Philippine Development Plan 2011-2016

Philippine Development Plan 2011-2016 MIDTERM UPDATE With Revalidated Results Matrices Published by: National Economic and Development Authority 12 Escriva Drive, Ortigas Center, Pasig City Tel: +632 631 0945 to 56 info@neda.gov.ph ISSN: 2243-7576 Philippine Development Plan 2011-2016 MIDTERM UPDATE With Revalidated Results Matrices iPhilippine Development Plan 2011-2016 Philippine Development Plan 2011-2016 © 2014 by National Economic and Development Authority All rights reserved. Any part of this book may be used and reproduced, provided proper acknowledgement is made. Philippine Development Plan 2011-2016 Midterm Update Published by: National Economic and Development Authority 12 Escriva Drive, Ortigas Center, Pasig City Tel: (+632) 631 0945 to 56 Email: info@neda.gov.ph www.neda.gov.ph ISSN: 2243-7576 Printed in the Philippines VPhilippine Development Plan 2011-2016 MIDTERM UPDATE Three years ago, we launched the Philippine Development Plan 2011-2016. This was crafted as a comprehensive blueprint for our efforts to reduce poverty and to promote inclusive development. Since then, we have witnessed the gradual transformation of our country from an economic laggard to one of the fastest growing economies in the world; from one in severe debt and financial deficit to one with enough funds to implement beneficial programs and projects; and from an investment pariah to one that enjoys the confidence of the local and international business community. During the first half of my administration, significant gains were made in removing and prosecuting corrupt officials, opening up government and making it more participatory, and eliminating leakages in the system. These gains allowed us to spend more on things that redound to the benefit of our people: education, health, social services, and infrastructure. These also led to increasing investments in manufacturing, tourism, logistics, agribusiness, and other productive sectors, suggesting that quality employment will continue to increase in the future. Most importantly, these have allowed us to reestablish the trust that has now forged peace in Mindanao. We recognize that we still have so much more to do to ensure that growth benefits all Filipinos. We know that economic growth is essential, but we need to invest directly in health, education, and employment to enhance the power of growth to reduce poverty. This is why we are making every effort to ensure that the process of reducing inequality happens at a much faster rate; and that our programs and projects will have an immediate and palpable impact on our people’s lives. The Philippine Development Plan 2011-2016 Midterm Update is a comprehensive guide on how we will fulfill that commitment: by fine-tuning our strategies to unleash the potential of all sectors in the areas and communities where the poorest and most vulnerable are found. Our interventions are designed to address the specific constraints and challenges faced by each sector and locality, to enable people and communities in all parts of the country to reap the benefits of growth. The solutions to our country’s needs are not short-term remedies that deliver quick but temporary results. We are looking toward long-term changes in the very structure of our institutions, economy, and society, so that whatever gains from reforms and initiatives we achieve now will forge an enduring mainstream of opportunities, and continue to produce benefits for future generations of Filipinos. It will take a great deal of work and our collective willpower to get these done, and it will mean valuing prudence and long-term goal-setting over the myopia borne of political expediency. However, as long as we remain united, working together and complementing each other along the straight path, we will overcome any obstacles that may come our way towards an equitably progressive future. BENIGNO S. AQUINO III President Republic of the Philippines viii Philippine Development Plan 2011-2016 Th e Philippine record of socioeconomic development has been slow and below par in comparison with our Asian counterparts. Despite episodes of positive growth, the benefi ts have yet to be felt by the majority of Filipinos. My administration’s program of government, thus, seeks to reverse this situation. Th is 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 people’s 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 specifi c goals, objectives, strategies, programs and projects all the things that we want to accomplish in the medium term. Th rough 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 fi nancial sector and capital mobilization, improving access to quality social services, enhancing peace and security for development, and ensuring ecological integrity. Th e 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 fi nally fi nding their way out of poverty, inequality, and the poor state of human development. Foreword Message of the President VI Philippine Development Plan 2011-2016 MIDTERM UPDATE Message of the Secretary The first half of the Philippine Development Plan (PDP) 2011-2016 implementation saw major strides taken by the government to ensure that the goal of inclusive development is achieved. So far, our economic gains have been well within our Plan targets as we remain to be one of Asia’s top performers. Despite many challenges, including the natural disasters that recently visited the country, we managed to progress as a result of our strong macroeconomic fundamentals. Now, the government has considerable fiscal space for making investments to catalyze private ventures, provide public goods and services, as well as fund social programs all aimed at reducing poverty and creating opportunities for everyone. What we have achieved thus far warranted this government’s emphasis on good governance and macroeconomic and political stability as the platform for economic growth. Yet, we recognize the necessity to do more and accomplish more to ensure that our country’s economic progress is felt by all Filipinos. We acknowledge that economic growth is but an instrument, and that the real measure of progress is improvement in the lives of our people. Access to development opportunities is critical in this respect, and geography can either facilitate or obstruct such access. Thus, to ensure inclusivity, we need new approaches that are more responsive to the needs of sectors and areas where many of the poor are found so that they can contribute to, and benefit from, growth. The Philippine Development Plan 2011-2016 Midterm Update specifies indicators of efficiency and effectiveness to measure success. Primarily, it will measure accomplishments in terms of economic growth of an average of 7-8 percent until 2016, and reductions in unemployment to 6.5-6.7 percent and the incidence of income poverty to 18 to 20 percent in 2016. Also, the Updated Plan is committed to quality-of-life targets such as creating the conditions for productive and remunerative work and improving overall well-being. Specifically, the Plan aims to reduce underemployment to about 17 percent and to bring the incidence of multidimensional poverty down to 16-18 percent in 2016. Beyond income poverty, the Plan views poverty as deprivation in multiple dimensions, and thus approaches poverty reduction as also ensuring people’s access to health, education, water, sanitation, and secure shelter, among others. The multidimensional poverty index serves as a gauge for monitoring the outcomes of several human development strategies that can affect future income. The experiences of other countries have shown that it takes several years of continued economic growth—10 or 20 years, in most cases—to significantly reduce poverty. But it does not mean that we can do nothing but wait until the benefits of economic expansion “trickle down” to the poor. Instead, we are engaging in concerted efforts to remove the constraints experienced by the poor to enable them to take advantage of growth opportunities. Through the PDP 2011-2016 Midterm Update, we have realigned our strategies to craft and implement concrete solutions to the country’s problems. The government is determined to make the necessary institutional changes and innovations to deliver lasting results that are felt by the people, especially the poor. Inclusive growth requires concerted actions not only within government but also among citizens, private businesses, and international development partners. We hope that this Updated Plan will be instrumental in coordinating and complementing development efforts across the country, and will effectively serve its purpose as the nation’s roadmap to inclusive growth. ARSENIO M. BALISACAN Secretary of Socioeconomic Planning and NEDA Director-General Table of Contents VII Message of the President V Message of the Secretary VI Table of Contents VII List of Results Matrices (RM) and Annual Target Indicator Matrices XI List of Non-RM Tables, Figures and Boxes XIII List of Acronyms XVI Chapter 1. A roadmap to inclusive growth 1 Unfinished Business 3 Strategic Framework 6 PDP: 2011-2016 Midterm Update Targets 7 Economic growth 7 Employment 8 Poverty incidence 9 Sectoral Strategies 10 Industry and services 10 Agriculture 11 Spatial Considerations 12 Category 1 provinces 13 Category 2 provinces 14 Category 3 provinces 14 Crosscutting Strategies 18 Social development 18 Social protection 19 Infrastructure development 20 Financial inclusion 22 Environment and natural resources 23 Good governance 24 Stable national security 25 Macroeconomic stability 26 Plan Implementation 27 Chapter 2. Macroeconomic policy 29 I. Introduction 30 II. Accomplishment and Challenges 30 Sustainable fiscal sector 31 Resilient monetary and external sectors 35 III. Updated PDP Targets 39 Fiscal sector 39 Monetary and external sectors 40 IV. Strategic Framework 40 Subsector outcome A: Sustainable fiscal sector achieved 41 Subsector outcomes B and C: Resilient external sector maintained; 44 monetary and financial sector made resilient and inclusive V. Plan Implementation 46 Table of Contents Philippine Development Plan 2011-2016 MIDTERM UPDATEVIII Chapter 3. Competitive and innovative industry and services sectors 49 I. Introduction 50 II. Assessment and Challenges 51 Contribution to rapid growth 51 Contribution to inclusive growth 51 Investments 52 Business climate 53 Productivity and innovative capacity 55 Consumer welfare 55 Market access 56 III. Updated PDP Targets 57 IV. Strategic Framework 59 Key sectors and locations 59 Subsector outcome A: Business climate improved 62 Subsector outcome B: Productivity and innovative capacity increased 65 Subsector outcome C: Consumer welfare enhanced 67 Subsector outcome D: Market access expanded 69 V. Plan Implementation 70 Chapter 4. Competitive and sustainable agriculture and fisheries sector 73 I. Introduction 74 II. Assessment and Challenges 75 Assessment 75 Challenges 82 III. Updated Targets 88 IV. Strategic Framework 90 Sector outcome A: Productivity in A&F sector increased 91 Sector outcome B: Forward linkage with the I&S sectors increased 93 Sector outcome C: Sector resilience to climate change risks 95 Crosscutting strategies 96 V. Plan Implementation 99 Chapter 5. Resilient and inclusive financial system 103 I. Introduction 104 II. Accomplishments and Challenges 104 Managing external capital flows 105 Facilitating financial inclusion 107 III. Updated PDP Targets in the Philippine Financial System 112 IV. Strategic Framework 113 Strategy 1: Manage the capital inflows towards investments 113 in the productive sector Strategy 2: Build the needed financial market infrastructure 114 Strategy 3: Pursue the financial inclusion agenda 115 Policy and regulatory instruments 116 Legislative agenda 117 V. Plan Implementation 117 Table of Contents IX Chapter 6. Social development 119 I. Introduction 120 II. Challenges, Opportunities and Strategies 121 Sector outcome: Human capabilities improved 122 Subsector outcome A: Health and nutrition status improved 122 Subsector outcome B: Knowledge and skills enhanced 127 Sector outcome: Vulnerabilities reduced 135 Subsector outcome C: Social protection expanded 136 Subsector outcome D: Access to secure shelter expanded 141 III. Plan Implementation 146 Chapter 7. Good governance and the rule of law 149 I. Introduction 150 II. Assessment 150 III. Updated PDP Targets 152 IV. Strategic Framework 153 Subsector outcome A: Transparency, citizen’s participation 154 and accountability increased Subsector outcome B: Rule of law strengthened 167 V. Plan Implementation 172 Chapter 8. Peace and security 177 I. Introduction 178 II. Assessment Challenges and Opportunities 178 Winning the peace 179 Ensuring national security 183 III. Strategic Framework 187 Strategies on subsector outcome A: Winning the peace 187 Strategies on subsector outcome B: Ensuring national security 193 Legislative agenda 196 IV. Plan Implementation 198 Chapter 9. Sustainable and climate-resilient environment and natural resources 205 I. Introduction 206 II. Assessment Challenges and Opportunities 206 Vulnerability to climate change and natural disasters 206 Sustainable management of natural resources 208 Environmental quality 212 Challenges in the ENR sector 214 III. Strategic Framework and Updated Plan Targets 216 Subsector outcome A: Adaptive capacities of human communities improved 216 Subsector outcome B: Sustainably managed natural resources achieved 221 Subsector outcome C: Environmental quality improved for cleaner 226 and healthier environment Crosscutting strategies 230 Priority ENR legislations 231 IV. Plan Implementation 234 Philippine Development Plan 2011-2016 MIDTERM UPDATEX Chapter 10. Accelerating infrastructure development 239 I. Introduction 240 II. Assessment, Challenges and Opportunities 240 Increasing competitiveness and productivity of the industry, 241 services and agriculture sectors Equalizing development opportunities 245 Making governance effective and efficient 246 Stabilizing national security 247 Improving sustainability and climate-resiliency of the environment 248 III. Strategic Framework 248 Overall strategy 249 Intermediate outcome A: Competitiveness enhanced 250 and productivity increased in the industry, services and agriculture sectors Intermediate outcome B: Adequacy and accessibility of basic 259 infrastructure services enhanced, and infrastructure gaps in far-flung areas reduced Intermediate outcome C: Governance improved 261 Intermediate outcome D: Safer and more secured 263 environment created and sustained Intermediate outcome E. Environmental quality improved 264 IV. Plan Implementation 267 Bibliography 273 Glossary 279 Planning Committees 325 NEDA Board Members 337 NEDA Secretariat 338 NEDA Regional Offices 340 Index 341 Table of Contents XI List of Results Matrices (RM) and Annual Target Indicator Matrices Chapter 1. A roadmap to inclusive growth Table 1.2 GDP and sectoral growth rate targets, 2014-2016 (in %) 7 Table 1.3 Gross regional domestic product (GRDP) growth targets, 2014-2016 (in %) 8 Table 1.4 Employment targets, 2014-2016 9 Table 1.5 Poverty incidence targets, 2014-2016 (in % of population) 9 Chapter 2. Macroeconomic policy Table 2.5 Revalidated RM on macroeconomic policy (in %) 39 Table 2.7 Annual target indicator matrix on macroeconomic policy, 2013-2016 47 Chapter 3. Competitive and innovative industry and services sectors Table 3.2 Revalidated RM on competitive and innovative I&S sectors 58 Table 3.3 Annual target indicator matrix on competitive and innovative 71 I&S sectors, 2013-2016 Chapter 4. Competitive and sustainable agriculture and fisheries sector Table 4.8 Revalidated RM on competitive and sustainable A&F sector 88 Table 4.9 Annual target indicator matrix on competitive and sustainable 100 A&F sector, 2013-2016 Chapter 5. Resilient and inclusive financial system Table 5.2 Revalidated RM on resilient and inclusive financial system 112 Table 5.4 Annual target indicator matrix on resilient and inclusive financial 118 system, 2013-2016 Chapter 6. Social development Table 6.1 Revalidated RM on subsector outcome A: Health and nutrition status improved 123 Table 6.2 Revalidated RM on subsector outcome B: Knowledge and skills enhanced 128 Table 6.5 Revalidated RM on sector outcome on vulnerabilities reduced: 136 Subsector outcomes C (social protection expanded) and D (access to secure shelter expanded) Table 6.12 Annual target indicator matrix on social development, 2013-2016 146 Chapter 7. Good governance and the rule of law Table 7.3 Revalidated RM on good governance and the rule of law 152 Table 7.4 Revalidated RM under subsector outcome A on enhancing 155 access to information Table 7.5 Revalidated RM under subsector outcome A on fully engaging 157 and empowering the citizenry Table 7.6 Revalidated RM under subsector outcome A on strengthening performance 161 management and accountability measures Philippine Development Plan 2011-2016 MIDTERM UPDATEXII Table 7.7 Revalidated RM under subsector outcome B on improving 168 administration of justice Table 7.8 Revalidated RM under subsector outcome B on enhancing 171 economic justice Table 7.9 Annual target indicator matrix on good governance and the rule 173 of law, 2013-2016 Chapter 8. Peace and security Table 8.2 Revalidated RM on subsector outcome A and intermediate outcome 1 188 of peace and security Table 8.3 Revalidated RM on intermediate outcome 2 of peace and security 190 Table 8.4 Revalidated RM on subsector outcome B and intermediate 193 outcomes 3, 4 and 5 of peace and security Table 8.5 Annual target indicator matrix on peace and security, 2013-2016 198 Chapter 9. Sustainable and climate-resilient environment and natural resources Table 9.1 Revalidated RM on subsector outcome A: Adaptive capacities 218 of human communities improved Table 9.2 Revalidated RM on subsector outcome B: Sustainably managed 221 natural resources achieved Table 9.3 Revalidated results matrix (RM) on subsector outcome C: Environmental 227 quality improved for cleaner and healthier environment Table 9.4 Annual target indicator matrix on sustainable and climate-resilient 234 environment and natural resources, 2013-2016 Chapter 10. Accelerating infrastructure development Table 10.2 Revalidated RM on improving connectivity and efficiency among 252 urban centers, regional growth hubs Table 10.3 Revalidated RM on supporting agricultural production 254 Table 10.5 Revalidated RM on pursuing energy and water security 256 Table 10.6 Revalidated RM on improving access to and adequacy 260 of basic infrastructure services Table 10.7 Revalidated RM on addressing infrastructure gaps in far-flung areas 261 Table 10.8 Revalidated RM on providing safety and security measures 263 Table 10.9 Revalidated RM on improving wastewater and solid waste management 266 Table 10.10 Revalidated RM on supporting measures to improve air quality 267 Table 10.11 Annual target indicator matrix on accelerating infrastructure 267 development, 2013-2016 Table of Contents XIII List of Non-RM Tables, Figures and Boxes Chapter 1. A roadmap to inclusive growth Table 1.1 Philippine Development Plan 2011-2016 targets and 2012-2013 3 actual accomplishment Table 1.6 Category 1: Ten provinces with high magnitude of poor households, 2010 13 Table 1.7 Category 2: Ten provinces with highest poverty incidence based 14 on population, 2012 (in %) Table 1.8 Category 3: Thirty provinces exposed to multiple hazards, by region 15 Table 1.9 Coordination mechanism of Planning Committees 28 Figure 1.1 Updated Plan Strategic Framework 6 Figure 1.2 Map of Category 1-3 Provinces 16 Box 1.1 Measuring multidimensional poverty 5 Box 1.2 Major infrastructure projects to improve connectivity between 21 urban centers and regional growth hubs Chapter 2. Macroeconomic policy Table 2.1 PDP targets versus actual revenue indicators: 33 Ratio to GDP, 2010-H1 2013 (in %) Table 2.2 Tax and revenue effort of selected ASEAN countries: 33 Ratio to GDP, 2010-2012 (in %) Table 2.3 Sources and share of LGUs total current operating income, 2010-2012 34 Table 2.4 Performance of the monetary and external sectors, 2010-2013 35 Table 2.6 Summary of revenue enhancement measures 41 Figure 2.1 Results framework on macroeconomic policy 31 Figure 2.2 Share of sectoral spending to total budget, 2010-2013 (in %) 32 Figure 2.3 Year-on-year inflation for all and bottom 30% households, 36 2010-Q2 2013 (in %) Figure 2.4 Year-on-year inflation for NCR and AONCR, 2010-Q2 2013 (in %) 36 Figure 2.5 Balance of Payments, 2010 to 2013 (in billion US$) 37 Figure 2.6 Gross International Reserves (GIR) and reserve adequacy measures 38 Figure 2.7 Strategic framework on macroeconomic policy 40 Chapter 3. Competitive and innovative industry and services sectors Table 3.1 Total approved investments, 2010-H1 2013 (in million PhP) 53 Figure 3.1 Results framework on competitive and innovative I&S sectors 51 Figure 3.2 Strategic framework on competitive and innovative I&S sectors 59 Box 3.1 Improving government support to micro, small and medium 68 enterprises (MSMEs) Chapter 4. Competitive and sustainable agriculture and fisheries sector Table 4.1 A&F sector’s contribution to the economy, 2010-H1 2013 76 Table 4.2 Value and growth of top agricultural exports, 2011-2013 79 Table 4.3 A&F sector’s contribution to employment, 2011-H1 2013 80 Philippine Development Plan 2011-2016 MIDTERM UPDATEXIV Table 4.4 Average daily basic pay of wage and salary workers by major 80 industry group, 2011-Q1 2013 (in PhP) Table 4.5 Average value and share of international trade of agricultural products, 81 2010-2012 Table 4.6 Yield comparison of major food commodities in selected ASEAN 81 countries, 2010-2012 (in mt/ha) Table 4.7 CARPER targets and accomplishments, 2011-2012 84 Figure 4.1 Results framework on competitive and sustainable A&F sector 75 Figure 4.2 Average regional share to agricultural gross value added (GVA), 78 2011-2012, and agricultural land share to total agricultural land area Figure 4.3 Strategic framework on competitive and sustainable A&F sector 90 Box 4.1 The National Industry Cluster Capacity Enhancement Project: 94 Bolstering pilot industry clusters Box 4.2 Integrated Coconut Industry Poverty Reduction Roadmap: 97 Towards growth that reduces poverty Chapter 5. Resilient and inclusive financial system Table 5.1 Financial inclusion strategies 111 Table 5.3 Key components of financial market infrastructure 115 Figure 5.1 Results framework on resilient and inclusive financial system 105 Figure 5.2 Philippine Stock Exchange prices, 2013 105 Figure 5.3 Comparative trend in Asia credit default swap (Senior-5 year term), 106 2011-2013 Figure 5.4 Four-quarter moving average of net private capital flows as percentage 106 of gross domestic product, 1991-2011 (in %) Figure 5.5 Net private capital flows (as percentage of GDP; four-quarter moving average) 107 Figure 5.6 Geo-spatial distribution of unbanked and unserved municipalities 108 Figure 5.7 Strategic framework on resilient and inclusive financial system 113 Box 5.1 The prospects of the ASEAN integration 115 Chapter 6. Social development Table 6.3 Accomplishment (SY 2010-2011 to 2012-2013) and targets 130 (SY 2013-2014 and 2016) on key performance indicators for basic education, public and private Table 6.4 Backlogs (2010) and accomplishment on basic education critical resources 131 Table 6.6 Accomplishment (2011-2012) and targets (2011, 2012 and 2016) 138 on social protection indicators Table 6.7 Targets and accomplishment on National Shelter Program, 2011-2012 141 Table 6.8 Targets and accomplishment on indirect housing assistance through 142 private funds, 2011-2012 Table 6.9 Housing needs estimates by region, 2011-2016 (in number of households) 143 Table 6.10 Updated housing assistance targets, 2014-2016 143 Table 6.11 Updated indirect housing assistance targets, 2014-2016 144 Figure 6.1 Results and strategic framework on social development 121 Table of Contents XV Chapter 7. Good governance and the rule of law Table 7.1 Worldwide Governance Indicators, 2010-2012 151 Table 7.2 Global ranking of the Philippines in governance indices, 2010-2012 151 Figure 7.1 Results framework on good governance and the rule of law 151 Figure 7.2 Strategic framework on good governance and the rule of law 153 Chapter 8. Peace and security Table 8.1 PAMANA geographical zones 181 Figure 8.1 Results framework on peace and security 179 Chapter 9. Sustainable and climate-resilient environment and natural resources Figure 9.1 Results framework on sustainable and climate-resilient 207 environment and natural resources Figure 9.2 Climate change projects, 2020 and 2050 207 Figure 9.3 Estimated direct cost of damage to properties of natural disasters 208 by sector, 2000-2012 (in million PhP) Figure 9.4 Total suspended particles (TSP) level in Metro Manila 212 Figure 9.5 Strategic framework on sustainable and climate-resilient environment 217 and natural resources Figure 9.6 Protected areas with potential ecotourism benefits 226 Box 9.1 Damage and losses incurred from Typhoon Yolanda 209 Box Table 9.1.1 Damage and loss caused by typhoon Yolanda 209 Box 9.2 Ongoing CCA/M and DRRM programs and projects in the Philippines 220 Box Figure 9.2.1 Spatial distribution of CCA/M and DRRM programs and projects 220 Chapter 10. Accelerating infrastructure development Table 10.1 Ranking and status of the Philippines, 2010-2012, and selected 242 ASEAN countries, 2012, in key infrastructure indicators Table 10.4 Target capacity of committed and indicative private sector-initiated 254 power plant projects, 2013-2016 Figure 10.1 Results framework on accelerating infrastructure development 241 Figure 10.2 Strategic framework on accelerating infrastructure development 249 Figure 10.3 Infrastructure spending as component of capital outlay, 2012-2016 250 Box 10.1 Major infrastructure achievements in support of the productive sectors 244 Box 10.2 Innovation and growth corridors in Mindanao 251 Box 10.3 Major infrastructure projects to pursue energy and water security 256 Box 10.4 Priority infrastructure sector policies and laws 258 Box 10.5 Major infrastructure programs and projects to improve access 260 to and adequacy of basic infrastructure services Box 10.6 Major infrastructure interventions to improve environmental quality 264 Philippine Development Plan 2011-2016 MIDTERM UPDATEXVI List of Acronyms A&D Alienable and Disposable A&F Agriculture and Fisheries AARNR Agriculture, Agrarian Reform and Natural Resources ACPC Agricultural Credit and Policy Council ADB Asian Development Bank ADBP Average Daily Basic Pay ADDSP Angat Dam and Dyke Strengthening Project ADR Alternative Dispute Resolution ADSDPP Ancestral Domain Sustainable Development and Protection Plans AEC ASEAN Economic Community AFAB Authority of the Freeport Area of Bataan AFI Alliance for Financial Inclusion AFMA Agriculture and Fisheries Modernization Act AFP Armed Forces of the Philippines AFP IPSP AFP Internal Peace and Security Plan AGT Automated Guideway Transit AHEPP Angat Hydro Electric Power Plant AHFF Agriculture, Hunting, Forestry and Fishing AI Avian Influenza AIDS Acquired Immune Deficiency Syndrome ALDA ARC Level of Development Assessment ALI Agrarian Legal Implementation AMCFP Agro-Industry Modernization Credit and Financing Program AO Administrative Order AONCR Areas Outside National Capital Region APIS Annual Poverty Indicators Survey ARB Agrarian Reform Beneficiary ARC Agrarian Reform Communities ARMM Autonomous Region in Muslim Mindanao ARTA Anti-Red Tape Act ARTP Anti-Red Tape Program ASEAN Association of Southeast Asian Nations ASTHRDP Accelerated Science and Technology Human Resource Development Program ASTI Advanced Science and Technology Institute ATMs Automated Teller Machines BAI Bureau of Animal Industry Bangkoop Cooperative Bank Federation of the Philippines BAP Bankers Association of the Philippines BAS Bureau of Agricultural Statistics BEIS Basic Education Information System BESF Budget of Expenditures and Sources of Financing BFAR Bureau of Fisheries and Aquatic Resources BFP Bureau of Fire Protection BHS Barangay Health Station BI Bureau of Immigration BIR Bureau of Internal Revenue BLGF Bureau of Local Government and Finance BOC Bureau of Customs List of Acronyms XVII BOD Biochemical Oxygen Demand BOI Board of Investments BOP Balance of Payments BOT Build–Operate–Transfer BPAs Budget Partnership Agreements BPI Bureau of Plant and Industry BPLS Business Permits and Licensing System BPM Balance of Payments Manual BPM5 Balance of Payments Manual 5 BPO Business Process Outsourcing BSP Bangko Sentral ng Pilipinas BTr Bureau of the Treasury CADT Certificate of Ancestral Domain Title CALABARZON Region IV-A (Cavite, Laguna, Batangas, Rizal and Quezon) CALAX Cavite-Laguna Expressway CALT Certificate of Ancestral Land Title CAMANAVA Caloocan City, Malabon City, Navotas City, Valenzuela City CAP Country Action Plan CAR Cordillera Administrative Region CARAGA Region XIII (Agusan del Norte, Agusan del Sur, Dinagat Island, Surigao del Norte, Surigao del Sur) CARP Comprehensive Agrarian Reform Program CARPER Comprehensive Agrarian Reform Program-Extension with Reforms CAS Cabinet Assistance System CBA/CPLA Cordillera Bodong Administration/ Cordillera People’s Liberation Army CBEP Community-Based Employment Program CCA/M Climate Change Adaptation/ Mitigation CCAMC Climate Change Adaptation and Mitigation Cluster CCB Contact Center ng Bayan CCC Climate Change Commission CCs Citizen’s Charters or Cabinet Clusters CCT Conditional Cash Transfer CDC Clark Development Corporation CeC Community e-Center CESDP Career Executive Service Development Program CESO Career Executive Service Officer CEZA Cagayan Economic Zone Authority CFL Compact Fluorescent Lamps CGAC Coast Guard Action Center CHED Commission on Higher Education CIA Clark International Airport CISL Collective Investment Schemes Law CLLEX Central Luzon Link Expressway CLOA Certificate of Land Ownership Award CLUP Comprehensive Land Use Plan CMP Community Mortgage Program CMTA Customs Modernization and Tariff Act CMTS Cellular mobile telephone service CNFIDP Comprehensive National Fisheries Industry Development Plan CNIS Comprehensive National Industrial Strategy COA Commission on Audit COD Centers of Development COE Centers of Excellence COMELEC Commission on Elections CompR Completion Rate CONVERGE Convergence on National Value- Chain Enhancement for Rural Growth & Empowerment Philippine Development Plan 2011-2016 MIDTERM UPDATEXVIII CPA Citizens’ Participatory Audit CPEIR Climate Public Expenditure and Institutional Review CPP/NPA/NDF Communist Party of the Philippines/New People’s Army/National Democratic Front CPSD Consolidated Public Sector Deficit CSC Civil Service Commission CSCSE Citizen’s Satisfaction Center Seal of Excellence CSFs Credit Surety Funds CSIS Citizens’ Satisfaction Index System CSOs Civil Society Organizations CSR Cohort Survival Rate CTAs Court of Tax Appeals CTB Chamber of Thrift banks CTI Coral Triangle Initiative CY Crop year DA Department of Agriculture DAP Development Academy of the Philippines DAR Department of Agrarian Reform DBCC Development Budget Coordination Committee DBM Department of Budget and Management DBP Development Bank of the Philippines DBR Doing Business Report DENR Department of Environment and Natural Resources DepEd Department of Education DFA Department of Foreign Affairs DHUD Department of Housing and Urban Development DILG Department of the Interior and Local Government DOE Department of Energy DOF Department of Finance DOH Department of Health DOJ Department of Justice DOLE Department of Labor and Employment DOLE BLES Department of Labor and Employment-Bureau of Labor and Employment Statistics DOST Department of Science and Technology DOST PAGASA Department of Science and Technology-Philippine Atmospheric, Geophysical & Astronomical Services Administration DOT Department of Tourism DOTC Department of Transportation and Communications DPWH Department of Public Works and Highways DRRM Disaster Risk Reduction and Management DSR Debt Service Ratio DSS Decision Support System DSWD Department of Social Welfare and Development DTI Department of Trade and Industry DU Distribution Utility E2M electronic-to-mobile EBNRS Enhanced Business Name Registration System EBT Enterprise-Based Training Econ Cluster Economic Development Cluster e-Courts Electronic Court System Project EDC Export Development Council EFCOS Equipment of the Effective Flood Control Operation System e-GMP Electronic Government Master Plan List of Acronyms XIX EITI Extractive Industries Transparency Initiative EMB Environmental Management Bureau EMEAP Executives’ Meeting of East Asia Pacific Central Banks ENR Environment and Natural Resources EO Executive Order EODB Ease of Doing Business EOP End-of-Plan (Target) EPI Environmental Performance Index ERC Energy Regulatory Commission ERDT Engineering R&D and Technology ESWM Ecological Solid Waste Management e-TAILS Electronic Transparency and Accountability Initiative for Lump Sum Funds FAB Framework Agreement on Bangsamoro FAOSTAT Food and Agricultur Organization Statistical Databases FDA Food and Drug Administration FDI Foreign Direct Investments FDP Full Disclosure Policy FHS Family Health Survey FHSIS Field Health Service Information System FiT Feed-in-Tarrif FLEMMS Functional, Literacy, Education and Mass Media Survey FMD Foot and Mouth Disease FMR Farm to Market Roads FNRI Food and Nutrition Research Institute FOB Freight on Board FRIMP Flood Risk Management Project FRM Flood Risk Management FRS Fiscal Risk Statement FSAA Flag State Administration Advisory FSCC Financial Sector Coordinating Council FSF Financial Sector Forum FSSP Food Staples Self-Sufficiency Plan FTA Free Trade Agreement FTAA Financial or Technical Assistance Agreement FTP Financial Transactions Plan GAA General Appropriations Act GCG Governance Commission on GOCCs GCI Global Competitiveness Index GCR Global Competitiveness Report GDP Gross Domestic Product GFIs Government Financial Institutions GGACC Good Governance and Anti Corruption Cluster GGI Good Governance Index GHRIS Government Human Resource Information System GIFMIS Government Integrated Financial Management Information System GIR Gross International Reserves GMP Good Manufacturing Practice GOCCs Government-Owned and Controlled Corporations GPBP Grassroots Participatory Budgeting Process GQMC Government Quality Management Committee GQMP Government Quality Management Program GROWTH Gearing Rural Organizations for Wealth Creation Towards Household Income Improvement Project Philippine Development Plan 2011-2016 MIDTERM UPDATEXX GSIS Government Service Insurance System GVA Gross Value Added H2 Second half of the year HACCP Hazard Analysis Critical Control Point HDMF Home Development Mutual Fund HDPRC Human Development and Poverty Reduction Cabinet Cluster HEDP Household Electrification Development Plan HEI Higher Education Institution HGC Home Guaranty Corporation HIV Human immunodeficiency virus HLURB Housing and Land Use Regulatory Board HOJs Halls of Justice HRDP Human Resources Development Program HUC Highly Urbanized City HUDCC Housing and Urban Development Coordinating Council HVCDP High Value Crops Development Program I&S Industry and Services IATF Interagency Task Force IBP International Budget Partnership IC Insurance Commission ICC Indigenous Cultural Communities ICCA Indigenous Community Conserved Areas ICM Integrated Coastal Management ICT Information and Communications Technology ICTO Information and Communications Technology Office IDPs Internally-Displaced Persons IEC Information, Education and Communication IFC International Finance Corporation IFMA Integrated Forest Management Agreement IFRS International Financial Reporting Standards iGovPhil Integrated Government Philippines ILO International Labour Organization ILP Interruptible Load Program ILT Idle Land Tax IMF International Monetary Fund INFRACOM NEDA Board Committee on Infrastructure IP Indigenous People IPA Investment Promotion Agency IPCR Individual Performance Commitment and Review IPP Individually Paying Program IPs Indigenous Peoples IPSAS International Public Sector Accounting Standards IRA Internal Revenue Allotment IRBM Integrated River Basin Management IRR Implementing Rules and Regulations IRRBAAS Integrated Results and Risk Based Auditing Approach System ISF Informal Settler Families ISO International Organization for Standardization ISP Investment Support Program IT-BPM Information Technology-Business Process Management ITP-PGS Integrated Transformation Program-Performance Governance System ITR Income Tax Return ITU International Telecommunication Union IWRM Integrated Water Resources Management List of Acronyms XXI JICA Japan International Cooperation Agency JPSCC Joint Peace and Security Coordinating Committee JRC Justice Research Center JSCC Justice Sector Coordinating Council KG Kilogram KM Knowledge Management KP Kalusugan Pangkalahatan KRA Key Result Area KTOE kilo tons oil equivalent LAD Land Acquisition and Distribution LBP Landbank of the Philippines LCA Local Conservation Area LCC Low Cost Carrier LDC Livestock Development Council LFS Labor Force Survey LGC Local Government Code LGU(s) Local Government Unit(s) LLDA Laguna Lake Development Authority LMS Land Management Sector LPRAPs Local Poverty Reduction Action Plans LRA Land Registration Authority LRT Light Rail Transit LSBs Local Special Bodies LSDF Land Sector Development Framework MA Master’s Degree MAPALLA Manila Bay-Pasig/Marikina River-Laguna Lake MARINA Maritime Industry Authority MARP Most-at-risk population MBOs Micro Banking Offices Mbps Million bits per second MC Memorandum Circular MCAP Market Capitalization MDG(s) Millennium Development Goal(s) MDGF Millennium Development Goal Fund MDGFAF Millennium Development Goal Achievement Fund MFIs Microfinance Institutions MICC Mining Industry Coordinating Council MICE Meetings, Incentive Travel, Conventions, Exhibitions/ Events MILF Moro Islamic Liberation Front MIMAROPA Mindoro Occidental, Mindoro Oriental, Marinduque, Romblon, Palawan MITHI Medium-Term ICT Harmonization Initiative MMDA Metropolitan Manila Development Authority MMR Maternal Mortality Ratio MNLF Moro National Liberation Front MPA Marine Protected Area MPS Mean Percentage Score MRF(s) Materials Recovery Facility(ies) MRP Manufacturing Revival Program MRRS Monitoring, Reporting and Response System MRT Metro Rail Transit MSME Micro, Small and Medium Enterprise MT Metric tons MW Megawatts NAB New Arrangements to Borrow NAMRIA National Mapping and Resource Information Authority NAP National Action Plan on Women, Peace and Security NAPC National Anti-Poverty Commission NAT National Achievement Test Philippine Development Plan 2011-2016 MIDTERM UPDATEXXII NBI National Bureau of Investigation NCC National Competitiveness Council NCIP National Commission on Indigenous Peoples NCR National Capital Region NDRRMC National Disaster Risk Reduction and Management Council NDRRMF National Disaster Risk Reduction and Management Fund NEA National Electrification Administration NEDA National Economic and Development Authority NEECP National Energy Efficiency and Conservation Program NER Net Enrolment Rate NEST National Environmentally Sustainable Transport NETRC National Education Testing and Research Center NFA National Food Authority NG National Government NGAs National Government Agencies NGO(s) Non-Governmental Organization(s) NGP National Greening Program NHA National Housing Authority NHIP National Health Insurance Program NHMFC National Home Mortgage Finance Corporation NHTS-PR National Household Targeting System for Poverty Reduction NIA National Income Accounts NICCEP National Industry Cluster Capacity Enhancement Project NIPAS National Integrated Protected Areas System NJIS National Justice Information System NLA National Leadership’s Agenda NLUC National Land Use Committee NNS National Nutrition Survey NOAH Nationwide Operational Assessment of Hazards NPC National Power Corporation NPS National Payroll System NQI National Quality Infrastructure NSCB National Statistical Coordination Board NSO National Statistics Office NSP National Shelter Program NSSMP National Sewerage and Septage Management Program NSWMC National Solid Waste Management Commission NTC National Telecommunications Commission NTDP National Tourism Development Plan NTESDP National Technical Education and Skills Development Plan NWRB National Water Resources Board OADR Office for Alternative Dispute Resolution OBI Open Budget Index OC Office for Competition ODA Official Development Assistance ODP Open Data Portal OECD Organization for Economic Cooperation and Development OFs Overseas Filipinos OFWs Overseas Filipino Workers OGP Open Government Partnership OMB Optical Media Board OMB Office of the Ombudsman OPCR Office Performance Commitment and Review OPIF Organizational Performance Indicator Framework List of Acronyms XXIII OPSD Outstanding Public Sector Debt OTS Office of Transport Security PAGASA Philippine Atmospheric, Geophysical and Astronomical Services Administration Pag-IBIG Pagtutulungan sa Kinabukasan: Ikaw, Bangko, Industriya at Gobyerno (Home Development Mutual Fund) PAMANA Payapa at Masaganang Pamayanan PAP Programs, Activities and Projects PAs Protected Areas PAWB Protected Areas and Wildlife Bureau PBB Performance-Based Bonus PBIS Performance-Based Incentives System PBR Philippine Business Registry PCA Philippine Coconut Authority PCF Performance Challenge Fund PCFC People’s Credit and Finance Corporation PCG Philippine Coast Guard PCIC Philippine Crop Insurance Corporation PCM Provinces, cities and municipalities PCOS Precint Count Optical Scan PD Presidential Decree PDEA Philippine Drug Enforcement Agency PDF Philippine Development Forum PDIC Philippine Deposit Insurance Corporation PDP Philippine Development Plan PEDP Philippine Export Development Plan PEI Productivity Enhancement Incentive PESOs Public Employment Service Offices PEZA Philippine Economic Zone Authority PFM Public Financial Management PH or PHL Republic of the Philippines (DFA Protocol) PhD Doctor of Philosophy PhilGEPS Philippine Government Electronic Procurement System PhilHealth Philippine Health Insurance Corporation Philmech Philippine Center for Postharvest Development and Mechanization PhP Philippine Peso PIDS Philippine Institute for Development Studies PM Particulate Matter PMC Philippine Mediation Center PMDP Public Management Development Program PNP Philippine National Police PNP-FED Philippine National Police Firearms Explosive Division PPP Public-Private Partnership PPSAS Philippine Public Sector Accounting Standards PQA Philippine Quality Awards PQF Philippine Qualifications Framework PRC Professional Regulation Commission PRMF Provincial Road Management Facility Project SHINE Strengthening High-level commitment for Integrity initiatives and Nurturing collective action of Enterprise Project PSA Philippine Statistics Authority PSE Philippine Stock Exchange PSF People’s Survival Fund PSHS Philippine Science High School Philippine Development Plan 2011-2016 MIDTERM UPDATEXXIV PSIP PPP for School Infrastructure Project PWD Persons with disability Q1 First quarter of the year Q2 Second quarter of the year Q3 Third quarter of the year Q4 Fourth quarter of the year QC Quezon City QMS Quality Management Systems QMSC Quality Management Systems Certifications R&D Research and Development RA Republic Act RASCALD Rapid Assessment and Seminar on Case Analysis and Legal Draftsmanship RATE Run After Tax Evaders RATS Run After The Smugglers RBAP Rural Bankers Association of the Philippines RBPMS Results-Based Performance Management System RCS Report Card Survey RD&E Research Development and Extension RDCs Regional Development Councils RE Renewable Energy REDD Reducing Emissions from Deforestation and Forest Degradation REIT Amendments to the Real Estate Investment Trust Law RHU Rural Health Unit RIPS Revenue Integrity Protection Service RM Results Matrix RORO Roll-On/Roll-Off RPM-P/RPA/ABB Rebolusyonaryong Partidong Manggagawang Pilipinas/ Revolutionary Proletarian Army/Alex Boncayao Brigade RSBSA Registry System for Basic Sectors in Agriculture SALINTUBIG Sagana at Ligtas na Tubig sa Lahat SBMA Subic Bay Metropolitan Authority SC Supreme Court SCMB Subic-Clark-Manila-Batangas SDC Social Development Committee SDEP Service Delivery Excellence Program SDP Stimulus Development Plan SEA-K Self-Employment Assistance for Kaunlaran SEC Securities and Exchange Commission SEnA Single Entry Approach Program SETUP Small Enterprise Technology Upgrading Program SGH Seal of Good Housekeeping SGISM Shared Government Information System on Migration SGLG Seal of Good Local Governance (formerly SGH) SHFC Social Housing Finance Corporation SJPC Security, Justice and Peace Cluster SLF Sanitary Landfills SLM Sustainable Land Management SME Small and Medium Enterprises SOCCSKSARGEN South Cotabato, Cotabato, Sultan Kudarat, Sarangani, General Santos City SP Social Protection SPMS Strategic Performance Management System SPUG Small Power Utilities Group SRA Sugar Regulatory Administration SRS Skills Registry System SSF Shared Service Facility SSS Social Security System List of Acronyms XXV STCW Standards of Training, Certification & Watchkeeping STI Science Technology and Innovation SUC(s) State Universities and College(s) SWM Solid Waste Management SWS Social Weather Station TA Technical Assistance TB Tuberculosis TESDA Technical Education and Skills Development Authority TPA Terrestrial Protected Areas TSA Treasury Single Account TSP Total Suspended Particulates TVET Technical Vocational Education and Training TVI Technical Vocational Institutions TVWS Television White Space UACS Unified Account Code Structures UHC Universal Health Care ULAP Union of Local Authorities in the Philippines UN United Nations UNCAC United Nations Convention Against Corruption UNCLOS UN Convention on the Law of the Sea UNCTAD United Nations Conference on Trade and Development UNEP United Nations Environment Programme VA Vulnerability Assessment VE/VA Value Engineering/Value Analysis WatSan Water and Sanitation WAVES Wealth Accounting and Valuation of Ecosystem Services WB World Bank WB-IFC World Bank-International Finance Corporation WC-FSL Working Committee on Financial Services Liberalization WCMC World Commission Monitoring Center WEF World Economic Forum WGI Worldwide Governance Indicators WSS Water Supply and Sanitation WTO World Trade Organization ZamBaSulTa Zamboanga del Norte, Zamboanga del Sur, Zamboanga Sibugay, Basilan, Sulu and Tawi-Tawi ZBB Zero Based Budgeting 1A roadmap to inclusive growth 1A roadmapto inclusivegrowth 2 Philippine Development Plan 2011-2016 MIDTERM UPDATE A roadmap to inclusive growth “Undeniable is the fact that some hopeful conditions have emerged, and that economic and political opportunities now exist for a real change...” —Philippine Development Plan 2011-2016 (p. 32) Since the unveiling of the Philippine Development Plan 2011-2016 (PDP) three years ago, the conditions favoring a departure from the country’s perennial situation of poverty, inequity, and lagging development have continued to hold, if not gotten better. First, evidence of robust economic performance is strong halfway into the current Plan period. The country has achieved remarkable progress in sustaining its growth momentum, even exceeding Plan growth targets. Unperturbed by the slump in the major economies in the western hemisphere, the economy grew robustly in 2012 to 2013 supported by low and stable inflation, a sound financial system, and a sustainable fiscal and external position. With at least 7 percent gross domestic product (GDP) growth for five consecutive quarters, the Philippines has emerged as one of the best performers among Asian economies in the current period. Second, the government has considerable fiscal space to finance new initiatives and expand existing ones on account of recent reforms in tax collection, revenue administration, and expenditure management. While economic managers will have to continue exercising prudence in public spending, government has ample elbow room for making investments to catalyze private ventures, provide public goods and fund social programs. Third, the country enjoys an unprecedented level of confidence among the international business community. The investment grade status accorded by the three major credit rating agencies (Fitch, Standard and Poors, and Moody’s) in 2013 and the improved rankings recently obtained by the country in several global competitiveness reports1 reflect the renewed business confidence and only reinforce the increasing attractiveness of the Philippines as an investment destination. Finally, with its legitimacy never in doubt, the present government is in a position to institute wide-ranging economic and social reforms in pursuit of inclusive development. The passage of two important pieces of long-pending legislation— one restructuring taxes on tobacco and alcohol, and the other providing mechanisms for households to manage family size—attest to the political capital of the current 1 These include the International Finance Corporation’s (IFC) Ease of Doing Business Report, Institute of Management Development’s (IMD) World Competitiveness Report, Transparency International’s Corruption Perceptions Index, The Heritage Foundation’s Economic Freedom Index, The World Economic Forum’s (WEF) Global Competitiveness Index and Travel and Tourism Report, and the World Intellectual Property Organization’s Global Innovation Index (Source: National Competitiveness Council). 3A roadmap to inclusive growth Table 1.1. Philippine Development Plan 2011-2016 targets and 2012-2013 actual accomplishment Indicators Target 2012-2013 Accomplishment Real gross domestic product (GDP) annual growth rate 7-8% 7.2% (2013) 6.8% (2012) Investment-to-GDP ratio 22% 21.1% (2013) 20.3% (2012) Unemployment rate 6.8-7.2% 7.1% (2013)* 7.0% (2012) Poverty incidence based on population 16.6% 25.2% (2012) * Average from January, July, April and October 2013 Labor Force Survey (LFS) rounds. The October 2013 round excludes Leyte because of loss of data due to typhoon Yolanda. The rates shown however are still comparable. To be sure, poverty reduction is a long-term program that requires uninterrupted growth over a reasonable length of time. The experiences of other countries clearly demonstrate that rapid and sustained growth over a period of eight to 10 years is necessary in order to make a significant dent on poverty. This has not been the case for the Philippines whose past growth has been characterized by alternating episodes of boom and bust. But it is not just the short period of relatively high growth experienced thus far that explains why “not all boats have been lifted by the rising tide.” It is also the consumption-driven nature of the growth that has administration, which can be harnessed to advance fundamental, even if politically controversial, reforms. Despite persistent challenges, the administration’s commitment to good governance has restored credibility in government institutions with the President as Chief Executive continuing to enjoy a high satisfaction rating among the general public. UNFINISHED BUSINESS Notwithstanding gains achieved in the areas of economy and governance, there is a growing sense among the public that progress has been too slow even in relation to the government’s own pronouncements. Witness only the critical commentaries aired in various fora pertaining to delays in the implementation of vital infrastructure projects, or the incessant complaints regarding the stubbornly high cost of doing business in the country. Still, a more serious criticism is that the benefits of growth have not been broadly shared among the population. Of the country’s 17 regions, three account for close to two-thirds of GDP. Poverty incidence has declined only marginally between 2009 and 2012, with about a quarter of the population considered income poor. Employment has not grown fast enough and nearly a fifth of the employed want additional work. And agrarian reform, still the country’s boldest attempt at asset reform, remains to be completed. Thus, when viewed against the promise of inclusive growth, the achievements do not seem to amount to much. Simply stated, the gains have yet to materialize into actual, tangible improvements in the lives of the majority of the people. 4 Philippine Development Plan 2011-2016 MIDTERM UPDATE tended to limit its beneficial impact, primarily on employment and incomes. Thus, a re-balancing of the economy towards greater investments is in order even as the growth momentum must be sustained. Concomitant with sustained economic growth is the need to continually nurture credible and effective institutions to enforce the rule of law and guarantee a stable and predictable investment climate. Transparency and accountability in government transactions cement public trust in the state bureaucracy and in the seriousness of government’s efforts to address long-standing problems of poverty and inequity. In contrast, bad governance inhibits investment and constrains growth; corruption exacerbates poverty and inequality, undermines the social fabric, and leads to political instability which makes poor economic performance and poverty mutually reinforcing. Indeed, an important lesson derived from the first three years of Plan implementation is that good governance is an effective platform for implementing development strategies. The problem is that both economic growth and good governance cannot by themselves reduce poverty, let alone provide immediate relief from it. That is, while strategically necessary for poverty reduction, they are not sufficient. As the example of India shows, even two decades of rapid growth will not guarantee a significant decline in poverty incidence. Other factors must be present that will increase the likelihood of more people partaking of the benefits of growth sooner rather than later through improved access to the available opportunities. Access, however, has a spatial dimension, and the degree to which people can benefit from the opportunities allowed by economic progress depends upon how the limits imposed by geography can be overcome. This does not imply the tried-tested and-failed policy of uniformly dispersing production across space in the mistaken belief that growth will be more evenly distributed and thus more equitable. On the contrary, spatially uneven and unbalanced growth need not be an impediment to the equalization of opportunities across space (Philippine Human Development Report [PHDR], 2013). Lagging areas can be linked with leading ones through connective infrastructure and human capital investments. Small agricultural producers in rural communities can be encouraged to engage in higher value-adding activities by linking them to the supply chain of major economic players in urban or national markets who have access to capital, technology, and market information. By lowering mobility costs for goods and people, infrastructure investments reduce the distance between people and economic opportunities. Likewise investments in education and health that build human capabilities regardless of location allow people to easily move to wherever the opportunities might be. National and local governments, as well as civil society and people’s organizations, can play a facilitative role in linking small producers with major market players that are connected to the larger end-user market, whether domestic or overseas. An important implication of considering space is the necessity to change mind sets from a one-size-fits-all approach to planning and programming to one that is more sensitive to diverse local conditions and needs. This requires discarding “business as usual” where interdependent interventions are carried out as disparate, Good governance is an effective platform for implementing development strategies. 5A roadmap to inclusive growth parallel activities by several national line agencies, or programs within a line agency (PHDR, 2013). Spatial consideration in planning, moreover, requires geographical convergence of plans, programs and activities among national government agencies and between national government agencies and local government units (LGUs) to maximize effectiveness. This is already happening to some extent but considerable scope remains for replication in various contexts. For example, with the Department of Agrarian Reform’s (DAR) program for agrarian reform communities (ARCs), the Departments of Agriculture (DA), Environment and Natural Resources (DENR) and LGUs respectively contribute for the roads and irrigation, watershed protection services, and extension services to make the land productive, while DAR and, subsequently, government financial institutions support the farmers’ organizations in financing the requirements for their enterprises. In addition, the DAR and Department of Trade and Industry (DTI) bring together ARCs, often from contiguous towns, to negotiate supply contracts with businesses downstream, in the process reducing transaction costs and facilitating commerce. The challenge for the remainder of the Plan period, therefore, is to ensure that economic growth will be sustained, and that, moreover, it is inclusive; that is, it will result in greater job creation of the productive and remunerative kind and lead to the reduction of poverty in its multiple dimensions (Box 1.1). As in the original Plan, the PDP: 2011-2016 Midterm Update (also referred to as the Plan) will continue to give priority to addressing the infrastructure backlog and investing in human capital. But for the Plan to have an immediate and palpable impact on the population, key growth strategies will need to be informed by geographical and sectoral specificities, as different sectors or groups of the population are differently situated and respond differently to interventions based on their geography, which in the Philippines is unusually diverse, fragmented, and hazard-prone (PHDR, 2013). Box 1.1. Measuring multidimensional poverty Poverty is a state of being deprived of goods and services necessary for basic functioning. This is manifested in several dimensions: lack of education, insufficient nutrition and poor health, inadequate living standard (e.g. no access to clean water and sanitation facilities, electricity, poor quality of housing, etc.), lack of income, social exclusion, disempowerment, unstable and poor quality of work/employment, and threat of violence. In the Philippines, the state of being poor is proxied by current income. But given the inherent shortcomings of income measurement and the imperfections in the financial market, current income is not a sufficient indicator of the state of poverty. The Oxford Poverty and Human Development Initiative (2013) also observed that while this method is very simple and easier to analyze, it does not provide an incentive to reduce the deprivations of the poorest of the poor, nor can it be broken down by dimensions to show how people are poor. A multidimensional measure involving several information/indicators to capture the complexity of poverty can better inform policies to effectively formulate a poverty reduction strategy. In 2007, a new method called Alkire Foster (AF) was devised to measure multidimensional poverty. It still uses a counting approach to distinguish the poor households but now considers several factors that show poor people’s experience of deprivation. The new approach shows societal poverty in a way that can be broken down by dimension and is able to identify how people are poor. Balisacan (2011) applies the AF methodology in the Philippines and estimates the incidence of multidimensional poverty in 2008 using the Annual Poverty Indicator Survey at 28.2 percent. Disaggregating this number into specific deprivation, the study finds that deprivation in amenities characterizes this deprivation, followed by deprivation in health. 6 Philippine Development Plan 2011-2016 MIDTERM UPDATE STRATEGIC FRAMEWORK Figure 1.1 shows the overarching strategic framework of the Updated Plan, with inclusive growth—defined as poverty reduction in multiple dimensions and massive creation of quality employment—as the desired outcome. For job creation, capital accumulation is necessary. Investment must continually rise for the economy to grow and absorb labor into productive jobs. Being a bet on the future, investment requires a stable and predictable market environment. Macroeconomic stability, supported by sound monetary and fiscal policy, a strong financial system, and healthy external sector, is thus essential to maintaining positive consumer and business expectations about the future. Financial markets also tend to look more favorably at countries whose macroeconomic house is in order. The performance of the production sectors (i.e. agriculture, industry, and services) is, of course, a critical determinant of the economy’s growth potential and its ability to create jobs. In part this is influenced by macroeconomic policy, but sector-specific policies (e.g. fiscal incentives, credit subsidies) and other crosscutting measures (e.g. labor market regulations and policies towards foreign direct investments) also affect competitiveness. Of special importance in raising productivity and expanding the range of products and services produced in the economy is private investment in research and development (R&D), which government can influence through its science and technology policy. The state of the country’s infrastructure (roads, ports, airports, telecommunications, transportation, etc.) and the availability of a healthy, highly trainable and skilled labor force are similarly important factors bearing on the cost of doing business. Circumscribing the above are the quality of governance, the natural environment, and national security, all of which exert a profound influence on the economy’s productive potential. Figure 1.1. Updated Plan strategic framework 7A roadmap to inclusive growth The service sector is expected to remain robust during the Plan period. Real estate, renting and business activities, which include the information technology business process management (IT-BPM) sector, are targeted to grow by an average of 9 percent beginning 2015, together with the expected economic recovery in Indicators Baseline (2012) Annual Plan targets 2014 2015 2016 GDP 6.8 6.5-7.5 7.0-8.0 7.5-8.5 Gross value added (GVA) in agriculture, hunting, fishery and forestry 2.8 (0.9)-0.1 2.0-3.0 2.5-3.5 GVA in industry 6.8 9.8-11.0 8.6-9.7 9.3-10.3 GVA in services 7.6 6.0-6.9 6.8-7.8 7.2-8.1 Table 1.2. Gross domestic product (GDP) and sectoral growth rate targets, 2014-2016 (in %) However, getting all the prerequisites for rapid and sustained growth right is not sufficient for growth to be inclusive. Some individuals may be able to benefit neither immediately nor at all from economic growth because of sickness, physical disability, age, lack of education, location, or some natural or social barriers. In these instances, inclusivity calls for more deliberate state action so that any disadvantage owing to circumstance does not hinder a person from gaining access to available opportunities to improve his or her lot. It is in this sense that inclusive growth is about equalizing opportunities, rather than outcomes. PDP: 2011-2016 MIDTERM UPDATE TARGETS The economy is targeted to track a higher growth path during the period 2014 to 2016. Employment rate is expected to increase to 93.3-93.5 percent and incidence of income poverty to be reduced to 18.0-20 percent. The updated Plan also includes as desired outcome the reduction of multidimensional poverty incidence, from 28.2 percent in 2008 to 16-18 percent by 2016. Economic growth GDP is targeted to grow by 6.5 to 7.5 percent in 2014, 7 to 8 percent in 2015, and 7.5 to 8.5 percent in 2016. Industry is projected to grow the fastest, led by construction and manufacturing. Public construction is expected to pick up in 2014, as government spearheads reconstruction efforts in the areas affected by typhoon Yolanda and further addresses infrastructure bottlenecks elsewhere. Private construction and manufacturing (in support of construction and new dwellings) are expected to gain momentum beginning late 2014 up until the end of the Plan period. 8 Philippine Development Plan 2011-2016 MIDTERM UPDATE Table 1.3. Gross regional domestic product (GRDP) growth targets, 2014-2016 (in %) Regions Baseline (2012) Annual Plan targets 2014 2015 2016 National Capital Region* 7.3 6.8-7.5 7.3-8.0 7.8-8.4 Cordillera Administrative Region 1.0 4.5-5.5 5.5-6.5 5.5-6.5 Region I: Ilocos 5.2 6.8-7.8 7.3-8.3 8.2-9.2 Region II: Cagayan Valley 8.2 4.1-5.1 4.4-5.4 4.7-5.7 Region III: Central Luzon 6.3 6.1-7.1 7.1-8.1 8.0-9.0 Region IV-A: CALABARZON 7.0 5.7-6.7 6.2-7.2 6.6-7.6 Region IV-B: MIMAROPA 4.2 3.2-4.2 4.2-5.2 5.2-6.2 Region V: Bicol* 7.1 7.1-7.6 7.0-7.8 7.0-8.0 Region VI: Western Visayas 7.5 6.1-7.5 6.6-8.1 7.3-8.8 Region VII: Central Visayas 9.3 8.9-11.2 9.7-11.9 10.1-12.5 Region VIII: Eastern Visayas (6.2) 4.5-5.5 4.5-5.5 4.6-5.6 Region IX: Western Mindanao 12.4 5.5-7.5 5.5-7.5 5.5-7.5 Region X: Northern Mindanao 7.4 8.0-9.0 8.5-9.5 8.5-9.5 Region XI: Davao Region 7.4 6.0-7.0 6.5-7.5 7.7-8.7 Region XII: SOCCSKSARGEN 8.1 8.2-9.2 8.3-9.3 9.1-10.1 Region XIII: Caraga 10.6 8.2-9.0 9.3-10.1 9.9-10.8 ARMM* 1.2 1.6-2.6 1.9-2.9 2.4-3.4 * Estimated by NEDA-National Policy and Planning Staff Employment The unemployment rate is expected to decrease from 7 percent in 2012 to 6.5 to 6.7 percent by 2016. Assuming a labor force growth rate of between 1.7 to 1.9 percent,2 these targets translate to an additional 740,000 employed persons per year. The quality of employment is another indicator that will be monitored during the remaining Plan period. The target is to reduce the underemployment rate from the current 20 percent to 17 percent by 2016. 2 The lower labor force growth rate is due to the implementation of the K to 12 program. developed countries. Similarly, tourism is also expected to recover around the same time, growing by an average of 7.5 percent from 2015 to 2016. The higher growth path is expected to manifest in all regions, as targeted by the corresponding Regional Development Councils. The bullish regions are Central Visayas, Caraga and the National Capital Region. It should also be noted that Eastern Visayas is targeting a turnaround beginning 2014 even coming from the heels of typhoon Yolanda. 