 11. Support and institutionalize
education (e.g., indexing of curriculum cultural and values-oriented projects on
concepts and competencies for TV, radio, print and Internet through
systematic development of e-learning partnership with media and other private-
materials); sector and civil society entities; produce
TV documentaries and infomercials, to
8. Ensure that the structure and highlight positive Filipino values and
program of formal basic education, promote sustainable development, peace
within the framework of Kindergarten and human security, good governance,
to 12 Years (K+12) Basic Education disaster-risk reduction and climate-
Program, are adequate and sufficiently change preparedness. The development
responsive to: meet legal and other communication policy framework of the
formal requirements of employment; Philippine Information Agency (PIA)
pass the test of global comparability shall be adopted, with the convergence
and prepare students for employability of traditional and multimedia platforms,
and for higher levels of learning; and as well as online and social media, in
reinforce career consciousness among engaging wider clientele and audiences
students, and provide guidance and at all levels;
counselling throughout the K+12 Work for a highly accountable
Basic Education Program; 12. Embed the development higher education subsystem and
communication approach espoused by institutions with strong external
9. Strengthen, streamline, and the PIA in all government information governance, management,
improve the learner assessment programs and projects, from policy and financing (including
system based on the expanded formulation to implementation, locally-funded and maintained
definition of Functional Literacy, monitoring and evaluation. The institutions) and demonstrating
utilizing it as a mechanism for: (a) a private media, academe, civil society desired socioeconomic impact,
more comprehensive measurement of organizations and business sector shall responding to the imperatives of
system performance; (b) curriculum be encouraged to join in the various globalization but reaching out to
development and instructional development communication efforts of politicallychallenged areas and
delivery; (c) further learning and government, to inspire the citizenry and communities.
training enhancement; (d) career and instill in them an active commitment as
skills aptitude and job readiness; and stakeholders in building better citizenry
(e) actual entry into employment; and stronger and self reliant communities;
10. Institutionalize preservice 13. Sustain heritage conservation

education, in-service training, approaches to nurture countrys history
hiring, licensure, promotion and and preserve the patrimony of bio-
performance assessment of teachers, cultural diversity;
fully anchoring on the National
Competency-Based Teacher 14. Develop a sporting culture that
Standards (NCBTS) and the views grassroots and mass-based sports
expanded definition of functional as an important mechanism in promoting
literacy as firm foundations of human development and peace, and as a
all quality enhancement and source for development of athletes by: (a)
professionalism; and establish an strengthening the national centerpiece
effective system for the two-track program for grassroots and sports for
career paths of teachers (teaching all; (b) harnessing high-level training
and management) that guarantees towards developing Filipino athletes

who will be at par with the worlds phase-out or closure of nonperforming
best; and (c) enforcing the mandates, HEIs and redundant programs, and
responsibilities and accountabilities of harmonization and complementation
major sports stakeholders, to encourage of offerings;
partnerships and good governance;
19. Enhance the cross-level
15. Pursue an integrated system mobility of students between higher
of all publicly-funded forms of student education and middle-level skills
financial assistance in post-basic development based on the Philippine
education to achieve the following: (a) National Qualification Framework
increased student purchasing power and (PNQF) through ladderization,
freedom of choice; (b) improved targeting the expanded tertiary education,
and selection system; and (c) rationalized equivalency and accreditation program
financing. The bulk of public resources for (ETEEAP) and other modalities;
post-basic education shall be channeled
directly to students through efficient 20. Devise a transnational
and effective governance and clientele education (TNE) strategy in programs
targeting of financing schemes (e.g. and services for both inbound and
voucher system, expanded scholarships, outbound students and workers,
student loans), and other forms of including mutual recognition/
student assistance, in order to promote accreditation of skills and professional
the matching of and demand for critical development of Filipino workers vis-a-
skills and professions; vis neighboring countries. Reasonable
and mutually beneficial supervision
16. Rationalize the governance and regulation of TNE should lead
of middle-level skills development by to quality assurance and management
strengthening TESDA and focusing on of foreign providers, as well as the
development planning, resource allocation, integrity and competitiveness of
standard-setting and quality assurance; Filipino providers;
and encouraging LGUs and industries to
directly participate in the delivery of TVET 21. Improve the efficiency and
skills development programs; effectiveness of the demand-supply
match for critical skills and high-
17. Work for highly accountable level professions by: (a) addressing
higher education subsystem and the problem of job-skills mismatch
To rapidly address the housing institutions with strong external through tighter industry-academe
problem, particularly the governance, management, and financing links and better dissemination of
proliferation of slums and (including locally-funded and maintained labor market information (including
informal settlements, the institutions), thus demonstrating desired career guidance and counselling);
government shall formulate socioeconomic impact, responding to the (b) emphasizing education and
a National Slum Upgrading imperatives of globalization, and at the training in generic competencies,
Strategy that will set the targets same time reaching out to politically such as trainability, work ethics,
for slum upgrading programs. challenged areas and communities. ICT literacy, critical thinking and
HEIs shall be encouraged to incorporate problem solving, and communication
the promotion of peace, sustainable skills; and (c) improving levels
development, gender equality, and women of competencies among trainers
empowerment in appropriate parts of the and assessors in human resource
curriculum and in agendas for research development, including heightened
and extension; gender sensitivity;
18. Rationalize the number, size, 22. Integrate human rights

and roles of HEIs through systematic concepts and principles in the
interventions, including amalgamation, educational system, to empower

students, faculty and education staff Government shall pursue the following
to uphold their rights and prevent any reforms to scale up and sustain slum
discrimination; upgrading: (a) supporting other forms
or modalities of security of tenure
23. Strengthen social cohesion and such as usufruct and lease rights; (b)
solidarity (i.e. unity in diversity) among developing PPPs for onsite upgrading
the different ethnolinguistic groups and and resettlement; (c) stimulating housing
faith communities in the country and microfinance for end-user financing;
within the ASEAN community by and (d) strengthening community
enhancing awareness and understanding partnerships and stakeholdership through
of common cultural, economic, and capacity development. Through the PPPs,
political interests; promote intercultural urban renewal shall also be promoted Social protection policies
and interfaith dialogues alongside for sustainable urban development, to and strategies shall be
informal and nonformal modalities, to ensure balanced provision of revitalized guided by an operational
train communities and leaders in the art infrastructure that would support social framework of reducing poverty
and practice of conflict resolution; sectors, including socialized housing. and vulnerability through
interventions in four major
24. Balance the demands of LGUs shall lead the efforts in shelter areas: labor market, social
globalization through a locally-adapted/ planning, since housing and human welfare, safety nets, and social
indigenized curricula that promote and settlements will be localized in terms of insurance.
preserve indigenous knowledge by: (a) identifying solutions and programming.
expanding and upgrading the capacity Thus, LGUs shall develop a land inventory
to teach foreign languages in response system to identify areas for urban growth
to the requirements of internationally- and planned areas for human settlements
shared human resources and emerging through their Comprehensive Land Use
needs in the ASEAN region; (b) Plans (CLUPs).
integrating balanced messages of
migration and development in the Building capacity for effective urban
Philippine education, both in the formal planning systems, data management,
and alternative learning system; (c) and disaster risk management especially
making the education system responsive among the LGUs shall be established.
to the needs of the global community,
while minimizing brain drain, The following policies and strategies shall
encouraging brain gain and protecting be pursued:
the Filipino family from the social
costs of migration; and (d) encouraging Housing
Filipinos overseas to remain rooted in
their culture through an appreciation of 1. Create alternative funds and mobilize
Filipino languages, culture and heritage. resources, to spur housing production
through the revival of the SSS, GSIS and
Housing and Urban Development GFIs contribution in the housing sector
pool; reinstate the entitlements of the
To rapidly address the housing housing sector under the Comprehensive
problem, particularly the proliferation and Integrated Shelter Finance Act (RA
of slums and informal settlements, 7835); involve rural banks, cooperatives and
the government shall formulate a microfinance institutions in implementing
National Slum Upgrading Strategy a housing micro-finance program, catering
that will set the targets for slum to the marginalized sector and rural
upgrading programs. Expanded homebuyers; and develop an effective and
slum upgrading, onsite upgrading or viable secondary mortgage market and
incity resettlement shall be pursued rationalization of the guarantee system;
as strategies by government and
stakeholders.

2. Build strong partnerships with LGUs and activities to provide secured
to accelerate housing production through tenure to urban informal settlers,
land use and local shelter planning, land especially those in danger areas.
inventory and creation of Local Housing
Strengthen the CBEP to create Boards (LHB); rechannel development Social Protection
jobs and sustain labor market funds to LGUs for housing projects for
programs by adhering to decent their constituents; and set aside lands for Social protection policies and
work standards socialized housing in accordance with strategies shall be guided by an
the Urban Development and Housing operational framework of reducing
Act (RA 7279); poverty and vulnerability through
interventions in four major areas: labor
3. Engage NGOs (e.g., Gawad Kalinga, market, social welfare, safety nets,
Habitat for Humanity, ABS-CBN and social insurance. A convergence
Foundation) and the private sector of social protection programs,
in building and scaling up socialized through partnership-building, and
housing projects; participatory governance, shall be
implemented.
4. Promote the use of green technology
and materials in housing construction Crosscutting Issues
and in building disaster-resilient
homes; and 1. Improve the targeting of social
protection programs:
5. Develop a strong, cohesive and
responsive shelter team (e.g., key shelter a) Ensure the integrity and the use
agencies and stakeholders) to bring of the NHTS-PR to target social
significant changes and institutional protection programs for the
reforms, including simplifying loan poor, such as the CCT program
application procesing for development and the PhilHealth Indigent
and homebuyers loans, and reducing red Program, to maximize coverage
tape in the issuance of land titles and and minimize leakages;
housing and development permits, at
the national and local levels; and ensure b) Consolidate, maintain, and
transparency and good governance in the update the NHTS-PR system
housing sector. and database;
Urban Development c) Make the NHTS-PR available

to all agencies and entities at the
1. Formulate an action plan implementing national and local levels; and
the National Urban Development and
Housing Framework (NUDHF) 2009- d) Complement NHTS-PR
2016, to achieve urban competitiveness with the Community-Based
and sustainability, housing affordability, Monitoring System (CBMS)
poverty alleviation, and effective and available at the LGU level.
performance-oriented governance
through a participatory process; and 2. Provide adequate funding for social
protection:
2. Prioritize slum improvement under
a policy of maximum retention and a) Redirect public spending from
minimum dislocation; and vigorously less effective to more effective
implement the National Slum Upgrading and efficient social protection
Strategy through a National Slum programs;
Improvement Action Plan for 2011-2016
that comprise specific targets, programs

b) Increase and sustain the budget 5. Improve the database on vulnerable
for social protection programs; population groups to help form the basis
and for sound policies and effective programs;
and
c) Intensify advocacy among LGUs
to reinforce political will and 6. Guarantee the inclusion of the
improve their commitment to vulnerable groups in local development
the implementation of social plans through their representation
protection programs and projects. in local development councils and
their participation in the formulation,
3. Improve policy coordination and development, and implementation of
program implementation of social policies and programs.
protection measures:
Labor Market Interventions
a) Ensure that the necessary
institutional arrangements to 1. Establish emergency employment/
implement the programs are in guaranteed employment programs for
place; workers affected by crisis, the seasonally Achieve and sustain universal
jobless and the long-term unemployed, coverage of the poorest and
b) Ensure the coherence and particularly the youth and women; vulnerable sectors, including
coordination among national the IS and OFWs who can
government agencies, LGUs, 2. Strengthen the Community-Based afford to pay
key private sector organizations, Employment Program (CBEP) to create
NGOs and international jobs and sustain labor market programs
development agencies for by adhering to decent work standards,
greater financing, coverage and to prevent the effects of sudden loss of
convergence; and income and to enable vulnerable workers,
especially women, to attain economic
c) Raise the capacity of government security:
agencies involved in social
protection, particularly in a) Intensify advocacy for self employment
implementation and monitoring. and livelihood programs;
4. Establish a monitoring and b) Promote workers cooperatives in the

evaluation scheme: community for mutual assistance
(e.g., damayan, paluwagan);
a) Establish a reliable and
responsive monitoring and c) Make workers relief and rehabilitation
evaluation system to regularly contingent to relocation to safer
assess impact, identify habitats and more sustainable
successes, improve program livelihood;
features and performance,
win political commitment for d) Guarantee the availability of suitable
program sustainability, and housing, jobs and livelihood in
inform program administrators relocation areas;
of changes in the status of
beneficiaries; and e) Promote paradigm shift during
crisis from response to mitigation to
b) Revisit program designs regularly preparedness interventions; and
to check their consistency with
objectives, desired outcomes and f ) Establish a multipurpose Emergency
the adequacy of coverage. Fund for crisis-affected workers.

3. Implement active labor market f ) Implement gender-responsive
policies and programs to enhance the OSH programs (e.g. breastfeeding
employability of vulnerable workers, in the workplace).
such as those affected by crisis, workers
in the informal economy, displaced and 6. Strengthen measures against child
distressed OFWs, internally displaced labor and exploitation through strategic
people, the youth and women: partnerships, and intensify advocacy
and action at all levels while improving
a) Improve access, availability and access to quality and integrated services;
affordability of training in new
skills and occupations; 7. Use labor-intensive techniques,
whenever appropriate, in implementing
b) Expand training opportunities for government infrastructure projects
vulnerable workers; and by giving priority to the socially and
economically disadvantaged residents of
c) Facilitate the reintegration the project areas;
of returning OFWs through
appropriate training, investment 8. Make Public Employment Services
and savings programs. Office (PESO) more responsive to the
needs of job seekers; and
4. Initiate policy interventions, programs,
projects and other measures to ensure the 9. Promote the integration of PWDs
transformation of the brain-drain into a in mainstream vocational training,
brain-gain phenomenon, and enhance the employment, and livelihood schemes,
earning capabilities and entrepreneurship with particular attention to the
opportunities of returnees. participation of women with disabilities.
5. Intensify workforce-focused occupational Social Insurance

safety and health (OSH) programs:
1. Achieve and sustain universal
a) Improve OSH compliance, coverage of the poorest and vulnerable
Complement the CCT program particularly in high-risk industries, sectors, including the IS and OFWs
with other social protection such as construction; who can afford to pay:
programs, to ensure it is linked
with programs on job generation, b) Strengthen industrial tripartite a) Enrol the poorest families in
livelihood, or asset reform. councils for business process PhilHealth by utilizing the
outsourcing; NHTS-PR;
c) Sustain dialogues to strengthen b) Expand coverage of IS workers,

interaction and cooperation between and pursue legislation that
labor and management, to promote mandates the enrolment among
OSH programs at the enterprise level, of IS workers who can afford to
particularly in industries identified pay;
as key employment generators or
industry winners; c) Provide effective membership
services; and
d) Integrate OSH in local development
plans and in school curricula; d) Secure access to critical outpatient
services at accredited rural health
e) Intensify the campaign for family units and health centers, and to
welfare programs; and critical inpatient services at the
national and local hospitals.

2. Develop enhanced social insurance coordinate with provider agencies to
measures for vulnerable groups against improve compliance among CCT
economic and natural shocks particularly beneficiaries.
for laid-off workers:
2. Complement the CCT program with To achieve inclusive
a) Implement employment other social protection programs, to growth and sustainable
insurance for workers in the ensure it is linked with programs on job socioeconomic development,
private sector and IS; generation, livelihood, or asset reform; the completion of agrarian
reform must be prioritized as
b) Implement indigenous 3. Develop and implement appropriate, the governments antipoverty
microinsurance schemes and adequate and cost-effective social welfare and social justice program.
integrate microinsurance into interventions, to address the needs of the
microfinance lending; poorest and the most vulnerable;
c) Re-examine whether the SSS 4. Sustain and expand the gains achieved
contributions required of IS in CDD projects, such as KALAHI-
workers remain affordable and CIDSS, and facilitate environmental
realistic; and protection and conservation through
CDD and participatory development
d) Implement mandatory SSS projects, such as rainforest rehabilitation,
coverage for landbased OFWs, reforestation, biodiversity conservation,
and include SSS enrolment watershed management, river basin
as prerequisite in the issuance management, coastal and lakes protection;
of the Overseas Employment
Certificate. 5. Provide sustainable microfinance
services:
3. Reform the provider payment
mechanism and benefit packages in a) Expand and enhance microfinance
the NHIP, to improve private health programs and services, especially
insurance schemes and financial risk in areas with low saturation rate,
protection of members; complementing the CCT Program;
4. Promote hazard insurance coverage b) Provide capacity development for

for vulnerable groups. microfinance institutions to effectively
and viably implement microfinance
Social Welfare programs;
1. Expand and strengthen the CCT c) Develop and enhance the

program to cover all poor households in entrepreneurial skills of target end-
the country: clients; and
a) Maintain and enhance the d) Operate and manage microenterprises

CCT support systems, such sustainably.
as compliance verification,
beneficiaries update, payment 6. Strengthen regulation and enforcement
system, targeting, regular spot of social welfare and development (SWD)
checking and monitoring; and standards for both public and private
organizations engaged in SWD;
b) Implement supply-side reforms
and adjustments (basic health 7. Strengthen measures against human
and education services), and trafficking and provide support for its
victims;

8. Fully implement the laws protecting and 4. Reform the NFA Rice Subsidy
promoting the rights of vulnerable groups, program, to effectively target the poor
(e.g., IPRA, Expanded Senior Citizens and to support the CCT and other
Act, Amended Magna Carta for PWDs, anti-poverty and social protection
Magna Carta of Women, Magna Carta programs; and
of Migrant Workers, Anti-Trafficking in
Persons Act, Juvenile Justice Welfare Act, 5. Strengthen safety nets for OFWs:
Anti-Violence against Women and their
Children Act); a) Intensify the effort for OWWA
membership enrolment and
9. Monitor and ensure the countrys renewal; and
compliance with various international
treaties, conventions and protocols that b) Institute dialogues and forge
protect and promote the rights of the agreements to further strengthen
vulnerable groups; cooperation with labor-receiving
countries towards mutual
10. Campaign for other countries to protection and benefits for the
ratify international conventions, treaties, OFWs.
standards and protocols that are relevant
to the protection and promotion of the Asset Reform
rights and wellbeing of OFs;
Land Acquisition and Distribution
11. Promote service-delivery models, (LAD)
such as partnership with faith-based
organizations and NGOs, in providing To achieve inclusive growth
SWD services and cost-sharing between and sustainable socioeconomic
NGAs and LGUs or NGOs. development, the completion of
agrarian reform must be prioritized
Safety Nets as the governments antipoverty and
social justice program. Completing
1. Develop safety net programs that are the CARP by 2014 will be a historic
readily available and can be scaled up milestone of this Plan. The country
during financial and economic crisis, will finally put to rest the greatest
calamities, emergencies and disasters property issue once property relations
(e.g., public workfare program); in agriculture are clarified.
2. Allocate quick-disbursing funds at the The DAR, as the lead CARP

national and local levels, to assist victims implementing agency, shall adopt
of calamities and disasters; the following strategic directions in
improving land tenure security of the
3. Implement an emergency response landless farmers:
income-support program through
employment creation in distressed 1. Complete LAD of private
areas, to respond to contingencies such agricultural lands (PAL) in the
as recessions, natural and man-made CARPer balance:
disasters or sudden income shocks;
and put in place a regular monitoring a) Focus on large private agricultural
mechanism to ensure the readiness of lands;
relevant agencies during natural and
man-made disasters; b) Streamline processes and
procedures by utilizing
technology-enabled information
tracking systems; and

c) Enhance the database of 3. Continue the coordination and
landholdings for ease in targeting dialogue among government agencies,
and monitoring land acquisition such as the DENR, DA, LRA, DAR and
and distribution. NCIP, on land and tenurial conflicts and
overlapping claims involving ancestral
2. Continue the distribution of public lands;
alienable and disposable lands;
4. Review and simplify existing NCIP
3. Synergize the efforts of CIAs in all policies, circulars, issuances, and
LAD processes; and guidelines, including the guidelines
on the issuance of the FPIC, without
4. Establish and operationalize sacrificing the welfare and concerns of
strategic partnership with CSOs, IPs. The inclusive and full participation of
particularly on the coverage of large IPs in the process shall be ensured while
private agricultural lands. maintaining a meaningful collaboration/
partnership with CSOs, the private
Agrarian Justice Delivery sector, national government agencies, and
LGUs;
1. Prioritize cases with higher number
of affected ARBs; 5. Improve and facilitate IP access to
justice and traditional decision-making
2. Enhance the case-tracking processes on the settlement of conflicts
system for the inventory of cases and by the elders. Traditional practices and
flowcharting of existing systems; processes shall be documented and serve
as reference for transfer of knowledge
3. Speed up decisions of cases through on conflict resolution, to strengthen IP
the development of templates, proper decision making processes. Coordination
docketing and establishment of central among the DOJ, the Public Attorneys
servers for monitoring; Office (PAO) and the Supreme Court,
as well as the civil society, shall also be
4. Ensure transparency by streamlining pursued towards advocating indigenous
administrative orders and utilizing the rights and increasing access by IPs to free
web links to case resolution; and and immediate legal services;
5. Develop new training programs for 6. Assist ICCs/IPs in documenting

Program Beneficiaries Development cases resolved under indigenous justice
(PBD) to support enterprise systems, conflict resolution mechanisms
management of ARBs. and peace building processes, for NCIP
to adequately defend the indigenous
Ancestral Domains and Lands litigants. Documentation of cases is
essential as written evidence is required
1. Intensify the information, by regular courts in cases filed against
education, and communication drive IPs;
on IPRA and the NCIPs delineation
and titling program in all levels of 7. Consider the IPRA provisions
government; in discussions regarding Reducing
Emissions from Deforestation and Forest
2. Fasttrack the identification, Degradation (REDD) and other carbon
delineation, titling and registration of forest engagements in the national and
ancestral domain claims; international arena;

8. Encourage ecotourism as a source of the organization, education,
alternative or supplementary income, and mobilization of the small
subject to community protocols on fishers in the municipality;
protection of indigenous knowledge speed up the delineation of
systems and practices. Watershed municipal waters; and facilitate
management and the planning of the implementation of coastal
ancestral waters to enhance biodiversity resource management planning
shall be considered in ancestral domain and the Fisheries Code;
planning;
b) Issue a Memo Circular (from
9. Ensure that IP data and statistics are DA-BFAR and DILG) to local
up-to-date by including IP indicators, chief executives advocating the
particularly the ethnicity variable, in the swift implementation of the
national censuses and related surveys Fisheries Code, especially the
and by ensuring the involvement of the delineation of municipal waters,
NCIP from the preparatory activities as a means to help 1.5 million
up to the validation of the collected IP- small fishermen and increase
related statistics. The NCIP shall also the LGU tax base;
take the lead in orienting LGUs with
IP population on gathering IP ethnicity c) Explore the granting of
variable statistics, and utilizing these in incentives to small fishers
formulating socioeconomic profiles. The participating in the process, in
NCIP shall ensure that institutional the form of their immediate
coordination and agreement on this registration and licensing as
concern is established; and municipal fishers, and provision
of settlement sites and land
10. Strengthen partnership among tenure security; and
ICCs, LGUs, NGAs and CSOs to
ensure synergy in activities for IPs. d) Provide technical assistance
Partnerships shall be tapped in: ensuring through DILG and relevant
compliance with the FPIC process; agencies in delineating and
formulating and implementating validating municipal waters,
ADSDPPs and their integration in especially among municipalities
CLUPs and local development plans; and with territorial conflicts.
providing capacity building and training
in entrepreneurial skills enhancement, 2. Explore a moratorium on all
business management, bookkeeping, approvals of Foreshore Lease
communication, product development, Agreements, except on ensuring
training and marketing. the settlement of small fisherfolks,
and set up a task force on fisherfolk
Coastal and Marine Settlement settlement, to begin providing land
tenure security to small fisherfolk
1. The delineation of municipal waters households;
shall be fasttracked and completed during
this Plan period through the following 3. Ensure that 40 percent of women
strategies: are represented in all management
structures, both nationally and locally,
a) In partnership with NGOs and as provided in RA 9710 or the Magna
fishersmens federations at the local Carta for Women;
and national levels, deploy at least
one trained community organizer 4. Set aside sufficient funds
in each of the remaining 873 for the implementation of the
coastal municipalities, to: facilitate Comprehensive National Fishery

Industry Development Plan
(CNFIDP), which is the 25-year Legislative Agenda
development plan initiated by the
DA-BFAR by virtue of the Philippine Health, Nutrition and
Fisheries Code of 1998; and Population
5. Conduct vulnerability risk Health Financing
assessments of coastal communities
through DA-BFAR and DENR, in Amendment of RA 7875, or the
coordination with LGUs, and provide National Health Insurance Act of 1995
the necessary funds for the activity.
A roadmap towards universal health
Urban Asset Reform care through a refocused PhilHealth,
this seeks to modify national-local
1. Increase funding for proven housing government premium sharing for the
programs and institutions, scale up Sponsored Program and full subsidy
the Community Mortgage Programs scheme for the lowest income bracket
success and strength, and fasttrack the of the population (5 million families);
issuance of Presidential proclamations sustain membership to PhilHealth
for socialized housing; for all Filipinos; include membership
to PhilHealth as requirement for
2. Provide incentives to unlock government transactions, such as
land for affordable housing through application of business permit, drivers
resource generation for socialized or license, marriage certificate; strengthen
low-cost housing and private sector- the visitorial powers of PhilHealth; and
guided redevelopment of public land define offenses and abuses against the
(e.g., redevelopment of NHA land NHIP.
to raise funds for relocation and
construction of socialized housing Restructuring the Excise Tax on
facilities); and Alcohol and Tobacco Products and
Earmarking Portions of Incremental
3. Provide and encourage access to Revenue for Health Programs
land for affordable housing through
the alternative land access modes, This seeks to increase the resources for
such as long-term lease and usufruct health promotion and disease control
rights, including putting in place basic programs of DOH and Philhealths
infrastructure ahead of settlements coverage of indigent households, by
and making the accessed land in the amending Sections 141, 142, 143, 144,
periphery available for mass housing. 145 and 288 of the National Internal
Revenue Code of 1997, as amended.
Income Retention of National

Government Hospitals
This seeks to authorize all national

government hospitals to utilize all
its income for hospital operations,
particularly the capital outlay,maintenance
and other operating expenses, and allow
them to invest their funds in high yield
investment instruments. The coverage
shall include all government hospitals at
national and local levels.

Service Delivery Philippine Childrens Medical Center,
and East Avenue Medical Center, to
A National Policy on Reproductive provide specialized medical services,
Health, Responsible Parenthood and professional and advanced medical
Population Development training.
This seeks to strengthen governments Human Resources

efforts towards the protection of womens
rights and the realization of the peoples Improved Management Systems
vital role in family health, among others; in Human Resources for Health
and compel the State to guarantee (HRH)
universal access to medically-safe, legal,
affordable and quality reproductive This seeks to institutionalize the
health services, methods, devices, supplies Human Resources for Health
and relevant information for responsible Network as a structure to support
parenthood. human resources for health
development in the Philippines.
Strengthening of the Philippine
comprehensive policy on the prevention Amendment of the Medical Act of
and control of AIDS 1959
This seeks to enhance existing HIV This seeks to amend or include the
and AIDS information and educational following provisions: classification
program to increase the level of awareness and/or reclassification of all existing
of the citizens; provide mandatory allowances, including magna carta
disclosure of HIV and AIDS status to for health workers; creation of the
spouse; and strengthen the Philippine Council on Medical Education;
National AIDS Council Secretariat. admission requirements; creation
of the Professional Regulatory
Regulation on the Donation and Board for Medicine; examination,
Transplantation of Human Organs registration and licensure; regulation
and Tissues from Living and Deceased of the practice of medical profession
Donors (suspension or revocation); and
foreign reciprocity.
This seeks to promote access to organs
and tissues for transplantation for Amendment of the Midwifery Act
patients with end-stage diseases, and
regulates the donation of human organs This seeks to allow midwives to
and tissues from living and deceased administer vaccination during
donors; develop and maintain a national immunization campaigns, as well as
registry and reporting system of donors routine immunization at the barangay
and recipients of human organs and health stations, and administer life-
tissues, and continuous evaluation of the saving drugs in emergency cases.
system.
Regulation
Establishment of a Philippine Center
for Specialized Health Care (PCHSC) Bureau of Health Facilities and
Services (BHFS) strengthening
This seeks to establishe the Philippine
Center for Specialized Health Care, This seeks to strengthen the licensing
composed of Philippine Heart Center of health facilities and services under
for Asia, Lung Center of the Philippines, BHFS.
Natonal Kidney & Transplant Institute,

Health Information System the DepEd the use of the Filipino in
teaching, learning and assessment, to
Notifiable Disease Act enhance the efficiency, effectiveness and
relevance of the learning process, both
This seeks to improve reporting formal and ALS.
of important communicable and
noncommunicable diseases, including Amendments to the Roxas Law
injuries and trauma, and strengthen
the use of ICT for data collection. This seeks to restructure the allocation
of DepEds budget for capital outlay,
Education, Training and amending RA 7880 (Fair and
Culture Equitable Access to Education Act),
and emphasizing the role of up-to-date
Basic Education school mapping in the rational allocation
of educational infrastructures in all
Amendments to the Education planning cycles.
Provisions of the Local Government
Code An Act Strengthening and Expanding
the Education Service Contracting
This seeks to amend the education Scheme for Basic Education
provisions of the Local Government
Code of 1991, including: mandating This seeks to support current basic
the broader and better use of the education reforms by comprehensively
Special Education Fund; reorienting amending the existing GASTPE Law
the roles of the LGUs in the local and promoting fiscal savings-oriented
management and quality assurance PPP. Alongside other purchaseable
of basic education; and changing services, the legislation will provide for
the composition of the Local School the expanded outsourcing of instructional
Board, which shall be renamed services for early childhood education,
Local Basic Education Board, to elementary education and ALS, on top
promote greater roles, synchrony of the existing secondary education.
and check-and-balance among local
stakeholders, thus following the An Act Providing for an Integrated
constitutional priority accorded to System of Licensure, Assessment,
basic education. Qualification and Professional
Development of Teachers, and Revising
Amendments to Magna Carta for RA 7836 (as amended by RA 9293)
Teachers
This seeks to provide a three-stage
This seeks to balance the enjoyment of licensure and qualification system, and
rights and privileges with the exercise authentic, performance- and NCBTS-
of responsibility and accountability, based examination; reform the criteria
in order to expediently implement for appointment or membership in the
the developmental objectives of the Licensure Examination for Teachers
DepEd in promoting equity and (LET); and limit the number of times
quality in the provision of basic LET can be taken.
education.
Amendments to ECCD Law (RA 8980)
An Act Establishing a Multilingual
Education and Literacy Policy This seeks to recognize the early years
from 0-6 as the first cycle of educational
This seeks to mandate a permanent development, and strengthening the
policy that institutionalizes within ECCD Council.

Middle-level Skills Development Public Higher Education
Institutions Restructuring Bill
Enterprise-Based Education and
Training Bill This seeks to address the urgent
need to innovate and rationalize the
This seeks to subsume the apprenticeship system of governance, financing and
chapter of the Labor Code of the quality assurance of publicly funded
Philippines; and integrate all enterprise- institutions of higher learning, to
based training programs, including on- make state higher education more
the-job training, apprenticeship, dual accountable and responsive to both
training system, and similar training the needs of the students and the
modalities, under one set of coherent economy.
policies, and structure to implement and
expand opportunities and venues for Regional University System in
work-relevant education and training. Region 11 Bill
Institutionalizing the LEP This seeks to create the Southeastern

Philippines Regional State University
This seeks to develop and implement a System in Region 11 that integrates
unified national qualifications framework the existing state university and three
that establishes equivalency pathways and state colleges in Davao City, Davao
access ramps for a ladderized system that del Norte, and Davao Oriental.
allows easier transitions and progression This shall serve as the pioneering
between TVET and higher education. model for the envisioned national
restructuring of state higher education
Higher Education subsystem that will promote better
resource management and utilization
Amendment to CHED Charter ( RA while pursuing enhanced quality
7722) towards Comprehensive Higher management, effectiveness and
Education Reform Law regional relevance.
This seeks to pursue the recommended Comprehensive Scholarship and

measures of the Philippine Education Student Financial Assistance
Sector Study (PESS), to eliminate the Reform Act
conflict of interest between the system of
internal and external governance due to This seeks to rationalizes provisions
CHEDs chairmanship of the governing and rules governing all publicly funded
boards. Other needed provisions include: scholarship based on merit and talent,
for LGU-created/funded HEIs to be part student loans, grants and vouchers.
and parcel of the overall governance of This will modify the existing law on
higher education, for them to conform to Government Assistance to Students
national standards and best practices; clear- and Teachers in Private Education, and
cut definition of the functions of regional integrate under one set of policies the
offices; strengthen the management of the optimal resource use, systematizing of
Higher Education Development Fund; clientele targeting and selection and
strengthen, safeguard and institutionalize awarding of grantees. The legislation
normative financing; and update private is patterned after Thailands Income-
higher education provisions of the Contingent Allowance and Loans
Education Act of 1978. Program and the Australian Higher
Education Contributions Scheme.

Housing and Urban Comprehensive and Integrated Shelter
Development Finance Act (CISFA) II
Creation of the Department of This seeks to enact the continuation

Housing and Urban Development of CISFA or RA 7835, to increase
(DHUD) budget appropriation for the socialized
housing program of the government,
This seeks to ensure an adequate and and significantly increase the provision
coherent institutional framework for of housing and tenure security to poor
a holistic management of the housing informal settlers, and in order to attain
and urban development sector. the MDGs.
Balanced Housing Requirement for Social Protection

Condominium Projects
An Act Establishing a Comprehensive
This seeks to require developers of System for Registration and Licensing
proposed condominium projects to of SWD Agencies and Accreditation of
develop socialized housing projects SWD Programs and Service
(costing at least 20 percent of the
projects) as compliance with the 20 This seeks to encourage the participation
percent balanced housing requirement of all persons, organizations or
for subdivisions, per Section 18 of the corporations, natural or judicial, that
Urban Development and Housing engage mainly or in part, or represents
Act or RA 7279. themselves to engage in charitable or
SWD activities in uplifting the quality
Establishment of Local Housing of life of the poor, vulnerable and the
Boards disadvantaged sectors through a DSWD
registration, licensing and accreditation;
This seeks to create Local Housing provide benefits and incentives to
Boards in every city and municipality registered, licensed and accredited
that shall serve as the focal unit in SWD agencies; and reinforce the
the delivery of housing services, local regulatory functions of the DSWD over
shelter planning and disposition public and private individuals, agencies
of underutilized assets of shelter and/or organizations engaged in SWD
agencies and national government. activities.
National Land Use Act (NALUA) Philippine Adoption Act
This seeks to establishe a national This seeks to integrate all the existing
land use framework that will define laws on adoption and establish a central
the indicative priorities for land adoption office under the DSWD.
utilization and allocation. NALUA
shall integrate efforts, monitor Magna Carta for Workers in the
developments related to land use, Informal Economy
and evolve policies, regulations
and directions of land use planning This seeks to address the development,
processes. The NALUA mandates rights and protection of poor,
the formulation of national planning marginalized, unprotected and
and zoning guidelines and standards, underrepresented workers in the IS;
to guide LGUs in the formulation recognize the real economic value of their
of their CLUPs and enactment of labor; and provide standard registration
zoning ordinances. and accreditation.

An Act to Strengthen and Propagate Magna Carta for Youth
Foster Care for Abandoned and
Neglected Children and For Other This seeks to ensure the rights,
Children with Special Needs, Providing freedoms and protection of the
Funds Therefore and for Other youth in all aspects of their lives, and
Purposes put into reality the tenet of youth
empowerment.
This seeks to develop a comprehensive
legal framework that will consolidate the Asset Reform
interest of children in need of foster care
and for those who can provide such care. Land Administration Reform Act
(LARA)
Anti-Prostitution Bill
This seeks to establish the Land
This seeks to address the system of Administration Authority integrating
prostitution through the apprehension the Land Management Bureau, the
and prosecution of agents, recruiters, Land Registration Authority, the
traffickers, pimps, procurers, National Mapping and Resource
establishment owners, customers and Information Authority, and Registry of
others who derive sexual gratification, Deeds.
financial gain or any other benefit from
the prostitution of another person. It
shall also complement the current laws
on antitrafficking and violence against
women, in protecting and promoting the
rights of the vulnerable groups, especially
women and children.
Magna Carta for Domestic Workers
It seek to protect and promote the welfare

of domestic workers by providing realistic
minimum wage and other benefits, such
as SSS and PhilHealth, implementing
the use of a formal contract to govern
employee-employer relationship, and
preventing physical, sexual, mental and
economic abuse of workers among others.