9A roadmap to inclusive growth Poverty incidence The target is to decrease the incidence of poor individuals to 18.0 to 20.0 percent by 2016, which, admittedly, will fall short of the Millennium Development Goals (MDGs) target of 16.6 percent by 2015. This new target takes into consideration the slow response of poverty to economic growth beginning 2006 and the setback in 2013 due to the wide-scale destruction resulting from natural and man-made disasters. In the Philippines, an individual is considered poor if the income of his family falls below the poverty threshold. However, this measure is just a convenient simplification. In reality, poverty is a state of deprivation in multiple dimensions – health and nutrition, education, living standards (water and sanitation facilities, electricity, quality of housing, etc.). Consideration of the multiple dimensions of poverty then brings to the fore the issue of quality of life. A study by Balisacan (2011) provides the baseline for the incidence of multi dimensional poverty. The target is to bring down this incidence from 28.2 percent in 2008 to between 16.0 and 18.0 percent in 2016. The strategies in the PDP Midterm Update are directed at improving the responsiveness of poverty to growth (which implies higher incomes), enhancing the provision of basic services (so that quality of life is improved) and increasing resilience to disasters (so that improved quality of life is maintained). These strategies are discussed in the succeeding sections. Indicators Baseline Annual Plan targets 2014 2015 2016 Poverty incidence 25.2 (2012) 23.0-25.0 20.0-23.0 18.0-20.0 Multidimensional poverty 28.2 (2008) 20.0-22.0 18.0-20.0 16.0-18.0 Table 1.5. Poverty incidence targets, 2014-2016 (in % of population) Indicators Baseline (2012) Annual Plan targets 2014 2015 2016 Unemployment rate (in %) 7.0 6.7-6.9 6.6-6.8 6.5-6.7 Employment generated (in ‘000) 414 689-776 753-814 664-753 Underemployment rate (% of employed) 20.0 19.0 18.0 17.0 Table 1.4. Employment targets, 2014-2016 10 Philippine Development Plan 2011-2016 MIDTERM UPDATE 3 Investments approved by the different investment promotion agencies. SECTORAL STRATEGIES How the production sectors (i.e. industry, services, and agriculture) perform will largely determine the economy’s growth trajectory in the next three years as well as the potential for greater employment creation and poverty reduction. Industry and services Over the next three years, growth will be mainly driven by the industry and services sectors (Chapter 3). These sectors are targeted to grow by 7.0 to 8.0 percent in 2014, 7.5.to 8.5 percent in 2015 and 8.0 to 9.0 percent in 2016, resulting in additional employment in said sectors, averaging 887,000 to 921,000 per year from 2014 to 2016. For this to happen, investments in the sectors need to increase, which will raise the demand for labor. Investments3 are targeted to increase by 36 percent between 2012 and 2016. To achieve the above goals, specific interventions need to be undertaken to improve business climate, increase productivity and improve innovative capacity. At the same time, government will continue to promote the country as a desirable investment destination. Improving the business climate means reducing the cost of doing business, or costs associated with the administrative procedures from starting a business to closing one, labor market rigidities, and overhead and logistics. Going forward, government will continue to promote transparent and predictable policies and further streamline bureaucratic procedures to encourage investments. By 2016, the government aims to have all LGUs adopt and streamline the business permit licensing system. The government will likewise continue to undertake measures to link the Philippine Business Registry with LGUs to ensure that businesses in local communities enjoy the benefits of easier registration. The linkage of the National Single Window to the Electronic to Mobile (E2M) system will be pursued to facilitate trade and reduce cost of transactions for businesses. Equally important are adequate and good quality infrastructure, such as intermodal transport (air, sea, and land), power supply facilities, and logistics, among others. Government will continue to invest in infrastructure development, with government capital outlay increasing to 5 percent of GDP by 2016. The government will continue to push for Voluntary Codes of Good Practices in industries to maintain industrial peace. Mutually agreed-upon work arrangements, which increase efficiency, simplify operations, and are consistent with the promotion of employment and protection of basic rights of workers, will be supported. The following subsectors will be encouraged in view of their potential to contribute to employment generation as well as rapid and sustained growth: (a) agro-industry (related to coconut coffee, cacao, fisheries and forestry); (b) manufacturing, especially food manufacturing, garments, wood furniture and fixtures, and halal food industry; (c) tourism; (d) IT-BPM; (e) construction; and (f ) logistics. 11A roadmap to inclusive growth Concerning the key sectors identified above, the government will provide comprehensive business intelligence to enable businesses to make informed decisions. It will also invest in the needed product quality monitoring infrastructure to ensure that the country’s products meet international standards to penetrate export markets. The industry clustering program will be expanded. Under this program, industries prepare sectoral roadmaps that show linkage with primary sectors as suppliers and/or markets; and continuously upgrade their technologies and facilities with government’s proactive support through the establishment of technology business incubation centers, shared service facilities that provide testing laboratories for safety and quality standards, agro-industrial hubs and central storage. Innovation and product development will be supported. The country will make full use of existing technologies to make local industries competitive and innovative while building local R&D capacity to address local problems, including green technologies. The government will also ensure that even micro, small and medium enterprises (MSMEs) have access to these technologies. Moreover, the government will intensify advocacy programs that will encourage businesses to take advantage of benefits offered by Philippine participation in free trade agreements and the ASEAN Economic Community 2015. Investment promotion activities will be undertaken not only in the traditional investor countries (i.e., US, Japan, European Union), but also in member-countries of economic groups to which the Philippines belongs. Related to this, the government will aggressively promote unified country branding that will bring home the message that the Philippines is a producer and supplier of high quality, ethical, sustainable and world-class products and services which are valued worldwide. Agriculture The agriculture and fisheries sector is central to addressing the country’s employment and poverty problems. Nearly a third of the country’s labor force is employed in agriculture and 60 percent of them are considered vulnerable. Moreover, the sector has been observed to be shedding jobs too quickly, more than can be explained by productivity increases, and certainly more than can be absorbed by the growing industry and services sectors. For the remaining Plan period, the PDP strategies for agriculture and fisheries sector (Chapter 4) will aim to (a) increase productivity in the sector; (b) increase forward linkage with the industry and services sectors; and (c) improve sector resilience to risks, including climate change. Interventions will be directed towards increasing the productivity of key commodities, such as palay, corn, sugarcane, pineapple, coconut, coffee, banana, mango, livestock and poultry and fisheries, among others. Productivity in these commodities is targeted to increase by 19 percent from 2012 to 2016. Investments in R&D and extension will be increased to generate appropriate technologies The agriculture and fisheries sector is central to addressing the country’s employment and poverty problems. 12 Philippine Development Plan 2011-2016 MIDTERM UPDATE and to strengthen the capacities of farmers and fisherfolk. Agrarian reform will be fast-tracked; in particular, the distribution of individual land titles will be accelerated to provide greater security of tenure and access to finance for agrarian reform beneficiaries. In order to facilitate the linkage of agriculture to the industry and services sectors, farmers and fisherfolk will be trained in value-adding, agri-business development and value chain management activities. Farmers and fisherfolk groups and cooperatives will be strengthened and, where possible, transformed into MSMEs that can transact with other MSMEs in industry and services. Rural infrastructure will be enhanced by focusing on connectivity between production areas and markets, as well as facilities that provide production and technology choices to farmers and fisherfolk. Public-private sector partnerships will be explored to finance certain postharvest facilities and other rural infrastructure. Meanwhile, to increase resilience, households engaged in agriculture and fisheries will be encouraged to diversify production and livelihood sources. The insurance system for the sector will also be strengthened. Moreover, the Community based Employment Program (CBEP) will be re-designed to function as a social protection mechanism. SPATIAL CONSIDERATIONS Geography is an important determinant of the quality of human life because it facilitates or obstructs access to opportunities for improving one’s conditions, whether these are economic, social, or political (PHDR, 2013). The easiest way to think of the effect of geography on access to opportunity is in terms of distance, where the two are inversely related. However, access may also be determined by other initial conditions apart from distance; say, the quality of one’s natural environment (that causes one to be healthy or sickly, less or more vulnerable to disasters), or the quality of institutions (that may encourage or stifle private initiative). But these, too, take place in space. Hence, provinces along the Philippines’ eastern coastline that are perennially visited by typhoons tend to be poorer on average than the rest of the country. So, too, are those provinces in the conflict-affected areas of Mindanao, where the risk to life and property is relatively high. To talk about inclusive growth without regard for location is to entirely miss the point. Economic growth by its nature generates unevenness as economic activity tends to concentrate in space to take advantage of agglomeration economies. These refer to the increasing returns from being closer to markets for inputs and products, as a result of which economic activity becomes more concentrated and magnifies the spatial disparities. Hence, some regions lead while others lag. Sixty-two percent of the Philippines’ GDP, for example, is accounted for by the National Capital Region, and its two adjacent regions, CALABARZON to the south and Central Luzon to the north. Not surprisingly, these regions host the provinces with the lowest incidence of poverty (National Statistics Office–Family Income and Expenditure Survey [FIES], 2012). Clearly, more deliberate state action is needed to ensure that growth is truly inclusive. Geography is an important determinant of the quality of human life because it facilitates or obstructs access to opportunities for improving one’s conditions, whether these are economic, social, or political. 13A roadmap to inclusive growth Table 1.6. Category 1: Ten provinces with high magnitude of poor households, 2010 Province Region Number of poor households Zamboanga del Sur Region IX: Western Mindanao 170,181 Cebu Region VII: Central Visayas 151,425 Pangasinan Region I: Ilocos Region 148,601 Negros Occidental Region VI: Western Visayas 138,664 Camarines Sur Region V: Bicol 136,208 Leyte Region VIII: Eastern Visayas 132,377 Iloilo Region VI: Western Visayas 122,770 Sulu ARMM 122,218 Quezon Region IV-A: CALABARZON 122,139 Davao del Sur Region XI: Davao Region 111,655 Source: National Household Targeting System for Poverty Reduction (DSWD, 2010) In order for growth to result in more opportunities, and thereby accelerate poverty reduction, the Updated Plan will deliberately address the constraints faced by the poor as summarized by their province of residence. The provinces are categorized on the basis of some criteria. These are (a) number or magnitude of poor households in the province; (b) the provincial poverty incidence, or the proportion of poor individuals to the provincial population; and (c) the province’s vulnerability to natural disasters (floods and landslides, in particular). Table 1.6 (Category 1) shows the 10 provinces in 2010 according to the number of poor families, while Table 1.7 (Category 2) presents the 10 provinces with the highest percentage of families considered poor. Except for Pangasinan, Quezon, Masbate, and Apayao, all provinces in the two categories are located in the Visayas and Mindanao. Category 1 provinces These areas, which have high number of poor families, are not necessarily the poorest provinces. In fact, for a number of the provinces in this category, namely Cebu, Pangasinan, and Iloilo, development opportunities clearly exist. However, pockets of poverty also exist in these provinces. In-migration may also be a factor to the extent that the provinces tend to attract the poor from other places. While there may be economic growth in these provinces, opportunities are limited and certain segments of the population, perhaps with limited skill sets, are unable to readily participate in the growth process. Addressing the constraints faced by the poor in these provinces requires being able to track them down. For this reason, data from the National Household Targeting System for Poverty Reduction (NHTS-PR) that identifies the poor by name are used. 14 Philippine Development Plan 2011-2016 MIDTERM UPDATE Table 1.7. Category 2: Ten provinces with highest poverty incidence based on population, 2012 (in %) Province Region Poverty Incidence (%) Lanao del Sur Autonomous Region in Muslim Mindanao 73.8 Maguindanao4 Autonomous Region in Muslim Mindanao 63.7 Eastern Samar Region VIII: Eastern Visayas 63.7 Apayao Cordillera Administrative Region 61.4 Zamboanga del Norte Region IX: Western Mindanao 54.4 Camiguin Region X: Northern Mindanao 53.6 Saranggani Region XII: SOCCSKSARGEN 53.2 North Cotabato Region XII: SOCCSKSARGEN 52.4 Masbate Region V: Bicol 51.3 Northern Samar Region VIII: Eastern Visayas 50.2 Source: Philippine Statistics Authority - National Statistical Coordination Board (2013) Note: National average of poverty incidence is at 25.2 percent. Category 3 provinces Meanwhile, certain geographic characteristics also make provinces exposed and prone to multiple hazards, such as landslides and flooding. When these disasters occur, the marginally non-poor in these provinces can slide into poverty relatively quickly. These provinces are presented in Table 1.8. Most of them are included in the Hazards Mapping and Assessment for Effective Community-Based Disaster Risk Management (READY) Project, and they generally traverse the country’s eastern seaboard facing the Pacific Ocean (see Figure 1.3). Notable in the list are the provinces hit by major weather-related disasters in 2013—the earthquake in Bohol and super typhoon Yolanda. The latter caused 12.2 million Filipinos to lose family members, their homes and/or properties, as well as their sources of livelihood and employment. It is estimated to have increased national poverty incidence by about 2 percentage points (ppts) and slashed economic growth rate by 0.3 ppts in 2013. 4 Maguindanao is also among the Top 10 provinces in terms of the magnitude of the poor. However, it shares more similarities with Category 2 provinces (namely, conflict affected and limited development opportunities) than with Category 1 provinces. Category 2 provinces Provinces in this category are mostly in Eastern Visayas, Autonomous Region in Muslim Mindanao (ARMM) and SOCCSKSARGEN (Central Mindanao). They have small population, are less dense, or are located in remote areas. Weather related events and armed conflict have been additional factors to contend with. These provinces are generally characterized as having limited opportunities for development. Consequently, between 50 to 75 percent of the residents in these provinces are considered poor based on the 2012 FIES. 15A roadmap to inclusive growth Region Province Region I: Ilocos Ilocos Norte Ilocos Sur Cordillera Administrative Region Abra Benguet Region II: Cagayan Valley Cagayan Quirino Isabela Nueva Vizcaya Region III: Central Luzon Zambales Pampanga Aurora Region IV-A: CALABARZON Cavite Laguna Rizal Quezon Region V: Bicol Albay Catanduanes Region VI: Western Visayas Antique Iloilo Region VII: Central Visayas Bohol Region VIII: Eastern Visayas Eastern Samar Leyte Northern Samar Southern Leyte Region IX: Western Mindanao Zamboanga del Sur Zamboanga Sibugay Region XIII: Caraga Dinagat Islands Agusan del Sur Surigao del Norte Surigao del Sur Table 1.8. Category 3: Thirty provinces exposed to multiple hazards, by region Sources: Department of Science and Technology and Department of Environment and Natural Resources (2012) 16 Philippine Development Plan 2011-2016 MIDTERM UPDATE Differences in the characteristics owing to location and initial endowments across the provinces in the above three categories imply different constraints to growth— and opportunities to participate in growth—for the population, especially the poorer segments, in these provinces. Hence, different responses are required. For provinces in Category 1 where development opportunities exist, interventions should be aimed at increasing investments to create more employment opportunities. Improving physical infrastructure to enhance trade and labor mobility are critical interventions. For provinces in Category 1 where development opportunities exist, interventions should be aimed at increasing investments to create more employment opportunities. Figure 1.2. Map of Category 1-3 provinces LEGEND Category 1 Category 2 Category 3 Category 1 and 3 Category 2 and 3 17A roadmap to inclusive growth Depending on their comparative advantage, the potential for agro-industry, food manufacturing, tourism and logistics in some of the provinces should be exploited. Some of these provinces may also host an IT-BPM subsector. Enabling the poor to provide goods and services for these subsectors can unleash the growth potentials of these industries while also increasing remunerative employment opportunities for the poor. In line with this, the government will facilitate enhancement of the human capital of the present and potential workforce to ensure that they have the knowledge and skills that are relevant to the needs of industry and services, particularly the key sectors. Firms will be encouraged to provide inputs to the design of technical-vocational education and training (TVET) and higher education institution (HEI) programs to increase the employability of the workforce, especially from the poor households. Providing training on entrepreneurship alongside introducing flexibilities in work arrangements may also be warranted. In the relatively more developed and urbanized areas (e.g. Cebu), social services need to be continually upgraded to prevent congestion as a result of in-migration from other areas that may not be as well-endowed. In the provinces falling under Category 2, the imperative is to ensure that basic social services in the form of health services, basic education, water and sanitation are available. These “spatially blind” investments promote economic and physical mobility, making it possible for people in these areas to out-migrate, if necessary, to gain access to opportunities wherever these may be while economic opportunities in the area are still being created. Small agriculture-based enterprises linked to the supply chain of product or service providers in the more developed areas of the region should be encouraged as a way of increasing employment and ensuring incomes. In areas where human security is particularly at risk because of violence or armed conflict, peace-building efforts should be earnestly pursued by addressing the fundamental bases of the conflicts. One project that has the potential for greater value-adding and linking with downstream end-users and consumers is the Integrated Coconut Industry Development and Poverty Reduction Project. The implementation of this project, initially in Category 2 provinces, will be continuously monitored for possible replication to cover other areas producing coconuts and/or other commodities. The strategies to be implemented in the vulnerable areas belonging to Category 3 should focus on disaster-risk reduction and mitigation, social insurance and social protection, and income diversification. Albay (Bicol) and Quezon (CALABARZON) are way ahead of the pack, with geohazard maps and institutional mechanisms for disaster-risk management already in place. These should be further studied for possible replication. In the provinces falling under Category 2, the imperative is to ensure that basic social services in the form of health services, basic education, water and sanitation are available. The strategies to be implemented in the vulnerable areas belonging to Category 3 should focus on disaster-risk reduction and mitigation, social insurance and social protection, and income diversification. 18 Philippine Development Plan 2011-2016 MIDTERM UPDATE CROSSCUTTING STRATEGIES The above strategies will be supported by a menu of interventions to improve the quality of human and physical capital and access to financing. At the same time, efforts to promote lasting peace and sustainable development will be implemented. And based on the experience of the past three years, macroeconomic stability and good governance will remain the platform for all these. Social development Some individuals have not been able to take advantage of growth opportunities for reasons of ill-health or inadequate education—two of several dimensions of poverty. The Updated PDP envisions equalizing opportunities for people to get themselves employed, acquire assets, and improve their quality of life (Chapter 6). Under the Plan, social development interventions will directly reduce poverty in its multiple dimensions by increasing the poor’s access to social services and basic facilities. The MDGs present a framework for defining “quality of life,” to which the Philippines has committed at the turn of the millennium together with the rest of the world. There is medium to high probability that the country will achieve most of its MDG targets by 2015. Of the health-related MDGs, the target indicators that will require more aggressive programs are on (a) reducing maternal mortality ratio, (b) achieving universal access to reproductive health, and (c) halting and reversing the spread of HIV. The Updated Plan commits to achieving these unmet targets by improving the delivery of health services. The major challenge is to ensure a defined minimum set of clinical competencies in family planning and maternal and childcare services among existing staff, especially at the level of rural health units and barangay health stations. At the same time, government will intensify programs to hire and train additional skilled health and nutrition workers especially in disadvantaged areas to deliver the required public health care services for poor families. Investment in education will be increased and the quality of public investments will be improved. Providing access to education and training for life skills and the capacity to pursue economic opportunities helps achieve inclusive development. Moreover, this is part of government’s commitment to the MDGs, of which five are education-related. The K to 12 program represents the government’s commitment to investing in education. More than adding two years to basic education, in line with the rest of the world, the K to 12 program is about enhancing the curriculum, making it learner-centered and ensuring that teachers are retooled and adequate instructional There is medium to high probability that the country will achieve most of its MDG targets by 2015. 19A roadmap to inclusive growth materials and educational facilities are provided. These will be accompanied by the proper targeting of areas, prioritizing those with severe shortages to ensure equitable distribution of resources. The program will also address low performance in terms of education indicators among regions, divisions and schools. There is also a need to develop competencies and life skills for the current and would be members of the labor force to enable them to pursue economic opportunities. Strategies consist of expanding access to quality TVET and developing workforce competencies required in key growth areas, as well as in leadership, management and innovation. The same goes for HEIs. As a proxy for quality, the Updated Plan will focus on improving the performance of higher education students in licensure examinations across disciplines. Social protection Importantly, social protection from catastrophic situations will be designed to prevent the poor from falling deeper into poverty and the near-poor from joining the ranks of the poor. Chapter 6 provides, among others, a menu of social protection programs that will be developed to address different types of hazards faced by different localities. Increasing Philippine Health Insurance (PhilHealth) coverage and benefits is a major social protection program. The challenge is to seek out and cover the poor who have not been surveyed by the National Household Targeting System for Poverty Reduction (NHTS-PR) nor by LGUs (e.g. indigenous people, street children, children from orphanages, persons with disability, internal migrants, etc.). The coverage of the Individually Paying Program will also be increased. One strategy is to cover them at the point of care. Close collaboration with LGUs and other government agencies as service points is also necessary. The CBEP will also be re-designed to function as a social protection mechanism that replaces lost income in times of crises or disasters. The program represents all projects of government that employ unskilled workers like maintenance of farm-to-market roads and other community infrastructure, re-greening and reforestation programs, coastal resource management program and the like (Chapter 9). The implementation of these projects can be timed to coincide with the lean months in agriculture or after the onset of disasters or other shocks, thus smoothing income streams. Informal tenure of shelter is also associated with vulnerability and also needs to be addressed. Owing to poverty, informal settlers live in shelters to which they have no legal right to occupy or in areas prone to disasters just to survive until they find decent and more regular employment. Having no secure shelter or properties, they face risks of being evicted or of falling victims to natural and man-made disasters. For the remaining Plan period, the target is to deliver 510,683 units of housing assistance focusing on vulnerable households. A menu of housing options/ Social protection from catastrophic situations will be designed to prevent the poor from falling deeper into poverty and the near poor from joining the ranks of the poor. 20 Philippine Development Plan 2011-2016 MIDTERM UPDATE To promote the IT-BPM sector, government will provide the overall development framework on the deployment of new technologies and improvement of the country’s digital connectivity. Energy security will also be pursued by increasing energy generating capacity, encouraging efficient use of energy and implementing various transmission projects. Provision of adequate infrastructure also addresses inequalities in opportunities. For the remaining Plan period, the government will massively construct, rehabilitate and upgrade basic health care hospitals and facilities, close the student-classroom gap, provide water supply and sanitation facilities in rural and hard-to-reach areas, and provide housing units to over 500,000 households. assistance based on the needs and affordability of intended housing beneficiaries will also be developed. The beneficiaries include informal settler families, victims of calamities such as typhoons, earthquakes, fire, and armed conflict, and low salaried employees. For 2014 to 2016, the Housing and Land Use Regulatory Board will continue to extend technical assistance to LGUs in the formulation and/or updating of comprehensive land use plans. The objective is to provide a holistic approach to sustainable development, even sustainable urban development. Infrastructure development Infrastructure development will be accelerated to support rapid and sustained growth and promote inclusivity (Chapter 10). As earlier mentioned, public infrastructure spending will be increased to at least five percent of the GDP by 2016. In addition, private sector investments are expected to supplement this amount through public-private partnerships. Infrastructure development is necessary to catalyze development in the key sectors listed above. In agriculture, the objectives are to increase agricultural productivity and linkage with industry and services. Adequate irrigation facilities will be provided, including small irrigation facilities, to increase crop productivity and enable farmers to have greater control over their production patterns. In addition, farm-to-market roads will be constructed or rehabilitated to strategically connect rural and agricultural areas to market towns and destinations. In industry and services, infrastructure development will focus on improving the connectivity between urban centers and regional growth hubs, between airport and ports and economic/industrial zones; and between airport and ports and tourism destinations. Box 1.2 lists the major infrastructure projects designed to improve connectivity. Public infrastructure spending will be increased to at least five percent of the GDP by 2016. 21A roadmap to inclusive growth Airports • Bicol International Airport Development • Puerto Princesa Airport • New Bohol (Panglao) Airport Development Project • Clark International Airport Construction of a Budget/Low Cost Carrier (LCC) Terminal • Mactan Cebu International Airport Construction of the New Passenger International Terminal • Tacloban Airport Redevelopment Project • NAIA Terminal 3 Completion Works • NAIA Terminal 1 Retrofitting/Renovation Road-RORO Terminal System • Central Spine RORO Development Expressways • Central Luzon Link Expressway (CLLEX), Phase I • Cavite-Laguna Expressway (CALAX) • Tarlac-Pangasinan-La Union Expressway • Skyway- FTI-C5 Connector • NAIA Expressway Phase 2 • Skyway Stage 3 & NLEX-SLEX Connector Roads • Samar Pacific Coastal Road Project • Albay West Coast Road • Panay East-West Road • Cebu City-San Remigio Road • Mindanao East-West Lateral Road • Bayugan-San Luis-Talacogon-La Paz-Loreto-Veruela-Sta. Josefa Road • Basilan Circumferential Road Urban Transport System • LRT Line 1 and Line 2 System Rehabilitation • Common Station for LRT 1, MRT 3 and MRT 7 • MRT 3 Capacity Expansion • MRT 7 Box 1.2. Major infrastructure projects to improve connectivity between urban centers and regional growth hubs The government will continue providing infrastructure support to conflict-affected and impoverished areas through the Investment Support Program (ISP) for the ARMM and the Payapa at Masaganang Pamayanan or PAMANA Program. Infrastructure sector strategies will be implemented to ensure a livable and safe environment. The Master Plan for Flood Management in Metro Manila and Surrounding Areas will be implemented to protect lives, property and livelihood 22 Philippine Development Plan 2011-2016 MIDTERM UPDATE from floods and related environmental risks. Flood management structures in highly vulnerable areas based on river basin master plans will be constructed. The government will strengthen the coordination among the National Disaster Risk Reduction and Management Council (NDRRMC), Advanced Science and Technology Institute (ASTI), Philippine Atmospheric, Geophysical and Astronomical Services Administration (PAGASA), Department of Public Works and Highways (DPWH), Metro Manila Development Authority and LGUs to improve existing flood forecasting and warning systems, particularly in provinces vulnerable to flooding. Good governance will also be promoted with the use of proper infrastructure. The e-Government Master Plan 2013-2016 will serve as a blueprint for introducing innovations within government work processes, enhancing administrative productivity and allowing more citizen participation. Financial inclusion The efficient mobilization and management of resources to finance the country’s economic development requires a responsive, development-oriented, and inclusive financial system. For the next three years, the objective is to maintain a resilient and inclusive financial system underpinned by the discipline of credit standards. This means that the asset base of the financial system needs to increase to service the needs of a growing economy. At the same time, service coverage should also expand (Chapter 5). Achieving this objective calls for: (a) managing capital inflows towards real sector investment; (b) building the needed financial market infrastructure; and (c) pursuing the financial inclusion agenda. By the end of the Plan period, the above strategies are expected to (a) raise the total assets of the financial system by more than 10 percent from the 2012 level; (b) improve the national saving rate (gross national saving to GDP ratio) from 23 percent in 2012 to higher than 30 percent; (c) increase the number of deposit accounts per 1,000 Filipino adults from 454 in 2012 to 750; (d) improve microfinance services delivery from PhP8.4 billion in 2012 to more than PhP10 billion; and (e) increase the number of bank access points per 10,000 population to 6 from 5 in 2012. Channeling the capital inflows from portfolio capital and overseas Filipino remittances towards investments in the real sector remains a challenge. But if the appropriate match between financial instruments and risk-return profiles of the relevant group can be struck, then the potential for expanding investment and creating employment can be realized. In connection with financial inclusion, the following strategies already identified in the original PDP will be continued: (a) establishment of a regulatory environment that balances financial inclusion objectives with financial stability goals; (b) promotion of use of alternative products and delivery of financial services in underserved and unserved areas of the country; (c) promotion of financial literacy The asset base of the financial system needs to increase to service the needs of a growing economy. At the same time, service coverage should also expand. 23A roadmap to inclusive growth and consumer education; and (d) encouraging the continuing development of new loan products and other banking services aimed to address the special needs of the poor, women and persons with disability. Among the programs and activities in support of inclusive finance are: (a) the Economic and Financial Learning Program of the Bangko Sentral ng Pilipinas (BSP) to promote greater public awareness of economic and financial issues and provide information to enable households and businesses to make well-informed economic and financial decisions; and (b) the BSP’s Credit Surety Program, which creates a trust fund from the contributions of a provincial government and a cooperative in the same province to encourage financial institutions to lend to MSMEs in the province using the surety cover as a collateral substitute. A system that will encourage financial institutions to accept other than real property assets as security for lending to MSMEs is also being established, with its framework being finalized in June 2013. This is expected to enhance and simplify the processes of taking movable and intangible assets as collateral. Finally, measures to strengthen the regulatory and supervisory framework and enhance the risk management capability of banks will be sustained to ensure the stability of the system. Macroeconomic and financial sector policies will be closely coordinated through the government’s Financial Sector Forum. Environment and natural resources The country’s environment and natural resources (ENR) are a means and an end in achieving inclusive growth. As a means, they provide the needed inputs and ecosystem services to sustain resource dependent communities, agriculture, industries, water supply and the energy sector, among others. As an end, the ENR sector bears both the positive and negative impacts of activities intended to accelerate economic growth. For the remaining years of the PDP, focused interventions are geared towards (a) increasing adaptive capacities of communities, (b) effectively managing ENR for sustainability and (c) improving environmental quality. These are key towards achieving a sustainable and climate-resilient environment, which is the sector’s contribution to inclusive growth. Increasing adaptive capacities of communities requires more climate change adaptation and disaster risk reduction activities being mainstreamed into local development plans. As outlined in Chapter 9, this Updated Plan aims for an annual increase in the level of investments for climate change adaptation and mitigation (CCA/M) and disaster risk reduction and management (DRRM). It will entail promotion of climate/disaster resilient infrastructure for which innovative financing will have to be designed. The government is also set to invest in developing and adopting more effective vulnerability assessment tools to identify highly susceptible communities and prevent and mitigate potential disaster impacts. The country’s environment and natural resources are a means and an end in achieving inclusive growth. 24 Philippine Development Plan 2011-2016 MIDTERM UPDATE To sustain the country’s ecosystem services, effective management of natural resources will require strengthening the conservation, protection and rehabilitation of forest and watershed, coastal and marine life, land and mineral resources, and the entire biodiversity. The quality of air, land and water should meet minimum quality standards to provide communities with a healthier environment. It is imperative for the ENR sector in the next midterm to encourage research, development and extension, sustain financing, improve law enforcement and strengthen coordination and institutional mechanisms. Good governance In the Updated PDP, as in the original PDP, the need for good governance is made clear. Chapter 7 discusses the need for institutions to transform themselves to meet the demands of a more complex economy and a better informed, more sophisticated citizenry. Capable and credible institutions will ensure that critical reforms introduced and implemented are well-designed, enforceable, and durable. The Plan aims for effective and efficient governance by empowering citizens with access to information and venues for participation, as well as by providing high-quality public services where service providers are held accountable for the quality and efficiency of services delivered. Intensifying anti-corruption efforts will continue to be a key strategy. Improving administration of justice will form an important part of efforts to restore the credibility of the justice system and to earn citizens’ trust. Moreover, as economic opportunities are expanded, the Updated PDP emphasizes the need for efficiency of regulation such that broader interests are served and economic justice is achieved without going through tedious processes. To improve transparency, citizens’ participation and accountability, strategies will aim to deepen participatory planning and budgeting, monitoring and evaluation (M&E), support community and civil society organization participation, and enhance voter’s education. Anti-corruption efforts will be further intensified by strengthening internal control systems in relation to the generation and allocation of government funds, and the enforcement of penalties against those found guilty of corrupt practices. In terms of strengthening rule of law, the PDP targets to improve the Philippines’ percentile rank in Worldwide Governance Indicators (WGI)-Rule of Law from 33.65 in 2010 to at least 60 by 2016. Backlogs in investigations/cases will be significantly reduced. By 2016, the percentage of investigations/cases beyond the maximum prescribed periods will have been reduced from 27 percent in 2011 to 15 percent at the National Bureau of Investigation and from 60 percent in 2010 to 30 percent at the DOJ Prosecutor’s Investigation. Phase I of the National Justice Information System will have been 100 percent completed by 2016. Strategies to improve administration of justice include reducing backlogs and decongesting case dockets; instituting good governance in the justice system, Capable and credible institutions will ensure that critical reforms introduced and implemented are well designed, enforceable, and durable. 25A roadmap to inclusive growth including performance and integrity management systems and computerization of processes and services; streamlining criminal investigation; addressing fragmentation in the justice system; promoting and maximizing Alternative Dispute Resolution; enhancing access to justice by the poor and other vulnerable sectors through the implementation of the Recognizance Act of 2012 (RA 10389); and ensuring consistency and stability of jurisprudence. Furthermore, enhancing economic justice entails enacting a unified competition/ anti-trust law and intensifying enforcement efforts, in partnership with sector regulators and other stakeholders; addressing efficiency concerns on commercial dispute resolution and intensifying tax enforcement through the Run After Tax Evaders (RATE) and Run After The Smugglers (RATS) programs. As before, the accomplishments on good governance will be judged by how well the country performs in international rankings. The PDP targets to improve the country’s Open Budget Index score from 48 in 2012 to 60 by 2016; the country’s percentile rank in the WGI-Voice and Accountability from 48.34 in 2010 to at least 50; in WGI-Government Effectiveness from 55.5 in 2010 to at least 70; and in WGI-Control of Corruption from 22.38 in 2010 to at least 60 by the end of the Plan period. Furthermore, the PDP targets to improve the country’s percentile rank in WGI-Regulatory Quality from 44.98 in 2010 to at least 70 by the end of the Plan period. Stable national security A politically stable and secure nation is necessary to achieve development and improve the collective welfare of the people. Chapter 8 presents the government’s twin goals of attaining peace and security. . Building on the positive results in peace tables, particularly with the Moro Islamic Liberation Front (MILF), Cordillera Bodong Administration/Cordillera People’s Liberation Army (CBA/CPLA), and the Rebolusyonaryong Partidong Manggagawang Pilipinas/Revolutionary Proletarian Army/Alex Boncayao Brigade (RPM-P/RPA/ABB), the government will continue to pursue negotiated political settlement of internal armed conflict. The Payapa at Masaganang Pamayanan (PAMANA) will remain as the flagship development program that aims to bring back the government’s presence in conflict-affected communities through improved access to basic social services, strengthening of institutions, and protection of children’s and women’s rights, as well as ensuring their participation in peace building and development efforts. The government targets to significantly increase the number of communities in conflict-affected areas that are able to return to conditions where they can achieve their desired quality of life within a peaceful society. The government also aims to significantly reduce criminality, uphold sovereignty, and ensure protection of its people and create a safer and more secure environment conducive to national development. The police and other law enforcement agencies will intensify their operations against criminality, armed violence and transnational The government will continue to pursue negotiated political settlement of internal armed conflict. The Payapa at Masaganang Pamayanan (PAMANA) will remain as the flagship development program. 26 Philippine Development Plan 2011-2016 MIDTERM UPDATE security issues such as terrorism, trafficking in persons, illegal arms and drugs smuggling, and the emerging concerns on cybercrime. The government will also exert all efforts to ensure the country’s sovereignty over its territories by pursuing a rules-based collective security framework in international relations. Moreover, given the increasing occurrences of extreme natural hazard events, the government will increase its capability in preparedness against natural as well as human-induced disasters and emergencies to protect lives and properties of its citizens. Macroeconomic stability The strategies enumerated in the Plan will be implemented without sacrificing macroeconomic stability (Chapter 2). The government aims to increase the revenue effort to 17.1 percent of GDP by 2016. The tax effort is targeted to increase to 16.1 percent in 2016 from 13.4 percent in 2013. This will be due to heightened tax collection efforts of the BIR and the more aggressive campaign of the BOC to curb smuggling. Moreover, the granting of fiscal incentives shall be rationalized to minimize duplication while encouraging investments that have high backward and forward linkages and generate quality employment. At the subnational level, the Bureau of Local Govenment and Finance projects local sources of income to grow by 6.3 percent in 2013, and by 5.7 percent in 2014 and 2015. This will grant greater autonomy to LGUs and provide more financing for local development. The efficiency of public spending also needs to be improved. The slow absorption of funds of government agencies needs to be addressed and the revenue leakages plugged. Moreover, spending on infrastructure and social services needs to increase. Quality infrastructure increases macro-level competitiveness and encourages investments, while government spending on social services serves to equalize opportunities and leads to sustainable poverty reduction. The inflation rate is expected to fall within the 3.0-5.0 percent band in 2014 while a lower inflation band of 2.0 to 4.0 percent is targeted for both 2015 and 2016. On the external sector, the aim is to maintain a positive current account balance to-GDP ratio, reaching 1.2 percent by end-2016. The big challenge to macroeconomic stability is the volatility of international capital flows. This complicates liquidity management, creates pressures for the currency to appreciate and leads to financial systemic stresses. On the other hand, capital inflows could be beneficial because they provide funding for much needed investment. Quality infrastructure increases macro-level competitiveness and encourages investments, while government spending on social services serves to equalize opportunities and leads to sustainable poverty reduction. 27A roadmap to inclusive growth A high proportion of external flows is due to remittances which have proven to be quite robust even during times of economic crises elsewhere in the world. A big portion of these remittances finances the consumption needs of families left behind. But there may be a substantial portion that is investable. What is needed is a financial instrument that matches the risk-return profile of overseas Filipinos and overseas Filipino workers so that this resource can be channeled to investments that would lead to job creation in the country. PLAN IMPLEMENTATION It is acknowledged that the overall development of the country is ultimately a product of the dynamism of the private sector. The role of government is to set the necessary policy and regulatory framework and provide public goods and services to catalyze private initiative and encourage efficiency improvements. The Plan emphasizes the government’s facilitative role in promoting competition and making it easy for firms and entrepreneurs, regardless of size, to do business in the country. But at the same time, government will intervene strategically where the private sector cannot be relied upon to deliver the goods, services and facilities needed by the poor and marginalized. In this regard, the plan recognizes the need for public investment and sound, credible, and effective regulation. PDP implementation calls for convergence of agency programs and coordination among agencies at different levels as well as the private sector and development partners to be able to make a significant impact. The different programs and strategies to be undertaken by government are described in the subsequent chapters. During the implementation period, the efficiency and effectiveness of these strategies will be monitored alongside implementation progress. In general, the measure of efficiency is the extent to which private effort has been steered towards the direction laid out in the Plan; effectiveness is the extent to which the well-being of Filipinos has been improved. The different Planning Committees (PC), constituted to update the Plan, will be responsible for monitoring welfare outcomes and implementation progress as indicated in their corresponding Results Matrices. The outcomes and progress will then be reported by the PC Chair before an appropriate interagency committee of the National Economic and Development Authority (NEDA) Board or Cabinet Cluster, as shown in Table 1.9. The NEDA Secretariat will also prepare an annual Socioeconomic Report (SER), where each SER presents the accomplishment in terms of output and desired outcomes, identifies key challenges and recommends solutions going forward. 28 Philippine Development Plan 2011-2016 MIDTERM UPDATE Table 1.9. Coordination mechanism of Planning Committees Planning Committee Coordination mechanism Macroeconomic policy NEDA Board-Development Budget Coordination Committee and Economic Development Cluster (EDC) Infrastructure development NEDA Board-Infrastructure Committee Peace and security Security, Justice and Peace Cluster Governance and the rule of law Good Governance and Anti-Corruption Cluster Social development NEDA Board-Social Development Committee Environment NEDA Board-National Land Use Committee 29Macroeconomic policy 2Macroeconomicpolicy 30 Philippine Development Plan 2011-2016 MIDTERM UPDATE I. INTRODUCTION A stable macroeconomy fuels positive expectations that encourage investments and increase opportunities for quality employment and higher incomes. This is characterized by sound fiscal, monetary and financial environments, and a robust external position. For the remaining period of the Philippine Development Plan (PDP), the challenge that faces macroeconomic stability is the volatility of international capital flows. Capital inflows could be beneficial to recipient countries because they provide funding for much-needed investment. However, the sustained surge of foreign capital could complicate liquidity management, create pressures for currencies to appreciate and lead to financial systemic stresses. The risks become starker because of the possibility of sudden stops and capital flow reversals, as global shifts in sentiment can cause significant volatility even in countries that have strong fundamentals. At the same time, the efficiency of public spending and revenue collection needs to be improved. The slow absorption of funds by government agencies needs to be addressed and the revenue leakages plugged. Given the uncertainty in the global economy and the physical environment, it is important to have ample fiscal space to be able to respond, as necessary, in a timely and effective manner. II. ACCOMPLISHMENT AND CHALLENGES Owing to improving fiscal conditions, a resilient economy, moderate inflation, and a potential for further growth, the Philippines has received successive investment grade ratings from major credit rating agencies beginning March 2013. The first was awarded by Fitch Ratings on 27 March 2013. This was followed by Standard and Poor’s which also gave the Philippines an investment grade on 2 May 2013, the Japan Credit Rating agency on 7 May 2013, and Moody’s on 3 October 2013. These successive recognitions of the country’s elevation to investment-grade territory have undoubtedly cemented the status of the Philippine economy as one of the brightest globally. The Philippine government is the primary beneficiary of these ratings. An investment grade indicates that the Philippines is a preferred borrower and would allow the government to borrow at a lower rate from international or domestic financial markets. Low borrowing rates for the government would lead to lower borrowing costs for the business sector. The savings that may be earned with lower borrowing costs could be channeled to development programs and provision of basic services. Successive recognitions of the country’s elevation to investment-grade territory have undoubtedly cemented the status of the Philippine economy as one of the brightest globally. 31Macroeconomic policy Prudent and responsible monetary and external policies that support a low and stable inflation ensure that wage goods remain affordable. This, in turn, decreases uncertainty in operating businesses in the country and improves household and business confidence. At the same time, a stable financial sector helps ensure that markets are well-functioning and that credit conditions are appropriate to support economic expansion, thereby creating opportunities for additional demand for labor. Sustainable fiscal sector Government expenditure is needed to finance programs and projects critical to inclusive growth. These empower the poor and marginalized sectors by enabling them to participate in the mainstream economy. However, the spending must be supported by an appropriate level of revenues and a manageable public debt in order to promote macroeconomic stability. At the same time, prudent fiscal management allows the economy to be more resilient against shocks. Expenditure The higher fiscal space provided the government with enough flexibility to sustain the momentum of increased spending in 2013. As of the first semester of 2013, total disbursements of the national government (NG) reached PhP890.8 billion. This is higher by P95.4 billion or 12.0 percent than the same period level in 2012. In 2012, total government spending reached PhP1.7778 trillion, registering a 14.1-percent growth from 2011. This is the highest growth seen in more than a decade, and a significant rebound from the 2.3-percent growth recorded in 2011. Figure 2.1. Results framework on macroeconomic policy Goals Intermediate goals Sector outcome Subsector outcomes Poverty in multiple dimensions reduced and massive quality employment created Rapid and sustained economic growth achieved Equal development opportunities achieved Stable macroeconomy achieved Sustainable fiscal sector achieved Resilient external sector maintained Monetary and financial sector made resilient and inclusive 32 Philippine Development Plan 2011-2016 MIDTERM UPDATE The biggest increase is noted in infrastructure and other capital outlays, which grew by 57.7 percent.5 These infrastructure outlays were for projects consisting of rehabilitation/construction of roads and bridges, enhancement of tourism access, and irrigation to support the agriculture sector. By sectoral allocation, worth noting is the increasing amount intended for social services, which grew by 1.0 percent in 2010, 31.0 percent in 2011 and 8.7 percent in 2012. Furthermore, the share of social services to total budget increased from 28.2 percent in 2010 to 34.5 percent in 2011 in line with the government’s commitment to enhance the capabilities of the poor to participate in the growth process. For 2013, its share is programmed to reach 34.8 percent from 32.4 percent in 2012 (Figure 2.2). Figure 2.2. Share of sectoral spending to total budget, 2010-2013 (in %) 100.0 90.0 80.0 70.0 60.0 50.0 40.0 30.0 20.0 0.0 2010 Economic 10.0 2011 2012 2013* Social Services Defense General Public Services Net Lending Interest Payments 20.0 0.6 19.1 6.2 28.2 25.9 17.117.7 1.51.1 18.219.0 4.14.5 32.434.5 26.823.2 16.6 1.3 17.3 4.5 34.8 26.5 Source: 2012, 2013 and 2014 Budget of Expenditures and Sources of Financing (BESF) *Based on the program budget Revenues From a single-digit growth of 7.5 percent in 2010, total revenues rose by 12.6 percent, 12.9 percent and 10.3 percent in 2011, 2012 and in the first semester of 2013, respectively. Growth of revenue collections by the Bureau of Internal Revenue (BIR) was particularly robust, owing mostly to better implementation of administrative measures, including the Run After Tax Evaders (RATE) program. Collection effort of BIR rose from 9.1 percent in 2010 to 9.5 percent in 2011 and 10.0 percent in 2012, exceeding the PDP targets. In the first half of 2013, total revenues were up by 10.3 percent to PhP839.5 billion, led by the 13.9-percent growth in the BIR collection relative to the same period in 2012 due to good economic conditions and administrative and legislative reforms, particularly the implementation of Republic Act (RA) 10351 or the Sin Tax Reform Law of 2012. Non-tax revenue collection was also above the annual target of 1.2 percent of gross domestic product (GDP) with 1.3 percent in 2010, 1.6 percent in 2011 and 2012. For the first semester of 2013, non-tax revenue effort registered at 1.7 percent. 5 Based on the Department of Budget and Management’s (DBM) Assessment of National Government Disbursements Performance Report for January to December 2012 33Macroeconomic policy However, in comparison with counterparts in the Association of Southeast Asian Nations (ASEAN), the revenue performance of the Philippines remains below average as no major improvements were observed in recent periods. Its gap with the leaders, especially Vietnam, Thailand, and Malaysia, is relatively large. Indicator 2010 2011 2012 2013 Actual Target Actual Target Actual FY Target H1 actual Revenues 13.4 13.9 14.0 14.5 14.5 15.1 15.3 Tax revenues 12.1 12.7 12.4 13.3 12.9 13.9 13.6 BIR 9.1 9.4 9.5 9.7 10.0 10.0 10.8 BOC 2.9 3.0 2.7 3.1 2.7 3.2 2.6 Other offices 0.1 0.3 0.1 0.5 0.1 0.6 0.1 Non-tax revenues 1.3 1.2 1.6 1.2 1.6 1.2 1.7 Table 2.1. PDP targets versus actual revenue indicators: Ratio to GDP, 2010-H1 2013 (in %) Sources: Department of Budget and Management (DBM), Department of Finance (DOF), Philippine Statistics Authority-National Statistical Coordination Board (PSA-NSCB), and National Economic and Development Authority (NEDA) Country Revenue effort Tax effort 2010 2011 2012 2010 2011 2012 Philippines 13.4 14.0 14.5 12.1 12.3 12.9 Indonesia 15.4 16.2 15.6 11.2 11.8 11.3 Malaysia 20.1 21.0 22.2 13.8 15.3 16.2 Thailand 16.8 18.1 17.7 14.6 16.2 15.3 Vietnam* 26.7 24.4 22.6 22.4 21.1 20.5 Table 2.2. Tax and revenue effort of selected ASEAN countries: Ratio to GDP, 2010-2012 (in %) Source: Asian Development Bank (ADB) Key Indicators for Asia and the Pacific 2013 *Tax revenue includes local government taxes Significant amount of revenues is also lost, roughly equivalent to about 6.0 percent of GDP annually, due to tax evasion, smuggling, and redundant fiscal incentives.6 In addition to the current programs being implemented (e.g., Run After the Smugglers or RATS, and RATE), reducing the leakage from individual income tax collection, particularly among the self-employed, will provide additional boost to the government’s collection effort. Other potential areas where tax leakages can occur are corporate income tax, value-added tax, and estate tax. The lack of manpower in the BIR to audit/investigate and litigate, in addition to the agency’s bridled powers to prosecute, remains the biggest stumbling blocks to the continued success of the RATE program. Moreover, the heightened globalization and continuing economic 6 DOF estimate 34 Philippine Development Plan 2011-2016 MIDTERM UPDATE integration have already limited the Bureau of Customs’ (BOC) capacity to collect taxes from international trade transactions. Organizational deficiencies may also undermine the BOC’s effectiveness to monitor and collect appropriate taxes. Revenue collection by local government units (LGU) presents an important fund source to promote local economic development. However, data from the Bureau of Local Government and Finance (BLGF) show that LGUs are still heavily dependent on the internal revenue allotment (IRA), with its share to total LGU income ranging from 62.8 percent in 2010 to 60.3 percent in 2012.7 Meanwhile, local sources of LGU income increased to 34.9 percent in 2012 from 32.4 percent in 2010. Particulars Amount (in million PhP) Share to total (in %) 2010 2011 2012 2010 2011 2012 Local sources 101,631 110,972 112,136 32.4 33.2 34.9 Tax revenue 67,191 76,577 77,388 21.4 22.9 24.1 Non-tax revenue 34,440 34,396 34,748 11.0 10.3 10.8 External sources 211,963 223,716 209,346 67.6 66.8 65.1 of which: IRA 196,887 209,048 193,775 62.8 62.5 60.3 Total current operating income 313,594 334,688 321,481 100.0 100.0 100.0 Table 2.3. Sources and share of local government units’ (LGUs) total current operating income, 2010-2012 Source: Bureau of Local Government Finance Deficit Deficit of the NG stood at PhP242.8 billion or 2.3 percent of GDP in 2012. This was within the target deficit-to-GDP ratio of 2.6 percent. Given improved revenue collections, the fiscal deficit ratio to GDP in the first semester of 2013 was 0.9 percent, below the 2.0 percent full-year target. Meanwhile, consolidated public sector deficit (CPSD)8 amounted to PhP162.7 billion or 1.5 percent of GDP in 2012. This was lower by PhP12.4 billion compared to the deficit incurred in 2011 (PhP175.1 billion or 1.8% of GDP) and significantly below the PhP362.8 billion deficit (4.0% of GDP) in 2010. In the first semester of 2013, CPSD was even lower at PhP56.9 billion or 1.0 percent of GDP. The lower CPSD is partly attributed to improved financial position of government-owned and -controlled corporations (GOCCs) following the reforms in GOCC governance including the enactment of the GOCC Governance Act in 2011. 7 The slowdown in LGU income in 2012 was due to the lower IRA received by LGUs given the decline in the national tax revenues in 2009 following the enactment of several revenue eroding measures. 8 CPSD is the combined financial positions (in terms of balances, positive for surplus and negative for deficit) of the NG, the monitored non-financial government corporations (MNFGCs), the government financial institutions (GFIs), LGUs, social security institutions (SSIs) as well as the cost of restructuring the defunct Central Bank and the financial position of the present Bangko Sentral ng Pilipinas (BSP). 35Macroeconomic policy Debt Overall debt profile of the public sector remains favorable owing to the low-interest environment and improved macroeconomic fundamentals. The outstanding public sector debt (OPSD) as of June 2013 amounted to PhP7.7348 trillion or 64.9 percent of GDP.9 This OPSD-to-GDP ratio was lower than the 71.2 percent in end-2012, 78.2 percent in end-2011, and 73.1 percent in end-2010. In the past three years, domestic debt accounted to more than half of the total OPSD. Meanwhile, NG debt-to-GDP ratio remains sustainable, registering 52.4 percent, 51.0 percent, 51.5 percent and 45.8 percent in 2010, 2011, 2012 and June 2013, respectively. The share of actual interest payments to the total disbursements declined to 17.9 percent in 2011 and 17.6 percent in 2012 from 19.3 percent in 2010 due to lower NG deficit, the deliberate policy to restructure the domestic and foreign borrowing mix, and the appreciation of the peso against the US dollar. For the first semester of 2013, this share declined to 17.6 percent. Resilient monetary and external sectors The Bangko Sentral ng Pilipinas (BSP) remains committed to a stable monetary policy that is conducive to achieving sustainable economic growth. Since 2010, the annual average headline inflation rate remained within the 3.0- to 5.0-percent target range set in the PDP. Moreover, the country enjoyed a healthy external payments position despite uncertainties in the global environment and heightened risk aversion of investors following weak growth in the advanced economies. Indicators 2010 2011 2012 2013 Baseline Target Actual Target Actual FY Target H1 actual Inflation rate (in %) 3.8 3.0-5.0 4.6 3.0-5.0 3.2 3.0-5.0 2.9 Goods exports (balance of payments, in billion US$) 50.7 55.3-55.8 47.5 62.5 51.6 71.3 22.2 Table 2.4. Performance of the monetary and external sectors, 2010-2013 Note: Target figures are based on PDP 2011-2016. For 2013, goods exports figures use the Balance of Payments Manual (BPM) 6 classification. However, full-year targets for 2011-2013, as indicated in the PDP 2011-2016, are based on BPM5 standards. Inflation rate Year-on-year headline inflation rates for 2010, 2011, and 2012 were at 3.8 percent, 4.6 percent, and 3.2 percent, respectively. The lower average headline inflation in 2012 was due largely to lower food prices on the back of ample domestic supply. This situation was maintained in the first half of 2013, with headline inflation settling at 2.9 percent. 9 Debt ratios are computed using the full-year GDP program based on the 2014 BESF 36 Philippine Development Plan 2011-2016 MIDTERM UPDATE Inflation rate faced by the poorest households eased at 2.9 percent in 2012, lower compared to the 3.2-percent average for all households in the same period. Still, prices remained volatile and this was observed in the food, beverages and tobacco, clothing and housing and repairs indices. In fact, in the first half of 2013, the inflation rate among the poorest 30 percent households was higher at 3.3 percent than those faced by all households at 2.9 percent. Inflation rate in areas outside National Capital Region (AONCR) continued to be relatively higher than in the NCR, highlighting the need for better transport logistics in these areas. In 2012, inflation in AONCR averaged at 3.2 percent while that in the NCR was at 2.9 percent. Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2010 6.0 2011 2012 2013 5.0 4.0 3.0 2.0 1.0 0.0 Inflation (Bottom 30% HHs) Inflation (All HHs) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2010 6.0 2011 2012 2013 5.0 4.0 3.0 2.0 1.0 0.0 Inflation for AONCRInflation for NCR Figure 2.3. Year-on-year inflation for all and bottom 30% households, 2010-Q2 2013 (in %) Figure 2.4. Year-on-year inflation for NCR and AONCR, 2010-Q2 2013 (in %) Source: National Statistics Office Balance of payments (BOP)10 The BOP has been in surplus since 2005. For the past three years, it yielded surpluses of US$14.3 billion in 2010, US$11.4 billion in 2011, and US$9.2 billion in 2012. In 2012, preliminary data show that the BOP position yielded a surplus of US$9.2 billion, although this was 19.0 percent lower than the surplus of US$11.4 billion in 2011. For the first half of 2013, the country’s BOP position remained in surplus and amounted to US$2.6 billion. Rising global demand for professional and skilled Filipino workers and the continuous growth of the information technology-business process management (IT-BPM) services boosted the current account balance. The country’s IT-BPM industry got a major boost due to President Aquino’s approval of a P500-million fund for the Technical Education and Skills Development Authority (TESDA), which is expected to provide short-term training for “near-hire” applicants who 10 2010-2012 are based on the BPM5 concept while the 2013 BOP figures are already based on the BPM6 classification 37Macroeconomic policy require remedial training.11 Meanwhile, the capital and financial account yielded a net inflow of US$5.7 billion in 2012, slightly lower than the recorded US$6.0 billion in 2011. Figure 2.5. Balance of Payments, 2010 to 2013 (in billion US$) 10.0 8.0 6.0 4.0 2.0 0.0 2.0 Q1 Q2 Q3 Q4 4.0 6.0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2010 2011 2012 Overall BOP Position Current Account Capital and Financial Account Overall BOP Position Current Account 5.0 6.0 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 5.0 4.0 3.0 2.0 1.0 0.0 1.0 Q1 Q2 Q3 Q4 Q1 Q2 2012 2013 Capital Account Financial Account Source: Bangko Sentral ng Pilipinas; Note: Figures are based on BPM5 standards Exports of goods grew by 8.5 percent in 2012, outpacing that of imports of goods which grew by 5.1 percent. However, export of goods declined by 3.7 percent in first semester of 2013, following the lackluster performance of manufactured exports. With export revenues remaining below target, the bigger challenge is to diversify the product and market mix of exports. Electronics products (including other electronics) continued to constitute the bulk of exports at 48.4 percent in 2012, although relatively lower from the proportion observed in 2004 at 71.8 percent. Similarly, export shipments remained concentrated to the country’s traditional markets such as US, Japan, and China. The BOP surpluses recorded in the last three years imply that the economy has earned more than it spent externally. This led to the steady build-up of international reserves. Gross international reserves (GIR) as of 2012 rose to US$83.8 billion, higher by US$8.5 billion than the US$75.3 billion as of 2011. The 2012 GIR level could adequately cover 11.9 months’ worth of imports of goods and payments of services and income. It is also 9.9 times the country’s short-term external debt based on original maturity and 6.5 times based on residual maturity. As of June 2013, GIR reached US$81.3 billion, enough to cover 11.6 months’ worth of imports of goods and payments of services and income. It is also 8.5 times the country’s short-term external debt based on original maturity and 5.7 times based on residual maturity. Overall, the accumulation of foreign exchange reserves in recent years provided the BSP ample flexibility to respond to risks associated with capital flows and meet any foreseeable net demands for foreign currencies in order to preserve the international stability and convertibility of the Philippine peso. 11 Sourced from the Department of Trade and Industry’s “Upbeat” (Issue No. 23, 12/01/11), retrieved from http://dti.gov.ph/uploads/DownloadableForms/Upbeat%20No.