Annex 8.1 Pace of Progress of the Philippines in terms of Attaining the MDG Targets
MDG Goals, Targets and Indicators Pace of Progress Probability of Attaining

the Target
Goal 1: Eradicate extreme poverty and hunger
Target 1.A: Halve, between 1990 and 2015, the proportion of people whose income is less
than the poverty threshold
Proportion of population below the poverty threshold 0.88 MEDIUM
Proportion of population below the food threshold 1.28 HIGH
Target 1.C: Halve, between 1990 and 2015, the proportion of people who suffer from hunger
Prevalence of underweight children 0-5 years old 0.67 MEDIUM
Proportion of households with per capita intake below 100 percent dietary 0.79 MEDIUM
energy requirement
Goal 2. Achieve universal primary education
Target 2.A: Ensure that, by 2015, children everywhere, boys and girls alike, will be able to
complete a full course of primary schooling
Elementary education net enrolment rate 0.00 LOW
Elementary education cohort survival rate 0.36 LOW
Elementary education completion rate 0.35 LOW
Goal 3. Promote gender equality and empower women
Target 3.A: Eliminate gender disparity in primary and secondary education, preferably by
2005, and in all levels of education no later than 2015
Ratios of girls to boys in elementary education participation rate HIGH
Ratios of girls to boys in secondary education participation rate HIGH
Ratios of girls to boys in elementary education cohort survival rate HIGH
Ratios of girls to boys in secondary education cohort survival rate HIGH
Ratios of girls to boys in elementary education completion rate HIGH
Ratios of girls to boys in secondary education completion rate HIGH
Goal 4. Reduce child mortality
Target 4.A: Reduce by two-thirds, between 1990 and 2015, the under-five mortality rate
Infant mortality rate 1.17 HIGH
Under-five mortality rate 1.20 HIGH
Goal 5. Improve maternal health
Target 5.A: Reduce by three quarters, between 1990 and 2015, the maternal mortality ratio
Maternal mortality ratio 0.47 LOW
Target 5.B: Achieve, by 2015, universal access to reproductive health
Contraceptive prevalence rate 0.27 LOW
Goal 6. Combat HIV/AIDS, malaria and other diseases
Target 6.A: Have halted by 2015 and begun to reverse the spread of HIV/AIDS
HIV prevalence among 15 years old and over 0.02 LOW
Proportion of population aged 15-24 years with comprehensive correct 0.03 LOW
knowledge of HIV/AIDS
Target 6.B: Achieve, by 2010, universal access to treatment for HIV/AIDS for all those
who need it
Proportion of population with advanced HIV infection with access to 0.72 MEDIUM
antiretroviral drugs
Target 6.C: Have halted by 2015 and begun to reverse the incidence of malaria and other
major diseases
Malaria morbidity rate 2.01 HIGH
Malaria mortality rate 2.37 HIGH
Tuberculosis case detection rate 3.82 HIGH
Tuberculosis cure rate 2.53 HIGH
Goal 7. Ensure environmental sustainability
Target 7.C: Halve, by 2015, the proportion of people without sustainable access to safe
drinking water and basic sanitation
Proportion of population with access to safe water 0.82 MEDIUM
Proportion of population with access to sanitary toilet facilities 1.68 HIGH

Annex 8.2 Regional Poverty and Subsistence Incidence and Magnitude: 2009
Poverty Incidence Magnitude of Poor Subsistence Magnitude of

Region Among the Population Incidence Among Subsistence Poor
Population (%) Population (%) Population
Philippines 26.5 23,142,481 10.8 9,440,397
NCR 4.0 447,891 0.6 69,747
Region I 23.3 1,085,078 7.9 367,955
Region II 18.8 545,053 5.8 167,479
Region III 15.3 1,457,004 5.0 480,695
Region IV-A 13.9 1,566,359 3.7 414,399
Region IV-B 35.0 980,542 14.8 413,876
Region V 45.1 2,422,267 17.8 956,531
Region VI 31.2 2,113,255 11.2 761,200
Region VII 35.5 2,368,361 17.1 1,143,065
Region VIII 41.4 1,731,617 19.0 794,766
Region IX 43.1 1,361,287 23.5 744,286
Region X 39.6 1,586,668 20.7 829,041
Region XI 31.3 1,278,985 14.8 604,612
Region XII 35.7 1,332,061 15.6 582,716
CAR 22.9 346,193 10.8 162,371
ARMM 45.9 1,388,856 11.5 349,459
CARAGA 47.8 1,131,004 25.3 598,201
Source: NSCB
Annex 8.3 Provinces with Highest Poverty Annex 8.4 Gini Concentration Ratios, by Region:
Incidence: 2009 2006 and 2009
Province Poverty Incidence Region 2006 2009
Zamboanga del Norte 46 Philippines 0.4580 0.4484
Agusan del Sur 43.5 NCR 0.3988 0.3953
CAR 0.4481 0.4212
Surgao Del Norte 43.1 I (Ilocos Region) 0.3953 0.4086
Eastern Samar 37.6 II (Cagayan Valley) 0.4216 0.4425
Maguindanao 37.7 III (Central Luzon) 0.3994 0.3727
Zamboanga Sibugay 35.4 IV-A (CALABARZON) 0.4082 0.4063
IV-B (MIMAROPA) 0.4106 0.4004
Romblon 36.3 V (Bicol) 0.4428 0.4164
Masbate 36.6 VI (Western Visayas) 0.4326 0.4197
Davao Oriental 36.4 VII (Central Visayas) 0.4639 0.4601
Northern Samar 32.4 VIII (Eastern Visayas) 0.4828 0.4841
IX (Zamboanga Peninsula) 0.5054 0.4738
Bohol 33.6
X (Northern Mindanao) 0.4806 0.4737
Saranggani 34 XI (Davao) 0.4225 0.4275
Sulu 33 XII (SOCCSKSARGEN) 0.4006 0.4425
Lanao del Norte 31.9 XIII (CARAGA) 0.4452 0.4595
Camarines Sur 33.8 ARMM 0.3113 0.2948
Sources: FIES, NSO
Source: NSCB

Annex 8.5 Income Poverty Measures, by Region: 2006 and 2009
Income Gap Poverty Gap Severity of Poverty
Region
2006 2009 2006 2009 2006 2009
PHILIPPINES 27.2 25.7 5.7 2.7 2.2 2.0
NCR 19.2 16.9 0.7 0.4 0.2 0.1
CAR 27.5 28.0 5.1 4.8 1.9 1.8
I (Ilocos Region) 23.5 22.4 4.8 4.0 1.7 1.4
II (Cagayan Valley) 21.2 21.0 3.3 3.0 1.0 1.0
III (Central Luzon) 22.3 22.9 2.7 2.8 0.9 0.9
IV-A (CALABARZON) 22.2 20.2 2.1 2.1 0.7 0.6
IV-B (MIMAROPA) 28.8 25.6 9.9 7.1 3.9 2.6
V (Bicol) 28.7 25.1 10.3 9.0 4.0 3.3
VI (Western Visayas) 24.2 23.8 5.4 5.7 1.8 2.0
VII (Central Visayas) 31.7 28.8 10.6 8.7 4.6 3.6
VIII (Eastern Visayas) 27.6 27.4 8.6 9.1 3.3 3.5
IX (Zamboanga Peninsula) 32.9 30.8 11.3 11.3 5.1 4.8
X (Northern Mindanao) 31.1 29.9 10.1 9.8 4.3 4.1
XI (Davao) 28.4 27.5 7.4 7.0 2.9 2.8
XII (SOCCSKSARGEN) 26.4 27.0 7.2 7.6 2.6 2.9
XIII (CARAGA) 30.1 30.5 11.1 12.1 4.6 5.0
ARMM 23.3 20.2 8.5 7.7 2.8 2.3
Source: NSCB
Annex 8.6 National and Regional BDR Estimates for the Regular Benefit Package: 2008
Adjusted
Region Coverage (%) Availment Rate (%) Support Value (%) BDR (%)
Philippines 53 42 34 7.7
I - Ilocos Region 65 19 29 3.6
II - Cagayan Valley 48 10 38 1.9
III - Central Luzon 54 24 29 3.7
IVA - CALABARZON 62 35 26 5.7
IVB - MIMAROPA 36 23 32 2.7
V - Bicol Region 46 38 40 7.0
VI - Western Visayas 44 40 38 6.6
VII - Central Visayas 54 61 27 8.7
VIII - Eastern Visayas 38 62 32 7.3
IX - Zamboanga Peninsula 36 76 40 11.0
X - Northern Mindanao 74 49 42 15.1
XI - Davao Peninsula 43 64 41 11.5
XII - SOCCSKSARGEN 35 92 37 11.9
NCR 77 33 21 5.4
CAR 57 37 36 7.4
ARMM 14 87 37 4.4
CARAGA 51 28 42 6.1
Source: Joint DOH-PhilHealth Benefit Delivery Review, August 2010

Annex 8.7 Various Forms of Malnutrition, by Region: 2008
Children 0-5 years old, in Anemia, in percent Median urinary iodine Overweight
percent excretion, in mcg/L and obesity
Region among adults,
Stunting Wasting 6mos 5years Pregnant Pregnant Lactating in percent
Philippines 32.3 6.9 23.7 42.5 105 81 26.6
I 27.5 6.5 29.4 33.3 82 112 23.0
II 31.1 8.0 39.3 60.0 157 161 22.3
III 22.3 7.1 21.4 40.7 143 94 29.8
IV-A 24.8 6.5 22.9 37.8 111 97 29.3
IV-B 37.2 7.0 25.4 49.6 75 67 20.6
V 38.2 8.0 24.9 51.1 125 97 20.5
VI 39.1 8.5 29.1 61.5 111 74 19.4
VII 35.1 4.6 20.4 40.4 82 63 28.0
VIII 41.1 6.7 16.1 39.5 83 58 27.1
IX 40.3 8.0 20.5 34.1 68 48 23.9
X 37.7 6.6 16.0 35.7 38 55 29.1
XI 37.0 5.7 15.4 22.6 62 50 28.9
XII 39.6 6.9 34.8 49.8 105 72 25.4
CARAGA 37.2 7.8 29.0 34.3 94 49 29.6
NCR 24.7 6.2 23.7 48.0 135 128 32.2
CAR 36.3 5.8 12.4 22.6 107 99 29.9
ARMM 39.7 10.3 22.7 47.3 85 88 17.1
Source: 2008 National Nutrition Survey by the Food and Nutrition Research Institute of DOST
Annex 8.8 Poverty Estimates of the Basic Sectors: 2000, 2003 and 2006
Poverty Incidence (%) Magnitude in Millions
Basic Sector 2000 2003 2006 2000 2003 2006
Women 32.3 29 30.1 12.22 11.60 12.80
Youth 24.5 23.5 25.4 5.47 5.29 5.92
Children 42.5 38.8 40.8 14.09 13.47 14.40
Senior Citizens 28 18.4 20.3 1.27 .96 1.29
Urban Poor 17.3 15.9 16.1 6.78 6.36 6.85
Migrant and Formal 18.7 18.4 19.5 2.62 2.88 3.22
Sector Workers
Farmers 46.6 42.4 44 2.43 2.02 2.09
Fishermen 50.8 43.6 49.9 .45 .44 .48
Source: NSCB Press Release ( July 2009)

Annex 8.9 Regions with Minimum and Maximum Poverty Incidences for Each Basic Sector: 2006
Least Poor Poorest
Basic Sector Region Poverty Incidence (%) Region Poverty Incidence (%)
Women NCR 9.7 ARMM 58.9
Youth NCR 7.3 ARMM 53.2
Children NCR 15.2 ARMM 66.3
Senior Citizens NCR 4.4 ARMM 46.5
Urban Poor CAR 7.4 ARMM 52.4
Migrant and Formal NCR 4.8 CARAGA 36.8
Sector Workers
Farmers Region II 16.9 ARMM 62.3
Fishermen Region III 23.9 CARAGA 66.7
Annex 8.10 Regions with the Most Number of Poor for Each Basic Sector: 2006
Magnitude Region
Basic Sector Highest Lowest Poorest Least Poor
Children 1,420,163 262,711 1. Region V 1. CAR
2. Region VI 2. Region II
3. Region IV-A 3. Caraga
Women 1,183,088 245,306 1. Region V 1. CAR
2. Region VI 2. Region II
Urban Poor 1,138,424 37,563 1. NCR 1. CAR
2. Region III 2. Region II
3. Region IV-A 3. Region IX
Youth 547,595 135,222 1. Region VI 1. CAR
2. Region V 2. Region II
Migrant and Formal 400,251 41,863 1. Region VI 1. CAR
Sector Workers 2. Region III 2. ARMM
Farmers 212,188 47,118 1. ARMM 1. Region II
2. Region VII 2. Region III
3. Region V 3. CAR
Senior Citizens 144,473 26,936 1. Region VII 1. Region II
2. Region VI 2. CAR
3. Region VIII 3. NCR
Fishermen 116,725 2,512 1. ARMM 1. Region II
2. Region V 2. NCR
3. Region VII 3. Region III

Children of beneficiary family
PAMANA and ARMMs IDP Shelter Assistance Project
Poblacion, Talayan, Maguindanao
Photo courtesy of: Office of the Presidential Adviser
on the Peace Process
09
Peace &
Security Peace & Security 291
Peace & Security
Peace and security shall be achieved in support to national development. The
government shall exert all efforts to win peace and ensure national security. The
peace process shall center on the pursuit of negotiated political settlement of all
armed conflicts and the implementation of complementary development tracks
to address its causes. This shall be anchored on conflict prevention and peace-
building in conflict-affected areas. On the other hand, national security shall
involve the whole-of-nation approach, focusing on internal stability, upholding
the sovereignty and territorial integrity of the state, capability and preparedness
against natural calamities and disasters, and reform and modernization of the
security sector.
with large Muslim population. While

Assessment and government instituted efforts to come
to a political settlement with the armed
Challenges groups and has worked to address
the causes of conflict, these conflicts
A stable national security environment is have persisted, thereby affecting the
crucial to achieving development, human delivery of basic services and creating
security and general welfare. Stability a large development gap between
can be threatened, however, by internal conflict-affected areas and the rest
security concerns such as recurring of the country. Among the causes
armed conflict and criminality, together of armed conflict are abject poverty,
with new global security threats such as poor governance, abuse of power,
terrorism, human trafficking, illegal arms corruption, failures of the justice
trade, and drug trafficking. system, human rights violations,
disputes over land ownership and use
The challenge, therefore, is for the country of natural resources, marginalization
to achieve national stability through an of lumad and indigenous cultural
appropriate and adequate response to communities, and the lack of respect
internal conflicts and external threats, and recognition of ancestral domain
so that it may become a responsible and indigenous peoples rights.
partner in promoting peace and good
relations among nations. All these must Government will continue to pursue
occur within the irreducible framework negotiated political settlements with
of national sovereignty and territorial the Moro Islamic Liberation Front
integrity. (MILF) and the Communist Party
of the Philippines-New Peoples
Internal Security Challenges Army-National Democratic Front
(CPP-NPA-NDF). There is also a
Of all security concerns, the most need to complete the implementation
pressing is the internal conflict involving of Final Peace Agreements with
armed groups with a capability to gravely the Cordillera Peoples Liberation
affect lives and properties in areas in Army (CPLA) (1986), Moro
Southern Philippines, especially those National Liberation Front (MNLF)

(1996), and the Rebolusyonaryong Other Security Challenges
Partido ng Manggagawa-Pilipinas/
Revolutionary Proletariat Army/ Other threats to peace and development
Alex Boncayao Brigade (RPMP/ in local communities arise from criminal
RPA/ABB) (2000). While this elements and other armed threats to
requires disposition of forces through peace and order, including politically
appropriate reintegration, it will also partisan armed groups (PAGS) that
involve provision of socioeconomic surface during the conduct of national
assistance to former rebels and and local elections. Putting an end to
delivery of basic services to conflict- these criminal activities shall be given
affected communities. Meanwhile, the prime importance.
Tripartite Implementation Review
of the 1996 Final Peace Agreement External Security Challenges
with MNLF is nearing completion,
during which common grounds and As global trade in goods and services
common proposals were formulated and international investment become
for adoption and implementation. important drivers of the countrys
economic growth, government shall
While formal negotiations with both continue to be vigilant in responding to
the MILF and the CPP-NPA-NDF crimes that thrive under an environment
have stalled in recent years, prospects of increasingly open borders, such as
have since improved for the resumption terrorism, human trafficking, arms and
of formal negotiations. These include: drug-trafficking, and smuggling.
(a) reconstitution by government of
the negotiating panels for the MILF The archipelagic nature of the country
and the CPP-NPA-NDF peace makes it both urgent and challenging for
talks; (b) continued implementation the government to uphold its territorial
of the agreements with the MILF integrity. Greater efforts shall be exerted
on ceasefire mechanisms, and to safeguard the countrys interests within
rehabilitation and development maritime areas, notably its Exclusive
of conflict-affected areas; and (c) Economic Zone (EEZ), through
agreement with the CPP-NPA-NDF heightened maritime security capabilities.
on respect for human rights and
international humanitarian law. Not
the least of the reasons, however, has
been the renewal of the governments
legitimacy through the democratic The administration will have to pick up the pieces and resume the quest
election of an administration that for peace with vigor and clarity of purpose. Our quest must not only
enjoys the peoples support and that focus on ensuring stability of the State and the security of our nation.
is willing to invest its political capital Our ultimate goal must be the safety and wellbeing of our people.
on peace.
We must revive the peace process on the basis of a comprehensive
While peace negotiations are pursued, understanding of the root causes of the conflict, under clear policies
the causes of conflict must also be that pave and clear the way ahead, and driven by a genuine desire to
addressed in order to reap dividends attain a just and lasting peace. We shall endeavor to restore confidence
from peace efforts. For conflict- in the peace process that is transparent and participatory, and renew
affected areas, the peace talks must our faith in our shared vision of a peaceful, secure and prosperous
be complemented by the delivery future under one sovereign flag.
of basic services, institution of good -President Benigno S. Aquino, April 22, 2010
governance, people empowerment,
Mandarin Hotel, Makati
assistance for the return or
resettlement of IDPs, policy reforms,
and local economic development.
Peace & Security 293

In addition to territorial threats, the forces and oversight government
overseas diaspora of Filipinos entails a institutions, but also by civil society
wider redefinition and understanding of and all the nations communities. This
threats to Filipino interests. In particular, shared responsibility can only emanate
the predicament of overseas Filipinos who from a shared concept of security.
come into conflict with the laws of other People-centered security within
countries poses complex new challenges to the framework of human security
the countrys conduct of foreign relations, puts peoples welfare at the center
with potential repercussions on issues of of its operations. It gives primacy to
sovereignty and territorial integrity. human rights while recognizing and
promoting local security and safety
A comprehensive response to these based on the needs and realities of
concerns involves initiatives to improve communities.
relations and forge cooperation with other
nations to preserve and protect national This framework shall be pursued under
security and interest, including the welfare the following guiding principles: (a)
of Filipinos living and working abroad. full respect, promotion and protection
Because peace and security are of human rights and human security;
indivisible, efforts toward their Nontraditional Security (b) primacy of the peace process at
attainment must be anchored Challenges all times; and (c) acceptance of social
through a whole-of-nation diversity and promotion of a culture
approach, which seeks to bring Nonmilitary and transnational threats, of peace. These principles shall be
about a concerted effort towards otherwise called nontraditional security adopted in all key aspects of the
national peace and security. concerns, also challenge the countrys implementation of strategies.
peace and security. Armed personnel of
government shall continue to assist other Overall, specific strategies shall support
government agencies during emergency governments National Security Policy
situations, such as during disasters caused and National Security Strategy. These
by natural hazards and health pandemics, two documents lay down the blueprint
as well as in securing vital development for the countrys national security
projects under threat of destabilization. vision and serve as the basis for the
preparation of the plans and programs
Strategic Framework of government agencies involving
national security.
As the challenges to national security
become more complex, effective strategies Section 1. Winning the
that would ensure the attainment of Peace
peace, public order and safety through the
cessation of armed conflict and prevention Promotion of the peace process shall
of crimes shall be continuously identified be the centerpiece of the internal
and pursued while communities are security program, as a testament
empowered and transformed into areas of to governments commitment to a
growth and productivity. policy of peace, reconciliation and
reunification. Peace is not just the
Because peace and security are indivisible, absence of war or conflict, rather it is
efforts toward their attainment must be the sum total of conditions that ensure
anchored through a whole-of-nation human and social wellbeing in all its
approach, which seeks to bring about a dimensions. This entails winning the
concerted effort towards national peace hearts and minds of the aggrieved and
and security. This approach is not about afflicted while retaining the allegiance
burden-sharing but rather about creating of the rest.
a consensus and understanding of security,
that is shared not just among core security

A. Goal d. Final disposition of arms of the
abovementioned armed groups and
While the governments ultimate aim mainstreaming of former rebels as
is to win the peace, the goal for the productive members of society, in
medium term shall be to bring all accordance with peace agreements;
armed conflict to a permanent and
peaceful closure. e. Establishment of mechanisms for
a participatory and accountable peace
B. Objectives process.
Toward this end, the following Negotiations with armed groups shall
objectives shall be met by the end of be guided by the principles laid down in
the Plan period: EO 3 (series of 2001), with reference to
a comprehensive peace process which:
1. A negotiated political settlement (a) is community-based, reflecting
of armed conflicts; and the sentiments, values and principles
important to all Filipinos; (b) aims to
2. The causes of armed conflict and forge a new social compact for a just, To put in place a transparent
other issues that affect the peace equitable, humane and pluralistic society; and accountable peace process,
process being effectively addressed. and (c) seeks a principled and peaceful civil society organizations shall
resolution to the internal armed conflicts, be involved in various peace
C. Specific Strategies with neither blame nor surrender, but processes.
with dignity for all concerned. The
In pursuit of the abovementioned following parameters for peace talks are
goal and objectives, two tracks shall be further specified:
followed, each with its corresponding
strategies and programs, as follows: a. the Constitution, inclusive of
the flexibilities provided within its
1. A Negotiated Political Settlement provisions;
of all Armed Conflicts
b. the experience and lessons learned
This track shall involve the following: from past negotiations and with the
creation and operation of the ARMM;
a. Resumption and completion of
negotiations with the MILF and c. Governments ability to deliver -
CPP-NPA-NDF, respectively; politically, economically and socially -
commitments made and agreed on; and
b. Completion and
implementation of signed final d. Inclusiveness and transparency,
closure agreements with the CPLA sensitivity to general public sentiment
(1986) and the Rebolusyonaryong as far as practicable, with the aim of
Partidong Manggagawa-Pilipinas restoring full confidence and trust in
/ Revolutionary Proletariat Army / the peace process.
Alex Boncayao Brigade (RPM-P/
RPA/ABB) (2000), respectively; In order to put in place a gender-
responsive mechanism for transparent
c. Adoption and implementation and accountable peace process, civil
of actions agreed upon in the society organizations shall be involved,
Tripartite Implementation Review with government support if necessary,
of the 1996 Final Peace Agreement in the establishment of a Consultative
with the MNLF; Body defining its own structures and
mechanisms to fully participate in various
peace processes. Alongside this body

led by civil society organizations, the social cohesion. Over a period of four
government shall establish an Advisory years, PAMANA shall cover 218
Body with representatives from Congress, municipalities in 43 provinces. Some
members of the 1987 Constitutional 3,500 conflict-affected barangays and
Commission, retired Justices of the an estimated 400,000 households
Supreme Court, local government will benefit from this intervention.
executives, and former government chief This will be implemented through
negotiators. This shall serve as venue for collaboration between national
dialogues to address issues of discontent, government agencies, LGUs and
inhibition, and agitation, facilitate development partners. PAMANA
conflict resolution and, prevent armed rests on three main pillars:
confrontations in conflict-affected areas.
Pillar 1 refers to interventions at
2. Complementary Track the macrolevel that help establish
the foundations of peace and the
A complementary track will be followed building of communities capable
to address the causes of conflict and of addressing peace issues. Among
Government will implement issues affecting the peace process. This the policy issues the framework
a converged peace-building includes: seeks to address are:
program focused on the
development of conflict-affected a. Focused development in conflict- Dialogues and policy
areas to address the causes of affected areas through the PAMANA formulation to improve
armed conflict. Payapa at Masaganang Pamayanan governance and address threats
Program; to identity and marginalization;
PAMANA (Peaceful and Resilient Ancestral domain, agrarian

Communities) is the national reform and natural resource
governments peace and development conflict resolution; and
framework to respond and strengthen
peace building, reconstruction and Security guarantees and
development in conflict-affected areas transitional support especially
(CAAs). Under the guiding principles of to internally displaced persons
PAMANA, government will implement (IDPs).
a converged peace building program
focused on the development of conflict- Pillar 2 refers to microlevel
affected areas to address the causes interventions focused on
of armed conflict. The main strategy households and communities.
is to bring back government in these These include delivery of basic
communities by ensuring that they services at the community level
benefit from improved basic services through conditional cash transfer
delivery and are served by responsive and approaches, community driven
accountable government. This will ensure reconstruction and development
that these communities feel the presence and community livelihood.
of government in their lives. The design
of specific interventions shall recognize Pillar 3 refers to mesolevel
cultural practices and traditions. interventions that address
local development challenges,
PAMANA aims to: (a) reduce poverty including constraints to local
and vulnerability in conflict-affected economic development, economic
areas; (b) improve governance; and (c) integration of poor areas with
empower communities and strengthen more prosperous areas and physical
their capacity to address issues of conflict and economic connectivity
and peace through activities that promote improvements. These include

high-impact local development e. Support the enhancement of
projects, such as ancestral domain ARMM governance, including greater
management plans, support accountability to citizens living in
services for farmers and farm- remote and poorest areas. This shall
workers, including roads and be accompanied by efforts to end
post-harvest facilities, or culturally patronage politics, dismantle all private
sensitive industries, such as armies, ensure free, responsible and
development of community-based clean elections, strengthen democratic
tourism and the halal industry. processes and the rule of law in the
electoral system, and fully integrating
b. Support efforts to end impunity ARMM in all Mindanao-wide and
and extra-judicial killings through national development plans;
decisive action of the government
in dealing with grave human rights f. Support the implementation of UN
violations as well as political or Security Council Resolution 1325,
election-related violence; which entails close collaboration
with the CSOs to fully comply with
c. Support the indigenous the governments commitment to
peoples agenda which includes: increase participation of women in
professionalizing the service peace processes and address sexual
bureaucracy; the review of violence against women in armed
Certificate of Ancestral Domain conflict situations. More specifically,
Titles (CADTs) issuances; delivery efforts shall be exerted to: (i) ensure
of basic services and review/ the protection of womens rights and
redress IPs in conflict areas and prevent the violation of these rights
realization of the Indigenous in armed conflict and postconflict
Peoples Masterplan (IPMAP) situations; (ii) empower women and
2011-2016 with particular stress on ensure their active and meaningful
Human Rights Protection of IPs; participation in areas of peace
implementation and compliance building, peace keeping, conflict
with the International Convention prevention, conflict resolution and
on the Elimination of All Forms of postconflict reconstruction; (iii)
Racial Discrimination (ICERD) promote and mainstream the gender
and the Convention of the Rights perspective in all aspects of conflict
of the Child; and advocacy of the prevention, conflict resolution and
ratification of ILO Convention peace building; and (iv) institute a
No. 169, or the Convention on system to monitor, evaluate and report
Indigenous and Tribal Peoples; the implementation of the national
action plan to enhance accountability
d. Support an affirmative action for successful implementation and the
agenda for Muslims including the achievement of its goals;
development of a halal industry,
institutionalization of the Hajj g. Address the needs of children in
management system, establishment situations of armed conflict by setting
of economic and financial up an effective mechanism to monitor,
mechanisms, such as Islamic report and immediately respond
banking and microfinance, speedy to the identified seven grave child
resolution of cases involving children rights violations in conflict situations,
and women languishing in jails, namely: recruitment and use of minors
putting an end to discriminatory by armed groups, killing and maiming,
practices in work places, and the abduction, denial of humanitarian
establishment of Shariah Courts; assistance, rape and sexual abuse,
and attacks on schools and hospitals.

Protecting children in situations of are envisioned to secure internal and
armed conflict will likewise entail external peace that will contribute
monitoring of implementation and to the development efforts of the
compliance to the International government and ensure that Filipinos
Convention of the Rights of the Child; will be able to take part in the process
of economic growth and development.
h. Support the reform of the security
sector, which entails mainstreaming a A. Goal
people-centered approach to human
security and developing policies to Throughout the Plan period, the
institutionalize Democratic Control government shall create and sustain a
of the Armed Forces (DCAF); safer and more secured environment
conducive to national development.
i. Support the settlement of land
disputes aimed at rationalizing national B. Objectives
land policies and strengthening
conflict resolution mechanisms on In particular, the following objectives
Secure internal and external the ground, recognizing the fact that shall be pursued:
peace that will contribute to internal armed conflicts are largely
development efforts and ensure rooted in long-standing disputes over 1. Promotion of sustained internal
that Filipinos will be able to take land and resources. stability;
part in the process of economic
growth and development. Legislative Agenda 2. Full capability to uphold the
sovereignty and territorial integrity
During the Plan period, the of the state assured;
administration shall work toward the
passage of legislation to achieve the 3. Highest standard of capability
following outcomes, among others: and preparedness against natural
calamities and disasters achieved;
1. An Organic Act for the ARMM as and
amended to ensure full implementation
of the GRP-MNLF Final Peace 4. Security sector reformed and
Agreement; modernized.
2. Protection of women and children C. Specific Strategies

in situations of armed conflict; and
1. To promote and sustain
3. Human rights and human security internal stability, the following
of persons in conflict-affected areas strategies shall be pursued:
fulfilled and protected.
a. Capabilities of armed groups
Section 2. Ensuring National must be reduced at a level where
Security they can no longer threaten the
stability of the state. These shall be
Apart from the peace process, the done through the following:
government shall create and sustain
an enabling environment conducive End activities of Abu
to development. This will be done by Sayyaf Group (ASG), Jemiah
involving the whole government, other Islamiyah( JI) and their allied
institutions, and the entire citizenry armed groups and other criminal
in addressing national integrity, public elements; and
order and safety, and governance reforms.
These mutually-reinforcing strategies

Contribute to the promote cooperative projects in
establishment of conditions the political, economic and military
for civil authorities to take fields, as well as assuring the security
responsibility for the safety and and welfare of Filipinos working
wellbeing of their constituents. and living abroad; and
b. Continuous and intensified Expand and improve

police and other law enforcement participation in UN Peace
agencies operations must be Operations.
implemented to address criminality
including organized crime groups. b. Capability on border management,
To ensure the safety of the citizenry surveillance and detection against
from becoming victims of unlawful lawless elements must be improved
acts, the following shall be carried through the following:
out:
Enhancement of border security
Enforce the law effectively through the strict enforcement of
and credibly and anticrime the Philippine immigration laws
strategies in partnership and and upgrading of surveillance and
collaboration with stakeholders detection capacity to thwart the
and other pillars of the Criminal entry of foreign terrorists and other
Justice System; lawless elements as well as human
trafficking and smuggling of anti-
Improve performance in social goods and weapons of mass
solving crimes; and destruction; and
Dismantle private armed Ensuring that maritime assets,

groups. maritime practices, territorial
integrity and coastal areas are
2. To assure full capability to protected in accordance with the
uphold the sovereignty and Baselines Law (RA 9522) and
territorial integrity of the state, by upgrading air and maritime
the following strategies shall be capability.
undertaken:
3. To achieve the highest standard of
a. International relations and capability and preparedness against
external security must be sustained natural and man-made calamities
and cultivated through the and disasters, the following will be
following: undertaken:
Strengthen cooperative Strengthen the role of the

security arrangements with security sector in emergency relief
neighbors and other countries and rescue operations to maintain
by adopting mechanisms in public order and safety during
the regional and global setting calamities. Mechanisms to improve
in building confidence and alert warning and monitoring
promoting consultations and before and during disasters will
interactions. be enhanced to pre-empt loss to
lives and properties. The sector will
Pursue friendly and peaceful be transformed to become more
bilateral and multilateral dynamic, proactive, and responsive
relations with other nations to prevent and prepare for disasters
and international agencies to through improvement on technical

and institutional capacity, and Strengthening of the rule of
by promoting synergy among law throughout the country by
stakeholders and building resiliency ensuring a strong, independent
of communities to disasters; and judicial system and a better
functioning of correctional
Support national development systems so that justice is applied
programs by securing and protecting to all. The Philippine government
critical infrastructures and facilities, recognizes the need to strengthen
and other high value projects of the the rule of law to assure the people
public and private sector. of the basic protective services
with an effective and reliable
4. To carry out Security Sector response mechanism from the
Reform and Modernization law enforcement agencies as well
initiatives that shall adhere to as a functioning and dependable
the principle of transparency justice system.
and accountability, the following
strategies shall be implemented: b. Pursue the upgrading and
modernization of the defense and
a. Pursue reforms in the security security establishments to perform
sector by adopting policies, programs the full spectrum of roles and
and activities that contribute to: mandates in accordance to the
more comprehensive and updated
Strengthening the civilian control definition of National Security. This
and oversight of the security sector; entails the following:
Orienting the security forces, to Capability to perform all

include, among others, programs types and levels of internal and
designed to train soldiers, police and external operations as well as non-
other security sector personnel on their traditional and development roles;
respective responsibilities, respect on
human rights and international law, Capability to perform air, land
and ethnic sensitivity; and sea operations, as mandated;
Strengthening the internal security Capacity building of the

system. Pursue and support the security sector particularly on
reform efforts in both the AFP and non-traditional skills on conflict
PNP through programs such as the resolution and peace-building,
Philippine Defense Transformation democratic accountability, gender
Program of the AFP and the and development issues, ethnic
Integrated Transformation Program- sensitivity, and indigenous peoples
Performance Governance System of rights; and
the PNP. The security sector must
rebuild themselves as institutions Education, training, and
by reorganizing, retooling, and preparation of all officers
reorienting the approaches to keep up (including non-commissioned
with the constantly changing policy officers) and civilian employees,
and security strategy environment; in accordance with the highest
and standards of personal integrity
and professional competence
required in all the leadership,
officer, technical and rank and file
positions in the armed and other
uniformed services.

Legislative Agenda
During the Plan period, the
administration shall work toward the
passage of legislation or amendments to
existing laws such as:
1. Amendment of the
AFP Modernization/Development
Program (RA 7898) to extend its
implementation;
2. Enactment of the National

Defense and Security Act to make it
relevant to the contemporary global
and regional environment;
3. Enactment of a law declaring

the countrys maritime zones
(Territorial Sea, Contiguous Zone
and Exclusive Economic Zone) to
ensure Philippine Maritime interests;
4. Enactment of PNP
Reorganization Law; and
5. Enactment of Comprehensive
Law on Firearms, light Weapons and
Ammunition.

Hundred Islands National Park, Alaminos, Pangasinan
Photo by: Annbee G. Tiangson
10 Conservation,
Protection &
Rehabilitation of
the Environment
& Natural
Resources
Conservation, Protection & Rehabilitation of the Environment & Natural Resources 303
Conservation, Protection
& Rehabilitation of the Environment
& Natural Resources
The country is widely acknowledged as having an outstanding endowment of natural
resources, which could provide essential ecosystem services to the population.
Demands arising from development and utilization activities, population expansion,
poor environmental protection, and external factors such as climate change,
however, have placed the countrys environment and natural resources under grave
threat. For the medium-term, an environment that is healthy, ecologically balanced,
sustainably productive, climate change resilient, and one that provides for present
and future generations of Filipinos is envisioned. This vision will be pursued through
an integrated and community-based ecosystems approach to environment and
natural resources management, precautionary approach to environment and natural
resources, sound environmental impact assessment (EIA) and cost-benefit analysis
(CBA). These, then, are all anchored on the principles of shared responsibility,
good governance, participation, social and environmental justice, intergenerational
space and gender equity, with people at the core of conservation, protection and
rehabilitation, and developmental initiatives.
Assessment Luyang, Sapangdaku, Cagayan de

Oro and Balili) are already within
State of the Environment standard and BOD levels of rivers
and Natural Resources have improved. However, waterways
in major urban centers, especially
The degraded state of the countrys esteros, are unfit for human activity,
environment and natural resources is felt despite recent clean-up efforts.
most intensely by the poor, especially The cost of medical treatment and
the rural communities given that they loss of income from water-borne
depend on these resources for their diseases total PhP6.7 billion per year,
primary source of living. On the other according to a WB report (2007). At
hand, poverty frequently aggravates least six rivers in the NCR, Region 3
environmental stress as the marginalized and Region 4-A fail in terms of both
population presses upon limited resources, dissolved oxygen (DO) and Biological
such as unregulated activities and upland Oxygen Demand, namely: the
cultivation. Paraaque, San Juan, Marikina, Pasig,
Meycauayan, and Ylang-Ylang rivers.
Major urban centers are polluted The Supreme Court in December
2008 issued a continuing mandamus
With regard to water pollution, the for the government to clean up the
Biochemical Oxygen Demand (BOD) waterways, especially those emptying
levels of 10 rivers (Bocaue, Anayan, into Manila Bay, in order to improve
Malaguit, Paniqui, Calapan, Iloilo,

the water quality in the bay to SB only 70 percent is collected. For the
level. 1 whole country, only half of the garbage
generated is collected. Uncollected
In Metro Manila, up to 58 percent garbage ends up mostly in rivers, esteros,
of groundwater has been found to be and other water bodies, clogging the
contaminated with coliform.2 drainage system and leading to floods
and the pollution of major water bodies.
The problems posed by hazardous
wastes are also beginning to be a Water is becoming scarcer
priority concern due to the increasing
number of large companies that The country is endowed with abundant
generate wastes considered hazardous water resources. It experiences an average
to health and the environment. annual rainfall of 2,400 mm. and has 421
Like most developing countries, river basins, of which 20 are major river
the Philippines still has inadequate basins ranging from 990 to 25,000 sq. km.
equipment and technical expertise to The countrys watersheds and aquifers, if
deal with these wastes despite steps to fully functional, could supply 146 billion
define the regulatory and enforcement cubic meters (BCM) of water annually The Philippines generates
responsibilities of various government for domestic, industrial and agricultural 30,000 tons of garbage per day.
agencies. Currently, the Philippines uses. Total water availability is estimated Metro Manila alone produces
has no large-scale treatment and at 126 BCM per year from surface water 8,000 tons per day, of which only
disposal facilities for hazardous such as rivers or streams, and an estimated 70 percent is collected.
wastes. 20 BCM per year groundwater potential
(NWRB 1998).
solid waste remains a major
source of pollutants Although water is still abundant in
certain areas, the country faces the
Uncontrolled dumping of raw sewage threat of emerging water scarcity. Lack
in coastal areas, particularly those that of urban planning, indiscriminate
are thickly populated or used heavily urban development, lack of investment
by tourists, contributes to dangerous in water, problems of water resource
water contamination levels. The lack management, and the impact of climate
of point-source and nonpoint-source change threaten water security and
pollution controls are the main factors sustainability. Deforestation and lack
that contribute to the degradation of of effective management of forest and
water quality in the Philippines. freshwater ecosystems have led to the
further deterioration of watersheds,
The problem of solid waste limiting aquifer recharge and increases
disposal is most serious in urban water runoff and soil erosion. Around
centers, particularly Metro Manila, 267 watersheds with a total area of 10.6
because of high population density, million hectares have been identified as
high consumption rates, and the needing immediate rehabilitation. These
concentration of packaged goods, and priority watersheds support national
packaging materials, some of which irrigation systems and are the major
are toxic and nonbiodegradable.3 The source of domestic water supply. Storage
Philippines generates 30,000 tons of and distribution of water to deficient areas
garbage per day. Metro Manila alone and proper water-resources management
produces 8,000 tons per day, of which are also areas of concern.
1
SB-areas regularly used by the public for bathing, swimming, skin diving, etc.
2
European Commission (EC), Country Environmental Profile, 2005.
3
DENR, National State of Brown Environment, 2009.
Figure 10.1 Philippine Forest Cover, 1934-2003
The quality of land resources

has deteriorated steadily Source: World Bank (2009) and Forest Management Bureau (2010)
because of erosion, pollution
and land conversion. Twenty- Increasing water demand has resulted in
one percent of the countrys a number of regions and at least nine key quality of farm land is
agricultural lands and 36 urban centers experiencing water stress deteriorating and forested
percent of nonagricultural lands (NWRB 1998). These include Metro lands are shrinking
are moderately or severely Manila, Metro Cebu, Davao, Baguio,
eroded. Cagayan de Oro, Bacolod, Angeles, Iloilo, The quality of land resources has
and Zamboanga. These highly urbanized deteriorated steadily because
cities rely mostly on groundwater for of erosion, pollution and land
water supply, resulting in uncontrolled conversion. Twenty-one percent of
withdrawal from groundwater aquifers the countrys agricultural lands and 36
in recent years. Rapid and uncontrolled percent of nonagricultural lands are
urban development has reduced aquifer moderately or severely eroded.4 Soil
recharge and has eventually resulted in erosion has affected the productivity
the decline of groundwater levels as well of land, limited the rehabilitation
as saltwater intrusion. or restoration of degraded lands,
lowered the quality of surface water,
The 2010 Philippines MDG Progress and modified hydrologic conditions
Report shows the proportion of the by changing land resources and
Philippine population with access to land management. Moreover, the
safe water has risen at a moderate rate, changing weather patterns have
increasing from 73.8 percent in 1991 brought about prolonged droughts
to 81.4 percent in 2008. If the trend and excessive rains. Farmers have
continues, the 2015 target (86.9%) may to endure lower yields and lower
be attainable. These favorable results, income from farming.
however, hide the fact that almost one
in five (or 15.73 million) persons is Of the countrys total land area of
still unable to access safe water despite 30 million hectares, 47 percent (14
abundant water resources. million hectares) has been classified
as alienable and disposable (A&D)
4
ADB, Country Environmental Analysis: Philippines, 2009

lands while 15.9 million hectares The countrys unique biodiversity
(52%) are classified as forestlands. is under severe pressure
Some 2.7 million hectares of total
classified forestlands have been either The Philippines is rich in biological and
established or considered as protected genetic resources or biodiversity and is
areas, making up a total of 238 one of the 18 megadiverse countries in
protected areas. Of the 15.9 million the world. The majority of plant and
hectares of forestland, only 6.43 animal species in the country are unique
million hectares or 41 percent were and cannot be found anywhere else. The
still forested in 2003, a significant countrys species are among the worlds
decline from the 17 million hectares top 10 in terms of endemism. Given
recorded in the 1930s.5 Figure 10.1 the land density and the density of both
shows the decline in forest cover flora and fauna, the Philippines may even
from 1934 to 2003. be considered to be the worlds most
megadiverse country.
An analysis of satellite-based maps
elaborated by the EUs Joint Research The countrys forests and coastal and
Centre ( JRC) in 2007 revealed that marine ecosystems, inland water bodies, Located within the Coral
possibly, only 19 percent of the wetlands and caves are also home to Triangle, at the center of high
countrys land area remains forested. a wide variety of flora and fauna. The marine diversity, the countrys
wetlands are home to one of the largest vast, rich and diverse coastal
The main threats to Philippine assemblies of microorganisms, reptiles, and marine resources are
forests come from the collection of amphibians, fish, birds, and mammals that composed of coral reefs,
fuel wood, settlements in forestlands, live within or near waters. Over 1,500 sea grass beds, mangrove
conversion to agricultural uses, caves have been recorded in the country and beach forests, fisheries,
kaingin and forest fires, and illegal since 1994 with a significant number invertebrates, seaweeds, marine
logging. There are approximately yet to be discovered and mapped. These mammals and many others.
20 million people living in upland caves are considered unique, natural and
watershed areas, half of whom are nonrenewable resources with important
dependent on shifting cultivation scientific, economic, educational, cultural,
for their livelihood6. Inequitable historical and aesthetic values.
land distribution, insecure tenure
and rural poverty are often cited as Biodiversity in the Philippines, however,
causes of deforestation and forest is also among the most endangered in
degradation in the Philippines, linked the world. As of 2008, 221 species of
to increases in rural populations fauna and 526 species of flora have been
both as a result of high fertility included in the list of threatened species.
and in-migration7. Deforestation The continually increasing demands for
has made many poor communities food, energy, and other goods, coupled
more vulnerable to natural calamities with the pressures exerted by rapid
such as of typhoons, flash floods and development and economic growth,
landslides8. have put much stress on the countrys
natural environment resulting in the
destabilization of ecosystems, destruction
of natural habitats and an alarming rate
of biodiversity loss. The introduction of
invasive alien species (IAS) has threatened
biodiversity and destabilized ecosystems.
5
DENR-FMB estimate based on 2003 satellite images
6
Cruz and Zosa-Feranil, 1998.
7
Kummer, 1992; Liche, 1997.
8
EC CEP, 2009
coastal and marine resources Bay in Luzon, Palawan, Cuyo Islands,
are under threat the Cebu-Bohol-Siquijor area,
Zamboanga, and Davao. About half of
The Philippines has one of the worlds the countrys seagrass beds have been
longest coastlines, a total of 36,289 lost due to coastline development and
kilometers. The countrys marine blast fishing. The mapping of seagrass
jurisdiction extends up to 200 nautical bed distribution remains limited, and
miles from the baseline (Exclusive the management of seagrass resources
Economic Zone) and up to the limits of has not received priority.
the continental margin where it extends
beyond 200 miles (Extended Continental Mangroves protect the coast from
Shelf ). Located within the Coral waves, tidal currents, and typhoons
Triangle, at the center of high marine and provide habitats, shelter, breeding
diversity, the countrys vast, rich and sites, and food sources to various
diverse coastal and marine resources are groups of fish and other coastal
composed of coral reefs, sea grass beds, wildlife. The ecological functions
mangrove and beach forests, fisheries, of mangroves as land builder and
invertebrates, seaweeds, marine mammals coastline stabilizer are also widely
and many others. About 60 percent of the known. Mangrove cover, however, has
total Philippine population live in the declined from 450,000 hectares in
coastal zones and depend on these coastal 1918 to only about 140,000 hectares in
resources for livelihoods. 2008.11 The development of mangrove
swamps into aquaculture ponds, salt
Some unsustainable human activities, beds, reclamation areas and other
however, cause great stress to coastal and agricultural activities has extensively
marine resources. Coastal development degraded this resource. A total of
and climate change impacts such as 62,834 hectares of mangrove forest
sea-level rise and increasing sea-surface area were issued Fishpond Lease
temperature add to the stress on these Agreements (FLAs) between 1973
resources. Sedimentation in coastal areas and 2002. Logging concessionaires
due to unsustainable land use in upland generally have not left behind mother
areas continues to threaten coastal trees to replenish the area, and several
ecosystems. The productivity of the cases of illegal logging cutting occur
countrys coral reefs, mangrove forests, even in protected reserves.
sea grass, and algal beds and fisheries
is declining at an alarming rate. Of the mineral resource
27,000 sq km. of coral reef, over 70 development is delivering
percent are of poor or fair quality and only mixed results
five percent are in excellent condition.9
The Philippine reefs may already be in a The mining industry in the
steady state of decline from 5 percent to Philippines has rebounded due to
3 percent to less than 1 percent (Nanola the promotion and revitalization of
et. al., 2004). The countrys coral reefs responsible mining and recognition of
are considered to be one of the highly the industrys possible contribution in
threatened reef areas in the world.10 inducing economic growth, attracting
investments and reducing poverty in
Major distributions of seagrass beds in the countryside. Challenges remain
the Philippines are found in Bolinao on the emerging framework of
9
Gomez et. al., 1994.
10
Burke et al., 2002
11
WB, 2009

responsible mining specifically on Data show that the share of mining in
corporate accountability, voluntary GDP and employment is increasing
compliance among companies and and there are considerable potentials.
giving of due recognition to local However, target investments and excise
autonomy and indigenous peoples tax from mining in 2004-2010 have not
rights. been fully achieved due to the financial
crisis, among others. In addition, an
Of the countrys 30 million hectares assessment report of a mining project
of land area, 9 million hectares (30%) has indicated that the fair share of the
is considered as having high mineral government from mining has not been
potential. Only 2.7 percent of this achieved due to the existing incentive
high-potential area is covered by mechanism.13 Issues have been also raised
mining permits or contracts and only on sharing of the mining industry with
0.32 percent is in the development or regard to foreign companies as well as the
operating stage. The mining industrys undesirable environmental conditions
potential as a driver of economic which the Filipino communities will
growth has led to the revitalization have to deal with.
of the sector in the last six years.12
As a result, investments in priority In separate researches, it was found that
mineral exploration, development and mining permits or contracts were within
processing projects from 2006-2009 half the number of titled and claimed
have reached US$2.2 billion, and the ancestral domains.
production of gold, copper, and nickel
has also increased. Nickel production A number of mining projects, however,
increased by 651 percent, buoyed have been alleged to have caused
by favorable prices, while copper environmental degradations, physical
production rose by 141 percent in the displacement of indigenous peoples,
same period. The value of mineral and cultural dislocations. In 2005, a
production increased by 46.34 percent European Union (EU)-commissioned
from PhP72.5 billion in 2006 to study reported that legal and illegal
PhP106.1 billion in 2009. Mining mining operations posed serious threat
contributed 1.3 percent to GDP, to the forest and to local rivers because of
or a gross value added of PhP97.1 forest clearing and the release of toxins.14
billion in 2009 (at current prices). Metallic mine waste generated from 1990
With the expected operation of five to 1999 amounted to 131 million metric
metallic mines and one cement plant, tons (MT), while mine tailings were
output value is projected to increase about 136 million MT.15 Many of these
by 30 percent to PhP138.5 billion in concerns stem from the failure of many
2010. For the period 2006 to 2009, small and large-scale mining companies
employment in mining and quarrying to adhere to stringent, globally-defined
increased from 141,000 to 166,000 standards for responsible mining.
(0.50 %), while taxes, fees and royalties
from the minerals industry rose by Ensuring the equitable and just
93.7 percent, from PhP6.39 billion in distribution of benefits from extracted
2006 to PhP12.38 billion in 2009. mineral resources remains to be a
challenge.
12
DENR-MGB, Mining Industry Statistics, 2011
13
DENR, Assessment of the Rapu-Rapu Polymetallic Project, 2006.
14
EU, Commission Country Environment Profile, 2005
15
EU, Commission Country Environment Profile, 2005
Currently, there is no standard resource earthquakes with Magnitude 6 or
and environment valuation. There is a more and when the associated ground
need to have a cost-benefit analysis and shaking is at Intensity 6 or higher. The
standard parameters that will consider country has 300 volcanoes, of which
The countrys vulnerability all relevant values (including nonmarket 22 are active.
to natural hazards cost the values).
government an average of The country also lies along the
PhP15 billion annually in direct Extreme vulnerability to typhoon belt of the Western North
damages, or more than 0.5 environmental hazards and Pacific where 66 percent of tropical
percent of GDP. The indirect climate-related risks cyclones originate. About 20 tropical
and secondary impact of cyclones enter the Philippine Area of
disasters further increases this Owing to its location and natural Responsibility (PAR) every year, of
cost. attributes, the country is prone or which seven to nine make a landfall.
vulnerable to natural hazards such as Tropical cyclone season is from
tropical cyclones, floods, earthquakes May to December; peak months are
and volcanic eruptions. Active faults and July to September with an average
trenches line the country (Figure 10.2). of three or more occurrences. Their
The longest of these, the Philippine Fault, movements follow a northwesterly
is one of the major active faults in the direction, frequently hitting northern
world. On the average, the Philippine Luzon and provinces in the eastern
Institute of Volcanology and Seismology seaboard (Figure 10.3). Mindanao is
(PHIVOLCS) records 20 earthquake usually spared from being directly hit
occurrences every day, but damage by majority of the typhoons that cross
is normally caused by shallow-focus the country.
Figure 10.2 Distribution of Active Faults Figure 10.3 Frequency of Tropical Cyclones in the
and Trenches Philippines, 1948-2006
Source: PHIVOLCS Source: PAGASA

Table 10.1 Top 20 Provinces Susceptible to Floods Table 10.2 Top 20 Provinces Susceptible to Landslides
Provinces Rank Area Rank Provinces Estimated Area
Susceptible to Susceptible to
Flooding (%) Landslide (%)
Pampanga 1 79.5 1 Benguet 90.3
Nueva Ecija 2 51.2 2 Mountain Province 87.1
Pangasinan 3 48.1 3 Nueva Vizcaya 86.7
Tarlac 4 47.1 4 Kalinga/Apayao 84.7
Maguindanao 5 42.5 5 Southern Leyte 82.6
Bulacan 6 39.9 6 Abra 82.1
Metro Manila 7 33.2 7 Marinduque 78.6
Cotabato (North Cotabato) 8 30.1 8 Cebu 77.6
Oriental Mindoro 9 28.7 9 Catanduanes 77.4
Ilocos Norte 10 27.9 10 Ifugao 77.3
Iloilo 11 26.7 11 Antique 74.5
La Union 12 26.3 12 La Union 74.4
Cagayan 13 25.5 13 Quirino 72.9
Sultan Kudarat 14 24.4 14 Batanes 71.5
Ilocos Sur 15 23.4 15 Bukidnon 70.9
Bataan 16 23.1 16 Davao Oriental 70.1
Leyte 17 20.8 17 Samar (Western Samar) 68.9
Davao Del Norte/Compostela Valley 18 20.2 18 Aurora 67.9
Compostela Valley/Davao Del Norte 19 20.2 19 Ilocos Sur 67.4
Camarines Sur 20 19.2 20 Sarangani 67.0
Source: DENR-Mines and Geosciences Bureau (MGB), 2010. Source: DENR-MGB, 2011
Data from the DENR-Mines and and communities, disasters have also
Geosciences Bureau (MGB) show that derailed social and economic development.
in eight provinces, at least 30 percent A WB 2005 study reported that the
of provincial land area are susceptible countrys vulnerability to natural hazards
to floods (Table 10.1). The same report cost the government an average of PhP15
shows 68 provinces are more susceptible billion annually in direct damages, or more
to rain-induced landslides, affecting at than 0.5 percent of GDP.16 The indirect and
least one-third of the total land area of secondary impact of disasters has further
each province (Table 10.1). increased this cost. This was surpassed in
2009 when typhoons Ondoy and Pepeng
Aside from the direct impact of natural inflicted damage equivalent to 2.7 percent
disasters on human lives, their properties, of GDP.17
16
WB, Natural Disaster Risk Management in the Philippines: Enhancing Poverty Alleviation through Disaster
Reduction, 2005.
17
WB, Typhoons Ondoy and Pepeng Post-Disaster Needs Assessment, 2009.
Table 10.3 Hazard Susceptibility of Selected Provinces by Poverty Incidence
Province/Region 2006 Pov. Inc Susceptibility to hazards Typhoon

(% of area) frequency
% Rank Flood RIL
Tawi-Tawi 78.9 1 0.8 5.7 1 in 50 yrs
Zamboanga Del Norte 63.0 2 3.2 50.1 1 in 50 yrs
Maguindanao 62.0 3 42.5 23 1 in 50 yrs
Apayao 57.5 4 7.2 84.7 4 in 3 yrs
Surigao Del Norte 53.2 5 9.8 35 1 in 1 yr
Lanao Del Sur 52.5 6 7.6 41.4 1 in 30 yrs
Northern Samar 52.2 7 14.9 49.6 4 in 3 yrs
Masbate 51.0 8 5.7 28.8 1 in 1 yr
Abra 50.1 9 7.6 82.1 4 in 3 yrs
Misamis Occidental 48.8 10 3.5 50 1 in 30 yrs
Agusan Del Sur 48.7 11 15.3 51.4 1 in 10 yrs
Oriental Mindoro 47.1 12 28.7 54.6 1 in 1 yr
Sulu 46.5 13 no data 10.4 1 in 50 yrs
Occidental Mindoro 46.5 13 18.3 63.5 1 in 1 yr
Kalinga 45.8 15 7.2 84.7 2 in 1 yr
Surigao Del Sur 45.4 16 11.1 48.3 1 in 3 yrs
Mountain Province 45.0 17 0.8 87.1 2 in 1 yr
Sarangani 44.8 18 5.3 67 1 in 50 yrs
Lanao Del Norte 44.1 19 11.7 54.9 1 in 30 yrs
Negros Oriental 43.7 20 5.6 51 1 in 3 yrs
Sorsogon 43.5 21 13.7 47 4 in 3 yrs
Antique 43.0 22 13.6 74.5 1 in 2 yrs
Eastern Samar 42.7 23 8.5 62.1 4 in 3 yrs
Aklan 42.6 24 18.3 66.5 1 in 2 yrs
Romblon 41.9 25 10.7 58 1 in 1 yr
Camarines Sur 41.2 26 19.2 38 1 in 1 yr
Davao Oriental 40.8 27 7.9 70.1 1 in 30 yrs
Palawan 40.8 27 10.3 43.7 1 in 3 yrs
Marinduque 40.8 27 10.6 78.6 1 in 1 yr
Sultan Kudarat 40.7 30 24.4 52.1 1 in 50 yrs
Leyte 40.5 31 20.8 49.5 1 in 1 yr
Samar 40.2 32 6.2 68.9 1 in 1 yr
Sources: NSO, NSCB, MGB, PAGASA, UNDP

The degradation of the environment with maximum temperature in excess of
aggravates the impacts of disasters 35oC is expected to increase in all parts
and climate change. Deforestation of the country within the said period.19
increases the chances of landslides.The Projected seasonal mean temperatures
risk of drought and poor availability in the Philippines are expected to rise
of water are aggravated by the loss by about 0.5oC to 0.9oC for 2020 and
of forest cover.18 Depleted mangrove 1.2oC to 2.0oC by 2050. Extreme rainfall
reserves deprive coastal communities is also projected to increase in Luzon
of natural protection from storm and Visayas, while a decreasing trend is
surges. Uncontrolled urban growth projected in Mindanao.
coupled with poor land use planning
results in encroachment on protected
forests or danger zones like riverbanks. Challenges
Together with shortfalls in basic
services such as proper waste disposal Policy Responses
and decent housing, these result in
clogged waterways and increased In line with RA 9003 or the Ecological
flood risk. Solid Waste Management Act of 2000, The degradation of the
technical assistance was provided to 1,325 environment aggravates the
Of the 32 provinces with poverty LGUs for the closure and rehabilitation impacts of disasters and
incidence of at least 40 percent, 16 are of open or controlled dumps, while climate change. Deforestation
hit by typhoons at least once a year technical assistance for the establishment increases the chances of
(Table 10.3). Provinces in extreme of sanitary landfills was extended to landslides. The risk of drought
Northern Luzon (Apayao, Abra, 236 LGUs. Despite closure orders and and poor availability of water
Kalinga, and Mt. Province) and on technical assistance, there were still 838 are aggravated by the loss
the eastern seaboard (Surigao del open dumpsites and 396 controlled of forest cover. Depleted
Norte, Northern Samar, Masbate, disposable facilities that need to be mangrove reserves deprives
Agusan del Sur, and Surigao del Sur), closed or rehabilitated. Only 338 of 1,610 coastal communities of
where typhoons are more frequent, cities and municipalities (20.9%) have natural protection from storm
are among the 20 poorest provinces. completed their solid waste management surges. Uncontrolled urban
plans. In Metro Manila, only eight out growth coupled with poor land
Climate change has exacerbated of 17 cities and municipalities have use planning results in the
these hazards. In the last six decades, complete plans. encroachment on protected
the annual mean temperature has forests or danger zones like
increased by about 0.57oC. Extreme Hazardous wastes have been an increasing riverbanks. Together with
events and severe climatic anomalies concern because of the increasing number shortfalls in basic services such
have been recorded, such as heat waves, of transnational companies that generate as proper waste disposal and
intense rains and floods, droughts, and hazardous wastes. A core inventory of decent housing, these result
an increasing frequency of typhoons 38,000 legally allowable substances under in clogged waterways and
and tropical storms. The Department the Philippine Inventory of Chemicals increased flood risk.
of Science and Technology- and Chemical Substances (PICCS) has
Philippine Atmospheric, Geophysical been prepared. The Toxic Substances and
and Astronomical Services Hazardous and Nuclear Waste Control
Administration (DOST-PAGASA) Act of 1990 (RA 6969) already bans the
scenarios for 2020 to 2050 project consumption, storage or transport of toxic
widespread warming in most parts of or nuclear waste into or within the country.
the country, with longer hot days and However, the country lacks adequate
shorter cold days. The number of days
18
OCD-NDCC, Strengthening Disaster Risk Reduction of the Philippines: Strategic National Action Plan
(2009-2019)
19
MDGF-1656, PAGASA GCM Scenarios, 2010
equipment and technical expertise to Mines in Western Samar included the
deal with these wastes, although steps are implementation of interim structural
being taken to define the regulatory and measures, phytoremediation and
enforcement responsibilities of various revegetation of disturbed areas. Rapid
government agencies. risk assessment of other abandoned
and inactive mines has also been
With respect to mining, several conducted by the following companies:
environmental safeguards and social Basay Mining Corp (Negros Oriental);
development programs have been Thanksgiving Mine-Benguet
installed in mining projects, including Exploration, Inc. (Benguet); Black
the 97 Environmental Protection and Mountain (Benguet); Consolidated
Enhancement Program (EPEP), 23 Mines, Inc. (Marinduque); Palawan
Final Mine Rehabilitation and/or Quicksilver Mines (Palawan); Western
Decommissioning Program (FMR/DP), Mine Corp (Benguet); and Dizon
387 Social Development Management Mines (Zambales).
Program (SDMP) and IEC Campaigns.
Mining companies have committed While some case studies20 present
A cost-benefit analysis is to inculcate the following in their examples of economic valuation of the
required that considers all environmental and social programs: environment and natural resources,
relevant (including nonmarket) other sectors contest the validity of the
values pertinent to the project. a. the implementation of some 400 parameters used. Issues of transparency
While some case studies approved five-year SDMPs for the have also cropped up, with some
present examples of economic host and neighboring communities sectors and support groups pointing to
valuation of the environment amounting to PhP1.89 billion difficulties in accessing information on
and natural resources, other benefitting over 700 barangays mining contracts.
sectors contest the validity of nationwide;
the parameters used. As for forest lands, approximately
b. the implementation of environmental 78,000 hectares were reforested during
management and protection activities the period 2004-2010 although this
through the EPEP amounting to only 60 percent of the total target of
PhP25 billion and for mine closure 130,000 hectares. More than 14 million
through the FMR/DP worth PhP600 hectares of untenured forestlands have
million; been protected. As of end of 2009, 41
of the 78 target provinces for forest
c. a mining forest program with 79 boundary delineation21 have completed
participating companies reforesting boundary surveys. Seventeen of these
or afforesting 10,319 hectares of mine are ready for legislation. A total of
affected and nonmining disturbed areas 336 municipalities were also covered
with 9.3 million seedlings; and by public land survey (partial cadastre
only) while 770,835 hectares were
d. payment of royalties to indigenous covered by patents issued from 2004
peoples of at least PhP330 million to 2010. As of 2010, both government
between 2007-2009. and nongovernment sectors reforested
a total of 1,958,928 hectares22. The
The assessment and rehabilitation of government, through projects of
abandoned or inactive mines have also the DENR, contributed a total of
been started. The rehabilitation of Bagacay 1,368,645 hectares or 70 percent,
20
Galang, Angelina P., The Philippine Environment in the Ecozoic Age, 2009.
21
The delineation of forestland boundary is the first and an important step in the management of the countrys forest
areas. Section 4, Article 12 of the Constitution provides that the congress, shall, as soon as possible, determine by law
the specific limits of forest lands and national parks marking clearly their boundaries on the ground.
22
DENR-Forest and Management Bureau

while the nongovernment sector Table 10.4 Forest Tenurial Instruments Implemented
accomplished 590,283 hectares or 30 No. LTI Type Number/a Area (has)
percent. As of 2010, approximately
11.6 million hectares of forestlands 1 Timber License Agreement 4 252,510
were covered by some form of 2 Integrated Forest Management Agreement 145 1,017,654
community forest management
under various government programs 3 Socialized Industrial Forest Management Agreement 1,822 36,941
(Table 10.4). Despite the rise in the 4 Agroforestry Farm Lease Agreements 17 4,776
distributed number of these tenurial
instruments, few protected areas have 5 Tree Farm Lease Agreement 88 9,742
been declared, while deforestation 6 Forestland Grazing Management Agreement 364 97,019
continues.23
7 Special Land Use Permit 198 2,063
Biodiversity conservation and 8 Special Land Use Lease Agreement 18 98
protection measures have been taken
in the form of cave and wetland 9 Forest Land Use Agreements for Tourism Purposes 31 967
management, proclamation of 10 Special Forest Land Use Agreement 11 2,580
protected areas and critical habitats,
and establishment of protected 11 Community-Based Forest Management Program
areas and zones. An Updated CBFM Agreement 1,790 1,633,892
Other CBFM Tenure 3,314 3,200,024
National Wetlands Action Plan for
the Philippines (NWAPP) to be 12 Approved CADT and CALT 414 4,276,639
implemented from 2011-2016 has
been prepared. RA 9072, otherwise 13 PACBRMA 58 22,240
known as the National Caves and 14 Areas under Management Arrangements
Cave Resources Management and Philippine National Oil Corporation 266,326
Protection Act of 2001, provides National Power Corporation 337,721
the backbone for managing and National Irrigation Administration 153 22,243
Co-Management Agreement with LGUs 485,536
protecting caves in the country. The
DENR Memorandum Circular TOTAL 8,427 11,668,974
2007-04 or the Procedure in Cave
Classification has been issued to (Footnotes)
/a Accumulated from the start of the implementation of each tenurial instrument.
assess the status and values associated Source: DENR- Forest Management Bureau (2010)
with a particular cave and assign its
most beneficial use. A Cave Strategic
Action Plan has been developed with (NIPAS) Act in 1992, covering 3.53
cave stakeholders for implementation million hectares. Terrestrial areas cover
within the period 2011-2016 to 2.16 million hectares or 7.2 percent of
guide the priority actions on cave the land area, and marine areas cover
management and conservation. 1.371 million hectares or 0.69 percent of
the total sea area of the country. Of these,
Biodiversity protection has been 13 protected areas covering 894,262.16
expanded and intensified. A total hectares have been established through
of 111 protected areas (terrestrial specific laws, namely: (a)Batanes
and marine) have been proclaimed Protected Seascape, (b) Northern
since the passage of the National Sierra Madre in Isabela, (c) Bangan
Integrated Protected Areas System Hill National Park in Isabela, (d) Mts.
23
Caucus of Development NGO Networks (CODE-NGO), The Freedom from Debt Coalition (FDC) and
United Nations Development Program (UNDP). Citizens Roadmap for Poverty REduction and Achieving the
MDGs, Recommendations for the 2010-2016 MTPDP, and Kalikasan Peoples Network for the Environment.
Philippine Environmental Situation 2001-2009.
Box 10.1 Women and the Environment and Natural Resources
Women, especially the poor, are most vulnerable to changing

environmental conditions and economic shifts. The roles of women in the
management of the environment and natural resources management have
not been duly recognized. Womens initiatives that include establishment
of women-managed areas illustrate womens enhanced role in effective
implementation of coastal resources management. Yet, women are
still less recognized particularly in existing policies. One of the critical
challenges is the implementation of the Magna Carta of Women (RA
9710), of which an increase in the number of women participating in
Fisheries and Aquatic Resources Management Councils and other bodies
are mandated. In terms of access to productive resources, women enjoy
less benefits than their male counterparts. There is differential access
among men and women to forest resources. DENR data in 2002/2003
show that women beneficiaries make up only 30 percent of the total holder
The Philippines passed the of community-based forest management agreements (CBFMAs).
Climate Change Act of 2009 Source: Philippine Council for Women and Women Network of Aksyon Klima, 2010
(RA 9729) to incorporate
climate change in government
policy formulation and establish
the framework strategy for Banahaw-San Cristobal in Quezon and management as a national strategy to
climate change. The National Laguna, (e) Tubbataha Reefs in Palawan, ensure the sustainable development
Framework Strategy on Climate (f ) Mt. Kanlaon and Sagay in Central of the countrys coastal and marine
Change was formulated in Visayas, (h) Mt. Malindang, Misamis; resources. The protection of the
2010 to ensure and strengthen (i) Mt. Mimbilisan, Misamis, (j) Mt. whale shark has been intensified with
the adaptation of the countrys Apo, Davao, (k) Mt. Hamiguitan Range, the issuance of AO 282 (March 16,
natural ecosystems and human Davao, (l) Mt. Kitanglad, Bukidnon. 2010), providing for the following
communities to climate change, There are also protected areas outside added protection for whale sharks:
charting a cleaner development the NIPAS such as those proclaimed by mapping of their migratory pathways,
path for the country in the LGUs and Peoples Organizations (PO). mandatory rescue, intensified
process. This is reinforced by Unfortunately, most of these protected investigation and prosecution, and
the enactment of RA 10121, areas do not have sufficient budgets, staff provision of rewards. EO 797, on
the Philippine Disaster Risk or capacity for effective self-management. the other hand, adopts the Coral
Reduction and Management Act Triangle National Plan of Action,
of 2010. The operating policies and strategies which contributes to the attainment
for these laws are provided in various of the goals and targets agreed by the
issuances. EO 578 established six Coral Triangle countries under
the national policy for protecting, the Regional Plan of Action. During
conserving and sustainably utilizing the Ministerial Meeting held in the
biological diversity. It also revitalized Solomon Islands in December 2009,
the management of rich fishing grounds the six countries officially recognized
like the Sulu-Celebes Seas and Verde the Sulu-Sulawesi Marine Ecoregion
Island Passage, which are considered as the First Priority Seascape under
the center of marine shore fish diversity the Coral Triangle Initiative-Regional
in the world. The Philippines has signed Plan of Action.
an agreement with Indonesia, Malaysia,
Papua New Guinea, Solomon Islands These initiatives have contributed
and Timor Leste on the protection to the protection and conservation
and sustainable management of the of threatened species and their
Coral Triangle. Through EO 533, the habitats. Among others, the tamaraw
government adopted integrated coastal population in the wild has increased

from 187 in 2001 to 314 heads a national strategy. Small MPAs are
in 2010. In 1999, only about 20 unlikely to provide protection for larger,
cockatoos were observed in the more mobile species25 and contribute
wild; at present about 239 cockatoos little to regional conservation objectives.
have been recorded in Raza Island, Smaller MPAs must therefore be scaled
Palawan alone. To date, 48 new up to become MPA networks and made
species of plants and animals have resilient to climate change by developing
been discovered in the Philippines, or redesigning them into climate-smart
including new species of bats, birds MPAs.
rodents, frogs, and rafflesia (worlds
largest flower). The new species Effective and sustained enforcement
were discovered in the mountains of fishery and relevant environmental
of Cagayan, Camiguin, Cordilleras, laws have also been a major challenge.
Quezon, Palawan, Mindoro, among There are notable achievements in
other places. community-based law enforcement by
local Bantay-Dagat groups and networks
Various actions have been taken to in Verde Island Passage and in the
address threats to coastal resources. Visayas, working as composite teams in
Several initiatives led to the cooperation with enforcement agencies
establishment of marine protected and LGUs. Still there is an urgent need
areas (MPAs) covering around 22,540 to strengthen, expand, replicate, and
sq km. Of more than 1300 existing sustain these successful interventions.
and proposed MPAs, however, only
10-15 percent are effective. Many As long as coastal resources continue
MPAs are either unmanaged or to be threatened by both human-
nonfunctioning. Sixty percent are induced and natural disasters, the poor,
located in the Visayas Seas region, particularly women, who are dependent
in the most heavily-fished waters in on these ecosystems for their subsistence
the country. It is estimated that 4.9 will likewise be further disadvantaged
percent of coastal municipal waters (Box 10.1).
are protected as MPAs, but only 0.5
percent are within no-take areas. One To deal with disasters and extreme events,
study shows that marine corridors are the country has adopted legislation
also not well represented by the current and policy dealing with DRRM and
MPAs.24 Four of the nine identified CCA. Since the signing of the United
corridors (namely, Babuyan Corridor, Nations Framework Convention on
Mindoro-Calavite Tablas Triangle, Climate Change (UNFCCC) in 1992,
Balabac Strait Corridor, Sibutu the country has passed several laws
Passage-Sulu Archipelago Corridor, and localized various international
Ticao Pass-San Bernardino Strait- environmental commitments. Its policy
Samar Sea Corridor, Panay Gulf responses have evolved from approaches
Guimaras Strait Corridor, Philippine focusing on greenhouse gas emissions
Sea Corridor and Tapiantana to one that integrates mitigation and
Corridor) have designated no MPAs. adaptation in practically all sectors. Its
This implies that the development of policy and institutional reforms are
MPAs has largely been dominated by implemented through broad-based
local initiatives rather than through platforms on sustainable development

24
Weeks, R; Russ, GT; Alcala, AC; White, AT. Effectiveness of Marine Protected Areas in the Philippines for
Biodiversity Conservation. Conservation Biology, Volume 24 Issue 2 p. 531-540. April 2010
25
Sale, PF, et al, 2005. Critical science gaps impede use of no-take fishery reserves. Trends in Ecology & Evolution
20:74-80.
Philippine Disaster Risk Reduction
Box 10.2 Environmental Education and Management Act of 2010.
In 2008, the Philippines enacted RA 9512 or the National Environmental The National Disaster Risk
Awareness and Education Act of 2008. This legislation concretized Reduction and Management Council
the countrys support to the United Nations Decade of Education for (formerly NDCC) has been given
Sustainable Development (2005-2014) and the ASEAN Environmental the mandate to protect the wellbeing
Education Action Plan for Sustainable Development (2008-2012). This of people and safeguard the national
law has reiterated the policy of the State to protect and advance the economy and environment through
right of the people to a balanced and healthful ecology in accord with more concrete financial investment
the rhythm and harmony of nature. The law has further recognized in DRR. This paradigm shift is also
the vital role of the youth in nation building, and the role of education in consonance with the countrys
to foster patriotism and nationalism, accelerate social progress and international commitment to the
provide total human liberation and development. Hyogo Framework for Action (HFA)
of 2005, which seeks to build the
In the DENR, the Environmental Education and Information Division resilience of nations and communities
(EEID) and the 16 Regional Environmental Education and Information in the face of disasters. The National
Sections of the EMB has been the agencys lead arm in creating DRRM Framework and Plan
environmental awareness. It has spearheaded year-round environmental utilizes the multihazard approach in
events from World Water Day (March 22) and Philippine Water Week managing the impact of natural and
(third week of March), International Earth Day (April 22), Philippine human-induced disasters. It calls for
Earth Month (April), World Environment Day (June 5), Philippine building the disaster resilience of
Environment Month (June), National Clean Up Month, and National communities and institutionalizing
Ozone Protection (September), International Ozone Day (September arrangements and measures for
16), International Coastal Clean Up Weekend (third weekend of reducing disaster risks, and enhancing
September), National Clean Air Month, and National Environmental disaster-preparedness and response
Awareness Month (November), Global Warming and Climate Change capabilities at all levels. Since DRR
Consciousness Week (November 19-24). is closely linked to poverty alleviation
and development, it is necessary to
EEIDs activities which include distribution of IEC materials, recyclables link it firmly to development planning
collection, tree planting and environmental exhibits have contributed to at all levels.
the increasing awareness of Filipinos in caring for the environment and
natural resources of the country. Before the passage of RA 10121,
Source: DENR-EMB, 2009 the government already initiated the
development of a long-term master
plan for disaster mitigation known as
the Strategic National Action Plan
such as multisector national plans and on DRR or SNAP. This document
strategies, and special environmental proactively serves as a road map for
management agenda. The Philippines the next 10 years and was formulated
passed the Climate Change Act of through as inclusive participatory
2009 (RA 9729) to incorporate climate process of all stakeholders. SNAP was
change in government policy formulation approved on June 17, 2010 through
and establish the framework strategy EO 888 (Adopting the SNAP on
for climate change. The National DRR). EO 888 explicitly adopts
Framework Strategy on Climate Change the 18 priority programs/projects
was formulated in 2010 to ensure on DRR and identified agencies
and strengthen the adaptation of the with primary responsibility. The
countrys natural ecosystems and human consistency of SNAP with RA 10121
communities to climate change, charting however still has to be reviewed and
a cleaner development path for the reevaluated.
country in the process. This is reinforced
by the enactment of RA 10121, the

The GAA allocates specific amounts
annually (PhP5 billion in 2011) for
the calamity fund, for use in aid, Box 10.3 Devolution of ENR Functions
relief and rehabilitation services to
communities or areas affected by man- The Local Government Code of 1991 placed LGUs at the forefront
made and natural calamities, repair of environment and natural resources management. According to the
and reconstruction of permanent League of Municipalities of the Philippines (LMP), the following ENR
structures, including other capital functions were devolved to LGUs in 2005:
expenditures for disaster operation,
and rehabilitation activities, although a. Regulation of environmental impacts of SMEs under Kalakalan
it has a special provision allowing 20 Law;
its use for predisaster activities. On
the other hand, Section 22 of the b. Regulation of fishing in municipal waters;
Philippine DRRM Act of 2010 (RA
10121) also enumerates permissible c. Regulation of minor mineral extraction like small-scale mining and
uses of the annual calamity fund, certain scales of quarrying and sand and gravel gathering;
generally allowing support for a
wider range of activities. There is a d. Regulation of nuisance and pollution under the Clean Air Act;
need to reconcile differences and
arrive at a common interpretation of e. Solid waste management under the Ecological Solid Waste
what DRR measures can be charged Management Act; and
against the calamity fund. Moreover,
a big financing gap exists between the f. Antismoke belching program.
annual budget reserve of government
for calamities (average of PhP2 billion Likewise, the Code assigns municipalities the task of establishing a
a year) and the damage typically solid waste disposal system or environmental management system
incurred in times of disasters. and services or facilities related to general hygiene and sanitation.
Meanwhile, provinces are tasked to enforce forestry laws limited to
Risk transfer mechanisms such as community-based forestry projects, pollution control law, small-scale
microinsurance/finance, although mining law, and other laws on the protection of the environment; and
available, need to be made more minihydro electric projects for local purposes.
accessible. Health insurance is also Source: WB Country Environmental Analysis, 2009
being made more widely accessible,
but the uptake by poor rural
communities, which are the most
affected in terms of disaster, remains
low.26 in the development of their disaster
risk management programs, their local
The government has initiated various climate change action plans and in the
programs and projects to provide formulation of their land use plans.
more up-to-date scientific and Vulnerability assessments, adaptation
technical information and data scales tools and downscaling climate change
to be used in decision making. The scenarios and projections are being
DENR- Ecosystems Research and developed to equip decision makers and
Development Bureau (ERDB) has planners on how to adapt to climate
completed vulnerability assessments change and disasters. IEC campaign
of 43 priority watersheds nationwide materials and knowledge management
with the aim of highlighting areas products are also being created to increase
vulnerable to soil erosion, landslide, public awareness of climate change, its
biodiversity loss, and forest fire. Such impacts and attendant risks, and DRR.
information is critical for LGUs
26
SNC
Institutional Issues in the implementation of various laws
such as the Mining Act, NIPAS Act,
Despite government efforts at IPRA and the LGC, among others.
sustainably managing the countrys These conflicts, overlaps, or divergent
environment and natural resources, interpretations have led to the delay
environmental degradation continues. or suspension of some projects.
The plethora of laws and policies, as well
as the established agencies to manage, Government capacity for
protect, and preserve the countrys resource management is
environment and natural resources have wanting
not sufficed or worked effectively enough
to address the threats to ecological Overlapping jurisdictions. Due to
integrity. Institutional issues need to be the large number of players in the
addressed to ensure the sustainability of environment and natural resources
the countrys fragile environment and sector, governance issues are
natural resources. Policies, programs and inevitable. In some instances, conflicts
existing institutional arrangements must arise between national and local
For CCA, putting in place be revisited in order to move forward governments in terms of the protection
adaptation measures also and deliver the promise of sustainable and utilization of natural resources.
requires financial resources. development. This is apparent when LGUs initiate
The Philippines continues to the reversion of abandoned fishponds,
uphold the UNFCCC principle Implementation is confused while it is the DENR who should lead
of common and differentiated by overlapping and conflicting the process, following the Philippine
responsibilities to hold on to policies Fisheries Code of 1998 and several
the agreement that Annex I joint administrative orders. Another
countries will extend financial There is a need to review and harmonize concern is the national-local conflicts
assistance over and above the a number of conflicting and overlapping in mining projects, specifically when
level of development assistance. policies. A case of policy conflict is LGUs pass local legislation rejecting
Developed countries are that between forest protection laws, on or opposing the entry or expansion
required under the Convention the one hand, and the Agriculture and of large-scale mining projects. This
to provide new and additional Fisheries Modernization Act (AFMA), contravenes the DOJ opinion that
resources, either through on the other. AFMA encourages local ordinances cannot undo a law
bilateral, multilateral or regional agriculture expansion into the uplands and should not run counter to national
funding mechanisms, to meet including forestlands through the policy; DENR memoranda also
the agreed costs of developing creation of Strategic Agriculture and order its regional offices to continue
countries in complying with their Fisheries Development Zone (SAFDZs) implementing their mandate.27
obligations as well. The country, that promote the production of high
however, cannot be dependent value crops such as coconut, pineapple To ensure compliance in incorporating
on these funds. and sugarcane. While there is a need to CCA and DRRM management in
improve the income of upland farmers, the development process, the roles of
the identification of suitable upland agencies and their respective mandates
areas for commercial high-value crop as provided by law must converge and
production should be given priority and synchronize. The Climate Change
closely undertaken together with DENR Act and the Philippine DRRM
to avoid onsite and offsite negative Act of 2010 are significant strides
externalities. The NIPAS Act is also in to include climate change and
conflict with the Fishery Code on the DRR management in the planning
municipal water income of municipalities process. Sectoral plans, including the
within protected areas, as well as the LGC Environment and Natural Resources
on the matter of the jurisdiction of LGUs Framework Plan, must be updated to
within protected areas. Conflicts also exist include these concerns.
27
DOJ Opinion No. 8, Series of 2005