%2023%20-Canada%20keen%20on%20PHL.pdf 38 Philippine Development Plan 2011-2016 MIDTERM UPDATE Figure 2.6. Gross International Reserves (GIR) and reserve adequacy measures Source: Bangko Sentral ng Pilipinas 100 80 60 40 20 0 Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun 2010 2011 2012 2013 GIR (in US$ billion, lhs) Import Cover (rhs) Short-term External Debt Cover Original Maturity (rhs) Short-term External Debt Cover Residuak Maturity (rhs) 14 12 10 8 6 4 2 0 The external debt ratio, or outstanding external debt as a percentage of GDP, improved from 30.1 percent in 2010 to 27.0 percent in 2011 and to 24.1 percent in 2012. On the other hand, the external debt service ratio (DSR) increased to 9.4 percent in 2011 from 8.7 percent in the previous year due to the decline in exports receipts as the Eurozone and the US crises sapped global demand. In 2012, the ratio improved to 7.1 percent from 9.4 percent the previous year due to higher receipts and lower debt payments. As of June 2013, preliminary data show that the external debt ratio continued to decline to 21.8 percent from 22.8 percent as of March 2013, indicating the country’s very strong liquidity position vis-à-vis payment obligations. During the same period, the DSR also improved to 7.5 percent from 9.2 percent – well below the 20- to 25-percent international benchmark. 39Macroeconomic policy III. UPDATED PDP TARGETS At the end of the planning period, the economy is projected to grow by 7.5 to 8.5 percent from 6.5 to 7.0 percent in 2013, as shown in Table 2.5. Table 2.5. Revalidated results matrix (RM) on macroeconomic policy (in %) Indicators Baseline (2010) End-of-Plan target (2016) Assumptions and risks Sector outcome: Stable macroeconomy achieved Assumptions: • Macroeconomic fundamentals (e.g. inflation, GDP growth, fiscal balance, external position, interest rates) remained sound • Political stability is maintained • Governance improvement efforts are leveled up • Preparation and response to natural disasters and calamities are well-managed Risks: • Political instability • Economic crisis • Projects/programs are not implemented or not implemented on time High real GDP growth achieved 7.6 7.5-8.5 Subsector outcome A: Sustainable fiscal sector achieved Higher government revenue-to-GDP ratio achieved 13.4 17.1 Tax revenue-to-GDP ratio improved 12.1 16.1 Non-tax revenue-to-GDP ratio achieved 1.3 0.9 Primary expenditure-to-GDP ratio improved 13.6 16.5 Percentage share of interest payments in the total disbursements declined 19.3 13.7 Positive primary balance-to-GDP ratio maintained 0.2 0.6 NG fiscal deficit-to-GDP ratio reduced 3.5 2.0 Outstanding NG debt stock as a share of GDP reduced 52.4 43.4 Sustainable consolidated public sector deficit as a share of GDP maintained 4.0 0.8 (2014) Local income sources of LGUs increased (year-on-year growth rate) 1.0 (2012) 5.7 (2015) Subsector outcome B: Resilient external sector maintained Positive sustainable current account balance-to-GDP ratio maintained 2.8 (2012) 1.2 External debt-to-GDP ratio reduced 24.1 (2012) 23.5 (2014) Subsector outcome C: Monetary policy made resilient Low and stable inflation rate achieved 3.8 2.0-4.0 Note: For indicators and targets in the financial sector, refer to Chapter 5: Resilient and inclusive financial system Fiscal sector The NG aims to increase the revenue effort to 17.1 percent of GDP by 2016. The tax effort is targeted to increase to 16.1 percent in 2016 from 13.4 percent in 2013. Correspondingly, non-tax revenue collection effort shall be maintained at 1.3 percent in 2013 and with an average of 1.0 percent for 2014-2016. 40 Philippine Development Plan 2011-2016 MIDTERM UPDATE The NG adopted a deficit target of 2.0 percent of GDP beginning 2013 until 2016. To achieve this, it will sustain its strategy on fiscal consolidation, with the growth of revenues outpacing that of disbursements. Moreover, the NG aims to further decrease the debt to a 43.4-percent ratio to GDP in 2016 from 45.8 percent as of June 2013. At the beginning of the planning period, it stood at 52.4 percent. The ratio of interest payment to total disbursement is seen to decline to 16.7 percent for full year 2013 and will further drop to 13.7 percent in 2016 from a high of 19.3 percent in 2010. At the subnational level, the BLGF projects local sources of income to grow by 6.3 percent in 2013, and by 5.7 percent in 2014 and 2015. Monetary and external sectors For full year 2013, the baseline inflation forecast is pointing close to the low-end of the 3.0- to 5.0-percent target range. For 2014, the inflation target range is retained at 3.0 to 5.0 percent while a lower inflation band of 2.0 to 4.0 percent is targeted for both 2015 and 2016. On the external sector, the aim is to maintain a positive current account balance to-GDP ratio, reaching 1.2 percent by 2016. IV. STRATEGIC FRAMEWORK Figure 2.7 presents the strategic framework in achieving a stable macroeconomy. Seven strategies are geared towards achieving the three subsector outcomes of achieving a sustainable fiscal sector, maintaining the resilience of the external sector, and making the monetary and financial sectors resilient and inclusive. Figure 2.7. Strategic framework on macroeconomic policy Sector outcome Subsector outcomes Strategies Stable macroeconomy achieved Sustainable fiscal sector achieved Resilient external sector maintained Monetary and financial sector made resilient and inclusive 1. Implement revenue enhancement measures 2. Implement expenditure management reforms 3. Formulate medium-term debt management strategy 4. Achieve low and stable inflation 5. Maintain current account surplus to GDP 6. Reduce external debt to GDP 7. Strengthen financial sector (see Chapter 5) 41Macroeconomic policy Subsector outcome A: Sustainable fiscal sector achieved Strategy 1: Implement revenue enhancement measures Revenue-enhancing measures will focus on heightened collection efforts of the BIR in tandem with anti-smuggling strategies of the BOC in coordination with relevant government agencies. In the case of the BIR, enhanced tax collection will be supported by increased collection efficiency from the self-employed business and professionals, better assessment of estate taxes, and strengthened Fiscal Unit/ Revenue Intelligence Unit. On the other hand, the BOC’s comprehensive anti smuggling strategies will include port accreditation, import mapping, fuel marking alongside the conduct of audit on oil companies, trade statistics reconciliation, and the requirement to submit a rolling import plan from all importers of sensitive commodities. Table 2.6. Summary of revenue enhancement measures Agency initiative Coordination Bureau of Internal Revenue (BIR) Self-employed business and professionals National Government Agencies (NGAs) to use Income Tax Return (ITR) as basis for transactions with the government Estate Taxes Philippine Statistics Authority and Civil Registry Fiscal/Revenue Intelligence Unit BIR, BOC Bureau of Costume (BOC) Port Accreditation BOC, Department of Trade and Industry (DTI) Import Mapping BIR, BOC, LGUs Audit of Oil Companies BOC, BIR, Department of Energy (DOE) Trade Statistics Reconciliation BOC, DTI Rolling Import Plan DTI Source: DOF Other policy and legislative initiatives that will be pursued to support the expansion of fiscal space and to get on a sustainable revenue-and-spending path for the fiscal sector include (a) Customs Modernization and Tariff Act (CMTA); (b) rationalization of the mining fiscal regime; and (c) transparency and accountability in the administration and rationalization of fiscal incentives. The fiscal performance of LGUs will likewise be improved. To this end, the DOF, through the BLGF and in partnership with LGUs, will strive to increase locally sourced revenues. This will be achieved through administration reforms involving the updating of the Local Revenue Codes, reviewing and revision of the LGU schedule of market values, and implementation of the idle land tax (ILT). Other supporting measures include the enhancement of local treasury and assessment manuals, as well as monitoring of financial reports and treasury operations of 42 Philippine Development Plan 2011-2016 MIDTERM UPDATE LGUs including the strengthening of LGU debt monitoring systems. The DOF will also pursue the passage of important legislative proposals, such as the LGU Income Re-classification System Bill and the proposed Valuation Reform Act. Achieving fiscal sustainability also requires an effective management of the government’s assets and liabilities. With the passage of RA 10149 or the GOCC Governance Act of 2011,12 the Governance Commission on GOCCs (GCG) will help ensure the sustained dividend collection from GOCCs. An effective disposition of government assets will also be pursued, estimated to be between PhP1.5 billion to PhP3.5 billion for the period 2013 to 2015. To complement the efforts to improve the administration of government resources, international finance management will be enhanced through strategic mobilization and allocation of funds. In particular, official development assistance (ODA)/ international grants and loans will be aligned to support strategic key priorities of the PDP. To achieve this, the processing for NG grants will be streamlined through the creation of database, process workflow analysis and monitoring systems that will be fully operational by 2014. Strategy 2: Implement expenditure management reforms The government remains committed to the implementation of expenditure management reforms that aim for a strong and healthy fiscal position over the medium term (sustaining deficit at 2.0 percent of GDP until 2016), better quality expenditures, and more transparent and accountable spending. Expenditure policy will seek to substantially increase productive expenditures especially for infrastructure and social services. Public expenditure on infrastructure, as a share of GDP, will be raised from 2.5 percent in 2013 to at least 5.1 percent by 2016. Similarly, public spending on social services is programmed to increase. From an average of about 33.5 percent in the 2011-2012 period, the share of social services expenditures to total budget (net of debt amortization) is programmed to be 34.9 percent in 2013 and 37.2 percent in 2014, or equivalent to PhP699.4 billion and PhP842.8 billion, respectively. Beginning 2013, the government has intensified efforts to weed out lump-sum budgets. It also piloted the one-year validity of appropriations (a shift from the current two-year validity of appropriations on maintenance and capital outlays). Line agencies were also directed to focus on their core mandates and accelerate the delivery of services. The Department of Public Works and Highways (DPWH) has been designated as the principal agency to ensure that infrastructure outlays are focused on “the right projects, with the right costs and the right quality.” This means that infrastructure budgets for education facilities, hospitals and farm-to market roads will be transferred to the DPWH for implementation. 12 Signed into law by President Benigno Aquino III on June 2011, the law also created the Governance Commission on GOCCs (GCG) as an oversight body. Beginning 2013, the government has intensified efforts to weed out lump sum budgets. 43Macroeconomic policy Moreover, the DBM is rolling out technological innovations to speed up budget release and procurement transaction, improve information flows and strengthen transparency and accountability. The Government Integrated Financial Management Information System (GIFMIS), which enables timely and more comprehensive monitoring of budget execution and agency utilization of funds, is currently being developed. Meanwhile, the National Payroll System will be pilot tested in 2014, as well as the Cashless Purchase Cards System in the military. In crafting the 2014 budget, the government started with Cabinet-level discussions on the government’s priorities that will be funded for 2014 to 2016, with focus on 2014. The decisions and commitments were summarized in a Budget Priorities Framework to guide all departments in strategically planning their activities and crafting their budgets. The 2014 budget also adopts the Performance informed Budgeting, integrating performance information from the strengthened Organizational Performance Indicator Framework (OPIF) strategy to the National Expenditure Program/General Appropriations Act (GAA). The greater disaggregation of the budget and the one-year validity of appropriations will pave the way for the implementation of the GAA, which will serve as the Budget Release Document for 2014. This will eliminate the duplicative processes of requesting, processing and releasing budgetary allotments. The roadmap for Public Financial Management (PFM) reforms will continue to be implemented, part of which includes the adoption of the Treasury Single Account by 2014. This will revolutionize cash management operations and provide more predictability in budget releases and ease in cash programming and financial reporting. The national budget will continue to reflect the nation’s priorities in accordance with the PDP. The budget preparation will be more open and participatory and will engage multi-sectoral stakeholders. The evaluation of existing major programs/ projects, through the Zero-based Budgeting ( ) approach, will be widened in scope. The government’s performance in achieving the target outputs and sectoral outcomes will be continuously monitored under the OPIF, where performing institutions will be rewarded under a performance-based incentive system. Spending commitments of government agencies will be constantly checked, so that prompt, efficient and effective public goods and services will be delivered. To secure the irreversibility of these reforms, the government will deeply embed good governance measures in the policies, processes, and practices of government institutions. A way of embedding these reforms is to leverage technology to radically improve the pace and quality of public service delivery. The government will also ensure that the reforms actually bring immediate and substantial benefit to our people by way of adequate social and economic services, as well as inclusive growth. The budget preparation will be more open and participatory and will engage multi-sectoral stakeholders. 44 Philippine Development Plan 2011-2016 MIDTERM UPDATE Strategy 3: Formulate medium-term debt management strategy For debt management, a strategic framework will include the formulation of a medium-term debt strategy with cost-risk analysis. Improvement of the domestic debt market will likewise be supported through the design and implementation of a domestic debt issuance program that produces liquid benchmarks, taking into account factors such as refinancing risk and market needs.13 The DOF, with the Bureau of the Treasury (BTr) will also work for the unification of taxable and non taxable investors to support the secondary market and reduce distortions on the true interest cost of debt instruments. A framework for managing contingent liabilities will likewise be developed, consisting of regular analysis and quantification of contingent liabilities from all sources including public-private partnership (PPP) projects. This is to be accompanied by a process for the regular monitoring and updating of all contingent liabilities for each project and aggregating them at the macro level. To ensure transparency, there is also a need for a disclosure process of contingent liabilities in the Fiscal Risk Statement (FRS) as well as in the GAA. Subsector outcomes B and C: Resilient external sector maintained; monetary and financial sector made resilient and inclusive Strategy 4: Achieve a low and stable inflation While the inflation environment remains benign, monetary authorities will continue to monitor emerging price and output conditions to ensure that monetary policy remains supportive of sustained non-inflationary economic growth. Strategy 5-6: Maintain current account surplus to GDP ratio and reduce external debt to GDP On the external front, policymakers will ensure that the economy is cushioned from the adverse financial impact of external shocks. In addition, a market-determined exchange rate and a comfortable level of international reserves will be maintained to better insulate the economy from external shocks that may disrupt the pace of economic growth. External debt sustainability will be promoted by keeping the country’s outstanding external debt manageable and within the economy’s capacity to service in an orderly manner. The BSP will continue to actively participate in regional and international cooperation programs to improve its capability to undertake economic surveillance and help generate quality outputs that would contribute to informed formulation of policies supportive of the regional integration and cooperation framework. Specifically, the BSP will continue its active participation in the ASEAN meetings, Chiang Mai Initiative Multilateralization, Executives’ Meeting of East Asia-Pacific Central Banks (EMEAP) Monetary and Financial Stability Committee, ASEAN Working Committee on Financial Services-Liberalization (WC-FSL), and other regional cooperation undertakings. 13 Ideally, “benchmarks” provide guidance in managing government debt, usually expressed as numerical targets for certain risk indicators such as the maturity structure of the debt, currency composition, and interest rate duration. A market-determined exchange rate and a comfortable level of international reserves will be maintained to better insulate the economy from external shocks. 45Macroeconomic policy Moreover, the BSP’s US$1-billion commitment to the International Monetary Fund’s (IMF) crisis-fighting fund pool and its US$500-million pledge contribution to the IMF’s expanded New Arrangements to Borrow (NAB) program14 is a show of support to the global efforts in stabilizing the world economy and maintaining its growth path. As a member of the global community of nations, the Philippines also benefits from economic and financial stability across the globe. In light of the complexities and risks associated with global economic and financial interdependencies, the monetary authorities will continue to pursue the expansion of its monetary policy toolkit and to adopt best practices used by other central banks. To this end, the BSP’s policy agenda will continue to be geared towards the amendment of the BSP Charter.15 Specifically, the following proposed amendments will be pursued: • Explicit inclusion of the objective of financial stability and payments and settlements system stability; • Removal of the thresholds in the growth of monetary aggregates and credit as guiding principles in monetary management; • Restoration of authority to issue negotiable certificates of indebtedness even during normal times; • Authority to create reserve buffers against future risks and contingencies; • Increase in its capitalization; and • Expansion of the authority of the BSP to obtain data from the non-bank sector. The explicit mandate of the BSP to ensure stability of the financial and payments system merely formalizes the practice adopted by the BSP and recognizes the fact that monetary stability is deeply intertwined with financial stability and that the conduct of monetary policy and financial policy is completely rooted in the stability and soundness of the payment and settlements system. With respect to expanded authority to access data from the non-bank sector, the proposed change 14 The pledge from the Philippines to the IMF’s NAB program is on top of the country’s $251.5-million contribution to the Financial Transactions Plan (FTP), another lending facility of the IMF. The FTP is the mechanism by which the IMF finances its lending and repayment operations through a transfer of foreign exchange from members with strong external position to borrowing members. The Philippines holds a creditor (or reserve) position in the IMF through its participation in the Fund’s FTP. By virtue of their participation in the FTP, emerging market economies like the Philippines have joined international cooperation efforts to mitigate the spillover effects of Europe’s sovereign debt crisis by enhancing global financial safety nets. Most importantly, the country’s continued participation in the FTP will pave the way for the BSP’s admission in the NAB facility, a credit (lending) arrangement between the IMF and member countries or institutions that aims to forestall or cope with difficult situations that could impair the international monetary system. The participation in the NAB is a significant step in strengthening international cooperation and demonstrates the BSP’s strong commitment to global efforts to help address threats to the international monetary system. 15 The proposal to amend the BSP charter was also included in the priority legislative measures supported by the Economic Development Cluster (Econ Cluster). Monetary authorities will continue to pursue the expansion of its monetary policy toolkit and to adopt best practices used by other central banks. 46 Philippine Development Plan 2011-2016 MIDTERM UPDATE 16 For a more detailed discussion, see Chapter 5. is seen to expand and enrich the information upon which the BSP bases its policy decisions, as well as to further improve the quality of research done by its staff. Lastly, the proposed creation of reserve accounts, combined with an increase in capitalization, will help insulate the credibility of monetary and financial policy from the implications of losses to its financial position. The BSP will also continue to mainstream financial inclusion in its domestic policy agenda.16 Hence, it will continue to adopt a proactive role in microfinance development in areas of policy and regulation, advocacy, training and capacity building to support the development of a sustainable microfinance business environment in the country. Strategy 7: Strengthen financial sector (see Chapter 5: Resilient and inclusive financial system) V. PLAN IMPLEMENTATION Annual plan targets are set out in the PDP Midterm Update, which in turn, are translated into key performance indicators geared towards achieving a stable macroeconomy as reflected in the annual target indicator matrix in Table 2.7. The growth path of real GDP will be monitored by the NEDA Secretariat using the National Income Accounts (NIA) data to be reported by the PSA. The DOF (including BIR, BOC, and BLGF), DBM, and BTr share the responsibility of overseeing the implementation of strategies identified under the subsector outcome on sustainable fiscal sector that focus on the revenue, expenditure and debt operations of the national government and LGUs. As the country’s monetary authority, the BSP is responsible for ensuring financial and monetary stability. It will also monitor the two indicators representing the country’s foreign transactions. To ensure that these outcomes are achieved as indicated in the RM, the Development Budget Coordination Committee (DBCC) will serve as the interagency committee that will review and monitor the implementation of strategies identified in this chapter and the macroeconomic indicators. 47Macroeconomic policy Table 2.7. Annual target indicator matrix on macroeconomic policy, 2013-2016 Indicators Annual Plan targets (in %) Means of verification Agency responsible2013 2014 2015 2016 Sector outcome: Stable macroeconomy achieved High real GDP growth achieved 7.2* 6.5-7.5 7.0-8.0 7.5-8.5 NIA NEDA, PSA** Subsector outcome A: Sustainable fiscal sector achieved Higher government revenue-to-GDP ratio achieved 14.7 15.5 16.2 17.1 BESF Fiscal Parameters table DOF Tax revenue-to-GDP ratio improved 13.4 14.5 15.2 16.1 BESF Fiscal Parameters table DOF Non-tax revenue-to-GDP ratio achieved 1.3 1.1 1.0 0.9 BESF Fiscal Parameters table DOF Primary expenditure-to GDP ratio improved 13.9 14.9 15.4 16.5 BESF Fiscal Parameters table DOF/DBM Percentage share of interest payments in the total disbursements declined 16.7 15.4 14.6 13.7 BESF Fiscal Parameters Table DBM, BTr Positive primary balance to-GDP ratio maintained 0.8 0.7 0.7 0.6 BESF NG Cash Disbursements table DOF/DBM NG fiscal deficit-to-GDP ratio maintained 2.0 2.0 2.0 2.0 BESF Fiscal Parameters table DOF/DBM Outstanding NG debt stock as a share of GDP reduced 48.7 46.8 45.8 43.4 BTr NG Outstanding Debt Report and NIA DOF-BTr Sustainable consolidated public sector deficit as a share of GDP maintained 0.7 0.8 NA NA BESF CPSFP Table DOF Local income sources of LGUs increased (year-on year growth rate) 6.3 5.7 5.7 NA LGU Fiscal Data DOF-BLGF Subsector outcome B: Resilient external sector maintained Positive sustainable current account balance to-GDP ratio maintained 2.3 1.6 1.5 1.2 BESF Macroeconomic Parameters table BSP*** External debt-to-GDP ratio reduced 24.9 23.5 NA NA BSP Selected External Debt Ratios table BSP*** Subsector outcome C: Monetary policy made resilient Low and stable inflation rate achieved 3.0-5.0 3.0-5.0 2.0-4.0 2.0-4.0 BESF Macroeconomic parameters table BSP * Actual data **PSA as data source, NEDA to monitor only ***BSP to monitor only 49Competitive and innovative industry services sectors 3Competitive and innovative industry and services sectors 50 Philippine Development Plan 2011-2016 MIDTERM UPDATE I. INTRODUCTION The Philippines’ long-term growth rate is estimated to be at 4.0 percent per year. Assuming that this has not changed and given a high population growth rate averaging 2.11 percent annually from 1990 to 2010, per capita growth rate only stands at 1.89 percent. This low growth implies that it will take at least 37 years before incomes double. It is no wonder, then, that poverty reduction has been painfully slow. What the country needs, instead, is rapid growth that is sustained over a longer period so that incomes are increased significantly and quality of life is improved dramatically. The industry and services (I&S) sectors continue to be the growth drivers of the Philippine economy. However, this growth needs to be sustained and made more inclusive. A globally competitive sector is one that is able to tap the global market and, therefore, grow faster. An innovative sector, on the other hand, implies the creation of new products, which can mean additional markets and perhaps new production processes that will allow the sector to link better with the primary sectors, namely agriculture and fisheries. Underlying all these are the strategies to expand markets, part of which is the expansion of the domestic market resulting from population and income growths. The bigger part, however, will be the penetration into foreign markets, including tourism. To promote global competitiveness and innovation in the I&S sectors, the government will continue to improve the business climate, promote an environment that increases productivity and innovative capacity, enforce regulations that enhance consumer welfare and expand market access, as indicated on Figure 3.1. A globally competitive sector is one that is able to tap the global market and, therefore, grow faster. An innovative sector, on the other hand, implies the creation of new products. 51Competitive and innovative industry services sectors II. ASSESSMENT AND CHALLENGES Contribution to rapid growth The I&S sectors contributed 6.5 percentage points (ppts) of the 6.8-percent gross domestic product (GDP) growth rate in 2012 and 7.5 ppts of the 7.7-percent expansion in the first half of 2013. The 2012 industry growth rate, however, was below the original Philippine Development Plan (PDP) growth target (8.1-9.1%) while the 2013 first half growth exceeded the revised growth target for 2013 (6.4 7.5%).17 On the other hand, the services sector’s growth was already within the target (7.1-8.1% for 2011 and 2012; 6.3-7.3% for 2013).18 The services sector continues to account for more than half of the country’s GDP. Contribution to inclusive growth I&S sectors remained the major economic sectors in all regions, except the Autonomous Region in Muslim Mindanao (ARMM). Based on 2012 data, regions with the highest contribution to the gross value added (GVA) of the industry sector are Region IV-A (33.3%) and National Capital Region or NCR (19.4%) while those with the lowest contribution are ARMM (0.1%) and Region II (0.6%). Regions with the highest contribution to the GVA of the services sector are NCR (51.7%) and Region IV-A (9.9%) while those with the lowest contribution are ARMM (0.4%) and CARAGA (1.0%).19 17 Revised growth estimates as of July 2013 18 Revised growth estimates as of July 2013 19 2012 Gross Regional Domestic Product. National Statistical Coordination Board (NSCB) Figure 3.1. Results framework on competitive and innovative industry and services (I&S) sectors Goals Intermediate goals Subsector outcomes Poverty in multiple dimensions reduced and massive quality employment created Rapid and sustained economic growth achieved Equal development opportunities achieved Sector outcome Globally competitive and innovative industry and services (I&S) sectors achieved Business climate improved Productivity and innovative capacity increased Consumer welfare enhanced Market access expanded 52 Philippine Development Plan 2011-2016 MIDTERM UPDATE From 2010 to 2012, I&S sectors generated 1.4 million additional employment, which falls short by 157,000 of the target of 1.56 million additional employed persons in these sectors. The capacity of the industry sector, especially manufacturing, to absorb displaced and/or shifting labor force and new entrants has remained the same. From 2010 to 2012, the industry sector accounts for only 15 percent of total employment, with manufacturing only 8 percent. Employment elasticity is lowest in the industry (0.37) compared to agriculture (0.43) and services (0.67).20 On a subsector level, employment in the manufacturing sector weakly responds to its growth, with employment-to-growth elasticity of 0.22 in contrast with wholesale and retail trade under the services sector with 0.78.21 Apart from the low absorption of labor, a substantial proportion of those working in I&S, especially in services, is considered vulnerable.22 In 2012, 14.3 percent of those employed in industry are considered vulnerable, with 32.5 percent in services. Investments Based on Table 3.1, total approved foreign and local investments reported by investment promotion agencies (IPAs) reached PhP697.7 billion in 2012, lower by 6.6 percent than in 2011. The contraction is observed among domestic investments, which shrank by 16.4 percent. In contrast, approved foreign investments increased by 12 percent. Manufacturing; electricity, gas, steam and air conditioning supply; and real estate accounted for the bulk of these investments. In the first half of 2013, total approved investments amounted to PhP266.2 billion, which is 22.6 percent higher than in the same period last year. Domestic investments slightly decreased while foreign investments more than doubled compared with the same period last year. Meanwhile, inflows of net foreign direct investments (FDI)23 to the Philippines in 2012 amounted to US$2.8 billion, which is 54 percent higher than the US$1.3 billion recorded in 2010,24 although this is considerably less than those in other Association of Southeast Asian Nations (ASEAN) member states. Of the US$114 billion net FDI inflows to ASEAN in 2011, Singapore received the most with US$64 billion (56%) followed by Indonesia (17%), Malaysia (11%), Thailand (7%) and Vietnam (6.5%). The Philippines tailed the list, together with Cambodia and Lao PDR, with only 1 percent of the total.25 20 Based on regression of income and employment data from 1998 to 2011 21 Source of basic data: NSCB and NSO 22 Number of self-employed and unpaid family workers 23 Approved foreign investments reported by NSCB represent the amount of proposed contributions or share of foreigners to various projects in the country as approved and registered by the investment promotion agencies. Net FDI reported by the BSP is defined as an international investment by a resident entity in one economy (“direct investor”) in an enterprise resident in another economy (“direct investment enterprise “) made with the objective of obtaining a lasting interest. 24 The 2012 figure is based on Balance of Payments Manual (BPM) 6 classification (BPM6) while 2010 figure is based on BPM5. 25 Foreign direct investment statistics database as of 30 September 2012, retrieved from http://www.asean.org/ news/item/foreign-direct-investment-statistics Apart from the low absorption of labor, a substantial proportion of those working in industry and services, especially in services, is considered vulnerable. 53Competitive and innovative industry services sectors 26 2010 ranking is based from the 2010-2011 WEF report while 2013 ranking is based from the 2013-2014 report 27 Namely: (a) institutions, (b) infrastructure, (c) macroeconomic environment, (d) health and primary education, (e) higher education and training, (f) goods market efficiency, (g) labor market efficiency, (h) financial market development, (i) technological readiness, (j) market size, (k) business sophistication and (l) innovation. 28 The WB-IFC competitiveness ranking is based on the following factors: (a) trading across borders, (b) getting electricity, (c) dealing with construction permit, (d) enforcing contract, (e) registering property, (f) protecting investors, (g) getting credit, (h) paying taxes, (i) starting a business, and (j) resolving insolvency. The ranking reflects only collected data from the economy’s largest business city, which in the case of the Philippines is Quezon City, and may not be representative of the regulations in other parts of the economy. 29 2010 ranking is based from the 2009-2010 WB-IFC Doing Business Report while 2013 ranking is based from the 2013-2014 report Table 3.1. Total approved investments, 2010-H1 2013 (in million PhP) Nationality 2010 2011 2012 H1 2013 Filipino 346,632 488,911 408,560 172,833 Foreign 196,064 258,231 289,118 93,419 Total 542, 696 747,142 697,678 266,252 Source: National Statistical Coordination Board Note: 2010 covers data from four investment promotion agencies (IPAs): Board of Investments (BOI), Clark Development Corp. (CDC), Philippine Economic Zone Authority (PEZA) and Subic Bay Metropolitan Authority (SBMA). Two IPAs were added in 2011: Authority of the Freeport Area of Bataan (AFAB) and BOI-ARMM. The Cagayan Economic Zone Authority (CEZA) was added in 2012. Business climate Business climate in the Philippines has considerably improved, as reflected in various competitiveness rankings. In the World Economic Forum (WEF) Global Competitiveness Report, the country improved to 59th place out of 148 countries in 2013 from 85th place out of 139 countries in 2010.26 Of the 12 pillars of competitiveness,27 the Philippines advanced in 10, except in primary education and health. The country also improved its ranking in the World Bank-International Finance Corporation (WB-IFC) Doing Business Report28 from 144th place out of 183 economies in 2010 to 108th place out of 189 countries in 2014.29 Infrastructure The PDP 2011-2016 identified inadequate infrastructure as a major constraint to long-term economic growth and employment generation. To address this, government has been investing heavily in infrastructure development. In 2011 and 2012, government spent 2.6 and 2.4 percent of GDP, respectively, on infrastructure projects. As a result, the country’s ranking in the infrastructure pillar of the WEF Global Competitiveness Reports improved from 104th out of 139 countries in 2010 to 96th out of 148 countries in 2013. 54 Philippine Development Plan 2011-2016 MIDTERM UPDATE Regulatory environment In May 2013, President Benigno S. Aquino III issued Administrative Order 38 which constituted an interagency task force headed by the Department of Trade and Industry (DTI) to implement reforms and action plans to improve the ease of doing business in the country.30 The most significant of these efforts were the Business Permit and Licensing System (BPLS), Enhanced Business Name Registration (EBNR) and the Philippine Business Registry (PBR). Business Permit and Licensing System (BPLS) With the streamlining of the BPLS, the number of days to process business permits and licenses was reduced to five days or less for renewals and not more than 10 days for new applications in 823 out of 1,634 local government units (LGU). Enhanced Business Name Registration System (EBNRS) The time to register a business was reduced from four to eight hours to only 15 minutes under the EBNRS, as information fields in the application document were reduced from 36 to 18 and the number of pages were lessened from nine to one. Philippine Business Registry (PBR) The average processing time to register sole proprietorships was reduced to 30 minutes with the use of the PBR. Corporations registered with the Securities and Exchange Commission (SEC) are also able to use the PBR in kiosks located in the SEC Head Office. The number of days to process applications of micro and small enterprises for registration with the BOI was reduced from 20 days to one day with the implementation of measures to simplify procedural flow and required documents. At present, sole proprietorships can already register/validate their existing business name (DTI), obtain their tax identification number (Bureau of Internal Revenue or BIR) and employer registration numbers (Social Security System or SSS, Philippine Health Insurance Corp. or PhilHealth, and Home Development Mutual Fund or Pag-IBIG) through this web-based facility in DTI tellers. For corporations, PBR allows SEC-registered companies to get SSS, PhilHealth and Pag-IBIG employer registration numbers at the SEC Head Office. To better improve service delivery, the EBNRS and PBR have been successfully migrated to the cloud-computing environment on 17 January and 4 February 2013, respectively. 30 Other members include the National Competitiveness Council, Department of Finance, Department of Interior and Local Government, Department of Justice, Bureau of Internal revenue, Bureau of Customs, Land Registration Authority, Credit Information Corporation, Securities and Exchange Commission, Social Security System, Home Development Mutual Fund and Philippine Health and Insurance Corporation. The time to register a business was reduced from four to eight hours to only 15 minutes. 55Competitive and innovative industry services sectors 31 Technological readiness measures how quick an economy adopts existing technologies to enhance the productivity of its industries, with emphasis on its capacity to fully leverage information and communication technologies (ICT) in daily activities and production processes for increased efficiency and enabling innovation for competitiveness. Innovation focuses more on technological innovation. 32 The Hirschman Index measures the degree of concentration. A value closer to 1 indicates that the manufacturing industry is concentrated in few subsectors/products. 33 Based on the 2012 ADB study entitled “Taking the right road to inclusive growth: Industrial upgrading and diversification in the Philippines” conducted by Norio Usui 34 DTI website accessed on 27 August 2013. Source of basic data is the MSME Development Plan 2011-2016 35 Aldaba, R.M. (2013). “Reviving the manufacturing industry” presented during NAST roundtable discussion on development Progeria on 17 January 2013 Productivity and innovative capacity Improved technological readiness and innovation In the latest 2013-2014 WEF Global Competitiveness Report, the country improved in terms of technological readiness and innovation indices. The Philippines moved from 95th out of 139 countries in 2010 to 77th out of 148 countries in 2013 in technological readiness index and climbed from 111th out of 139 countries in 2010 to 69th out of 148 countries in 2013 in innovation index.31 Product and market diversification Innovation equals dynamic I&S sectors characterized by the proliferation of many products and their designs. The manufacturing sector in general lacks product diversification. The Hirschman Index32 has not improved since the 1960s and has even become more concentrated (i.e. from 0.41 in 1967 to 0.43 in 2012). The sector is concentrated on relatively few products, particularly low-value added manufactures. It is also characterized by a narrow product space consisting mainly of natural/raw materials (periphery products) and less of machinery, chemicals and capital intensive products (core products).33 Low productivity in the MSME sector Of the 820,254 business enterprises in 2011, 99.6 percent are micro-, small and medium enterprises (MSMEs). The MSME sector contributed 61.0 percent of total employment but only accounted for 35.7 percent of total value added.34 The sector is also characterized by a hollow and missing middle.35 Of the total MSMEs, 91.0 percent are micro, 8.6 percent are small, and 0.4 percent are medium enterprises. This implies that a huge number of enterprises in the country are unable to reach the scale needed to achieve production efficiency. Consumer welfare Consumer complaints received by Consumer Welfare Desks both in government field offices and in business establishments reached 74,913 in 2010, 64,759 in 2011 and 69,192 in 2012. Majority were about consumer products and service warranties, product quality and safety, and change of consumer preference. Resolution remained high at 98 to 99 percent but the challenge is on reducing the A huge number of enterprises in the country are unable to reach the scale needed to achieve production efficiency. 56 Philippine Development Plan 2011-2016 MIDTERM UPDATE resolution period. There is also a need to step up enforcement activities to prevent proliferation of substandard products in the local market. Market access Philippine goods exports grew by 7.9 percent from US$48.3 billion in 2011 to US$52.1 billion in 2012. In the first half of 2013, goods exports reached US$25.6 billion, which is 4.4 percent lower than in the previous year. On the other hand, the value of exports of services in 2012 was recorded at US$18.6 billion, or an increase of 4.2 percent from that in 2011. Transactions related to information technology business processes management (IT-BPM) were the main contributors to the exports of services. The Philippines’ goods export concentration based on the Herfindahl Hirschman Index has improved from 0.25 in 2011 to 0.22 in 2012, although it is still heavily dominated by electronics, which accounts for 43.3 percent of total Philippine exports in 2012. Moreover, Philippine goods exports are still more concentrated than that of Indonesia (0.17), Malaysia (0.16), Vietnam (0.12) and Thailand (0.08).36 In addition, Philippine goods exports are still dependent on traditional markets such as the US, Japan and China. Part of the reason is the country’s inability to meet standards of and comply with measures imposed by other countries and due to comparatively higher production cost, which affects the competitiveness of Philippine exports, among others. A study on the country’s national quality infrastructure (NQI) and government regulatory practices conducted in September-December 2011 showed that elements of the NQI (i.e., standards, metrology, accreditation, certification and testing) are fragmented and, for the most part, inadequate. The Philippine tourism brand “It’s more fun in the Philippines” was launched in 2012, primarily to attract foreign tourists and create a positive image of the country especially to investors. In 2012, total inbound visitors reached 4.3 million, which is 9.1 percent higher than that in 2011. Koreans were the biggest group of inbound visitors accounting for 24 percent of total, followed by US (16 percent) and Japan (10 percent). Despite the increase in tourist arrivals, the Philippines ranked only 6th among 10 ASEAN member states in attracting foreign tourists in 2011, the same ranking since 2004. Total tourist arrivals in the Philippines only accounts for 4.8 percent of the total tourist arrivals in ASEAN. 36 UNCTAD Stat, unctad.org; The Herfindahl-Hirschman Index or export concentration index is a measure of the degree of concentration of exports of a country. A value that is much closer to 1 indicates that exports are concentrated in few products. Total tourist arrivals in the Philippines only accounts for 4.8 percent of the total tourist arrivals in ASEAN. 57Competitive and innovative industry services sectors III. UPDATED PDP TARGETS For the remaining Plan period, the country aims to strengthen the industry sector while continuing support for a robust services sector to facilitate the attainment of a more rapid and sustained growth, generate more quality employment, reduce poverty and eventually achieve an inclusive growth. One of the main priorities of the government is to revitalize the manufacturing subsector, given its potential for innovation, value adding, and backward linkage with the agriculture sector, which is the main source of livelihood of the poor. Industry roadmaps will be implemented and will serve as bases of the Comprehensive National Industrial Strategy (CNIS). The CNIS will include strategies to strengthen the link with basic sectors as suppliers (i.e., link to agriculture sector for raw materials) or markets (i.e., potential for downstream link) and to make local industries more competitive in preparation for greater regional and global integration. The industry sector will also be fuelled by the construction subsector, as the government ramps up its effort to address infrastructure backlogs and targets infrastructure spending at 5 percent of GDP by 2016. The bulk of the rehabilitation and reconstruction efforts in areas affected by disasters, especially Typhoon Yolanda, is expected to be undertaken in 2014 and this could increase the demand for labor in the construction and agriculture subsectors. While these efforts are expected to linger in 2015, the private sector is expected to gain momentum during this period as the country demonstrates its resilience and the level of investor confidence heightens due to the implementation of needed strategies and reforms. The I&S sectors will continue to be the major sources of growth. The industry sector is targeted to grow by 9.2 to 9.7 percent in 2013, 9.8 to 11.0 percent in 2014, 8.6 to 9.7 percent in 2015, and 9.3 to 10.3 percent in 2016. The services sector is projected to expand by 6.6 to 7.0 percent in 2013, 6.0 to 6.9 percent in 2014, 6.8 to 7.8 percent in 2015 and 7.2 to 8.1 percent in 2016. With the implementation of measures to make the workforce more responsive to the needs of industries and ready to participate in the growth process, the I&S sectors are targeted to create an average net employment of 887,000 to 921,000 from 2014 to 2016. These targets consider the implications of the K to 12 educational system in the labor force growth rate, which is expected to slowdown from an average of 2.2 percent in 2010 to 2012 to an average of 1.7 to 1.9 percent in 2014 to 2016. Table 3.2 shows the summary of the updated targets for the I&S sectors. One of the main priorities of the government is to revitalize the manufacturing subsector, given its potential for innovation, value adding, and backward linkage with the agriculture sector. 58 Philippine Development Plan 2011-2016 MIDTERM UPDATE Table 3.2 Revalidated results matrix (RM) on competitive and innovative industry and services (I&S)sectors Indicator Baseline (2012) End-of-Plan target (2016) Assumptions and risks Sector outcome: Globally competitive and innovative industry services sectors achieved Employment generated from the I&S sectors increased annually 597,000 887,000-921,000 (average 2014 2016) • Macroeconomic fundamentals (e.g. inflation, GDP growth, interest rates) stable • Political stability • Governance improvement efforts maintained • Natural disasters and calamities managed GVA in the I&S sectors improved I: 6.8% S: 7.6% I: 9.3-10.3% S:7.2-8.1% Philippine innovation index in the WEF Global Competitiveness report improved37 3.0 3.5 Sector outcome A: Business climate improved Philipine overall ranking in the WB-IFC Doing Business report improved 136/183 Top third of total countries surveyed (e.g. 62/189) • Projects/programs implemented on time Sector outcome B: Productivity and innovative capacity increased Intellectual property products expenditures increased 18% 5-6% • Macroeconomic fundamentals/indicators stable • Infrastructure development pursued • Projects/programs implemented on time Labor productivity in I&S sectors increased38 4.9% 4.7-5.5% Sector outcome C: Consumer welfare enhanced Level of consumer awareness on rights to safety, information and prices improved 57% 80% • Projects/programs implemented on time Sector outcome D: Market access expanded Merchandise exports increased by 74.7% US$ 52.1 billion US$ 91.0 billion • Global economic situation (recession) managed • Macroeconomic fundamentals/indicators stable • Peace and security managed • Infrastructure development pursued Services exports increased by 55.9% US$ 18.6 billion US$ 29.0 billion Total approved investments increased by 35.8% PhP697.7 billion PhP947.2billion 37 Innovation index rated from 1 to 7, 7=best 38 Labor productivity =GVA/number of employed. 59Competitive and innovative industry services sectors IV. STRATEGIC FRAMEWORK The strategies to make I&S sectors globally competitive and innovative are aimed at four subsector outcomes: business climate improved; productivity and innovative capacity increased; consumer welfare enhanced; and market access expanded (Figure 3.2). Key sectors and locations The following sectors will be developed in view of their potential to contribute to employment generation, as well as rapid and sustained growth. Agro-industry The government will pursue programs/interventions that strengthen agriculture industry linkage. Large enterprises will be encouraged to partner with MSMEs. Agriculture-based sectors, such as, but not limited to, coconut, coffee, furniture, garments, fisheries and forest-based sectors, will be developed given their potential Figure 3.2. Strategic framework on competitive and innovative industry and services (I&S) sectors Sector outcome Subsector outcomes Strategies Globally competitive and innovative I&S sectors achieved Business climate improved Productivity and innovative capacity increased Consumer welfare enhanced Market access expanded 1. Improve governance 2. Provide adequate infrastructure support 3. Harness science, technology and innovation 4. Enhance competencies of labor 5. Expand industry cluster development 6. Ensure consumer satisfaction 7. Improve supply chains of basic and prime commodities 8. Maximize opportunities in regional and global integration 9. Harmonize the National Quality Infrastructure NQI) with internationally accepted QI 10. Strengthen national brand awareness 60 Philippine Development Plan 2011-2016 MIDTERM UPDATE to generate employment and reduce poverty in rural areas, particularly in the Category 1 provinces (see Chapter 1: A roadmap to inclusive growth). For the coconut sector, the Integrated Coconut Industry and Poverty Reduction Roadmap will be implemented. Entrepreneurship will be promoted among small-holder farmers. While agricultural productivity is being addressed, the government will also provide support to small holder farmers and agri-cooperatives in terms of product development, value adding, and integration to big enterprises for marketing and financing purposes. Strategies to increase value-adding and agri-business development among small holder farmers are also discussed in Chapter 4 (Competitive and sustainable agriculture and fisheries sector). Manufacturing The manufacturing sector will be revitalized through the implementation of the Manufacturing Revival Program by various national agencies.39 The private sector will be encouraged to venture to “nearby products” with highest spillover effects including, among others, manufacture of digital data processing machines, watches, cameras, television, and clocks. These products can be developed with ease since existing capabilities to manufacture currently exported products could be used.40 To boost employment, labor-intensive manufacturing subsectors (e.g. garments, footwear, processed foods, furniture, etc.) will also be promoted. The halal industry will be developed, especially in Mindanao. The government will continue to provide information to producers on good manufacturing practices, international standards, and clean production technologies, among others, as well as provide metrology, calibration and accreditation services. These will facilitate the entry of local products in more export markets and assure consumers of the safety of locally made products. The country will also continue to promote and expand investments in the shipbuilding industry especially in the Visayas area. A framework for mineral processing/value-adding will be formulated. A fair revenue-sharing mechanism for both the government and the mining firms will be put in place and the country will participate in the Extractive Industries Transparency Initiative (EITI). 39 DTI (lead), Departments of Labor and Employment (DOLE), Science and Technology (DOST), DOLE Technical Education and Skills Development Authority (TESDA), Commission on Higher Education (CHED), Department of Agriculture (DA), Philippine Coconut Authority (PCA), Department of Energy (DOE), National Power Corporation (NPC), and National Electrification Administration (NEA). 40 Based on the 2012 ADB study entitled “Taking the right road to inclusive growth: Industrial upgrading and diversification in the Philippines” conducted by Norio Usui The halal industry will be developed, especially in Mindanao. 61Competitive and innovative industry services sectors Tourism Tourism development will be a priority program of the government. By 2016, the government aims to achieve the following: (a) 10 million international visitor arrivals; (b) PhP455-billion international visitor receipts; (c) 56.1 million domestic travelers; and (d) PhP1.86-trillion domestic receipts.41 To achieve these, the following strategies will be pursued: (a) develop and market competitive destinations and products; (b) improve market access, connectivity and destination infrastructure; and (c) improve tourism governance and human resource capabilities.42 Strategic tourism products will be developed and supported in the following top nine tourism cluster destinations to expand visitor’s expenditure and length of stay: Central Visayas; Metro Manila and CALABARZON; Central Luzon; Palawan; Western Visayas; Davao Gulf and Coast; Cagayan de Oro, Island and Hinterland; Bicol; and Laoag-Vigan.43 These products include medical and retirement tourism; leisure and entertainment; meetings, incentives, conventions and exhibitions; cruise and nautical tourism; education tourism; and agri-tourism. Business travelers will be encouraged to tour the country while looking for investment opportunities. IT-BPM The country will exert efforts to remain as the leader in voice BPM services. The government will also nurture the Filipino talent pool by promoting and accelerating the development of high-value IT-BPM services and the Next-Wave Cities.44 By 2016, the sector is expected to directly employ 1.3 million people, 520,000 of whom will be in the countryside. Both the public and the private sectors will promote the Philippines as a preferred IT-BPM destination. The marketing strategy will highlight the country’s large trainable and educated English-speaking talent pool, proven track record, good infrastructure, cost competitiveness, and other competitive advantages. 41 National Tourism Development Plan 42 Department of Tourism (DOT) presentation to the Economic Development Cluster (EDC) on 17 June 2013 43 Top 9 cluster destinations in order of importance based on the National Tourism Development Plan. 44 Baguio, Davao, Dumaguete, Iloilo, Lipa, Metro Bulacan (Baliuag, Calumpit, Malolos, Marilao, and Meycauayan), Metro Cavite (Bacoor, Dasmariñas and Imus), Metro Laguna (Calamba, Los Baños and Sta. Rosa), Metro Naga (Naga and Pili), and Metro Rizal (Antipolo City, Cainta and Taytay) Both the public and the private sectors will promote the Philippines as a preferred information technology and business process management (IT-BPM) destination. 62 Philippine Development Plan 2011-2016 MIDTERM UPDATE 45 DOTC presentation to the EDC on 17 June 2013 Logistics To support the expansion of Philippine industries, the government will encourage investments in the development of logistics infrastructure to cater to both domestic and international supply chains. Furthermore, the government will review and develop/reform related policies and rules, such as customs practices; trans shipment of cargoes through various modes (i.e. air-air, sea-air, and air-sea); and foreign shipping services along the entire multimodal transportation chain. The government, in coordination with the private sector, will formulate and implement the National Logistics Plan and will target to reduce the share of logistics costs (including shipping) in the cost of goods and services from 23 percent to 15 percent by 2016.45 Construction The country will also promote investments in construction (e.g. infrastructure projects, mass housing and housing related materials, etc.). A strong public-private partnership will be pursued to effectively govern and monitor the sector. The government in partnership with the private sector will pursue the liberalization of contractors licensing and registration, promotion and development of domestic and overseas construction, and efficient implementation of the dispute resolution mechanism. Subsector outcome A: Business climate improved To improve the business climate, the first strategy is to improve governance by streamlining procedures, implementing policy reforms and the e-commerce law, combating smuggling, rationalizing economic zone development, promoting mutually agreed upon work arrangements and maintaining industrial peace. The second strategy is to provide adequate infrastructure. Strategy 1: Improve governance a. Further streamline bureaucratic procedures The government will continue to promote transparent and predictable policies to create an environment conducive to business to encourage investments. By 2016, the government aims that all LGUs have adopted streamlined BPLS. Moreover, efforts to automate the BPLS for faster and more efficient transactions with government will be continued. The government will likewise continue to undertake measures to link the PBR with LGUs to ensure that businesses in local communities will enjoy the benefits of easier registration. These programs will be complemented by the efforts of the National Competitiveness Council (NCC), with the help of the DTI, Department of the Interior and Local Government (DILG), SEC, BIR, SSS, PhilHealth, Pag IBIG and the Quezon City government, under the Doing Business Dashboard, to bring down the number of steps (from 16 to 3) and days (from 36 to 6) to start a business by 2016. The government will continue to promote transparent and predictable policies to create an environment conducive to business to encourage investments. 63Competitive and innovative industry services sectors The linkage of the National Single Window with the Electronic to Mobile (E2M) system will be pursued to facilitate trade and reduce transaction costs for businesses. b. Promote a consistent, predictable and responsive policy environment The government will, among others, continue to support policy reforms that will: • Liberalize certain investment areas, except those provided in the Constitution, to increase investments and generate more and decent employment; • Reduce domestic shipping costs through the review of the cabotage rule and leveling of playing field among domestic and foreign shipping lines; • Harmonize various incentive-giving laws such as those given by the BOI, PEZA, special economic zones, and other statutes through the Rationalized Fiscal Incentives Act; • Institutionalize land use planning as a means for the rational and just allocation, utilization, management, and development of our country’s land resources, as well as lay down specific policies on industrial development areas/sites and tourism development areas, among others, through the enactment of the Land Use Act; • Level the business playing field by strengthening the legal and institutional framework to prevent unfair and anti-competitive practices through the enactment of the Anti-trust/Competition Policy Act; • Pursue customs modernization by amending the Tariff and Customs Code of the Philippines, consistent with the prescribed standards and recommended practices of the revised Kyoto Convention; • Rationalize revenue-sharing arrangement for large-scale metallic mining operations; • Broaden protection of consumers46 and incorporate the Lemon Law through the amendment of the Consumer Act; • Increase labor mobilization and gradually shift industries to technology-driven processes, among others, through the amendment of the Labor Code; • Provide uniform rules and regulations governing global maritime professionals in accordance with the Standards for Training, Certification and Watchkeeping (STCW) Convention and establish the Maritime Industry Authority (MARINA) as the single and central maritime administration of government; and • Improve the negotiation process and build the capacity of trade negotiators. 46 Through provisions on price tag requirements, physical safety, labelling to include translations and official sources on information, among others. 64 Philippine Development Plan 2011-2016 MIDTERM UPDATE c. Fully-implement the e-commerce Law The government will fully implement the e-Commerce law to ensure speedy and better delivery of government services and information, including health and education, especially in the countryside. d. Strengthen measures against smuggling The government will curb and prevent smuggling by putting in place specific measures identified under Chapters 2 (Macroeconomic policy) and 7 (Good governance and the rule of law). e. Rationalize economic zone development The government will continue to adhere to its policy that the development of economic zones is private sector-led but with appropriate and strategic support from the government. Development/expansion of economic zones through existing economic zone and/or free port authorities will consider regional dispersal of industries, pre-identified priority growth areas for targeted sectors, use of local/ indigenous resources, and adherence to environmental laws, land use policies, and net benefits, among others. f. Promote mutually agreed-upon work arrangements Mutually agreed-upon work arrangements, which are consistent with the promotion of employment and protection of basic rights of workers, as well as increased efficiency and streamlined operations, will be supported. The two-tiered wage system, which seeks to balance interests of workers and employers, will be implemented. This system, which was already piloted in Region IV-A, has two components: (a) a mandatory single regional floor wage as the first tier; and (b) voluntary performance or productivity-based pay adjustments for wages above the floor wage, as the second tier. g. Maintain industrial peace The government will continue to push for the development of Voluntary Codes of Good Practices in industries to transform a traditionally litigious labor relations system to one that incorporates the tenets of social dialogue. The mechanism will foster the culture of self-regulation, where labor and management can freely set industry rules and standards in accordance with existing laws and regulations. The Single Entry Approach Program (SEnA), which is 30-day mandatory conciliation mediation approach, will be promoted as a means to “de-judicialize” dispute settlement procedures. Strategy 2: Provide adequate infrastructure support Adequate and good quality infrastructure such as intermodal transport (air, sea, land), power supply facilities, logistics, among others, are needed to facilitate doing business in the country. Strategies, programs and action plans for infrastructure development are listed in Chapter 10 (Accelerating infrastructure development). The development of economic zones is private sector-led but with appropriate and strategic support from the government. 