Technical expertise. Environment consolidation of data/information to
and natural resources management deliver quality and timely statistics
requires a skilled and competent in spatial and digital form. (Box 10.2
workforce to implement professional summarizes current government efforts
standards of operation in on environmental education.)
environment, but technical experts
and trained personnel at the national Enforcement of environmental
and local levels are in short supply. laws and policies is inadequate
Some implementing agencies
have the capacity to implement Full and effective implementation
provisions of environment and of environmental laws, policies and
natural resources laws requiring the programs continues to be a challenge.
application of new and sophisticated Governance issues, including corruption,
technologies (e.g., highly technical are among the reasons for low compliance
LAMTM technologies geographic in these laws. The incomplete devolution
information system (GIS), global of mandates to LGUs has also hampered
positioning system (GPS), valuation, their full implementation (see Box 10.3
databases and online connectivity of for devolved functions). A DILG-
information systems). Still others, commissioned study in 200528 called
however, particularly LGUs, still the state of environment and natural
have to develop the competence to resource devolution partial and at worst,
implement their mandated tasks and minuscule and insignificant. Devolved
to properly assume environment and functions were mainly peripheral,
natural resources functions. unattractive to private investors, and were
costly to perform. Among these functions
Information systems. Integrated, were watershed regulation, greenbelt
updated and quality information and treepark development, farmer-level
for ENR and climate change is integrated social forestry, and small-
necessary for planning, management scale mining, all of which do not attract
and decision making. The lack of significant investments from the private
a participatory and science-based sector or are limited to certain LGUs.
baseline data creates discrepancies The control of smoke-belching vehicles,
that can cause uncertainty and lead the management of solid wastes, and
to serious errors in carrying out the coastal zone regulation and protection are
policy and planning functions of devolved functions requiring substantial
ENR stakeholders. investments from LGUs. In 2007,
ADB also commissioned a study on the
A better system for gathering, devolution of DENR functions, to help
processing, storing, and sharing identify responsibilities in the Integrated
information needs to be put in place. Coastal Resources Management Project
The DENR is currently implementing (ICRMP). The study pointed out the
the Information Systems Strategic institutional weaknesses in most of the
Plan (ISSP) which aims to provide a 206 Protected Area Management Boards
coherent, integrated and decentralized (PAMBs) revealed by a 2003 UNDP
set of data to every office, making study. Of these PAMBs, only five were
information to stakeholders available fully constituted boards backed by specific
anytime. ISSP also aims to develop laws; the rest became interim boards.29
information systems that will address
the integration, collaboration and
28
DILG/ADB, 2005. Local Government Financing and Budget Reform.
29
ADB, Country Environmental Analysis, 2008.
Contributing to poor enforcement and their obligations as well. The country,
compliance is the lack of knowledge however, cannot be dependent on
of environmental laws, policies, and these funds.
programs among LGUs, specifically in
communities or barangays. There are The National Environmental
still rural communities which depend on Economic and Development Study
resource extraction for their livelihood. (NEEDS) 2010 on the inventory of
Relevant environmental laws, specifically financial flows showed that grants
those regulating the utilization of natural to the environment, agriculture,
resources, e.g., NIPAS, Wildlife Act, etc. biodiversity, energy, CCA, health, and
are poorly implemented. There is a need water supply and sanitation address
to intensify information and advocacy only a given problem or requirement,
campaigns on existing environmental like solid waste management,
laws and policies among communities. resource conservation, production
constraints, biodiversity loss,
Absence of a financing strategy Greenhouse Gas (GHG) emissions,
for environment and natural institutional capacity, outbreak
In order to improve the resources programs and CCA of infectious diseases, and water
conservation, protection, shortages. The grants received have
and rehabilitation of the Government programs are hobbled by moreover been limited in scope and
countrys natural resources, financial constraints. Funding support geographic coverage. The restricted
the sector shall pursue their for watershed management has been project scale, for instance, could be
sustainable use and integrated insufficient to cover all important seen in an integrated area project
management. Natural resources watersheds. It will take 280 years to covering at most only one or few
management activities shall be reforest given the average budget cities or municipalities, a watershed
directed at enhancing the state allocation of about PhP300 million or ecosystem, or of a nationwide scale
of the different ecosystems and for reforestation in the past 10 years.30 but focused only on a few provinces
the natural resources within Thus, more funds should be allocated, or interregional areas. Limited
them to provide resource- to prioritize watersheds that support geographical coverage result in project
dependent communities with irrigated lands. The implementation benefits being confined to particular
sustainable livelihoods. of National Sewerage and Septage area niches, a project piloting mode
Management Program by the DPWH of introducing change, an inability to
has also been slow due to lack of funds scale up, and turfing among country
to meet the large investment needed for donors and multilateral agencies
infrastructure development. (EMB-DENR, 2010).
As for CCA, putting in place adaptation The NEEDS study concluded the
measures also requires financial resources. budgetary resources set aside by the
The Philippines continues to uphold the Philippine Government for CCA have
UNFCCC principle of common and been inadequate. The larger budgetary
differentiated responsibilities to hold on share of disaster management from
to the agreement that Annex I countries 2003 to 2008 did not represent proactive
will extend financial assistance over and efforts to mitigate the expected damages
above the level of development assistance. and risks from natural disasters but
Developed countries are required under merely reflected the postdisaster relief
the Convention to provide new and and rehabilitation expenditures.
additional resources, either through
bilateral, multilateral or regional funding The budget for DRR, particularly those
mechanisms, to meet the agreed costs of appropriated as Calamity Fund in the
developing countries in complying with GAA, still reflects the response-oriented
30
DENR-FMB

perspective of traditional disaster
management. The DRRM Act (RA Strategic Framework
10121) already explicitly provides for the
change in the nature of the calamity fund Consistent with Philippine Agenda
making it more appropriate for DRR 21 and its enhanced version and the
use as the NDRRMF. Government countrys commitments to multilateral
budget allocations for DRR should environmental agreements, the
be clearly delineated so that aid from Environment and Natural Resource
international financial institutions can Sector shall pursue the following goals
be directed to where it is really needed. and strategies:
It is also critical to determine the extent
and manner of obtaining funding from Goal 1. Improved
other stakeholders and partners in order Conservation, Protection
to finance DRR activities, especially and Rehabilitation of Natural
costly structural measures. Resources
While good results from DRR In order to improve the conservation,
projects and activities have provided protection, and rehabilitation of the The PNRPS aims to empower
opportunities for sound practices to take countrys natural resources, the sector forestland managers and
root, existing organizational and societal shall pursue their sustainable use support groups that sustainably
structures do not necessarily allow and integrated management. Natural and equitably managing
positive values to thrive. Sustaining resources management activities shall forestlands and ancestral
mechanisms such as making DRR a be directed at enhancing the state of domains with enhanced carbon
regular budget item, strengthening PPP, the different ecosystems and the natural stock and reduced greenhouse
creating incentives for disaster risk- resources within them to provide gasses emission. Besides
reducing behaviour, recognizing and resource-dependent communities with reducing forest degradation
replicating best practice, instilling risk sustainable livelihoods. Priority shall be and deforestation, the strategy
awareness at all levels of government, given to the implementation of national alleviates poverty, conserves
in households, firms and workplaces action plans on forest, biodiversity, coastal biodiversity, and improves
should be part of a general strategic plan. and marine resources and wetlands. governance.
Mechanisms and policies will be pursued
The inadequacy of financing for the to rationalize the use of the countrys land
enforcement of laws and policies is and mineral resources. In line with the
an important continuing concern. National Framework Strategy on Climate
Several studies and initiatives have Change, integrated ecosystem-based
been undertaken to measure the costs management will continue to be adopted
of users activities on natural resources, as a major strategy for sustainable natural
assessing the feasibility of generating resource management as well as a means
funds for their management. ENR to adapt to climate change scenarios. As
agencies however continue to rely a safeguard for all undertakings with a
largely on administrative services for potential impact on the environment
regulation rather than on market-based and natural resources, a mechanism for
instruments. third party cost-benefit analysis31 and
monitoring shall be enforced that takes
environmental and social costs and
benefits into account.
31
WB, 2009
Sustainably manage forests and and implementation among
watersheds DENR, LGUs and other
watershed stakeholders towards
Targeting to have 15 million hectares of responsible forest management;
forested land, 50 percent of which may and
be production forest, the following will
be implemented to increase forest cover Develop a portfolio approach
by 600,000 hectares by 2016; for forest investment in
collaboration with the LGUs
a. Continue and enhance the and the National Commission
protection of forest and reforested on Indigenous Peoples (NCIP),
areas (especially in critical watersheds) which shall jointly prepare a
and sustain the productivity of forest land use plan identifying
agroforestry areas: areas for protection and areas
for investment and provide the
Manage, protect, and develop necessary permits and clearances
natural forest, established prior to development;
PES is a mechanism in plantation, and economically
environment and natural important nontimber forest c. Improve baseline information,
resources management that products and species; and conduct valuation and
corrects the flaw in current accounting of forest resources:
economic system whereby the Encourage communities to
users of ecosystem/environment enhance protection and sustain Conduct monitoring and
services are made to pay the productivity of reforestation areas evaluation using common
managers. and upland areas for livelihood and criteria and indicators, third-
poverty alleviation; party monitoring, and forest
certification, among others; and
Transform open, denuded and
degraded areas into protection Strengthen the decision-
forests and/or economically- support system through an
productive assets; and inventory of forest resources,
baseline data generation and
Encourage communities to GIS mapping, and forest
develop multipurpose forests in valuation and natural resource
open, denuded and degraded areas; accounting;
b. Complete the delineation of d. Implement the Philippine

forestland boundaries and develop National REDD32 + Strategy
plans for forest land use and watershed (PNRPS). The PNRPS aims to
management: empower forestland managers and
support groups that sustainably
Delineate and assess forestland and equitably manage forestlands
boundaries and push for the and ancestral domains with
enactment of relevant bills, placing enhanced carbon stock and reduced
all untenured /open access areas greenhouse gasses emission. Besides
under management regimes; reducing forest degradation and
deforestation, the strategy alleviates
Carry out collaborative poverty, conserves biodiversity, and
watershed management planning improves governance.
cum vulnerability assessment
32
REDD is an acronym for Reducing Emissions from Degradation and Deforestation.

Improve protection and Complete the boundary
conservation of biodiversity delineationanddemarcationofprotected
areas;
a. Conserve, preserve, and manage
protected areas, wildlife, and their Preparation/updating of
habitats: management plan for protected areas
and ecologically important habitats to
Assess the effectiveness include CCA; and
of management and
implement adaptive Manage priority wetlands for food
management in all protected areas production, water conservation and
proclaimed under the NIPAS; disaster mitigation;
Establish and manage critical c. In protected areas, institute and

habitats to reduce habitat loss and operationalize the concept of Payment
enhance ecosystem services that for Environmental Services (PES).
play important roles in addressing PES is a mechanism in environment
climate change impacts; and natural resources management that
corrects the flaw in current economic
Establish and effectively system whereby the users of ecosystem/
manage additional protected environment services are made to pay the
areas focused on identified KBAs ENR managers;33
through Presidential Proclamation
to sustain ecological goods and d. Continue implementing
services of the area; internationalcommitmentsonbiodiversity
conservation, protection and
Strengthen management rehabilitation:
of protected areas in partnership
with local communities through Implement EO 514 (Establishing
issuance of security of tenure and the National Biosafety Framework,
provision of alternative livelihood; Prescribing Guidelines for its
Implementation, Strengthening the
Manage significant caves for National Committee of the Biosafety
their socioeconomic and ecological of the Philippines, and for Other
values; Purposes) particularly the provisions
on environmental and health risk
Rehabilitation of important assessment in the field-testing and
habitats such as wetlands; and regulated propagation of genetically-
modified organisms (GMO)
Facilitation of significant following the precautionary principle;
increases in the population
threatened and endangered Implement the Nagoya Protocol
species; on Access to Genetic Resources and
Fair and Equitable Sharing of Benefits
b. Prepare protected area Arising from their Utilization (e.g.,
management plan incorporating capacity building and formulation of
vulnerability and adaptability of the relevant policies); and
sector to disaster risk and climate
change Implement the Updated National
Wetland Action Plan for the
Philippines (NWAPP) as part of
33
Memorandum of Understanding on PES, 2010
the countrys commitment to the waters, archipelagic waters,
Convention on Wetlands or Ramsar territorial sea and exclusive
Convention. economic zone;
Enhance coastal and marine h. Conduct inventory and status

resources management of foreshore lands to identify and
clarify impacts of privatization
a. Develop and implement and commercialization to the
the national integrated coastal environment and the fishing
management (ICM) program to communities;
include principles, strategies and
action plans in accord with EO i. Revert abandoned, underutilized
533 (Adopting Integrated Coastal and unproductive fishponds to
Management as a National Strategy to mangroves;
Ensure the Sustainable Development
of the Countrys Coastal and Marine j. Revise policies on the
Environment and Resources and management of mangrove areas in
The development of Establishing Supporting Mechanisms order to increase mangrove cover;
environment-friendly enterprise for Its Implementation);
and livelihood opportunities for k. Integrate coastal and marine
local communities is envisioned b. Prioritize the protection and water use plans into the
to address the prevailing management of mangroves, sea comprehensive land use plans of
poverty of resource-dependent grasses, coral reefs and beaches as a LGUs;
communities. This will also management unit to derive maximum
motivate communities to protect benefits resulting in synergistic l. Complete the delineation of
natural habitat and wildlife. interactions of these four ecosystems municipal waters; and
that enhance marine productivity;
m. Improve the status of coastal
c. Apply the ecosystem approach and marine biodiversity by
to the management of fisheries and safeguarding coastal ecosystems,
other marine resources, addressing species, and genetic diversity.
transboundary policy and regulatory
concerns; Improve land administration
and management
d. Evaluate management effectiveness
of all MPAs proclaimed under NIPAS; a. Fast track the cadastral survey
to delineate boundaries of all
e. Implement the Coral Triangle municipalities/cities, provide
Initiative National Plan of Action and economic data for land-based
the Sulu-Sulawesi Marine Ecoregion development studies and projects
(SSME) Conservation Plan which and facilitate land disposition and
includes designating priority seascapes titling;
across the Coral Triangle as geographic
focus of sustainable management; b. Accelerate the titling of
agricultural and residential lands
f. Update nautical charts for safety and ancestral lands in partnership
at sea and protection of the marine with DAR, NCIP, LRA and LGUs
environment; to improve the socio-economic
condition of beneficiaries and
g. Pursue claims for an extended provide security of land tenure;
continental shelf and delineate various
maritime jurisdictions such as internal

c. Rationalize land policies and Manage a more equitable
laws towards a harmonized and utilization of mineral resources
effective Land Administration
laws; a. Review and harmonize mining
policies and other related policies (e.g.,
d. Incorporate environmental IPRA, NIPAS, LGC, etc.);
safeguards in the issuance of
foreshore leases taking into account b. Ensure the mining industrys
the likely effect of climate change; compliance with laws and policies
on conservation, protection and
e. Intensify a more vigorous rehabilitation:
nationwide campaign against
the proliferation of fake or Institute comprehensive resource
fraudulently-issued certificates of valuation of mining operations
land title; (including environmental and social
costs);
f. Strengthen the management
of land resources information Safeguard the ecological and In order to provide communities
and cadastral information environmental integrity of areas with a healthier environment, the
through computerization and in affected by mining operations; quality of the air, land and water
partnership with other land-related must improve.
agencies, local governments, and Strictly enforce compliance
the private sector for improved of mining companies within
land administration services and environmental and social
revenue collection; development commitment;
g. Enhance the capacity and Implement noncapital intensive

competence of professionals, and short-term remediation
practitioners and workers in the measures; and
land sector, supporting them
with modern technology and Develop mine viability and
land-resources information made environmental assessment
available at national and local levels guidelines for the remediation/
and in the private sector; and rehabilitation or redevelopment of
viable projects.
h. Develop a national country
program to combat land c. Rationalize the extraction and use
degradation and poverty in marginal of minerals for national development:
areas and rural communities and
mainstream issues of sustainable Determine the actual minerals
land management (SLM) and and metal needs of the country that
desertification, land degradation will contribute to the realization of
and drought in agriculture and industrialization;
environment planning and policy
formulation. Promote the development of
downstream industries to maximize
the benefits or value-added from
mining;
Rationalize resource assessment

for both metallic and mineral
commodities; complete an accurate
and realistic inventory of actual
mineral reserves, indicating specific implement transparency and
locations, types and values of the accountability among mining
minerals to be potentially extracted; companies operating in the
country;
Strictly implement the use-
it-or-lose-it policy to cleanse Ensure the timely and
inactive mining applications and accurate release of the legitimate
nonperforming mining contracts; share of local governments in the
extraction of national wealth;
Determine untapped offshore
mineral resources by actively Improve the government
pursuing characterization and share in taxes; and
assessment surveys; and
Rationalize the incentives
Pursue new mining technology granted by the government to
and research and development mining companies.
of mining techniques in mining
planning, scheduling, and design to Develop and implement
raise the level of mine productivity environment-friendly enterprise
and make the local mining industry and livelihood opportunities.
globally competitive. This should be
supported by capability-building The development of environment-
programs and the establishment friendly enterprise and livelihood
of laboratory facilities with opportunities for local communities
state-of-the art equipment. is envisioned to address the prevailing
poverty of resource-dependent
d. Guarantee the equitable distribution communities.
of benefits from minerals through
good governance in the mining sector: This will also motivate communities
to protect natural habitat and wildlife.
Protect public investments This includes among others:
through government oversight
over mining companies to ensure a. Well-regulated ecotourism
transparency and accountability, areas;
stimulating more investment as a
result; b. Livelihood activities (income
and food-based) designed for
Review, monitor and evaluate women; and
existing large-scale mining
contracts with respect to their c. Development and intensification
compliance with existing rules and of markets for products out of
regulations; waste such as organic composts
and reusable items.
Reaffirm ordinances and
resolutions issued by LGUs to The DA-DAR-DENR National
protect their environment to the Convergence Initiative (NCI)
extent these are consistent with intends to help provide more jobs and
national laws and policies; livelihood in identified convergence
sites for productive management and
Sign on to the Extractive sustainable utilization of forestlands.
Industry Transparency Initiative The programs of the three agencies
(EITI) in order to practice and will be integrated to promote

increased investment in rural areas, d. Promote the use of clean fuel and
increased and sustainable food use indigenous resources to the fullest
production, good governance and as sources of clean energy;
efficiency in proper implementation.
e. Establish a financial mechanism to
Goal 2. Improved jump-start a massive electric vehicle
Environmental Quality for (EV)-based public transportation
a Cleaner and Healthier system by supporting either new
Environment EV production or the conversion of
existing fossil-fuel vehicles; and
In order to provide communities
with a healthier environment, the f. Revise emission standards and
quality of the air, land and water must update emission limits for motor
improve. Vital to the improvement vehicles.
of environmental quality is the full
implementation of laws and other Reduce water pollution to
regulatory measures. Measures to improve water quality in priority
reduce pollution and waste generation rivers and other economically
will also be pursued. The promotion and ecologically important water
of green jobs and the greening of bodies
industry are win-win solutions that
should be pursued. a. Establish, and operationalize the
Water Quality Management Fund
Reduce air pollution in Metro and water quality management areas
Manila and other major urban and their governing boards;
centers
b. Establish in Metro Manila the
Achieve a 30-percent reduction of required number of monitoring
2009 levels of pollution by 2011 and a stations provided under the Clean
5-percent annual reduction thereafter Water Act;
by 2016 in Metro Manila and other
major urban centers through the c. Undertake a massive clean-
following: up and rehabilitation of esteros in
partnership with DILG, LGUs, and
a. Intensify enforcement on other government agencies through
stationary and mobile sources partnership agreements such as the
of pollution, instilling discipline Adopt-an-estero program;
and improving compliance
with emission-testing and d. Undertake the massive cleaning
mandatory vehicle inspection and rehabilitation of Manila Bay
and maintenance, and promoting using funds collected from identified
conversion to fuel-efficient engine; polluters to bring water quality to
SB classification through an effective
b. Monitor industry compliance Operational Plan for the Manila Bay
with environmental standards; Coastal Strategy Goal 2020;
c. Establish the full number of e. Implement river rehabilitation and

monitoring stations as provided protection using bio-eco-engineering
under the Clean Air Act (CAA) technology; and
in Metro Manila and other major
urban centers;
f. Include other priority rivers for j. Promote private sector research,
clean-up, including Laguna de Bay, development and manufacture
Boracay, and Pasig Rivers, with funds of nonmercury-based devices
collected from identified polluters. and technologies used in health
facilities and for health care; and
Reduce wastes generated and
improve waste disposal k. Encourage the development
and manufacture of local waste-
a. Ensure compliance with RA treatment technology and ensure
9003 or Ecological Solid Waste their availability in the market.
Management Act of 2000, the overall
principle of which is that all waste Specific strategies, programs and
should be brought to where they can projects as well as activities on the hard
be converted into resources; components of waste management
are discussed in detail in Chapter
b. Reduce land-based pollution by 4, Accelerating Infrastructure
cutting back on waste generation; Development.
c. Implement environmentally sound Establish a healthier and livable

management and disposal of toxic and urban environment
hazardous waste, including electronic
waste (e-waste); a. Establish urban parks with
dense greenery to minimize heat
d. Immediately close or rehabilitate island effects in town and cities
dumpsites and waste disposal facilities
in environmentally critical areas; b. Adopt green architecture with
rooftop gardens in central business
e. Publish the list of districts; promote climate change-
nonenvironmentally acceptable resilient building designs in new
packaging and products; urban centers for a cool and
refreshing environment;
f. Regulate or ban consumer products
containing chemicals of concerns; c. Intensify ecological solid waste
and wastewater management;
g. Promote clean production and
extended producer responsibility as d. Promote waste recycling
part of corporate social responsibility; technologies to reduce green house
gas emissions (CO2 and methane)
h. Institute healthcare waste and groundwater pollution in
management systems in health sanitary landfills;
facilities by investing in training and
communications; encourage schools to e. Encourage industries to use
include healthcare waste management cleaner technologies and practice
processes in their technical curricula; extended producer responsibilities
through provision of tax incentives;
i. Engage LGUs in PPP options
and financial schemes for the f. Establish a pollution release and
establishment of large-scale waste transfer registry and the pay-as-
treatment technologies; BOT projects you-pollute scheme; and
for cooperative waste treatment
facilities and sanitary landfills are g. Promote Green Industry and
viable options; greening the supply chain.

Goal 3. Enhanced public and private sectors to increase
Resilience of Natural their contribution to risk reduction
Systems and Improved activities; develop a common
Adaptive Capacities of understanding of resource needs and
Human Communities to include DRR and CCA in the regular
Cope with Environmental business, policies, and actions of
Hazards Including Climate- organizations;
Related Risks
f. Enhance national and local
Strengthen institutional capacities for monitoring, forecasting,
capacities of national and local hazard identification, early warning,
governments for CCA and and risk evaluation and management;
DRRM
g. Complete the geological mapping
a. Mainstream and integrate of hazards using a larger scale
DRR and CCA in national, (1:10,000);
sectoral, regional and local
development plans, including h. Improve the postdisaster
integration of hazard and climate rehabilitation and development
change vulnerability maps in the process;
updating of CLUPs by LGUs and
enforcement of zoning regulations; i. Make the newly established
and encourage more provinces to national DRRM fund more accessible
mainstream DRR in their plans, to resource-poor LGUs; explore
and build capacities of national new mechanisms to expedite fund
and local agencies assigned to lead releases during emergencies; provide
the effort; information on possible funding
sources; and
b. Support the initiatives for
mainstreaming DRR and CCA in j. Harmonize the implementation
by granting it priority in budget of the DRRM Act and the Climate
allocation; Change Act.
c. Adopt a responsive national and Enhance the resilience of natural

local legal and policy framework systems
through multistakeholder dialogues
that will create an enabling a. Conduct vulnerability assessment
environment for all Filipino and mapping on the different
citizens and the government to ecosystems;
guide them towards an integrated
DRR and CCA approach; b. Issue guidelines for the review
and approval of design proposals
d. Enhance the self-reliance of and projects that are climate change-
local DRRM councils and their resilient under the EIA and risk
ability to implement the program assessment system of the EMB; and
through responsible DRMM
offices; c. Establish a network of protected
areas in coordination with other
e. Devise cost-effective means to LGUs based on ecological, social and
offset socioeconomic losses from economic considerations (ecosystem
disasters; prepare for disaster resiliency and biological connectivity)
recovery by establishing an to address the impacts of human-
enabling environment for both induced factors and climate change.
Improve adaptive capacities of Crosscutting Strategies
communities
In order to achieve the three goals
a. Conduct geohazard mapping, and to realize an environment that
vulnerability and risk assessments is healthy, ecologically-balanced,
especially for highly susceptible sustainably productive, climate-
communities and areas for the change resilient, the following
formulation and implementation crosscutting strategies will be pursued:
of disaster risk reduction and
management plans; Effective environmental
governance
b. Integrate CCA and DRRM in all
education levels and in specialized a. Encourage multistakeholder
technical training and research partnership through enabling
programs; mechanisms that encourage
greater stakeholders participation
c. Raise public awareness of DRR and commitments, including:
and mitigating the impacts of natural
disasters through the formulation and Community-based natural
implementation of a communication resources management efforts
plan for DRR and CCA; in forestry, biodiversity
conservation, protected area
d. Conduct gendered vulnerability management, coastal resource
assessment, recognizing the differing management and integrating
vulnerabilities and capacities of poor resilience especially among
women and men across economic vulnerable groups (women,
sectors and geographic locations; children, elderly, etc);
e. Use science-based tools and Partnership with the

technologies to support decisions in business sector in cleaning the
identifying, preventing and mitigating environment, natural resource
potential disaster impacts; collect management, DRR and CCA;
and disseminate data according to
risk knowledge needs and develop Devolution of relevant ENR
information systems to support mandate to LGUs accompanied
decision makers and apprise by capacity development;
stakeholders;
Mandatory creation of
f. Enhance disaster-preparedness Environment and Natural
through multistakeholder Resources Offices for LGUs;
coordination; and
Provision of effective
g. Conduct an extensive IEC mechanisms that will empower
campaign for an increased public marginalized groups as
awareness of DRR. important partners for the
sustainable development
and management of natural
resources;
Tenurial security both in

upland and coastal areas and
recognition of indigenous

peoples rights to their ancestral d. Implement Convergence Initiative:
domain;
Facilitate complementation
Stewardship agreements of different agencies to ensure
and/or contracts between that resources are maximized by
government and community; achieving synergy and institutional
and efficiency;
Improved multistakeholders Build partnerships between

effectiveness in enforcing and among the local communities,
environmental law. LGUs, and government agencies
to ensure that all development
b. Reduce graft and corruption: interventions are based on the
actual needs and aspirations of the
Curbing graft and corruption community; and
in the natural resources
sector is crucial to improving Achieve spatial integration
environmental governance. within the different ecosystems to In order to sustainably
Transparency in decision- ensure environmental integrity and finance environment and
making and in the disposition of sustainability. natural resources activities,
revenues raised from extraction, government will pursue the use
processing, and sale of natural Continued institutional of appropriate valuation methods
products must be ensured. strengthening and capability in the computation of applicable
Philippine participation in building fees and taxes for the use the
the EITI is also important. countrys natural resources and
The greening of the judiciary a. Strengthen institutions for enhance its collection.
should also be pursued. The environment and natural resources
desired end is a vigorous and management at various levels (i.e.,
consistent enforcement of insufficient manpower for ENR);
environmental laws and policies.
b. Improve and institutionalize
c. Harmonize and streamline various multistakeholder coordination
efforts in protection and mechanisms as mandated by the
conservation: different ENR laws for greater
transparency and accountability
Environmental governance is important in environmental
should be emphasized in the governance;
local level. There should be
clear delineation of duties and c. Provide assistance to LGUs
responsibilities of stakeholders. to develop and implement local
ENR management strategies environment and natural resources
should also be harmonized management plans and programs
horizontally and vertically. (i.e., ICM plans, forest and watershed
Furthermore, harmonization management plans, etc.) in accordance
and strengthening of DENRs with the national programs, thereby
policies, plans and programs facilitating the achievement of
related to the different economic and environmental
ecosystems and natural resources sustainability priorities and targets
will be pursued. Relatedly, through relevant on-the-ground
requirements for environmental strategies and action plans; and
permits (e.g., ECC) will be
streamlined and simplified.
d. Support womens enhanced roles Develop resource-based
in ENR through policy development, management technologies;
capacity-building and strengthening
of gender mainstreaming mechanisms. Provide clear guidelines
to minimize environmental
Research, Development, Extension impacts of existing technologies
and Knowledge Management (e.g., incinerators) and new
technologies (GMOs, e-waste,
a. Pursue research, development and nano technology, etc.);
extension to:
Develop and propagate
Demonstrate, develop and low-cost noncombustion
replicate low-cost technologies to technologies for infectious and
optimize the recycling, reuse, and hazardous wastes;
recovery of solid waste, including
the conversion of residual organic Develop risk and vulnerability
materials into clean renewable assessments using gendered
energy; tools and generating gender-
disaggregated data; and
Establish valuation of resources
and develop a system of natural Assess metallic and
resources accounting; nonmetallic minerals, both
onshore and offshore;
Determine the values and
potential benefits of the natural b. Make available timely, accurate
resources. and updated science-based
information on the environment
Conduct gender-aware resource- though an effective knowledge
use studies to recognize roles, management system:
impacts and opportunities among
women in ENR ecological profiling; Establish the National Spatial
Data Infrastructure (NSDI);
Develop DRR and CCA
technologies; Establishment of baseline
information on the environment
Develop clean and energy and natural resources through
efficient technologies; ecosystem profiling;
Rehabilitate mines to ensure Establish strategic

that abandoned/inactive, current organization structure for
and future mines are effectively information systems sharing;
rehabilitated;
Update the national
Obtain the most benefits and topographic and nautical chart
value-added from mineral resources; databases, including electronic
charts;
Geologically assess and explore
of undiscovered mineral resources; Develop a National
Coastal and Marine Resource
Determine forest-based Information Management
industrial requirements; System to support research,
policy formulation and
implementation and public

education and communication e. Strengthen LGU revenues through
on coastal resources and the local real property tax to achieve better
environment; local tax efficiency, a wider tax base,
and greater equity;
Rationalize mapping
activities; and f. Promote and roll out the
adoption of the Philippine Valuation
Establish a monitoring Standards and compatible valuation
and evaluation mechanism to methodologies in the public and
measure and push performance private sector;
to a high-level.
g. Develop local capacities to generate
c. Establish National Wildlife revenues to finance activities in the
Research Center pursuant to the control of polluting vehicles;
Wildlife Act (RA 9147).
h. Increase the value of natural
Environment and Natural resources by adopting resource
Resource Financing valuation techniques in determining
rates of users fees for use of forest land
In order to sustainably finance such as telecom, power, water utilities
environment and natural resources and others;
activities, government will pursue the
use of appropriate valuation methods i. Increase Government share from
in the computation of applicable fees the use of the countrys mineral wealth
and taxes for the use the countrys through thru the establishment of
natural resources and enhance its mineral reservations and greater value
collection. Likewise, PES shall be adding;
institutionalized at the national
and local levels and shared with j. Formulation of policies on accessing
communities to encourage natural carbon credits;
resource protection and management
as well as increase household income. k. Exploring further innovative sources
of finance, both for environment and
a. Ensure rightful share of ENR natural resources activities and climate
activities and priorities in national change adaptation; and
and local government budgets;
l. Increase value-added from natural
b. Enhance collection of taxes/ resources (e.g., users fee and payment
revenues including pollution and for environmental services) to
exploitation fees from industries generate revenues for protection and
(i.e., mining companies including conservation
small-scale mining);
m. Implement a national
c. Retain the LGU share of communications strategy particularly
taxes and revenues, specially for pollution concerns (air, water and
those pertaining to environment solid waste). This is due to the fact that
activities; people themselves contribute to the
pollution and they need to be made
d. Utilize disposable public and responsive on how pollution affects
government land assets and their wellbeing.
resources, balancing economic,
environmental, and social
development objectives;
6. Permanent Forestline Bills
Legislative Agenda to provide the specific boundaries
limits of forestlands per province
In order to push forward sustainable delineating areas in which no other
management of the countrys land use may prevail;
environment and natural resources, the
passage of the following pieces of priority 7. Bills on Enactment of Priority
legislation should be pursued: Protected Areas to cover
areas that are among the Key
1. National Land Use Bill to provide Biodiversity Areas in the country
a rationalized land use planning in the which are globally significant and
country and put in order the national considered as actually manageable
laws on land uses (such as agrarian for biodiversity conservation;
reform, protected areas, ancestral
domain, fisheries, forestry, agriculture 8. Integrated Coastal
agricultural modernization, mining Management Bill
and housing) that are sector specific to institutionalize the
and do not address the cross cutting Integrated Coastal Management
land use issues; in the Philippines as a national
strategy to ensure the sustainable
2. A Sustainable Forestry Bill - development of the countrys
to provide the clear policy for the coastal and marine environment
sustainable management of the and resources and establishing
countrys forest resources; supporting mechanisms for its
implementation;
3. Land Administration Reform Bill
to address the pervading multi titling 9. Improvement and enhancement
problems through the rationalization of Small-Scale Mining Law
of the various agencies responsible to make it more responsive to
in land titling and related activities present and emerging needs on
and address this concern through the environmental, safe-time health
adoption of the one stop concept; and social concerns;
4. Land Administration Code - update 10. Enactment of legislation

and harmonize land administration recognizing access to clean water
laws enacted at different dispensations and sanitation as a human right;
to support the future roles of key
agencies towards addressing cadastral 11. Peoples Survival Fund
information requirements and land (PSF) Bill - to amend the Climate
administration services for sustainable Change Act of 2009 and put up a
development; fund that will finance adaptation
programs and projects that are
5. Marine Pollution Bill to respond directly supportive of the objectives
to the pressing need of reducing risks enumerated in the local climate
and preventing disasters caused by change action plans (LCCAP) of
trade and other economic activities LGUs and communities;
in the marine environment and its
resources;

12. Archipelagic Principle Bill - The following pieces of proposed
to amend Section 4 of RA 8550 or legislation need further discussion and
the Philippine Fisheries Code of deliberation:
1998 that provides guidelines on
the delineation of municipal waters 19. Minerals Management Bill -
using the archipelagic principle; This bill pushes for the conservation
of nonrenewable mineral resources
13. Extended Producers for the benefit of both present and
Responsibility Bill - to compel future generations of Filipinos by
industries, manufacturers, adopting a sustainable, rational, needs-
importers and sellers to take-back based minerals management, geared
the waste and end-of-life of their towards effective utilization of mineral
products or goods; resources for national industrialization
and modernization of agriculture; and
14. Formulation of the
Electronic Waste (e-waste) policy 20. Ratification of the Basel Ban
framework to provide a mechanism Amendments. The Basel Convention
on how to dispose, reuse and/ is an international treaty seeking
or recycle waste coming from to reduce movements of hazardous
electronic equipment; wastes between nations, and
specifically preventing the transfer of
15. Environmental Code for hazardous waste from developed to
LGUs - to provide LGU budget less developed countries (LDC). The
appropriations for localized country has yet to ratify its position on
environmental activities; the said Convention.
16. Marine Protected Area Bill

- to mandate local government
units to establish marine protected
areas in their respective municipal
waters;
17. PAG-ASA Modernization

Law - to allocate funds for the
needed reforms of the agency; and
18. Bill on Hazardous and

Radio Active Waste Management
- to provide penalties for violation
thereof and for other purposes.
List of Acronyms
3Rs Reduce, Reuse, and Recycle BemONC Basic and Comprehensive Emergency
Obstetric and Neonatal Care
3G Third Generation Barangay Agrarian Reform Committee
BARC
4Ps Program Pantawid Pamilyang Pilipino Program BAS Bureau of Agricultural Statistics
Alienable and Disposable Basel II New Risk-based Capital Adequacy
A&D Framework
AAGR Annual Average Growth Rate Billion Cubic Feet
BCF
AARNR Agriculture, Agrarian Reform and Billion Cubic Meter
Natural Resources BCM
ASEAN Center for Energy BDR Benefit Delivery Ratio
ACE
Agricultural Credit and Policy Council BESRA Basic Education Sector Reform
ACPC Agenda
AD Ancestral Domains BFAR Bureau of Fisheries and Aquatic
Resources
ADB Asian Development Bank
BHS Barangay Health Stations
ADBI Asian Development Bank Institute
BHFS Bureau of Health Facilities and
ADM Alternative Delivery Modes Services
ADR Alternative Dispute Resolution BI Bureau of Immigration
ADSDPP Ancestral Domain Sustainable BIR Bureau of Internal Revenue
Development and Protection Plan Bank for International Settlements
BIS
AFF Agriculture, Fisheries and Forestry
BMT Billion Metric Ton
AFFLA Agroforestry Farm Lease Agreement
BOC Bureau of Customs
AFMA Agriculture and Fisheries
Modernization Act BOD Biological Oxygen Demand
AFP Armed Forces of the Philippines BOI Board of Investments
AHA Aquino Health Agenda BOP Balance of Payment
ALS Alternative Learning System BOT Build-Operate-Transfer
AMTP AIDS Medium Term Plan BPLS Business Permits and Licensing
System
APIS Annual Poverty Indicators Survey
BPO Business Process Outsourcing
AMCFP Agro-Industry Modernization Credit
Financing Program BSP Bangko Sentral ng Pilipinas
AMLA Anti-Money Laundering Act BSWM Bureau of Soils and Water
Management
AO Administrative Order
BTr Bureau of the Treasury
APEC Asia-Pacific Economic Cooperation
BTU/lb British Thermal Unit / Pound
APJR Action Program for Judicial Reform
CA Court of Appeals
APP Annual Procurement Plan
CAA Clean Air Act
ARB Agrarian Reform Beneficiaries
CAA Conflict-affected Area
ARC Agrarian Reform Communities
CAAP Civil Aviation Authority of the
ARTA Anti-Red Tape Act Philippines
ASA Air Service Agreement CAB Civil Aeronautics Board
ASEAN Association of Southeast Asian Nations CADT Certificate of Ancestral Domain Titles
ATM Automated Teller Machine CALABARZON Region IV-A (Batangas, Cavite,
ATO Air Transportation Office Laguna, Quezon and Rizal)
AWS Automatic Weather Stations

CALT Certificate of Ancestral Land Title CISFA Comprehensive and Integrated Shelter
CAMIS Court Administration Management Finance Act
Information System CISL Collective Investment Schemes Law
CAR Capital Adequacy Ratio CISs Communal Irrigation Systems
CARP Comprehensive Agrarian Reform CITP Convention on Indigenous and Tribal
Program Peoples or ILO Convention No. 169
CARPER Comprehensive Agrarian Reform Ckt Circuit Kilometer
Program Extension with Reforms CL Contingent Liabilities
CATV Cable Television CLM Contingent Liability Management
CBA Cost - Benefit Analysis CLOA Certificate of Land Ownership Award
CBEP Community-Based Employment CLUP Comprehensive Land Use Plan
Program
CME Coco-Methyl Ester
CBFMA Community-Based Forest Management
Agreement CMIS Case Management Information System
CBFMP Community-Based Forest Management CMP Community Mortgage Plan
Program CMTS Cellular Mobile Telephone Service
CBMS Community-Based Monitoring System CNFIDP Comprehensive National Fishery
CBOs Community-based Organizations Industry Development Plan
CCA Center for Culture and the Arts CNG Compressed Natural Gas
CCA Climate Change Adaptation CNS-ATM Communications Navigation
Surveillance-Air Traffic Management
CCC Climate Change Commission
CO2 Carbon Dioxide
CCIC Central Credit Information Corporation
COA Commission on Audit
CCT Conditional Cash Transfer
COMELEC Commission on Elections
CDA Cooperative Development Authority
CPI Consumer Price Index
CDD Community Driven Development
CPI Corruption Perception Index
CDI Child Development Index
CPP Communist Party of the Philippines
CDIS Citizens Database Information System
CPR Contraceptive Prevalence Rate
CEA Country Environmental Analysis
CQI Continuous Quality Improvement
CeC Community e-Center
CRC Convention of the Rights of the Child
CES Career Executive System
CSC Certificate of Stewardship Contract
CFL Compact Fluorescent Lamp
CSF Credit Surety Fund
CFO Commission on Filipinos Overseas
CSO Civic Society Organization
CFP Community Forestry Program
CTI-R/N POA Coral Triangle Initiative Regional/
CFSA Community Forest Stewardship National Plan of Action
Agreement
DA Department of Agriculture
CHED Commission on Higher Education
DAR Department of Agrarian Reform
CISFA Comprehensive and Integrated Shelter
Finance Act DBCC Development Budget Coordination
Commission on Human Rights of the Committee
CHRP
Philippines DBM Department of Budget and
CARP Implementing Agencies Management
CIA
DBP Development Bank of the Philippines
CIAC Children in Armed Conflict
DCAF Democratic Control of Armed Forces
CICT Commission on Information and
Communications Technology DENR Department of Environment and
Communal Irrigation Development Natural Resources
CIDF
Fund DepEd Department of Education
CIMS Collateral Information and DFA Department of Foreign Affairs
Management System DHUD Department of Housing and Urban
CIPB Compliance and Integrity Programs for Development
Business DICT Department of Information and
CIS Communal Irrigation System Communications Technology