65Competitive and innovative industry services sectors Subsector outcome B: Productivity and innovative capacity increased Increasing productivity will require harnessing science, technology and innovation, enhancing the competencies of the labor force, and expanding industry cluster development. Strategy 3: Harness science, technology and innovation The country will make full use of existing technologies to make local industries competitive and innovative while building local research and development (R&D) capacity to address local problems. The government will build local R&D capabilities for transformative, cutting-edge and sustainable technologies with broad applications (e.g. information and communications technology or ICT, biotechnology, advanced manufacturing technology and new materials technology, among others). Climate-smart/clean technologies will also be developed and promoted. To ensure the efficient use of resources, a national R&D agenda will be adopted that will guide relevant government agencies on the prioritization of programs. a. Broaden access of small entrepreneurs to innovative, cost-effective and appropriate technologies Local industries will be encouraged to benchmark processing technologies with countries considered leaders in specific industries (e.g. food processing in Thailand and Taiwan) and to design and implement technology catch-up programs to make them at par with benchmarked countries. Innovation centers will be established nationwide to support MSMEs to undertake innovative product development. Existing testing, calibration and quality assurance facilities and services will be enhanced and upgraded. The Small Enterprise Technology Upgrading Program (SETUP) will be expanded to focus on identified priority geographical locations where the poor reside. Mining and minerals processing industries will be provided with sustainable practices and green technologies, not only to add value to extracted minerals, but also to promote better and responsible mining practices. b. Enable local industries to innovate The government will provide state-of-the-art facilities to assist local companies to undertake design, prototyping, and product development (e.g. Advanced Materials Testing Laboratory, Electronic Product Development Center, and Philippine IC Design Center, among others). The government will also build local technological capability of the mass transport industry by supporting the design and development of alternative mass transport systems that are low-cost, environment-safe and efficient but suited to the needs of commuters in the metropolis, such as the Automated Guideway Transit (AGT) and road trains. A national research and development agenda will be adopted that will guide relevant government agencies on the prioritization of programs. 66 Philippine Development Plan 2011-2016 MIDTERM UPDATE 47 As provided under RA 7687 48 As provided under RA 9036 c. Leverage ICT to expand economic opportunities The government will adopt strategies aimed at making the country a global leader in IT-BPM services. This will be complemented by the implementation of the e-Gov Master Plan (EO 47), which aims to broaden the access of citizens to government services (i.e., health and education) with the use of ICT. This includes the provision of the needed ICT infrastructure and shared services, standards and interoperability for publicly funded systems, particularly the rolling out of the TV White Space Public Service Infrastructure. The latter will serve as a platform for 1,500 community e-Centers covering 42,000 barangays. Strategies, programs and action plans on ICT are also discussed in Chapter 10 (Accelerating infrastructure development). d. Mobilize scientists, engineers and researchers The government will strengthen the networking, cooperation and exchange mechanisms to mobilize Filipino scientists and engineers to support social and technological innovations at the community level. Science and technology (S&T) graduate scholarship programs, such as the Engineering R&D and Technology (ERDT) Program and the Accelerated S&T Human Resource Development Program (ASTHRDP) will be expanded to promote S&T-related professions. The undergraduate S&T scholarship program for poor but deserving students will be democratized with at least one DOST scholar in each town by 2016.47 A Philippine Science High School (PSHS) campus will also be established in each region.48 Strategy 4: Enhance competencies of labor Market-driven education and training will be pursued to address the needs of the I&S sectors. The government, through the Department of Education, will develop curricula that put more emphasis on S&T, entrepreneurship, agribusiness, software and vocational skills in the senior years (years 11-12 of the K to 12 system). Colleges/universities will be encouraged to participate in technology parks and business incubator facilities and introduce entrepreneurship training in their curricula to inspire students to take research from the academe to firms. Other policies and strategies on education and training can be found in Chapter 6 (Social development). The competency of Filipino workers and professionals will be strengthened to prepare them for regional and global integration (e.g. AEC 2015) through the following: (a) Philippine Qualifications Framework; (b) competitiveness roadmaps of different professions; (c) outcome-based education and the use of learning outcomes; and (d) continuing professional development. The government will strengthen the networking, cooperation and exchange mechanisms to mobilize Filipino scientists and engineers to support social and technological innovations at the community level. 67Competitive and innovative industry services sectors 49 Organisation for Economic Cooperation and Development (OECD), 2010 The government, through TESDA, will continuously provide enhancement trainings/programs to produce highly skilled Filipino workforce needed by the I&S sectors. Strategy 5: Expand industry cluster development The government will also promote inclusive businesses and include low-income communities in product value chains. To the extent possible, the industry-cluster approach will be used to develop the identified key sectors. The approach will promote linkage between agriculture and industry (processing) to increase value added of products. It will also allow the industries to realize economies of scale and link micro- and small enterprises to medium and large ones. The industry clustering program will be expanded. Industries need to prepare sectoral roadmaps that will show linkage with basic sectors as suppliers and/or markets. These industries will also continuously upgrade their technology and facilities with government’s proactive support through the establishment of technology business incubation centers, shared service facilities that provide testing laboratories for safety and quality standards, agro-industrial hubs and central storage. Subsector outcome C: Consumer welfare enhanced Even as industries are supported, it is important to protect and promote consumer welfare by taking into account consumer satisfaction and intensifying consumer protection and trade regulation. Strategy 6: Ensure consumer satisfaction a. Intensify consumer education/advocacy The strategy will focus on empowering consumers by informing them of their rights, responsibilities and avenues for redress. Consumers then become discriminating customers and demand better quality goods and services as well as value for money. When consumers are empowered, they improve economic performance by driving competition and business innovation.49 b. Intensify consumer protection and trade regulation To safeguard the interests of consumers, the government will increase market visibility through aggressive monitoring and enforcement activities. It will intensify price monitoring activities to guarantee reasonable prices and prevent any acts of illegal price manipulations by suppliers/producers. Complementing these efforts need increased partnership with business and consumer groups, LGUs, and non government organizations (NGOs). Industries need to prepare sectoral roadmaps that will show linkage with basic sectors as suppliers and/or markets. 68 Philippine Development Plan 2011-2016 MIDTERM UPDATE Box 3.1. Improving government support to micro, small and medium enterprises (MSMEs) Government will continue to support MSMEs to increase their contribution to the country’s GDP and total employment. SME Roving Academy. The government will scale up implementation of the SME Roving Academy Program. This is a continuous learning program for MSMEs to help them become more competitive in the domestic and international markets. Under the SME Roving Academy, start-up enterprises will be provided assistance on business registration procedures, training on managerial skills, customer relations management, financial management, green values, marketing management, costing and pricing, and market information. Existing enterprises will be assisted on technology application, productivity improvement, Hazard Analysis Critical Control Point (HACCP), Good Manufacturing Practice (GMP) awareness, waste minimization in the manufacturing process, Total Quality Management, basics on exporting, and trade fairs participation, among others. Improved access to financing. Programs under this strategy will help ensure reasonable and affordable cost of obtaining MSME loans; reasonable and manageable requirements for compliance by MSMEs to obtain loans; and simplified and streamlined process to obtain loans. The government will also promote institutions that could develop insurance parameters against risks. More rural banks and financial institutions will be trained on risk-based lending. Improved access to technology. Small entrepreneurs will be provided access to innovative, cost-effective and appropriate technologies, such as the Shared Service Facilities. Sustainable micro-enterprises. The government recognizes the importance of achieving economic growth that is environmentally sustainable. Initiatives will be undertaken to increase awareness among MSMEs on the effects of climate change and how green economy can foster long-term competitiveness. In fostering “green growth,” the government will promote, develop and sustain I&S that are climate-smart and -resilient, eco-efficient and environment friendly. To guarantee product safety, product standards laws, rules and regulations will be strengthened and penalties imposed on violators. Market surveillance activities (e.g. marking of products, declaration of conformity, among others) will be strengthened to push the need for accurate measurements, standards, and accredited conformity assessments. Consumer complaints will be resolved promptly. The resolution period of seven working days for mediation and 20 working days for arbitration will be strictly implemented. The government will also continue to recognize establishments that uphold the rights of consumers and sell quality products. This effort aims to encourage the retail industry to strengthen and accelerate its self-policing mechanism, so consumers can expect value for money. 69Competitive and innovative industry services sectors Strategy 7: Improve supply chains of basic and prime commodities The government through the DTI will continue to implement various programs to ensure affordability and supply of basic necessities and prime commodities, especially during crisis. The government and the private sector will work together in undertaking an in-depth review of the supply chain to determine major bottlenecks and identify effective points of interventions to make enhancements and eliminate inefficiencies. The government will also strengthen infrastructure support and logistics mechanisms to improve efficiency in transport and distribution system, hence, reducing cost in bringing goods and services to the market. Subsector outcome D: Market access expanded The government will focus its investment promotion activities in the identified priority sectors and provide comprehensive business intelligence to enable businesses to make informed decisions. Investment promotion programs of the national IPAs and LGUs will be harmonized. The IPAs will intensify promotion efforts in countries such as Japan, Netherlands, US and Korea, while at the same time strategically reach out to developmental markets with strong potential for outward investments such as Russia, Brazil, Middle East, among others. Overseas Filipinos (OFs) will also be tapped as possible sources of investments. The Commission on Filipinos Overseas, DTI, and the Bangko Sentral ng Pilipinas will continue to conduct financial literacy campaigns among OFs and their families to educate them on business opportunities, investment and remittance options. Strategy 8: Maximize opportunities in regional and global integration The government will intensify advocacy programs that will encourage businesses, particularly MSMEs, to maximize benefits from opportunities offered by Philippine participation in free trade agreements and the ASEAN Economic Community 2015. Local industries will be encouraged to make use of preferential agreements not only through education and information campaigns but also through business matching activities. The Philippine Export Development Plan (PEDP) 2014-2016 will be formulated and implemented. The PEDP strategies will take into consideration the thrusts to diversify export products as well as adapt to the changing global demands and emerging issues. It will be linked with the Comprehensive National Industrial Strategy. Greater collaboration with ASEAN member states will be undertaken to realize the potential of the ASEAN as a source market for tourism. This is in line with the ASEAN Tourism Strategic Plan and the Multilateral Agreement on Full Implementation of Passenger Air Services and ASEAN Common Visa for non ASEAN nationals. Tour programs will be developed through twinning and dual Greater collaboration with ASEAN member states will be undertaken to realize the potential of the ASEAN as a source market for tourism. 70 Philippine Development Plan 2011-2016 MIDTERM UPDATE destination with other ASEAN countries, and attracting more international tourists and foreign direct investments in tourism. Strategy 9: Harmonize the National Quality Infrastructure (NQI) with internationally accepted QI The government will harmonize and strengthen the different elements of NQI to be at par with those of ASEAN neighbors. The NQI will: (a) provide access to traceable calibrations and measurement standards through the National Metrology Laboratory; (b) link internationally recognized accreditation bodies with the national accreditation body (i.e. Philippine Accreditation Office under DTI); (c) enable compliance with international requirements (e.g. ISO standards and CODEX); and (d) allow the country’s active participation in international standards comparison and have mutual recognition arrangements with ASEAN and other trading partners. Strategy 10: Strengthen national brand awareness The government will undertake a highly targeted media campaign in priority investment source countries. The Philippines will aggressively promote unified country branding that will bring home the message that it is a producer and supplier of high quality, ethical, sustainable and world-class products and services that are valued worldwide. Buying of Philippine-made products and local technology works will also be promoted. V. PLAN IMPLEMENTATION To determine progress towards having globally competitive and innovative I&S sectors, three core indicators will be monitored: (a) employment generated from I&S increased; (b) GVA in the I&S sectors improved; and (c) Philippine innovation index in the WEF Global Competitiveness Report improved. There are also indicators corresponding to subsector outcome and these are listed in Table 3.3. The agencies/bodies that will lead in the implementation and report on the results of the strategies are the DTI, Departments of Science and Technology (DOST), Labor and Employment (DOLE), Tourism (DOT), NCC, Export Development Council (EDC), Intellectual Property Office, BOI, PEZA, and other IPAs. These agencies/bodies will report every quarter to the Economic Development Cluster (Econ Cluster) of the Cabinet, which is chaired by the Department of Finance, and co-chaired by the DTI and Department of Energy, with the NEDA as secretariat. 71Competitive and innovative industry services sectors Table 3.3. Annual target indicator matrix on competitive and innovative industry and services (I&S) sectors, 2013-2016 Indicators Annual Plan targets Means of Verification Agency responsible2013 2014 2015 2016 Sector outcome: Globally competitive and innovative I&S sectors achieved Employment generated from the I&S sectors increased annually 824,000 890,000 887,000 921,000 887,000 921,000 887,000 921,000 Labor Force Survey DTI GVA in the I&S sectors improved I: 9.2-9.7% S: 6.6-7.0%50 I: 9.8-11.0% S: 6.0-6.9% I: 8.6-9.7% S: 6.8-7.8% I: 9.3-10.3% S: 7.2-8.1% National Income Accounts Philippine innovation index in the WEF Global Competitiveness report improved51 3.2 3.3 3.4 3.5 WEF Global Competitiveness Report DOST Subsector outcome A: Business climate improved Philippine overall ranking in the WB-IFC Doing Business report improved - - top third WB-IFC Doing Business Report NCC Subsector outcome B: Productivity and innovative capacity increased Intellectual property products expenditures increased 5-6% 5-6% 5-6% 5-6% National Income Accounts IPO Labor productivity in I&S sectors increased52 4.2-4.3% 3.9-4.7% 4.1-5.0% 4.7-5.5% PSA Reports DOLE Subsector outcome C: Consumer welfare enhanced Level of consumer awareness on rights to safety, information and prices improved 73% 74% 75% 80% DTI Reports DTI Subsector outcome D: Market access expanded Merchandise exports increased by 74.7% US$60.0 billion US$69.0 billion US$79.0 billion US$91.0 billion PSA Reports EDC Services exports increased by 55.9% US$21.0 billion US$23.0 billion US$26.0 billion US$29.0 billion BSP Reports Total approved investments increased by 35.8% - - PhP947.2 billion PSA Reports DTI/BOI 50 DBCC approved growth estimates as of December 2013 51 Innovation index rated from 1 to 7, 7=best 52 Labor productivity =GVA/number of employed. 73Competitive and sustainable agriculture and fisheries sector 4Competitive and sustainable agriculture and fisheries sector 74 Philippine Development Plan 2011-2016 MIDTERM UPDATE I. INTRODUCTION The agriculture and fisheries (A&F) sector plays an important role in the country’s development and improvement of living conditions of Filipinos. Given the country’s natural endowments, many Filipinos rely on A&F both to provide food for their families and to earn income so they can improve their quality of life. The sector also produces not only food but also raw materials vital to fuel the growth of other economic sectors. The Updated Philippine Development Plan (PDP) pays closer attention to A&F sector and its links with industry and services (I&S) so as to fulfill its potential to reduce poverty and generate quality employment for more Filipinos. This Updated PDP provides a strategic policy framework for facilitating the process of structural transformation that will make the A&F sector sustainable and competitive and enable it to help rapidly bring the economy to a higher growth trajectory where more Filipinos not just benefit from growth but also contribute to it. By the end of 2016, the sector will have achieved higher incomes and improvement of food security, especially for the farm households, through (a) further increases in agricultural and fisheries production with more prudent use of resources; (b) greater linkage with the manufacturing and industrial sector with increased production of raw material inputs; and (c) enhanced sector resilience to climate change risks. These are reflected in Figure 4.1, which is the results framework for the chapter. 75Competitive and sustainable agriculture and fisheries sector Figure 4.1. Results framework on competitive and sustainable agriculture and fisheries (A&F) sector Goals Intermediate goals Subsector outcomes Intermediate outcome Poverty in multiple dimensions reduced and massive quality employment created Rapid and sustained economic growth achieved Equal development opportunities achieved Sector outcome Competitive and sustainable agriculture and fisheries sector achieved Productivity in agriculture and fisheries sector increased Forward linkage to the industry and services sectors increased Sector resilience to climate change risk increased Land tenure security improved II. ASSESSMENT AND CHALLENGES The Updated PDP draws lessons from the A&F sector’s performance and identifies challenges, which inform the strategies for the sector in the next half of the PDP implementation. Assessment Experiences of major developing countries show that substantial poverty reduction that was achieved in the past two decades was due primarily to economic growth and structural transformation, particularly in Asia. Structural transformation involved significant shifts of labor from low-productivity areas in agriculture to high-productivity areas in industry, particularly manufacturing, and services. Agriculture had to grow rapidly to make this happen. Without rapid agricultural growth, food prices and wages would have had to rise. But with rapid agricultural growth, fewer people needed to work in the farms to produce for everybody else. This released workers from agriculture and enabled them to find remunerative and high-quality employment opportunities in industry. 76 Philippine Development Plan 2011-2016 MIDTERM UPDATE In the Philippines, agriculture has yet to achieve and sustain a level of growth that will make such transformation happen. Nonetheless, there are encouraging signs of economic restructuring. It is thus important to seize growth opportunities for the A&F sector especially at a time when business confidence is high. Contribution to rapid and sustained growth Growth in the sector’s gross value added (GVA) From 2011 to 2012, the A&F sector accounted for about 11.2 percent of the total gross domestic product (GDP) on average. While posting positive annual growth of 2.4 percent and 2.8 percent in 2011 and 2012, respectively, the sector’s performance remained below the PDP target of 4.3 to 5.3 percent annual growth (Table 4.1). Table 4.1. Agriculture and fisheries (A&F) sector’s contribution to the economy, 2010-H1 2013 Particulars Annual growth target 2011-2012, in % Accomplishments 2011 2012 2011-2012 Average H1 2013 GVA in A&F* (in million PhP and growth (in%) 4.3-5.3 676,075 (2.4%) 695,100 (2.8%) 685,587 (2.6%) 336,591 (1.3%) Crops 4.9-5.9 333,255 (5%) 347,456 (4.3%) 340,355 (4.6%) 170,810 (-0.5%) Livestock 1.6-2.6 92,225 (2%) 93,260 (1.1%) 92,758 (1.5%) 45,722 (2.1%) Poultry 4.2-5.2 71,262 (4.4%) 74,536 (4.6%) 72,899 (4.5%) 36,835 (4.2%) Fisheries 4.5-5.5 130,529 (-4.3%) 130,032 (-0.4%) 130,280 (-2.3%) 60,148 (4.6%) % Share to GDP 11.4 11 11.2 10.2 Note: Computed using National Statistical Coordination Board’s (NSCB) National Income Accounts; includes only agriculture, hunting, and fishing and excludes forestry 77Competitive and sustainable agriculture and fisheries sector Subsector contribution to GVA Crops (palay, corn, coconut including copra, sugarcane, banana, mango, pineapple, coffee, cassava, rubber, other crops), livestock and poultry remain the growth drivers, accounting for about 74 percent of the sector GVA. In particular, the crop subsector grew by 5 percent and 4.3 percent in 2011 and 2012, respectively. Growth was mainly propped up by strong performances of palay and corn, which contribute about 20 percent to the GVA of the crop subsector. In 2012, palay production expanded by 2.1 percentage points (ppts) from 5.9 percent in 2011 to 8.0 percent in 2012. This enabled the country to achieve a self-sufficiency ratio of 95 percent. This expansion was facilitated by the development of new irrigation areas, and restoration and rehabilitation53 of existing irrigation systems. Among the high-value crops, coconut and banana posted the highest contribution of around 19 percent to crop subsector GVA. In 2012, coconut production increased by 4.2 percent not only because of the favorable weather conditions but also because of the thorough implementation of the salt fertilization program of the Philippine Coconut Authority (PCA) in most of the major coconut-producing provinces of the country. Similarly, the 0.7-percent growth in production of banana in 2012 was also due to the good weather that enabled larger areas to be harvested and the addition of more bearing hills especially in Northern Mindanao, MIMAROPA, Western Visayas, Central Visayas and Autonomous Region in Muslim Mindanao (ARMM). The livestock subsector grew by 2.0 percent in 2011, following the increase in farm gate prices because of higher demand for beef and pork. However, its growth slowed down to 1.1 percent in 2012, due to the shortage of both imported and local inputs, primarily animal feeds, which affected production. Meanwhile, the poultry subsector continued to post strong gains as it recorded an average annual growth rate of 4.5 percent over the three-year period. This is well above the lower-end target of 4.2 percent annual poultry subsector growth. The fisheries subsector finally recovered in the first semester of 2013, posting a record-high growth of 4.6 percent from a dismal performance of -4.3 percent and 0.4 percent for the full year 2011 and 2012, respectively. This upturn resulted from the positive performance of aquaculture, particularly tilapia and milkfish, which continue to contribute about 44 percent of total fisheries output. The capture fishing also exhibited strong performance because of the increased catch of skipjack, round scad, and yellow fin tuna, after the tuna ban in the Pacific Sea was lifted and marine resources were enhanced following the close fishing season policy of the government in 2011 and 2012. Regional contribution to GVA Among the regions, the top contributors to the sector GVA in 2012 are Central Luzon (14%), CALABARZON (10%), Western Visayas (9.4%), Northern 53 Rehabilitation works improve the efficiency of existing irrigation systems. While rehabilitation projects do not expand harvest areas, such projects are crucial to avoid the deterioration of the existing facilities which can result to a decrease in harvest areas. 78 Philippine Development Plan 2011-2016 MIDTERM UPDATE Mindanao (8.5%) and SOCCSKSARGEN (7.4%). Figure 4.2 shows that Central Luzon (Region III) far exceeds the other regions in terms of land productivity. Bicol (Region V) and Zamboanga (Region IX) have relatively large agricultural areas but are shown to be among those with the lowest land productivity. Enhancing productivity levels in these areas to reach the levels achieved by Regions XI and XII could have huge impact on agricultural incomes and GVA. NCR CAR I III IVA VI X II VIIIVB ARMM XIII XII XI IXVIII V 16.00 14.00 12.00 10.00 10.00 Share in Agricultural Land S ha re in A gr ic ul tu ra l G VA 8.00 8.00 6.00 6.00 4.00 4.00 2.00 2.00 0.00 0.00 Figure 4.2. Average regional share to agricultural gross value added (GVA), 2011-2012, and agricultural land share to total agricultural land area Source of data: Bureau of Agricultural Statistics (BAS), NSCB Exports performance For 2011 to 2012, the A&F sector generated US$5.195 billion in exports revenue, representing an average annual growth rate of 12 percent. Top agriculture exports include coco oil, banana, tuna, pineapple, desiccated coconut, seaweeds, tobacco and centrifugal sugar. The same mix of commodities has remained for the past several decades. However, none of them could be considered niche export commodity of the country and they could lose their market to more competitive suppliers. Hence, the boom-and-bust performance of the export sector has paralleled the rise and fall of world prices of the commodities. In 2011, for example, the sector posted a 31.4-percent increase in export revenue due to the relatively high world prices, particularly sugar that managed to increase exports earnings by almost ten times the 2010 level. In 2012, however, export revenue contracted by 7.1 percent as a result of the decline in world market prices of coco oil, copra, and sugar. The country’s sugar exports, in particular, dropped given the stiff competition posed by Thailand’s growing sugar industry. On the other hand, tuna exports bounced back from a 12.5-percent contraction in 2011 to a 44.7-percent increase in 2012. The continued trade facilitation activities of the government, through the Department of Agriculture (DA), to increase market access alongside the sustained Avian Influenza (AI)- and foot and mouth disease (FMD)-free livestock and poultry sectors are seen to support exports growth. 79Competitive and sustainable agriculture and fisheries sector Commodities Value (in US$ M) Growth (in %) 2011 2012 H1 2013 Average 10-11 11-12 Average Value (11-12) % Share Coco oil 1,425.50 1,016.10 538.31 1,220.80 23.50 12.61 (28.72) (8.06) Banana, fresh 471.00 646.70 453.98 558.85 10.76 47.51 37.30 42.41 Tuna 314.60 455.10 339.35 384.85 7.41 (12.47) 44.66 16.10 Pineapple & products 341.30 414.90 196.35 378.10 7.28 40.68 21.56 31.12 Desiccated coco 286.80 197.00 95.63 241.90 4.66 87.94 (31.31) 28.32 Seaweeds & carrageenan 210.90 184.20 123.60 197.55 3.80 36.77 (12.66) 12.06 Tobacco manufactured 200.00 157.50 155.00 178.75 3.44 24.07 (21.25) 1.41 Centrifugal sugar 351.50 108.80 148.35 230.15 4.43 1,087.50 (69.05) 509.23 Top agricultural exports 3,601.60 3,180.30 2,242.27 3,390.95 65.27 34.15 (11.70) 11.23 Total agricultural exports 5,388.20 5,003.50 3,229.91 5,195.85 100.00 31.38 (7.14) 12.12 Table 4.2. Value and growth of top agricultural exports, 2011-2013 Source: BAS Contribution to employment generation The sector employs about 32.0 percent of the country’s total labor force but accounts for 43 percent of the total underemployed. Based on the first three rounds of the Labor Force Survey in 2013, the number of people engaged in the sector has declined by 2.7 percent compared to the previous year, much faster than originally targeted and certainly much faster than can be absorbed in industry and services. The reduction in employment may be explained by extreme weather conditions that leave farmers who rely on a single crop unemployed when their farms are destroyed by typhoons or drought. Inadequate irrigation, among others, constrains the sector’s flexibility to shift to other crops when a primary crop fails. The employment problem in the fisheries sector, on the other hand, can be traced to the fishing ban imposed, as the resource had to be allowed time to regenerate. 80 Philippine Development Plan 2011-2016 MIDTERM UPDATE Table 4.3. Agriculture and fisheries (A&F) sector’s contribution to employment, 2011-H12013 Particulars 2011 2012 H1 2013 Average (2011-H1 2013) Employment (in thousand) and growth (in %) 12,267 (2.6) 12,093 (-1.4) 11,693 (-4.9) 12,018 (-1.2) Share to total employment (in %) 33.0 32.2 30.9 32.0 Underemployment (in thousand) and growth (in %) 3,111 (1.6) 3,285 (4.0) 3,142 (1.2) 3,163 (2.3) Share to total underemployment (in %) 43.4 43.1 41.4 42.6 * Total employed and underemployed in A&F includes hunting and forestry. Source: National Statistics Office, Annual Labor and Employment Estimates for Various Years and Labor Force Survey Table 4.4. Average daily basic pay of wage and salary workers by major industry group, 2011-Q1 2013 (in PhP) Major Industry Group 2011 2012 Q1 2013 Average All industries 317.44 333.82 345.99 322.42 Agricultural 158.20 166.74 169.06 164.67 Agriculture, hunting and forestry 156.81 165.27 167.10 163.06 Fishing 178.43 191.68 202.08 189.40 Non-agricultural 349.01 366.90 384.04 366.65 Source: Bureau of Labor and Employment Statistics (BLES), 2012 Yearbook of Labor Statistics and 2013 Current Labor Statistics Meanwhile, the number of underemployed agriculture workers increased by about 2.3 percent, on average. This can be attributed to the seasonal nature of agriculture work, low wage rates and limited opportunities for livelihood diversification. For 2011 to 2013, the basic pay in the sector amounted to an average of PhP165 per day, about PhP200 less compared to the basic pay of non agriculture workers (Table 4.4). This suggests the need to generate agri-related industries to absorb the underemployed especially during the off-cropping seasons and calls for more intensified private sector participation to facilitate the effective and efficient establishment of such linkages. The additional livelihood opportunities, especially those that draw inputs from agricultural produce, could lead to increases in rural incomes from higher wages earned and from increases in the production of raw inputs. 81Competitive and sustainable agriculture and fisheries sector Table 4.5. Average value and share of international trade of agricultural products, 2010-2012 Country Export Import Average trade balance (in million US$) Average value (in million US$) Average share* (%) Average value (in million US$) Average share* (%) Indonesia 43,041 0.25 19,654 0.11 23,387 Malaysia 33,906 0.19 19,544 0.11 14,362 Philippines 4,874 0.03 7,030 0.04 (2,156) Thailand 41,589 0.24 14,675 0.08 26,914 Vietnam 21,370 0.12 12,385 0.07 8,984 Source: World Trade Organization (WTO) *Share to total merchandise trade Comparison with ASEAN countries The country remains the laggard in agricultural productivity when compared to its neighbors in the Association of Southeast Asian Nations (ASEAN). Productivity of traditional crops such as rice (3.7 mt/ha), corn (2.7 mt/ha), coffee (1.5 mt/ha) and coconut (4.35 mt/ha) is low compared to other countries in the region (Table 4.6). Average yield levels of banana and sugarcane are on the high side but could still be further improved to be at least on par with Indonesia for banana and Thailand for sugarcane. Banana is one of the Philippines’ export winners with markets in Japan, Korea, China and the Middle East. Its competitive stance, however, should be strengthened to further improve its market potential. This goes the same for other agricultural commodities of the country. Table 4.6. Yield comparison of major food commodities in selected ASEAN countries, 2010-2012 (in mt/ha) Country Average (2010-2012) Rice Corn** Sugarcane Coconut Banana* Coffee* Indonesia 5.04 4.63 57.93 5.97 57.85 0.51 Malaysia 3.84 5.42 61.27 5.20 21.36 1.59 Philippines 3.71 2.72 71.86 4.35 40.61 1.52 Thailand 2.97 4.31 73.60 5.19 23.90 1.67 Vietnam 5.50 4.23 62.07 8.79 30.27 4.51 Philippine Rank 4 5 2 4 2 4 *2010-2011 only **Average yield for both yellow and white corn Source: Food and Agricultural Organization Corporate Statistical Database (FAOSTAT) 82 Philippine Development Plan 2011-2016 MIDTERM UPDATE Contribution to food security and poverty reduction The relatively high production growth rates in the crop subsector during the period should have led to improvements in terms of the country’s food security agenda. But this growth performance was not high enough to make a dent in the goal of reducing poverty in the sector. Official data on poverty for 2009 indicated that poverty incidence in the A&F sector stands at 36.7 percent (1.7 million) among farmers and 41.4 percent (346,345) among fisherfolk. For 2012, the NSCB reported that subsistence incidence among families remained at 7.5 percent. Challenges The A&F sector will need to overcome numerous challenges to be able to realize its potentials. Among these are (a) low productivity and production; (b) slow market growth and poor linkage to value-adding activities; (c) weak institutions and policies; (d) weak governance and resource degradation; and (e) vulnerability to climate risks and disasters. Low productivity and production Overcoming low productivity levels is the most challenging concern that hinders the development of the A&F sector. Several factors impede the achievement of higher yield levels. Limited access to credit and insurance Inadequacy of working capital limits the access of agricultural workers to modern technologies, farm equipment, post-harvest facilities, and new plant varieties, among others. Reports published by the Bangko Sentral ng Pilipinas (BSP) show that the share of banks’ loans granted to the sector remains low, representing only about 20 percent. While the Agro-industry Modernization Credit and Financing Program (AMCFP) significantly increased the release loans through cooperative rural banks from PhP446 million in 2011 to PhP1.12 billion in 2012, or by 151 percent, the average share of agricultural and agri-production loans granted against total loans granted by banks remained low at 2.0 percent in 2011 and 0.7 percent in 2012, respectively. The same factors have contributed to the limited access and availability of credit to the A&F sector. Among the reasons why banks hesitate to offer loans to small farmers and fisherfolk are: (a) lack of viable/profitable agriculture projects; (b) poor repayment capacity or cash flow of borrowers; (c) high risk of lending to agriculture relative to non-agriculture; (d) high cost of administering small loans; and (e) lack of borrowing experience or poor credit track record. On the other hand, small farmers cite the following reasons for their inability to access credit from banks: (a) lack of knowledge in accessing formal/bank loans; (b) stringent documentary requirements and cumbersome procedure; (c) lack of/inadequate collateral; and (d) high cost of borrowing/interest rate (Agricultural Credit Policy Council or ACPC, 2013). The average share of agricultural and agri production loans granted against total loans granted by banks remained low. 83Competitive and sustainable agriculture and fisheries sector The expansion of insurance for the sector, on the other hand, has been constrained by the Philippine Crop Insurance Corporation’s (PCIC) weak capitalization. PCIC was only able to cover about 0.45 percent and 0.55 percent of the total climate-related damages incurred by the sector in 2011 and 2012, respectively. The country’s vulnerability to inclement weather further aggravates the case as it keeps profit from reaching a sufficient level that would allow it to recover the outlays from insurance coverage. Low adoption and application of technology Despite the availability of science and technology packages and products to Filipino farmers and fisherfolk, the rate of adoption is low due to: (a) weak links among technology producers, extension workers, and farmers/fisherfolk; (b) lack of media/public awareness on the benefits of the technologies; (c) financial or capacity constraints of intended users; and (d) inadequate local government unit (LGU) commitment in the provision of extension service. Incomplete land ownership transfer under CARPER Growth in productivity can be enhanced if land is owned by farmers who will have the freedom to make their own production decisions, such as technology adoption that leads to higher efficiency. This highlights the need to fast-track asset reform program in the country to provide incentive to farmers and other stakeholders to invest in rural areas (Habito and Briones, 2005). For 2011-2012, the Departments of Agrarian Reform (DAR) and Environment and Natural Resources (DENR) have acquired and distributed 422,743 hectares of land, or about 66 percent of their combined targets (Table 4.7). These accomplishments by the Comprehensive Agrarian Reform Program-Extension with Reforms (CARPER) have benefitted 345,185 agrarian reform beneficiaries (ARBs). To strengthen the tenurial security of ARBs, minimize boundary disputes, and facilitate the payment of taxes and individual amortization, DAR has likewise subdivided and re-documented collective Certificates of Land Ownership Awards (CLOAs) into individual titles covering 77,353 hectares of agricultural lands, or 23.35 percent of the PDP target for the period. Despite the availability of science and technology packages and products to Filipino farmers and fisherfolk, the rate of adoption is low. 84 Philippine Development Plan 2011-2016 MIDTERM UPDATE Indicator PDP target Actual accomplishment 2011 2012 2011 2012 Land distributed under CARP (in hectares) Land distributed by DAR 200,000 240,247 120,284 115,099 Land distributed by DENR 100,000 100,000 92,146 95,214 Total 300,000 340,247 212,430 210,313 CARP beneficiaries Number of ARBs (DAR assisted) 117,647 141,322 63,755 48,806 Number of ARBs (DENR assisted) 129,747 129,747 115,631 116,993 Total number of ARBs 247,394 217,069 179,386 165,799 Table 4.7. CARPER targets and accomplishments, 2011-2012 Source: DAR and DENR In terms of agrarian justice delivery, DAR has resolved 94,128 cases or 96 percent of its target on Agrarian Legal Implementation (ALI) covering relevant land acquisition and distribution (LAD) cases such as protest against CARP coverage, identification of beneficiaries, and issuance and subdivision of CLOAs, among others. DAR interventions to strengthen capacities of ARBs and ARB organizations for agriculture production translated into economic empowerment of the ARBs. In particular, the average yields in irrigated rice (4.57 mt/ha) and corn lands (3.89 mt/ha) in agrarian reform communities (ARCs) are higher by 0.43 mt/ha and 1.29 mt/ha than the national average, respectively.54 In terms of 2011 income, the average ARB annual household income stands at PhP159,614.00,55 or PhP58,568.00 higher than the rural poverty threshold for a family of six, which is about PhP101,046.00.56 Slow market growth and poor linkage to value-adding activities Another hurdle that the sector has to overcome is the inability of the market to develop at a faster and more dynamic pace. The following issues have been identified to contribute to the challenge: 54 Department of Agrarian Reform (2012). ARC Level of Development Assessment (ALDA) Report for CY 2011. Quezon City: Department of Agrarian Reform, Planning Service. 55 ALDA Report Cy 2011 56 National Statistical Coordination Board-Philippine Poverty Statistics. 85Competitive and sustainable agriculture and fisheries sector Limited diversification of production and products The composition of the top performing agricultural commodities has been constant for the past years. Rice, corn and coconut continue to have the largest share in terms of land area. Similarly, the mix of commodities in the list of top agricultural exports has not changed throughout the years. The production portfolio needs to be diversified primarily: (a) to manage and reduce the impact of shocks especially those brought about by weather disturbances and volatility of prices both in the domestic as well as in the international markets; and (b) to promote other commodities with high linkage potential to other sectors, primarily the industrial sector. The latter requires strengthening the value-chain between agriculture and industry sectors to create quality jobs for the underemployed and to produce quality processed products for both the domestic and international markets. Limited connectivity (farm-to-market roads or FMRs, interisland shipping) One of the most critical binding constraints that hamper agricultural productivity growth and market expansion is the absence or inadequacy of an efficient logistics system, particularly for transport. Its direct outcomes include high transaction costs of doing business in rural areas that prevent farmers and fisherfolk from maximizing potential business opportunities in rapidly growing and urban areas, including foreign markets for export commodities. Comparatively, domestic prices of products are higher than the landed cost of their equivalent or, in some cases, better-quality imports. Domestic retail price of rice (PhP34.7/kg versus PhP25.9/ kg) and refined sugar (PhP59/kg vs. PhP50/kg) in 2011 was about 34 percent and 16 percent higher, respectively, compared with their imported counterparts. The connectivity challenge is more formidable because of the archipelagic characteristic of the Philippines, where interisland transportation support facilities are a prerequisite in catalyzing the flow of goods from the production area, up to the point of final sale. Effects of climate change add to the threats of limited connectivity, given the country’s high vulnerability to inclement weather. Inefficient and inadequate post-harvest and other marketing facilities Huge post-harvest losses result from inefficient or absence of post-harvest and other marketing facilities, ineffective logistics services, and post-harvest mishandling, all of which translate to reduction in farmer incomes. In 2011, about 16.47 percent of total rice production was lost during post-harvest operations. Similarly, there were about 5- to 48-percent production losses in fruits, 15 to 45 percent in vegetables, and 27 percent in fisheries in the same period. Weak capacity of farmers and fisherfolk for entrepreneurship One aspect lacking in the Filipino farmers and fisherfolk is their capacity to maximize additional business opportunities and value-adding activities beyond farming. Weak entrepreneurial skills further hinder agricultural producers from utilizing market information that will help them in improving their competitiveness, as well as in identifying the type of demand-driven products that are more profitable. One of the most critical binding constraints that hamper agricultural productivity growth and market expansion is the absence or inadequacy of an efficient logistics system, particularly for transport. 86 Philippine Development Plan 2011-2016 MIDTERM UPDATE Weak institutions and policies The presence of an enabling environment is important in effecting the desired economic growth and development from the programs, plans and policies being implemented by the government, given that it is also key in managing negative externalities. Critical to this is the capability and capacity of concerned institutions in formulating and executing appropriate activities and policy instruments that will encourage collective action from all stakeholders, thereby promoting and effecting inclusive growth. Smuggling Though there are no current studies on the effects of smuggling in the economy, it is clear that the entry of illegal and undocumented goods in the country results in a wide price disparity that disadvantages local producers. Further, smuggled agricultural commodities do not undergo the necessary quality and safety procedures. This poses health and security issues and even introduces foreign borne pests and diseases. Weak agriculture extension service The different geographic and environmental attributes of the agriculture and fisheries production areas in the country stress the need for local-level extension services. The devolution of the agriculture sector has lodged the leadership of such responsibility to the LGUs. However, it has been noted that LGU funding allocation is minimal and is still largely dependent on the support from the national government, through DA. Added to this is the inadequate manpower and technical capacities of technicians, which contribute to the government’s inability to effectively respond to and address the needs of sector’s stakeholders. Inadequate support for R&D The national budgetary support for R&D and extension, education and training services for 2011 to 2013 account for an average of only 9 and 13 percent of the total agriculture budget, respectively. The continued underinvestment in these public goods should be reversed, as these investments are expected to generate and facilitate subsequent adoption of technologies that would help improve productivity and raise incomes. Overlapping functions and contradicting policies There is a need to rationalize government functions and policies to establish a strategic approach in addressing the needs of stakeholders and in creating an enabling environment for their participation. At present, there is an apparent overlap of functions of DA and DAR, particularly in the provision of support services to farmers and fisherfolk, which requires a systematic and more unified approach to enhance its efficiency. Such is also the case between the DA and DENR in terms of fisheries management in marine-protected areas, as well as among DAR, DENR, Land Registration Authority (LRA) and National Commission on Indigenous Peoples (NCIP) in terms of land titling and distribution. Local government funding allocation is minimal and is still largely dependent on the support from the national government, through the Department of Agriculture. 87Competitive and sustainable agriculture and fisheries sector On the other hand, the National Food Authority (NFA) interventions currently cover both the protection of rice farmers and consumer welfare, two dimensions that require different and potentially conflicting sets of policies. As such, there is a need to rationalize the role of NFA, by way of resolving and settling its appropriate mandate. Resource degradation due to weak enforcement of regulations Natural and man-made hazards to the environment, natural resources and biodiversity have dampened economic services to support higher productivity growth. Despite recognition of their negative consequences, continued use of unsustainable production practices (e.g. extensive use of chemical inputs, expansion of grazing lands, slash and burn practices, and deforestation especially in watershed areas, overfishing, etc.) have continued. Numerous laws and regulations have been formulated and put into force supposedly to arrest and halt these destructive farming and fishing practices. The governance of their implementation has been weak due to lack of capable manpower, financial capacities to purchase the needed equipment for policing and patrolling, and most critical of all is the lack of political will to provide teeth to the laws and regulations. Vulnerability to climate risks and disasters and inadequate climate risk-resilient technologies Changing rainfall patterns, rising temperatures, increasing frequency and intensity of typhoons and dry spells, and sea level rise are manifestations of climate change. These changes will spell a difference in terms of cropping calendars, unpredictability of yields, pest pressures, crop losses, livestock and fisheries production, and damage to existing infrastructure. Production losses from climate-related disasters (i.e. typhoons, tropical storms and flooding) increased to PhP33.5 billion in 2012, from PhP25.2 billion in 2011 and PhP13.8 billion in 2010. Interventions to improve the sector’s resiliency against the negative impact of extreme weather events and climate change continue to be prioritized. The scenarios from the Department of Science and Technology—Philippine Atmospheric, Geophysical and Astronomical Services Administration (DOST-PAGASA) for 2020 and 2050 project widespread warming in most parts of the country. Longer hot days and shorter cold days are expected. The number of days with maximum temperature of more than 35oC is expected to increase in all parts of the country. Projected seasonal mean temperatures in the Philippines are expected to rise by about 0.9 to 1.1oC for 2020 and 1.8 to 2.2oC by 2050. Extreme rainfall is also projected to increase in Luzon and the Visayas while a decreasing trend is projected in Mindanao (MDGF-1656, 2011). About 27.3 percent of the total land area in the country (8.34 million hectares) is considered to be vulnerable to drought, alternating with floods and typhoons on an annual basis. This is further magnified by the insufficient climate risk-resilient technologies and subsequent adoption of related innovations that may help palliate the effects of inclement weather and other climate-related disasters. Production losses from climate-related disasters (i.e. typhoons, tropical storms and flooding) increased to PhP33.5 billion in 2012, from PhP25.2 billion in 2011 and PhP13.8 billion in 2010. 88 Philippine Development Plan 2011-2016 MIDTERM UPDATE III. UPDATED TARGETS A summary of the updated targets in the A&F sector is presented in Table 4.8, according to sector, subsector and intermediate outcomes. Table 4.8. Revalidated results matrix (RM) on competitive and sustainable agriculture and fisheries (A&F) sector. Indicators Baseline (2012) End-of-Plan target (2016) Assumptions and risks Sector outcome: Competitive and sustainable A&F sector achieved A&F GVA increased (in million PhP) 695,100 793,794-824,958 • Budgetary allocations and reforms in the sector are implemented Crops 347,456 408,429-424,346 Livestock 93,260 98,495-104,147 Poultry 74,536 87,869-91,291 Fisheries 130,032 140,881-146,349 Value of agricultural exports increased (in million US$) 5,004 7,194-7,460 Labor productivity in A&F sector increased (in PhP) 57,797 62,561-70,253 Sector outcome A: Productivity in A&F sector increased Yield of major commodities increased (in metric ton per hectare) • Farmers, fisherfolk and their oganizations adopt sustainable, productivity enhancing technologies and innovations Palay 3.84 4.53 White corn 1.65 2.08 Yellow corn 4.09 5.16 Banana 20.36 24.57 Coconut (copra) 0.88 1.00 Pineapple 41.06 45.66 Mango 4.07 5.06 Sugarcane 61.34 71.20 Cassava 10.23 20.23 Coffee 0.74 0.88 Cacao 0.52 0.70 Rubber 2.52 3.62 Volume of production increased (in ‘000 metric ton) Hog 1,974 2,172 Chicken 1,479 1,852 Commercial fisheries 1,042 1,169 Municipal fisheries 1,281 1,392 Aquaculture fisheries 2,542 2,784 89Competitive and sustainable agriculture and fisheries sector Indicators Baseline (2012) End-of-Plan target (2016) Assumptions and risks Level of post-harvest losses reduced (in %) • Farmers, fisherfolk and their oganizations adopt sustainable, productivity-enhancing technologies and innovations Rice 16.5 (2010) 14.1 Corn 7.2 (2009) 6.9 Fisheries 25.0 (2008) 18.0 Banana 16.0 (2009) 13.0 Mango 30.0 (2009) 24.0 Rice self-sufficiency ratio increased (in %) 95.0 100.0 Intermediate outcome of subsector outcome A: Land tenure security improved Total land distribution under CARP (in hectares) DAR 115,099 818,390 DENR 95,214 312,188 (2015) Subdivided and re-documented collective CLOAs into individual titles (in hectares) 38,866 740,668 Proportion of farmer/fisherfolk borrowers obtaining loans from formal sources increased (in %) 57.0 (2008) 85.0 Sector outcome B: Forward linkage to the I&S sectors increased Proportion of industrial crops to total crop production increased (in %) • Farmers, fisherfolk and their organizations adopt sustainable, productivity-enhancing technologies and innovations Abaca 0.1 0.4 Cacao 0.1 2.0 Coffee 0.1 2.0 Oil palm 0.6 3.6 Rubber 0.5 2.5 Sugarcane 30.5 38.0 Tobacco 0.1 0.5 Volume of industrial crops production increased (in ‘000 metric tons) Abaca 68.5 70.3 Cacao 4.8 5.0 Coffee 88.9 92.6 Oil palm 531.3 654.3 Rubber 443.0 478.4 Sugarcane 26,395.9 34,681.5 Tobacco 48.1 63.5 Private investments in agri-related activities increased (in million PhP) 5,172 10,725 Sector outcome C: Sector resilience to climate change risks increased Annual proportion of fram households’ income to total income decreased (in %) 48.5 (2011) Decreasing per year • Climate change adaptation programs are mainstreamed and implemented in all government programs.Number of farmers with risk insurance increased 311,388 2,035,864 90 Philippine Development Plan 2011-2016 MIDTERM UPDATE IV. STRATEGIC FRAMEWORK Taking into account the challenges identified in the previous section, the PDP strategies for the A&F sector will aim to (a) increase productivity in the sector, (b) increase forward linkage with the I&S sectors, and (c) increase sector resilience to risks, including climate change. Figure 4.3. Strategic framework on competitive and sustainable agriculture and fisheries (A&F) sector Sector outcome Crosscutting strategies Competitive and sustainable A&F sector achieved Strategies 1. Increase investments in research, development and extension (RD&E) to generate appropriate technologies and innovations to improve farm productivity. 2. Strengthen and build the capacities of farmers and fisherfolk through the provision of extension and conduct of trainings on appropriate technologies and innovations on production, farming systems and fishery practices. 3. Improve rural infrastructure to enhance connectivity and integration of production areas to markets 4. Fast-track the completion of asset reform through the distribution of land titles 5. Improve access to credit and other financial packages 14. Encourage diversification of production and livelihood options for A&F households. 15. Reduce the degradation and improve the quality of the sector’s environmental resources 16. Increase the resilience of agriculture communities and strengthen their capacities to respond effectively to climate risks and natural hazards 17. Enhance convergence among govenment agencies 18. Pursue public-private parnerships (PPPs) especially for infrastructure and value chain development and management 19. Pursue the formulation of national and local A&F commodity roadmaps 20. Conduct and aggresive anti-smuggling campain 21. Review/update critical policy measures 22. Promote the passage and enhancement of key legislative actions 6. Promote the production of high value commodities with comparative advantage, including industrial crops; 7. Expand existing markets, explore new markets, and link farmers and fisherfolk to these value chains and commodity/industry clusters; 8. Strengthen and build the capacities of stakeholders through extension and training (value-adding, agribusiness development, value-chain management) 9. Strengthen and build the capacities of stakeholders by providing extension services and conducting training on value-adding agribusiness development and value-chain management (see also Chapter: 6 Social development); 10. Increase investments in RD&E on agri-processing, product development of A&F products, agri-tourism, and agro-forestry; 11. Provide timely market information to farmers, fishfolk, farmers’ and fisherfolk groups, and small and medium enterprises (SMEs) through the use of ICT and other appropriate technologies; 12. Support the transformation of farmers’ and fisherfolk groups and cooperatives into formal and viable SMEs; and 13. Promote proper eco-labelling and enhance product standards to ensure the safety and quality of products. Productivity in A&F sector increased Forward linkage to the I&S sectors increased Sector resilience to climate change risk increased Subsector outcomes 91Competitive and sustainable agriculture and fisheries sector Sector outcome A: Productivity in A&F sector increased For the remaining years of the Plan period, interventions will be directed towards increasing the productivity of key commodities such as palay, corn, sugarcane, pineapple, coconut, coffee, banana, mango, livestock and poultry and fisheries, among others. The targeted level of increase in productivity is 19 percent from 2012 to 2016. In particular, the government is committed to ensure enough supply of rice for the country. The DA has launched the Food Staples Sufficiency Program (FSSP), which aims to provide sufficient, locally-sourced food staples to every Filipino. Specifically, it intends to reach 100-percent rice self-sufficiency by 2014 and beyond primarily through increasing the areas suitable to palay production. It likewise calls for the reduction of the country’s dependence on imported rice and requires the NFA to increase its annual local procurement to about 10 percent of annual domestic production. Strategy 1: Increase investments in research, development and extension (RD&E) to generate appropriate technologies and innovations to improve farm productivity: • Update databases and information systems for the formulation of a reliable and responsive national RD&E agenda; • Encourage partnership between and among higher education institutions, LGUs, private and business sector on RD&E and training initiatives; • Rationalize and strengthen the provision of extension services through improved complementation of national, local and private sector entities; and • Encourage the participation of farmers, fisherfolk and their organizations in research and promotion activities; Strategy 2: Strengthen and build the capacities of farmers and fisherfolk through the provision of extension and conduct of trainings on appropriate technologies and innovations on production, farming systems and fishery practices Strategy 3: Improve rural infrastructure to enhance connectivity and integration of production areas to markets There are Category 1 provinces that have lagged behind because of poor/slow development of infrastructure support. Faster improvement of the following facilities will open their further growth and development: • Provide irrigation services and facilities; maintain existing systems and establish small-scale irrigation systems; enhance cost-sharing/counterpart mechanisms for financing with LGUs; • Establish roads, bridges and other logistics-related infrastructure to link production areas to markets; 92 Philippine Development Plan 2011-2016 MIDTERM UPDATE • Increase the effectiveness and efficiency of the rural infrastructure system such as FMRs, bridges, post-harvest, information and communications technology (ICT) systems and all other infrastructure (see also Chapter 10: Accelerating infrastructure development); • Enhance the technical design of irrigation, drainage systems and facilities, FMRs, bridges and other infrastructure to take into account climate risks and extreme climate events; and • Establish post-harvest facilities in strategic agricultural production areas. Strategy 4: Fast-track the completion of asset reform through the distribution of land titles LAD activities have entered a more difficult phase. In particular, huge portions of the remaining 792,639 hectares of LAD balances are private agricultural lands that have to be acquired through compulsory acquisition. To help overcome this more difficult situation which is exacerbated by the poor land administration and management system now in place, DAR has instituted several policy and operational measures to speed up completion of land distribution by 2016 and ensure post-LAD tenurial stability. These include: (a) streamlining of LAD processes; (b) accurate assessment of actual magnitude and status of LAD balance and corresponding issues; and (c) intensification of the monitoring of performance of provincial/municipal agrarian reform offices. Alongside the intensified efforts to complete LAD, the government will ensure continued delivery of support services to ARBs and ARCs, including: (a) strengthening the organizational capacity of ARBs and ARB organizations to develop and manage agri-enterprises; (b) scaling up microenterprises into formal and viable micro-, small and medium enterprises (MSMEs) through the clustering of ARCs and establishing networks of enterprises; and (c) establishing physical infrastructure in strategic ARCs and clusters. Investments along these lines are deemed imperative towards providing more development opportunities in CARP awarded lands, especially that about 21 percent and 11 percent of the total ARCs are located in Category 1 and 2 provinces, respectively.57 An example of such intervention is the newly approved Convergence on Value Chain Enhancement for Rural Growth & Empowerment (CONVERGE) Project. It aims to reduce incidence of poverty through crop diversification and increased farm incomes of 135,000 agricultural households in 91 ARCs, 11 ARC clusters, 50 municipalities and 515 barangays in regions IX, X and XIII in Mindanao. These three target regions are among the six poorest regions of the country and have majority of the provinces included under Categories 1 and 2. 57 Computed using DAR data on number of ARCs confirmed by region, as of June 2013 Alongside the intensified efforts to complete land acquisition and distribution, the government will ensure continued delivery of support services to agrarian reform beneficiaries and communities. 93Competitive and sustainable agriculture and fisheries sector Another example is the proposed Gearing Rural Organizations for Wealth Creation Towards Household Income Improvement (GROWTH) Project. The five-year project aims to significantly raise household incomes, productivity and the quality of life of ARBs and small-holder farmers in the targeted 14 ARC clusters involving 102 ARCs located in 14 provinces, including Pangasinan, Negros Occidental, Camarines Sur, Leyte, Iloilo, Eastern Samar and Masbate, and spread in 10 regions. The provinces, which are selected based on the criteria of high provincial poverty incidence and high percentage of poorest municipalities within the province, are also part of Category 1 and 2. Strategy 5: Improve access to credit and other financial packages • Strengthen the Agriculture and Fisheries Modernization Act (AFMA) mandated AMCFP; • Implement capacity building programs to improve the credit-worthiness of farmers, fisherfolk and their organizations; • Develop and promote innovative financing schemes and risk-reducing mechanisms (i.e., guarantee and insurance) to encourage more banks and other lending conduits (i.e., cooperatives, government agencies, LGUs) to lend to farmers’ and fisherfolk; and • Intensify information dissemination of credit, guarantee and insurance program. Sector outcome B: Forward linkage with the I&S sectors increased In order to increase the forward linkage of agriculture to the I&S sectors, the volume and productivity of industrial crops will be increased for abaca, cacao, coffee, oil palm, rubber, sugarcane and tobacco. Notably, sugarcane production will be increased by 31 ppts from 26.4 million metric tons to 34.7 million metric tons by the end of the Plan period. In addition, cacao and coffee production will be increased by 4 percent and 23 percent from 2012 levels to 2016, respectively. The following strategies will be implemented to promote value-adding of A&F products and agribusiness development among small-holder farmers, including ARBs and indigenous peoples: Strategy 6: Promote the production of high value commodities with comparative advantage, including industrial crops Strategy 7: Expand existing markets, explore new markets, and link farmers and fisherfolk to these value chains and commodity/industry clusters 94 Philippine Development Plan 2011-2016 MIDTERM UPDATE Strategy 8: Strengthen and build the capacities of stakeholders by providing extension services and conducting training on value-adding, agribusiness development and value-chain management (See also Chapter 6: Social development for similar strategies.) Strategy 9: Increase investments in RD&E on agri-processing, product development of A&F products, agri-tourism, and agro-forestry Strategy 10: Provide timely market information to farmers, fisherfolk, farmers’ and fisherfolk groups, and small and medium enterprises (SMEs) through the use of ICT and other appropriate technologies Strategy 11: Support the transformation of farmers’ and fisherfolk groups and cooperatives into formal and viable SMEs Strategy 12: Promote proper eco-labeling and enhance product standards to ensure the safety and quality of products Box 4.1. The National Industry Cluster Capacity Enhancement Project: Bolstering pilot industry clusters The National Industry Cluster Capacity Enhancement Project (NICCEP) is a three year technical cooperation project funded by the Japan International Cooperation Agency (JICA). The project aims to enhance the capacity of selected pilot industry clusters (i.e., ICT, tourism, agribusiness, manufacturing, health and wellness, and mining) throughout the country to plan, implement, facilitate service delivery, evaluate projects, and improve industry competitiveness and business environment. Selection of pilot industry clusters to be promoted in a certain region is drawn from consultations with local industry stakeholders, considering respective geographical attributes and available natural resources, among others. This approach allows agribusiness projects to be strategically distributed within the country, given agriculture’s dependence on its production area’s natural endowments. Through the NICCEP, the government is able to provide capacity-building trainings and related activities that help boost sector stakeholders’ participation in the value chain, thereby enabling them to maximize available entrepreneurial opportunities beyond farming. In support of this, the Department of Trade and Industry (DTI) has been establishing shared service facilities (SSFs) or production centers to provide micro-, small and medium enterprises (MSMEs) better access to technology and more sophisticated equipment. This accelerates the MSMEs’ bid for competitiveness and helps them graduate to the next level where they could tap a better and wider market and be integrated in the global supply chain. For agribusiness, established SSFs include processing facilities for bamboo, coco coir, coffee and dairy products. As a result of these interventions, the agribusiness industry, as one of the targeted industry clusters, is expected to increase its contribution to the national economy, particularly in terms of investments generation, exports expansion, creation of jobs and development of MSMEs. Ultimately, this will contribute to the goal of inclusive growth and poverty reduction. 