DILG Department of the Interior and Local ERDB Ecosystems Research and
Government Development Bureau
DMIA Diosdado Macapagal International ERDT Engineering Research and
Airport Development for Technology
DO Dissolved Oxygen ERP Economic Resiliency Plan
DOE Department of Energy ESCO Energy Service Company
DOF Department of Finance ESWMA Ecological Solid Waste Management
DOH Department of Health Act of 2000
DOJ Department of Justice ETEEAP Expanded Tertiary Education,
Equivalency and Accreditation
DOLE Department of Labor and Employment Program
DOPPI Deep Ocean Power Philippines, Inc. EU European Union
DOST Department of Science and Technology E-waste Electronic waste
DOT Department of Tourism EV Electric Vehicle
DOTC Department of Transportation and FAA Federal Aviation Authority
Communications
FDCP Film Development Council of the
DPWH Department of Public Works and Philippines
Highways
FDI Foreign Direct Investment
DRR Disaster Risk Reduction
ETEEAP Expanded Tertiary Education,
DRRM Disaster Risk Reduction and Equivalency and Accreditation
Management Program
DSWD Department of Social Welfare and F1 FOURmula One
Development
FDA Food and Drug Administration
DTI Department of Trade and Industry
FL Functionally Literate
DTT Digital Terrestrial Television
FLEMMS Functional Literacy, Education and
DTU Direct-to-User Satellite Provider Mass Media Survey
DU Distribution Utility FE Forward Estimates
EC Electric Cooperative FIA Freedom of Information Act
ECC Environmental Compliance Certificate FICAP Federation of International Cable TV
ECCD Early Childhood Care and Association of the Philippines
Development FIES Family Income and Expenditures
ECE Early Childhood Education Survey
eCFM Enhanced Case Flow Management FiT Feed-in Tariff
EE & C Energy Efficiency and Conservation FLA Fishpond Lease Agreement
EEID Environmental Education and FLAg (Special) Forest Land Use Agreement
Information Division FLAgT Forest Land Use Agreement for
EEZ Exclusive Economic Zone Tourism Purposes
EFA Education For All FLGMA Forestland Grazing Management
EIA Environmental Impact Assessment Agreement
Extractive Industry Transparency FLMA Forest Land Management Agreement
EITI
Initiative FMB Forest Management Bureau
EIU Economist Intelligence Unit FMR Farm-to-Market Road
E-JOW Enhanced Justice on Wheels FMR/DP Final Mine Rehabilitation and/or
EMB Environmental Management Bureau Decommissioning Program
Environment and Natural Resources FOB Freight on Board
ENR
Executive Order FOI Freedom of Information
EO
EPEP Environmental Protection and FPIC Free, Prior and Informed Consent
Enhancement Program FRB Fiscal Responsibility Bill
EPIRA Electric Power Industry Reform Act FRIA Financial Rehabilitation and
ERA Energy Reform Agenda Insolvency Act
Energy Regulatory Commission FSAP Financial Sector Assessment Program
ERC

FSF Financial Sector Forum HUDCC Housing and Urban Development
FSSR Food Staples Self-Sufficiency Coordinating Council
Roadmap HWG Hazardous Waste Generator
FTA Free Trade Agreement IAM Internal Audit Manual
FY Fiscal Year IAS International Accounting Standards
GAA General Appropriations Act IAs Irrigators Associations
GAD Gender and Development IAS Invasive Alien Species
GCM Global Climate Model IATCTP Inter-Agency Technical Committee
GCR Global Competitiveness Report on Transport Planning
GDI Gender Development Index IC Insurance Commission
GDP Gross Domestic Product ICAO International Civil Aviation
Organization
GEF Global Environment Facility
ICC Investment Coordination Committee
GEM Gender Empowerment Measure
ICC Indigenous Cultural Communities
GFI Government Financial Institution
ICC-DBCC Investment Coordination Committee-
GHG Greenhouse Gas Development Budget Coordination
GIFMIS Government Integrated Financial Committee
Management Information System ICERD International Convention on the
GIR Gross International Reserve Elimination of All Forms of Racial
GIS Geographic Information System Discrimination
GMO Genetically-Modified Organism ICM Integrated Coastal Management
GNP Gross National Product ICS Internal Control System
GOCC Government Owned and Controlled ICT Information and Communications
Corporations Technology
GPI Gender Parity Index ICRMP Integrated Coastal Resources
Management Project
GPS Global Positioning System
IDP Integrated Development Plan
GQMP Government Quality Management
Program IEC Information, Education and
Communication
GQMSS Government Quality Management
Systems Standards IES Impact Evaluation Study
GRP Government of the Republic of the IFC International Finance Corporation
Philippines IFMA Integrated Forest Management
GS Government Securities Agreement
GSIS Government Service Insurance System IFRS International Financial Reporting
GSM Global System for Mobile Standards
Communications IGF International Gateway Facility
GVA Gross Value Added IKSP Indigenous Knowledge Systems and
GWh Gigawatt-Hour Practices
HCW Health Care Waste ILO International Labour Organization
HDI Human Development Index IMD International Institute for
Management Development
HEI Higher Education Institution
IMF International Monetary Fund
HFA Hyogo Framework for Action
IMR Infant Mortality Rate
HGC Home Guaranty Corporation
IMT Irrigation Management Transfer
HIV-AIDS Human immunodeficiency virus
acquired immune deficiency syndrome INFRACOM NEDA Board Committee on
Infrastructure
HLURB Housing and Land Use Regulatory
Board IP Indigenous People
HRD Human Resource Development IPCC Intergovernmental Panel for Climate
Change
HRH Human Resources for Health
IPMAP Indigenous Peoples Masterplan
HSRA Health Sector Reform Agenda
IPP Independent Power Producer
HUCs Highly Urbanized Cities

IPPA Independent Power Producer LWUA Local Water Utilities Administration
Administrator M1 Currency in circulation, peso demand
IPR Intellectual Property Rights deposits
IPRA Indigenous Peoples Rights Act M2 M1 and peso savings, time deposits
IRA Internal Revenue Allotment MARINA Maritime Industry Authority
IRR Implementing Rules and Regulations Mbps
ISDB-T Integrated Services Digital Broadcast- MC Memorandum Circular
Terrestrial MCC Millennium Challenge Corporation
ISFs Irrigation Service Fees MCP Mandated Credit Program
ISM International Safety Management MDFO Municipal Development Fund Office
ISO International Organization for MDG Millennium Development Goals
Standardization
MDGF Millennium Development Goal Fund
ISPS International Ship and Port Facility
MEDP Missionary Electrification
ISSP Information Systems Strategic Plan Development Plan
IWRM Integrated Water Resources MERALCO Manila Electric Company
Management
MfDR Managing for Development Results
JCMS Judiciary Case Management System
MFI Microfinance Institution
JICA Japan International Cooperation
Agency MGB Mines and Geosciences Bureau
JMC Joint Memorandum Circular MIGA Multilateral Investment Guarantee
Agency
JMP Joint Monitoring Program
MILF Moro Islamic Liberation Front
JRC Joint Research Centre
MIMAROPA Mindoro, Marinduque, Romblon and
JV Joint Venture Palawan
KALAHI-CIDSS Kapit-bisig Laban sa Kahirapan- MB Million Barrels
Comprehensive and Integrated
Delivery of Social Services MBFOE Million Barrels of Fuel Oil Equivalent
KPO Knowledge Process Outsourcing MMDA Metro Manila Development
Authority
kV Kilovolt
MME Monitoring, Management, and
LAA Land Administration Authority Evaluation
LAD Land Acquisition and Distribution MMLOE Million Liters of Oil Equivalent
LARA Land Administration Reform Act MMMT Million Metric Tons
LBP Land Bank of the Philippines MMR Maternal Mortality Ratio
LCCAP Local Climate Change Action Plan MMS Multimedia Messaging Service
LDC Least Developed Countries MMSCF Million Standard Cubic Feet
LEP Ladderized Education Program MNCHN Maternal, Neonatal and Child Health,
LET Licensure Examination for Teachers and Nutrition
LHB Local Housing Boards MNLF Moro National Liberation Front
LFS Labor Force Survey MOA Memorandum of Agreement
LGC Local Government Code MOOE Maintenance and Other Operating
LGU Local Government Unit Expenses
LMB Land Management Bureau MPA Marine Protected Area
LMP League of Municipalities of the MPDI Mandatory Pre-Departure Inspections
Philippines MRF Materials Recovery Facility
LNB Liga ng mga Barangay MRF Microinsurance Regulatory
LPG Liquefied Petroleum Gas Framework
LRA Land Registration Authority MRR Mandatory Rate Reduction
LRTA Light Rail Transit Authority MRS Materials Recovery System
LTI Land Tenure Improvement MSACC Multi-Sectoral Anti-Corruption
Council
LUB Luzon Urban Beltway
MSME Micro, Small and Medium Enterprises

MT Metric Tons NEDA National Economic and Development
MTDPFS Medium-Term Development Plan for Authority
the Financial Sector NEECP National Energy Efficiency and
MTEF Medium-Term Expenditure Conservation Programs
Framework NEEDS National Environmental Economic
MTOE Million Tons of Oil Equivalent and Development Study
MTPDP Medium Term Philippine NEFCA National Endowment Fund for
Development Plan Culture and the Arts
MVA Megavolt-Ampere NER Net Enrolment Rate
MVUC Motor Vehicle User's Charge NFA National Food Authority
MW Megawatt NG National Government
MWSS Metropolitan Waterworks and NGA National Government Agency
Sewerage System NGCP National Grid Corporation of the
MWSS-RO Metropolitan Waterworks and Philippines
Sewerage SystemRegulatory Office NGICS National Guidelines on Internal
NACPA National Anti-Corruption Plan of Control System
Action NGO Non-Governmental Organization
NAFC-CFA National Agriculture and Fishery NGVPPT Natural Gas Vehicle Program for
Council-Committee on Fisheries and Public Transport
Aquaculture NHA National Housing Authority
NAIA Ninoy Aquino International Airport NHIP National Health Insurance Program
NALUA National Land Use Act NHTS-PR National Household Targeting System
NAMRIA National Mapping and Resource for Poverty Reduction
Information Authority NIA National Irrigation Administration
NAPC National Anti-Poverty Commission NIMF National Irrigation Management
NATCCO National Confederation of Fund
Cooperatives NIPAS National Integrated Protected Areas
NAT MPS National Achievement Test Mean System
Percentage Score NIS National Irrigation Systems
NBB National Biofuels Board NJIS National Justice Information System
NCBTS National Competency-Based Teacher NLEX North Luzon Expressway
Standards
NPA New Peoples Army
NCCA National Commission for Culture and
the Arts NPA Non-Performing Assets
NCCAP National Climate Change Action Plan NPC National Power Corporation
NCI National Convergence Initiative NPL Non-Performing Loans
NCIP National Commission on Indigenous NPP New Power Provider
Peoples NREB National Renewable Energy Board
NCR National Capital Region NREP National Renewable Energy Program
NDCC National Disaster Coordinating NSCB National Statistical Coordination
Council Board
NDF National Democratic Front NSDI National Spatial Data Infrastructure
NDHS National Demographic and Health NSM National Safety Management
Survey NSO National Statistics Office
NDRRMC National Disaster Risk Reduction and NSWMC National Solid Waste Management
Management Council Commission
NDRRMF National Disaster Risk Reduction and NTC National Telecommunications
Management Framework Commission
NDSA National Defense and Security Act NTP National Transport Policy
NEA National Electrification NUDHF National Urban Development and
Administration Housing Framework
NEC National Ecology Center

NWAPP National Wetlands Action Plan for PDIC Philippine Depository Insurance
the Philippines Corporation
NWAR National Warrant of Arrest Registry PDR Philippine Defense Reform
NWRA Net Worth-to-Risk Assets PDU Private Distribution Utility
NWRB National Water Resources Board PECR Philippine Energy Contracting Round
NWRP National Water Resources Policy PEEP Philippine Energy Efficiency Program
NWAPP National Wetlands Action Plan for PEGR Partnership for Economic Governance
the Philippines Reforms
O&M Operations and Maintenance PELMATP Philippine Energy Efficiency Lighting
ODA Official Development Assistance Market Transformation Project
OECD Organisation for Economic PER Public Expenditure Review
Cooperation and Development PERA Personal Equity and Retirement Act
OEOs Other Executive Offices PES Payment for Environmental Services
OFW Overseas Filipino Worker PESFA Private Education Student Financial
OMB Office of the Ombudsman Assistance Program
OPIF Organizational Performance Indicator PESO Public Employment Service Office
Framework PESS Philippine Education Sector Study
OSH Occupational Safety and Health PEZA Philippine Economic Zone Authority
OTEC Ocean Thermal Energy Conversion PFM Public Financial Management
OWWA Overseas Workers Welfare PFRS Philippine Financial Reporting
Administration Standards
PACBRMA Protected Area Community Based PGIAM Philippine Government Internal
Resource Management Agreement Audit Manual
PAGASA Philippine Atmospheric, Geophysical PGS President Gloria Scholarship Program
and Astronomical Services PHF Post-Harvest Facilities
Administration
PhilGEPS Philippine Government Electronic
PAGCOR Philippine Amusement and Gaming Procurement System
Corporation
Philhealth Philippine Health Insurance
PAL Private Agricultural Land Corporation
PAMANA Payapa at Masaganang Pamayanan PHILPOST Philippine Postal Corporation
Program PHIVOLCS Philippine Institute of Volcanology
PAMB Protected Area Management Board and Seismology
PAO Public Attorneys Office PIA Philippine Information Agency
PAR Philippine Area of Responsibility PICCS Philippine Inventory of Chemicals
PAS Philippine Accounting Standards and Chemical Substances
PAYGO Pay-As-You-Go PIDS Philippine Institute for Development
Studies
PBD Program Beneficiaries Development
PIOU Private Investor-owned Utility
PBS Paper on Budget Strategy
PISs Private Irrigation Systems
PC Personal Computer
PMS Performance Management System
PCFC Peoples Credit and Finance
Corporation PMS-OPES Performance Management System-
Office Performance Evaluation
PCG Philippine Coast Guard System
PCL Priority Chemical List PMTP Philippine Medical Tourism Program
PCSHC Philippine Center for Specialized PNHA Philippine National Health Accounts
Health Care
PNHRS Philippine National Health Research
PCSO Philippine Charity Sweepstakes Office System
PCTA Philippine Cable Television PNOC Philippine National Oil Corporation
Association, Inc.
PNOC-AFC Philippine National Oil Company -
PCW Philippine Commission on Women Alternative Fuels Corporation
PDEx Philippine Dealing Exchange

PNQF Philippine National Qualification ROW Right-of-Way
Framework RP Rationalization Plan
PNP Philippine National Police RP-FP Responsible Parenting and Family
PNP-MG Philippine National Police- Maritime Planning
Group RPMP/ RPA-ABB Rebolusyonaryong Partido ng
PNRPS Philippine National REDD+ Strategy Manggagawa-Pilipinas /Revolutionary
PO Peoples Organization Proletariat Army-Alex Boncayao
Brigade
POs Private Operators (Water Service
Provider) RPS Renewable Portfolio Standard
PPP Public-Private Partnership RRTS Road-RORO Terminal System
PPP Purchasing power parity RSEC-WR Rules for Setting EC Wheeling Rates
PQA Philippine Quality Award S&T Science and Technology
PROC Peoples Republic of China S/S Substation
PS Personal Services SAFDZ Strategic Agriculture and Fisheries
Development Zone
PSA Payment System Act
SBC Small Business Corporation
PSALM Power Sector Assets and Liabilities
Management Corporation SBIA Subic Bay International Airport
PSEi Philippine Stock Exchange Index SC Service Contract
PSF Peoples Survival Fund SC Supreme Court
PSSR Philippine Sustainable Sanitation SCMB Subic-Clark-Manila-Batangas
Roadmap SCTEx Subic-Clark-Tarlac Expressway
PTF Patubigayan Trust Fund SCWR Sub-Committee on Water Resources
PWD Persons with Disability SD Sustainable Development
PWSSR Philippine Water Supply Sector SDAH Sector-wide Development Approach
Roadmap for Health
QMS Quality Management System SDMP Social Development and Management
QTP Qualified Third Party Program
R&D Research and Development SEA-K Self-Employment Assistance -
Kaunlaran
RA Republic Act
SEC Securities and Exchange Commission
RATE Run After Tax Evaders
SIFMA Socialized Industrial Forest
RATS Run After the Smugglers Management Agreement
RBCA Risk-based Capital Adequacy SIJ Strengthening the Integrity of the
Framework Judiciary
RCA Revealed Comparative Advantage SLB Securities Borrowing and Lending
RD&E Research, Development and Extension SLM Sustainable Land Management
RDC Regional Development Councils SLP Special Land Use Permit
RE Renewable Energy SME Small and Medium Enterprises
REC Regional Ecology Center SNAP Strategic National Action Plan
REDD Reducing Emissions from SNC Second National Communication
Deforestation and Forest Degradation
SOLAS Safety of Life at Sea
REDD+ Reducing Emissions from
Deforestation and Forest Degradation SPED Special Education
(with enhanced carbon stock) SPLULA Special Land Use Lease Agreement
REER Real Effective Exchange Rate SPPD Support for Policy and Programme
REIT Real Estate Investment Trust Development
RHU Rural Health Units SPUG Small Power Utilities Group
RIPS Revenue Integrity Protection Service SRNH Strong Republic Nautical Highway
RLX Regional Check Centers SSIPs Small-Scale Independent Providers
ROD Registry of Deeds SSL Salary Standardization Law
RORO Roll-On/Roll-Off SSME Sulu-Sulawesi Marine Ecoregion

SSS Social Security System VAT Value-Added Tax
STAR Southern Tagalog Arterial Road VAW Violence Against Women
STuFAPs Student Financial Assistance Programs VE/VA Value Engineering/Value Analysis
SUF Spectrum User Fee VTMS Vessel Traffic Management System
SWM Solid Waste Management WB World Bank
SWS Social Weather Stations WDR World Development Report
TB Tuberculosis WDs Water Districts
T/L Transmission Line WEDC Women in Extremely Difficult
TDP Transmission Development Plan Circumstances
TelOf Telecommunications Office WEF World Economic Forum
TESDA Technical Education and Skills WEO World Economic Outlook
Development Authority WESM Wholesale Electricity Spot Market
TESDP Technical Education and Skills WGI Worldwide Governance Indicators
Development Program WHO World Health Organization
TEU Twenty-foot Equivalent Unit WHS Wooden Hull Ships
TEZ Tourism enterprise zones WiFi Wireless Fidelity
TFEC Total Final Energy Consumption WSP Water Service Provider
TFLA Tree Farm Lease Agreement WTO World Trade Organization
TFP Total Factor Productivity WWF World Wildlife Fund
TIEZA Tourism Infrastructure and Enterprise YTD Year-to-Date
Zone Authority
ZBB Zero-Based Budgeting
TLA Timber Licence Agreement
TNE Transnational Education
TPES Total Primary Energy Supply
TPLEx Tarlac-Pangasinan-La Union
Expressway
TransCo National Transmission Corporation
TRM Trade Related Matters
TSD Transport, Storage, Disposal
TSNs Transcript of Stenographic Notes
TSP Total Suspended Particles
TV Television
TVET Technical And Vocational Education
And Training
UASF Universal Access and Service Fund
UCME Universal Charge for Missionary
Electrification
UDHA Urban Development and Housing Act
UHC Universal Health Care
ULAP Union of Local Authorities of the
Philippines
UNCAC United Nations Convention Against
Corruption
UNDP United Nations Development
Programme
UNESCAP United Nations Economic and Social
Commission for Asia and the Pacific
UNFCCC United Nations Framework Convention
on Climate Change
UNICEF The United Nations Children's Fund
VAS Value-Added Service

Glossary
Absorption rate The percentage of the number of graduates who get a job after completion of education
and/or training to the number of graduates who were not employed prior to completion of
education and/or training.
Access to Finance Sustained availability of reasonably priced, socially responsible and environment friendly
financial products, services and support programs that are designed for MSMEs, and that
MSMEs can conveniently and readily access.
Accordingly, a fully inclusive financial system is characterized by (a) the provision of a
wide range of financial services (credit, savings, payments, insurance, innovative products)
to serve the demands of different market segments, (b) the development of financial
products that are appropriately designed and priced, tailor-fitted to market needs and
capacities, (c) the participation of a wide variety of strong, sound and duly authorized
financial institutions utilizing innovative delivery channels to provide financial services
to more Filipinos, and (d) the effective interface of bank and non-bank products/delivery
channels, technology and innovation to reach the financially excluded.
Action Program for Judicial Reform A comprehensive set of programs and projects aimed at enhancing conditions and
(APJR) performance for an improved delivery of judicial services. The APJR embodies the vision
and mission of then Chief Justice Hilario G. Davide, Jr. for a judiciary that is independent,
effective, efficient and worthy of public trust and confidence.
Adaptation Adjustment in natural or human systems in response to actual or expected climatic stimuli
or their effects, which moderates harm or exploits beneficial opportunities.
AFP Coast Watch South System A program designed to secure the countrys coasts especially in Mindanao regions.
AFP Modernization/Development A comprehensive modernization of the AFP primarily for defense capability with support
Program or RA 7898 mechanisms for national development.
Agrarian Reform Community A community composed and managed by agrarian reform beneficiaries (ARBs) who are
willing to be organized and to undertake the integrated development of an area and/or
their organizations or cooperatives (RA 9700).
Agrarian Reform The redistribution of lands, regardless of crops or fruits produced, to farmers and regular
farm workers who are landless, irrespective of tenurial arrangement, to include the totality
of factors and support services designed to lift the economic status of the beneficiaries
and all other arrangements alternative to the physical redistribution of lands, such as
production or profit-sharing, labor administration, and the distribution of shares of stock,
which will allow beneficiaries to receive a just share of the fruits of the lands they work
(RA 6657).
Agribusiness The sum of all operations involved in the manufacture and distribution of farm supplies;
production activities on the farm; and the storage, processing and distribution of farm
commodities and items made from them (DAR AO No. 5, Series 2009).
Agricultural Lands Lands devoted to or suitable for the cultivation of the soil, planting of crops, growing of
trees, raising of livestock, poultry, fish or aquaculture production, including the harvesting
of such farm products, and other farm activities and practices performed in conjunction
with such farming operations by persons whether natural or juridical and not classified by
the law as mineral land, forest land, residential land, commercial land, or industrial land
(RA 8435).
Agriculture and Fisheries An act modernizing the agriculture and fishing industries of the Philippines. It mandated
Modernization Act (AFMA) of 1997 the prescription of urgent related measures to modernize the agriculture and fisheries
or RA 8435 sectors to enhance their profitability, and prepare said sectors for the challenges of
globalization through an adequate, focused and rational delivery of necessary support
services.
Glossary 347
Agroforestry The sustainable management of land, which increases their productivity by properly
combining agricultural crops with forest crops simultaneously or sequentially over time
through the application of management practices which are compatible with the local
climate, topography and slope.
Alienable or Disposable Land Land of the public domain, which has been classified and declared as such and available
for disposition.
Allocation to Local Government The share of LGUs from the internal revenue collections of the national government based
Units on a sharing scheme computed for each LGU provided for under the Local Government
Code and other special laws.
Alternative Dispute Resolution A procedure used to resolve a dispute or controversy, other than by adjudication of a
(ADR) presiding judge of a court or an officer of a government agency in which a neutral third
party participates to assist in the resolution of issues, which includes arbitration, mediation,
conciliation, early neutral evaluation, mini-trial, or any combination thereof (as defined
under RA 9285).
Alternative fuels Nonconventional or advanced fuel; Any material or substance that can be used as fuel,
other than conventional fuels such as fossil fuels and nuclear materials. Some well known
alternative fuels include biodiesel, bioalcohol (methanol, ethanol, butanol), chemically
stored electricity (batteries and fuel cells), hydrogen, non-fossil methane, non-fossil natural
gas, vegetable oil, and other biomass sources.
Alternative Learning System A parallel learning system aimed to provide a viable alternative to the existing formal
education instruction. It encompasses both the informal and the non-formal sources of
knowledge and skills.
Ancestral Domains All areas generally belonging to ICCs/IPs comprising lands, inland waters, coastal areas,
and natural resources therein, held under a claim of ownership, occupied or possessed by
ICCs/IPs, themselves or through their ancestors, communally or individually, continuously
to the present except when interrupted by war, force majeure or displacement by force,
deceit, stealth or as a consequence of government projects or any other voluntary dealings
entered into by government and private individuals, corporations, and which are necessary
to ensure their economic, social and cultural welfare.
Ancestral Lands Land occupied, possessed and utilized by individuals, families and clans who are members
of the ICCs/IPs since time immemorial, by themselves or through their predecessors-in-
interest, under claims of individual or traditional group ownership, continuously, to the
present except when interrupted by war, force majeure or displacement by force, deceit,
stealth, or as a consequence of government projects and other voluntary dealings entered
into by government and private individuals/corporations, including, but not limited to,
residential lots, rice terraces or paddies, private forests, swidden farms and tree lots.
Armed Forces of the Philippines Established by virtue of Commonwealth Act No.1 otherwise known as the National
Defense Act of December 21, 1935, as the official military organization of the state. It is
composed of three branches of service: Philippine Navy (PN), Philippine Air Force (PAF)
and the Philippine Army (PA).
Autoclave/Autoclaving A more efficient wet thermal disinfection. This method is typically used in hospitals for
the sterilization of reusable medical equipment. Allows for the treatment of only limited
quantities of waste and is therefore commonly used only for highly infectious waste, such
as microbial cultures or sharps.
Backbone Network A major transmission path/facility that can carry high volume of traffic, and is designed to
interconnect, often lower-speed distribution networks, channels, or clusters of dispersed
terminals or devices.
Bank Density Ratio The ratio of the total number of domestic banking offices to the total number of cities/
municipalities in the Philippines.
Barangay The smallest administrative division in the Philippines and is the native Filipino term for a
village, district or ward. Municipalities and cities are composed of barangays.

Basel II & III It refers to the global minimum capital standards set by the Basel Committee on
Banking Supervision. The Basel II (International Convergence of Capital Measurement
and Capital Standards: A Revised Framework) framework is composed of three pillars:
minimum capital requirements, supervisory review process and market discipline. It was
released in June 2006 to provide global standards on risk-sensitive capital requirements for
banks. As a revision to the 1988 Basel Accord, Basel II is designed to establish minimum
levels of capital for internationally active banks. Basel III embodies the changes to existing
capital rules under Basel II in response to the global financial crisis of 2008.
Basic Education The education intended to meet basic learning needs which lays the foundation for
subsequent learning. It encompasses early childhood, elementary and high school
education as well as alternative learning system for out-of-school youth and adult learners
and includes education for those with special needs (RA 9155).
Basic Education Sector Reform A package of policy reforms pursued by the Department of Education (DepEd) to
Agenda (BESRA) improve the quality of education in the Philippines and attain the Education For All
(EFA) goals in 2015.
Basic or Simple Literacy The ability to read and write with understanding a simple message in any language or
dialect.
Benefit Delivery Ratio (BDR) The cumulative likelihood that any Filipino is (a) eligible to claim; (b) aware of
entitlements and is able to access and avail of health services from accredited providers;
and (c) is fully reimbursed by PHIC as far as total health care expenditures are concerned.
Bio-chemical Oxygen Demand The measurement of the approximate quantity of dissolved oxygen that will be required by
(BOD) bacteria to stabilize organic water in wastewater or surface water.
Biodiesel Ethanol produced from feedstock and other biomass.
Biodiversity Variability among organisms from all sources, including terrestrial, marine and other
aquatic ecosystems and the ecological complexes of which they are a part; this includes
diversity within species, between species and of ecosystems. (Source: RA 9125)
Bioethanol Fatty Acid Methyl Ester (FAME) or mono-alkyl esters derived from vegetable oils or
animal fats and other biomass-derived oils that shall be technically proven and approved
by the Department of Energy for use in diesel engines, with quality specifications in
accordance with the Philippine National Standards.
Biofuel Bioethanol and biodiesel and other fuels made from biomass and primarily used for
motive, thermal and power generation, with quality specifications in accordance with the
Philippine National Standards.
Biomass energy systems Energy systems which use biomass resources to produce heat, steam, mechanical power
or electricity through either thermochemical, biochemical or physico-chemical processes,
or through such other technologies which shall comply with prescribed environmental
standards pursuant to Republic Act No. 9136.
Biomass resources Non-fossilized, biodegradable organic material originating from naturally occurring or
cultured plants, animals and micro-organisms, including agricultural products, by-products
and residues such as, but not limited to, biofuels except corn, soya beans and rice but
including sugarcane and coconut, rice hulls, rice straws, coconut husks and shells, corn
cobs, corn stovers, bagasse, biodegradable organic fractions of industrial and municipal
wastes that can be used in bioconversion process and other processes, as well as gases
and liquids recovered from the decomposition and/or extraction of nonfossilized and
biodegradable organic materials.
Broadband A high data rate connection to the Internet and a transmission capacity with sufficient
bandwidth to permit combined provision of voice, data and video. Each country may have
varying definitions of "basic broadband" for data transmission speeds, ranging up from 256
kbps up to 4.0 Mbps.
Broadcast-Terrestrial (ISDB-T) The digital terrestrial television broadcasting standard originally developed by Japan, and
is also one of international digital broadcasting standards recommended by ITU. DTT
broadcasting services using ISDB-T started in Japan in December 2003. Currently, the
ISDB-T standard is mostly adopted/deployed in South American countries (e.g., Brazil,
Peru, Argentina, etc.) and is also the standard adopted in the Philippines.
Glossary 349
Business Development Services The wide array of nonfinancial services critical to the entry, survival, productivity,
(BDS) competitiveness and growth of enterprises. BDS are provided to assist individuals and
entrepreneurs to enhance their business skills and market access to improve their income
generation and asset-building capacity. These services include training, consultancy and
advisory services, marketing assistance, market information, technology development and
transfer, and business linkage promotion.
Business Process Outsourcing (BPO) A form of outsourcing that involves the contracting of the operations and responsibilities
of a specific business function (or process) to a third-party service provider. It is typically
categorized into back office outsourcing which includes internal business functions such
as human resources or finance and accounting, and front office outsourcing which includes
customer-related services such as contact center services.
Cable Television (CATV) A transmission system which distributes broadcast television signals and other services
by means of coaxial cable. CATV is also one of the popular pay-TV platforms in the
Philippines.
Cabotage principle A state wherein a country grants rights to another country to trade and navigate within its
own coastal territories, and to operate and regulate the traffic inside its territorial waters.
Capital Accounts Refers to the sum of paid-in capital, assigned capital and allowable qualified components,
other equity instruments, retained earnings and undivided profits, other comprehensive
income and appraisal increment reserves.
Capital Inflows Private and official inward flows of money to the country in the form of investments,
grants and loans
Capital Market An alternative market from bank-originated loan market wherein individuals and
institutions raise funds mostly via trading or other over-the-counter (OTC) financial
instruments. It is also considered as a long-term (maturities of longer than one year)
funding source. The most common subcomponents of capital market are stock and bond
markets.
Capital Outlay Appropriations for the purchase of goods and services, the benefits of which extend
beyond the fiscal year and which add to the assets of the Government, including
investments in the capital stock of GOCCs and their subsidiaries.
Carbon Dioxide (CO2) A chemical compound composed of two oxygen atoms covalently bonded to a single
carbon atom. It is a colorless, odorless, nonpoisonous gas that is a normal part of earth's
atmosphere. It is considered as a greenhouse gas because it traps heat radiated by the earth
into the atmosphere and thereby contributes to global warming.
Case Management Information An automated modernization program to improve overall efficiency of the Judiciary in
System (CMIS) theadministrationof justice in the Supreme Court andthe Appellate courts(e.g. Court of
Appeals, Court of Tax Appeals and Sandiganbayan.)
Center of Excellence A higher education institution, whether public or private, that demonstrates the highest
degree or level of standards in a given field of instruction, research and extension as
identified by CHED.
Certificate of Ancestral Domain Title A title formally recognizing the rights of possession and ownership of ICCs/IPs over their
ancestral domains identified and delineated in accordance with this law; Land titles given
to tribal communities in asserting their right on the protection and sustainable utilization
of their ancestral domain areas.
Certification rate The percentage of examinees who passed the national competency assessment for or
within a given period.
Chattel Movable items of property which are neither land nor permanently attached to land or
building. A chattel mortgage is a conditional sale of personal property as security for the
payment of debt or the performance of some other obligation, the condition being that the
sale shall be void upon the seller's payment to the purchaser of a specific sum of money
or his accomplishment of some named act. If the condition is performed according to its
terms, the mortgage and the sale immediately become void and the mortgagee is hereby
divested of his title.
Chemical Disinfection A method to treat wastes by adding chemicals, mostly aldehydes, chlorine compounds,
ammonium salts, and phenolic compounds, to kill or inactivate the pathogens the waste
contains.

Chemical mixture Any combination of two or more chemical substances if the combination does not occur
in nature and is not, in whole or in part, the result of a chemical reaction, if none of the
chemical substances comprising the combination is a new chemical substance and if the
combination could have been manufactured for commercial purposes without a chemical
reaction at the time the chemical substances comprising the combination were combined.
This shall include nonbiodegradable mixtures.
Citizens Database and Information An information system maintained by the National Bureau of Investigation (NBI)
System (CDIS) whose main sources include the Clearance Processing and Issuance, e-Clearance and the
Crime Information and Monitoring System. It is an information system that will provide
effective and efficient frontline service to NBI clients, partners and counterparts. This
system is useful for clearance, authentication, investigation, and for effective decision-
making.
Civil Society Organization Civil Society Organizations (CSOs) refer to a wide array of organizations: community
groups, non governmental organizations (NGOs), labor unions, indigenous groups,
charitable organizations, faith-based organizations, professional associations, and
foundations.
Classroom shortage The condition wherein the classroom-pupil ratio is higher than 1:45.
Climate Change Act of 2009 or RA An act mainstreaming climate change into government policy formulations, establishing
9729 the framework strategy and program for climate change. It adopts a principle of protecting
the climate system for the benefit of humankind, on the basis of climate justice or
common but differentiated responsibilities and the Precautionary Principle to guide
decision-making in climate risk management.
Climate Change Refers to a change in climate that can be identified by changes in the mean and/or
variability of its properties and persists for an extended period typically decades or longer,
whether due to natural variability or as a result of human activity (RA 9729).
Co-Generation Facility A facility which produces electrical and/or mechanical energy and forms of useful thermal
energy such as heat or steam which are used for industrial commercial heating or cooling
purposes through the sequential use of energy.
Cohort survival rate The percentage of enrolees at the beginning grade or year in a given school year who
reached the final grade or year of the elementary/secondary level.
Communal Irrigation System An irrigation system managed by a bona fide Irrigators Association (RA 8435).
Communist Party of the Philippines Founded by Jose Maria Sison in December 26, 1968, the CPP is the major communist
party in the Philippines.
Community e-Center (CeC) A Community e-Center is a self sustaining shared facility owned and operated by the
government as a one-stop shop for ICT needs of the citizens, providing affordable access
to ICT-enabled services and relevant content. It serves as a conduit for efficient delivery
of government and other services and a potent tool for empowerment and participation of
unserved and underserved communities in development.
Competency Assessment The process of gathering and judging evidence to decide whether a person has achieved a
standard of competency or competence objective.
Competitive Advantage Competitive edge in terms of product quality and/or price. It likewise refers to the ability
to produce a product with the greatest relative efficiency in the use of resources (RA 8435).
Comprehensive Land Use Plan A document accompanied by maps and similar illustrations, which represent the
community-deserved pattern of population distribution and proposal for the future
allocation of land for the various land use activities, in accordance with the social and
economic objectives of the people. It identifies the location, character and extent of the
area's land resources to be used for different purposes and includes the process and the
criteria employed in the determination of the lands use (DAR AO No. 1, Series of 2002.)
Concession Contract The award by the government to a qualified private entity of the responsibility for
financing, operating, expanding, maintaining and managing specific Government-owned
assets.
Conflict-affected Area Areas where the local and peripheral population is heavily impacted by the infighting of
armed groups.
Glossary 351
Consolidated Public Sector Deficit The combined deficit of the National Government, the Central Bank restructuring
or Surplus accounts, the major non financial government corporations, the government financial
institutions, the local government units, the social security institutions, and the Bangko
Sentral.
Consumer Price Index A measure of change in the average retail prices of goods and services commonly
purchased by a particular group of people in a particular area.
Continuous Quality Improvement A strategic approach to providing the best health care possible. It is a preventive strategy
(CQI) that uses consultant innovation to improve work processes and systems by reducing time-
consuming, low-value activities.
Contraceptive prevalence rate (CPR) The percentage of currently married women 15 to 49 years of age reporting current use of
any method of contraception.
Controlled dumpsites A disposal site at which solid waste is deposited in accordance with the minimum
prescribed standards of dumpsite operation.
Convention on the Rights of the The first instrument to incorporate the complete range of international human rights
Child including civil, cultural, economic, political and social rights as well as aspects of
humanitarian law.
Convention on Indigenous and Convention No.169 is a legally binding international instrument open to ratification,
Tribal Peoples (ILO Convention which deals specifically with the rights of indigenous and tribal peoples. Today, it has been
No. 169) ratified by 20 countries. Once it ratifies the Convention, a country has one year to align
legislation, policies and programmes to the Convention before it becomes legally binding.
Countries that have ratified the Convention are subject to supervision with regards to its
implementation.
Convergence This refers to two different trends: (a) convergence between the broadcasting and
telecommunications sectors. Advances in technology make it possible to use different
media (cable networks, terrestrial and satellite radio relay systems, computer terminals and
television sets) to carry and process all kinds of information and services, including sound,
images and data; and
(b) fixed/mobile convergence. Increasingly similar technologies are used and services
provided by fixed telephone and mobile telephone systems. This type of convergence
opens up prospects for operators to propose the same services to all users, regardless of the
technology or networks they use.
Core Housing Any formally built house that is incomplete at the time of initial occupation. It is
normally designed so that it can be completed by the inhabitant.
Corporate Malfeasance Deceptive and fraudulent activities carried out by corporate officers, investment banks or
brokerage firms that may cost investors millions. This takes place when trusted financial
professionals abandon ethical principles to pursue excessive material gain.
Court Administration Management A software designed for logging, monitoring and monitoring caseload and caseflow
Information System (CAMIS) statistical data. The software was developed with the assistance of the Canadian
International Development Agency (CIDA).
Coverage The geographical reach, or the area on earth capable of effectively receiving transmission of
a certain network (e.g., coverage for cellular or satellite network).
Creditworthiness A creditors measure of an individual's or companys ability to meet debt obligations.
Current Operating Expenses Amount budgeted for the purchase of goods and services for the conduct of normal
government operations within a budget year. Includes goods and services that will be used
or consumed during the budget year.
Democratic Control of Armed Forces The norms and standards governing the relationship between the armed forces and society.
The armed forces are subordinated to democratically-elected authorities and subject to the
oversight of the judiciary as well as the media and civil society organisations.
Dependable capacity The load-carrying ability of a power plant during a specific time interval and period. The
dependable capacity of a generating facility or transmission system is a fluctuating value
that depends upon the available energy, the demand for that energy, the capability of the
system to deliver that energy at a given moment, and the facilities available to handle
increased capacity should the need arise.

Digital Divide The gap between individuals, households, businesses and geographic areas at different
socioeconomic levels with regard to both their opportunities to access information and
communication technologies (ICTs) and to their use of the Internet for a wide variety of
activities. The digital divide reflects various differences among and within countries.
Digital Terrestrial Television (DTT) The sending and receiving of moving images and sound by means of discrete (digital)
Broadcasting signals providing a greater number of channels and different interactive services and/
or better quality of picture and sound in the same amount of frequency spectrum
(bandwidth) as that used by analogue transmissions through a conventional (aerial)
antenna instead of a satellite dish or cable connection.
Disaster Risk Reduction (DRR) Concept and practice of reducing disaster risks through systematic efforts to analyze
and manage the causal factors of disasters, including through reduced exposure to
hazards, lessened vulnerability of people and property, wise management of land and the
environment, and improved preparedness for adverse events.
Disbursements Settlement of government obligations and/or accounts payable by cash; movement of cash
from the BTr or from an authorized disbursing officer to the final recipient.
Disposal site A site where solid waste is finally discharged and deposited.
Disposal The discharge, deposit, dumping, spilling, leaking or placing of any solid waste into or in
any land.
Dissolved Oxygen (DO) Amount of gaseous oxygen (O2) actually present in water expressed in terms either of its
presence in the volume of water (milligrams of O2 per liter) or of its share in saturated
water (percentage).
Distribution Utility Any electric cooperative, private corporation, government-owned utility or existing local
government unit which has an exclusive franchise to operate a distribution system in
accordance with RA 9136.
Diversion Rate The rate or percentage of a potentially recyclable material that has been diverted out of the
waste disposal stream and therefore not put into disposal sites.
Double-shift class A schooling system wherein a school caters to two entirely separate groups of pupils/
students during the school day using the same classroom.
Eco-efficiency Means having more value with less impact on the environment; it emphasizes
monitoring of material and energy flows of stocks and life cycle assessment.
Ecological Solid Waste Management An act providing for an ecological solid waste management program, creating the
Act of 2000 (RA 9003) necessary institutional mechanisms and incentives, declaring certain acts prohibited and
providing penalties. It reinforces the country's drive towards a healthier environment by
providing a comprehensive solution to the country's solid waste problem.
Ecological Solid Waste Management The systematic administration of activities which provide for segregation at source,
segregated transportation, storage, transfer, processing, treatment, and disposal of solid
waste and all other waste management activities which do not harm the environment.
e-Commerce Commercial transactions occurring over open networks, such as the Internet. Both
business-to-business and business-to-consumer transactions are included.
Economic zones Selected areas with highly developed or which have the potential to be developed into
agroindustrial, industrial tourist/recreational, commercial, banking, investment and
financial centers.
Eco-tourism A form of tourism that can sustainably use natural and cultural resources while providing
employment opportunities for local communities.
e-Governance A wider concept that defines and assesses the impacts that technologies are having on the
practice and administration of governments, and the relationships between public servants
and the wider society, such as dealings with the elected bodies or outside groups such as
non-government organizations, or private sector corporate entities. It is understood to
extend the scope by including citizen engagement and participation in governance, and
can be defined as the use of ICTs to achieve better governance.
e-Government The development of online services for the public, providing services such as: e-tax;
business registration; birth, wedding, and death certificates; voting or public opinion
polling; passport or identification renewal; social benefits; licences and approvals, planning
or business applications; or e-health. Also included are networked ICT systems supporting
various levels of government in the administration and delivery of mandated services.
Glossary 353
El Nio/La Nia El Nio is a warming of the surface water of the Pacific Ocean that causes extreme dry
weather or drought while the La Nia causes heavy rains in the country that may also
bring strong winds and storms. La Nia brings mostly the opposite effect of El Nio.
Electric Cooperatives Cooperatives supplying or empowered to supply electric service.
Electricity The fundamental form of energy created by the movement of electrons or an electric
current supplied as a public utility for lighting, heating, etc.
Employment generation Derived from the Labor Force Survey conducted by the NSO, and pertains to the number
of individuals that were granted with work.
Employment rate The ratio of the total number of employed persons to the total number of persons in the
labor force.
End-user financing Financing for stakeholders in a particular sector usually incorporated in a modality or
program.
Enhanced Case Flow Management An offshoot project of the Case Flow Management (CFM) System that aims to establish
System (ECFMS) a judiciary-wide ICT systems development for increasing efficiency in the management
of dockets of all first and second level courts. It involves the design, development,
testing, pilot testing, and process and system documentation of the eCFM system that
is integrated with the existing CAMIS of the OCA, e-Payment and other application
systems that may be developed later.
Enhanced Justice on Wheels A program created by the High Court to reach out to poor Filipinos and expedite
(E-JOW) litigation of cases they are involved in. The project aims to literally bring the courts to
the people via an air-conditioned bus that houses a small courtroom representing first
and second level court. The bus is staffed by a judge, court personnel and a mediator. It is
divided into two main sections: the front section serves as the courtroom, while the rear
section serves as a mediation room.
Enterprise-based training A program of learning which takes place in the enterprises or in the workplace.
Entrepreneurship The act of being an entrepreneur, which can be defined as one who takes over the world
innovations, finance and business acumen in an effort to transform innovations into
economic goods.
Environmental Compliance A document issued by the DENR Secretary or the Regional Executive Director certifying
Certificate (ECC) that based on the representations of the proponent and the preparers, as reviewed and
validated by the EIARC, the proposed project or undertaking will not cause a significant
negative environmental impact; that the proponent has complied with all the requirements
of the EIS System and that the proponent is committed to implement its approved
Environmental Management Plan in the Environmental Impact Statement or mitigation
measures in the Initial Environmental Examination.
Environmental Impact Assessment The process of predicting the likely environmental consequences of implementing projects
(EIA) or undertakings and designing appropriate preventive, mitigating and enhancement
measures.
EO 570, series of 2006 Also known as Institutionalizing Peace Education in Basic Education and Teacher
Education.
Ethanol A volatile, flammable, colorless liquid that is most often used as a motor fuel, mainly as a
biofuel additive for gasoline. It is made by fermenting and then distilling starch or sugar
crops such as sugarcane, maize, sorghum, wheat and other grains, or even cornstalks, fruit
and vegetable waste. Also called ethyl alcohol, pure alcohol, grain alcohol, or drinking
alcohol.
Excise Tax Tax, either specific and/or ad valorem, imposed on selected articles manufactured or
produced in the country for domestic sale or consumption or for any other disposition, and
or selected imports.

Exclusive Economic Zone A zone beyond and adjacent to the territorial sea in which a coastal state has: sovereign
rights for the purpose of exploring and exploiting, conserving and managing the natural
resources, whether living or nonliving, of the waters superjacent to the seabed and of the
seabed and its subsoil, and with regard to other activities for the economic exploitation and
exploration of the zone. This includes the production of energy from the water, currents,
and winds; jurisdiction with regard to the establishment and use of artificial islands,
installations, and structures; marine scientific research; the protection and preservation of
the marine environment. The outer limit of the exclusive economic zone shall not exceed
200 nautical miles from the baselines from which the breadth of the territorial sea is
measured.
Executive Order 514 An order establishing the National Biosafety Framework which aims to strengthen the
existing science-based determination of biosafety to ensure the safe and responsible use
of modern biotechnology, enhance the decision-making, and guide implementation of
international obligations on biosafety. The NBF puts together into the framework the
existing biosafety regulations, delineates the responsibilities of each biosafety agencies,
strengthens the National Committee on Biosafety of the Philippines and provides a venue
for discussion of overlapping policy issues.
Executive Order 533 An order adopting an Integrated Coastal Management as a National Strategy to ensure
the sustainable development of the country's coastal and marine environment and
resources and establishing supporting mechanisms for its implementation. It seeks to
address environmental as well as socioeconomic issues in a comprehensive and integrated
manner in order to promote optimum resource utilization and sustainable coastal and
marine development.
Executive Order No. 3 (series of Also known as the EO Defining the Policy and Administrative Structure: For
2001) Government Comprehensive Peace Efforts
Executive Order No. 797 An order that seeks to reorganize the ministry of labor and employment, creating the
Philippine overseas employment administration, and for other purposes. It is basically
geared towards the development of employment opportunities, the protection of workers,
and the promotion of industrial peace.
Executive Order No. 888 An order adopting the Strategic National Action Plan (SNAP) on Disaster Risk
Reduction, 2009-2019 and institutionalizing DRR. It seeks to reduce economic losses
from the adverse impacts of climate variability including extreme events as the country
undergoes economic growth, population increase and rapid urbanization.
Expanded Tertiary Education A certification mechanism for nonschool based learning that is integrated into the
Equivalency and Accreditation countrys educational system through the EO 330. This program is a comprehensive
Program (ETEEAP) educational assessment scheme at the tertiary level which recognizes, accredits and gives
equivalency to the knowledge, skills, attitudes and values gained by individuals from
relevant work experiences, high-level non-formal training and informal experiences
parallel to those obtained from the formal system leading to an award of a degree. In
essence, it is an alternative learning system in tertiary education.
Extension Services The provision of training, information, and support services by the government and non
government organizations to the agriculture and fisheries sectors to improve the technical,
business, and social capabilities of farmers and fisherfolk (RA 8435).
Farm-to-Market Roads Roads linking the agriculture and fisheries production sites, coastal landing points and
post-harvest facilities to the market and arterial roads and highways (RA 8435).
Feed-in Tariff A policy mechanism that involves the obligation on the part of electric power industry
participants to source electricity from renewable energy generation at a guaranteed fixed
rate per kilowatthour for renewable energy generation for a given period of time.
Feedstock Organic sources such as molasses, sugarcane, cassava, coconut, jatropha, sweet sorghum or
other biomass used in the production of biofuels.
Financial Sector Forum (FSF) It principally provides for an institutionalized framework for coordinating the supervision
and regulation of the financial system, for strengthening the exchange of information
among the different regulators and for the promotion of better consumer protection.
Fiscal Deficit Shortfall/deficiency of revenues over expenditures of the government.
Fiscal Policy The part of government policy which is concerned with the raising of resources through
taxation and borrowing and deciding on the level and pattern of expenditures.
Glossary 355
Fiscal Responsibility Bill (FRB) A proposed bill which aims to strengthen fiscal discipline in the public sector by
prescribing principles of responsible fiscal management, establishing control mechanisms
on spending, and adopting preventive measures against the erosion of the tax base of the
government.
Fixed Telephone Line Voice telephony via land line telephone service. It is a physical line connecting the
subscriber to the telephone exchange. Typically, fixed-line network is used to refer to
the traditional phone system or the Public Switched Telephone Network (PSTN), to
distinguish it from mobile networks.
Food security It exists when all people, at all times, have physical and economic access to sufficient, safe
and nutritious food that meets their dietary needs and food preferences for an active and
healthy life (FAO, 2002).
Foreign Direct Investments Investments made to acquire a lasting interest by a resident entity in one economy in an
enterprise resident in another economy. The purpose of the investor is to have a significant
influence and effective voice in the management of the enterprise.
Forward and backward linkages Channels through which information, material and money flow from suppliers to the
firms (backward) and from suppliers to customers (forward).
Forward Estimates (FEs) Projections or estimation of future costs of existing policies. It also serves as the validation
instruments for the reasonableness of agency proposals on existing programs, projects, and
activities.
Fossil fuels Fuels formed by natural resources such as anaerobic decomposition of buried dead
organisms. The age of the organisms and their resulting fossil fuels is typically millions
of years, and sometimes exceeds 650 million years. The fossil fuels, which contain high
percentages of carbon, include coal, petroleum, and natural gas.
Franchise area A geographical area exclusively assigned or granted to a distribution utility for distribution
of electricity.
Functional Literacy (new definition) A range of skills and competencies cognitive, affective and behavioral which enables
individuals to: (a) live and work as human beings; (b) develop their potentials; (c) make
critical and informed decisions; (d) function effectively in society within the context of
their environment and that of the wider community (local, regional, national, global) in
order to improve the quality of their life and that of society.
Functional Literacy (old definition) A significantly higher level of literacy which includes not only reading and writing skills
but also numerical skills. The skills must be sufficiently advanced to enable the individual
to participate fully and efficiently in activities commonly occurring in her/his life situation
that require a reasonable capability of communicating by written language.
General Fertility Rate The number of live births per 1,000 women aged 15-49 in a given year.
Geothermal Energy Systems Machines or other equipment that converts geothermal energy into useful power.
Geothermal Resources Mineral resources, classified as renewable energy resource, in the form of: (a) all products
of geothermal processes, embracing indigenous steam, hot water, and hot brines; (b)
steam and other gases, hot water, and hot brines resulting from water, gas, or other fluids
artificially introduced into geothermal formations; (c) heat or associated energy found in
geothermal formations; and (d) any by-product derived from them.
Gini concentration ratios Measures the inequality in income distribution where zero means perfect equality and a
value of 1 implies perfect inequality.
Gini ratio (Gini coefficient) A concentration ratio which is used to measure income inequality. It takes values from
zero (0), representing complete equality of income, to one (1), representing complete
inequality. Thus, the higher the value of the coefficient, the more unequal is the
distribution of income among families within a given area under study.
Global Warming Increase in the average temperature of the earths near-surface air and oceans that is
associated with the increased concentration of greenhouse gases in the atmosphere.
Government of the Republic of the The official title of the government.
Philippines
Greenhouse gases (GHG) Constituents of the atmosphere that contribute to the greenhouse effect including, but not
limited to, carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons
and sulfur hexafluoride.

Green ICT Green ICT is a new approach to ensuring environmental sustainability of ICTs in
businesses and organizations. This involves reducing carbon emissions and improving
energy efficiency of ICT systems, as well as promoting use of less harmful materials and
encouraging recycling and appropriate disposal of ICT equipment and peripherals.
Grid The high voltage backbone system of interconnected transmission lines, substations and
related facilities.
Gross Domestic Product (GDP) Refers to the value of all goods and services produced domestically. It is the sum of gross
value added of all resident institutional units engaged in production (plus any taxes, and
minus any subsidies, on products not included in the values of their outputs); The total
output produced within the geographical boundaries of the country regardless of the
nationality of the entities producing the output.
Gross Enrolment Rate (GER) The total enrolment in a given level of education, regardless of age, as a percentage of
population which, according to national regulations, should be enrolled at this level.
Gross International Reserve (GIR) Foreign assets that are readily available to and controlled by the BSP for direct financing
of payment imbalances and for managing the magnitude of such imbalances, GIR consists
of holdings of gold, special drawing rights, foreign investments, and foreign exchange,
including Reserve Position in the Fund.
Gross National Product (GNP) A measure of the countrys output of final goods and services. It is equivalent to the Gross
Domestic Product adjusted with the net factor income from the rest of the world. It refers
to the aggregate earnings of the factors of production (nationals) plus indirect taxes (net)
and capital consumption allowance.
Gross Value Added Total payment to factors of production namely: wages, interest, profit and rent. It also
includes capital consumption allowance and indirect taxes. It is estimated by deducting
from the gross value of output of non-factor such as raw materials, fuel, advertising and
other non-industrial overhead cost.
Hazardous Substances Substances which present either: (a) short-term acute hazards, such as acute toxicity by
ingestion, inhalation or skin absorption, corrosivity or other skin or eye contact hazard or
the risk of fire or explosion; or (b) long-term environmental hazards, including chronic
toxicity upon repeated exposure, carcinogenicity (which may in some cases result from
acute exposure but with a long latent period), resistance to detoxification process such as
biodegradation, the potential to pollute underground or surface waters, or aesthetically
objectionable properties such as offensive odors.
Hazardous Wastes Substances that are without any safe commercial, industrial, agricultural or economic
uses and are shipped, transported or brought from the country of origin for dumping or
disposal into or in transit through any part of the territory of the Philippines.
Health Care Waste Infectious waste from hospitals such as equipment, instruments, utensils, and fomites of
a disposable nature from patients who are suspected to have or have been diagnosed as
having communicable diseases and must therefore be isolated as required by public health
agencies, laboratory wastes such as pathological specimens (i.e., all tissues, specimens of
blood elements, excreta, and secretions obtained from patients or laboratory animals),
and disposable fomites that may harbor or transmit pathogenic organisms, and surgical
operating room pathologic specimens and disposable fomites attendant thereto, and
similar disposable materials from outpatient areas and emergency rooms.
High Speed Packet Access (HSPA) A family of high-speed 3G digital data services provided by cellular carriers worldwide
that use the GSM technology.
Higher Education (HE) The stage of formal education requiring secondary education covering the programs on
all courses of study leading to bachelors degree and all degree courses of study beyond
bachelors degree level.
Household A person or a group of persons who occupy a housing unit such as a house, an apartment,
a mobile home, a group of rooms, or a single room that is occupied (or if vacant, is
intended for occupancy) as separate living quarters.
Housing loan ceiling The limit one can acquire as loan for the construction of a housing structure.
Housing Unit A building or structure that is a dwelling or place for habitation by human beings.
Human Development Index (HDI) Measures quality of life or wellbeing in terms of health, education and income.
Hydropower Resources Water resources found technically feasible for development of hydropower projects.
Glossary 357
Hydropower Systems Water-based energy systems which produce electricity by utilizing the kinetic energy of
falling or running water to turn a turbine generator.
Inclusive Finance Greater access to in financial services and further deepening of the financial system
towards sustainable growth and stability.
Inclusive Growth Growth that is rapid enough to matter, given the countrys large population, geographical
differences, and social complexity. It is sustained growth that creates jobs, draws the vast
majority into the economic and social mainstream, and continuously reduces mass poverty.
It is an essential ingredient of any successful growth strategy where the idea of equality
of opportunity is emphasized in terms of access to markets, resources, and unbiased
regulatory environment for businesses and individuals.
Income gap The average income shortfall expressed as a proportion to the poverty line of families with
income below the poverty threshold.
Independent Power Producer An existing power generating entity which is not owned by NPC.
Indigenous People People, communities, and nations who are native to a particular area; Refer to a group of
people or homogenous societies identified by self-ascription and ascription by other, who
have continuously lived as organized community on communally bounded and defined
territory, and who have, under claims of ownership since time immemorial, occupied,
possessed customs, tradition, and other distinctive cultural traits, or who have, through
resistance to political, social and cultural inroads of colonization, non-indigenous religions
and culture, become historically differentiated from the majority of Filipinos. IPs shall
likewise include peoples who are regarded as indigenous on account of their descent from
the populations which inhabited the country, at the time of conquest or colonization, or
at the time of inroads of non-indigenous religions and cultures, or the establishment of
present state boundaries, who retain some or all of their own social, economic, cultural and
political institutions, but who may have been displaced from their traditional domains or
who may have resettled outside their ancestral domains.
Indigenous Peoples Masterplan Under the Indigenous Peoples Rights Act (IPRA) of 1997, the National Commission on
Indigenous Peoples (NCIP) is mandated to formulate regularly the Five Year Master Plan
Indigenous Peoples Rights Act of An act which recognizes, protects and promotes the rights of indigenous cultural
1997 (RA 8371) communities/indigenous people, creating a national commission of indigenous people,
establishing implementing mechanism, appropriating funds therefore, and for other
purposes.The law restores the rights of indigenous peoples over their ancestral lands and
ancestral domains.
Inelastic supply Market characteristic or situation where any increase or decrease in the price of a good or
service does not result in a corresponding increase or decrease in its supply.
Infant mortality ratio (IMR) The number of deaths among children below one year old per 1,000 livebirths at a
specified period of time. IMR is used as a general indicator of the nutritional and health
status of the population.
Inflation rate The annual rate of change or year-on-year change in Consumer Price Index.
Inflation Rates The annual rate or percentage change or the year-on-year change in the Consumer Price
Index (CPI). It indicates how fast or slow the CPI increases or decreases.
Informal settlers Occupants of public or private lands without any legal entitlement or authority to said
lands.
Informal waste sector Individuals or groups involved in extraction of recyclable and reusable materials from
mixed waste, i.e., scavengers and waste pickers.
INFRACOM Sub-Committee on An interagency committee for the Water Resources Sector established through NEDA
Water Resources (SCWR) Board Committee on Infrastructure (INFRACOM) Resolution No. 2, Series of 2008
composed of representatives from key national government agencies, leagues of cities and
municipalities, academe and civil society. Its functions include, among others: (a) ensuring
that sector plans are carried out; (b) coordinating the conduct of sector monitoring and
periodic assessments; (c) coordinating the undertaking of studies, researches and analyses
in order to propose subsequent policy recommendations for the sector; (d) formulating
areas of cooperation within the sector; (e) clearing sector data/information; and (f ) serving
as a platform for discussion and resolution of issues in the sector.
Installed/rated capacity The maximum capacity of an equipment/facility such as a power plant for which it is
designed by the manufacturer and is usually expressed in megawatts (MW).

Integrated Water Resources A framework which promotes the coordinated development and management of water,
Management (IWRM) land and related resources in order to maximize the resultant economic and social welfare
in an equitable manner without compromising the sustainability of vital ecosystems.
Interconnection The physical connection of telephone networks owned by two different operators. Network
operators typically charge a per minute fee for use of their network by other network
operators.
International Convention on the United Nations convention adopted and opened for signature and ratification by the
Elimination of All Forms of Racial United Nations General Assembly on December 21, 1965, and which entered into force
Discrimination on January 4, 1969. It defines and condemns racial discrimination and commits States to
change national laws and policies which create or perpetuate racial discrimination.
Investment climate Overall environment for investments. It refers to the factors such as economic, monetary,
and other conditions that affect the performance of investments.
Irrigation Service Fees (ISF) A means to generate revenues to cover operations and maintenance (O&M) costs of
irrigation facilities.
Job generation The number of tasks, duties, or activities that were created.
Judiciary Case Management System A management system of the Supreme Court and one of the Judiciary's reform projects
( JCMS) aimed at declogging congested dockets and helping solve delays in case management and
resolution through the use of information technology.
Justice Sector Coordinating Council An inter-agency body composed of senior representatives from the Judiciary, the
( JSCC) Department of Justice, the Department of the Interior and Local Government, and their
relevant attached agencies, which serves as a joint forum for dialogue on issues of common
interest and mechanism for effective coordination and sharing of information for planning
and implementation of joint initiatives.
K+12 system Kindergarten and the twelve years of elementary and secondary education. Kindergarten
refers to the 5-year old cohort that takes a standardized kinder curriculum. Elementary
education refers to primary schooling that involves six or seven years of education;
meanwhile secondary education refers to high school. Under the K+12, the intention
is not just to add two years of schooling but more importantly to enhance the basic
education curriculum.
Kapit-bisig Laban sa Kahirapan- A program for implementing small-scale projects by barangays following their own plans,
Comprehensive and Integrated priorities, and processes, with funding support and in-kind support from the national and
Delivery of Social Services local governments.
(KALAHI-CIDSS)
Kilowatt-hour (kWh) A unit of energy equivalent to one kilowatt (kW) of power expended for one hour of time.
Labor Force The population 15 years old and over, whether employed or unemployed, who contribute
to the production of goods and services in the country. Persons considered not in the labor
force are those who are not working and are not available for work during the reference
week, and persons who are not available and are not looking for work because of reasons
other than those previously mentioned, (e.g., housewives, students, disabled or retired
persons and seasonal workers.)
Labor Market Programs Measures aimed at enhancing employment opportunities and protection of the rights
and welfare of workers. Employment enhancing measures include trade policies and skills
development and training. Labor protection includes compliance with labor standards
such as minimum wages or health and safety in the workplace.
Ladderized Education A new system of education in the Philippines that allows learners to progress between
TVET and college, and vice-versa.
Lateral Attrition The transfer in post and/or separation from government service, in accordance with civil
service rules and regulations of internal revenue or customs officials/officers and collection
officers of other revenue-generating units, who do not meet their respective revenue or
collection goals for the year with all due considerations being taken.
Level I Water Supply System (point A protected well or developed spring system without a distribution system, generally
source) adaptable for rural areas where the houses are thinly scattered. A Level I facility normally
serves an average of 15 households. (NEDA Board Resolution No. 12 Series of 1995).
Glossary 359
Level II Water Supply System A system composed of a source, reservoir, distribution system and communal faucets.
(communal faucet system or Usually, one faucet serves 4 to 6 households. Generally suitable for rural and urban fringe
standpost) areas where houses are clustered densely to justify a simple piped-system (NEDA Board
Resolution No. 12 Series of 1995).
Level III Water Supply System A system composed of a source, reservoir, piped distribution system and household taps.
(waterworks system or individual It is generally suited for densely populated urban areas (NEDA Board Resolution No. 12
household connections) Series of 1995).
Lifeline rate The subsidized rate given to low-income captive market end-users who cannot afford to
pay at full cost.
Liquefied petroleum gas (LPG) A flammable mixture of hydrocarbon gases used as a fuel in heating appliances and
vehicles. It is increasingly used as an aerosol propellant and a refrigerant, replacing
chlorofluorocarbons in an effort to reduce damage to the ozone layer.
Local Exchange Carrier The regulatory term in telecommunications for the local telephone company.
Local Government Code of 1991 or An act providing for a local government code which seeks to promote genuine and
RA 7160 meaningful local autonomy for territorial and political subdivisions of the State to enable
them to attain their fullest development as self-reliant communities and make them
more effective partners in the attainment of national goals. It provides a responsive and
accountable local government structure instituted through a system of decentralization
whereby local government units shall be given more powers, authority, responsibilities, and
resources.
Low cost housing Under Philippine laws, these are housing units that are priced from PhP 400,000 to PhP
3,000,000.
Magna Carta for Countryside and An act establishing the Magna Carta for countryside and barangay business enterprises,
Barangay Business Enterprises granting exemptions from any and all government rules and regulations and other
(Kalakalan 20) incentives and benefits thereof, and for other purposes. It aims to achieve growth in the
countryside business enterprises through absence of bureaucratic restrictions and granting
of incentives and other benefits.
Magna Carta of Women or RA 9710 A comprehensive women's human rights law that seeks to eliminate discrimination
against women by recognizing, protecting, fulfilling and promoting the rights of Filipino
women, especially those in the marginalized sectors. It promotes empowerment of women
and pursues equal opportunities for women and men and ensures equal access to resources
and to development results and outcome.
Magnitude of Poor Families The number of families whose income cannot provide for the basic food and non-food
requirements called the poverty threshold.
Magnitude of Poor Population The number of individuals whose income cannot provide for the basic food and non-food
requirements called the poverty threshold.
Maintenance and Other Operating Expenditures to support the operations of government agencies such as expenses for
Expenses (MOOE) supplies and materials; transportation and travel; utilities (water, power, etc) and the
repairs, etc.
Managing for Development Results A management strategy that focuses on development performance and on sustainable
improvements in country outcomes. It provides a framework for development
effectiveness in which performance information is used to improve decision making. It
also includes practical tools for strategic planning, risk management, progress monitoring,
and outcome evaluation (OECD Policy Brief, March 2009).
Market Turnover A number of shares of stocks sold on the market during a given period of time. Generally,
it is the trading volume numerated against the outstanding volume of stocks in the bourse.
Materials Recovery Facility Includes solid waste transfer station or sorting station, drop-off center, a composting
facility, and a recycling facility.
Maternal mortality ratio (MMR) The number of women who die from any cause related to or aggravated by pregnancy
or its management (excluding accidental or incidental causes) during pregnancy and
childbirth or within 42 days of termination of pregnancy, irrespective of the duration and
site of the pregnancy, per 100,000 livebirths.

Medical tourism The concept of traveling to a particular destination for health care services. These services
are offered by countries with qualified and experienced health care professionals working
in some of the highly technologically advanced facilities in the world. International
medical travel helps medically underserved residents located in the US, Europe, Australia,
Canada, and Asia. The costs are usually a fraction of what the same procedure would be in
their countries. Moreover, these medical travels may include holiday amenities like hotel
or resort accommodation, chauffered city travel, and a bilingual personal assistant to guide
and make a client feel secure and to arrange any other requirements he or she may need
aside from medical needs.
Medium-Term Expenditure A planning budgeting framework of the government which provides a medium term
Framework (MTEF) three-year perspective to decision making process during budget preparation.
Metrology The field of science concerned with weights and measures which includes all aspects of
measurement in whatever level of accuracy and in any field of science and technology
Micro, Small and Medium Any business activity/enterprise engaged in industry, agribusiness/services, whether single
Enterprises (MSMEs) proprietorship, cooperative, partnership, or corporation whose total assets, inclusive of
those arising from loans but exclusive of the land on which the particular business entity's
office, plant and equipment are situated, must have value falling under the following
categories:
Asset Size Employment

(in million PhP)
Large > 100 > 200
Medium 15.1 100 100 199
Small 3.1 1.5 10 99
Micro <3 19
Missionary Electrification The provision of basic electricity service in unviable areas with the aim of bringing the
operations in these areas to viability levels.
Mitigation Human intervention to address anthropogenic emissions by sources and removals by
sinks of all GHG, including ozone-depleting substances and their substitutes.
Managing for Development Results A management strategy that focuses on development performance and on sustainable
improvements in country outcomes. It provides a framework for development
effectiveness in which performance information is used to improve decision making.
It also includes practical tools for strategic planning, risk management, progress
monitoring, and outcome evaluation (OECD Policy Brief, March 2009)
Monetary Policy The part of economic policy which regulates the level of money or liquidity in the
economy to achieved desired policy objectives, such as inflation control, improvement of
the BOP or growth of the economy.
Moro Islamic Liberation Front The MILF is an Islamic secessionist movement in the Bangsamoro homeland in
Mindanao and the neighbouring islands. The MILF was formed in 1977 when Hashim
Salamat split from the Moro National Liberation Front, in 1977.
Moro National Liberation Front The Moro National Liberation Front (MNLF) is a political organization whose former
aim was to secede away from the Philippines. The MNLF, led by its Chairman, Nur
Misuari, signed a Final Peace Agreement with the Governmentin 1996 which resulted
to the enactment of RA 9054 otherwise known as the Autonomous Region in Muslim
Mindanao.
Multimedia Messaging Service A service that allows the sending of multiple media in a single message, and the ability
(MMS) to send a message to multiple recipients.
Mutual Funds Funds (open or closed) of individual and institutional investors that are pooled to form a
massive asset base. The assets are then entrusted to a full time professional fund manager
who develops and maintains a diversified portfolio of security investments. Investors
of a mutual fund are the owners or shareholders. Their investments provide the money
for a mutual fund to buy securities such as stocks and bonds. Mutual funds profit from
security investments either through dividends and interests to the fund or increase in
fund value.
Glossary 361
National Convergence Initiative A multisectoral and integrated planning approach adopted by the DA, DAR, and the
DENR towards more efficient use of resources.
National Defense and Security Act The law that governs the mechanisms of the national defense of the Philippines
National Democratic Front The political component of the Communist Party of the Philippines. The NDF sits
across the GPH on the peace negotiating table.
National Environmental Awareness An act to promote national awareness on the role of natural resources in economic
and Education Act of 2008 growth and the importance of environmental conservation and ecological balance
(RA No. 9512) towards sustained national development. This legislation concretized the countrys
support to the United Nations Decade of Education for Sustainable Development
(2005-2014), and the ASEAN Environmental Education Action Plan for Sustainable
Development (2008-2012).
National Framework Strategy on A framework strategy of the Philippines serving as basis for a program for climate
Climate Change change planning, research and development, extension, and monitoring of activities
to protect vulnerable communities from the adverse effects of climate change. It seeks
to build the adaptive capacity of communities in the country, increase the resilience
of our natural ecosystems to climate change, and optimize the country's mitigation
opportunities towards sustainable development. It highlights the critical aspect of
Climate Change adaptation, which will be applied to all levels of governancefrom city
to municipal down to the barangay level. "
National Integrated Protected Areas An act providing for the establishment and management of national integrated
System Act of 1992 (RA 7586) protected areas system, defining its scope and coverage, and for other purposes. It
encompasses outstanding remarkable areas and biologically important public lands that
are habitats of rare and endangered species of plants and animals, biogeographic zones
and related ecosystems, whether terrestrial, wetland or marine, all of which shall be
designated as protected areas.
National Integrated Protected Areas Classification and administration of all designated protected areas to maintain essential
Systems (NIPAS) ecological processes and life-support systems, to preserve genetic diversity, to ensure
sustainable use of resources found therein, and to maintain their natural conditions to
the greatest extent possible.
National Irrigation System (NIS) A major irrigation system managed by the National Irrigation Administration (RA
8435).
National Justice Information System A program that is intended to address and remedy the current information gaps in
(NJIS) the Philippine criminal justice system by enabling effective sharing of data between
the participating agencies, including the police, judiciary, probation services, custodial
authorities, and criminal information registries, at key decision points in our criminal
justice system process.
National Transport Policy (NTP) A long-term comprehensive policy which shall guide all elements of the transportation
system and all sub-sectors of transportation, including passengers, shippers, service
providers, agencies and instrumentalities of government and those involved in the
movement of people and goods and in the provision of transportation infrastructure,
facilities and services. The NTP shall cover the areas of: (a) Resource Generation and
Allocation; (b) Criteria for the Preparation of Agency Plans, Programs and Projects; (c)
Cost Recovery and Subsidies; (d) Regulation of Passenger Transport Services; (e) Urban
Transport; (f ) Transport Logistics; and (g) Governance, in all their decision-making,
undertakings, and transactions.
Natural gas A gas consisting primarily of methane, typically with 0 to 20 percent higher
hydrocarbons (primarily ethane). It is found associated with other hydrocarbon fuel, in
coal beds, as methane clathrates, and is an important fuel source and a major feedstock
for fertilizers.
Net Enrolment Rate (NER) or The ratio of the enrolment for the age group corresponding to the official school age in
Participation Rate the elementary/secondary level to the population of the same age group in a given year.
Net Foreign Transaction The net change in the ownership of foreign assets.
Net Intake Rate (NIR) The percentage of the population at the official elementary school-entrance age (defined
as 6 years old per DepEd Order No. 65, s. 1994) who are new entrants in the first grade
of elementary education, and who are of the same age (IACES).

Net Lending Advances by the NG for the servicing of government-guaranteed corporate debt during
the year; net of repayments on such advances. Includes loan outlays or proceeds from
program loans relent to government corporations.
Network Combination of telecommunications resources, for example, exchanges, wire links
(copper cable, optical fiber) and terrestrial or satellite radio transmission links.
New Peoples Army Military arm of the Communist Party of the Philippines.
Non-Tax Revenues Revenue collected from sources other than compulsory tax levies. Include those collected
in exchange for direct services rendered by government agencies to the public, or those
arising from the governments regulatory and investment activities.
Nuclear wastes Hazardous wastes made radioactive by exposure to the radiation incidental to
the production or utilization of nuclear fuels but does not include nuclear fuel, or
radioisotopes which have reached the final stage of fabrication so as to be usable for any
scientific, medical, agricultural, commercial, or industrial purpose.
Ocean Energy Systems Energy systems which convert ocean or tidal current, ocean thermal gradient or wave
energy into electrical or mechanical energy.
Off-Grid Areas Areas not connected to the wires and related facilities of the OnGrid System of the
Philippines.
On-Grid System Electrical systems composed of interconnected transmission lines, distribution lines,
substations, and related facilities for the purpose of conveyance of bulk power to the
grid.
Open access The system of allowing any qualified person the use of transmission, and/or distribution
system, and associated facilities subject to the payment of transmission and/or
distribution retail wheeling rates duly approved by the Energy Regulatory Commission
(ERC).
Organic Agriculture Includes all agricultural systems that promote the ecologically sound, socially acceptable,
economically viable and technically feasible production of food and fibers. Organic
agriculture dramatically reduces external inputs by refraining from the use of chemical
fertilizers, pesticides and pharmaceuticals. It also covers areas such as, but not limited to,
soil fertility management, varietal breeding and selection under chemical and pesticide-
free conditions, the use of biotechnology and other cultural practices that are consistent
with the principles and policies of RA 10068, and enhance productivity without
destroying the soil and harming farmers, consumers and the environment as defined by
the International Federation of Organic Agriculture Movement (IFOAM): Provided,
that the biotechnology herein referred to shall not include genetically modified
organisms or GMOs (RA10068).
Organizational Performance An approach to expenditure management that directs resources towards results or major
Indicator Framework (OPIF) final outputs and measures agency performance by key quality and quantity indicators.
Over-urbanization A term used in relation to cities in the developing world which have been deemed to be
too large in relation to their countrys industrial base.
Pantawid Pamilyang Pilipino Program The countrys conditional cash transfer (CCT) program, which provides direct cash
(4Ps program) transfers to the poor on condition that (a) their children continue to attend school and
(b) the family makes use of preventive health care and nutrition services.
Paper on Budget Strategy This will link budget allocation with the national agenda of the government to identify
the priority areas for spending and to incorporate the sectoral and regional implications
in the dimension and distribution of the budget.
Payapa at Masaganang Pamayanan The national governments peace and development framework to respond and
Program strengthen peace building, reconstruction and development in conflict-affected areas.
PAYGO A part of the budget process which requires that any additional budgetary allocation
and/or mandatory spending increase must be compensated by a corresponding increase
in tax and/or revenue or a cut in spending in other items in the budget over a specified
time period.
Glossary 363
Payment for Environmental Services A compensation involving cash that is linked directly to the provision of environmental
(PES) services. This is a mechanism to improve the provision of indirect environmental
services, which the provider gets paid for doing so (provider-gets) and the beneficiaries
pay for getting the services (user-pays). Payment for environmental goods and services
may include: watershed protection from upland forest, biodiversity of forest and coastal
resources, carbon sequestration of forest and landscape/scenic beauty of the countrys
natural resources. Other forms of PES include: purchase of land critical to habitat
preservation, biodiversity conservation, important ecological function; and tax relief to
owners who will maintain the desired land uses.
Penetration A measurement of access to telecommunications. It is usually calculated by dividing the
number of subscribers by the population, and multiplying by 100. Also referred to as
density.
Per capita income Obtained by dividing the total family income by the total number of family members.
Petroleum A naturally occurring, flammable liquid consisting of a complex mixture of hydrocarbons
of various molecular weights and other liquid organic compounds, that are found in
geologic formations beneath the earth's surface. Petroleum is recovered mostly through
oil drilling. It is refined and separated, most easily by boiling point, into a large number
of consumer products, from gasoline and kerosene to asphalt and chemical reagents used
to make plastics and pharmaceuticals.
Philippine Clean Air Act of 1999 An act providing for a comprehensive air pollution control policy and for other
(RA 8749) purposes. It aims to protect and advance the right of the people to abalanced and
healthful ecology in accord with the rhythm and harmony of nature. It seeks to promote
and protect the global environment to attain sustainable development whilerecognizing
the primary responsibility of local government units to deal with environmental
problems.
Philippine Clean Water Act of 2004 An act providing for a comprehensive water quality management, and for other
(RA 9275) purposes. It aims to protect, preserve and revive the quality of the countrys fresh,
brackish and marine waters.
Philippine Defense Reform The PDR provides the framework for introducing a comprehensive, institutional,
structural and systemic reform package at the strategic level for the defense and military
establishment.
Philippine Disaster Risk Reduction An act that seeks to strengthen the Philippine disaster risk reduction and management
and Management Act of 2010 system through the adoption of the National Disaster Risk Reduction and Management
(RA 10121) Framework (NDRRMF), and the National Disaster Risk Reduction and Management
Plan (NDRRMP). It further aims to recognize and strengthen the capacity of the
national government and the local government units (LGUs), together with partner
stakeholders, to build the disaster resilience of communities, and to institutionalize
arrangements and measures for reducing disaster risks, including projected climate risks,
and enhancing disaster preparedness and response capabilities at all levels.
Philippine National Police The Republics national and local police force that provides all law enforcement services
throughout the Philippines.
Post -Harvest Facilities Includes, but is not limited to, threshers, moisture meters, dryers, weighing scales,
milling equipment, fish ports, fish landings, ice plants and cold storage facilities,
processing plants, warehouses, buying stations, market infrastructure and transportation
(RA 8435).
Poverty gap The total income shortfall of families with income below the poverty threshold, divided
by the number of families.
Poverty Incidence The proportion of families/individuals with per capita income/expenditure less than the
per capita poverty threshold to the total number of families/individuals
Poverty Incidence of Families The proportion of families whose income cannot provide for the basic food and nonfood
requirements called the poverty threshold to the total number of families.
Poverty Incidence of Population The proportion of individuals whose income cannot provide for the basic food and
nonfood requirements called the poverty threshold to the total number of individuals.