95Competitive and sustainable agriculture and fisheries sector Sector outcome C: Sector resilience to climate change risks The A&F sector needs to adapt to climate change, as weather-related shocks are expected to become normal occurrences. The Updated PDP intends to increase insurance protection extended to farmers and fisherfolk against losses in the A&F sector due to natural calamities as well as plant pests and diseases. The target is to increase the number of beneficiaries covered by 60 percent per year, from 311,388 in 2012 to 2,035,864 in 2016. (See also Chapter 9: Sustainable and climate-resilient environment and natural resources.) Strategies for this consist of the following: Strategy 14: Encourage diversification of production and livelihood options for A&F households • Conduct training in crop-weather relationships and crop diversification to mitigate risks on off-seasons; • Promote the development of off-farm and non-farm activities; • Revise the design of the Community-Based Employment Program (CBEP) to function as an income protection measure; and • Conduct information, education and communication (IEC) campaigns and capacity-building activities for the purpose at the local level. Strategy 15: Reduce the degradation and improve the quality of the sector’s environmental resources • Adopt effective approaches to develop, rehabilitate and restore the natural resource base for A&F production; • Increase investments in sustainable and climate change-responsive technologies and innovations in the production and processing of A&F products; and • Promote the integration of agricultural development priorities/thrusts in land use and development, especially at the sub-national level. Strategy 16: Increase the resilience of agriculture communities and strengthen their capacities to respond effectively to climate risks and natural hazards • Promote the adoption of climate-responsive technologies and innovations in the production, processing and distribution of A&F products; • Strengthen the A&F insurance system; • Strengthen agricultural extension and support services on the adoption of climate-sensitive farming and fishing technologies; and • Continuously conduct vulnerability and adaptation assessments, especially in critical A&F products. 96 Philippine Development Plan 2011-2016 MIDTERM UPDATE Crosscutting strategies Strategy 17: Enhance convergence among government agencies The agriculture bureaucracy, including the DA, DAR, and DENR, will be rationalized through the efficient and effective convergence and complementation of the agriculture, agrarian reform and natural resources (AARNR) service agencies and related offices. Rationalization will include measures to sort out institutional overlaps such that the social, economic, and environmental aspects of rural development will be integrated as a way to operationalize sustainable development. The proposed legislation will rationalize and strengthen the provision of extension services towards improving national, local and private sector complementation. Strategy 18: Pursue public-private partnerships (PPPs) especially for infrastructure and value chain development and management The private sector will be tapped to participate in the government’s efforts to immediately deliver the needed infrastructure and services for A&F. Among the projects that may be eligible under PPP include irrigation infrastructure, food supply chain and postharvest services (i.e., bulk handling facilities, food/ grains terminals and processing, storage, handling and port/transport facilities), production centers for various farm inputs, fish-farming infrastructure, and market and trading centers. Strategy 19: Pursue the formulation of national and local A&F commodity roadmaps Strengthening LGU involvement in agricultural development is an important strategy for the overall development of the sector. Formulation of provincial and municipal agricultural development plans will support and strengthen the implementation of national agricultural commodity and subsector roadmaps at the local level. This would provide the needed agricultural support based from local contexts which could make development of the sector more grounded. The formulation of A&F roadmaps will guide the overall development of the sector. This will include the objectives and the necessary government interventions, including the areas needing private sector participation. An example is the DA PCA’s Integrated Coconut Industry Poverty Reduction Roadmap (see Box 4.2). The agriculture bureaucracy, including the Department of Agiculture, Department of Agrarian Reform, and Department of Environment and Natural Resources, will be rationalized through the efficient and effective convergence and complementation of the agriculture, agrarian reform and natural resources service agencies and related offices. 97Competitive and sustainable agriculture and fisheries sector Box 4.2. Integrated Coconut Industry Poverty Reduction Roadmap: Towards growth that reduces poverty The Integrated Coconut Industry Poverty Reduction Roadmap is a program designed to alleviate poverty and develop the coconut industry. This roadmap, which harmonizes coconut-related programs of national agencies, will encompass four poverty reduction components, namely market development through agro-enterprise development, social protection, fast tracking of land reform, and institutional reforms and innovations. The applications of these components vary in degree and intensity in each of the four scenarios. Poverty reduction through market participation measures will be more applicable for coconut farmers who have secured land. Moreover, coconut farmers in these localities are expected to be more socially prepared in linking and engaging markets as entrepreneurs. Market-fuelled growth for coconut farmers is expected to be highest for farmers with land security and good access to roads because this would facilitate strong market connectivity. Public investments such as access connectivity and electricity will be needed for those without road access to boost market potential. For these farmers, social protection strategy will be geared towards attenuating the risks and costs that poor coconut farmers will bear during their transition from subsistence production to market integration. For farmers without land security, immediate market participation will be difficult. Hence, fast-tracking agrarian reform and social protection programs will be prioritized. The completion of CARPER will be facilitated along with social protection interventions (i.e., cash-for-work program, Self-employment Assistance for Kaunlaran or SEA-K, universal PhilHealth and scholarship program) to augment subsistence farm incomes. Institutional reforms and innovations, which aim to develop institutional environment, are an encompassing strategy that applies to all four scenarios. For the first year of implementation, the integrated roadmap will focus on 12 pilot provinces, including Camarines Sur, Masbate, Eastern Samar, Samar, Northern Samar, Zamboanga del Norte, Davao Oriental, North Cotabato, Sarangani, Agusan del Sur, Surigao del Norte and Surigao del Sur. These provinces, which represent 6 out of the 10 provinces under Category 2, were chosen based on the extent of their poverty incidence as indicated in the Registry System for Basic Sectors in Agriculture (RSBSA, 2012). The program will likewise help fast-track LAD to cover additional provinces with highest LAD balance, including Agusan del Norte, Albay, Camarines Norte, Compostela Valley, Davao del Sur, Lanao del Norte, Leyte, Misamis Occidental, Quezon, Sibugay, Sorsogon and Zamboanga del Sur. Four of these provinces are under Category 1. Strategy 20: Conduct an aggressive anti-smuggling campaign Smuggling is one of the major challenges faced by the sector’s stakeholders across commodities. In order to address this issue, an aggressive campaign against smuggling, including an effective oversight mechanism, is needed. In addition, the oversight mechanism will include representatives from both the public and private sector to ensure transparency (see also Chapter 3: Competitive and innovative I&S sectors). 98 Philippine Development Plan 2011-2016 MIDTERM UPDATE Strategy 21: Review/update critical policy measures A review of laws and policies will be a continuing activity to ensure the responsiveness of such issuances to current developments in the sector. The following are some of the critical policy measures that need to be reviewed/updated: Philippine Fisheries Code of 1998, including the updating of the Comprehensive National Fisheries Industry Development Plan (CNFIDP) The Philippine Fisheries Code of 1998 mandates the review of its provisions every five years to take into account the current trends, opportunities, issues and challenges that face the sector, including the assessment and updating of the CNFIDP 2006 2025. The CNFIDP serves as the comprehensive framework for the promotion of optimal development and long-term sustainability for the fisheries industry. The plan has yet to be updated since 2006. Food standards In light of the move towards trade liberalization and reduction of logistics cost, the government will strengthen competitiveness of domestic agriculture to take advantage of trade opportunities while ensuring the provision of safety nets. Logistics development Stakeholders have consistently raised their concern on the inefficiency of the country’s logistical system that has resulted in high transactions costs and put further pressure on profitability. To address this, there is a need to review the provisions of relevant laws that tackle inter-island shipping activities of foreign vessels that are perceived to support the development of shipping operations within the country. These laws include, but are not limited to, the Tariff and Customs Code of the Philippines (PD 1464) and the Domestic Shipping Development Act of 2004 (RA 9295). Institute Post-CARPER Reforms The sustainability of the gains achieved during the program implementation lies in the establishment of appropriate reforms, which should be able to address current and emerging issues of the agrarian reform program. It should include the completion of the LAD component and continued delivery of support services to ARBs. The proposed legislative action will likewise contain the institutional restructuring between and among concerned national government agencies to address problems in land administration and management, and agriculture extension services. The envisioned reforms will also consider mechanisms to strengthen LGUs in relation to the delivery of extension services. There is a need to review the provisions of relevant laws that tackle inter-island shipping activities of foreign vessels that are perceived to support the development of shipping operations within the country. 99Competitive and sustainable agriculture and fisheries sector Strategy 22: Promote the passage and enactment of key legislative actions National Land Use The passage of the bill, pending for two decades now, is expected to provide legal and other mechanisms not only for land reform areas, but also zoned areas for water and water uses, especially for agriculture. This is especially important in anticipation of the end of the agrarian reform program and the subsequent opening of the land market. Further, it is envisioned that the policy will serve as guide to the optimum allocation of land among competing uses within the framework of sustainable development. It will also provide a mechanism for resolving land use policy conflicts by taking into consideration the principles of social equity and economic efficiency. (See also Chapter 9: Sustainable and climate-resilient environment and natural resources.) NFA reforms The NFA Reorganization Act will further rationalize grains-sector trading. It restructures the agency by separating its regulatory and proprietary functions. The NFA will grant import permits for rice to all applicants as a ministerial function, subject to the payment of applicable taxes, duties, and service fees. The quantitative restriction on rice must be reviewed in light of the WTO exemption that expires in 2012. The proposed law enables NFA to engage in activities consistent with its renewed mandate. Soil and Water Conservation Act This policy aims for soil and water conservation technologies and approaches through the development, promotion, and implementation of soil and water conservation facilities including rainwater-harvesting systems in the country. In furtherance of its implementation, a National Soil and Water Conservation Program will be established as the framework for addressing the problem of land degradation. In particular, the program will establish the linkage between agricultural productivity improvement and sustainable land management through the promotion and implementation of soil and water conservation technologies and methodologies. V. PLAN IMPLEMENTATION To achieve a competitive and sustainable A&F sector, the DA, DAR and DENR will continue to spearhead the formulation and implementation of relevant plans, programs and policies. Outcome and intermediate outcome indicators that will be monitored are presented in Table 4.9. Programs and projects for the A&F sector will be implemented through the banner programs of DA and its attached agencies, namely Philippine Center for Postharvest Development and Mechanization (PhilMech), Agricultural Credit Policy Council (ACPC) and Philippine Crop Insurance Corporation (PCIC), on The National Food Authority Reorganization Act will further rationalize grains-sector trading. It restructures the agency by separating its regulatory and proprietary functions. 100 Philippine Development Plan 2011-2016 MIDTERM UPDATE rice, corn, high value crops, livestock and fisheries. These involve the provision of support services, such as credit and financing, insurance, rural infrastructure, post harvest facilities, training and extension, research and development. DAR and DENR are mainly responsible for improving land tenure security. For proper monitoring of Plan targets, all concerned agencies are expected to regularly submit progress reports (e.g. quarterly and annual) to the NEDA Secretariat for consolidation and subsequent transmittal to the Economic Development Cluster (Econ Cluster). The Econ Cluster will exercise oversight functions in tracking the progress and achievements of the implementing agencies vis-a-vis the Plan targets. The indicators and targets will continue to be enhanced and updated annually through an iterative process involving collaboration of sector agencies, statistical agencies, research institutions, the academe and civil society organizations. Table 4.9. Annual target indicator matrix on competitive and sustainable agriculture and fisheries (A&F) sector, 2013-2016 Indicators Annual Plan targets Means of Verification Agency responsible2013 2014 2015 2016 Sector outcome: Competitive and sustainable A&F sector achieved A&F GVA Increased to PhP793,794-824,958 million (in %) 3.5-4.5 3.2-4.2 3.3-4.3 3.5-4.5 PSA National Accounts DA Crops to PhP408,429 424,346 million (in %) 4.5-5.5 4.0-5.0 4.0-5.0 4.0-5.0 Livestock to PhP98,495 104,147 million (in %) 1.2-2.2 1.2-2.5 1.5-3.0 1.6-3.5 Poultry to PhP87,869 91,291 million (in %) 4.2-5.2 4.2-5.2 4.2-5.2 4.2-5.2 Fisheries to PhP140,881 146,349 million (in %) 1.5-3.0 1.5-2.5 2.3-3.0 2.8-3.5 Value of agricultural exports increased to US$7,194 7,460 million (in %) 9.5-10.5 9.5-10.5 9.5-10.5 9.5-10.5 PSA Agricultural Foreign Trade Development Labor productivity in A&F sector increased to PhP62,561-70,253 (in %) 2.0-5.0 2.0-5.0 2.0-5.0 2.0-5.0 PSA Yearbook of Labor Statistics Sector outcome A: Productivity in A&F sector increased Yield of major commodities increased (in metric ton per hectare) PSA Countrystat/ Selected Statistics on Agriculture DA Palay 4.2 4.4 4.5 4.53 White corn 1.8 1.8 2.0 2.08 Yellow corn 4.4 4.6 5.0 5.16 Banana 22.5 23.2 23.9 24.57 Coconut (copra) 0.9 0.9 0.9 1.00 PCA 101Competitive and sustainable agriculture and fisheries sector Indicators Annual Plan targets Means of Verification Agency responsible2013 2014 2015 2016 Pineapple 41.9 43.1 44.4 45.66 PSA Countrystat/ Selected Statistics on Agriculture DA Mango 4.6 4.8 4.9 5.06 Sugarcane 58.6 62.8 66.9 71.20 SRA Cassava 13.8 16.4 18.3 20.23 DA Coffee 0.8 0.8 0.9 0.88 Cacao 0.6 0.6 0.6 0.70 Rubber 3.46 3.59 3.62 3.62 Volume of production increased (in ‘000 metric ton) PSA Countrystat/ Selected Statistics on Agriculture DAHog 2,013 2,057 2,109 2,172 Chicken 1,562 1,651 1,747 1,852 Commercial fisheries 1,070 1,102 1,135 1,169 BFARMunicipal fisheries 1,306 1,332 1,361 1,392 Aquaculture fisheries 2,599 2,657 2,717 2,784 Level of post-harvest losses reduced (in %) Research study PhilmechRice 15.6 15.1 14.6 14.1 Corn 7.1 7.0 6.9 6.9 Fisheries 18.0 BFAR Banana 14.5 13.0 Philmech Mango 27.2 24.0 Rice self-sufficiency ratio increased (in %) 100.0 100.0 100.0 100.0 PSA Agricultural Indicator System: Food Sufficiency and Security DA Intermediate outcome of subsector outcome A: Land tenure security improved Total land distribution under CARP (in hectares) DAR Accomplishment Report DARDAR: 818,390 by 2016 160,000 240,707 180,707 121,877 DENR: 312,188 by 2015 90,000 90,000 36,974 DENR CARP Secretariat Report DENR Subdivided and re documented collective CLOAs into individual titles (in hectares) 79,119 215,020 203,331 204,332 DAR Accomplishment Report DAR Proportion of farmer/ fisherfolk borrowers obtaining loans from formal sources increased (in %) 85.0 DA-ACPC Small Farmers and Fisherfolk Credit Accesibility Survey ACPC 102 Philippine Development Plan 2011-2016 MIDTERM UPDATE Indicators Annual Plan targets Means of Verification Agency responsible2013 2014 2015 2016 Subsector outcome B: Forward linkage to the I&S sectors increased Proportion of industrial crops to total crop production increased (in %) PSA Countrystat/ Selected Statistics on Agriculture DA Abaca 0.2 0.2 0.3 0.4 Cacao 0.5 1.0 1.5 2.0 Coffee 0.5 1.0 1.5 2.0 Oil palm 1.4 2.1 2.9 3.6 Rubber 1.0 1.5 2.0 2.5 Sugarcane 32.0 34.0 36.0 38.0 Tobacco 0.2 0.3 0.4 0.5 Volume of industrial crops production increased (in ’000 metric tons) Abaca 69.0 69.4 69.9 70.3 Cacao 4.9 4.9 5.0 5.0 Coffee 89.8 90.7 91.6 92.6 Oil palm 559.7 589.6 621.1 654.3 Rubber 451.6 460.36 469.3 478.4 Sugarcane 28,260.3 30,256.4 32,393.5 34,681.5 Tobacco 51.54 55.25 59.23 63.49 Private Investments in agri related activities increased (in million PhP) 6,207 7,448 8,938 10,725 BOI Report BOI Subsector outcome C: Sector resilience to climate change risks increased Annual proportion of farm households’ income to total income decreased Decreasing per year Decreasing per year Decreasing per year Decreasing per year PSA Countrystat DA Number of farmers with risk insurance increased 497,037 795,259 1,272,415 2,035,864 DA PCIC Report PCIC 103Resilient and inclusive financial system 5Resilient and inclusive financialsystem 104 Philippine Development Plan 2011-2016 MIDTERM UPDATE II. ACCOMPLISHMENTS AND CHALLENGES A number of targets listed in the PDP 2011-2016 for the financial sector are either already met or on track. These are: (a) number of access points per 10,000 population, which currently tallies at five; and (b) microfinance services delivery with end-of-plan target of more than PhP10 billion, which currently sums to PhP8.4 billion.58 However, a more concerted effort is needed to increase the number of people with bank deposit accounts, as the target of 750 out of 1,000 adults is still far from the current 454 out of 1,000 population achieved in 2012. The local capital market is now in a better position to take advantage of the rapid economic growth. Recent investment rating upgrades fuelled by strong macroeconomic fundamentals through continuous expansion of the industrial and services sectors have contributed to increasing attractiveness of the local capital market. 58 Includes loans from universal, commercial, government banks and excludes the microfinance loan portfolio of non-bank financial institutions such as cooperatives and non-government organizations (NGOs) due to data constraints. Nonetheless, the People’s Credit and Finance Corporation (PCFC), as proxy for the non-bank financial institution, has an outstanding loan balance to microfinance institutions (MFIs) of P3.0 billion from its wholesale lending program. I. INTRODUCTION The Philippine financial market continues to support the national economy. Despite volatilities in global markets in the past decade, it recorded considerable gains as it expanded beyond traditional channels. Its development contributed to further financial inclusion while sustaining financial resilience. Towards this end, a responsive, development-oriented and inclusive financial system will be pursued to serve as a platform for the efficient management and mobilization of resources that will provide alternative sources of financing for the country’s economic development. With economic improvement usually comes higher inflow of foreign portfolio capital and growth in internal resources. The government sees this situation as an opportunity, as it intends to deploy the liquidity buildup to serve the needs of the previously underserved and disadvantaged members of society. The Updated Philippine Development Plan (PDP) for 2011-2016 emphasizes the continuous expansion of the financial system in support of rapid growth while facilitating inclusive growth. Even so, the system should continue to observe accepted prudential norms in order to promote macroeconomic stability. 105Resilient and inclusive financial system Figure 5.2. Philippine Stock Exchange prices, 2013 8000 7000 6000 5000 1-Jan-13 4000 1-Feb-13 1-Mar-13 1-Apr-13 1-May-13 1-Jun-13 1-Jul-13 1-Aug-13 Figure 5.1. Results framework on resilient and inclusive financial system Goals Intermediate goals Subsector outcomes Poverty in multiple dimensions reduced and massive quality employment created Rapid and sustained economic growth achieved Equal development opportunities achieved Sector outcome Access to financing expanded in support to macroeconomic stability Mobilization of financial resources made more efficient Regulatory framework for the financial system strengthened and improved Financial inclusion improved Managing external capital flows Figures 5.2 and 5.3 summarize the performance of Philippine financial markets and improved investor sentiment as evidenced by the general strengthening of the domestic equities market and tightening of sovereign debt spreads. 106 Philippine Development Plan 2011-2016 MIDTERM UPDATE Figure 5.3. Comparative trend in Asia credit default swap (Senior-5 year term), 2011-2013 Senior - 5 year term , 2011-2013300 250 200 150 100 50 Indonesia 3 Ja n 11 0 Malaysia Philippines Thailand 3 M ar 1 1 3 M ay 1 1 3 Ju l-1 1 3 Se p 11 3 No v 11 3 Ja n 12 3 M ar 1 2 3 M ay 1 2 3 Ju l-1 2 3 Se p 12 3 No v 12 3 Ja n 13 3 M ar 1 3 3 M ay 1 3 3 Ju l-1 3 3 Se p 13 3 No v 13 Source: Asian Bonds Online The Philippine Stock Exchange (PSE) exceeded its end-of-year 2012 total value turnover and average daily value turnover, notwithstanding the comparatively low number of trading participants relative to other Asian stock markets. As of June 2013, it is also one of the fastest-growing Asian Exchanges as it ranked second in terms of growth from its 2011 value in domestic market capitalization (MCAP). Figure 5.4. Four-quarter moving average of net private capital flows as percentage of gross domestic product, 1991-2011 (in %) Source: “Surging capital flows to emerging Asia: Facts, impacts and responses”. R. Balakrishnan et al. IMF Working Paper 12-2012. May 2012. Emerging Asia Direct investment Bank and other private flows Portfolio investment Net private capital flows 12 8 4 0 4 8 12 19 91 :0 2 19 92 :0 2 19 93 :0 2 19 94 :0 2 19 95 :0 2 19 96 :0 2 19 97 :0 2 19 98 :0 2 19 99 :0 2 20 00 :0 2 20 01 :0 2 20 02 :0 2 20 03 : 0 2 20 04 : 0 2 20 05 : 0 2 20 06 : 0 2 20 07 : 0 2 20 08 : 0 2 20 09 : 0 2 20 10 : 0 2 20 11 : 0 2 ASEAN-5 12 8 4 0 4 8 12 19 91 :0 2 19 92 :0 2 19 93 :0 2 19 94 :0 2 19 95 :0 2 19 96 :0 2 19 97 :0 2 19 98 :0 2 19 99 :0 2 20 00 :0 2 20 01 :0 2 20 02 :0 2 20 03 : 0 2 20 04 : 0 2 20 05 : 0 2 20 06 : 0 2 20 07 : 0 2 20 08 : 0 2 20 09 : 0 2 20 10 : 0 2 20 11 : 0 2 Inflows comprise, perhaps, the most immediate challenge for the financial system that may persist in the long term. The strong economic performance and the traditionally higher market yields in the country provided the “pull effects” which attracted further financial flows from abroad. On balance to-date, majority of the inflows going to the Philippines are financial in nature rather than foreign direct investments. This means that the flows are subject to higher volatility, even sudden stops and reversals. 107Resilient and inclusive financial system Figure 5.5. Net private capital flows (as percentage of GDP; four-quarter moving average) Source: Balance of Payments Data using the BPM5 (5th Edition of Balance of Payments) concept 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012r p Portfolio Funds FDI 1328 488 1637 4480 06-08 07-09 08-10 09-11 10-12 5359 Facilitating financial inclusion The financial sector provides services to savers and borrowers alike. These services range from safekeeping to providing insurance, consumer loans, and investment loans. The efficiency by which the financial sector is able to provide these services depends in large part on the amount that it is able to mobilize and on the number of stakeholders it will be able to serve. Financial inflows come from both domestic and external sources. These inflows are attracted into the system based on the expectation of risk-adjusted return but first premised on the confidence of a healthy and robust financial system. The financial system is considered inclusive if it is able to provide services to a broader spectrum of society, including small savers and borrowers. Banks and banking access point Access to banks and banking services is still inadequate in some municipalities. Figure 5.6 shows that there is still much to be done in providing financial services across the country. A significant portion of the population can be made better off if provided with more access points. The Philippines actually has the most number of banks per 1,000 square kilometers and is next to Malaysia in terms of number of automated teller machines (ATMs) per 1,000 square kilometers. However, on the whole, there is roughly only one bank for every 10,000 Filipinos aged 15 years and older. This puts the country comparatively better than such countries such as Thailand and Kenya. However, 37 percent of cities and municipalities do not have banks and 13 percent do not even have access points, like ATMs. 108 Philippine Development Plan 2011-2016 MIDTERM UPDATE Figure 5.6. Geo-spatial distribution of unbanked and unserved municipalities. Philippines 1,634 municipalities 92 million Filipinos With 9,375 banking offices, 37% of cities and municipalities (15% of population) are unbanked With the addition of over 40,000 access points (offsite ATMs, NBFIs, credit cooperatives, pawnshops, money changers, remittance agents, e-money agents), only 13% of cities and municipalities (4% of the population) remain unserved Source: Report on the State of Financial Inclusion in the Philippines, BSP Insurance Insurance is another service being provided by the financial sector that can be utilized by the covered individual in case of an adverse event. Insurance penetration, however, remains low, although it grew from 1.02 percent in 2009 to 1.45 percent in 2012. Similar to other financial instruments, increasing insurance coverage requires building the confidence of consumers in the system, informing the public about their options and rights, and introducing various designs of the instrument to cater to different consumers. 109Resilient and inclusive financial system To ensure resilience among the insurance industry players, the Department of Finance (DOF) issued Department Order No. 15-2012 in 2012, prescribing step up increases in the minimum capital requirements for insurance companies from PhP250 million by 2012 to PhP1 billion by 2020. Moreover, in September 2013, the New Insurance Code (RA 10607) took effect which will further increase the minimum net worth of insurance companies to PhP1.3 billion by 2022. In January 2010, the Insurance Commission formally launched the Microinsurance Program to encourage the provision of affordable and accessible insurance products, targeting the 27 million-marginalized sector. The program involves the following strategies: • Monitor compliance with microinsurance regulations, especially on the Circular on Performance Standards to ensure the financial strength and stability of the Microinsurance providers; • Encourage development of new, relevant and innovative microinsurance products, especially those that will address multiple risks, including non traditional ones such as index-based and parametric insurance products; • Continue advocacy campaign for microinsurance to reach out to the rest of the 23 million Filipinos who are living below the poverty line; • Develop appropriate rules and guidelines on innovative distribution channels that are effective but still affordable; and • Pursue implementation of an alternative dispute resolution (ADR) mechanism to address complaints and resolve disputes in an accessible, practical and efficient manner. Furthermore, to extend insurance covers to the vulnerable overseas Filipino workers (OFW), the Compulsory Insurance for Agency-Hired Workers Act (RA 10022) was passed into law. In 2012, the number of OFWs and/or beneficiaries who benefited from this program reached 4,630, reflecting an increase of 207.8 percent from 2011 with total benefits paid reaching PhP175 million. In the case of the Social Security System (SSS), there is a need to meet the international standard for “fund perpetuity” which has a lifespan of 70 years. This means that an increase of 14 percent in the contribution rate should be set. This suggestion has to be implemented on a gradual basis given the positions raised by both labor and employer groups during dialogues and consultations. 110 Philippine Development Plan 2011-2016 MIDTERM UPDATE Loans to small borrowers The government, through the Land Bank of the Philippines (LBP) and Development Bank of the Philippines (DBP), continues to promote inclusive growth and alleviate poverty by creating opportunities in the countryside through expanded assistance to small farmers, fisherfolk and micro, small and medium enterprises (MSMEs). As of 30 October 2013, total outstanding loan to these sectors reached PhP72.3 billion.59 Also for the same period, government financial institutions (GFIs) provided key services and support to the national government and its line agencies with a total outstanding loan of PhP311.6 billion. Financial inclusion strategies With financial stability and inclusivity as the overall strategic objective, the task of sustaining a robust and inclusive domestic financial market rests in taking pro active action from a position of strength. Financial sector authorities have adopted a pragmatic approach consisting of three activities: (a) increasing the confidence of the public about the health of the financial sector; (b) educating the public on financial instruments and their rights; and (c) encouraging the offering of a variety of products to cater to different consumers. Table 5.1 details the specific strategies undertaken. 59 Based on LBP and DBP’s data submitted on 10 December 2013 111Resilient and inclusive financial system 60 http://www.bsp.gov.ph/downloads/Publications/2012/microfinance 2012.pdf accessed on 25 July 2013. 61 This provides a maximum of 80 percent surety cover for loans granted by banks to borrowers that would have difficulty assessing such credit facilities. As of end- December 2012, there are 26 CSFs nationwide aggregated contribution pledges of PhP396.621 million, of which PhP303,284 million has been paid Table 5.1. Financial inclusion strategies Specific steps60 Specific target Policy regulation and supervision Issued Circulars 730, 754, and 755 to enhance the implementation of the Truth in Lending Act (RA 3765) Ensured that there is adequate disclosure of the true cost of credit, which protects consumers and enables them to make informed decisions in borrowing Issued Circular 746 which grants exemptions from the submission of documents like income tax returns and financial statements to clients. Streamlined access to finance by MSMEs Issued Circular 694 Facilitated the establishment of micro-banking offices (MBO) to expand the physical network of banking offices in areas without banks or alternative access points Financial education and consumer protection Continued the implementation of a multi-dimensional Economic and Financial Learning Program Disseminated public information, through campaigns and consumer education programs on economic and financial issues to promote awareness and understanding of essential economic and financial issues. Actively engaged in global discussions and initiatives in financial inclusion Enhanced promotion of financial inclusion initiatives. BSP also currently chairs the Steering Committee of the AFI, a global network of policy makers and regulators committed to financial inclusion, and the recently established Basel Consultative Group Workstream on financial inclusion. BSP leadership and involvement in these fora have allowed the inclusion of Philippine perspectives in global discussions. Calibrated product offerings for targeted needs Implemented the Credit Surety Fund61 Increased advocacy for MSME access to finance Adoption of rules and regulations regarding derivative products and trading 112 Philippine Development Plan 2011-2016 MIDTERM UPDATE Table 5.2. Revalidated results matrix (RM) on resilient and inclusive financial system Indicators Baseline (2012) End-of-Plan target (2016) Assumptions and risks Sector outcome: Access to financing expanded in support to macroeconomic stability Financial system’s total assets increased (in %) 9.7 >10 • Passage of majority of the bills under the Financial Sector legislative agenda within the medium term National saving rate (Gross National Saving-to-GDP ratio) improved (in %) 23 >30 • Proper and immediate implementation of the enacted Financial Sector legislative measures Number of deposit accounts per 1,000 population increased 454 750 • Attainment of the macro assumptions, financial inclusion strategies and stable external and domestic economic environment Subsector outcome A: Mobilization of financial resources made more efficient Microfinance services delivery improved (in PhP billion) 8.4 >10 • Attainment of the macro assumptions, financial inclusion strategies and stable external and domestic economic environment Subsector outcome B: Regulatory framework for the financial system strengthened and improved (Outcome indicator to be developed) Subsector outcome C: Financial inclusion improved Number of access points per 10,000 population increased 5 6 • Attainment/realization of macroeconomic assumptions (e.g. GDP, inflation rate, foreign interest rates [LIBOR]) and labor sector targets III. UPDATED PDP TARGETS IN THE PHILIPPINE FINANCIAL SYSTEM For the next three years, the objective is to maintain a resilient and inclusive financial system underpinned by the discipline of credit standards. This means that the asset base of the financial system needs to increase to serve the needs of a growing economy. At the same time, the coverage of the service should also expand. Table 5.2 indicates the major targets for the financial sector. 113Resilient and inclusive financial system Strategy 1: Manage the capital inflows towards investments in the productive sector Capital inflows could be beneficial because these provide funding for much-needed investment. The gains in the financial sector should translate into the real economy and be relevant to a greater proportion of the population in the form of enhanced capital formation, more infrastructure development, and employment growth. Foreign investments make up only a small part of the foreign exchange inflows.62 However, if capital inflow intensifies, it could have an advantageous impact on the real sector. The sustained surge of foreign capital could help liquidity management, create positive sentiments and lead to financial growth. This is very significant for a market where current decisions have long-term implications. The ability to attract and absorb direct investments is largely dependent on the structure of the macroeconomy, mix between labor and capital across various 62 BSP, retrieved from http://www.bsp.gov.ph/downloads/Publications/FAQs/fximpact.pdf accessed on 26 June 2013. IV. STRATEGIC FRAMEWORK To achieve the sectoral objectives, the strategic framework for the financial sector must involve: (a) managing the capital inflows towards investments in the productive sector; (b) building the needed financial market infrastructure; and (c) pursuing the financial inclusion agenda. Figure 5.7. Strategic framework on resilient and inclusive financial system Sector outcome Subsector outcome Strategies Access to financing expanded in support to macroeconomic stability Mobilization of financial resources made more efficient 1. Manage the capital inflows towards investments in the productive sector 2. Build the needed financial market infrastructure 3. Pursue the financial inclusion agenda Regulatory framework for the financial system strengthened and improved Financial inclusion improved 114 Philippine Development Plan 2011-2016 MIDTERM UPDATE industries, as well as specific programs designed to channel funding to specific priority undertakings. Moreover, it may be useful to come up with estimates of the following: • Funding requirements by the real economy over the next three years, broken down by economic activity and by province; • Ideal mix of labor and capital that must be deployed to generate production; and • Capital projections under special programs such as the public-private partnership (PPP). A big portion of external flows consists of remittances. Unlike foreign direct investment (FDI) and foreign portfolio investments, remittance flows have been proven to be resilient even during times of economic crises elsewhere in the world. This is because of the huge stock of Filipinos overseas, estimated to be about 10.5 million63 as of 2012 and the wide diversity of countries they are in. Most of these remittances finance the consumption of families left behind. During the early years, some of these are spent to accumulate assets (house, car, other durables) but after a while, the family may be ready to channel some amount to productive investments. The financial sector then needs to design the proper instrument that matches the risk-return profile of this group. In turn, this resource can be channeled to investments that would create jobs in the country. Regardless of the source, financial inflow is ultimately transmitted as household consumption, a firm’s working capital and investment as financing resources become cheaper. Hence, these may contribute to the expansion of the three main sectors, namely agriculture, industry and services. These also open opportunities for the banking industry to widen its reach by crafting a delivery mechanism for more productive lending to the real sectors, particularly to the MSME. This would lead to a more stable and diversified loan system that supports job growth. Strategy 2: Build the needed financial market infrastructure Equally important is the necessary infrastructure to enable participants in the financial market to make rational decisions. Investors, for example, may have targeted investment yields (i.e., retirement funds, defined-benefit schemes) or have set behavior that is based on an expectation of returns (i.e., less adverse high-net worth investors). The infrastructure needed to provide this information involves various components and may take some time to complete. In the short term, what is needed is the 63 CFO stock estimate as of December 2012 Unlike foreign direct investment and foreign portfolio investments, remittance flows have been proven to be resilient even during times of economic crises elsewhere in the world. 115Resilient and inclusive financial system In the immediate term, it is important to define the mandatory financial market infrastructures and the strategies to strengthen their governance structure. The enforcement of these initiatives is expected to better capture data and break the boundaries of traditionally bilateral transactions, such as over-the-counter derivatives and repurchase agreements/securities borrowing. Box 5.1. The prospects of the ASEAN integration The integration of Association of Southeast Asian Nations (ASEAN) member states is a decided policy issue. For the capital market, the clear intent is to mobilize ASEAN savings for ASEAN investment needs. However, there are many challenges that need to be hurdled before the envisioned benefits can be reaped. At the very least, becoming a regional player requires that the Philippine capital market is efficient and not prone to arbitrage across jurisdictions. This covers a gamut of issues that needs to be considered, such as appropriate regulations, suitable products, competitive institutions, and functioning infrastructure. Strategy 3: Pursue the financial inclusion agenda The Updated PDP recognizes the role of government in putting in place appropriate safety nets and risk protection for the poor. Financial inclusion will continue to be a major concern given the archipelagic structure of the economy and the significant differences across socioeconomic groups. In order to attain financial inclusion, the government will continue to pursue reforms in policy regulation, supervision and accessibility. Financial education and consumer protection will also be provided. Table 5.3. Key components of financial market infrastructures Payment systems • Retail payment systems • Large-value payment systems Trading platforms • Exchange-based system • Over-the-counter-like system Post-trade processing • Trade repositories • Central counterparties • Central securities depository • Securities settlement system development of an overarching roadmap that will connect the key components of the market architecture. This will at least include critical work in the areas identified in Table 5.3. 116 Philippine Development Plan 2011-2016 MIDTERM UPDATE 64 The FSF is an interagency body composed of the BSP, Securities and Exchange Commission (SEC), Insurance Commission (IC), and the Philippine Deposit 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. Through its Economic and Financial Learning Program, the BSP will continue to promote greater public awareness of economic and financial issues and provide information to enable households and businesses to make well-informed economic and financial decisions. As it is, Filipinos overseas and their families left behind are offered seminars and/or literature on financial literacy. This strategy will be maintained and even enhanced. The BSP’s Credit Surety Program, a PPP initiative, will continue to support the government’s poverty alleviation program and efforts to increase access to credit in the countryside. Moreover, in line with its commitment to protect the rights and welfare of consumers of financial services, the BSP will continue to provide an accessible avenue for consumer assistance and redress. The government will also establish a system that will encourage financial institutions to accept non-real property assets as security for lending to MSMEs in order to further boost economic development, financial inclusion and job generation. The framework was finalized in June 2013. It will enhance and simplify the processes on taking movable assets, such as inventory, equipment, sales contracts, and other intangible assets, as collateral. Recently, the PSE has formally ventured into Islamic finance and released a list of Shari’ah-compliant stocks. This will provide Filipino Muslims with investment options in the country. The PSE will continuously evaluate Shari’ah compliance of these stocks. Policy and regulatory instruments The strategic framework cited above is not new to regulatory authorities. However, within the larger community of stakeholders, the market trade-offs and operational ramifications may not be as well-known. At the very least, a national approach has yet to be articulated. Furthermore, there is a need for a more proactive communication with the larger constituency, although a common stance on the issue has yet to be decided upon. Key reforms that will strengthen the regulatory and supervisory framework and enhance responsible risk management by banks will be sustained to maintain the stability of the financial system. Policy initiatives will continue to focus on aligning prudential standards with international norms, and enhancing the implementation of existing banking rules and regulations. In this regard, closer coordination of macroeconomic and financial sector policies shall be enhanced through the government’s Financial Sector Forum (FSF).64 Initiatives of different financial institutions are voluntary in nature. However, these can be influenced by policy directions and regulatory instruments consistent with the financial stability agenda. The government will also establish a system that will encourage financial institutions to accept non-real property assets as security for lending to micro, small and medium enterprises. 117Resilient and inclusive financial system Going forward, it is important to designate an institution whose mandate is to maintain financial stability, and recognize the role the Financial Stability Coordinating Council (FSCC) plays in the overall financial stability agenda. Both the institution and the FSCC will be given authority and, subsequently, the legal statute for defining appropriate macro-prudential policies while avoiding distracting issues related to legitimacy or the coverage of institutional oversight. It is also important to establish a framework for financial inclusion that will serve as input to the design of financial inclusion strategies, as well as the necessary policies and regulations. The effectiveness and impact of these initiatives will also be thoroughly monitored and evaluated and the proper feedback mechanism be put in place. Legislative agenda To prevent and minimize systemic risks, efforts will be made to strengthen regulations in the face of current challenges. Emphasis will be placed on the timely passage of legislative agenda to achieve financial sector targets by prioritizing the following: • Draft Corporate Governance provisions of the Corporation Code of the Philippines; • BSP Charter with respect to financial stability; • Payments System Act; • Amendments to the Securities Regulation Code; • Financial Sector Tax Neutrality Bill; • Amendments to the Investment Company Act and the Insurance Code; • Amendments to the Real Estate Investment Trust Law (REIT); • Bill on Pension Fund Regulation; • Collective Investment Schemes Law (CISL); and • Chattel Mortgage Law Amendment. Each of these strategies is formidable in its own right. While they are inherently linked, they collectively form the foundation for financial inclusion and financial stability. V. PLAN IMPLEMENTATION The indicators comprising the revalidated RM are spread across sector and sub sector outcomes. The three sector outcome indicators (i.e., financial system’s total assets increased, national saving rate improved, and number of deposit accounts It is important to designate an institution whose mandate is to maintain financial stability, and recognize the role the Financial Stability Coordinating Council plays in the overall financial stability agenda. 118 Philippine Development Plan 2011-2016 MIDTERM UPDATE Table 5.4. Annual target indicator matrix on resilient and inclusive financial system, 2013-2016 Indicators Annual Plan targets (in %) Means of verification Agency responsible2013 2014 2015 2016 Sector outcome: Access to financing expanded in support to macroeconomic stability Financial system's total assets increased (in %) N/A N/A N/A >10% Agency reports BSP, GSIS, SSS, Pag-Ibig National saving rate (Gross National Saving to-GDP ratio) improved (in %) N/A N/A N/A >30% NEDA, BSP, PSA* Number of deposit accounts per 1,000 population increased N/A N/A N/A 750 BSP, BAP Subsector outcome A: Mobilization of financial resources made more efficient Microfinance services delivery improved N/A N/A N/A > Php10 billion Agency reports BSP, Microfinance institutions Subsector outcome B: Regulatory framework for the financial system strengthened and improved (Outcome indicator to be developed) Subsector outcome C: Financial inclusion improved Number of access points per 10,000 population increased N/A N/A N/A 6 Agency reports BSP, BAP, CTB, RBAP, Bangkoop *NEDA and BSP to monitor only, with PSA as data source increased) indicate expansion of access to financing in support to macroeconomic stability, with the BSP, Government Service Insurance System (GSIS), SSS and Pag-Ibig Fund as lead agencies. The subsector indicator “microfinance services delivery improved” is focused on mobilizing financial resources by improving and increasing microfinance services. Concerned agencies include BSP, Insurance Commission (IC) and other microfinance institutions. The subsector indicator “number of access points per 10,000 population” is focused on improving financial inclusion and is currently monitored by the BSP, with Bankers’ Association of the Philippines (BAP), Chamber of Thrift Banks (CTB), Rural Bankers Association of the Philippines (RBAP) and Cooperative Bank Federation of the Philippines (Bangkoop) as support entities. NEDA, in partnership with Financial Sector Forum (FSF) and Financial Sector Coordinating Council (FSCC), will regularly consolidate and monitor reports on the sector’s accomplishments based on the identified performance indicators. The designated GFIs will be submitting to NEDA the updated data. 119Social development 6Social development 120 Philippine Development Plan 2011-2016 MIDTERM UPDATE I. INTRODUCTION The Philippine Development Plan (PDP) envisions having equal opportunities for people to get themselves employed, acquire assets, and raise their living standards. This means having healthy and educated people who have the means to withstand crises such as emergencies, disasters, calamities, and sudden drops in income or joblessness—a risk accompanying the process of economic restructuring and adapting to new demands. As growth tends to be concentrated in a few cities or urban areas, equalizing opportunities also means that those who choose to seek employment in these growth areas will have access to secure and affordable shelter. Rapid economic growth is necessary to make this vision a reality, to adequately care for people’s well-being. Yet economic growth also depends on the quality of the country’s workforce and on the ability of growth areas to accommodate members of the labor force who seek productive employment. But if few people are given opportunities to keep themselves healthy enough to work, to acquire the skills and capabilities necessary for entrepreneurs and workers to succeed, to find secure and affordable shelter in growth areas, then economic growth will be constrained and its benefits will not be enough to reach the needy. And if there is not enough protection from catastrophic situations, then even the productive ones can lose whatever they have, including the opportunities to earn income and to raise their families’ quality of life. This can worsen poverty and slow down growth or even reverse its gains. However, human development and social protection services, as well as secure shelter, are replete with market failures. The private sector, left to its devices, will not be able to achieve the level of education, health, and shelter that is desirable for equitable social development and necessary to sustain growth and make it inclusive. The role of government is thus critical in financing, providing, or regulating these services that will substantially improve health and education outcomes and reduce vulnerability and social inequality. Guided by the President’s Social Contract with the Filipino People, as well as the country’s pursuit of the Millennium Development Goals (MDG) and reduction of poverty in its multiple dimensions, the PDP seeks to (a) improve human capabilities through better health and nutrition and through enhancement of knowledge and skills; and (b) reduce people’s vulnerability by expanding social protection services and providing more secure shelter. Interventions will directly address deprivations experienced by the poor and vulnerable so that they become better able to participate in the country’s development process. 121Social development Figure 6.1. Results and strategic framework on social development Goals Intermediate goals Subsector outcomes Poverty in multiple dimensions reduced and massive quality employment created Rapid and sustained economic growth achieved Equal development opportunities achieved Sector outcomes Health and nutrition status improved 1. Provide health care to all: Kalusugan Pangkalahatan (Universal Health Care) Knowledge and skills enhanced Social protection expanded Access to secure shelter expanded Human capabilities improved Vunerabilities reduced 2. Provide complete and quality basic education 3. Develop workforce competencies and life skills through TVET 4. Make higher education competitive and responsive to national development goals 5. Enhance the targeting system by identifying the “near poor”/ vulnerable and knowing their needs 6. Enhance social protection and insurance for vulnerable groups 7. Set up convergence mechanism at all levels 8. Provide a menu of housing options/ assistance 9. Building strong parnerships with stakeholders 10. Pursue the policy agenda for socialized housing Strategies II. CHALLENGES, OPPORTUNITIES AND STRATEGIES While the country is on track in terms of economic targets, it continues to face the challenge of achieving social outcome targets. In the past several years, the government has been significantly increasing spending and investment in social services and housing. From 2009 to 2013, the share of the social services sector in the total budget has been expanding from 28.7 percent to 34.9 percent. As a share of gross domestic product (GDP), total national government spending for social services for the same period averaged 5.4 percent, from 5.1 percent in 2009 to 5.9 percent in 2013. There was also a major improvement in the allocation of housing and community development from 0.59 percent in 2009 to 1.16 percent in 2013. 122 Philippine Development Plan 2011-2016 MIDTERM UPDATE While these investments have yielded positive results in terms of providing access to health, education, and housing services, the country is at risk of not meeting some of the targets specified in the MDG and PDP, particularly on reducing poverty, maternal deaths, prevalence of underweight children below five years of age, and undernourishment of families, as well as on improving educational achievement rates. In particular, provinces in Categories 1, 2 and 3 will be given priority in the delivery of social services. To make a significant impact on poverty reduction and social development, there is a need to accelerate efforts to invest in improving human capabilities and in reducing vulnerabilities of families. Sector outcome: Human capabilities improved Freedom from illness and freedom from illiteracy are two of the most important ways poor people can escape poverty. Strategies and policies in the PDP are geared towards providing health care to all Filipinos, especially the poor, and towards improving access and quality of basic education, technical-vocational education and training (TVET), and higher education. Access to affordable and quality health care and education and training services increases people’s chances of getting quality employment, increasing incomes, and enjoying better quality of life. Subsector outcome A: Health and nutrition status improved The PDP has identified targets for 15 health indicators. Table 6.1 presents the revalidated results matrix (RM) on subsector outcome A: Health and nutrition status improved. Based on latest data under the baseline column, the country is either close to meeting or already met targets in 9 of 15 indicators (in boldface). 123Social development Table 6.1. Revalidated results matrix (RM) on subsector outcome A: Health and nutrition status improved Indicators Baseline End-of-Plan target (2016) Assumptions and risks Maternal mortality ratio per 100,000 live births decreased 221 (2011) 50 Assumptions • Cooperation of families/ households in the implementation of health programs is ensured. • Commitments and capacities of LGUs to deliver basic services and provide supply requirements are strengthened. • The Responsible Parenthood and Reproductive Health Act of 2012 (RA 10354) is fully implemented. • Incremental revenues from the Sin Tax Reform Law (RA 10351) is fully realized to increase funding for Universal Health Care (UHC). • The country’s economic performance continuously improves. Risks • Changes in political leadership, particularly at the LGUs • Competing priorities of LGUs • Occurrence of natural disasters and armed conflicts • Emergence of new diseases/ new strain facilitated by globalization • Rapid urbanization putting strain to public health services in the urban areas Infant mortality rate per 1,000 live births decreased (in %) 22 (2011) 17 Under-five mortality rate per 1,000 live births decreased (in %) 30 (2008) 25.5 Prevalence of underweight children under five decreased (in %) 20.2 (2011) 12.7 Contraceptive prevalence rate (all methods) increased (in %) 48.9 (2011) 65 Proportion of births attended by health professional increased (in %) 72.2 (2011) 90 Proportion of births delivered in facility increased (in %) 52.2 (2011) 85 Malaria mortality rate per 100,000 population decreased (in %) 0.01 (2011) <0.03 Malaria morbidity rate per 100,000 population decreased (in %) 9.5 (2011) 6.6 TB case detection rate (all forms) increased (in %) 82 (2012) 85 HIV prevalence decreased Less than 1% of population (2012) Less than 1% of population Proportion of population with access to safe water increased (HH in %) 83 (2011) 88 Proportion of population with access to sanitary toilet increased (HH in %) 91.6 (2011) >92 National Health Insurance Program (NHIP) coverage rate increased (in %) 72 (2012) 95 Proportion of households with per capita intake below 100% dietary energy requirement decreased (in %) 66.9 (2008) 32.8 124 Philippine Development Plan 2011-2016 MIDTERM UPDATE However, other indicators do not show encouraging results. Among the most alarming is the increasing number of pregnancy-related deaths. Based on the 2011 Family Health Survey (FHS), the maternal mortality ratio (MMR) increased to 221 per 100,000 live births in 2011 from 162 in 2006. The target is to bring down this ratio to 52 per 100,000 live births by 2015 and to 50 per 100,000 live births by 2016. This gap presents the big challenge faced by the Kalusugan Pangkalahatan (KP), or Universal Health Care program. The increase in maternal deaths is a manifestation of the deficiencies in the health system to address the various causes of maternal mortality, and more so, the inequitable access to quality health care. On combating human immunodeficiency virus (HIV), acquired immune deficiency syndrome (AIDS), malaria and other diseases, the achievement of targets remains on track but this should not cause complacency. The malaria mortality rate decreased from 0.03 in 2009 to 0.01 percent in 2011. Thus, the 2016 target has been achieved and should be sustained. On the other hand, the morbidity rate per 100,000 decreased from 22 in 2009 to 9.5 in 2011. The end-of-Plan target for this indicator is 6.6 per 100,000 population. But while the HIV and AIDS prevalence remains within the target of below one percent of the total population, the number of HIV cases continues to increase annually, particularly among the most-at-risk populations (MARP). The MDG and end-of-plan target for HIV prevalence is to keep it less than one percent of total population and halt the spread of the disease. Prevalence of underweight children under five of age decreased from 20.6 in 2008 to 20.2 percent in 2011 based on the 2011 National Nutrition Survey (NNS) updates. However, the 2011 target was not achieved. This indicates the urgent need for improving the delivery of nutrition and nutrition-related services. The MDG target (2015) for prevalence of underweight children under five is 13.7 percent while the end of plan target (2016) is 12.7 percent. To ensure financial risk protection, efforts will be geared towards increasing insurance coverage to 90 percent by 2015 and 95 percent by 2016. Strategy 1: Provide health care to all: Kalusugan Pangkalahatan (Universal Health Care) KP is the PDP’s main strategy for improving the country’s health status. Access to care not only promotes good health and longevity. As an investment in human capital, it also contributes to labor force productivity, employment and, eventually, economic growth in the long run. In addition, since ill health is a major cause of impoverishment among the near-poor, and a deepening of poverty among the already-poor, investing in health care for all as a means of providing financial risk protection is critical for reducing poverty and promoting inclusive development. Investing in health care for all as a means of providing financial risk protection is critical for reducing poverty and promoting inclusive development. 125Social development The key aspects of the KP are found in its three strategic thrusts: a. Achieve health-related MDGs by scaling-up promising preventive and promotive health programs and improving health-seeking behavior among the most vulnerable population; b. Improve financial risk protection by expanding national health insurance coverage and benefits; and c. Ensure quality of service by not only investing in facility infrastructure and equipment, but also improving clinical and management processes, and regulating the quality of care provided. Achieve health-related MDGs by scaling-up promising preventive and promotive health programs Insufficient and unequal use of preventive and promotive care is a symptom of health system problems, which contribute to the poor health status of Filipinos. Large regional and socioeconomic inequalities in access to care remain: maternal and child health outcomes are four times worse among the poorest 20 percent than among the wealthiest 20 percent; and geographic access to service delivery has hardly improved in the last five years. For instance, health facility delivery was most common in the National Capital Region or NCR (77.4%), Cordillera Administrative Region or CAR (67.5%) and Central Luzon (65.2%), and least common in the Autonomous Region in Muslim Mindanao (ARMM) at 19.2 percent. On assistance at birth delivery, 2011 FHS data indicate that 90 percent of deliveries in NCR and Central Luzon were assisted by a health professional as compared to Region IX in the Zamboanga peninsula (48.4%) and ARMM (31.9%). The government continues to undertake efforts as well as investments to address the twin challenge of health access and quality. The Sin Tax Reform Law (RA 10351) and Responsible Parenthood and Reproductive Health Act of 2012 (RA 10354) are two major opportunities now available to intensify KP interventions that will eventually contribute to improved health status. The Sin Tax Reform Law is expected to generate enough revenue to finance much needed investments in health. A total of 14.7 million poor identified in the National Household Targeting System for Poverty Reduction (NHTS-PR) from Category 1 provinces, as well as near-poor families, can be enrolled under the National Health Insurance Program (NHIP) with the expected windfall from sin tax revenues. These revenues will be directed to improve health care facilities, and to finance expanded coverage of preventive and promotive health care programs. Maternal and child health outcomes are four times worse among the poorest 20 percent than among the wealthiest 20 percent. 126 Philippine Development Plan 2011-2016 MIDTERM UPDATE However, any increases in current investments and efforts in the MDG programs may not achieve their desired effects if the current capacities and capabilities of frontline health workers are not improved. The major challenge is to ensure a defined minimum set of clinical competencies in family planning and maternal and childcare services among existing staff, especially at the level of rural health units (RHU) and barangay health stations (BHS). The government’s policy to focus on poor families would also require hiring and training of additional skilled health and nutrition workers especially in disadvantaged areas to deliver the required public health care services for poor families. The Responsible Parenthood and Reproductive Health Act of 2012 mandates the provision and delivery of essential services that are expected to significantly reduce maternal deaths. The law now clearly defines the responsibilities and accountabilities of national government, local government units (LGU), and other agencies in providing information, services, supplies, and commodities needed to fill the unmet needs for family planning and maternal care, especially among the poor and adolescents. Improve financial risk protection by expanding national health insurance coverage and benefits This strategy entails increasing Philippine Health Insurance (PhilHealth) coverage and benefits. A major challenge is how to seek out and cover the poor who have not been surveyed by the NHTS-PR nor by LGUs, such as indigenous people (IP), street children, children from orphanages, persons with disability (PWD), internal migrants, etc. The coverage of the Individually Paying Program (IPP) is also a challenge because, unlike the mandatory membership of those formally employed in the government and private sector, and the government subsidy of identified indigents, there is currently no means to enforce the enrolment of those in the informal and self-employed sectors, leading to a huge gap in coverage. A strategy to reach more of the poor self-employed and those in the informal sectors is to cover them at the point of care. Close collaboration with LGUs and other government agencies as service points is also necessary. Likewise, a parallel strategy to cushion Filipinos from the ill effects of high health care costs is improving benefit coverage. The necessary improvement includes a full shift in provider payment system from fee-for-service to case-based rates, providing no-balance billing arrangements for indigent members, strengthening gatekeeping mechanisms through the implementation and gradual expansion of the primary care benefits, and financing more catastrophic conditions. A strategy to reach more of the poor self-employed and those in the informal sectors is to cover them at the point of care. Close collaboration with local govenment units and other government agencies as service points is also necessary. 127Social development Ensure quality of service by investing in facility infrastructure and equipment, improving clinical and management processes, and regulating the quality of care provided Gaps in the quality of basic facility infrastructure and equipment will be addressed through the upgrading and construction of 10,596 government health facilities from 2014 through 2016, including the rehabilitation of health facilities in areas affected by Super Typhoon Yolanda.65 Regular technology assessments will ensure that infrastructure and procedures are both adequate and cost-effective. Clinical quality will be improved through the development and implementation of better clinical practice guidelines. The Department of Health (DOH), through PhilHealth, will implement an accreditation system in both public and private facilities to ensure that PhilHealth beneficiaries are served in facilities that meet minimum healthcare standards. Subsector outcome B: Knowledge and skills enhanced It is often said that education is key to moving people out of poverty and breaking the cycle of intergenerational poverty among families. Furthermore, as the economy grows and transforms its structure, acquisition and enhancement of skills allow the workforce to seize employment opportunities created by growth. Diversified knowledge and skills will also enable entrepreneurs and workers to adapt to changes brought about by shifting demands and new technologies. Providing access to education and training for life skills and the capacity to pursue economic opportunities is thus an investment in human capital that helps achieve inclusive development. Table 6.2 presents the updated PDP targets related to enhancing the knowledge and skills of the workforce. 65 This is based on DOH’s Philippine Health Sector Roadmap (as of 06 February 2014). 128 Philippine Development Plan 2011-2016 MIDTERM UPDATE Table 6.2. Revalidated results matrix (RM) on subsector outcome B: Knowledge and skills enhanced Indicators Baseline (2010) End-of-Plan target (2016) Assumptions and risks Net enrolment rate increased (in %) Assumptions • Appropriate budget allocation provided to the concerned agencies. • Improved participation of stakeholders such as LGUs, private sector and the community in meeting the targets Risks • Inability of households to send pupils/students to school due to poverty, peace and order concerns, natural calamity and other factors Kindergarten 57.2 100.0 Elementary 95.9 99.0 Secondary 64.7 71.0 Adjusted net enrolment rate increased (in %) Elementary 98.5 99.0 Secondary 92.5 99.0 Completion rate increased (in %) Elementary 72.1 83.0 Secondary 75.1 80.0 Cohort survival rate increased (in %) Elementary 74.2 83.0 Secondary 79.4 85.0 Achievement rate increased (in %) Elementary 68.2 77.0 Secondary 47.9 65.0 Certification rate in TVET increased (in %) 82.9 87.5 TVET graduates increased 1,344,371 1,383,026 Higher education graduates increased 498,418 601,505 Higher education faculty with MA increased (in %) 38.87 65 Higher education faculty with PhD increased (in %) 11.09 30 HEIs with accredited programs increased (in %) 19.89 35 National passing percentage (across disciplines) in licensure exams increased (in %) 33.91 52.53 129Social development Strategic interventions will have the following objectives: a. Provide every Filipino with access to a complete and quality basic education and that every graduate of complete basic education is prepared for further education and the world of work; b. Ensure that the labor force has the competencies and life skills to pursue economic opportunities; and c. Ensure that graduates of higher education have competencies and high-level skills for national development and global competitiveness. Strategy 2: Provide complete and quality basic education to prepare the youth for further education and the world of work There were positive developments in terms of enrolment, but the real challenge rests on keeping children in the school system until they finish the final year. In terms of internal efficiency indicators, there were slight improvements in elementary cohort survival rate or CSR (from 74.2 percent to 75.3 percent) and completion rate or CompR (from 72.1 percent to 73.7 percent) from 2010 to 2012. The reverse is true for secondary education with a decline in CSR from 79.4 percent to 78.2 percent, and the CompR from 75.1 percent to 74.8 percent in the same period. As the government tries to get children to the next level and eventually graduate, the quality of formal basic education remains a challenge as evidenced by the results of the National Achievement Test (NAT). The NAT results expressed in mean percentage score (MPS) increased from 2010 to 2012 in both elementary and secondary education but are still below the PDP targets. Elementary NAT score slightly increased from 68.2 percent in 2010 to 68.9 percent in 2012 while the secondary rate increased from 47.9 percent to 51.4 percent. 130 Philippine Development Plan 2011-2016 MIDTERM UPDATE Key Performance indicators Accomplishment (in %) Target SY 2010 2011 SY 2011 2012 SY 2012 2013 SY 2013 2014 End-of Plan target (2016) Kindergarten Net enrolment rate (5 yrs.old)* 57.2 74.2 77.4 79.3 100.0 Elementary Adjusted net enrolment rate** 98.5 99.6 97.4 99.0 99.0 Net enrolment rate* 95.9 97.3 95.2 96.0 99.0 Cohort survival rate 74.2 73.5 75.3 77.0 83.0 Completion rate 72.1 71.0 73.7 75.0 83.0 Achievement rate (NAT MPS66 ) 68.2 66.8 68.9 71.0 77.0 Secondary Adjusted net enrolment rate*** 92.5 89.8 90.0 93.0 99.0 Net enrolment rate* 64.7 64.8 64.6 65.0 71.0 Cohort survival rate 79.4 78.8 78.2 79.0 85.0 Completion rate 75.1 74.2 74.8 75.0 80.0 Achievement rate (NAT MPS67 ) 47.9 48.9 51.4 54.0 65.0 Table 6.3. Accomplishment (SY 2010-2011 to 2012-2013) and targets (SY 2013-2014 and 2016) on key performance indicators for basic education, public and private Source: Department of Education (DepEd) *The ratio of the enrolment for the age or age group corresponding to the official school age in the kindergar ten/elementary/secondary level to the population of the same age or age group in a given year ** Total number of 6-11 years old enrolled in any basic education level, expressed as a percentage of 6-11 population (official elementary school age) *** Total number of 12-15 years old enrolled in any basic education level, expressed as a percentage of 12-15 population (official secondary school age) Gains in the delivery of basic education services in terms of improving access and addressing input gaps have been encouraging. Table 6.3 shows accomplishments in reducing backlogs in critical resources for basic education. Besides inputs, government also put in place massive reforms in the curricula and structure of schooling. These include the enactment of the Kindergarten Act of 2012 (RA 10157), providing for mandatory implementation of universal kindergarten, 66 Source: National Education Testing and Research Center (NETRC). For elementary, the NAT was administered to Grade VI in all school years 67 NAT for secondary was administered in the 2nd year from SY 2007-2011, and 4th year on SY 2011-2012 131Social development Table 6.4. Backlogs (2010) and accomplishment on basic education critical resources Resources 2010 backlog Accomplishments Classrooms 66,800 66,813 classrooms constructed (as of 05 February 2014) Teachers 145,827 102,623 new teaching positions created; 43,204 kinder volunteers and LGU-hired teachers Textbooks 61.7 million 1:1 student to textbook ratio (as of 2012) Seats 2.5 million 1:1 student to school seat ratio (as of 2012) Toilets 135,847 52,590 completed; 5,747 ongoing construction; 70,532 ongoing procurement (as of September 2013) Source: Department of Education resulting in the increase of kindergarten net enrolment rate from 57.2 percent in 2010 to 77.4 percent in 2012. This was followed by another landmark legislation, the Enhanced Basic Education Act of 2013 (RA 10533), which institutionalizes the implementation of the K to 12 program. These highlight the achievement of the government, particularly the Department of Education (DepEd), in instituting critical reforms that align the country’s basic education system with international standards and ensure better learning opportunities for children. To sustain the gains and accelerate efforts in basic education reforms, the remaining years of the PDP implementation will have the following strategies: Ensure that every Filipino has access to complete basic education This involves: (a) creating conducive learning institutions; (b) providing affirmative action to learners with special needs and those in special circumstances; (c) engaging the private sector in broadening more opportunities for basic education; and (d) using technology in expanding reach. Ensure that every Filipino graduate of complete basic education is prepared for higher education, employment and entrepreneurship In line with the implementation of the K to 12 program, the government will pursue the: (a) development of enhanced learner-centered curriculum; (b) provision of adequate instructional materials and equipment; and (c) improvement of quality of instruction and professional development of teachers. Ensure effective, efficient and collaborative delivery of basic education services As the government gears towards full implementation of the K to 12 program, aligning and synchronizing efforts are crucial to achieve optimum use of resources. In promoting good governance within the subsector, the government, through the DepEd, will: (a) improve internal systems and processes; (b) strengthen education 132 Philippine Development Plan 2011-2016 MIDTERM UPDATE 68 National Technical Education and Skills Development Plan (NTESDP) 2011-2016 leadership and management and build people capacities; and (c) expand the network of stakeholders and enhance participation in the delivery of basic education. These will be accompanied by the proper targeting of areas, prioritizing those with severe shortages to ensure equitable distribution of resources and address low performance in terms of education indicators among regions, divisions and schools. Strategy 3: Develop workforce competencies and life skills through TVET68 The importance of TVET has been increasing as the economy sustains growth and undergoes transition. Growth has opened up new employment opportunities, creating greater expectations and prompting more people to join the labor force and for the underemployed to seek better employment opportunities. In the existing labor force, many had not benefitted from good quality education and training, falling short of the level of skills required by employers. Thus, even as more jobs are created, unemployment and underemployment have barely gone down because of job mismatch. To address this situation, there is a need to develop competencies and life skills for the current and would-be members of the labor force to enable them to pursue economic opportunities. Strategies consist of expanding access to quality TVET and developing workforce competencies required in key growth areas. There is also a need to strengthen TVET institutions in terms of leadership, management and innovation. Strategies include implementing a good governance system that encourages TVET institutions to meet quality standards and to use information technology to ease access to TVET. Other strategies are: Strengthen the Technical Education and Skills Development Authority (TESDA) and focus on development planning, resource allocation, standard setting and quality assurance To implement this strategy, the following interventions will be pursued: (a) push for the approval and implementation of the Rationalization Plan, which takes into consideration the changing environment and demands of operations, particularly at the frontlines; (b) build up the organizational capacity and capability of TESDA continuously in line with its mandate; and (c) implement the resource allocation mandate of TESDA under the framework of interagency coordination. Encourage LGUs and industries to directly participate in the delivery of TVET skills development programs This will be done through: (a) designing and developing capability-building programs for LGUs in establishing, managing and implementing TVET programs; 133Social development (b) providing technical assistance to LGUs in the area of trainers development, curriculum and learning materials development, center administration, and assessment and certification; (c) developing viable models and partnership arrangements for LGU-led TVET implementation in the localities; and (d) mobilizing multi-stakeholder support and participation in community-based skills development programs. Priority will be given to provinces with high magnitude of poor families. Expand enterprise-based training (EBT) This will involve the following measures: (a) strengthening and promoting EBT schemes (e.g., dual training system, apprenticeship and “learnership” and on the-job training as pre-employment modalities); (b) encouraging training in the workplace for skills upgrading, retooling and multi-skilling, and other skills development interventions to improve productivity and promote lifelong learning; (c) pushing for the expansion of incentives for the private sector investing in TVET and making availment easier; (d) making available incentives such as scholarships and other assistance for EBT participating industries and technical-vocational institutions (TVIs); and (e) tapping the corporate social responsibility programs of industry/private sector for TVET. Train agricultural workers to develop new skills To reduce under-employment in agriculture, workers in the sector need to be trained on value-adding, agribusiness development and value-chain management. This will provide them opportunities to diversify their sources of income and link with industry and services. Strategy 4: Make higher education competitive and responsive to national development goals As in TVET, higher education has increasingly gained significance with growth and economic restructuring, which fuel demand for a high quality, competitive labor force. The country’s labor market, however, is still faced with issues on the quality of graduates, as shown by the increasing skills gap and the decreasing number of passers in the Professional Regulation Commission (PRC) licensure examinations. While the national passing rate in licensure examinations for all takers showed an increasing trend from 35.9 percent in 2011 to 42.6 percent in 2012, the rate still fell below the 2012 target of 47.0 percent. Despite large scale unemployment, employers have difficulty filling-up their job vacancies because of shortage of applicants with the right competencies and qualifications for the job.69 Thus, in order to enhance the quality, productivity and global competitiveness of the Filipino workforce, it is imperative to enhance the 69 Survey conducted by the Bureau of Labor and Employment Statistics, January 2007-January 2008 Employers have difficulty filling-up their job vacancies because of shortage of applicants with the right competencies and qualifications for the job. 134 Philippine Development Plan 2011-2016 MIDTERM UPDATE relevance of education and training to the needs of the labor market. Improving the performance of higher education students in licensure examinations across disciplines will also be prioritized. Strategies to improve higher education outcomes include the following: Support the cross-mobility of students between higher education and middle level skills development This will be done through the Philippines Qualification Framework (PQF), which was institutionalized through Executive Order 83 in 2012. The PQF aims to (a) adopt national standards and levels for outcomes of education; (b) support the development and maintenance of pathways and equivalencies, which provide access to qualifications and assist people to move easily and readily between the different education and training sectors and between these sectors and the labor market; and (c) align the PQF with international qualifications framework to support the national and international mobility of workers through increased recognition of the value and comparability of Philippine qualifications. Expand EBT This will be pursued by strengthening the academe-industry linkages to address the problem of mismatch between competencies and jobs on the one hand, and to encourage research and development (R&D) collaboration between the two sectors, on the other. Align higher education institution (HEI) programs with national development goals and industry needs This will be pursued by (a) upgrading and aligning the curricula with international standards; and (b) identification of Centers of Excellence (COE) and Centers of Development (COD) capable of producing globally competitive graduates and cutting-edge research outputs relevant to the needs of the disciplines and the country’s development objectives. Fast-track the restructuring of public HEIs This is to improve efficiency in the delivery of quality programs, minimize duplication, and promote harmonization and complementation of program standards between and among public and private HEIs. This could be done through amalgamation of state universities and colleges into Regional University Systems and development of specialized institutions. Upgrade higher education quality standards to internationally comparable levels and strengthen quality assurance systems This will be implemented through the continuing revision of programs, policies, standards along learning competency-based standards or learning outcomes—a 135Social development requirement for the comparability of undergraduate and graduate programs in Asia Pacific and for referencing to the Association of Southeast Asian Nations (ASEAN) Reference Qualifications Framework when the ASEAN becomes an economic community in December 2015. Sector outcome: Vulnerabilities reduced Beyond developing human capabilities, equalizing opportunities also requires reducing vulnerabilities to various types of risks. Shocks worsen human deprivation. Shocks that can adversely affect anyone are those produced by natural disasters, conflict, illness, changing demographic profile and economic instability. While some can weather the shocks, there are a lot more who cannot, and they constitute the vulnerable population. The ability to protect people against crises and to enable them to rise from their impact is essential for preventing poor people from plunging deeper into poverty and the vulnerable ones from falling into poverty. After all, even better-off households can join the ranks of the poor when a member, for example, falls ill or becomes physically unfit to work. The need to reduce vulnerabilities has become even more important as weather related calamities are expected to become more frequent. Moreover, as the economy undergoes a restructuring process, employment and income become volatile as employers and entrepreneurs adjust to changing markets. Poorer households will need to have fallback options when they lose income or when they move from one job to another. Vulnerability is also related to fast urbanization. As people seek opportunities, they often move to cities where there are more employment opportunities. Unfortunately, many end up as informal settlers and some set up homes in dangerous areas. To gain access to development opportunities, employable household members need assistance in getting more secure shelters located in areas that do not entail huge transport cost to get to work places. Thus, a strategy to reduce vulnerabilities entails expanding social protection and providing more secure shelter, particularly in Category 3 provinces that are highly vulnerable and prone to multiple hazards. As the economy undergoes a restructuring process, employment and income become volatile as employers and entrepreneurs adjust to changing markets. 136 Philippine Development Plan 2011-2016 MIDTERM UPDATE Table 6.5. Revalidated results matrix (RM) on sector outcome on vulnerabilities reduced: Subsector outcomes C (social protection expanded) and D (access to secure shelter expanded) Indicators Baseline (2010) End-of-Plan target (2016) Assumptions and risks Subsector outcome C: Social protection expanded Percentage of poor families covered by PhilHealth as identified under the NHTS-PR and LGU Sponsored Program (in %) 88.7 100 Assumption: • Coordination between local governments, DSWD, and PhilHealth in providing coverage Risks: • Lack of local funding and competing LGU priorities • Low utilization of coverage Subsector outcome D: Access to secure shelter expanded Percentage of housing targets met (in %) 22.5 25.84 Assumption: • Passage of the Department of Housing and Urban Development (DHUD) Bill Risks: • Budgetary constraints • Natural and man-made disasters affecting housing construction • Unavailability of suitable and affordable land for socialized housing Share of socialized housing to housing target improved (in %) 56.78 77.77 Subsector outcome C: Social protection expanded Social protection enables people to manage and cope with risks, including risks associated with investment that entail forgoing income in the short term but could yield benefits in the long term. As such, it significantly contributes to inclusive development and poverty reduction. For the past three years of the Aquino administration, the government has been keen on continuing and putting in place different social protection mechanisms. These mechanisms cover risks faced by poor households identified under the NHTS-PR, poor senior citizens, groups vulnerable to natural and man-made socioeconomic shocks, labor force members at risk of losing employment, as well as overseas Filipino workers (OFW). 137Social development Table 6.6 shows the mechanisms that respond to various risks and the extent to which targets were reached. To mitigate individual and life-cycle risks, two major programs were implemented, namely, the Sponsored Program under the NHIP and the social pension for poor senior citizens. An increase in the coverage of the Sponsored Program was seen from 2011 to 2012. However, the government pension for indigent senior citizens, which only covers those 77 years old and above, has slightly fallen short of its target 14.85 versus 15.3 percent. Based on the assessment, the country has made significant strides in protecting the poor, the vulnerable, and the marginalized70 from various risks and shocks. But much is still to be done not only in fully protecting them but also in enabling them to adjust to shocks. The major challenges faced by the sector include the following: • Lack of a targeting mechanism that identifies the vulnerable, as well as the risks and shocks that they confront; • Need to strengthen capability of LGUs to implement disaster risk reduction strategies and deliver social protection services; • Limited number of poor and vulnerable beneficiaries despite nationwide implementation of programs and projects; • Increasing vulnerability of OFWs and migrant workers; and • Limited social protection interventions for the following sectors: displaced and repatriated workers; informal sector; PWD; orphans; and IPs/indigenous cultural communities. 70 Marginalized people are those groups in society who, for reasons of poverty, geographical inaccessibility, culture, language, religion, age, gender, migrant status or other disadvantage, have not benefited from health, education, employment and other opportunities, and who are relegated to the sidelines of political persuasion, social negotiation, and economic bargaining (IPPF). The marginalized includes farmers and landless rural workers; artisanal fisher folk; urban poor; indigenous people; workers in the informal sector; migrant workers; women; children; youth; senior citizens; and persons with disabilities. 138 Philippine Development Plan 2011-2016 MIDTERM UPDATE Table 6.6. Accomplishment (2011-2012) and targets (2011, 2012 and 2016) on social protection indicators Indicator Baseline 2011 2012 End-of-Plan target (2016)Target Actual Target Actual 1. Social insurances that seek to mitigate individual and life cycle risks to vulnerable households (HH) expanded Percentage of poor families covered by PhilHealth as identified under the NHTS-PR and LGU Sponsored Program 14% (3.76 M) as of June 2011 75% 81.5% (4.24 M) as of Dec 2011 80% 88.7% (4.61 M) as of Dec 2012 100% Proportion of poor senior citizens covered by social pension (New Indicator) 13.8% 13.3% 15.3% 14.85% 2. Safety nets provided to vulnerable groups during socioeconomic shocks (man-made and natural) improved and strengthened Coverage of emergency employment programs during crisis (economic, financial, disaster-related) 2,150 jobs (Emergency employment – Department of Labor and Employment or DOLE) (2010) Depends on the number of affected individuals 10,201 jobs (Emergency employment DOLE) Depends on the number of affected individuals 17,054 jobs (Emergency employment DOLE) Depends on the number of affected individuals Proportion of individuals affected by natural and man-made calamities provided relief assistance (New Indicator) 100% 63.3 % 100% 62.4% 100% Coverage of Community Based Employment Program (CBEP) 1,490,173 1,238,225 2,949,939 2,324,311 1 million CBEP jobs annually 3. Social welfare programs to protect the poor and vulnerable groups from risks enhanced Coverage of Conditional Cash Transfer (CCT) 1.0 million (2010) 2.3 million 2.345 million (101.9%) 3.0 million 3.01 million (100.33%) 2.9 million71 OFW membership to OWWAs, disability, and death benefits 1,355,311 (2010) 1,251,394 1,302,071 (104%) 1,376,534 1,304,197 (95%) 100% 71 By 2016, the number of beneficiaries of the PantawidPamilya will decrease as some of the previous sets of beneficiaries have already graduated from the program. 139Social development Strategy 5: Enhance the targeting system by identifying the “near poor”/ vulnerable and knowing their needs While the current targeting system of the government captures the poor, it does not capture those that are just above the poverty line and those who are most vulnerable to risks. Anti-poverty and social protection programs and projects are able to reach only a limited number of poor and vulnerable beneficiaries despite nationwide implementation. To address this challenge, there is a need to revisit and expand the NHTS-PR database to cover those who are vulnerable to different types of risks or shocks. Such expansion will enable the government to identify and locate the vulnerable groups and to determine the risks and shocks they confront so that appropriate and more responsive social protection programs may be developed. Closer attention will be paid to OFWs, displaced and expatriated workers, those in the informal sector, PWD, and orphans. Strategy 6: Enhance social protection and insurance for vulnerable groups Coverage of social protection programs and social insurance systems will be expanded and made more responsive to different types or sources of vulnerabilities such as the growing number of children in hazardous labor. Increase coverage of social insurance Despite increased enrolment in PhilHealth, particularly the Sponsored Program, members’ actual use of the health insurance package remains low, as indicated by the benefit delivery ratio of just 8 percent. Pantawid Pamilya Program beneficiaries enrolled in PhilHealth are unable to fully utilize health care services, especially the indigent members who have low awareness of their PhilHealth benefits. To address low utilization rate, there is a need to improve management and information system in PhilHealth that affects the pace of processing of claims. There is also a need to find out the reasons for the inability of vulnerable groups to pay their premiums. Moreover, the coverage of social pension for indigent senior citizens, which at present covers only the 77 years old and up and indigent senior citizens, needs to be fast-tracked to cover those aged 60 years and above. Expand social safety nets Capacities of LGUs shall be enhanced to provide immediate response in emergency situations to include a menu of tested safety net programs especially during calamities and disasters. Options for funding support will also be explored. Sustain and enhance social welfare programs These will involve enhancing programs such as the Pantawid Pamilya Program to enable its beneficiaries to be more self-sufficient when they graduate from the program. LGUs will be enjoined and provided with capacity-building support to 140 Philippine Development Plan 2011-2016 MIDTERM UPDATE effectively design and implement social welfare programs particularly to address violence against women, to provide social pension for indigent senior citizens, and to serve persons with disabilities. Strategy 7: Set up convergence mechanisms at all levels The mechanism will depict the multi-level and multi-program convergence, where various types of convergence will be implemented depending on the social protection needs of target areas or sectors. Implement the social protection framework and strategy Implementation of social protection programs will thus be guided by the Social Protection Operational Framework adopted in 2012. The Framework will serve as blueprint for policymakers, planners and program implementers on the specific approaches and strategic interventions best suited to be carried out by responsible agencies on social protection to cover specific target groups and vulnerabilities. To empower and capacitate LGUs, civil society organizations, and government agencies implementing social protection programs and projects, a Social Protection Handbook will also be developed to serve as primary reference in planning, implementing, monitoring and evaluating social protection interventions. The Vulnerability and Adaptation Manual for Social Protection, which is part of the Handbook focusing on risk and vulnerability assessment, will be formulated as a guide for local development workers from the LGUs, government agencies and NGOs in assessing risks and vulnerabilities and identifying adaptive strategies for social protection in the communities. Social protection programs and projects will be institutionalized to become part of the regular program and budget of the government at different levels. LGUs implementing social protection convergent programs will already start including them in their own plans and budgets as this will initially synchronize and harmonize program implementation/operations across sectors and institutions. The menu on bottom-up budgeting will be the take-off for this convergence. Regularly monitor and assess convergent programs at various levels Institutionalizing the Social Protection Framework will require a systemic review of how the various objectives and indicators are being achieved. A unified and user-friendly monitoring and evaluation system based on agreed common data sets shall be designed and used by agencies implementing social protection programs.72 72 From the Report of the PDF Working Group on MDGs and Social Progress (February 2013) 141Social development Subsector outcome D: Access to secure shelter expanded Shelter is associated with vulnerability and is an important dimension of social development. Urban slums and informal settlements have grown rapidly as many Filipinos from rural areas go to urban areas to be close to employment opportunities or to have access to services. Owing to poverty, they live in shelters to which they have no legal rights to occupy or in areas prone to disasters just to survive until they find decent and more regular employment. Having no secure shelters or properties, they face risks of being evicted or of falling victims to natural and man-made disasters. Providing secure shelter will thus form part of the strategy for inclusive development and poverty reduction aimed at reducing vulnerabilities and enhancing opportunities. In particular, the housing sector will aim to increase the number of Filipino households with access to adequate housing. In 2011 to 2012, the National Shelter Program (NSP) delivered direct housing assistance to 222,167 households, which is only 51 percent of the Plan target of 435,000 households. Socialized housing units accounted for 69 percent while the share of low-cost housing units was 31 percent of total housing delivery. The actual value of housing assistance in 2011 to 2012 amounted to PhP92.1 billion, way below the proposed budget of PhP134.052 billion (Table 6.7). Key performance indicators Target Actual accomplishment Households PhP billion Households PhP billion Socialized housing (<PhP450,000) 253,247 55.052 153,696 35.668 NHA housing production 140,000 41.387 103,093 25.877 SHFC Community-Driven Shelter Assistance Program 45,000 2.565 25,162 1.531 HDMF end-user financing 68,247* 11.100 25,441 8.260 Low-cost housing (>PhP450,000-PhP3 million) 181,753 79.000 68,471 56.439 HDMF end-user financing 181,753* 79.000 67,753 55.094 LBP end-user financing 606 1.207 SSS end-user financing 112 0.138 Total Housing Assistance 435,000 134.052 222,167 92.107 Source: Housing and Urban Development Coordinating Council (HUDCC) Table 6.7. Targets and accomplishment on National Shelter Program, 2011-2012 142 Philippine Development Plan 2011-2016 MIDTERM UPDATE To encourage greater private sector participation in housing construction and finance, housing loans are protected from credit default risk through the Home Guaranty Corporation (HGC) guaranty. From 2011 to 2012, the HGC guaranteed PhP70.328 billion worth of invested funds from private developers and financing institutions covering 45,643 households (Table 6.8). Due diligence and post-audit of approved guaranty lines were conducted to ensure that guaranteed housing loans are used for home purchase or construction. The National Home Mortgage Finance Corporation (NHMFC) also continued to purchase mortgages using proceeds from the issuance of Bahay Bonds. For the 2011-2012 period, NHMFC purchased loans covering 8,336 households worth PhP1.619 billion. Key performance indicators Target Actual accomplishment Households Households PhP billion HGC New Guaranty Enrollment 80,779 45,643 70.33 Socialized Housing 27,477 6,350 1.035 Low-Cost Housing 42,832 34,511 45.469 Medium Housing (>PhP3 million-PhP4 million) 7,237 2,285 5.758 Open Housing (>PhP4 million-PhP6 million) 3,233 2,497 18.066 NHMFC purchase of mortgages 4,132 8,336 1.619 Source: HGC, NHMFC Table 6.8. Targets and accomplishment on indirect housing assistance through private funds, 2011-2012 Due to rapid urbanization and rural-urban migration, the housing need continues to be enormous. The updated housing needs are now estimated at 5,556,463 for 2011 to 2016, including backlogs from previous years. Among the regions, the growth areas in CALABARZON, Central Luzon and NCR account for almost a third of the projected housing need for 2011 to 2016 (Table 6.9). For 2014-2016, the National Shelter Program seeks to deliver 510,683 units of housing assistance focusing on vulnerable households with an investment cost of PhP203.31 billion (breakdown in Table 6.10) based on the resource projections of key shelter agencies. 143Social development Program 2014 2015 2016 Households PhP billion Households PhP billion Households PhP billion Socialized housing 97,368 20.214 133,625 30.193 151,988 26.779 NHA production 63,331 10.988 94,300 20.242 107,367 16.210 SHFC Community Driven Shelter Assistance Program 22,600 4.67 27,600 5.28 32,600 5.78 HDMF socialized end-user financing 11,437 4.556 11,725 4.671 12,021 4.789 Low-cost housing: HDMF end-user financing 41,691 41.155 42,559 42.033 43,452 42.936 Total 139,059 61.369 176,184 72.226 195,440 69.715 Source: HUDCC Table 6.10. Updated housing assistance targets, 2014-2016 Regions Initial needs (as of Jan 1, 2011) Incremental housing need 2011 2012 2013 2014 2015 2016 Total Philippines 1,225,343 688,318 701,396 714,723 728,302 742,140 756,241 5,556,463 NCR 292,234 56,087 57,153 58,239 59,346 60,473 61,622 645,154 CAR 10,861 9,060 9,233 9,408 9,587 9,769 9,954 67,872 Region I 55,312 36,135 36,822 37,521 38,234 38,961 39,701 282,686 Region II 30,323 25,964 26,457 26,960 27,472 27,994 28,526 193,696 Region III 101,441 63,151 64,351 65,574 66,820 68,089 69,383 498,809 CALABARZON 135,068 82,250 83,813 85,406 87,028 88,682 90,367 652,614 MIMAROPA 28,931 27,491 28,013 28,546 29,088 29,641 30,204 201,914 Region V 61,738 46,599 47,484 48,386 49,305 50,242 51,197 354,950 Region VI 85,425 55,426 56,479 57,552 58,646 59,760 60,896 434,185 Region VII 79,815 50,248 51,203 52,176 53,167 54,177 55,207 395,993 Region VIII 41,081 37,380 38,090 38,814 39,551 40,303 41,069 276,288 Region IX 38,322 31,411 32,007 32,615 33,235 33,867 34,510 235,967 Region X 52,094 35,347 36,019 36,703 37,401 38,111 38,836 274,512 Region XI 66,099 42,139 42,940 43,756 44,587 45,435 46,298 331,255 Region XII 54,442 36,344 37,035 37,739 38,456 39,186 39,931 283,133 Caraga 29,572 23,011 23,448 23,894 24,347 24,810 25,281 174,362 ARMM 62,584 23,886 24,340 48,370 25,274 25,754 26,243 236,451 Source: HUDCC Note: This excludes the totally damaged houses resulting from natural and man-made disasters and calamities (e.g., Bohol earthquake, Zamboanga siege and Typhoon Yolanda). Table 6.9. Housing needs estimates by region, 2011-2016 (in number of households) 144 Philippine Development Plan 2011-2016 MIDTERM UPDATE The housing sector will focus on the following strategic thrusts: Strategy 8: Provide a menu of housing options/assistance based on the needs of intended housing beneficiaries In particular, programs will focus on: • Addressing the needs of informal settler families (ISFs), through upgrading of structures in slums and development of relocation sites for those in danger areas. These include ISFs in waterways and other danger areas in Metro Manila, ISFs affected by infrastructure projects, and ISFs primarily in privately owned lots; • Providing either temporary or permanent alternative shelters or assistance in rebuilding the homes of victims of calamities such as typhoons, earthquakes, fire, and armed conflict. Priority will be given to those in the 28 poorest provinces that are vulnerable to multiple hazards; and • Meeting growing demand for housing from low-salaried employees by directly constructing and financing low-cost and socialized housing projects and by encouraging greater private sector participation in housing. Strategy 9: Build strong partnerships with stakeholders, particularly LGUs, to ensure development of sustainable communities In partnership with various agencies and LGUs, housing agencies will scale up implementation of pro-poor, community-led housing/shelter security programs. In October 2012, the Housing and Land Use Regulatory Board (HLURB) approved the implementing rules and regulations (IRR) for Section 18 of the Urban Development and Housing Act of 1992 (RA 7279) through Board Resolution Funds Mobilization (Accounts) 2014 2015 2016 Total Households PhP billion Households PhP billion Households PhP billion Households PhP billion HGC New Guaranty Enrollment 21,631 34.609 22,712 36.34 23,848 38.157 68,191 109.106 NHMFC Housing Loan Receivable Purchase Program 1,000 2.000 750 1.50 1,000 2.000 2,750 5.500 Source: HUDCC Table 6.11. Updated indirect housing assistance targets, 2014-2016 HGC also targets to guaranty 68,191 more households for 2014-2016, while NHMFC seeks to purchase loans covering 2,750 households worth PhP5.5 billion (Table 6.11). 145Social development 890. The resolution requires developers of proposed residential subdivision projects to develop an area for socialized housing through balanced housing development, slum upgrading, joint venture with LGUs, participation in the Community Mortgage Program, and development of new settlements. To implement the resolution, which took effect on 1 January 2013, memorandum circulars were issued to provide uniform application, interpretation, usage and implementation of the different manners of compliance. For 2014 to 2016, the HLURB will continue to extend technical assistance in the formulation/updating of comprehensive land use plans (CLUPs) to 652 LGUs composed of 101 cities and 551 municipalities. By 2016, all 1,649 LGUs will have updated CLUPs. Strategy 10: Pursue the policy agenda for socialized housing The HLURB will continue its orientation of homeowner associations under the Magna Carta for Homeowners’ Associations (RA 9904) and review of its IRR. The agency will also review existing IRRs on the Subdivision and Condominium Buyers’ Protective Decree (PD 957) and the act authorizing HLURB to establish standards and technical requirements for economic and socialized housing projects (BP 220), to include green technology and other revisions on national standards for housing projects. Another important project is the International Organization for Standardization (ISO) certification of the core processes, which include planning assistance, registration and adjudication nationwide to improve delivery of service. The amendment of Section 18 of the Urban Development and Housing Act will be pursued to qualify vertical development as eligible in compliance with the balanced housing development requirement. The policy change works in tandem with the ongoing technical assistance to the Social Housing Finance Corporation on the scaling up of the Community Mortgage Program through Medium-Rise Buildings and the citywide approach to urban planning and development. The amendment will maximize the utilization of prime land accessible to social and economic opportunities. The passage of the Department of Housing and Urban Development (DHUD) bill is expected to provide a holistic approach to sustainable urban development. The pursuit of sustainable urban development will entail the adherence to a systematic approach to planning from the preparation of the CLUPs and local shelter plans as well as the creation and operation of local housing boards in the LGUs that will be guided at the national level by the DHUD. 146 Philippine Development Plan 2011-2016 MIDTERM UPDATE III. PLAN IMPLEMENTATION The progress of Plan implementation, using the RMs (Tables 6.1, 6.2 and 6.5) and the annual target indicator matrix in Table 6.12 below, will be monitored through the Social Development Committee (SDC), an interagency committee under the National Economic and Development Authority (NEDA) Board, as well as through the Human Development and Poverty Reduction Cabinet Cluster (HDPRC). The following are the lead agencies according to the four subsector outcomes: DOH, DepEd, Department of Social Welfare and Development (DSWD) and HUDCC. Indicators Annual Plan targets Means of verification Agency responsible2013 2014 2015 2016 Subsector outcome A: Health and nutrition status improved Maternal mortality ratio per 100,000 live births decreased 70 61 52 50 Family Health Survey (FHS) DOH Infant mortality rate per 1,000 live births decreased (in %) 21 20 19 17 Under-five mortality rate per 1,000 live births decreased (in %) 29.2 28 26.7 25.5 Prevalence of underweight children under five decreased (in %) 13.7 12.7 NCC Contraceptive prevalence rate (all methods) increased (in %) 63 65 DOH Proportion of births attended by health professional increased (in %) 90 90 Proportion of births delivered in facility increased (in %) 80 85 Malaria mortality rate per 100,000 population decreased (in %) <0.03 <0.03 Program data DOH Malaria morbidity rate per 100,000 population decreased (in %) 6.6 6.6 TB case detection rate (all forms) increased (in %) 85 85 HIV prevalence decreased Less than 1% of population Table 6.12. Annual target indicator matrix on social development, 2013-2016 147Social development Indicators Annual Plan targets (in %) Means of verification Agency responsible2013 2014 2015 2016 Proportion of population with access to safe water increased (HH in %) 87 88 Annual Poverty Indicators Survey (APIS) DOH Proportion of population with access to sanitary toilet increased (HH in %) >92 >92 National Health Insurance Program (NHIP) coverage rate increased (in %) 90 95 Program data PhilHealth Proportion of households with per capita intake below 100% dietary energy requirement decreased (in %) 45.6 41.4 37.1 32.8 National Nutrition Survey of FNRI National Nutrition Council Subsector outcome B: Knowledge and skills enhanced Net enrolment rate increased (in %) Basic Education Information System (BEIS) Deped Kindergarten 79.3 89.7 100 100 Elementary 96 97 98 99 Secondary 65 68 70 71 Adjusted net enrolment rate increased (in %) Elementary 99 99 99 99 Secondary 93 95 97 99 Completion rate increased (in %) Elementary 75 78 81 83 Secondary 75 76 78 80 Cohort survival rate increased (in %) Elementary 77 79 81 83 Secondary 79 81 83 85 Achievement rate increased (in %) Elementary 71 73 75 77 Secondary 54 57 62 65 Certification rate in TVET increased (in %) 86 86.5 87 87.5 Agency Report TESDA TVET graduates increased N/A 1,155,017 1,263,593 1,383,026 148 Philippine Development Plan 2011-2016 MIDTERM UPDATE Indicators Annual Plan targets Means of verification Agency responsible2013 2014 2015 2016 Higher education graduates increased 535,574 567,531 584,474 601,505 Agency Report CHED Higher education faculty with MA increased (in %) 50 55 60 65 Higher education faculty with PhD increased (in %) 16 20 25 30 HEIs with accredited programs increased (in %) 26 29 32 35 National passing percentage (across disciplines) in licensure exams increased (in %) 48.39 49.72 50.94 52.53 Subsector outcome C: Social protection expanded Percentage of poor families covered by PhilHealth as identified under the NHTS PR and LGU Sponsored Program (in %) 85% 90% 95% 100% Program Data PhilHealth Subsector outcome D: Access to secure shelter expanded Percentage of housing targets met (in %) 21.45 19.09 23.74 25.84 Key shelter agency reports HUDCC Share of socialized housing to housing target improved (in %) 74.01 70.02 75.84 77.77 NHA, SHFC, HDMF Good governance and the rule of law 149 7Good governanceand the rule of law 150 Philippine Development Plan 2011-2016 MIDTERM UPDATE 73 The WGI is a research dataset summarizing the views on the quality of governance provided by a large number of enterprise, citizen and expert survey respondents in industrial and developing countries. These data are gathered from a number of survey institutes, think tanks, non-governmental organizations, international organizations, and private sector firms. The WGI is a research project of the World Bank since 1996 and covers 211 countries. 74 The World Bank and International Finance Corporation, Doing Business 2011, 2012, 2013 (Washington DC: The International Bank for Reconstruction and Development / The World Bank, 2011, 2012, 2013). 75 Klaus Schwab, Global Competitiveness Report, 2010-2011, 2011-2012, and 2012-2013 (Geneva: World Economic Forum, 2010, 2011, 2013). I. INTRODUCTION Transforming the economy requires transforming institutions at the same time. Institutions need to transform themselves to meet the demands of a more complex economy and a better informed, more sophisticated citizenry. Even well-crafted plans cannot achieve goals without having capable institutions to execute them; even good policies will not work if these cannot be enforced by credible institutions. The Philippine Development Plan (PDP) for 2011-2016 outlined strategies aimed at increasing the responsiveness of government, strengthening democratic institutions, and, importantly, rebuilding people’s trust in government. Government initiatives have revolved around the President’s determined commitment to fight corruption and rebuild public institutions so that these are capable of serving the majority. II. ASSESSMENT The past three years saw improvements in governance. From 2010 to 2012, the percentile ranking of the Philippines in five out of the six dimensions of the Worldwide Governance Indicators (WGI)73 showed marked improvements in the control of corruption, political stability and regulatory quality, as well as slight improvements in rule of law and government effectiveness. There have also been substantial improvements in the Philippine ranking in the Ease of Doing Business Survey Index74 and Global Competitiveness Index,75 particularly in terms of perceptions on enforcing contracts, efficiency of the judicial system/legal framework in settling commercial disputes, and the effectiveness of existing anti-monopoly policy. Good governance and the rule of law 151 76 The second number indicates the number of countries included in the survey. Table 7.1. Worldwide Governance Indicators, 2010-2012 Country Voice & Accountability Political Stability Government Effectiveness Regulatory Quality Rule of Law Control of Corruption 2010 2012 2010 2012 2010 2012 2010 2012 2010 2012 2010 2012 Indonesia 47.87 51.18 20.75 27.49 47.85 44.02 37.80 43.06 31.75 34.12 25.24 28.71 Malaysia 33.65 37.91 51.89 44.55 82.78 80.38 70.81 69.86 65.88 65.88 62.86 65.55 Philippines 48.34 47.87 5.19 14.69 55.50 57.89 44.98 51.67 33.65 36.49 22.38 33.49 Singapore 40.76 54.03 89.62 96.68 100.00 99.52 98.09 100.00 92.89 95.73 98.57 97.13 Thailand 32.23 37.44 9.43 12.80 62.20 60.77 56.46 57.89 49.29 50.24 48.10 46.89 Vietnam 8.53 9.48 50.94 55.92 45.93 44.50 28.23 27.27 34.60 37.91 31.43 35.41 Table 7.2 Global ranking of the Philippines in governance indices, 2010-2012 Source: Doing Business, 2010, 2011, 2012; Global Competitiveness Report, 2010-2011, 2011-2012, 2012-2013. Survey/Indicator76 2010 2011 2012 Ease of Doing Business Survey Index Enforcing contracts (judicial system’s efficiency in resolving commercial disputes) 118/139 118/142 112/144 Global Competitiveness Index Efficiency of the legal framework in settling disputes of private businesses 122/139 115/142 107/144 Effectiveness of anti-monopoly policy 92/139 98/142 84/144 Figure 7.1. Results framework on good governance and the rule of law Goals Intermediate goals Subsector outcomes Poverty in multiple dimensions reduced and massive quality employment created Rapid and sustained economic growth achieved Equal development opportunities achieved Transparency citizen’s participation and accountability increased Rule of law strengthened Sector outcome Effective and efficientgovernance achieved 152 Philippine Development Plan 2011-2016 MIDTERM UPDATE Table 7.3. Revalidated results matrix (RM) on good governance and the rule of law Indicators Baseline (2010) End-of-Plan target (2016) Subsector outcome A: Transparency, citizens’ participation and accountability increased Percentile rank in the WGI-Voice and Accountability indicator improved 48.34 >50.00 Percentile rank in WGI-Government Effectiveness indicator improved 55.50 >70.00 Percentile rank in WGI-Control of Corruption indicator improved 22.38 >60.00 Subsector outcome B: Rule of law strengthened Percentile rank in the WGI-Rule of Law indicator improved 33.65 >60.00 Percentile rank in WGI-Regulatory Quality indicator improved 44.98 >70.00 Importantly, the administration’s commitment to “daang matuwid” has renewed the people’s trust in government as it relentlessly pursued high-profile graft and corruption cases involving high government officials. Increased people’s trust was evidenced by the consistently high satisfaction ratings of the President based on the regular surveys of the Social Weather Station (SWS) and Pulse Asia. Perception about the prevalence of corruption has improved considerably. In the 2012 enterprise survey of SWS done in seven cities, only 42 percent of the respondents– compared with 64 percent in 2009--perceived that there is a lot of corruption in the public sector. Further, both the enterprises (73%) and general public (64%) perceived that the degree of graft and corruption is now less compared with the previous administration. Despite significant progress in governance, sustaining the gains remains a challenge for these to have a lasting impact on the people’s welfare. This chapter builds on these gains and sharpens strategies to address challenges in governance and rule of law. III. UPDATED PDP TARGETS To gauge the performance on the strategies formulated, a results matrix (RM) has been prepared separately. The revalidated RM contains worldwide indicators and indices for good governance and rule of law, like the WGI and Open Budget Index (OBI), as well as targets/indicators from national government agencies (NGAs). Table 7.3 shows the revalidated RM at the level of subsector outcomes. Good governance and the rule of law 153 IV. STRATEGIC FRAMEWORK Rapid and sustained growth that will redound to reduction in poverty and generation of quality employment requires effective and efficient governance. To this end, increasing transparency, citizens’ participation, and accountability, and strengthening the rule of law are of strategic importance (Figure 7.2). Opening access to information and establishing venues for participation on various dimensions of governance empowers the citizenry. On the other hand, government needs to ensure high-quality, efficient, accountable, and accessible delivery of public services. Citizens, especially those already in dire situations, need to be spared from burdensome requirements and processes in accessing public services. Intensifying anti-corruption efforts is likewise important in earning citizens’ trust. Effective and efficient governance requires demonstration of the rule of law. Rule of law is particularly critical in promoting equality and fairness in the administration of justice to protect the poor and vulnerable on the one hand, and create an environment conducive to economic development on the other hand. This involves, among others, (a) enhancing access by the poor to law enforcement and legal assistance; (b) ensuring equal opportunity for businesses through effective regulation against monopolistic practices; (c) just and efficient resolution of commercial disputes, including contractual obligations and property rights; and (d) collection of taxes in accordance with the law and economic benefits. Gains and lessons from the past three years, together with an assessment of challenges ahead, have informed the strategies to sustain and fine-tune governance reforms to ensure their irreversibility. Figure 7.2 Strategic framework on good governance and the rule of law Sector outcome Subsector outcomes Effective and efficient governance achieved Transparency, citizen’s participation and accountability increased Rule of law strengthened Strategies 1. Enhancing public access to information 2. Fully engaging and empowering the citizenry 3. Strengthening performance management and accountability measures 4. Intensifying anti corruption efforts 5. Improving administration of justice 6. Enhancing economic justice 154 Philippine Development Plan 2011-2016 MIDTERM UPDATE Improving fiscal transparency Reform programs that promote transparency will be continued and a new face of the budget that links performance and budget will be adopted. Starting 2013, the Executive will submit a performance-based budget, which will present budget allocations in terms of expected outputs and outcomes to be delivered by agencies. This will allow for better performance tracking and evaluation. Full compliance by national government agencies (NGAs), government-owned and controlled corporations (GOCCs), and state universities and colleges (SUCs) with the Transparency Seal will be strictly monitored and reinforced through the performance-based bonus (PBB) that includes the Transparency Seal among the eligibility criteria. With the Philippines’ efforts to implement the standards of the Extractive Industries Transparency Initiative, data/information coming from extractive industries on payments they make to the government and where these were used by the government will now be transparent. Subsector outcome A: Transparency, citizen’s participation and accountability increased Good governance requires empowering citizens to participate while also making government accountable for decisions and actions. Strategy 1: Enhancing public access to information Transparency, by virtue, is a precursor for accountability and for citizens’ engagement. Despite efforts to make public information more transparent, particularly national and local plans and budgets, the challenge of accessibility and usability of these disclosed information remains. An even greater challenge is the absence of a law that will institutionalize public access to information. There is a need to provide uniform, clear, and speedy procedures for accessing information on all government transactions. To enhance access to information, strategies consist of the following: • Improving fiscal transparency; • Progressively adopting open data standards; • Improving access to information on local government operations; and • Ensuring compliance with the government procurement. Table 7.4 presents the updated targets on enhancing access to information. Good governance and the rule of law 155 Indicators Baseline (2012) End-of-Plan target (2016) Fiscal transparency improved Proportion of NGAs and GOCCs fully complying with the Transparency Seal achieved (in %) 100 100 Open Budget Index (OBI) score increased 48 60 Open data standards progressively adopted Datasets contributed by NGAs to the Open Data Portal (ODP) increased N/A 70 Access to information on local government operations improved Proportion of provinces, cities and municipalities (PCM) compliant with Full Disclosure Policy (FDP) increased (in %) Fully complying 75 (2015) Complying 98 99 (2015) Compliance with government transparency requirements ensured Proportion of NGAs, GOCCs, and LGUs registered in the PhilGEPS increased (in %) 97.21 100 For 2015, the Philippines will target to attain a score of 60 in OBI of the International Budget Partnership, from a score of 48 in 2012. This will be done by improving the executive budget proposal and publishing the following documents: Pre-budget Statement, Citizen’s Budget for at least two budget phases, Mid-year Review, and Year-end Report. Progressively adopting open data standards As one of the eight founding member countries of the Open Government Partnership (OGP) launched in 2011, the Philippines will develop and implement a Country Action Plan that contains initiatives in line with the OGP’s principles of engagement. The OGP is an international organization promoting multilateral initiative and seeking strong commitments from participating government institutions to promote transparency, increase civic participation, fight corruption, and harness new technologies to make government more open, effective, and accountable. Table 7.4. Revalidated results matrix (RM) under subsector outcome A on enhancing access to information 156 Philippine Development Plan 2011-2016 MIDTERM UPDATE The People’s Budget will be published on an annual basis and will contain a summary of the year’s results-focused budget, expenditure priorities, and the basics on budgeting. The Budget ng Bayan website will continue to be an interactive platform where citizens can learn more about the government budget and file reports on budget utilization. Information on releases for lump-sum funds will continue to be accessible in the website of the Department of Budget and Management (DBM) through the Electronic Transparency and Accountability Initiative for Lump Sum Funds or e-TAILS project. Fund releases for the School Building Program and the Calamity and Quick Response Fund are also made available on the website. The Official Gazette (www.gov.ph), the official journal of the Republic of the Philippines, will serve as the National Government Portal—a unified interface in the form of a one-stop source for information and service delivery. The online feedback mechanism featured in the site will continually be enhanced. In addition, the Open Data Portal (data.gov.ph) will be created to provide citizens and government researchers with the means to access, scrutinize, and analyze raw aggregate datasets from the government. The data, which would have been previously difficult to acquire, will be archived in a single platform under an open government license. The website in turn will offer the end user the means to visualize customized datasets for their own use, free of charge. Improving access to information on local government operations Regular disclosure of pertinent information to the public and providing citizens with access to this information will be enhanced by ensuring that Memorandum Circular (MC) 2012-141 of the Department of the Interior and Local Government (DILG) entitled “Full Disclosure of Local Budget and Finances, and Bids and Public Offerings” is consistently complied with by all local government units (LGUs) and also unfailingly monitored by the agency. The barangays are also directed to disclose budget-related documents per MC 2010-149 (“Posting of Barangay Budget, Statement of Income and Expenditures [SIE] and other Barangay Financial Transactions, and Annual Procurement Plan [APP]”). The financial documents will be posted in conspicuous places and in the full disclosure policy (FDP) portal. Show cause orders will await LGUs found not complying with the policy. By 2016, the DILG targets that all provinces, cities, and municipalities (PCMs) are fully compliant with the FDP and that majority of them are able to upload required budget documents in the FDP portal. Compliance with the FDP is one of the criteria for conferring the Seal of Good Local Governance (SGLG) to LGUs. Ensuring compliance with the government procurement transparency requirements The Philippine Government Electronic Procurement System (PhilGEPS), designed in 2004, will be redesigned to include additional functionalities Good governance and the rule of law 157 Indicators Baseline (2012) End-of-Plan target (2016) NGAs entering into Budget Partnership Agreements (BPAs) with CSOs increased 6 24 (2015) GOCCs entering into BPAs with CSOs increased 3 12 (2015) Cities and municipalities with Local Poverty Reduction Action Plans increased 595 90% of 1 ,634 (2015) Cities with Citizen Satisfaction Survey increased 7 (field-test in LGUs) 122 Table 7.5. Revalidated results matrix (RM) under subsector outcome A on fully engaging and empowering the citizenry relating to system integration, configuration and maintenance services. It will be expanded to include e-payment and e-bidding functions, such as inclusion of a facility to enable online submission of bid documents, development of modules for civil society organizations (CSOs) to monitor tenders online, an electronic fee payment system, an expanded supplier registry, and development of a module for agency posting of their annual procurement plans. The PhilGEPS will also be linked with the Government Integrated Financial Management Information System (GIFMIS) for tracking budget and expenditure. PhilGEPS is envisioned to be a world-class e-procurement system and an end-to-end government e-procurement solution by 2016. Strategy 2: Fully engaging and empowering the citizenry To effectively participate and constructively engage in national and local planning and budgeting process, existing mechanisms where citizens and CSOs can actively engage and participate will be enhanced and strengthened by making them more inclusive and free from political influence. Strategies will aim to: • Deepen participatory planning and budgeting, monitoring and evaluation (M&E); • Support community and CSO participation; and • Enhance voter’s education. Table 7.5 shows the updated targets on fully engaging and empowering the citizenry. 158 Philippine Development Plan 2011-2016 MIDTERM UPDATE Deepening participatory planning, budgeting, M&E The government will push for stronger collaboration among NGAs, LGUs and community organizations in localizing poverty reduction through the formulation of Local Poverty Reduction Action Plans (LPRAPs). For 2014 to 2015, 90 percent of the total number of cities and municipalities are targeted to undertake the bottom-up participatory planning and budgeting process and continuously come up with LPRAPs. By 2016, it is envisioned that the bottom-up planning and budgeting will cover all cities and municipalities. The Grassroots Participatory Budgeting Process (GPBP) will see to it that the planning and budgeting processes, both at the local and national government, are more participatory and responsive to local needs. It will also ensure that the funding requirements for the development needs of the poorest cities and municipalities are included in the budget proposals of participating national agencies. In addition, the number of NGAs and GOCCs mandated to undertake participatory budgeting through the establishment of Budget Partnership Agreements (BPAs) with CSOs will be expanded annually. Participation will also be mandatory not only during budget preparation but in other phases of the budget cycle as well. At the regional level, the Regional Development Councils (RDCs), whose memberships comprise regional line agencies, LGUs and CSOs, will also be used as a mechanism for participatory planning and budgeting. At the local level, the DILG, with the help of local resource institutes, will continue carrying out the Citizens’ Satisfaction Index System (CSIS) survey to cover all cities from 2014 to 2016. The CSIS is an external evaluation strategy that allows the general public to assess and say how their local governments perform. Results of this survey will serve as inputs to the LGUs’ areas for improvement on specific local services. Supporting community and CSO participation To promote transparency and accountability among LGUs, the DILG will also ensure that CSOs are represented in local special bodies (LSBs) as stipulated in the Local Government Code of 1991 (RA 7160). To develop and strengthen the capacity of CSOs to effectively participate in national and local governance processes, the DILG will conduct capacity-building activities for CSOs on identified competencies, including community organizing, mobilization and support for advocacy work, networking and participation in local governance. To help strengthen the LSBs, the Union of Local Authorities in the Philippines (ULAP) and its member leagues will support LGUs in policy development and in replicating good and inclusive local governance practices in the areas of education, health, and migration development. This will be a collaborative effort with NGAs, civil society and the private sector. The Grassroots Participatory Budgeting Process will see to it that the planning and budgeting processes, both at the local and national government, are more participatory and responsive to local needs. Good governance and the rule of law 159 77 The establishment of a Citizen’s Charter, as one of the good governance conditions in the implementation of the Performance-Based Incentives System (PBIS), got the highest overall compliance rating (94 percent) from participating agencies in 2012. Enhancing voter’s education The Commission on Elections (COMELEC) will continue to harness various media (e.g. print, voice and electronic, etc.) in educating the public about the electoral reforms and activities of the Commission, as well as its stand on various political issues. Voters’ education includes warning against campaign violations and information on legal, proper, and novel techniques that local candidates can adapt in their campaigns. The COMELEC will also aim to increase understanding and appreciation of the benefits of the automated election system and provide alternative sources of information which may be accessed with greater ease. It will conduct public demonstrations on the Precinct Count Optical Scan (PCOS) machines for special interest groups, walk-ins, and the general public. Furthermore, to increase voter registration and turnout for the next national elections, COMELEC will partner with CSOs in countries with high concentration of overseas Filipinos (OFs) in conducting sustained information dissemination campaigns, especially on the Overseas Voting Act of 2013 (RA 10590), to encourage OFs to register and cast their votes in the 2016 and future national elections. Strategy 3: Strengthening performance management and accountability measures In the past three years, the government has been able to implement several measures to make public institutions deliver services more efficiently and effectively and to make NGAs accountable for their level of performance. Streamlining government processes. With the Anti-Red Tape Act or ARTA (RA 9485), NGAs, GOCCs, SUCs and LGUs are required to set up Citizen’s Charter where service standards are made known to the public.77 Efforts were also devoted to improve business-related systems and procedures. For instance, the Business Permits and Licensing Systems (BPLS) were set up to streamline services by imposing a single unified form for applying or renewing business permits and licenses, reducing the number of signatories, and reducing processing time. Through the Enhanced Business Name Registration System (EBNRS), the Department of Trade and Industry (DTI) simplified the business name application process by reducing the required information fields from 36 to 18, thus reducing the application form from nine pages to a single page. From an average of four to eight hours, business name registration is now reduced to 15 minutes anywhere in the Philippines. The BPLS and the EBNRS provide 10.46 million OFs with the initial enabling environment to attract their investments. The BPLS and EBNRS can be integrated into transactional services offered by BaLinkBayan, the one-stop online government portal dedicated for OFs’ engagements in investment, philanthropy, technology and skills transfer, and online government services. 