Poverty Threshold Is equal to the food threshold plus the non-food requirements. In the new methodology
as approved by the NSCB Executive Board on December 8, 1992, the non-food
requirements provide only the expenditures on basic non-food items. This includes
clothing and footwear and other wears, fuel, light, and water, housing maintenance
and other minor repairs, rental of occupied dwelling units, medical care, education,
transportation and communication, non-durable and furnishings, household operations
and personal care and effects but excludes alcoholic beverages, tobacco, recreation,
durable furniture and equipment, miscellaneous expenditures and other expenditures.
The raising factor is estimated from the consumption pattern of all FIES (Family
Income and Expenditure Survey) families of size six by taking the average ratio of total
expenditures to total food expenditures.
Power The rate at which work is performed or energy is converted. It can be expressed in
kilojoules per second (kJ/sec) or kilowatts (kW).
Privatization The sale, disposition, change and transfer of ownership and control of assets and
Independent Power Producer (IPP) contracts from the government or a government
corporation to a private person or entity
Productivity and Efficiency Refers to the production and delivery of competitive, standards-compliant, socially-
responsible and environment-friendly products and services that generate optimum
economic returns.
Protected area Identified portions of land and water set aside by reason of their unique physical and
biological significance, managed to enhance biological diversity and protected against
destructive human exploitation.
Public-Private Partnership (PPP) A contractual arrangement between the government and the private sector to deliver
public infrastructure and/or public services.
Purchasing power of the peso A measure of the real value of the peso in a given period relative to a chosen reference
period. It is computed by getting the reciprocal of the CPI and multiplying the result by
100.
Rationalization Program A move to transform the Executive Branch into a more effective and efficient
government. It aims to: (a) focus government efforts on its vital functions and channel
government resources to these core public services; and (b) improve the efficiency of
government services, within affordable levels, and in the most accountable manner.
Real Effective Exchange Rate The weighted average of a country's currency relative to an index or basket of other
(REER) major currencies adjusted for the effects of inflation. The weights are determined by
comparing the relative trade balances, in terms of one country's currency, with another
country within the index. Essentially it refers to the NEER adjusted for inflation
differentials.
Real Per Capita GDP An approximation of the value of goods produced per person in the country, equal to the
country's constant GDP divided by the total number of people in the country.
Reasonable Water Supply Access Availability of at least 20 liters per day from a source within 1 kilometer of the dwelling.
Rebolusyonaryong Partido The party was formed in 1995 following a split from the Communist Party of the
ng Manggagawa-Pilipinas / Philippines due to its ideological differences like rejection of Maoism and preferring the
Revolutionary Proletariat Army-Alex act of insurrection over the Maoist Protracted People's War.
Boncayao Brigade
Recyclable material Any waste material retrieved from the waste stream and free from contamination
that can still be converted into suitable beneficial use or for other purposes, including,
but not limited to, newspaper, ferrous scrap metal, non-ferrous scrap metal, used oil,
corrugated cardboard, aluminum, glass, office paper, tin cans, plastics and other materials
as may be determined by the NSWMC.
Reducing Emissions from A proposed incentive system for reducing GHG emissions. Industrialized countries
Deforestation and Forest would provide financial incentive for forested, developing countries to manage and
Degradation Plus (REDD-plus) protect forests to reduce their GHG emissions and enhance carbon stocks. It is
performance-based, such that payments would only be delivered if emissions were
reliably reduced.
Regulatory capture An economic situation in which state regulators serve the interest of the industry or
firms rather than the interest of the public or society.
Glossary 365
Renewable Energy Resources Energy resources that do not have an upper limit on the total quantity to be used. Such
resources are renewable on a regular basis and the renewable rate is rapid enough to
consider availability over an indefinite time. These include, among others, biomass, solar,
wind, hydro and ocean energy.
Renewable Portfolio Standards A policy mechanism which places an obligation to electric power industry participants
(RPS) to source or produce a specified fraction of their electricity from eligible renewable
energy resources.
Rent-seeking Profit-seeking; when a company, organization or individual uses their resources to
obtain an economic gain from others without reciprocating any benefits back to society
through wealth creation.
Republic Act 8532 An act strengthening further the Comprehensive Agrarian Reform Program (CARP),
by providing augmentation fund therefor, amending for the purpose Section 63 of RA
6657, otherwise known as The CARP Law of 1988.
Republic Act 9700 An act strengthening the Comprehensive Agrarian Reform Program (CARP),
extending the acquisition and distribution of all agricultural lands, instituting necessary
reforms, amending for the purpose certain provisions of RA 6657, otherwise known
as the Comprehensive Agrarian Reform Law of 1988, as amended, and appropriating
funds therefor.
Repurchase Agreement One of the two open market operations (OMO) instruments of the BSP. Under a
repurchase (repo) agreement, the BSP buys government securities from a bank with a
commitment to sell it back at a specified future date at a predetermined rate. A repo
transaction expands the level of money supply as it increases the bank's level of reserves.
At present, the BSP enters into a repo agreement for a minimum of one day (overnight)
and for a maximum of 91 days.
Resettlement The act or instance of settling or being settled in another place; also, movement of
informal settlers from land where they have no legal right, to land provided by the
government and with just title.
Residual Waste Waste left from household sources containing materials that have not been separated
out or sent for reprocessing.
Retail Rate The total price paid by end-users consisting of the charges for generation, transmission
and related ancillary services, distribution, supply and other related charges for electric
service.
Retail trade Any act or occupation of selling direct to the general public merchandise, commodities
or good for consumption.
Revealed Comparative Advantage Refers to the share of product to total Philippine exports as a ratio of share of the
product to total world exports.
Revenue Effort Computed as the ratio of total government revenues (both tax and non-tax) to gross
domestic product (GDP) at current prices, aims to measure the capability of the
government sector to generate revenues to support the development needs of the
economy. Revenue data are sourced from the Department of Finance (DoF) while GDP
data are sourced from the National Statistical Coordination Board (NSCB).
Revenue Integrity Protection Service The anti-corruption arm of the DOF created by EO 259 (December 17, 2003). RIPS
(RIPS) investigates allegations of corruption in the Department of Finance and its attached
agencies such as the Bureau of Internal Revenue and the Bureau of Customs, the Bureau
of Local Government Finance, Bureau of Treasury, Central Board of Assessment
Appeals, the Insurance Commission, the National Tax Research Center, the Fiscal
Incentives Review Board, and the Privatization and Management Office.
Risk-Based Capital Adequacy The internationally accepted risk-sensitive capital adequacy standards for financial
Framework institutions. It prescribes that financial institutions must, at all times, have capital
commensurate with their risk taking activities.
Run Against Tax Evaders (RATE) A program initiated by the DOF and BIR to investigate and prosecute individuals and/
or entities engaged in tax evasion and other criminal violations of the National Internal
Revenue Code (NIRC) of 1997. RMO No. 24-2008 issued on June 11, 2008 provides
the policies and guidelines for the development, investigation and prosecution of cases
under the RATE Program of the BIR.

Salary Standardization Law An act prescribing a revised compensation and position classification system in the
government and for other purposes.
Sanitary Landfill A waste disposal site designed, constructed, operated and maintained in a manner that
exerts engineering control over significant potential environmental impacts arising from
the development and operation of the facility.
Sanitation A wide range of services and arrangements pertaining to the hygienic and proper
management of human excreta (feces and urine) and community liquid wastes to
safeguard the health of individuals and communities.
Secondary Mortgage Market A market for the purchase and sale of existing mortgages, designed to provide greater
liquidity, for selling mortgages.
Securities Borrowing and Lending The temporary loan of securities between borrower and lender. This allows the borrower,
who expects the price of the security (either a government security or a stock) to fall, to
hold a short position for a long duration. Meanwhile, the lender receives a fee that could
potentially enhance portfolio yield with relatively low risk. A repo is also one form of
securities borrowing and lending instrument wherein securities may be borrowed in a
repo market to cover short positions.
Septage The sludge produced in individual/communal onsite wastewater-disposal systems,
principally septic tanks.
Severity of poverty The total of the squared income shortfall of families with income below the poverty
threshold, divided by the total number of families and is sensitive to the income
distribution among the poor.
Sewage Wastewater which is a combinaion of the liquid or water-carried wastes removed from
households, insitutions, and commercial and industrial establishments, together with
such groundwater, surface water, and stormwater as may be present.
Sewerage Facilities that collect human waste and sullage from residences and establishments
usually piped and conveyed in structures (sewers, pump stations) for eventual central
treatment and safe disposal. Piped sewerage includes a collection system (street lateral),
a conveyance system (trunk sewers and pump stations), and a treatment plant/disposal.
Shariah Courts Shariah District Courts (SDCs) and Shariah Circuit Courts (SCCs) that were created
in 1977 through Presidential Decree 1083, which is also known as the Code of Muslim
Personal Laws. These courts have been established to resolve cases involving Muslims.
Short Messaging Service (SMS) A service available on digital networks, typically enabling messages with up to 160
characters to be sent or received via the message center of a network operator to a
subscriber's mobile phone.
Sitio A territorial enclave inside a barangay, especially in rural areas.
Slum A run-down area of a city characterized by substandard housing and squalor and lacking
in tenure security.
Small Power Utilities Group (SPUG) The functional unit of the National Power Corporation created to pursue missionary
electrification function.
Social Insurance Programs that seek to mitigate income risks by pooling resources and spreading
risks across time and classes. These are designed in such a way that beneficiaries pay
a premium over a given period of time to cover or protect them from loss of income
and unemployment as a result of illness, injury, disability, retrenchment, harvest failure,
maternity, old age, etc. This component includes micro and area-based schemes to
address vulnerability at the community level such as microinsurance, agricultural
insurance and social support funds.
Social Protection Constitutes policies and programs that seek to reduce poverty and vulnerability to
risks and enhance the social status and rights of the marginalized by promoting and
protecting livelihood and employment, protecting against hazards and sudden loss of
income, and improving peoples capacity to manage risks.
Social Safety Nets Stop-gap mechanisms or urgent responses that address effects of economic shocks,
disasters and calamities on specific vulnerable groups. These are measures that
specifically target affected groups with the specific objective of providing relief and
transition. Measures include emergency assistance, price subsidies, food programs,
employment programs, retraining programs and emergency loans.
Glossary 367
Social Welfare Preventive and developmental interventions that seek to support the minimum basic
requirements of the poor, particularly the poorest of the poor, and reduce risks associated
with unemployment, resettlement, marginalization, illness, disability, old age and loss
of family care. Social welfare and assistance programs usually comprise direct assistance
in the form of cash or in kind transfers to the poorest and marginalized groups, as well
as social services including family and community support, alternative care and referral
services.
Socialized Housing Provision of affordable housing (usually by the government) through efficient
production of housing units for ownership and sustainable housing financing.
Currently, socialized housing are house and lot packages costing PhP400,000 and below.
Solar Energy Energy derived from solar radiation that can be converted into useful thermal or
electrical energy.
Solar Energy Systems Energy systems which convert solar energy into thermal or electrical energy.
Solid Waste Management (SWM) The discipline associated with the control of generation, storage, collection, transfer and
transport, processing, and disposal of solid wastes in a manner that is in accord with the
best principles of public health, economics, engineering, conservation, aesthetics, and
other environmental considerations, and that is also responsive to public attitudes.
Standardization The creation and use of guidelines for the production of uniform, interchangeable
components, especially for use in mass production.
Stock Market Capitalization The sum of the current value of all securities traded on a financial market.
Strategic Agriculture and Fisheries The areas within the Network of Protected Areas for Agricultural and Agroindustrial
Development Zones (SAFDZ) Development (NAPAAD) identified for production, agro processing and marketing
activities to help develop and modernize, either the support of government, the
agriculture and fisheries sectors in an environmentally and socioculturally sound manner
(RA 8435).
Strengthening the Integrity of the A program of the Judiciary that aims to: (a) provide the Judiciary with effective tools
Judiciary (SIJ) and techniques to systematicaly assess the level of integrity of its administrative
processes; (b) guide the Judiciary as it conducts a comprehensive review of its
administrative processes that will provide the basis for the design of reform measures;
and (c) assist the Judiciary in effectively implementing the selected reforms.
Subprime Crisis The global financial meltdown in the housing mortgage market after a sharp increase
in mortgage delinquencies when adjustable rates were reset at higher rates. Securities
backed with subprime mortgages lost most of their market value. With almost 80
percent of US mortgages being subprime loans and held by banks, these resulted to the
decline in the capital of banks and other government sponsored enterprises worldwide
but mostly in the US and Europe.
Subsidy A grant or financial aid, usually by a government body, to persons, institutions, or
GOCCs; it may also refer to amounts used to cover operational expenses not supported
by corporate revenues or to cover corporate deficits and losses.
Subsistence Incidence The proportion of families/individuals with per capita income/expenditure less than the
per capita food threshold to the total number of families/ individuals.
Subsistence Incidence of Families The proportion of families whose income cannot provide the basic food requirements
called the food or subsistence threshold to the total number of families.
Subsistence Incidence of Population The proportion of individuals whose income cannot provide for the basic food
requirements called the food or subsistence threshold to the total number of individuals.
Subsistence Threshold The cost of basic food requirements. This is measured by costing low-cost menus
constructed by region, urban-rural, which meet 100 percent adequacy of the
Recommended Dietary Allowance (RDA) for energy (2,000 calories) and 80 percent
adequacy of other nutrients as recommended by the Food and Nutrition Research
Institute (FNRI). The menus are prepared by the FNRI and costed by the TWG using
the prices obtained from the NSO and BAS surveys.
Substation A part of an electrical generation, transmission, and distribution system, where voltage is
transformed from high to low, or the reverse, or many other important functions.

Sub-transmission Assets Facilities related to the power delivery service below the transmission voltages and
based on the functional assignment of assets including, but not limited to, step-down
transformers used solely by load customers, associated switchyard/substation, control
and protective equipment, reactive compensation equipment to improve customer power
factor, overhead lines, and the land, where such facilities/ equipment are located. These
include National Power Corporation assets linking the transmission system and the
distribution system which are neither classified as generation nor transmission.
Supplier Any person or entity authorized by the Energy Regulatory Commission to sell, broker,
market or aggregate electricity to the end-users.
Sustainable Development Development that is compatible with the preservation of the ecosystem in areas where
agriculture and fisheries activities are carried out (RA 8435).
Sustainable Land Management The use of the land to meet changing human needs (agriculture, forestry, conservation),
while ensuring long term socioeconomic and ecological functions of the land.
(The Updated Philippine National Action Plan to Combat Desertification, Land
Degradation and Drought 2010-2020).
Tariffs Tax levied on imports and exports.
Tax Effort The ratio between the governments tax revenue collection vis--vis GDP at current
prices.
Tax Revenues Compulsory charges or levies imposed by government on goods, services, transactions,
individuals, entities, and others, arising from the sovereign power of state.
Technical Vocational Education and The education process designed at secondary and lower tertiary levels, officially
Training (TVET) recognized as nondegree programs aimed at preparing technicians, para-professionals
and other categories of middle-level workers by providing them with a broad range of
education, theoretical, scientific, artistic and technological studies, social services and
related jobs skills training.
Information and Communication An umbrella term that covers all technical means for processing and communicating
Technology (ICT) information. It defines a broad range of technologies, including methods for
communication (communication protocols, transmission techniques, communications
equipment, media communication), as well as techniques for storing and processing
information (computing, data storage, etc.)
Third Generation (3G) A generation of standards for mobile phones and mobile telecommunications services
fulfilling specifications by the International Telecommunication Union. Application
services include wide-area wireless voice telephone, mobile Internet access, video calls
and mobile TV, all in a mobile environment.
Total Factor Productivity A measure of marginal productivity that takes into account the contribution of
technological change and improvements in production efficiency.
Total fertility rate (TFR) The number of births a woman would have on average at the end of her reproductive life
throughout her reproductive years (15-49).
Total suspended particulates (TSP) Small or liquid particles suspended in the air.
Tourism enterprises Facilities, services and attractions involved in tourism, such as, but not limited to: travel
and tour services; tourist transport services, whether for land, sea or air transportation;
tour guides; adventure sports services involving such sports as mountaineering,
spelunking, scuba diving, and other sports activities of significant tourism potential;
convention organizers; accommodation establishments, including, but not limited to,
hotels, resorts, apartelles, tourist inns, motels, pension houses, and home stay operators;
tourism estate management services, restaurants, shops and department stores, sports
and recreational centers, spas, museums and galleries, theme parks, convention centers
and zoos.
Tourism receipts The receipts of the country in the form of consumption expenditures or payments of
goods and services made by foreign visitors out of foreign currency resources.
Glossary 369
Toxic Substances and Hazardous An act to control toxic substances and hazardous and nuclear wastes, providing penalties
Waste Act of 1990 (RA 6969) for violations thereof, and for other purposes. It aims to regulate, restrict or prohibit the
importation, manufacture, processing, sale, distribution, use and disposal of chemical
substances and mixtures that present unreasonable risk and/or injury to health or the
environment; to prohibit the entry, even in transit, of hazardous and nuclear wastes and
their disposal into the Philippine territorial limits for whatever purpose; and to provide
advancement and facilitate research and studies on toxic chemicals.
Transmission (of Electricity) The conveyance of electricity through the high voltage backbone system.
Transmission Development Plan The program for managing the transmission system through efficient planning for
the expansion, upgrading, rehabilitation, repair and maintenance, to be formulated by
the Department of Energy (DOE) and implemented by the National Transmission
Corporation (TransCo)/National Grid Corporation of the Philippines (NGCP)
pursuant to Republic Act No. 9136.
Transnational education (TNE) All types of higher education study programs, or sets of courses of study, or educational
services (including those of distance education) in which the learners are located in a
country different from the one where the awarding institution is based. Such programs
may belong to the education system of a State different from the State in which it
operates, or may operate independently of any national education system.
UN Security Council Resolution The resolution reaffirms the important role of women in the prevention and resolution
1325 of conflicts, peace negotiations, peace building, peacekeeping, humanitarian response and
in post-conflict reconstruction and stresses the importance of their equal participation
and full involvement in all efforts for the maintenance and promotion of peace and
security. Resolution 1325 urges all actors to increase the participation of women and
incorporate gender perspectives in all United Nations peace and security efforts. It also
calls on all parties to conflict to take special measures to protect women and girls from
gender-based violence, particularly rape and other forms of sexual abuse, in situations
of armed conflict. The resolution provides a number of important operational mandates,
with implications for Member States and the entities of the United Nations system.
Underemployed All employed persons who expressed the desire to have additional hours of work in their
present job or an additional job, or to have a new job with longer working hours. Visibly
underemployed persons are those who work for less than 40 hours during the reference
period and want additional hours of work.
Underemployment rate Percentage of the total number of underemployed persons to the total number of
employed persons.
Unemployed The unemployed include all persons who are 15 years old and over as of their last
birthday and are reported as: without work, i.e., had no job or business during the
basic survey reference period; and currently available for work, i.e., were available and
willing to take up work in paid employment or self employment during the basic
survey reference period, and/or would be available and willing to take up work in paid
employment or self employment within two weeks after the interview date; and seeking
work, i.e., had taken specific steps to look for a job or establish a business during the
basic survey reference period; or not seeking work due to the following reasons: (a)
tired/believe no work available, i.e., the discouraged workers who looked for work within
the last six months prior to the interview date; (b) awaiting results of previous job
application; temporary illness/disability; (d) bad weather; and (e) waiting for rehire/job
recall.
Unemployment rate Percentage of the total number of unemployed persons to the total population 15 years
old and over.
Universal Access Ubiquitous access to ICT services, e.g., at a public place, thus also called public,
community or shared access.
Universal Health Care A focused approach to health reform implementation, ensuring that all Filipinos
especially the poor receive the benefits of health reform. This is a deliberate focus on
the poor to ensure that they are given financial risk protection through enrolment
to PhilHealth and that they are able to access affordable and quality health care and
services in times of needs.
Universal Service Means every individual or household can have service, using it privately e.g., either at
home or increasingly, carried with the individual through wireless devices such as mobile
phones, PDAs, etc.

Utilization rate Measures the attractiveness of a preferential regime relative to the Most Favoured
Nation (MFN) Treatment. It shows the extent to which imports eligible for the
preference rate actually enter or utilize the preferential tariffs rather than the MFN.
Value Chain In agriculture, identifies the set of actors and activities that bring a basic agricultural
product from production in the field to final consumption, where at each stage value
is added to the product. A value chain can be a vertical linking or a network between
various independent business organizations and can involve processing, packaging,
storage, transport and distribution. The terms value chain and supply chain are often
used interchangeably (FAO, 2005).
Value Engineering/Value Analysis A professionally applied and systematic team management approach used to manage
(VE/VA) risk, analyze, and improve value in infrastructure projects. It seeks to provide a balance of
quality, performance, and functionality in a project by minimizing costs of construction,
operation, and maintenance.
Value-Added Service (VAS) A telecommunications industry term for noncore services including all services beyond
standard voice calls and fax transmissions.
Vulnerability The susceptibility to deterioration in wellbeing as a result of risks including external
shocks and seasonal fluctuations, as well as of opportunities offered by resources owned
or transfers through various means.
Vulnerable groups Groups of people who are susceptible to poverty as a result of risks and external shocks.
Warrant of Arrest Information Refers to the database of Warrant of Arrests issued by the different courts nationwide
System (WAIS) accessible by all Philippine National Police (PNP) units and other law enforcement
agencies nationwide.
Wasting Current or recent or active malnutrition characterized by very low weight-for-height as
a result of deficits in both muscle tissue and fat mass.
Water Quality The characteristics of water, which define its use in characteristics by terms of physical,
chemical, biological, bacteriological or radiological characteristics by which the
acceptability of water is evaluated.
Water Resources (SCWR) An inter-agency committee with core members as well as subsector clusters comprised
of representatives from key national government agencies, leagues of cities and
municipalities, academe and civil society. Details of the composition and membership
of the SCWR are outlined in the Updated Philippine Waters Supply Sector Roadmap
(2009).
Waterless Barangay/Municipality A barangay/municipality wherein 50 percent or less of the population has access to safe
water.
Watershed Land area drained by a stream or fixed body of water and its tributaries having a
common outlet for surface runoff.
Wet Thermal Disinfection Steam disinfection which is based on exposure of shredded infectious waste to high-
temperature, high-pressure steam. It inactivates most types of microorganisms if
temperature and contact time are sufficient; for sporulated bacteria, a minimum
temperature of 121C is needed. This method is similar to the autoclave sterilization
process.
Whole-of-Government approach An approach wherein a government actively uses formal and/or informal networks
across the different agencies to coordinate the design and implementation of the range
of interventions that the agencies will be making in order to increase the effectiveness of
those interventions in achieving the desired objectives.
Wholesale Electricity Spot Market The market where competitive, efficient, transparent and reliable market/trading of
electricity will be made.
WiMAX Fixed wireless standard IEEE 802.16 that allows for long-range wireless
communication at 70 Mbit/s over 50 kilometres. It can be used as a backbone Internet
connection to rural areas.
Wind Energy Systems Machines or other related equipment that convert wind energy into useful electrical or
mechanical energy.
Wind Energy Energy that can be derived from wind that is converted into useful electrical or
mechanical energy.
Glossary 371
Wireless Fidelity (WiFi) A mark of interoperability among devices adhering to the 802.11b specification for
Wireless Local Area Networks (LANs) from the Institute of Electrical and Electronics
Engineers (IEEE). However, the term Wi-Fi is sometimes mistakenly used as a generic
term for wireless LAN.
Wireless Generic term for mobile communication services which do not use fixed-line networks
for direct access to the subscriber.
Yield Curve It is a line that plots the interest rates, at a set point in time, of bonds and other financial
instruments having equal credit quality but differing maturity dates. It is used as a
benchmark for other debt in the market such as mortgage rates or bank lending rates.
The curve is also a graphical representation of the range of interest rates available to
investors and fused to predict changes in economic output and growth.
Zero-Based Budgeting (ZBB) A budgeting approach which involves a review/evaluation of major on-going programs
and projects implemented by different department/agencies, in order to: (a) establish
the continued relevance of program objectives given the current development/directions;
(b) assess whether the program objectives/outcome are being achieved, and; (c) guide
decision makers on whether the resources for the program/project should continue at its
present level, or be increased, reduced or discontinued.

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Planning Committees
Philippine Development Plan 2011-2016
Plan Steering Committee

Name Position Agency
Sec. Cayetano W. Paderanga, Jr. Chair NEDA
Sec. Cesar V. Purisima Member Department of Finance
Department of Social Welfare
Sec. Corazon Juliano-Soliman Member and Development
Department of the Interior and
Sec. Jesse M. Robredo Member Local Governments
Planning Committee 1
Planning Committee Chair: National Economic and Development Authority
Subcommittee on Macroeconomy
Subcommittee Chair: Philippine Institute of Development Studies
Members:
Bangko Sentral ng Pilipinas
Department of Budget & Management
Department of Finance
Department of Labor and Employment
Office of the President Presidential Management Staff
Development Academy of the Philippines
Congressional Policy and Budget Research Department
Senate Economic Planning Office
National Statistics Office
University of Asia and the Pacific
Subcommittee on Industry and Services

Subcommittee Chair: Department of Trade and Industry
Subcommittee Co-Chair: National Competitiveness Council
Members:
Bureau of Micro, Small and Medium Enterprise Development
Caucus of Development NGO Networks
Clark International Airport Corp.
Commission on Human Rights
Commission on Information and Communications Technology
Planning Committees and Schedule of Consultations 385

Congressional Policy and Budget Research Department
Department of Agriculture
Department of Environment and Natural Resources - Mines and Geosciences Bureau
Department of Science and Technology
Department of the Interior and Local Government
Department of Tourism
Department of Trade and Industry
Department of Transportation and Communications
Development Bank of the Philippines
Export Development Council
Federation of Philippine Industries
Joint Foreign Chambers
National Statistical Coordination Board
Office of the President-Presidential Management Staff
Philippine Chamber of Commerce and Industry
Philippine Economic Zone Authority
Philippine Exporters Confederation Inc.
Subcommittee on Modern & Competitive Agriculture and Fisheries

Subcommittee Chair: Department of Agriculture
Subcommittee Co-Chair: Department of Agrarian Reform
Members:
Government Agencies:
Phil. Council for Agricultural, Forestry and Natural Resources, Research and Development
Phil. Council for Aquatic and Marine Research and Development
Department of Environment and Natural Resources
Bureau of Agricultural Statistics
Department of Budget and Finance
Bureau of Fisheries and Acquatic Resources
Land Bank of the Philippines
Department of Science and Technology -Philippine Atmospheric Geophysical and
Astronomical Services Administration
Philippine Institute for Development Studies
Legislative:
HOR - Committee on Agriculture and Food
HOR - Committee on Agrarian Reform
HOR - Committee on Rural Development
HOR - Committee on Food Security
HOR - Committee on Natural Resources
HOR - Committee on Aquaculture and Fisheries Resources

HOR - Congressional Oversight Committee on Agriculture and Fisheries Modernization
HOR - Congressional Policy and Budget Research Department
Senate - Senate Economic Planning Office
Senate - Committee on Agriculture and Food
Senate - Committee on Agrarian Reform
NGOs/POs
Asian NGO Coalition for Agrarian Reform and Rural Development
Alyansa Agrikultura
Private Sector:
Management Association of the Phils.-Agribusiness and Countyrside Development
Foundation
Northern Mindanao Vegetable Producers Association, Inc.
Federation of Philippine Industries, Inc.
Philippine Exporters Confederation, Inc.
Rural Bankers Association of the Philippines
Resource Persons:
UPLB-School of Environmental Science and Management
National Academy of Science and Technology
Planning Committee Chair: National Economic and Development Authority
Subcommittee on Transport
Subcommittee Chair: Department of Transportation and Communication
Members:
Department of Agriculture
Metro Manila Development Authority
Manila International Airport Authority
Department of Public Works and Highways
Department of Budget and Management
Philippine Ports Authority
Maritime Industry Authority
Clean Air Initiative for Asian Cities
Bases Conversion and Development Authority
National Computer Center
Light Rail Transit Authority
Civil Aeronautics Board
Toll Regulatory Board
Land Transportation Franchising and Regulatory Board
Department of Tourism
Cagayan Economic Zone Authority
Philippine National Railways

Subcommittee on Water
Subcommittee Chair: Department of Public Works and Highways
Subcommittee Co-Chair: National Water Resources Board
Members:
Manila Water and Sewerage System
League of Provinces
Department of Interior and Local Government
National Irrigation Administration
Local Water Utilities Administration
Pasig River Rehabilitation Commission
Board of Investments - Department of Trade and Industry
Philippine Water Partnership
Department of Justice
Department of Agrarian Reform
Maynilad
Manila Water
Office of the President
Office of Civil Defense
Cooperative Development Authority
Metropolitan Waterworks and Sewerage System
Subcommittee on Energy
Subcommittee Chair: Department of Energy
Members:
Power Sector Assets and Liabilities Management
National Power Corporation
National Power Corporation-Small Power Utilities Group
National Electrification Administration
National Transmission Corporation
Philippine National Oil Company
Energy Regulatory Commission
Subcommittee on Communications
Subcommittee Chair: Commission on Information and Communication Technology
Members:
National Telecommunications Division
Telecommunications Office
National Computer Center
Philippine Association of TElephone Companies
Bureau of Internal Revenue
Department of Science and Technology

Subcommittee on Social Infrastructure
Members:
Transparency International Philippines
Philippine Constructors Association, Inc.
Confederation of Filipino Consulting Organization
Organization of Socialized Housing Devt. Of the Phils.
Makati Business Club
Solid Waste Management Association of the Phils.
Departmen tof Health
National Solid Waste Management Commission
Department of Social Welfare and Development
National Housing Authority
Housing and Urban Development Council
Other Participants:
Philippine Chamber of Commerce and Industry
Office of the President
First Balfour
HOR- Congressional Policy and Budget Research Department
Australia and New Zealand Chamber of Commerce of the Philippines
Federation of Filipino-Chinese Chambers of Commerce and Industry, Inc.
Planning Committee Chair: Department of Finance
Subcommittee on Financial Sector

Subcommittee Chair: Bangko Sentral ng Pilipinas (BSP)
Members:
Bankers Association of the Philippines
Board of Investments
Department of Finance
Bureau of Customs
Export Development Council
Financial Executives Institute of the Philippines
Government Service Insurance System
Landbank of the Philippines
National Competitiveness Council
Philippine Institute for Development Studies
Philippine Stock Exchange
National Reintegration Center for Overseas Filipino Workers - Department of Labor
and Employment

Social Security System
Asian Institute of Management
Securities and Exchange Commission
Insurance commission
House Committee on Banks and Financial Intermediaries
House Committee on Cooperatives Development
Senate Committee on Banks, Financial Institutions, and Currencies; Office of Sen. Sergio
Osmea III
Senate Committee on Finance; Office of Sen. Franklin Drilon
Subcommittee on Good Governance and the Rule of the Law

Subcommittee Chair: Civil Service Commission
Members:
Commission on Audit
Government Watch
Office of the President - Presidential Management Staff
Philippine Judicial Academy
Supreme Court of the Philippines
Alternative Law Groups
House Committee on Good Government and Public Accountability
House Committee on Justice
Office of the Ombudsman
Senate Committe on Civil Service and Government Reorganization
Senate Committee on Justice and Human Rights
Transparency International-Philippines
UP National College of Public Administration and Governance
Congressional Policy and Budget Research Department of the House of Representatives
Transparency and Accountability Network
National Competitiveness Council
Planning Committee Chair: Department of Social Welfare and Development
Subcommittee on Health, Nutrition & Population Management

Subcommittee Chair: Department of Health
Members:
Commission on Population
National Nutrition Council

Philippine Health Insurance Corporation
Philippine Institute of Traditional Health Care
Philippine Charity Sweepstakes Office
Philippine Council for Health and Research Development
Philippine National AIDS Council Secretariat
Philippine Commission on Women
National Anti-Poverty Commission
Legislative:
HOR - Congressional Policy and Budget Research Department
HOR - Committee on Health
Senate Committee on Health and Demography
NGOs/Private Sector
WOMANHEALTH
Philippine Legislative Council for Population and Development
Health Justice
Subcommittee on Education, Training and Culture

Subcommittee Chair: Department of Education
Members:
Technical Education and Skills Development Authority
Commission on Higher Education
National Commission on Culture and the Arts
Department of Science and Technology - Science Education Institute
Philippine Sports Commission
Philippine Information Agency
National Commission on Indigenous Peoples
Legislative:
HOR Committee on Basic Education and Culture
HOR Committee on Higher and Technical Education
Senate Committee on Education, Arts and Culture
Senate Committee on Labor, Employment and Resource Development
NGOs/Private Sector:
Philippine Education Network
Philippine Business for Education

Subcommittee on Housing and Urban Development
Subcommittee Chair: Housing and Urban Development Council
Members:
Home Guaranty Corporation
National Housing Authority
Social Housing Finance Corporation
National Home Mortgage Finance Corporation
Housing and Land Use Regulatory Board
Home Development Mutual Fund
Presidential Commission for the Urban Poor
Social Security Systerm
Legislative:
HOR - Committee on Housing and Urban Development
Senate Committee on Urban Planning, Housing and Resettlement
Chamber of Real Estate and Builders Association
Subdivision and Housing Developers Association
Organization of Socialized Housing Developers of the Philippines
Subcommittee on Social Protection

Subcommittee Chair: Department of Social Welfare and Development
Members:
Commission for the Welfare of Children
Peoples Credit and Finance Corporation
Philippine Health Insurance Corporation
National Council on Disability Affairs
National Commission on Indigenous Peoples
Legislative:
HOR Committee on Labor and Employment
Senate Committee on Youth, Women and Family Relations

Social Watch Philippines
Pambansang Kalipunan ng mga Manggagawang Impormal sa Pilipinas
Subcommittee on Peace and Security

Subcommittee Chair: Office of the Presidential Adviser on Peace Process
Members:
Department of National Defense
Armed Forces of the Philippines
Bureau of Fire Protection
Philippine National Police
Department of Social Welfare and Development
Mindanao Development Authority
National Commission on Indigenous People
National Commission on Muslim Filipinos
ARMM Regional Planning and Development Office
Legislative:
HOR- Congressional Policy and Budget Research
CBCP National Secretariat for Social Action, Justice and Peace
Philippine Human Rights Information Center
Free Legal Assistance Group
Planning Committee Chair: Department of Environment and Natural Resources
Committee Co-Chair: Department of the Interior and Local Government
Members:
DENR-Planning Service
Environmental Management Bureau
Mines and Geosciences Bureau
Protected Areas and Wildlife Bureau
Forest Management Bureau
Ecosystems Research and Development Bureau
River Basin Control Office
National Water Resources Board
Land Management Bureau

National Mapping and Resources Information Authority
National Solid Waste and Management Commission
Pasig River Rehabilitation Commission
Laguna Lake Development Authority
Manila Bay Coordinating Office
Climate Change Commission
DOST-Philippine Atmospheric, Geophysical and Astronomical Services Administration
Philippine Institute of Volcanology and Seismology
Office of the Civil Defense - National Disaster Risk Reduction and Management Council
Department of Agriculture - Planning Service
Bureau of Fisheries and Aquatic Resources
Bureau of Soils and Water Management
DAR Planning Service
Department of Trade and Industries-Policy and Planning Dept.-BOI
Department of Budget and Management-Fiscal Planning
Department of Budget and Management- Operations
Department of Budget and Management- Bureau E
Department of Budget and Management-Fiscal Planning Bureau
Department of Public Works and Highways
Department of Public Works and Highways-Planning Service and PPP
Department of Transportation and Communications-Planning Service
National Stastistics Office
Philippines Institute for Development Studies
Legislative:
HOR Committee on Ecology
HOR Committee on Environment and Natural Resources
HOR Congressional Policy and Budget Research Department
Senate Committee on Climate Change
Private Sector:
Management Association of the Philippines
Philippine Business for the Environment
Chamber of Mines of the Philippines
NGOs/POs:
Civil Society Counterpart Council for Sustainable Development
World Wide Fund
Conservation International
Aksiyon Klima
Greenconvergence
Aidwatch Philippines

Schedule of Consultations
First Meeting of the Plan Steering Committee October 18, 2010
Visioning Group Meeting November 26, 2010
Planning Committee & Subcommittee Meetings November-December 2010
Inter-Planning Committee Meeting December 21, 2010
Regional Consultations
National Capital Region January 14, 2011
Region 1-Ilocos Region January 4, 2011
Region 2- Cagayan January 6, 2011
Region 3 - Central Luzon January 4, 2011
Region 4A - CALABARZON January 6, 2011
Region 4B - MIMAROPA January 5, 2011
Region 5 - Bicol Region January 5, 2011
Region 6 - Eastern Visayas January 6, 2011
Region 7 - Central Visayas January 6, 2011
Region 8 - Western Visayas January 6, 2011
Region 9 - Western Mindanao January 5, 2011
Region 10 - Northern Mindanao January 6, 2011
Region 11 - Southern Mindanao January 5, 2011
Region 12 - Central Mindanao January 5, 2011
Region 13 - Caraga January 14, 2011
CAR January 4, 2011
ARMM provinces joined the consultations in Region 9 and Region 12
Expanded Plan Steering Committee Meeting January 24, 2011
Representatives of Civil Society Organizations January 25, 2011
Representatives of Labor Groups January 31, 2011
NEDA Board Meeting March 28, 2011

A Social Contract with the
Filipino People
BENIGNO S. AQUINO III
PLATFORM of GOVERNMENT
A National Leadership in A People Crying out for

Need of Transformational Change
Change
Corruption robs our children of their
Its legitimacy is under question; protection, nutrition and education.
It persecutes those who expose the truth Corruption destroys our families and
about its illegitimacy and corruption; communities.
It stays in power by corrupting individuals Corruption steals from our farmers and
and institutions; workers.
It confuses the people with half-truths Corruption deters businessmen from

and outright lies; investing in our economy.
It rewards, rather than punishes, This has eroded our spirit as individuals,
wrongdoing; as communities, as a people.
It offers no lasting solutions for the many We have lost trust in the democratic
problems of the country; institutions we so courageously re-
established after the dictatorship.
It weakens the democratic institutions
that hold our leaders accountable. Our proven capacity for collective
outrage and righteous resistance has
It hinders our local governments from been weakened.
delivering basic services;
We have ceased to depend on the
It has no vision of governance beyond patriotism and civic engagement that
political survival and self-enrichment. used to animate many of our efforts.
We have become divided and alienated,

focusing only on ourselves and on our
individual pursuits.
Our moral faculties as a people have

been paralyzed.