160 Philippine Development Plan 2011-2016 MIDTERM UPDATE Improving LGU performance. As an incentive for improving LGU performance, the DILG confers an SGLG to LGUs that practice accountable, transparent, and participatory governance and improve frontline service performance. In 2012, 1,365 LGUs were awarded with SGLGs, making them eligible for a grant under the Performance Challenge Fund (PCF). From 2010 to 2012, 990 SGLG-qualified LGUs received a total of PhP1.51 billion from the PCF to help fund 1,316 projects for local economic development, poverty reduction, and climate change adaptation and mitigation. Upgrading service standards. The Development Academy of the Philippines (DAP) implemented the Government Quality Management Program (GQMP) to align the agencies’ planning, service, and support operations with ISO 9001 International Standards and to make “citizen satisfaction” as the focus of quality improvement efforts. In 2012, over 160 ISO 9001:2008 Quality Management Systems (QMS) certifications were granted to various government agencies, thus assuring the transacting public of a more efficient, consistent, and responsive delivery of services. Harmonizing performance management systems. The DBM harmonized all government performance management systems into a single system called the Results-based Performance Management System (RBPMS). The system consists of an across-the-board bonus in the form of the existing Productivity Enhancement Incentive (PEI) and a top-up bonus known as Performance-based Bonus (PBB). The latter is characterized by a system of ranking delivery units of departments and personnel within those units according to their performance and contribution to the accomplishment of their department’s overall targets and commitments. The 2012 pilot run of the system has achieved 96 percent participation rate from a total of 183 agencies, and 79 percent of these agencies were eligible for the PBB. Further improvements will be needed towards more responsive governance. The strategies will aim to: • Improve public financial management; • Harmonize government information and communications technology (ICT) systems; • Improve performance M&E, reporting and incentive systems; • Improve efficiency and competence of public service provided; • Streamline business processes and frontline services; and • Strengthen interagency coordination. Table 7.6 shows the updated targets on strengthening performance management and accountability measures. The Department of Budget and Management harmonized all government performance management systems into a single system called the Results based Performance Management System. Good governance and the rule of law 161 Indicators Baseline (2012) End-of-Plan target (2016) Public Financial Management (PFM) improved Proportion of LGUs assessed that are compliant with set PFM standards (in %) 50% 65% (2015) Performance monitoring, evaluation, reporting and incentive systems improved Proportion of government agencies participating in the performance based incentive system (PBIS) increased (in %) 96 100 Agencies with approved Strategic Performance Management System (SPMS) increased 16 2,366, or 95% (2015) Agencies with functional SPMS increased (in %) 0 90% of approved SPMS in 2014 (2015) PCMs conferred with the Seal of Good Local Governance (SGLG) increased 1,365 All qualified PCMs Percentage of qualified Provinces, Cities and Municipalities (PCMs) provided with the Performance Challenge Fund (PCF)* subsidy 42% of qualified PCMs or 563 PCMs out of 1,327 SGH 2011 Passers 40% of qualified PCMs or an estimate of 403 PCMs (2013) 20% of qualified PCMs or an estimate of 342 PCMs (2014) 20% of qualified PCMs or an estimate of 342 PCMs (2015) Efficiency and competence of public service improved Offices with ISO 9001 Certified QMS increased 165 315 Senior executives and middle managers capacitated in the Public Management Development Program increased 104 495 Business processes and frontline services streamlined High-density service offices passing the Anti-Red Tape Act (ARTA) Report Card Survey (RCS) increased (in %) 75 98 Table 7.6. Revalidated results matrix (RM) under subsector outcome A on strengthening performance management and accountability measures *Annual target provided but cannot be aggregated since same LGUs may qualify for PCF each year Improving public financial management (PFM) The banner program for PFM is the GIFMIS, a tool to assist the government in maintaining fiscal discipline, fund allocation and operations for the effective delivery of government services, as well as in making financial decisions. As a pre-requisite for the GIFMIS, a Unified Account Code Structures, which provides a harmonized 162 Philippine Development Plan 2011-2016 MIDTERM UPDATE budgetary and accounting classification system, is now used for the 2014 budget preparation. In addition, the Treasury Single Account is being developed to unify the structure of government bank accounts, enabling consolidation and optimum utilization of cash resources. To better manage government human resource requirements and improve accountability in the disbursement of funds for personal services, the government will complete its Government Human Resource Information System (GHRIS) and develop a National Payroll System (NPS). The NPS will allow for direct and timely payment to all employees through their bank accounts, eliminate the existence of retired or resigned employees in the system, and address the perennial problem of non-remittance of contributions to the Government Service Insurance System (GSIS). The system will interface with government-accredited banks for deposit instructions and with oversight agencies to facilitate work and data flow. Support to LGUs for more effective and accountable PFM will also continue. To build the PFM policy environment of the LGUs, government will formulate an LGU PFM Road Map and strengthen LGU PFM Policy Units in the oversight agencies, so they can provide technical assistance to LGUs on PFM. In addition, LGU PFM systems and tools will be streamlined and synchronized through the development of electronic tools for budgeting and financial transactions. Harmonizing government ICT systems The government will continue to implement the Medium-Term Information and Communication Technology Harmonization Initiative (MITHI). Through this process, the e-Government Master Plan or eGMP will be developed as a singular authoritative strategic blueprint for Philippine e-Governance. MITHI provides a bottom-up perspective of the government’s ICT needs and ensures a systematic process for the planning, budgeting, implementation, M&E of government-wide ICT projects. Likewise, administrative and field data of various government agencies on international migration will be harmonized for evidence-based policymaking and planning. The Shared Government Information System on Migration (SGISM) will be operationalized in response to the challenges and opportunities of migration. Improving performance M&E, reporting and incentive systems The government will further improve systems for performance M&E, reporting and incentive systems. RBPMS. The Interagency Task Force created under Administrative Order (AO) 25 will continue to improve the RBPMS framework. The RBPMS will be the basis for determining entitlement to performance-based allowances, incentives, or compensation of government personnel, taking into consideration the National Leadership’s Agenda, PDP 2011-2016, agency mandates, commitments and targets. Good governance and the rule of law 163 Strategic Performance Management System. The performance monitoring and appraisal system embodied in the Strategic Performance Management System (SPMS), designed by the Civil Service Commission (CSC), will be enhanced. The SPMS focuses on the agency’s major final outputs (MFOs), together with their corresponding performance indicators, as these relate to the achievement of the agency’s strategic objectives. The translation of success indicators, a combination of the targets and measures, from an organizational level to the office level, can be seen in the Office Performance Commitment and Review (OPCR) and further down the Individual Performance Commitment and Review (IPCR). In 2012, 390 SPMS were already approved for initial implementation. By 2013, the approved SPMS are expected to increase to 30 percent or 747 of the identified 2,490 agencies. By 2015, 95 percent or 2,366 of 2,490 agencies will each have an approved SPMS. It is expected that the approved SPMS will become functional by 2014 (85 percent of the approved SPMS in 2012 and 2013) and 2015 (90 percent of approved SPMS in 2014). The SPMS will be an effective tool in assessing individual accomplishments that are aligned with organizational goals. It can be used to operationalize Executive Order (EO) 80 signed in 2012 (“Directing the Adoption of a Performance-based Incentive System for Government Employees”), which ties incentive with performance. Incentives for good local governance. In terms of LGU performance, the DILG will scale up the SGLG to include gauging LGU performance not only in the areas of good financial housekeeping and people’s participation, but also on important areas such as business competitiveness, disaster preparedness, environmental protection, social protection, peace and order and public safety. Moreover, conferment of the Gawad Pamana ng Lahi award will be continued for LGUs that have shown exemplary performance in administrative, social, economic and environmental governance. The DILG will also continue to incentivize good performing LGUs through the PCF. To make this initiative felt by the public, the DILG will improve the M&E of PCF-supported projects and strengthen policies on local governance performance management and incentive systems. Participatory Audit. The Citizens’ Participatory Audit (CPA) Project, launched in 2012, will be expanded and eventually institutionalized. This initiative aims to enhance transparency, accountability and citizen participation in the public audit process. The CAMANAVA (Caloocan, Malabon, Navotas, and Valenzuela) flood control project of the Department of Public Works and Highways was chosen as the first pilot audit. Improving efficiency and competence of public service Government will continue and strengthen programs that enhance the competence of public officials to efficiently deliver quality public services. Under the GQMP, established through EO 605, the government has adopted the ISO 9001 QMS. The government will also enhance the Career Executive Service Development Program (CESDP) by addressing the development and team 164 Philippine Development Plan 2011-2016 MIDTERM UPDATE effectiveness needs of executives who are not yet career executive service officers (CESOs). Further, the Public Management Development Program (PMDP) will foster careerism in government and promote stability in the bureaucracy by producing a corps of development-oriented, competent, dedicated and honest government senior executives and middle managers. Streamlining business processes and frontline services Various initiatives put in place to make the country more conducive for investment will be continued and improved. The interagency Task Force on Ease of Doing Business (EODB), created under AO 38 in 2013 to improve the ease of doing business in the country, will implement the action plan prepared by the National Competitiveness Council (NCC) to enhance the business competitiveness of the Philippines.78 The task force will implement the Game Plan for Competitiveness to raise Philippine competitiveness rankings to the top third in the world by 2016. The Game Plan has set reform targets per government agency or office accountable for any of the ten indicators measured in the Doing Business Report. Furthermore, through the national streamlining of the BPLS, a joint effort of the DILG and the DTI, all cities and municipalities will have standard BPLS by the end of 2014. This includes the adoption of the BPLS Unified Form, reduction in the number of signatories (maximum of 5), limit in the number of steps in applying/processing business permits and licenses (maximum of 5), and reduction in processing time (new applications: maximum of 10 days; renewal: maximum of 5 days). Furthermore, the DILG will also begin providing technical assistance to LGUs in the streamlining of other local regulatory services, such as building/ construction and occupancy permitting in an effort to make them more competitive and business friendly. The CSC will enhance the implementation of the Anti-Red Tape Program to ensure the delivery of quality frontline services to the people. Its Service Delivery Excellence Program (SDEP) will be strengthened to increase the likelihood of government offices’ passing the ARTA-Report Card Survey (RCS). A system for reviewing and enhancing Citizen’s Charters will also be developed to ensure that Charters are products of (a) streamlining through time and motion studies and other business process improvements; and (b) genuine consultation and agreement between government bodies and citizens. Moreover, to encourage delay- and corruption-free frontline services, the CSC will continue conferring the Citizen’s Satisfaction Center Seal of Excellence to government offices epitomizing exemplary public service. Through these measures, the proportion of surveyed offices passing the ARTA-RCS is expected to increase from 75 percent in 2012 and 85 percent in 2013 to 95 percent in 2014 and 98 percent in the succeeding years. 78 The establishment of a Citizen’s Charter, as one of the good governance conditions in the implementation of the Performance-Based Incentives System (PBIS), got the highest overall compliance rating (94 percent) from participating agencies in 2012. The Civil Service Commission will enhance the implementation of the Anti-Red Tape Program to ensure the delivery of quality frontline services to the people. Good governance and the rule of law 165 The conferment of the Philippine Quality Awards (PQAs) for the public sector will be continued to recognize government agencies that excel in quality and productivity and with established quality management system. Strengthening interagency coordination Many of our public institutions have been designed to meet specific needs and to perform specific functions. But for synergy and maximum effectiveness, government agencies will move toward greater openness and collaboration. Interagency coordination will be strengthened through the Cabinet Clusters (EO 43) and the Cabinet Assistance System (CAS) (EO 99). Agencies will use these systems as a forum to discuss, streamline and resolve issues affecting their day-to day operations, as well as their respective projects. Under EO 43, the Cabinet was organized thematically into the following clusters: Good Governance and Anti-Corruption Cluster (GGACC); Human Development and Poverty Reduction Cluster (HDPRC); Economic Development Cluster (Econ Cluster); Security, Justice and Peace Cluster (SJPC); and the Climate Change Adaptation and Mitigation Cluster (CCAMC). The clusters are composed of members of the Cabinet as well as heads of agencies and bureaus. Each cluster discusses, assesses and evaluates the Executive’s programs or projects leading to 2016 to ensure that these are consistent with the intended outcomes set in the President’s Social Contract. On the other hand, under EO 99, the CAS was created to provide support to the Cabinet Secretary, who is in charge of monitoring and ensuring timely execution of priority projects or programs under the President’s Social Contract and PDP. By designating a focal person (with a rank not lower than bureau director or assistant secretary), the CAS aims to bring about closer coordination among the departments and agencies. Strategy 4: Intensifying anti-corruption efforts Considering how corruption has been embedded in institutions and remains prevalent in many aspects of governance, intensifying anti-corruption efforts is necessary to be able to make a significant dent in this area over time. Reducing opportunities for corruption Reducing opportunities for corruption entails a two-pronged approach. The first requires strengthening of internal control systems in relation to the generation and allocation of government funds; and the second involves strict enforcement of penalties against those found guilty of corrupt practices. For synergy and maximum effectiveness, government agencies will move toward greater openness and collaboration. 166 Philippine Development Plan 2011-2016 MIDTERM UPDATE 79 Twenty-three standards, which are intended for implementation in 2013, are being exposed to various national and international standard setting organizations. COA is also developing new PPSASs as well as an Integrated Results and Risk-Based Auditing Approach System (IRRBAAS). With respect to strengthening internal control systems, the following reforms in government budgeting, accounting and auditing systems will be pursued: • Enforcement of a rules-based approach and limiting the scope for discretion in the allocation of public funds; • Strengthening the CPA Project of the Commission on Audit (COA) to enhance transparency, accountability and citizen participation in the public audit process; and • Harmonizing the Philippine Public Sector Accounting Standards (PPSAS) with the International Financial Reporting Standards (IFRS) and International Public Sector Accounting Standards (IPSAS).79 Revenue Integrity Protection Service. The Revenue Integrity Protection Service (RIPS), the Department of Finance’s anti-corruption arm created under EO 259, will continue to prosecute public officers of its revenue-generating agencies who have committed acts of corruption and to improve the public’s perception on the current state of corruption. The RIPS has identified two key initiatives towards integrity development, namely: (a) increasing RIPS’ capacity to develop lifestyle cases; and (b) enhancing the integrity or building up the image of the bureaucracy. The acquisition and customization of case management software will aim to increase the sources of “leads” for RIPS through its case profiling function. To improve the quality of cases filed, training programs will be conducted and will focus on improving the investigative skills and technical knowledge of the Bureau of Internal Revenue (BIR) and Bureau of Customs (BOC). The RIPS aims to increase the number of cases filed against corrupt personnel from 29 in 2012 to 61 in 2015 and the number of investigations conducted on individuals from 65 in 2013 to 72 in 2015. The Policy Thrust and 8-point Agenda of the Office of the Ombudsman (OMB). The Policy Thrust and 8-point Agenda from 2011 to 2018 to curtail corruption will focus on: (a) disposition of high-profile cases; (b) zero backlog; (c) improved “survival” rate of fact-finding; (d) enforced monitoring of referred cases; (e) improved responsiveness of public assistance; (f ) improved anti-corruption policy and program coordination among sectors; (g) rationalization of the functional structure; and (h) enhanced transparency and credibility. The Ombudsman is doing an assessment of the Policy Thrust and 8-point Agenda to determine its progress in attaining its development objectives. The assessment, which is part of the Rapid Assessment and Seminar on Case Analysis and Legal Draftsmanship Initiative or RASCALD, will be used in the formulation of the Ombudsman Roadmap for Action for 2013 to 2018. Good governance and the rule of law 167 The United Nations Convention against Corruption (UNCAC) framework in multi sectoral anti-corruption efforts. The Philippines is one of the pioneer signatories of the UNCAC, the most comprehensive global framework in combating corruption. The UNCAC has five thematic pillars, namely: prevention, criminalization and law enforcement, international cooperation, asset recovery, and technical assistance and information exchange. It requires member-states to undertake key measures, both preventive and punitive and covering the public and private sectors, on criminalization of certain offenses and law enforcement, international cooperation on cross-border criminal matters, and adoption of civil and criminal law framework for asset recovery. Pursuant to the country’s commitments under the UNCAC, the Ombudsman facilitated the multi-stakeholder compliance assessment and adoption of a 21-point Action Plan, foremost of which are: (a) passage of laws on witness and whistleblower protection and freedom of information, and allowing the Ombudsman to look into bank deposits; (b) promulgation of rules of procedure governing extradition cases and conduct of discussions to enhance existing extradition treaties and mutual legal assistance on criminal matters; and (c) promulgation of rules clarifying solicitation and acceptance of gifts. The CSO coalition framework on UNCAC monitoring will be established and implemented. The integrity pledge and the unified code of conduct for business will be promoted and expanded. Project SHINE (Strengthening High level commitment for Integrity initiatives and Nurturing collective action of Enterprise) advocating for fair market conditions will likewise be pursued. Subsector outcome B: Rule of law strengthened The United Nations (UN) Secretary-General in 2004 described rule of law as “a principle of governance in which all persons, institutions and entities, public and private, including the State itself, are accountable to laws that are publicly promulgated, equally enforced and independently adjudicated, and which are consistent with international human rights norms and standards.” It requires, as well, measures to ensure adherence to the principles of supremacy of law, equality before the law, accountability to the law, fairness in the application of the law, separation of powers, participation in decision-making, legal certainty, avoidance of arbitrariness and procedural and legal transparency.80 Strategies to strengthen rule of law aim to improve administration of justice and to enhance economic justice. Strategy 5: Improving administration of justice Improving administration of justice is crucial for restoring the credibility of the justice system and earning citizens’ confidence. Table 7.7 shows the updated targets for this strategy. 80 Report of the UN Secretary-General: The rule of law and transnational justice in conflict and post-conflict societies (2004). 168 Philippine Development Plan 2011-2016 MIDTERM UPDATE Indicators Baseline (2012) End-of-Plan target (2016) Proportion of backlogs (investigations/ cases beyond the maximum prescribed periods) reduced (in %) NBI investigation 17 15 DOJ prosecutor investigation 51 30 Percent reduction in case backlog (backlog clearing rate) 0 15 Courts with rolled out continuous trial increased (partial coverage) 0 90 Courts with rolled-out e-courts system increased 0 308 Courts with rolled-out e-subpoena system increased (partial coverage) 0 95 Detainees under the jail decongestion program increased (under E-JOW, Judgment Day, and newly issued SC Guidelines on Jail decongestion) 1,272 5,000 Philippine Mediation Center (PMC) offices for promotion of Alternative Dispute Resolution increased 116 128 Table 7.7. Revalidated results matrix (RM) under subsector outcome B on improving administration of justice Reducing backlogs and decongesting case dockets Case decongestion and delay reduction activities will be conducted, especially for courts that have high caseloads. For this purpose, filling of vacancies will be a priority. Additional assisting judges will be designated and equipment will be upgraded. The Supreme Court (SC) aims to reduce case backlogs in the judiciary by 15 percent. The Department of Justice (DOJ), for its part, will pursue good governance reforms to reduce investigation backlogs. Instituting good governance in the justice system The DOJ will institute good governance reforms, including performance and integrity management systems, and expedite the recruitment of investigators and prosecutors. Computerization of processes and services will also be pursued and sustained. To minimize reliance on LGU resources/support, the Department will work on expanding the staff complement and increasing funding from the national government. It will also seek to and improve its resource management capability/systems towards optimal allocation/utilization at the regional and local levels. The national government will explore other means of support to field justice agencies to lessen or eliminate dependence on LGUs in improving judicial systems and infrastructure. Good governance and the rule of law 169 Electronic Court System. The Electronic Court System or e-Courts Project, which was first launched in the courts of Quezon City in June 2013, will be the first step towards the eventual automation of the operations of all courts. The e-Courts is a computer-based system designed to enable trial judges and court personnel to organize, plan and control the flow of cases from filing to resolution and enforcement. Judiciary HR plan. The Court will pursue an 18-year Human Resources Development Program (HRDP) for the judiciary. It will have three main career tracks: adjudication (for justices and judges); the technical track (for clerks of courts, legal researchers, interpreters, among others); and general administrative support. Furthermore, organization development reviews will be implemented in judiciary offices and the courts to strengthen institutional capacity and operational efficiency. Access to justice-Justice on Wheels. The Justice on Wheels buses will continue to visit various courts and jails. Prompt adjudication and disposal of cases have not only decongested court dockets but also contributed to jail decongestion. Access to legal information through free legal services has also been provided to indigent litigants and detainees. Streamlining criminal investigation Streamlining of the criminal investigation process will be pursued through legislation. The aim is to harmonize and integrate the functions of investigating law enforcers and prosecutors, and to repeal RA 5180, which prescribes the conduct of preliminary investigation by prosecutor—an adversarial and quasi-judicial proceeding to determine the merit of filing a case in court. The integrated case build-up and streamlined process will speed up the criminal justice system and increase the likelihood of securing convictions. Addressing fragmentation in the justice system To help address fragmentation in the justice system, sustained implementation of the National Justice Information System (NJIS) will be pursued in close coordination and collaboration among justice sector agencies. Existing mechanisms will be maximized, particularly the Justice Sector Coordinating Council ( JSCC) and Philippine Development Forum (PDF), in setting the strategic justice sector agenda and partnership roadmap, as well as implementing the NJIS and other critical justice reforms. Establishment of a Justice Research Center ( JRC) will also be explored and pursued based on international best practices in order to formulate, integrate, harmonize or rationalize policies, programs, systems procedures and capacity development in the justice system in a sector-wide approach. 170 Philippine Development Plan 2011-2016 MIDTERM UPDATE Promoting and maximizing Alternative Dispute Resolution (ADR) For the judiciary, new Philippine Mediation Center (PMC) units will be opened in Bohol, Legazpi City, Sorsogon, Dipolog City, Ilocos Norte, Ilocos Sur and Negros Oriental in 2013 and 2014. Increased ADR presence enables courts to refer cases for ADR and in the process contribute to the disposition of cases. The DOJ, through the Office for Alternative Dispute Resolution (OADR), will continue efforts to (a) promote and maximize the use of ADR by accrediting more practitioners in mediation and arbitration nationwide; (b) putting up ADR facilities in strategic cities/regions; and (c) strengthening research, policy/program development, information campaign and capacity building. Within the next few years, strengthening of the Barangay Justice System, prosecution-level mediation and contractual dispute resolution will be pursued. In recognition of the Lupong Tagapamayapa’s contribution to the promotion of the Barangay Justice System, the DILG will continue to institutionalize the granting of economic benefits and other incentives through the Lupong Tagapamayapa Incentives and Awards. The Lupons will be provided with the needed capacity development interventions to strengthen the efficacy of the Lupong Tagapamayapa as an ADR mechanism or indigenous mediation structure in resolving disputes within a community, and beyond the court system. Enhancing access to justice by the poor and other vulnerable sectors Besides the above-discussed strategies, which will redound to enhanced justice sector efficiency, reduced cost and increased access to justice, the Recognizance Act of 2012 (RA 10389) will be implemented together with reforms in the bail bond system to benefit the poor and vulnerable sectors. More public attorney positions nationwide will be created to ensure adequate free legal assistance and representation, especially for indigents. Relevant procedures and necessary facilities will be reviewed/improved to better serve these vulnerable sectors, particularly women, children, persons with disabilities, senior citizens and indigenous peoples. Jails will be decongested and reforms in corrections will be sustained/pursued for persons deprived of liberty (detainees/prisoners) and their families. Ensuring consistency and stability of jurisprudence In light of its constitutional mandate on adjudication, the judiciary will ensure consistency and rationality in jurisprudence through the decisions it renders before the courts. Doing so will contribute to stability, most especially in cases that have social, economic and political impact. Strategy 6: Enhancing economic justice Inclusive growth cannot happen without economic justice. To achieve economic justice, the government will work to strengthen competition, improve efficiency in commercial dispute resolution, and intensify tax enforcement. Table 7.8 shows the updated targets on enhancing economic justice. Good governance and the rule of law 171 Indicators Baseline (2012) End-of-Plan target (2013-2015) Cases filed under the Run After Tax Evaders (RATE) Program increased 57 108 Cases filed under the Run After The Smugglers (RATS) Program increased 60 72 Table 7.8. Revalidated results matrix (RM) under subsector outcome B on enhancing economic justice Strengthening competition/anti-trust enforcement Strengthening the country’s legal framework on promoting competition among businesses across various industry sectors will not only improve the country’s competitiveness but also rationalize commodity prices. The DOJ, through its Office for Competition, will pursue the enactment of a unified competition/anti-trust law and intensify enforcement efforts. It will expand partnerships with and among sector regulators and other stakeholders in policy development, regulatory impact assessment, information sharing, capacity building, investigation/case build-up, and eventual filing cases and prosecution in court against monopolistic practices. Improving efficiency in commercial dispute resolution EO 78, which mandates the inclusion of ADR in contracts involving public private partnerships (PPPs), build-operate and transfer (BOT) projects, and joint venture agreements between the government and private entities, will be fully implemented. The DOJ-Office of ADR will proceed with information campaigns on the said policy and promote ADR in resolving commercial/contractual disputes outside the court system. The DOJ will also work on ensuring the consistency of legal opinions and advice on government contracts, and engage the SC in policy dialogues to resolve concerns on statutory interpretation and contract enforcement. The judiciary, for its part, will address efficiency concerns on commercial dispute resolution through its efforts on case decongestion and consistency of jurisprudence. Intensifying tax enforcement The government will further intensify the implementation of the Run After Tax Evaders (RATE) and Run After The Smugglers (RATS) programs. Common standards for evidence gathering will be formulated and working arrangements will be institutionalized. Capacity building for specialized lawyers and prosecutors will continue to be pursued. For the succeeding years, the BIR will continue its bi-monthly filing with the DOJ of new cases against tax evaders under the RATE, and seek the successful prosecution and conviction of cases as well as the collection of civil liabilities. Under the RATS, the BOC will file two smuggling cases every year until 2015. It will also pursue capacity building for BOC operatives and lawyers, improve handling and custody/security of evidence, enhance information and document management through database development, and strengthen the monitoring of cases with the DOJ, quasi-judicial bodies, Court of Tax Appeals (CTAs), and other courts. 172 Philippine Development Plan 2011-2016 MIDTERM UPDATE V. PLAN IMPLEMENTATION The strategies will be implemented by the different NGAs, GOCCs, SUCs and LGUs, which will all be directed towards effective and efficient governance in order to achieve rapid and sustained economic growth as well as poverty reduction and quality employment creation. The DBM, DOF (including BIR and BOC), COA, CSC, and DILG will be at the forefront of activities aimed at increasing transparency and intensifying participatory governance, while the CSC, DAP, OMB and COA will spearhead strengthened performance management and anti-corruption initiatives. The GGACC, created under EO 43 of 2011, will coordinate and oversee the implementation of these strategies. On the other hand, activities relating to strengthened rule of law will be led by the DOJ, NBI, and the judiciary. The JSCC will be utilized as a collaborative mechanism to implement the justice sector agenda and partnership roadmap towards strengthened rule of law. To gauge performance on the above strategies, RMs have been prepared separately that contain worldwide indicators and indices for good governance and rule of law, like the WGI and OBI as well as NGA targets/indicators. Table 7.9 presents the annual target indicators of the outcomes and strategies from 2013 to 2016. Good governance and the rule of law 173 Indicators Annual Plan targets (in %) Means of verification Agency responsible2013 2014 2015 2016 Subsector outcome A: Transparency, citizens’ participation and accountability increased Percentile rank in the WGI Voice and Accountability indicator improved >50.00 WGI Reports All agencies; NEDA (for formulation of local governance indicator system) Percentile rank in WGI Government Effectiveness indicator improved >70.00 Percentile rank in WGI Control of Corruption indicator improved >60.00 Fiscal transparency improved Proportion of NGAs and GOCCs fully complying with the Transparency Seal achieved (in %) 100 100 100 100 Agency website DBM Open Budget Index (OBI) score increased NA NA 60 60 OBI Reports DBM, DOF, COA Open data standards progressively adopted Datasets contributed by NGAs to the Open Data Portal (ODP) increased 70 N/A N/A 70 ODP statistics Open Data Task Force (DBM, PCDSPO, OPS) Access to information on local government operations improved Proportion of provinces, cities and municipalities (PCM) compliant with Full Disclosure Policy (FDP) increased (in %) DILG report on LGU compliance to FDP DILG Fully Complying 55 65 75 Complying 95 97 99 Compliance with government transparency requirements ensured Proportion of NGAs, GOCCs, and LGUs registered in the PhilGEPS increased (in %) 100 100 100 100 PhilGEPS Statistics DBM, DILG Table 7.9. Annual target indicator matrix on good governance and the rule of law, 2013-2016 174 Philippine Development Plan 2011-2016 MIDTERM UPDATE Indicators Annual Plan targets (in %) Means of verification Agency responsible2013 2014 2015 2016 Citizenry fully engaged and empowered NGAs entering into Budget Partnership Agreements (BPAs) with CSOs increased 12 18 24 BPA Copies DBM, selected agencies GOCCs entering into BPAs with CSOs increased 6 9 12 DBM, selected GOCCs Cities and municipalities with Local Poverty Reduction Action Plans increased 1,266 90% of 1,634 90% of 1,634 Agency Reports DILG, DSWD, NAPC, NEDA Cities with Citizen Satisfaction Survey increased 35 52 35 122 Citizen Satisfaction Index Report DILG Public Financial Management (PFM) improved Proportion of LGUs assessed that are compliant with set PFM standards (in %) 50 60 65 PFMAT Results DBM Performance monitoring, evaluation, reporting and incentive systems improved Proportion of government agencies participating in the performance based incentive system (PBIS) increased 100% 100% 100% 100% PBIS Report Inter-Agency TF for AO 25/ DAP Agencies with approved Strategic Performance Management System (SPMS) increased 747 (30%) 2,366 (95%) CSC Audit Reports CSC Agencies with functional SPMS increased (in %) 85% of approved SPMS in 2012 and 2013 90% of approved SPMS in 2014 PCMs conferred with the Seal of Good Local Governance (SGLG) increased all qualified PCMs all qualified PCMs all qualified PCMs Report on LGUs conferred with SGLG (for 2014 onwards) DILGPercentage of qualified Provinces, Cities and Municipalities (PCMs) provided with the Performance Challenge Fund (PCF) subsidy 40% of qualified PCMs 20% of qualified PCMs 20% of qualified PCMs Agency Report on PCF Note: Provision of PCF subsidy to qualified PCMs is dependent on the budget provided by DBM Good governance and the rule of law 175 Indicators Annual Plan targets (in %) Means of verification Agency responsible2013 2014 2015 2016 Efficiency and competence of public service improved Offices with ISO 9001 Certified QMS increased 195 230 270 315 Official agency reports GQMC/DAP Senior executives and middle managers capacitated in the Public Management Development Program increased 202 300 395 495 NGCESDP Committee/ DAP Business processes and frontline services streamlined High-density service offices passing the Anti Red Tape Act (ARTA) Report Card Survey (RCS) increased (in %) 85 95 98 98 Annual ARTA-RCS Report CSC Subsector outcome B: Rule of law strengthened Percentile rank in the WGI-Rule of Law indicator improved >60.00 WGI Reports All agencies; NEDA (for formulation of local governance indicator system) Percentile rank in WGI Regulatory Quality indicator improved >70.00 Administration of justice improved Proportion of backlogs (investigations/ cases beyond the maximum prescribed periods) reduced (in %) NBI investigation 15 15 15 15 Official agency reports NBI DOJ prosecutor investigation 45 40 35 30 DOJ Proper Percent reduction in case backlog (Backlog clearing rate) 0 5% 5% 5% Court reports Judiciary Courts with rolled out continuous trial increased (partial coverage) 0 30 30 30 Installation reports Judiciary Courts with rolled-out e-courts system increased 58 80 90 80 Courts with rolled-out e-subpoena system (partial coverage) increased 0 31 31 33 176 Philippine Development Plan 2011-2016 MIDTERM UPDATE Indicators Annual Plan targets (in %) Means of verification Agency responsible2013 2014 2015 2016 No. of detainees released under the jail decongestion program increased (under E-JOW, Judgment Day, and newly issued SC Guidelines on Jail Decongestion) 1,272 5,000 BJMP Report Judiciary, BJMP DILG, DOJ Philippine Mediation Center (PMC) offices for promotion of Alternative Dispute Resolution increased 116 4 4 4 Installation reports Judiciary, Philippine Mediation Center Economic justice enhanced Cases filed under the Run After Tax Evaders (RATE) Program increased 36 36 36 108 from 2013 to 2015 Internal reports BIR, DOJ Cases filed under the Run After The Smugglers (RATS) Program increased 24 24 24 72 from 2013 to 2015 BOC, DOJ Peace and security 177 8Peaceand security 178 Philippine Development Plan 2011-2016 MIDTERM UPDATE Despite challenges confronting the peace process, the Philippines has made significant strides in resolving armed conflict, due largely to the commitment of the Aquino administration to pursue peaceful political settlements with armed groups. The government intends to sustain these gains by continuing the strategy of negotiated political settlement alongside a determined and deliberate complementary track that mitigates the impact of armed hostilities to affected communities. This chapter elaborates on this agenda. This chapter likewise tackles security concerns that threaten the integrity of the state—both internally and territorially—and issues of criminality and armed violence perpetrated by private armed groups, as well as transnational security issues such as terrorism, trafficking in persons, illegal arms and drugs smuggling, and cybercrime. It also elucidates on the government’s agenda of a rules-based collective security framework in international relations to ensure the country’s sovereignty over its territories and build capabilities and preparedness against disasters and emergencies to protect lives and properties. II. ASSESSMENT, CHALLENGES AND OPPORTUNITIES The government has been determined to overcome hurdles and take advantage of opportunities for winning the peace and ensuring national security. Such determination has yielded positive results in various fronts, even as government continues to face challenges especially in rebuilding and strengthening legitimate and capable institutions that stakeholders can trust so that development initiatives can move faster. I. INTRODUCTION Human security is the ultimate aim of national security. A politically stable and secure nation is necessary to achieve development and improve the collective welfare. This chapter presents the government’s strategies to achieve the twin goals of peace and security. Figure 8.1 illustrates these twin strategies, namely: (a) the peace process, which seeks to enable communities in areas affected by and vulnerable to armed conflict to return to peaceful conditions where they can achieve their desired quality of life; and (b) the preservation of a safe and secure environment free from criminality and threats to the country’s sovereignty and territorial integrity. Peace and security 179 Figure 8.1. Results and strategic framework on peace and security Goals Intermediate goals Subsector outcomes Intermediate outcomes Strategies Poverty in multiple dimensions reduced and massive quality employment created Rapid and sustained economic growth achieved Equal development opportunities achieved Communities in areas affected by and vulnerable to armed conflict return to peaceful conditions where they can achieve their desired quality of life Negotiated political settlements of all internal armed conflicts completed Winning the peace Ensuring national security Causes and impacts of all internal armed conflicts and other issues that affect the peace process effectively addresed Capability to uphold severeignty and territorial integrity improved Highest standard of capability and preparedness against disasters and emergencies attained Security sectors reforms implemented Internal stability sustained Safer and more secure environment conducive to national development created and sustained Sector outcome Stable nationalsecurity achieved Winning the peace Peace negotiations The following presents the progress of peace negotiations with armed groups. Moro Islamic Liberation Front (MILF) A breakthrough in the peace process was achieved with the signing of the Framework Agreement on the Bangsamoro (FAB) between the government of the Philippines (GPH) and the MILF. Comprising the Comprehensive Peace Agreements are the FAB and four Annexes, namely the Annexes on Transitional Modalities, on Wealth and Revenue Sharing, and on Power Sharing, and on Normalization. The Annex on Normalization is expected to be signed by early 2014. The Transition Commission has been convened to translate the FAB and the Annexes into a proposed Bangsamoro Basic Law (BBL), which will be submitted to Congress in time for the target 2014 legislation of said BBL. 180 Philippine Development Plan 2011-2016 MIDTERM UPDATE Complementary to this was the 2012 launching of “Sajahatra Bangsamoro,” a program conceived by both GPH and MILF to bring health, education and other socioeconomic projects to MILF communities. Enacting the BBL will require strong political will from leaders, utmost vigilance from people and demonstration of the principle of inclusiveness, to eliminate new conflict and grievances. Legitimate institutions need to be built, reformed and strengthened to increase citizens’ participation, guard against interests that are inimical to socioeconomic and political empowerment, and guarantee inclusive development. Moro National Liberation Front (MNLF) The conduct of the Tripartite Implementation Review addressed the issues on the full implementation of the 1996 Final Peace Agreement between the GPH and the MNLF. An inclusive framework has been pushed to ensure governance reforms and implementation of the Peace Agreement. Communist Party of the Philippines/New People’s Army/National Democratic Front (CPP/NPA/NDF) The resumption of talks in 2011 broke the seven-year impasse on negotiations with the CPP/NPA/NDF. The longest ceasefire in the history of this peace process was observed with minimum level of hostilities from both sides for almost four weeks. However, talks encountered a major roadblock due to conditions and issues raised by the NDF. The major challenge, therefore, is to pursue a time-bound, agenda based framework that will end the 27-year peace negotiations and finally bring peace to the affected communities. Cordillera Bodong Administration/Cordillera People’s Liberation Army (CBA/CPLA) The signing of the Closure Memorandum of Agreement between the GPH and the CBA/CPLA in July 2011 was another milestone. The Agreement facilitated the immediate implementation of socioeconomic programs in the Cordilleras and started the disposition of arms and forces of said group. The CBA/CPLA has transformed itself into a civilian socioeconomic group, which registered itself with the Securities and Exchange Commission under the name Cordillera Forum for Peace and Development, Inc. Rebolusyonaryong Partidong Manggagawang Pilipinas/Revolutionary Proletarian Army/Alex Boncayao Brigade (RPM-P/RPA/ABB) A Closure Agreement with the Tabara Paduano Group of the RPM-P/ RPA/ABB is expected to be signed and implemented soon. This includes the disposition of arms and forces and provision of socioeconomic support and development projects to identified communities in Negros and Panay. The peace process with the Nilo dela Cruz faction, however, did not progress mainly due to internal dynamics within the group on their authorized representative. Peace and security 181 Complementary track The complementary track facilitates positive sociopolitical conditions that support peace negotiations and operates under three general themes: (a) building community resilience against armed violence; (b) strengthening institutions; and (c) mainstreaming conflict-sensitive, peace-building and gender-sensitive lens in governance. The themes are meant to remove structural roadblocks hampering the approximation of human security goals in conflict-affected areas. Building community resilience against armed violence The “Payapa at Masaganang Pamayanan” or PAMANA is the national government’s focused development program for isolated, hard-to-reach, and conflict-affected communities (Table 8.1). From 2010 to 2013, PAMANA has a total allotment of PhP9.85 billion and served 414 municipalities in 44 provinces and five chartered cities. Another development initiative is the PhP8.5-billion Autonomous Region in Muslim Mindanao Transition Investment Support Program (ARMM-TISP) that addresses infrastructure and support-services gaps in the region. Table 8.1. PAMANA geographical zones Peace proccess line Areas Bangsamoro (MNLF/MILF) Central Mindanao: Lanao del Norte, North Cotabato, Sultan Kudarat, Sarangani, South Cotabato, Maguindanao and Lanao del Sur ZamBaSulTa: Zamboanga del Norte, Zamboanga del Sur, Zamboanga Sibugay, Basilan, Sulu and Tawi-Tawi CPP/NPA/NDF Bicol-Quezon-Mindoro: Sorsogon, Camarines Norte, Masbate, Quezon and Oriental Mindoro Samar Island: Northern Samar, Eastern Samar and Samar Davao-Compostela Valley-CARAGA Corridor: Davao Oriental, Davao del Sur, Davao del Norte, Compostela Valley, Agusan del Sur, Agusan del Norte, Surigao del Norte and Surigao del Sur Closure agreements Cordillera Administrative Region: areas identified by the CBA-CPLA Negros-Panay: Areas in Negros Occidental, Negros Oriental, Aklan, Iloilo, Antique identified by RPMP/RPA/ABB-TPG 182 Philippine Development Plan 2011-2016 MIDTERM UPDATE As of June 2013, the government identified 5,873 PAMANA projects81 on shelter assistance for internally displaced persons (IDPs), social protection, community driven development, agriculture, road infrastructure, and natural resource management. Of these, 998 (17%) have been completed, 987 (17%) are currently being implemented, and 3,876 (66%) are in the preparatory stage involving consultations and capacity building among national government agencies, local government units (LGUs) and communities. Strengthening institutions As support to ARMM for development and reconstruction increased, the government instituted reforms in the region to promote accountability of regional and LGU officials. The postponement of the 2011 ARMM elections and designation of an interim Governor ensured that reforms in the infancy stage are not reversed. Said move provided more time to facilitate an improved electoral process in the 2013 mid-term elections. In promoting and protecting human rights, the government enacted Republic Act (RA) 10353 in 2012 that criminalizes enforced disappearances. Other steps to deter extra-legal killings include: (a) the issuance of Administrative Order 5 creating a high-level interagency committee that assists in the speedy resolution of cases on extra-legal killings, enforced disappearances and torture; (b) adoption of Joint Operational Guidelines by the Department of Justice (DOJ) and the Philippine National Police (PNP) on investigating cases on extra-legal killings; and (c) institution of mechanisms involving human rights groups and major stakeholders in promoting and protecting human rights. Major strides have also been made in ensuring women’s participation in the peace process, with the National Steering Committee on Women, Peace and Security taking the lead. In fact, women hold key positions as presidential peace adviser and members of peace negotiating panels, technical working groups and the Bangsamoro Transition Commission. Greater efforts are exerted to empower women at the grassroots level to participate in local conflict resolution, peace building and post-conflict rehabilitation. There is also a need to strengthen the capabilities and skills of security forces and service delivery agents to respond to sexual and gender-based violence in affected areas, and be able to provide victims with appropriate support. To protect children from grave violations in situations of armed conflict, the government established the Monitoring, Reporting and Response System (MRRS) through Executive Order (EO) 138 in 2013. It also developed the MRRS protocol, conducted trainings in conflict-affected provinces in response to related United Nations (UN) Security Council resolutions, and issued guidelines to the Armed Forces of the Philippines (AFP) on the conduct of activities in schools or hospitals. 81 RPM-P/RPA/ABB Closure projects are not included since these are still subject to the Closure Agreement. Peace and security 183 Mainstreaming conflict-sensitive, peace-building, gender-sensitive lens The government conducted capacity-development programs to enhance the agencies and LGUs’ sensitivity and responsiveness to peace and gender issues in conflict and post-conflict situations, as well as to integrate gender and conflict perspectives in policies, programs and processes in areas affected by and vulnerable to conflict. In 2012, the Localization of the National Action Plan (NAP) on Women, Peace and Security was piloted in the ARMM, which led to the integration of programs addressing gender and conflict issues in ARMM provincial plans. Ensuring national security Internal stability The following are the accomplishments on ensuring the country’s internal stability. Reducing strength of insurgency The AFP Internal Peace and Security Plan (IPSP)-Bayanihan launched in January 2011 proved to be effective in stabilizing security in communities affected by armed conflict. For the last three years, insurgency-initiated violence in communities affected by armed conflict was significantly reduced, thus facilitating a more accelerated development in these areas. The IPSP-Bayanihan’s community and people-centered approach facilitated stronger convergence of development and security interventions in these communities. Meanwhile, former rebels who signed peace agreements have also disposed of their firearms and transformed their organizations into socioeconomic groups. Intensifying law enforcement Crime volume significantly decreased by 32 percent from 2010 to 2012.82 Likewise, crime solution efficiency rate, or the proportion of solved cases against reported incidents, increased from 19 percent in 2010 to 37 percent in 2012. This is due to intensified police operations, increased police presence in crime-prone areas, protection of vital installations, enhanced peacekeeping programs with community cooperation, organized police volunteer auxiliary force, and increased immediate reporting of crimes. Though the police-to-population ratio improved from 1:716 in 2010 to 1:651 in 2012, it is still way below the standard requirement of 1:500 needed to effectively respond to crimes. 82 Data on crime volume and crime efficiency from 2010 to 2012 considered only crimes reported to the PNP. Starting 2013, the PNP rectified these statistics to include those reported to the barangays and other law enforcement agencies. 184 Philippine Development Plan 2011-2016 MIDTERM UPDATE Expediting investigations, resolution of criminal cases As of 2012, 83 percent of National Bureau of Investigation (NBI) investigations were completed within the maximum prescribed period. Prosecutor investigation backlogs decreased from about 60 percent in 2010 to 49 percent in 2012, and disposition rate increased from 75 to 77 percent for the same period. The NBI established a new crime/forensic laboratory in Cebu City and planned to establish similar laboratories in Mindanao and Northern Luzon to augment the lone facility in Manila. Correctional facilities also posted a decrease in the re-offender rate in the last three years. Several critical laws against criminal acts were enacted for the past three years, including (a) the Terrorism Financing Prevention and Suppression Act of 2012 (RA 10168); (b) Amendments to the Anti-money Laundering Act (RA 10365); (c) the Bureau of Corrections Act (RA 10575); and (d) the Comprehensive Firearms and Ammunition Regulation Act (RA 10591). Addressing cyber security as an emerging critical area Given the prevalent use of information and communications technology (ICT) in governance, business and social interaction, ICT infrastructures have become vulnerable to cyber attacks. The Cybercrime Prevention Act (RA 10175) defines and penalizes cybercrimes, such as illegal access, fraud, identity theft, and child pornography, and establishes enforcement mechanisms. Sovereignty and territorial integrity The Philippines continued to protect its sovereignty and territorial integrity through various approaches, as discussed below. Upholding sovereignty, territorial integrity Amidst increasing tension in the West Philippine Sea, the government advocated a rules-based management to resolve disputes in accordance with international law, specifically the UN Convention on the Law of the Sea (UNCLOS). After exhausting all possible diplomatic measures, the Philippines formally initiated arbitral proceedings in 2013 to challenge China’s nine-dash line claim to almost the entire South China and West Philippine Seas and to desist from their activities that violate the Philippines’ sovereign rights and jurisdiction. The President of the International Tribunal of the Laws of the Sea already established a five member arbitral tribunal despite China’s refusal to participate in the process. The international community also recognized and supported the Philippines’ move in peacefully settling the disputes. In April 2012, the UN Commission on the Limits of the Continental Shelf confirmed the Philippines’ claim for an extended continental shelf in the Benham Rise region. The country obtained an additional seabed area of 135,506 square kilometers, an area larger than Luzon, for exploration and exploitation. Also, the Peace and security 185 government created an interagency task force to coordinate relevant agencies and LGUs in the protection of the country’s oil reserves, especially in the West Philippine Sea. Strengthening international relations The country engaged its international partners towards a stronger collective security posture in the region. It signed 26 bilateral agreements and acceded to 13 multilateral agreements on political, security and defense matters. Protecting Filipino nationals abroad Since 2010, the government has assisted over 30,000 overseas Filipinos (OFs) through its various embassies and consulates and provided legal assistance to more than 1,900 OF workers, including those with pending cases as well as victims of human trafficking. Also, the country arranged for the repatriation of over 44,000 OFs in identified hotspots worldwide from 2011 to 2012 and deployed Rapid Response Teams to facilitate repatriation and consular assistance. Enhancing border security To enhance the country’s border security, a Border Crossing Coordination Office was established in immigration field offices and an initial fund was appropriated in 2013 for setting up an automated border control system for the Bureau of Immigration (BI). The challenge, however, remains in the enforcement of immigration laws, particularly in detecting and monitoring immigration violations, and the difficulty of locating overstaying and illegal aliens due to inadequate coordination and data sharing system. After being in the Tier 2 Watch List83 from 2009 to 2010, the Philippines’ status was upgraded to Tier 2 in the US State Department’s 2011 Trafficking of Persons Report. Though it retained its Tier 2 status in 2012, the country still falls short in convicting illegal recruiters. RA 10364 expands the Anti-Trafficking in Persons Act and gives special attention to women and children through additional protection and support. Upgrading security capability The Revised AFP Modernization Act (RA 10349) extends the military modernization program to another 15 years to boost the AFP’s defense capability program and move closer to achieving a minimum credible defense posture against external threats. Furthermore, the creation of the National Coast Watch System through EO 57 in 2011 expanded the scope of the Coast Watch South from Southern Philippines to the entire Philippine archipelago. This, along with the acquisition of modern equipment, strengthened patrol coverage and naval presence in the West Philippine Sea, thus improving monitoring and apprehension of foreign vessels poaching within the country’s exclusive economic zone. 83 Countries that need special supervision due to high number of victims and that did not increase efforts against human trafficking 186 Philippine Development Plan 2011-2016 MIDTERM UPDATE Capability and preparedness against natural disasters and emergencies Given the country’s vulnerability to natural disasters, the government strengthened its disaster preparedness and response operations by upgrading capability and response skills and conducting reorientation of its forces down to the local level. The President issued EO 82 in 2013, which operationalized the Core Manual on National Crisis Management and established the Incident Command System throughout the country. This harmonizes and integrates all government efforts in crisis management. Security sector reforms Through the IPSP-Bayanihan, the AFP created a human rights office that coordinates and monitors human rights cases up to the level of military squad units. This resulted in the significant decrease in human rights cases against the military and prompt action against human rights violators within its ranks. On the other hand, the PNP established a Human Rights-based Policing Committee, a high-level policy and advisory body addressing human rights issues, as well as the Human Rights Desks in all its stations. Moreover, the PNP has also created Women and Children’s Protection desk in all its stations. The AFP and the PNP also instituted the Joint Peace and Security Coordinating Committee ( JPSCC) in the operational-tactical levels to address the issue of security convergence on the ground. The IPSP-Bayanihan set up stronger transparency and accountability mechanisms in the military, such as stronger check on the bids and awards committee and an oversight system on its operations through the civil society network Bantay Bayanihan. In the 2013 elections, the military maintained a strong non-partisan stance. The Department of National Defense’s (DND) Philippine Defense Reform and the Philippine Defense Transformation Programs and the PNP’s Integrated Transformation Program Performance Governance System (ITP-PGS) are other initiatives meant to achieve the highest standards of personnel integrity and professional competence in the security sector. The ITP-PGS was already cascaded to all PNP units, with each member of the police force now expected to produce a scorecard that serves as the “social contract” between the PNP institutions and the members of its police force. The Department of the Interior and Local Government (DILG) recently purchased 74,879 short firearms to meet the standard 1:1 police-firearm ratio. The PNP, likewise, instituted measures to increase the number of police on the ground by unloading police officers of administrative work. Peace and security 187 III. STRATEGIC FRAMEWORK Consistent with the overall goal of human security and inclusive development, peace and security efforts will be anchored on a whole-of-society approach by creating a national consensus and understanding of security and deepening of commitment and involvement towards peace building. The approach’s human security framework places people’s welfare at the center of operations and promotes local security and safety based on the needs and realities of communities. This chapter’s strategic framework has six intermediate outcomes, as shown in the previous Figure 8.1. These outcomes include: (a) the achievement of negotiated political settlements of all internal armed conflicts; (b) effective interventions to address the causes and impacts of all internal armed conflicts and other issues affecting the peace process; (c) sustained internal stability; (d) assured capability to uphold state sovereignty and territorial integrity; (e) attainment of the highest standard of capability and preparedness against disasters and emergencies; and (f ) implemented security sector reforms. The strategic framework will be guided by the principles of primacy of the people’s welfare; respect, promotion and protection of human rights; acceptance of social diversity and cultural inclusivity; and promotion of a culture of peace and gender sensitivity. Strategies on subsector outcome A: Winning the peace The government aims to significantly increase the number of communities in conflict-affected areas that are able to return to peaceful conditions where they can achieve their desired quality of life. Strategies and programs to win the peace will follow two tracks: pursuing negotiated political settlement of internal armed conflict; and effectively addressing the causes and impacts of internal armed conflicts and other issues affecting the peace process. Intermediate outcome 1: Negotiated political settlements of all internal armed conflicts achieved Table 8.2 presents the revalidated RM on subsector outcome A, as well as intermediate outcome 1, which is the achievement of negotiated political settlements of all internal armed conflicts. 