We have retreated into a dark world honing and mobilizing our peoples skills
of self-absorption and cynicism. Our and energies as well as the responsible
collective despair has reached its lowest harnessing of our natural resources;
point.
3. A collective belief that doing the right
Then finally, the gift of thing does not only make sense morally,
Light but translates into economic value as well;
Cory Aquino passed on to the next 4. Public institutions rebuilt on the

life. From our sadness, we awakened strong solidarity of our society and its
to a shaft of light cutting through communities.
the darkness. She left the Filipinos
a legacy of selfless love for country Our Mission:
and people. Filipinos connection
with each other was rekindled. In We will start to make these changes first
death, she enabled us to hope again in ourselvesby doing the right things,
for decent government. The millions by giving value to excellence and integrity
who connected with Cory at her and rejecting mediocrity and dishonesty,
funeral represented something more and by giving priority to others over
than euphoria, sentiment or transient ourselves.
emotions. They represented the
reverent memory of a good leader in We will make these changes across many
the past and the firm hope of having aspects of our national life.
a similarly good leader in the future.
A Commitment to
A Peoples Campaign of Transformational Leadership:
Renewed Hope
1. From a President who tolerates
Anchored on Ninoys and Corys corruption to a President who is the
legacy of change through the ways of nations first and most determined fighter
democracy of corruption.
Embraces the qualities of integrity, 2. From a government that merely

humility and trust-worthiness in conjures economic growth statistics
public leadership that our people know to be unreal to a
government that prioritizes jobs that
Recognizes the absence of these empower the people and provide them
qualities in government as a major with opportunities to rise above poverty.
cause of widespread poverty, misery
and despair. 3. From relegating education to just one
of many concerns to making education
The Vision for the the central strategy for investing in our
Philippines: people, reducing poverty and building
national competitiveness.
A country with
4. From treating health as just another area
1. A re-awakened sense of right and for political patronage to recognizing the
wrong, through the living examples of advancement and protection of public health,
our highest leaders; which includes responsible parenthood, as
key measures of good governance.
2. An organized and widely-shared
rapid expansion of our economy
through a government dedicated to
A Social Contract with the Filipino People 397

5. From justice that money and 12.From demoralized but dedicated civil
connections can buy to a truly impartial servants, military and police personnel
system of institutions that deliver equal destined for failure and frustration due
justice to rich or poor. to inadequate operational support to
professional, motivated and energized
Economy bureaucracies with adequate means to
perform their public service missions.
6. From government policies influenced
by well-connected private interests to a Gender Equality
leadership that executes all the laws of the
land with impartiality and decisiveness. 13. From a lack of concern for gender
disparities and shortfalls, to the
7. From treating the rural economy as promotion of equal gender opportunity
just a source of problems to recognizing in all spheres of public policies and
farms and rural enterprises as vital programs.
to achieving food security and more
equitable economic growth, worthy of Peace & Order
re-investment for sustained productivity.
14. From a disjointed, short-sighted
8. From government antipoverty Mindanao policy that merely reacts to
programs that instill a dole-out mentality events and incidents to one that seeks
to well-considered programs that build a broadlysupported just peace and will
capacity and create opportunity among redress decades of neglect of the Moro
the poor and the marginalized in the and other peoples of Mindanao.
country.
Environment
9. From a government that dampens
private initiative and enterprise to a 15. From allowing environmental
government that creates conditions blight to spoil our cities, where both the
conducive to the growth and rich and the poor bear with congestion
competitiveness of private businesses, and urban decay to planning alternative,
big, medium and small. inclusive urban developments where
people of varying income levels are
10. From a government that treats its integrated in productive, healthy and
people as an export commodity and safe communities.
a means to earn foreign exchange,
disregarding the social cost to Filipino 16. From a government obsessed with
families to a government that creates jobs exploiting the country for immediate
at home, so that working abroad will be a gains to the detriment of its environment
choice rather than a necessity; and when to a government that will encourage
its citizens do choose to become OFWs, sustainable use of resources to benefit
their welfare and protection will still be the present and future generations.
the governments priority.
This platform is a commitment to change
Government Service that Filipinos can depend on.
11. From Presidential appointees chosen With trust in their leaders, everyone can
mainly out of political accommodation work and build a greater future together.
to discerning selection based on integrity,
competence and performance in serving
the public good.

NEDA Board
Chairperson:
President Benigno S. Aquino III
Vice-Chairperson: Hon. Francis N. Tolentino

Chairman
Hon. Cayetano W. Paderanga, Jr. Metro Manila Development Authority
Secretary of Socio-Economic Planning
National Economic and Development Authority Hon. Jejomar S. Binay
Chairman
Members: Housing and Urban Development Coordinating Council
Hon. Florencio B. Abad Hon. Alberto A. Lim

Secretary Secretary
Department of Budget and Management Department of Tourism
Hon. Cesar V. Purisima Hon. Gregory L. Domingo

Secretary Secretary
Department of Finance Department of Trade and Industry
Hon. Proceso J. Alcala Hon. Ivan John E. Uy

Secretary Commissioner
Department of Agriculture Commission of Informantion and Communication Technology
Hon. Rogelio L. Singzon Hon. Julia Andrea R. Abad

Secretary Director General
Department of Public Works and Highways Presidential Management Staff
Hon. Ramon J.P. Paje Hon. Diwa C. Guinigundo

Secretary Deputy Governor
Department of Environment and Natural Resources Bangko Sentral ng Pilipinas
Hon. Jose P. de Jesus Hon. Ansaruddin A. Adiong

Secretary Governor
Department of Transportation and Communications Autonomous Region for Muslim Mindanao
Hon. Jose Rene D. Almendras Hon. Alfonso V. Umali, Jr.

Secretary President
Department of Energy Union of Local Authorities of the Philippines
Hon. Mario G. Montejo Hon. Luwalhati R. Antonino

Secretary Chairperson
Department of Science and Technology Mindanao Development Authority
NEDA Board & Secretariat 399

NEDA Secretariat
Cayetano W. Paderanga, Jr. Rolando G. Tungpalan
Director-General and Deputy Director-General
Socioeconomic Planning Secretary NEDA National Development Office, Programming
Augusto B. Santos Marcelina E. Bacani

Deputy Director-General Assistant Director-General
Regional Development Office Regional Development Office
Nestor R. Mijares IV Ruben S. Reinoso, Jr.

Central Support Office Infrastructure, Regulation and Contract Review Services
Margarita R. Songco Ruperto P. Majuca

National Development Office, Planning and Policy Planning and Policy
Central Office
Administrative Staff National Planning and Policy Staff

Director Librado F. Quitoriano OIC-Dir. Myrna Clara B. Asuncion
OIC-Assistant Director Lelina A. Quilates OIC-AD Marites B. Oliva
Agriculture Staff Project Montoring Staff

OIC-Dir. Sheila M. Encabo Dir. Roderick M. Planta
OIC-AD Ma. Luisa Isabel L. Jolongbayan OIC-AD Violeta S.Corpuz
Development Information Staff Public Investment Staff

Dir. Victoria V. Quimbo Dir. Jonathan L. Uy
OIC-AD Celine De Castro AD Florante G. Igtiben
Information Technology Coordination Staff Regional Development Coordination Staff

OIC-Dir. Justina A. Adina Dir. Susan Rachel G. Jose
AD Remedios S. Endencia
Infrastructure Staff
OIC-Dir. Kenneth V. Tanate Social Development Staff
Dir. Erlinda M.Capones
Legal Staff AD Cleofe F. Pastrana
OIC-Dir. Romeo T. Telpo
Trade, Industry and Utilities Staff
Management Staff Dir. Brenda Joyce R. Mendoza
OIC-Dir. Jocelyn P. Reyes OIC-AD Amelia M. Menardo
OIC-AD Joseph T. Lalog

NEDA Regional Offices
NRO CAR NRO VII

Regional Director Juan B. Ngalob RD Marlene C. P. Rodriguez
Assistant Regional Director Florida P. Faculo ARD Efren B. Carreon
NRO I NRO VIII

RD Leonardo N. Quitos Jr. RD Buenaventura C. Go-Soco
ARD Nestor G. Rillon ARD Ma. Purisima E. Sanop
NRO II NRO IX
RD Milagros A. Rimando RD Arturo G. Valero
ARD Maria Ann E.R. Darauay
NRO X
NRO III RD Leon N. Dacanay
RD Remigio A. Mercado
ARD Lynette Y. Bautista NRO XI
RD Ma. Lourdes D. Lim
NRO IV-A ARD Bonifacio G. Uy
OIC-RD Severino C. Santos
NRO XII
NRO IV-B RD Teresita Socorro C. Ramos
RD Oskar D. Balbastro
NRO XIII
NRO V RD Carmencita S.Conchingco
RD Jose Romeo C. Escandor ARD Cecilia M. Lopez
NRO VI
RD Ro-Ann A. Bacal
OIC-ARD Raul S. Anlocotan
NEDA Board & Secretariat 401

Lead Technical Secretariat
Lead Staff Secretariat: Chapter 7
National Planning and Policy Staff Roweena M. Dalusong
Director: Myrna Clara Asuncion Rose Ann S. Espiritu
Marcial S. Alcaeses
Chapter 1 and 2 Girlie I. Salarda
Bien A. Ganapin Jeson Q. de la Torre
Ivee F. Libunao Jinkee Gem P. Pasion
Joy Blessilda F. Sinay Gerald G. Bitonio
Richard Emerson D. Ballester
Jonathan B Bungcayao Chapter 8
Cherry Wyle G Layaoen Ramon N. Falcon
Adrian R Mendoza Myda A. Nieves
Jenneth C Taja Golda P. Cainglet
Raul O Padilla Jr. Arlene S. Ruiz
Arlene F Sison Marites B. Lagarto
Elnora C. Romero
Chapter 3 Susan M. Carandang
Celina G. Lacsam Girlie Grace J. Casimiro
Jazzie Di S. Dela Cruz Edgardo S. Aranjuez
Chapter 4 Chapter 9
Jose Dominador C. Gomez Cynthia A. Villena
Lenard P. Guevarra Mark S. Pagulayan
Walter M Bataller
Chapter 5 Joan Marivic F Alhambra-Ozo
NEDA Infrastructure Staff Norberto D Alensuela
Chapter 6 Chapter 10
Bayani Victor J. Bawagan Nheden Amiel D. Sarne
Nickson J. Cabote Jean R. Centeno
Production Team
Victoria V. Quimbo
Celine R. De Castro
Edwin P. Daiwey
Michelle U. Ardales
Sharon P. Managbanag
Judith L. Cornista
Andrei P. Bauzon
Omar O. Dumdum
Jyasmin M. Calub
Marie Jeanette P. Cordero
Benjamin Paolo C. Gogo
Ted Edward F. Ferreras

Index
1991 Local Government Code, 209 Basic Education Sector Reform
Agenda, 28
A basic sanitation, 134, 136, 139
absorptive capacity, 48 Biochemical Oxygen Demand, 304
adaptation tools, 319 Biodiversity, 307, 315, 336
adaptive management, 325 bio-eco-engineering technology, 329
Adopt-an-estero program, 329 Biological Oxygen Demand (BOD), 304
agri-business and forest-based Board of Investments, 71
industries, 63 Brand Philippines, 83
agriculture, 3760, 4060 border security, 299
Agriculture and Fisheries Modernization broadband Internet, 160, 161
Act, 320 budget deficits, 26
air pollution, 329 Build-Operate-Transfer (BOT), 57, 58
alienable and disposable lands, 306 Bureau of Customs (BOC), 48, 53
alternative delivery modes, 178 Bureau of Internal Revenue (BIR), 48, 53
Alternative Dispute Resolution, 212 Bureau of Treasury (BTr), 56, 57
ancestral domains, 309, 323, 324, 333, business environment, 62, 64, 70, 75, 79,
336 80, 82, 83, 89
anticorruption drive, 27 Business Process Outsourcing (BPO), 37,
Anti-Graft and Corrupt Practices 63, 67, 68, 69, 81, 82, 88, 89
Act, 221 Business Registration/Permits and
Anti-Money Laundering Act, 221 Licensing System, 80
Anti-Red Tape Act, 208
APEC Code of Conduct for C
Business, 211 Calamity Fund, 322
aquifer recharge, 305, 306 campaign finance, 223
Arangkada Philippines 2010, 64 capital and financial account, 51
armed conflict, 31, 292, 294, 295, 296, Capital formation, 37
297, 298 carbon stock, 323, 324
Association of Southeast Asian Nations Career Executive System (CES) bill, 216
(ASEAN), 46 case-monitoring, 225
asset, 52 causes of conflict, 292, 293, 296
Asset price, 52 caves, 307, 315, 325
Autonomous Region in Muslim Cave Strategic Action Plan, 315
Mindanao (ARMM), 143, 163, Cost-Benefit Analysis (CBA), 304
170, 176, 295, 297, 298 China, 37, 54
Citizen-centered government, 219
B Citizens Charter, 208
balance of payments, 51 Citizens participation, 212
Bangko Sentral ng Pilipinas (BSP), 46, Civil Service Academy, 216
47, 50, 57, 58, 59 civil society organizations, 58
Bantay-Dagat, 317 Clean Air Act, 319, 328, 329
Barangay Health Stations, 175 Clean Water Act, 141
client-satisfaction surveys, 28
Index 403
climate change, 31, 125, 137, 138, 139, D
141, 142, 146, 147, 159, 165, 313
Climate Change Act, 317, 318, 330, 331, debt, 47, 49, 51, 53, 58, 59, 60
336 Debt management, 58
Climate Change Adaptation (CCA), 82, deficit, 46, 48, 49, 53, 54, 55
125, 130, 134, 135, 136, 145, 147, Department of Budget and Management
148, 175, 177, 317, 320, 321, 322, (DBM), 54, 55, 56, 57, 58
324, 325, 331, 332, 334 Department of Environment and Natural
climate change resilient, 304 Resources (DENR), 141, 173,
climate change scenarios, 319, 323 305, 307, 309, 311, 314, 315,
coastal and marine resources, 308, 315, 316, 318, 319, 320, 321, 322,
316, 323, 326 324, 328, 333
coastal resources, 308, 317, 333, 335 DENR- Ecosystems Research and
Code of Conduct and Ethical Standards Development Bureau, 319
for Public Officials and DENR-Mines and Geosciences
Employees, 221 Bureau, 311
Codes of Conduct for law enforcers, 227 Department of Finance (DOF), 55, 57,
coliform, 305 58
Commission on Audit, 57 Department of Health (DOH), 129,
Committee on Infrastructure, 134 139, 140, 170, 171, 172, 176, 177
Communal Irrigation Development Department of Public Works and
Fund, 144 Highways (DPWH), 130, 141,
communal irrigation systems, 143 146, 147, 176, 178
community-driven development, 29, 30 Department of Science and
Competency Needs Assessment, 216 Technology - Philippine
competition policy, 28 Atmospheric, Geophysical and
competitiveness, 62, 63, 64, 65, 75, 79, 80, Astronomical Services (DOST-
83, 84, 85, 87, 90, 91, 94, 95, 96, 98 PAGASA), 313
Competitiveness indicators, 63 Department of Science and Technology-
Compliance and Integrity Programs for Philippine Atmospheric,
Business, 221 Geophysical and Astronomical
comprehensive anticorruption Services Administration, 313
program, 215 Department of the Interior and Local
Comprehensive Land Use Plans, 175 Government (DILG), 148
conditional cash transfers, 29 Developing Human Resources, 84
consolidated public sector deficit, 48, 53 Digital Terrestrial Television
Construction and Related Materials, 94 broadcasting, 162
Consumer Policy, 78 disaster-preparedness, 318, 332
Consumer Price Index, 50 disasters and extreme events, 317
consumer welfare, 62, 78, 99 Disaster Risk Reduction (DRR), 82,
Contingent Liability Management, 57 318, 319, 320, 322, 323, 331,
Continuous Quality Improvement, 177 332, 334
coral reefs, 308, 325, 326 Disaster Risk Reduction and
Coral Triangle, 308, 315, 316, 325, 326 Management (DRRM), 125,
Corruption Perception Index, 211 134, 135, 145, 147, 148, 175,
cost-benefit analysis, 304, 310, 314, 315, 177, 317, 318, 319, 320, 323,
323 331, 332
cost of doing business, 62, 64, 75 dissolved oxygen, 304
criminal elements, 293, 298 Doing Business Report, 64, 80
culture of competitiveness, 62, 63, 83, 84 Disaster Risk Reduction and
current account balance, 51 Management Act, 319, 320,
323, 331
duty-bearers, 215

E Executive Development and Strategic
Management, 216
Ease of Doing Business, 209 Expansion of Court-Annexed
East Asian, 54 Mediation, 226
eco-efficiency, 139, 147 Expansion of e-JOW, 226
ecoefficient water infrastructure, 135 export, 4260
ecological integrity, 31 exports, 62, 64, 66, 67, 69, 70, 80, 83, 84,
Ecological Solid Waste Management Act 86, 89, 90, 91, 92, 93, 96, 97
(ESWMA), 169, 170, 171, 313, export sector, 53
328, 330 exports of services, 51
Economic Regulation, 138 external, 37, 45, 47, 51, 52, 59, 60
Economic Zones, 72, 73, 83 external debt, 47, 51, 59, 60
ecosystem profiling, 334 external debt-to-GDP ratio, 51
ecotourism, 328 external security, 299
education, 43, 49, 53, 54, 59, 60 Extractive Industry Transparency
Education For All, 177 Initiative, 328
e-governance services, 218
e-Government system, 165 F
e-Government Systems, 162
Electric Power Industry Reform fees and charges, 47, 49
Act, 50 financial markets, 45, 50, 52, 58, 59
electronic Prosecution Case Financial Sector Forum, 59
Management, 225 financial stability, 52, 59
electronics, 63, 67, 69, 73, 85, 89 fiscal, 36, 37, 39, 45, 46, 47, 48, 49, 50,
electronic waste, 330 52, 53, 54, 55, 56, 57, 58, 59
El Nio, 40 fiscal consolidation, 48, 52, 53
employment, 36, 42, 43, 44, 48, 58, 62, fiscal deficits, 45, 49
67, 68, 73, 74, 75, 76, 77, 79, 80, fiscal incentives, 53, 55
83, 85, 86, 88 fiscal policy, 36, 52
employment generation, 29 fiscal responsibility, 53
Enhanced Case Flow Management Fiscal Responsibility Bill, 55
(eCFM) System, 226 fiscal stimulus, 39
entrepreneurial culture, 63 Fiscal Year, 48
environmental governance, 332, 333 Fisheries and Aquatic Resources
environmental impact assessment, 304 Management Councils, 316
environmentally critical areas, 330 Fishery Code, 320
environmental safeguards, 314, 327 Flood and Drainage Management, 145
environment and natural resources, 25, flood management, 133, 134, 146, 147,
31 148
Environment and Natural Resources flood management infrastructure, 147
Framework Plan, 320 food security, 144
Environmental Impact Assessment forest cover, 307, 313, 323, 324
(EIA), 304, 331 forestland, 307, 314, 315, 320, 324, 327,
Environmental Management Bureau 328, 336
(EMB), 173 forest lands, 314
e-waste, 330, 334, 337 Forward Estimates, 54, 55
excise tax, 46, 54 Freedom of Information Act, 213
Exclusive Economic Zone, 293, 301 Functional Competency Development, 216
Executive and Legislative Advisory
& Consultative Council
(JELACC), 228
Index 405
G Gross National Product (GNP), 37, 40
gross international reserves, 51
Garments, 93 groundwater, 305, 306, 330
General Appropriations Act (GAA), 57 Guidelines and Procedures for
Gender Development Index, 214 entering into Joint Venture (JV)
gendered interests, 214 Agreements between Government
gender mainstreaming, 334 and Private Entities, 124
General Appropriations Act, 57
General Procurement Reform Act, 125 H
genetically-modified organisms, 325
geographic positioning system, 321 habitats, 307, 308, 315, 316, 325
geohazard mapping, 332 hazard identification, 331
Gini ratio, 21 hazard maps, 147
Global And Regional Integration, 98 hazardous waste generators, 173
global commodity, 52 hazardous wastes, 305, 313, 334, 337
Global Competitiveness Report, 63, 64 Hazardous wastes, 313
global crisis, 39 hazards, 310, 311, 312, 330, 331
global financial crisis, 39, 46, 50, 51, 52, health care wastes (HCW), 172, 173
59 Health Facility Enhancement
global information system, 321, 324 Program, 175, 176
Global Integrity Report, 211 higher education, 31
global recession, 39 Homestyle Products, 93
Government Owned and Controlled housing, 63, 91
Corporations (GOCC), 57, 58 human capital, 62, 63, 84, 92, 96
Good governance, 206 Human development, 25
governance, 22, 27, 62, 80 Hyogo Framework for Action, 318
Governance and Public Leadership, 216
Government Compensation and Position
I
Classification System, 209
Government Corporate Council, 58 inclusive growth, 26, 52, 80, 95
Government Integrated Financial Inclusive growth, 18
Management Information Induction Program, 216
System, 57, 220 industrial peace, 63
Government Procurement Policy industries with high growth
Board, 222 potential, 63
Government Quality Management industry, 62, 63, 67, 68, 69, 72, 73, 74,
Committee, 219 75, 76, 77, 78, 79, 80, 81, 82, 84,
Government Quality Management 85, 86, 88, 89, 90, 91, 92, 93, 94,
Program, 219 96, 97
Government Rationalization Program, 55 industry-cluster approach, 63
green architecture, 330 inflation, 37, 39, 45, 50, 51, 52, 57,
Greenhouse Gas, 322 58, 59
green house gas emissions, 330 Inflation, 46, 50, 57
greenhouse gasses emission, 323, 324 Information, education, and
Green ICT, 165, 168 communication, 142
Green Industry, 330 Information Systems Strategic
greening of industry, 329 Plan, 321
green jobs, 329 infrastructure, 26, 45, 48, 49, 52, 53,
Gross Domestic Product (GDP), 36, 37, 54, 55, 56, 59, 60, 63, 64, 65, 70,
38, 39, 40, 46, 47, 48, 50, 51, 53, 54, 80, 83, 86, 87, 88, 89, 92, 97, 98,
57, 62, 64, 68, 69 100
Inmate Information System, 226
institutions, 22

integrated coastal management, 316, (JSCC), 228
326 justice system infrastructure, 225
Integrated Coastal Resources
Management Project, 321 K
integrated ecosystem-based Katarungang Pambarangay Law, 228
management, 323
Integrated Water Resources Management L
(IWRM), 135, 139
Integrity Development Review, 224, Labor Force Survey (LFS), 38, 40, 41, 42
226 labor mismatch, 42
Integrity of the Judiciary, 226 ladderized HRD program, 216
Internal Control System, 56, 221 land-use mapping, 145
Internal Revenue Allotment, 48, 209 Lateral Attrition Law, 46, 53
internal security program, 294 learning-by-doing, 29
internal security system, 300 Level II (communal faucet system or
internal stability, 292, 298 standpost), 137
International Labor Organization, 40 Level III (waterworks system or individual
International Organization For household connections), 137
Standardization (ISO) Level I (point source), 137
Quality Management System Light Rail Transit Authority, 50
(QMS), 219 loan portfolio, 52
invasive alien species, 307 loan-to-value ratio, 52
investment, 50, 51, 52, 54, 58, 59, 60 Local Government Code, 320, 327
Investment Coordination Committee- Local Government Code of 1991, 319
Development Budget Local Government Unit (LGU), 147, 160,
Coordination Committee (ICC- 165, 169, 170, 171, 175, 177, 179
DBCC), 57 logistics, 63, 66, 74, 92, 98, 100
investment promotion areas, 62, 83 Local Water Utilities Administration
investment ratio, 22 (LWUA), 137, 138
investments, 40, 62, 63, 64, 68, 69, 70,
71, 72, 73, 74, 80, 81, 82, 83, 84, M
86, 89, 90, 92, 96, 97, 99 macroeconomic stabilization, 45, 52
irrigable lands, 145 Macroprudential regulations, 52
irrigated agriculture, 143, 144 Magna Carta of Women, 316
irrigation, 133, 134, 142, 143, 144, mangrove, 307, 308, 313, 325, 326
145, 147 mangroves, 308, 326
irrigation management transfer Manila Bay Coastal Strategy Goal
(IMT), 145 2020, 329
irrigation service fees, 144 marine protected areas, 317, 337
irrigators associations, 144 Market Access, 98
irrigation service fee (ISF), 144, Materials Recovery Facilities, 170
145 materials recovery systems, 171
islands of good governance, 206 Medium-Term Expenditure Framework, 54
merchandise exports, 39, 51
Merchandise exports, 36
J Merchandise imports, 51
Joint Foreign Chambers of the Metropolitan Waterworks and Sewerage
Philippines, 221 SystemRegulatory Office, 137
Judiciary, 228 microfinance, 30
Judiciary Case Management micro, small, and medium enterprises, 63
System, 225 Millenium Challenge Corporation, 207
Justice Sector Coordinating Council Millenium Development Goals
(MDG), 19, 134, 135, 136, 137,
Index 407
138, 139, 140 National Sanitation Code, 141
Millenium Development Goal 7 (MDG national security, 292, 294
7), 134, 138 national sovereignty, 292
minimum wage, 50 National Telecommunications
mining, 63, 71, 82, 85, 90, 97, 308, 309, Commission, 160, 162, 167
310, 313, 314, 326, 327, 328, 335, National Transport Policy (NTP), 130,
336 131
Missionary areas, 156 National Transport Policy, 130
monetary, 36, 45, 50, 51, 52, 58, 59, 60 National Urban Development and
Monetary authorities, 50, 52, 58 Housing Framework, 174
monetary policy, 36, 45, 50, 51, 52, 58, 59 National Water Resources Board
Motor Vehicle Parts and Components, 93 (NWRB), 134, 135, 137, 138
Multi-Sectoral Anticorruption Council, 210 National Water Resources Board, 134
Municipal Development Fund Office, 138 National Water Resources Policy, 138
Metropolitan Waterworks and Sewerage National Wetlands Action Plan for the
System (MWSS), 137, 138, 141 Philippines, 315
National Wildlife Research
N Center, 335
Nagoya Protocol, 325 natural hazards, 310, 311
National Anticorruption Plan of National Ecology Center (NEC), 171
Action, 210 Next Wave Cities, 68, 89
National Biosafety Framework, 325 O
National Brand and Identity Awareness, 62
National Capital Region (NCR), 163, 170, Official development assistance, 141
172, 174, 176 one-stop shops, 215
National Citizen Satisfaction Index, 219 open defecation, 140, 141, 142
National Commission on Indigenous Open defecation, 141
Peoples, 324 open for business, 82, 83
National Consumer Affairs Council, 79 Organizational Performance Indicator
National Environmental Awareness and Framework, 55
Education Act of 2008, 318 Organizational Performance Indicators
National Food Authority (NFA), 50 Framework, 217
National Framework Strategy on Climate Overseas Filipino remittances, 51
Change, 316, 317, 318, 323
National Government (NG), 46, 47, 48, 49, P
53, 56, 57, 60 Paper on Budget Strategy, 54
National Government Agency (NGA), 123, part-time workers, 42
136, 142, 163, 164, 165, 168, 169 Patubigayan Trust Fund, 145
NG deficit, 48, 53 Payapa at Masaganang Pamayanan
National Health Insurance Program, 29 Program (PAMANA), 296
National Integrated Protected Areas pay-as-you-pollute, 330
System, 315 Payment for Environmental Services
National Irrigation Administration (PES), 324, 325, 335
(NIA), 143, 144, 145 peace process, 292, 293, 294, 295, 296
National Irrigation Authority, 143 Peoples Survival Fund, 336
National Irrigation Management Fund, 144 per capita income, 32
National Irrigation Systems (NIS), 145 Performance Management
national irrigation systems, 143 System, 217
National Justice Information System, 223 peso, 50, 51
National Power Corporation, 50 Philippine Agenda 21, 323
National Quality Infrastructure, 96 Philippine Amusement and Gaming
National Renewable Energy Program, 151, Corporation, 175, 177
157

Philippine Charity Sweepstakes public order and safety, 294, 298, 299
Office, 175, 177 public-private partnership, 26
Philippine Disaster Risk Reduction and Public-Private Partnership, 83
Management Act of 2010, 317, public procurement, 27
318
Philippine Ecological Solid Waste
Management Act of 2000, 169 R
Philippine Economic Zone RA 7718, 124
Authority, 71, 72, 73 RA 9003, 313, 330
Philippine Fisheries Code of RA 9710, 316
1998, 320, 337 RA 9729, 317, 318
Philippine Government Electronic rafflesia, 317
Procurement System, 55, 222 Ramsar Convention, 326
Philippine Inventory of Chemicals and RA No. 9003, 169
Chemical Substances, 173 rationalization, 27, 53
Philippine Strategy on Climate Change Rationalization Plan, 144, 210
Adaptation 2010, 146 real effective exchange rate, 51
Philippine Water Supply Sector Regional Development Councils, 58
Roadmap (PWSSR), 134, 137, reglementary period, 225
138, 139, 141 regulatory, 52, 59
policy interest rates, 50 Remittance, 40
policy rates, 39 remittances, 37, 39, 40, 50, 51, 59, 60
pollution control, 134 Remote area electrification, 157
potable water, 134, 138, 173, 175 Renewable Energy Act of 2008, 151
poverty, 19 research and development, 75, 81
poverty incidence, 20 Resource regulation, 139
Power Sector Assets and Liabilities resource valuation, 327, 335
Management Corporation, 50 Revenue effort, 46
PPP, 28, 58, 60, 123, 124, 125, 127, Risk Analysis and Management, 122
130, 132, 141, 142, 173, 175, 179 risk evaluation, 331
precautionary approach, 304 Risk transfer mechanisms, 319
price shocks, 52 rule of law, 206, 297, 300
Priority Chemical List, 173 Rules for Setting EC Wheeling Rates, 156
private irrigation systems, 143 Rural Health Units, 175
privatization, 48, 50
Procurement law, 221 S
Procurement Reforms, 55
productivity and efficiency, 62, 63, 79, saltwater intrusion, 306
84, 94 sanitation, 133, 134, 135, 136, 139, 140,
property-rights, 24 141, 142, 179
Property-rights, 26 Sanitation Code, 139, 141
prosecutors and judges, 227 Sanitation Code of 1975, 141
Protected Area Management science and technology, 31, 75, 98
Boards, 321 Science, Technology and Innovation, 95
protected areas, 307, 315, 316, 317, sea grasses, 326
320, 325, 331, 336, 337 sea-level rise, 308
Philippine Sustainable Sanitation Security Sector Reform and
Roadmap (PSSR), 141, 142 Modernization, 300
Public Financial Management, 57 self-employment, 30
public financial management (PFM) Self-sufficiency level, 148
system, 220 septage, 134, 139, 140, 141, 142
services, 62, 63, 64, 65, 66, 67, 68, 69, 71,
73, 74, 75, 77, 78, 79, 80, 82, 83, 84,
Index 409
85, 86, 87, 88, 89, 92, 94, 95, 96, 97, transparency, 62, 80, 83
98, 99, 100 Transparency Internationals Corruption
services sector, 3960, 40 Perception Index, 64
sewerage, 133, 134, 139, 140, 141, 142 Transport, Storage, Disposal, 172
shipbuilding, 63, 73, 92 tropical cyclones, 310
short-term external debt, 47, 51 typhoon Ondoy, 49
single, independent economic
regulator, 138, 142 U
single website/portal, 217 underemployment, 42, 43
single-window service channels, 216 Underemployment, 19
sin products, 46 unemployment, 38, 40, 41, 42, 43
social and economic services, 56 United Nations Convention against
social protection measures, 29 Corruption, 221
social services, 47, 49, 52, 54
solid waste, 305, 313, 321, 322, 330, 334, United Nations Framework
335 Convention on Climate
Sparkplugs for Governance and Economic Change (UNFCCC), 317,
Development, 208 321, 322
Strategic and Integrated HRD, 216 universal access, 160, 165, 166, 167,
Strategic National Action Plan on Disaster 168
Risk Reduction, 318 unpaid family workers, 42
streamlining bureaucratic procedures, 62 Updated National Wetland Action Plan
Subcommittee on Water Resources, 134 for the Philippines, 325
Subic Bay Regulatory Board, 137 urban parks, 330
Sulu-Celebes Seas, 316
Sulu-Sulawesi Marine Ecoregion, 316, 326 V
Supervisory Development, 216 value-added tax, 46
Supply Chains, 100 Value Engineering/Value Analysis, 122
sustainable development, 316, 317, 320, Verde Island Passage, 316, 317
332, 336 Vietnam, 54
sustainable environment, 134, 141 Volumetric (volume-based)
T pricing, 145
Vulnerabilities, 52
Tariff and Customs Code, 81 vulnerability assessment, 324, 331,
tax administration, 53 332
tax effort, 46, 53 Vulnerability assessments, 319
Tax effort, 46
tax reforms, 37, 46, 53 W
tax system, 53, 54 Warrant of Arrest Information
technical barriers, 65 System, 225
Ten-point Agenda, 80 waterless areas, 134, 137, 138
territorial integrity, 292, 293, 294, 298, 299 water pollution, 304, 329
Thailand, 54 Water Quality Management Fund, 329
total factor productivity, 32 water resource management, 305
tourism, 63, 67, 68, 69, 70, 74, 81, 82, 83, water resources, 133, 134, 135, 136,
84, 85, 86, 87, 88, 94, 95, 97, 98, 99 145, 305, 306
Toxic Substances and Hazardous and water-service providers, 136
Nuclear Waste Control Act of watershed management, 134, 146, 147
1990, 313 watersheds, 147, 305, 319, 322, 324
trade, 39, 40, 59 water supply, 123, 133, 134, 135, 136,
transcript of stenographic notes, 226

137, 138, 139, 140, 141, 142,
147, 172, 174
Wearables, 93
wetlands, 307, 323, 325
Whistleblower Protection Law, 223
World Health Organization/United
Nations Childrens Fund Joint
Monitoring Program on the
Millenium Development Goals
(WHO/UNICEF JMP on the
MDGs), 136, 139
wildlife, 308, 325, 327, 328
Wildlife Act, 322, 335
Women in Nation Building Act, 214
Workplace Basics, 216
World Bank, 134, 136
world-class forensic laboratories, 225
World Justice Project Rule of Law Index
2010, 211
Worldwide Governance Indicators, 206
Z
Zero-based budgeting (ZBB), 48, 56
Zero Backlog Project, 226
zero-based budgeting, 27, 218
Zero-Based Budgeting, 56
Index 411

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Philippine Development Plan

Philippine Development Plan 2011-2016 i

2011 by National Economic and Development Authority

This publication is printed on locally-sourced recycled paper using soy-based ink.

Philippine Development Plan 2011-2016

National Economic and Development Authority

Printed in the Philippines

ii Philippine Development Plan 2011-2016

List of Tables and Figures xiii

Chapter 1. In Pursuit of Inclusive Growth 17

What is Inclusive Growth 18

What Makes Inclusive Growth Elusive 21

How Shall We Achieve Inclusive Growth 26

How Shall We Monitor Progress Towards Inclusive Growth 32

Chapter 2. Macroeconomic Policy 35

Output and Employment 36

Economic Performance 2004-2010 36

Employment and Poverty 40

Fiscal and Monetary Sectors 45

Assessment and Challenges 45

Monetary and External Sectors 50

Monetary Policy and External Sector Reforms 58

Chapter 3. Competitive Industry and Services Sectors 61

Assessment and Challenges 63

Philippine Development Plan 2011-2016 iii

Micro, Small and Medium Enterprises (MSMEs) 74

Goal 1: Create a Better Business Environment 80

Goal 2: Action Agenda to Improve Productivity and Efficiency 84

Goal 3: Action Agenda to Enhance Consumer Welfare  99

Chapter 4. Competitive and Sustainable Agriculture and Fisheries Sector 101

Sector Performance 102

Strategic Framework 113

Goals and Strategies 113

Goal 1: Food Security Improved and Incomes Increased 113

Goal 2. Sector Resilience to Climate Change Risks Increased 116

Goal 3. Policy Environment and Governance Enhanced 118

Legislative Agenda 119

Chapter 5. Accelerating Infrastructure Development 121

Crosscutting Strategies 122

Assessment, Issues, and Challenges 125

Strategic Plan and Focus 130

iv Philippine Development Plan 2011-2016

Crosscutting Issues and Strategies in the Water Sector 134

Assessment, Issues, and Challenges 134

Strategic Plan and Focus 135

Water Supply 136

Sanitation, Sewerage, and Septage Management 139

Flood and Drainage Management 145

Assessment, Issues, and Challenges 148

Strategic Plan and Focus 157

Information and Communications Technology (ICT) Infrastructure 160

Assessment, Issues, and Challenges 160

Strategic Plan and Focus 165

Social Infrastructure 169

Waste Management 169

Solid Waste Management 169

Health Care Wastes 172

Toxic Chemicals and Hazardous Wastes 173

Health Facilities 175

Chapter 6. Towards a Resilient and Inclusive Financial System 181

Current Structure of the Financial System 183

Condition and Performance 187

Philippine Development Plan 2011-2016 v

Vision for the Financial Sector 192

List of Tables and Figures xiii

Chapter 1. In Pursuit of Inclusive Growth 17

What is Inclusive Growth 18

What Makes Inclusive Growth Elusive 21

How Shall We Achieve Inclusive Growth 26

How Shall We Monitor Progress Towards Inclusive Growth 32

Chapter 2. Macroeconomic Policy 35

Output and Employment 36

Economic Performance 2004-2010 36

Employment and Poverty 40

Fiscal and Monetary Sectors 45

Assessment and Challenges 45

Monetary and External Sectors 50

Monetary Policy and External Sector Reforms 58

Chapter 3. Competitive Industry and Services Sectors 61

Assessment and Challenges 63

Micro, Small and Medium Enterprises (MSMEs) 74

Goal 1: Create a Better Business Environment 80

Goal 2: Action Agenda to Improve Productivity and Efficiency 84

Goal 3: Action Agenda to Enhance Consumer Welfare 99

Chapter 4. Competitive and Sustainable Agriculture and Fisheries Sector 101

Sector Performance 102

Strategic Framework 113

Goals and Strategies 113

Goal 1: Food Security Improved and Incomes Increased 113

Goal 2. Sector Resilience to Climate Change Risks Increased 116

Goal 3. Policy Environment and Governance Enhanced 118

Legislative Agenda 119

Chapter 5. Accelerating Infrastructure Development 121

Crosscutting Strategies 122

Assessment, Issues, and Challenges 125

Strategic Plan and Focus 130

Crosscutting Issues and Strategies in the Water Sector 134

Assessment, Issues, and Challenges 134

Strategic Plan and Focus 135

Water Supply 136

Sanitation, Sewerage, and Septage Management 139

Flood and Drainage Management 145

Assessment, Issues, and Challenges 148

Strategic Plan and Focus 157

Information and Communications Technology (ICT) Infrastructure 160

Assessment, Issues, and Challenges 160

Strategic Plan and Focus 165

Social Infrastructure 169

Waste Management 169

Solid Waste Management 169

Health Care Wastes 172

Toxic Chemicals and Hazardous Wastes 173

Health Facilities 175

Chapter 6. Towards a Resilient and Inclusive Financial System 181

Current Structure of the Financial System 183

Condition and Performance 187

Vision for the Financial Sector 192

Medium-Term Development Plan for the Financial Sector (MTDPFS) 192

Key Reform Objectives and Targets 192

Specific Reform Strategies 192

Chapter 7. Good Governance and the Rule of Law 205

Assessment and Challenges 206

Public Service Delivery 208

Rule of Law 211

Citizens Participation 212

Political Processes and Systems 213

Gender Roles in Governance Structures 214

Strategic Framework 214

Curb Corruption Decisively 220

Strengthen the Rule of Law 225

Enhance Citizens Access to Information and Participation in Governance 229

Chapter 8. Social Development 231

Strategic Framework 254

Policies and Strategies 260

Legislative Agenda 279

Assessment and Challenges 292

Strategic Framework 294

Section 1. Winning the Peace 294

Section 2. Ensuring National Security 298

State of the Environment and Natural Resources 304

Policy Responses 313

Institutional Issues 320

Strategic Framework 323

Crosscutting Strategies 332