188 Philippine Development Plan 2011-2016 MIDTERM UPDATE Indicators Baseline End-of-Plan target (2016) Subsector outcome A: Communities in areas affected by and vulnerable to armed conflict return to peaceful conditions where they can achieve their desired quality of life Level of armed hostilities and other forms of violent incidents involving the following armed rebel groups significantly decreased Armed encounters between GPH and MILF decreased 14 (2010) 0 Armed encounters between GPH and CPP/ NPA/NDF84 significantly decreased 297 (2010) Significantly decreased Intermediate outcome 1: Negotiated political settlements of all internal armed conflicts achieved Comprehensive Peace Agreement between GPH and MILF signed and implemented Declaration of Continuity for Peace Negotiation between GPH and MILF signed (2010) GPH-MILF Comprehensive Peace Agreement signed and implemented85 GPH-MNLF Final Peace Agreement implementation satisfactorily completed86 Agreements reached during the Tripartite Implementation Review of the GPH-MNLF 1996 Final Peace Accord (2011) GPH-MNLF Final Peace Agreement implementation satisfactorily completed Political settlement with CPP/NPA/NDF forged Peace talks at impasse since 2004 (2010) Political settlement with CPP/ NPA/NDF forged89 Closure Memorandum of Agreement (MOA) between GPH and CBA-CPLA fully implemented GPH-CBA-CPLA Joint Declaration of Commitment for Peace signed (2011) Closure MOA fully implemented90 Table 8.2. Revalidated results matrix (RM) on subsector outcome A and intermediate outcome 1 of peace and security 84 Based on AFP data estimates on NPA-initiated violent incidents involving guerilla operations 85 Bangsamoro Government established 86 Based on resolution issued by MNLF or OIC affirming the satisfactory implementation of the 1996 Final Peace Agreement 87 This includes the following: (a) Amendatory bill to RA 9054 drafted based on the common proposals and common grounds of the GPH and MNLF signed by both parties; (b) Terms of Reference on Bangsamoro Development Assistance Fund and Tripartite Implementation Monitoring Committee agreed upon during the meetings of the Expert Working Groups composed of representatives 88 This includes the following: (a) MNLF Legislative Agenda included in the draft Bangsamoro Basic Law; (b) MNLF represented in the Bangsamoro Transition Authority; and (c) MNLF participating in the Bangsamoro Government 89 Level of armed violence lowered, if not ended, leading to the closure of the armed conflict 90 Closure MOA fully implemented (CBA-CPLA and RPM-P/RPA/ABB) Peace and security 189 Indicators Baseline End-of-Plan target (2016) Closure MOA with Tabara Paduano Group (TPG) of RPM-P/RPA/ABB signed and fully implemented Formulation of closure MOA with TPG of RPM-P/ RPA/ABB ongoing (2011) Closure MOA between GPH and TPG of RPM-P/ RPA/ABB signed and fully implemented Members of Nilo Dela Cruz Group (NDCG) of RPM-P/ RPA/ABB mainstreamed as productive and peaceful members of their receiving communities Formulation of closure MOA with TPG of RPM-P/ RPA/ABB ongoing (2011) Members of NDCG of RPM-P/RPA/ABB mainstreamed as productive and peaceful members of their receiving communities Percentage of former rebels and their families who are enrolled in reintegration programs are mainstreamed as productive and peaceful members of their receiving communities91 Formulation of reintegration programs for the different peace tables ongoing (2011) 100% of former rebels and their families who are enrolled in reintegration programs are mainstreamed as productive and peaceful members of their receiving communities 91 A Former Rebel Information System (FRIS) is currently being developed as a means to monitor this specific indicator. Completion and implementation of the Comprehensive Peace Agreement with the MILF will lead to the enactment of the Bangsamoro Basic Law that will establish an all-inclusive Bangsamoro Government in 2016. The Transition Commission will complete the draft Law by 2014. Other milestones include the setting up of the Bangsamoro Transition Authority and the establishment of the Bangsamoro Government in time for the 2016 elections. Within the Plan period, the government also targets the following: (a) final completion of the Tripartite Implementation Review Process and inclusion of the MNLF legislative agenda into the Bangsamoro Basic Law; (b) the resumption of time-bound and agenda-based talks with the CPP/NPA/NDF; (c) completion of signed final closure agreements with the CBA-CPLA and RPM-P/RPA/ABB; and (d) the final disposition of arms of said groups and mainstreaming of former rebels as productive members of society, in accordance with peace agreements. Intermediate outcome 2: Causes and impacts of all internal armed conflicts and other issues that affect the peace process effectively addressed Table 8.3 shows the revalidated RM on effectively addressing the causes and impacts of all internal armed conflicts and other issues affecting the peace process. 190 Philippine Development Plan 2011-2016 MIDTERM UPDATE Indicators Baseline End-of-Plan target (2016) Intermediate outcome 2: Causes and impacts of all internal armed conflicts and other issues that affect the peace process effectively addressed Access to the following basic social services improved in provinces92 with communities affected by and vulnerable to armed conflict: Net enrolment rate in primary education increased 88.16% (SY 2010-2011)93 99%94 Net enrolment rate in secondary education increased 53.90% (SY 2010-2011) 71%95 Percentage of households with access to improved safe water supply increased 77.17% (2011)96 88%97 Institutions in communities affected by and vulnerable to armed conflict strengthened Number of Transparency and Accountability Mechanisms fully operational in PAMANA implementation increased Mechanism framework for conflict-affected areas drafted (2011) 5 Transparency and Accountability Mechanisms98 fully operational in PAMANA areas Mechanisms to address grave human rights violations established and implemented Task force against political violence created (AO 211, s. 2007); RA 9745, Anti-Torture Act, signed (2010) Legal framework and enforcement procedures on grave human rights violations strengthened Monitoring, Reporting and Response System (MRRS) to address grave child rights violations in situations of armed conflict established and operational No MRRS established (2010) MRRS fully operational with enhanced CIAC Program Framework Number of fully recognized Certificates of Ancestral Domain Title (CADT) issued to indigenous peoples through PAMANA support increased Zero (2010)99 13 CADTs (Regions IV, IX, XI and XIII) Table 8.3. Revalidated results matrix (RM) on intermediate outcome 2 of peace and security 92 Including independent cities 93 Enrolment Rate for SYs 2010-2011 and 2011-2012 were computed based on the 2007 National Census on Population and Housing Net Enrolment Rate - Total number of pupils/students of the official school age group who are at primary or secondary education levels, expressed as a percentage of the primary population 94 End of Plan target is 2016 national target for adjusted net enrolment rate based on two-year threshold for overage children 95 End of Plan target is 2016 national target for net enrolment rate 96 From the DOH-Field Health Information System (FHSIS) 97 National target 98 (a) Third party monitoring; (b) Web posting; (c) Project and community billboards; (d) Performance-based fund releases; and (d) Grievance Redress System 99 PAMANA launched as national convergence program and framework for peace and development in 2011 Peace and security 191 Indicators Baseline End-of-Plan target (2016) Mechanism100 for monitoring and addressing IP rights violations established and operational Mechanism for alternative dispute resolution in place: participatory monitoring and actual handling of reported incidences/ cases (2010) Mechanism for monitoring and addressing IP rights violations established and operational Gender-responsive and conflict-sensitive policies / programs / support services for women and children in conflict situations identified and mainstreamed in national government agencies and LGUs in PAMANA provinces National Action Plan (NAP) on Women, Peace and Security drafted (2010) Gender-responsive and conflict-sensitive policies / programs / support services for women and children in conflict situations identified and mainstreamed in 17 national government agencies and local government units in 43 PAMANA provinces Conflict-sensitive, peace-building and gender-sensitive lens in governance mainstreamed: Percentage of agency programs related to the peace process capacitated on conflict sensitive planning, implementation and monitoring and evaluation increased Zero (2010)101 100% (4 out of 4 national government agencies: DILG, Departments of Social Welfare and Development or DSWD, Agriculture or DA, and Environment and Natural Resources or DENR) Percentage of provinces with communities affected by and vulnerable to armed conflict equipped with tools and processes for conflict sensitive, peace-promoting and gender-responsive planning and programming increased Zero (2010) 100% (43 out of 43 provinces) 100 Quick Response Team for Indigenous Peoples Human Rights Violations capacitated and institutionalized in all Indigenous Peoples ethnographic regions 101 PAMANA launched as national convergence program and framework for peace and development in 2011 Promoting greater convergence in the implementation of the PAMANA PAMANA will remain as the flagship development program in areas affected by conflict, but with greater convergence with other existing government programs and LGU plans. All PAMANA interventions will ensure synergy and avoid duplication with the DILG’s Bottom-up Budgeting Approach, Seal of Good Housekeeping and SALINTUBIG programs, and the Department of Energy’s (DOE) Barangay Electrification and Sitio Electrification Project. Water, road and electrification projects will be implemented according to criteria and standards 192 Philippine Development Plan 2011-2016 MIDTERM UPDATE set by lead government agencies and with strong conflict-sensitive and peace promoting processes. All PAMANA implementing partners will be continuously capacitated in order to ensure that PAMANA implementation helps mitigate existing causes of conflict and prevent the occurrence of new ones. Strengthening institutions The government will continue to strengthen reforms initiated when the interim ARMM Governor took office in 2012, as well as accelerate the delivery of basic services to catch up with the attainment of the Millennium Development Goals (see Chapter 6: Social development). The current ARMM government will accomplish these to provide a better baseline of governance and development once the Bangsamoro Basic Law becomes a reality. Gender-related provisions in the FAB will be translated into concrete programs for Bangsamoro women. There will also be stronger support in implementing the NAP on related UN Security Council resolutions to increase women participation and incorporate gender perspectives in all peace-building and development efforts. The government will also continue implementing the MRRS and enhance the comprehensive program framework for the protection of children in situations of armed conflict. The government will also support indigenous peoples’ (IPs) agenda by: (a) professionalizing the service bureaucracy; (b) strengthening processes towards full recognition of certificates of ancestral domain titles; (c) establishing mechanisms to protect IP rights; (d) complying with the International Convention on the Elimination of All Forms of Racial Discrimination and the Convention of the Rights of the Child; and (e) ratifying International Labour Organization (ILO) Convention No. 169, or the Convention on Indigenous and Tribal Peoples. Conscious efforts to forge multi-sectoral and multi-stakeholder partnerships will be pursued to further strengthen mechanisms to end impunity, enforced disappearances, torture and other grave human rights violations. Strong support will be provided to ARMM and the National Commission on Muslim Filipinos towards the development of the Halal industry (see Chapter 3: Competitive and innovative industry and services sectors), institutionalization of the Hajj Management system, establishment of a framework for Islamic finance and strengthening the Shari’ah Courts System. The government will pursue efforts to rationalize land use policies (see Chapters 4: Competitive and sustainable agriculture and fisheries sector; 9: Sustainable and climate-resilient environment and natural resources; and 10: Accelerating infrastructure development), since armed conflicts are largely rooted in long-standing disputes over land and resources. Peace and security 193 Strategies on subsector outcome B: Ensuring national security The government aims to significantly reduce criminality, uphold sovereignty, and ensure protection of its people, thus, creating a safer and more secure environment conducive to national development. Table 8.4 shows the revalidated RM of intermediate outcomes under peace and security’s subsector outcome B. Indicators Baseline End-of-Plan target (2016) Intermediate outcome 3: Internal stability sustained Number of provinces free from armed conflict increased 52 80 Crime volume reduced102 1,020,324 (2013) 743,817 Crime Solution Efficiency rate103 improved annually 27.76% (2013) 38.26% Backlogs in NBI criminal investigation cases reduced 24% (2011) 15% Backlogs in DOJ prosecution investigation cases reduced 53.6% (2011) 30% Re-offender rate in national prisons reduced 25% (2011) 20% Intermediate outcome 4: Capability to uphold sovereignty and territorial integrity assured Status in the US State Department’s Trafficking in Persons Report improved Tier 2 watch list Tier 1 Intermediate outcome 5: Highest standard of capability and preparedness against disasters and emergencies attained Number of provinces with all of its cities and majority of its municipalities having functional and empowered Local Disaster Risk Reduction and Management Office increased 20 (2013) 80 Table 8.4. Revalidated results matrix (RM) on subsector outcome B and intermediate outcomes 3, 4 and 5 of peace and security 102 For indicators on crime volume and crime solution efficiency, the rectified crime statistics in 2013 will be used as the new baseline data, which reflect not only those reported to the PNP but also those reported to the barangays and other law enforcement agencies. 103 Crime Solution Efficiency – percentage of solved cases out of the total number of crime incidents handled by law enforcement agencies for a given time; Solved Cases – A case shall be considered solved when the following elements concur: (a) the offender has been identified; (b) there is sufficient evident to charge the offender; (c) the offender has been taken into custody; and (d) the offender has been charged before the prosecutor’s office or court of appropriate jurisdiction. 194 Philippine Development Plan 2011-2016 MIDTERM UPDATE Strategies and programs to ensure national security are expected to contribute to four intermediate outcomes: (a) internal stability sustained; (b) capability to uphold sovereignty and territorial integrity of the stated assured; (c) highest standard of capability and preparedness against disasters and emergencies achieved; and (d) security sector reforms implemented. Intermediate outcome 3: Internal stability sustained To reduce the incidence of armed conflict, the government will pursue interagency cooperation through the IPSP-Bayanihan and support civilian agencies in law enforcement and development in conflict areas. The government will also intensify police and other law enforcement agencies’ operations by: • Increasing police presence in crime-prone areas and strategic locations through recruitment of additional uniformed personnel, provision of complete mission essential equipment and construction of additional police stations; • Strengthening police and community partnerships; • Intensifying law enforcement interventions against organized crime groups; • Improving crime investigation, prosecution, and resolution by upgrading crime investigation facilities and equipment, providing additional forensic laboratories in Baguio and Davao, and augmenting personnel augmentation; • Formulating a modern Criminal Code responsive to new laws, current social conditions and emerging crime trends; • Implementing reforms in the justice system to address case congestion and backlogs; • Upgrading detention and corrections facilities and equipment to improve security, living conditions and rehabilitation of inmates; • Formulating a National Cyber Security Plan; strengthening enforcement mechanisms for cybercrime detection, investigation and prosecution; and forging multilateral and bilateral agreements on cyber security; and • Establishing a crime victimization survey. Intermediate outcome 4: Capability to uphold sovereignty and territorial integrity assured The Philippines will continue to secure international support and cultivate international relations in pursuing legitimate rights over the West Philippine Sea. The government will also work towards formally establishing the Philippines’ archipelagic sea lanes and maritime zones. Peace and security 195 Strengthened cooperation with external bilateral and multilateral partners will help the country address security and defense issues through capacity building and operations support in matters related to transnational crime, human assistance, disaster relief, and the protection and preservation of natural resources. Modernizing defense and security establishments will enable concerned agencies to perform the full spectrum of their roles in accordance with the comprehensive and updated definition of national security. This entails the following: • Enhancing their capability to perform all types and levels of internal and external operations, including nontraditional support to development; • Acquiring modern equipment to support territorial defense activities; • Establishing the presence of effective and competent forces in disputed areas through greater surveillance and monitoring capability; • Ensuring that maritime assets, territorial integrity, and coastal areas are protected in accordance with the Archipelagic Baselines Law (RA 9522) by upgrading air and maritime capability and expanding coverage of coast watch stations; and • Providing expedient and efficient response to maritime incidents. The government will also improve its capability on border management, surveillance and detection against lawless elements. This entails enhancement of border security through upgrading of surveillance, detection capacity and information systems to thwart the entry of foreign terrorists, human traffickers and smugglers of antisocial goods and weapons of mass destruction. The country will build up and update its database of aliens through an Alien Registration Program, as well as strengthen coordination with the International Criminal Police Organization and other intelligence/law enforcement agencies. The enactment of the new Philippine Immigration Law and Customs Modernization Act will further improve border control and management in the face of transnational crimes, migration trends, continued increase of overseas workers, and tourism development. Intermediate outcome 5: Highest standard of capability and preparedness against disasters and emergencies attained As the government builds the LGUs’ disaster management capabilities, it is also imperative to strengthen the security sector in emergency relief and rescue operations by developing its organic capability to respond to calamities and disasters. The government will transform the sector to become more dynamic, proactive, and responsive by promoting synergy among stakeholders and the communities in disaster prevention and preparation (see Chapter 9: Sustainable and climate resilient environment and natural resources). Along this line, it will secure and protect critical infrastructures, facilities and other high value assets of the public and private sector (see Chapter 10: Accelerating infrastructure development). 196 Philippine Development Plan 2011-2016 MIDTERM UPDATE Intermediate outcome 6: Security sector reforms implemented Agencies under the security sector will undergo reorganization, retooling, and reorientation to keep up with the constantly changing policy and security strategy environment. All officers, both commissioned and non-commissioned, as well as civilian employees will undergo continuing training on human rights, international law, and cultural sensitivity. The government will continue its reforms as laid out in the DND’s Philippine Defense Transformation Program and the PNP’s ITP-PGS, to rationalize and integrate security forces (government and civilian/public and private) to address threats and challenges against peace. Capacity-building efforts of LGUs in managing peace and order concerns will be supported, alongside the broadening of the peace constituency by partnering with local and national civil society groups and the private sector. Legislative agenda Sustaining a stable national security environment is crucial to deliver basic services even in the most remote areas of the country, ensure human security and ultimately attain inclusive development. With this, the government will work towards the passage of the following legislation within the Updated Plan period: Peace • Bangsamoro Basic Law, establishing the Bangsamoro political entity that will replace the existing ARMM; • Rights of IDPs Act, providing protection for IDPs during and after armed conflicts, natural calamities, aggressive implementation of development projects, and other related matters; and • Protection of children in situations of armed conflict, providing protection to children in situations of armed conflict as guaranteed under the Convention of the Rights of the Child, its Optional Protocol on the Involvement of Children in Armed Conflict and all other core human rights treaties. Security • New Criminal Code, amending/updating the old Revised Penal Code, to be more responsive to new laws, current social conditions and emerging crime trends; • Criminal Investigation Law, rationalizing the investigation of crimes and criminal complaints by integrating the functions of investigating law enforcers and prosecutors, and repealing RA 5180 that prescribes the conduct of preliminary investigation by prosecutor; • Amended Cybercrime Law, addressing legal issues on the Cybercrime Prevention Act; Peace and security 197 • Amended Witness Protection Law, strengthening the Witness Protection, Security and Benefit Program by expanding its coverage and security capability; • National Defense and Security Act, rationalizing previous enabling laws on national defense and security, from the National Defense Act of 1935 to the 1987 constitution; • Philippine Maritime Zones, providing the necessary flexibility in the enactment of subsequent laws pertinent to the rights and obligations of the Philippines over its own maritime zones in accordance with the UNCLOS; • Philippine Archipelagic Sea Lanes, establishing the Philippines’ archipelagic sea lanes as espoused in Article 53 of the UNCLOS; • New Philippine Immigration Law, amending the old immigration law to improve border control and management in the face of transnational crimes, human trafficking, migration trends, continued increase of overseas workers, and tourism development; • PNP Reorganization Plan, strengthening the PNP’s organizational and functional structures by streamlining administrative functions from the uniformed to non-uniformed personnel and maximizing various police field services in maintaining peace and rule of law; • PNP Modernization Program, outlining a five-year program on the development of its human resources, doctrine, infrastructure and facilities, and equipment acquisition and support system, over and above the annual Capability Enhancement Program; and • NBI Modernization Law, strengthening the NBI’s organization and functional structure to enhance and modernize its investigative capacity. 198 Philippine Development Plan 2011-2016 MIDTERM UPDATE IV. PLAN IMPLEMENTATION The Office of the Presidential Adviser on the Peace Process (OPAPP) is the lead agency in the peace negotiations. It also coordinates the PAMANA program, with DILG, DSWD, Departments of Health (DOH), Education (DepEd), Commission on Higher Education (CHED), DOE, DENR, National Electrification Administration (NEA), Technical Education and Skills Development Authority (TESDA), National Commission on Indigenous Peoples (NCIP), Philippine Commission on Women (PCW), Council for the Welfare of Children (CWC) and the concerned LGUs and other agencies implementing specific components. Security agencies on the other hand, such as DND, DILG, Department of Foreign Affairs and DOJ, including their support units and bureaus such as the AFP, PNP, BFP, BI, NBI, National Security Council (NSC), Philippine Coast Guard (PCG) and Bureau of Customs (BoC), are responsible for protecting the country and its people. The annual outcome targets for peace and security are shown in Table 8.5. The accomplishments for these sectors shall be reported to the NEDA Board Regional Development Committee or the Cabinet Cluster on Security, Justice and Peace. Indicators Annual Plan targets (in %) Means of verification Agency responsible2013 2014 2015 2016 Subsector outcome A: Communities in areas affected by and vulnerable to conflict return to peaceful conditions where they can achieve their desired quality of life Level of armed hostilities and other forms of violent incidents involving the following armed rebel groups significantly decreased Armed encounters between GPH and MILF decreased 0 Agency reports DND-AFP, OPAPP Armed encounters between GPH and CPP/ NPA/NDF significantly decreased Significantly decreased Significantly decreased Intermediate outcome 1: Negotiated political settlements of all internal armed conflicts achieved Comprehensive Peace Agreement between GPH and MILF signed and implemented GPH-MILF Compre hensive Peace Agreement completed with signing of four Annexes to the FAB Bangsamoro Basic Law passed Bangsamoro Transition Authority established GPH-MILF Comprehen sive Peace Agreement signed and imple mented104 Agency reports OPAPP Table 8.5. Annual target indicator matrix on peace and security, 2013-2016 104 Bangsamoro Government established Peace and security 199 Indicators Annual Plan targets (in %) Means of verification Agency responsible2013 2014 2015 2016 GPH-MNLF Final Peace Agreement implementation satisfactorily completed105 Tripartite Implemen tation Review Process completed MNLF Legislative Agenda included in the Bangsa moro Basic Law MNLF repre sented in the Bangsamoro Transition Authority GPH-MNLF Final Peace Agreement implemen tation satisfactorily completed106 Agency reports OPAPP Political settlement with CPP/NPA/NDF forged Broad-based consulta tions and liaison work with stakeholders conducted Broad-based consensus against use of armed violence achieved Broad-based consensus against use of armed violence achieved and peaceful political settlement with CPP/ NPA/ NDF forged Political settlement107 with CPP/ NPA/ NDF forged Closure Memorandum of Agreement (MOA) between GPH and CBA CPLA fully implemented Closure MOA implement ted Closure MOA fully implement ted108 Mechanisms for transformation sustained Closure MOA with Tabara Paduano Group (TPG) of RPM-P/RPA/ABB signed and fully implemented Closure MOA with TPG of RPM-P/RPA/ ABB fully implemented Closure MOA with TPG of RPM-P/RPA/ ABB fully implemented Mechanisms for transforma tion sustained 105 Based on resolution issued by MNLF or OIC affirming the satisfactory implementation of the 1996 Final Peace Agreement 106 MNLF included in the Bangsamoro Government 107 Level of armed violence lowered, if not ended, leading to the closure of the armed conflict 108 Closure MOA fully implemented (CBA-CPLA and TPG of RPM-P/RPA/ABB) 200 Philippine Development Plan 2011-2016 MIDTERM UPDATE Indicators Annual Plan targets (in %) Means of verification Agency responsible2013 2014 2015 2016 Members of Nilo Dela Cruz Group (NDCG) of RPM-P/ RPA/ABB mainstreamed as productive and peaceful members of their receiving communities Mecha nisms for continuing dialogue established Reinte gration program for NDCG of RPM-P/ RPA/ ABB developed and imple mented Members of NDCG of RPM-P/RPA/ ABB main streamed as productive and peaceful members of their receiving communities Agency reports OPAPP DILG, AFP, DENR, DSWD, PHIC, CHED, LGUs, OPAPP110 Percentage of former rebels and their families who are enrolled in reintegration programs are mainstreamed as productive and peaceful members of their receiving communities109 100% Intermediate outcome 2: Causes and impacts of all internal armed conflict and other issues that affect the peace process effectively addressed Access to the following basic social services improved in provinces111 with communities affected by and vulnerable to armed conflict: Net enrolment rate in primary education increased 96% 97% 98% 99% Agency reports DepEd, OPAPP22Net enrolment rate in secondary education increased 65% 68% 70% 71% Percentage of households with access to improved safe water supply increased 88%112 DSWD, DOH, DILG, LGUs, OPAPP22 109 A Former Rebel Information System (FRIS) is currently being developed as a means to monitor this specific indicator. 110 Act as Oversight 111 Including independent cities 112 National target Peace and security 201 Indicators Annual Plan targets (in %) Means of verification Agency responsible2013 2014 2015 2016 Institutions in communities affected by and vulnerable to conflict strengthened Number of Transparency and Accountability Mechanisms fully operational in PAMANA implementation increased 4 mechanisms 4 mechanisms 5 mechanisms 5 mechanisms113 Agency reports OPAPP, PAMANA Implementing Agencies Mechanisms to address grave human rights violations established and implemented Legal framework and enforcement procedures on grave human rights violations strengthened DOJ, CHR, DND, AFP, DILG, PNP, OPAPP Monitoring, Reporting and Response System (MRRS) to address grave child rights violations in situations of armed conflict established and operational MRRS fully operational with enhanced CIAC Program Framework CWC, DSWD Number of fully recognized Certificates of Ancestral Domain Title (CADT) issued to indigenous peoples through PAMANA support increased 5 CADTs 6 CADTs 2 CADTs in 2016, total of 13 CADTs (Regions IV, IX, XI, XIII) for the Plan Period NCIP, DENR Mechanism114 for monitoring and addressing IP rights violations established and operational Mechanism for monitoring and addressing IP rights violations established and operational NCIP 113 (a) Third party monitoring; (b) Web posting; (c) Project and community billboards; (d) Performance based fund releases; and (d) Grievance Redress System 114 Quick Response Team for Indigenous Peoples Human Rights Violations capacitated and institutionalized in all Indigenous Peoples ethnographic regions 202 Philippine Development Plan 2011-2016 MIDTERM UPDATE Indicators Annual Plan targets (in %) Means of verification Agency responsible2013 2014 2015 2016 Gender-responsive and conflict-sensitive policies/ programs/ support services for women and children in conflict situations identified and mainstreamed in national government agencies and LGUs in PAMANA provinces 11 NGAs and LGUs in 27 PAMANA provinces capacitated on the NAP 17 NGAs and LGUs in 43 PAMANA provinces integrated and implemen ted NAP policies/ programs/ services in their respective plans 17 NGAs and LGUs in 43 PAMANA provinces main streamed NAP policies/ programs/ services in their respect tive plans 17 NGAs and LGUs in 43 PAMANA provinces main streamed NAP policies/ programs/ services in their respective plans Agency reports PCW, National Steering Committee on Women, Peace and Security115 Conflict-sensitive, peace-building and gender-sensitive lens in governance mainstreamed: Percentage of agency programs related to the peace process capacitated on conflict sensitive planning, implementation and monitoring and evaluation increased 100% of agency programs related to the peace process in 2 out of 2 national government agencies: DILG and DSWD 100% of agency programs related to the peace process in 4 out of 4 national government agencies: DILG, DSWD, DA and DENR 100% of agency programs related to the peace process in 4 out of 4 national government agencies: DILG, DSWD, DA and DENR 100% of agency programs related to the peace process in 4 out of 4 national government agencies: DILG, DSWD, DA and DENR Agency reports OPAPP, DILG, DSWD, DA and DENR Percentage of provinces with communities affected by and vulnerable to armed conflict equipped with tools and processes for conflict-sensitive, peace promoting and gender responsive planning and programming increased 70% (30 out of 43 provinces) 79% (34 out of 43 provinces) 100% (43 out of 43 provinces) 100% (43 out of 43 provinces) OPAPP, PAMANA Implementing Agencies and LGUs 115 Acts as Oversight Peace and security 203 Indicators Annual Plan targets (in %) Means of verification Agency responsible2013 2014 2015 2016 Subsector outcome B: Safer and more secure environment conducive to national development created and sustained Intermediate outcome 3: Internal stability sustained Number of provinces free from armed conflict increased 59 66 73 80 Agency reports DND-AFP Crime volume reduced 1,020,324 918,292 826,463 743,817 DILG-PNPCrime Solution Efficiency rate improved annually 27.76% 31.26% 34.76% 38.26% Backlogs in NBI criminal investigation cases reduced 16% 15% 15% 15% DOJ-NBI Backlogs in DOJ prosecution investigation cases reduced 45% 40% 35% 30% DOJ Re-offender rate in national prisons reduced 23% 21% 20% 20% DOJ-BuCor Intermediate outcome 4: Capability to uphold sovereignty and territorial integrity assured Status in the US State Department’s Trafficking in Persons Report improved Tier 2 Status Tier 1 Status Tier 1 Status Tier 1 Status US State Department’s published report DOJ Intermediate outcome 5: Highest standard of capability and preparedness against disasters and emergencies attained Number of provinces with all of its cities and majority of its municipalities having functional and empowered Local Disaster Risk Reduction and Management Office increased 20 40 60 80 Agency reports LGUs, DND OCD, NDRRMC Intermediate outcome 6: Security sector reforms implemented (Outcome indicator to be developed) Sustainable and climate-resilient environment and natiural resources 205 9Sustainable and climate-resilient environment and natural resources 206 Philippine Development Plan 2011-2016 MIDTERM UPDATE I. INTRODUCTION Vital to the achievement of the country’s inclusive growth is the improvement of the state of the environment and natural resources (ENR). Sustaining the services that will improve the state of the country’s ecosystem will support critical growth sectors and resource-dependent communities amidst risks posed by climate change and natural disasters. The vision for a sustainable and climate-resilient environment—one that provides for present and future generations of Filipinos—will continue to be pursued for the remaining years of the Aquino administration. As shown in Figure 9.1, this result consists of three subsector outcomes: (a) improved adaptive capacities of human communities; (b) sustainably managed natural resources; and (c) improved environmental quality for a healthier and cleaner environment. These outcomes will be pursued through an ecosystems approach that is integrated and based on prevention, science, rights, and community; sound environmental impact assessment; and cost-benefit analysis. Such interventions will be anchored on the principles of shared responsibility, effective institutions and good governance, participation, social and environmental justice, intergenerational space, and gender equity. II. ASSESSMENT, CHALLENGES AND OPPORTUNITIES The state of ENR has modestly improved during the first two years of the Aquino administration. According to the Environmental Performance Index (EPI) in 2012,116 the Philippines is categorized as a “strong performer” and ranked 42nd out of 132 countries (higher than Australia’s 48th, USA’s 49th, Singapore’s 52nd, and Israel’s 61st). Despite this, the full benefits from the ecosystem’s services still have to be optimally utilized in achieving inclusive development. While the economy grew by 6.8 percent in the same year, aggregate contribution of the agriculture, forestry and fisheries sector accounts for a meager 2.8 percent compared to industry117 and services118 with 6.8 and 7.6 percent, respectively. Vulnerability to climate change and natural disasters As the third most vulnerable country to natural hazards119 and 14th most affected by adverse impact of climate change120 (see Figure 9.2), the Philippines experienced 116 The biennial assessment ranks countries’ performance indicators covering both environmental public health and ecosystem vitality. 117 Includes mining and quarrying, manufacturing, construction, electricity, gas and water supply 118 Includes transport, storage and communication 119 United Nations University-Institute for Environment and Human Security (2012) 120 German Watch (2013). Global Climate Risk Index Sustainable and climate-resilient environment and natiural resources 207 Figure 9.1. Results framework on sustainable and climate-resilient environment and natural resources Goal Intermediate goals Subsector outcomes Poverty in multiple dimensions reduced and massive quality employment created Rapid and sustained economic growth achieved Equal development opportunities achieved Adaptive capacities of human communities improved Sustainably managed natural resources achieved Environmental quality improved for a healthier and cleaner environment Sector outcome Sustainable and climate resilient environment and natural resources achieved tragedies due to the occurrence of extreme climate events. Damage to properties from disasters in 2012 cost about PhP50.32 billion (Figure 9.3). Direct cost from this damage had an estimated share of 1.44 percent of the country’s gross domestic product (GDP) in the same year. In 2013, typhoon Yolanda recorded the highest damage from typhoon events amounting to PhP571.11 billion (Box 9.1). Figure 9.2. Climate change projections, 2020 and 2050 (a) Seasonal temperature increase, in °C (b) Rainfall change (increase/decrease), in % Source: Philippine Atmospheric, Geophysical and Astronomical Services Administration (2011). Climate Change in the Philippines Note: DJF=December, January, February; MAM=March, April, May; JJA=June, July August; SON=September, October November 208 Philippine Development Plan 2011-2016 MIDTERM UPDATE Figure 9.3. Estimated direct cost of damage to properties of natural disasters by sector, 2000-2012 (in million PhP) 50000 Infrastructure Agriculture 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Year Private/Commercial 40000 30000 20000 10000 0 The past two years focused on preparatory activities toward full operation of long term actions on climate change adaptation and mitigation (CCA/M) and disaster risk reduction and management (DRRM). These include the passage of the People’s Survival Fund (PSF) in 2012 (RA 10174), completion of climate change projection at the provincial level, implementation of the Nationwide Operational Assessment of Hazards (NOAH), geohazard mapping and assessment of all cities and municipalities at 1:50,000 scale, and mainstreaming of CCA/M and DRRM in LGUs’ comprehensive land use plans, among others. Sustainable management of natural resources Forest governance, protection and management The Department of Environment and Natural Resources (DENR) continues to intensify reforestation activities, particularly in 18 priority river basins.121 To achieve the goal of 30-percent forest cover (9 million hectares) by 2016, Executive Order (EO) 23 was issued to curb deforestation of remaining natural and residual forests122 and EO 26, to intensify reforestation activities.123 As of 2012, the National Greening Program (NGP) covered a total of 350,321 hectares, generated approximately 380,696 jobs and recorded an estimated carbon sequestration potential of up to 38.9 million tons worth PhP14 billion.124 To sustain these positive gains, forest protection programs will be intensively pursued with civil society organizations (CSOs) and the private sector. As the lead agency, the DENR will develop a commodity road map for timber and non timber plantations within NGP sites, as well as in Integrated Forest Management Agreement (IFMA) areas, to harness the forests’ production potential. The 121 These are the following river basins covering 108,498 hectares: Cagayan, Mindanao, Agusan, Pampanga, Agno, Abra, Pasig-Laguna de Bay, Bicol, Abulog, Tagum-Libuganon, Ilog-Hilabangan, Panay, Tagoloan, Agus, Davao, Cagayan de Oro, Jalaur and Buayan-Malungan. 122 Executive Order No. 23 “Declaring a Moratorium on the Cutting and Harvesting of Timber in the Natural and Residual Forest and Creating the Anti-Illegal Logging Task Force issued February 2011 123 Executive Order No. 26 “The National Greening Program” issued February 2011 124 Carbon price at $9.2/tonne, 2011 prices (Source: forestcarbonpartnership.org) Sustainable and climate-resilient environment and natiural resources 209 Box 9.1. Damage and losses incurred from Typhoon Yolanda Owing to its archipelagic nature and geologic structure, the Philippines is prone to natural disasters including typhoons, earthquakes and volcanic eruptions. The occurrence of these disasters is believed to have been exacerbated by climate change. On 8 November 2013, the Philippines experienced the ferocity of typhoon Yolanda, deemed the strongest ever recorded, with wind speeds of more than 300 km/h and storm surges of over four meters. It cut a swath of destruction across the central part of the Philippines, resulting in grave loss of lives and massive damage to private and public assets. There were 5,982 reported fatalities as of 12 December 2013 with 1,779 persons still missing. A total of 27,022 people were reported injured, many of whom would not be able to get back to work or resume their livelihood activities. The total damage and loss from typhoon Yolanda has been initially estimated at PhP571.1 billion (equivalent to US$12.9 billion). About PhP424.3 billion of the total damage and loss represents the value of destroyed physical assets, while the remaining PhP146.5 billion represents reduction in production, sales, and income to date and in the near term. The impact of typhoon Yolanda was most heavily felt by the economic and social sectors, which together sustained nearly 93 percent of the total damage and loss (Box Table 9.1.1). The private sector has borne 90 percent of the brunt of the impact of the disaster, with the remaining 10 percent by the public sector. Sector Damage and loss (in million PhP) Damage Loss Total Public Private Public Private Infrastructure 16,024.30 4,285.00 7,108.40 6,565.40 33,983.00 Economic 3,743.50 67,560.00 87.00 106,716.60 178,107.10 Agriculture 3,743.50 27,560.00 87.00 30,716.60 62,107.10 Industry and services 40,000.00 - 76,000.00 116,000.00 Social 23,175.30 305,472.10 3,442.30 22.628.80 354,718.50 Cross-sectoral 4,000.00 - 300.00 - 4,300.00 Total (in PhP) 46,943.00 377,317.10 10,937.10 135,910.80 571,108.50 Total (in M US$, $=PhP 44.135) 1,063.60 8,549.20 247.80 3,079.40 12,940.00 Box Table 9.1.1 Damage and loss caused by typhoon Yolanda Notes: Data and information from all sectors submitted as of 12 December 2013. 210 Philippine Development Plan 2011-2016 MIDTERM UPDATE DENR will also explore the NGP’s potential on carbon sequestration following established standards in the Philippine National REDD (Reduced Emissions from Deforestation and Forest Degradation)-Plus Strategy. Biodiversity conservation As of 2012, a total of 240 protected areas (PAs) were established covering 5.4 million hectares. Of these, 113 PAs covering 3.57 million hectares have been formally proclaimed by the President under the National Integrated Protected Areas System (NIPAS) as terrestrial protected areas (TPAs, 2.2 million hectares) and marine protected areas (MPAs, 1.37 million hectares). Efforts are also underway to expand and strengthen NIPAS by establishing indigenous community conserved areas (ICCAs) and local conservation areas (LCAs) managed by local government units (LGUs). By the end of 2016, a total of 102,000 hectares of ICCAs in seven sites is expected to be registered with the United Nations Environment Programme/World Commission Monitoring Center (UNEP/WCMC), along with six LCAs covering 56,000 hectares through LGU partnership. The population of three critically endangered species—Philippine eagle, tamaraw and Philippine cockatoo–improved due to the implementation of conservation programs, strict enforcement of regulations on wildlife trade and hunting, and intensive management of their critical habitats. In 2012, a total of 6,138 hectares was established as critical habitats while 38 caves have been classified as safe and open to visitors, making them potential ecotourism sites for employment generation and economic development in the localities. Sustaining conservation efforts are greatly dependent on the availability of adequate financial resources particularly in the establishment of additional key biodiversity areas, effective management of proclaimed PAs and continuous implementation of conservation programs for threatened species. Coastal and marine resources rehabilitation and management According to Reefs at Risk in the Coral Triangle, local activities such as overfishing and destructive fishing threaten 98 percent of reefs in the Philippines. Coastal development along crowded shorelines, as well as watershed and marine-based pollution, aggravated this degraded state. With the projected impacts of climate change, coastal and marine ecosystems require intensified protection and rehabilitation. Integrated coastal resources management is an effective strategy to ensure better management of coastal and marine resources and prevent further degradation of coastal areas. In relation to this, two priority seascapes—the Sulu-Sulawesi 125 “Procedure for the Execution of Cadastral Survey Projects” under the Philippine Reference System of 1992 Sustainable and climate-resilient environment and natiural resources 211 Marine eco-region and West Philippine Seas—have been designated as areas for sustainable management under the Coral Triangle Initiative (CTI) National Plan of Action. The National Mapping and Resource Information Authority (NAMRIA) completed the preliminary delineation of municipal waters for 928 coastal LGUs in 2011. However, only 285 coastal LGUs (30.71 percent) have been certified by neighboring LGUs as of 2012. The delays were due to the absence of guidelines for LGUs with offshore islands and failure of LGUs with certified municipal waters to pass the required municipal ordinances. Sustainable land management In 2011, the DENR issued Memorandum Order 2011-03125 to accelerate cadastral surveys to delineate boundaries and facilitate land disposition and titling, and Administrative Order 2011-06 to prescribe guidelines for the implementation of land titling in partnership with LGUs. Considering the 90-percent accomplishment for distribution of alienable and disposable (A&D) lands in 2012, the agency is set to issue only about 237,012 remaining patents to achieve its 2015 target. However, there is a need to fast-track the distribution of residential patent to achieve its 2016 target of 516,064 patents. In terms of sustainable land management (SLM), a total of 44,137 hectares of degraded lands were covered against the target of 50,000 hectares by 2012. From 2011 to 2012, the National Commission on Indigenous Peoples (NCIP) issued only two certificates of ancestral domain titles (CADTs) and none for certificates of ancestral land titles (CALTs). Several reasons for the delay include the temporary suspension of issuance of pending applications due to legal issues, moratorium due to the review of the Omnibus Rules on the Delineation and Recognition of Ancestral Domains/Lands, continuing boundary conflicts among claimants, and the alarming peace and order situation in said areas. Despite these, a total of 107 Ancestral Domains Sustainable Development and Protection Plans (ADSDPPs) were formulated in 2012 that serve as bases of convergence efforts for indigenous cultural communities (ICCs) and indigenous peoples (IPs). Mineral resource development In July 2012, the President issued EO 79 which provided policies and guidelines to ensure environmental protection and responsible mining, and constituted the Mining Industry Coordinating Council (MICC) as a policy governing body for mining-related concerns. The MICC provided inputs on the EO’s implementing rules and regulations (IRR), developed an integrated map of areas closed to mining application, conducted a study on mining fiscal regime and revenue sharing arrangement, and drafted the revised Guidelines on Small-scale Mining, among others. 212 Philippine Development Plan 2011-2016 MIDTERM UPDATE Figure 9.4. Total suspended particles (TSP) level in Metro Manila TS P le ve l ( in u g/ N cm ) 350 300 250 200 150 100 50 0 VALENZUELA EDSA NPO EDSA EAST AVE. QC. ATENEO KAY., QC. MANDALUYONG PASIG MAKATI EDSA, MRT MARIKINA MANILA, Rizal Ave. AVERAGE TARGET 2004 2005 2006 2007 2008 2009 2010 2011 2012 Year 126Abandoned mines for 100-percent risk assessment include Antamok Mine, Black Mountain Inc., Consolidated Mines Inc., Dizon Cu-Aq Mines, Inc and Construction and Dev’t. Corp. 127Abandoned mines for 70-percent risk assessment include north Davao Tailings Dam, Bano Mine, Palawan Quicksilver, Philippine Iron Mines, and Batong Buhay Mine. 12812 TSP Monitoring Stations outside Metro Manila include those in Alaminos; San Fernando City; Saluysoy; Cabanatuan; San Fernando, Pampanga; Iriga City; Panganiban Drive; Mandaue City; Zamboang City (i.e., Medical Center, Brgy. Sto. Nino, San Jose Road, and Phil. Int. Dev’t. Inc.); and Davao City. Of the 22 abandoned mines, the government targets the full rehabilitation of Bagacay and completion of risk assessment of five abandoned mine sites by 2016.126 As of 2012, rehabilitation of Bagacay was only 87 percent of its 2012 target, while the five other abandoned mines are on track with the 55-percent completion of their risk assessment. Rehabilitation of these six priority mines will be fast-tracked, along with inclusion of additional five abandoned mines targeted for 70-percent risk assessment from 2013 to 2016.127 Environmental quality Air Measuring air quality using the total suspended particulate (TSP) level is difficult to establish as it depends highly on available monitoring stations. As shown in Figure 9.4, 10 stations in Metro Manila still registered below the normal TSP level of 90 micrograms per normal cubic meter (ug/Ncm) in 2012. On the other hand, only three of 12 monitoring stations outside the capital registered within standard levels, namely, Saluysoy in Bulacan, Mandaue City in Cebu and Zamboanga City Medical Center.128 Sustainable and climate-resilient environment and natiural resources 213 129 These rivers include those in Meycauayan, Marilao, Bocaue, Ylang-ylang, Imus, Calapan, Iloilo, Balili, Paranaque, Marikina and San Juan, Anayan, Malaguit, Paniqui, Pampanga, Luyang, Sapangdaku, CDO and Angat. 130 DENR-DAO No. 34, s. 1990 The modest improvement in air quality is attributed to policies and programs providing additional monitoring stations, imposing higher emission standards for vehicles, intensifying the anti-smoke belching program (Bantay Tambutso) and monitoring major industry and stationary sources of pollution (Bantay Tsimneya). These were complemented by the Department of Transportation and Communication’s (DOTC) implementation of intelligent transport systems and reduction of road vehicle volume through mass transportation systems, alternative modes/green transport and integration of provincial terminals. However, there is still a need to increase air quality monitoring facilities pursuant to the Clean Air Act (RA 8749) that requires airsheds and monitoring stations in every 500 meters. The DENR-Environmental Management Bureau (EMB) already installed 27 monitoring stations nationwide that assess air quality using particulate matter of up to 10 micrometers in diameter (PM10). The EMB also started installing monitoring stations in Metro Manila for PM2.5, with data to be available by 2014. Water Water quality management of 19 rivers has been prioritized for clean-up, rehabilitation and maintenance under the Sagip-Ilog Program.129 However, 11 priority rivers are still not within the standard biochemical oxygen demand (BOD) of 7 milligrams per liter (mg/L). Notably, however, Pasig River showed significant improvement in BOD level from 31.71 mg/L in 2011 to 23.09 mg/L in 2012. While Laguna Lake remains to be within the standard BOD level, Manila Bay has a low progress towards achieving the SB classification, or the standard for areas regularly used for public bathing.130 Still, the quality of priority rivers has partially improved due to a number of notable interventions, such as close monitoring of industrial establishments and the implementation of the Adopt-an-Estero Program. Solid waste Despite implementation of the Ecological Solid Waste Management (SWM) Act (RA 9003), garbage management remains a problem due to increased volume of generated solid waste. To illustrate, 353 LGUs generate solid waste of more than 15 tons per day, the threshold that already requires LGUs to establish a waste management facility. Solid waste diversion rate, which measures how much solid waste is redirected from disposal to recycling, slightly improved in Metro Manila from 34 percent in 2011 to 39.1 percent in 2012. This was due to the LGUs’ establishment of materials recovery and composting facilities, formulation and implementation of policies regulating the use of plastic bags, and adoption of appropriate and locally 214 Philippine Development Plan 2011-2016 MIDTERM UPDATE available technology for waste treatment/processing, among others. On the other hand, diversion rate outside Metro Manila is only 30 percent, or below the 2012 target of 38 percent. As of 2012, only 44 landfills were operational across the country and only 21 percent of 42,000 barangays have materials recovery facilities (MRFs). Of the 1,610 municipalities and cities, only 27.39 percent submitted SWM Plans, with the National SWM Commission (NSWMC) approving only 37 plans. Challenges in the ENR sector The ENR sector has been confronted with long-standing issues and ineffective implementation of strategies that jeopardize the ecosystem’s capacity to provide services and protect the vulnerable. Challenges in policies, institutions and operations cut across the three outcome areas of this Chapter. Policy Lack of harmonized national land use policy, poor land management and administration The first National Land Use bill was filed in 1995, but issues were raised on specific provisions such as the definition of terms, categories of land uses, and structural mechanisms. This bill is identified as a priority legislative agenda in five out of 10 chapters of the original Philippine Development Plan (PDP) for 2011-2016. Absence of a comprehensive forestry law The Revised Forestry Code (Presidential Decree 705) issued in 1975 remains the basis of the forest policy in the Philippines. Its inclination to commercial exploitation and production requires a shift to people-oriented, small-scale, community-based forest management.131 There is also a need to update forest charges based on appropriate resource valuation methods. Inadequate provisions that ensure sustainable management of mineral resources The country’s mining policy is articulated in the People’s Small-Scale Mining Program of 1991 (RA 7076) and the Philippine Mining Act of 1995 (RA 7942). The laws’ implementation is plagued with controversies due to inconsistencies of mining provisions; land use conflicts on mining tenements, certificate of land ownership awards (CLOAs) and ancestral domains; revenue sharing; hazards posed to human and environmental health; and illegal operations. 131 Carandang (2005) Sustainable and climate-resilient environment and natiural resources 215 Inadequate provisions of laws on solid and hazardous wastes The implementation of the Ecological SWM Act remains weak, with deliverables not completed on time (e.g., closure of open dumpsites by 2010 and submission of SWM plan) due to absence of a concrete operational mechanism (e.g., funding and sanctions for non-compliance). There is also a need to reconcile the law’s provisions with those of existing laws, such as Local Government Code (RA 7160), Philippine Environmental Impact Statement System (PD 1586), Clean Air Act (RA 8749), Environmental Education Act (RA 9512), Organic Agriculture Act (RA 10068), Climate Change Act (RA 9729), and the Omnibus Investments Code (EO 226). Moreover, the Toxic Substances and Nuclear Wastes Control Act (RA 6969) needs provisions for electronic waste management (see Chapter 10: Accelerating infrastructure development). Absence of ENR valuation/accounting While there have been initial efforts to institutionalize natural resource accounting, the sector still lacks a reliable measure to value ENR, thus hindering the accurate calculation of ENR share to the country’s economy. Moreover, the country’s vulnerability to climate and disaster risks requires proper inventory and accounting of resource requirements, estimation of losses from the negative impacts and of gains from development interventions. The World Bank (2006) estimated that about one-third of the country’s total wealth is from natural capital. Institutions Conflicting, overlapping mandates of government agencies Multiple players and stakeholders make it difficult for the management and coordination of ENR initiatives, resulting in counterproductive measures. At the local level, conflicts arise between national and local governments over devolved ENR functions and the definition of the LGUs’ role in the issuance of local ordinances, approval of local permits and collection of local taxes. Also, there is a need to delineate responsibilities on land distribution among DENR and the Departments of Agriculture (DA) and Agrarian Reform (DAR); CCA/M and DRRM among the Climate Change Commission (CCC) and the National Disaster Risk Reduction and Management Council (NDRRMC); ENR management among DENR bureaus; resource permit issuance among DA, DAR, DENR and NCIP; and resolution of convergence issues on foreshore and easement area management. Lack of manpower and expertise at the local level ENR agencies suffer from lack of personnel, inadequate capacities/expertise and inefficient institutional processes. Similarly, local ENR management is constrained by poor governance and inadequate financing. Multiple players and stakeholders make it difficult for the management and coordination of environment and natural resources initiatives, resulting in counterproductive measures. 216 Philippine Development Plan 2011-2016 MIDTERM UPDATE Weak water governance A comprehensive review and subsequent restructuring of water sector governance will help address fragmented and weak water resources management. The sector also needs to adopt the principles of the Integrated Water Resources Management (IWRM); regulate the management of waterworks, water supply, and sewerage service providers; and identify agencies that enforce water-related policies (see Chapter 10: Accelerating infrastructure development). Operations Inadequate tools and facilities supporting ENR management The following issues on ENR management support need to be addressed: (a) lack of facilities and equipment for forest inventory, surveillance and patrolling; (b) inadequate air and water facilities and equipment for monitoring; (c) upgrading of weather forecasting facilities, systems and tools; (d) lack of geohazard maps with a scale of 1:10,000; and (e) the need to downscale climate projections. Unavailability of timely and updated ENR data and integrated database Integral to an effective ENR response is accurate and timely information. In addition, there is a lack of climate change studies that identify impacts on different ecosystems and communities. Inadequate and non-sustained financing for ENR, CCA/M and DRRM Timely and effective implementation of natural resource management programs has always been constrained by inadequate financial resources. Programs and projects either rely on ODA financing or national government budget, as internal revenue allotment for LGUs are not sufficient to sustain ENR programs and projects. The LGUs’ authority to generate additional funding has not been fully exercised. III. STRATEGIC FRAMEWORK AND UPDATED PLAN TARGETS This updated chapter maintains the overall goal of sustaining ecological integrity to support economic development and improve human welfare. It highlights strategies that increase resiliency from climate risks and natural disasters through institutionalization of CCA/M and DRRM measures, as shown in Figure 9.5. Subsector outcome A: Adaptive capacities of human communities improved Recognizing the country’s high vulnerability to climate-related disasters, there is a need to enhance capacities of local communities on CCA/M and DRRM, establish adaptation and disaster preparedness measures, and provide investments for such interventions. Sustainable and climate-resilient environment and natiural resources 217 Figure 9.5. Strategic framework on sustainable and climate-resilient environment and natural resources Sector oucome Subsector outcomes Crosscutting strategies Sustainable and climate-resilient ENR achieved Adaptive capacities of human communities improved Sustainably managed natural resources achieved Environmental quality improved for a healthier and cleaner environment Strategies 1. Mainstreaming CCA/DRRM in development plans and guidelines 2. Promote climate/ disaster resilient infrastructure facilities 3. Improve access to innovative national and international financing schemes for CCA/M and DRRM 4. Development and adoption of more effective Vulnerability Assessment tools 5. Support research and development and extension 6. Strengthen the management of forest, coastal and marine, land and biodiversity 7. Strengthen the enforcement of solid waste management, hazardous waste management, clean air and water act 8. Update air and water quality standards and intensity monitoring 9. Promote eco friendly production technologies, and energy-efficient infrastructure and transport facilities 10. Promote appro priate technology for waste management and establishment of sustainable markets for recyclables and recycled products 11. Pursue research, development and extension to im prove the quality of the environment 12. Improve Knowledge Management (KM) systems and tools 13. Strengthen multi-stakeholder participation and partnership in ENR management and governance 14. Continuous capacity building, institutional strengthening and IEC campaign In the absence of a clear indicator for adaptive capacity, decreased damage and losses due to natural disasters, environmental hazards, human induced and hydro meteorological events will be used as proxy indicator to monitor the progress of this subsector outcome (see Table 9.1). 218 Philippine Development Plan 2011-2016 MIDTERM UPDATE Table 9.1. Revalidated results matrix (RM) on subsector outcome A: Adaptive capacities of human communities improved Indicators Baseline End-of-Plan target (2016) Assumptions and risks Annual damage and losses (crops and properties) due to natural disasters, environmental hazards, human induced and hydro meteorological events decreased PhP19,272.70 million with 193 incidents (2004-2010 annual average) Annual damages and losses decreased • The projections of climate change impacts based on current climate change scenarios can be more adverse than projected. • CCA/M activities are not enough to build capacities of ecosystems and communities to withstand projected climate change impacts. Five key strategies will be pursued to achieve this outcome: Strategy 1: Mainstream CCA/DRRM in development plans and guidelines This strategy involves: (a) supporting initiatives for mainstreaming CCA/M and DRRM in the development process; (b) integrating CCA/M and DRRM in all education levels and in specialized technical training and research programs; (c) formulating criteria for identifying CCA/M and DRRM responsive projects; and (d) adopting a responsive national and local legal and policy framework on CCA/M and DRRM through multi-stakeholder dialogues. Strategy 2: Promote climate/disaster-resilient infrastructure facilities With the aim of institutionalizing CCA/M and DRRM in infrastructure development, existing engineering standards and designs will be reviewed and updated to integrate emerging technologies and retrofitting techniques. This ensures resilience to disasters and impacts of climate change. Disaster and climate infrastructure programs and projects will be continuously pursued, even beyond the Updated Plan period. (See also Chapter 10: Accelerating infrastructure development.) Sustainable and climate-resilient environment and natiural resources 219 Strategy 3: Improve access to innovative national and international financing schemes for CCA/M and DRRM To effectively respond to CCA/M and DRRM needs, available financing both nationally (e.g., PSF and National Disaster Risk Reduction and Management Fund or NDRRMF) and internationally (e.g., Green Climate Fund and Adaptation Fund) will be tapped. At the local level, there is a need to operationalize the PSF to provide additional financing source to support adaptation activities of LGUs and communities. Priority activities to support the operationalization of PSF are formulation of climate change-tagging criteria, finalization and approval of the IRR of RA 10174, and preparation of the operational guidelines for the PSF. On the other hand, there is a need to revisit the mechanism to access the NDRRMF to ensure that it will not only be used for relief assistance, rehabilitation and reconstruction activities but also for disaster preparedness and prevention measures. Among the priority activities for funding include adaptation measures, forecasting and early warning system, institutional strengthening, knowledge management and risk financing. Strategy 4: Develop and adopt more effective vulnerability assessment (VA) tools Developing and adopting science-based VA tools will allow for the proper identification of highly susceptible communities, which will be useful for formulating DRRM plans. The tools will support decisions in identifying, preventing and mitigating potential disaster impacts. Pilot testing of such initiatives, such as the Decision Support System (DSS) tool by the DA-Bureau of Soils and Water Management and the VA and Impact Assessment tools for coastal, health and water sectors developed under Millennium Development Goal Achievement Fund (MDGF-1656), will be pursued. (See also Chapter 4: Competitive and innovative industry and services sectors.) Strategy 5: Support research, development and extension (RD&E) Priority research in the next three years will include, but not be limited to, the impacts of climate change on natural ecosystems, CCA/M technologies (e.g., resistant planting stocks), and cost-benefit analysis of eco-friendly and low carbon technologies. There is a need to operationalize the people’s survival fund to provide additional financing source to support adaptation activities of LGUs and communities. 220 Philippine Development Plan 2011-2016 MIDTERM UPDATE Box 9.2. Ongoing CCA/M and DRRM programs and projects in the Philippines Since 2011, a total of 49 programs and projects (PAPs) funded through official development assistance (ODA) amounting to PhP50 billion were tagged as climate change responsive. Of these, 26 PAPs (PhP22.4 B) were categorized for adaptation; 11 PAPs (PhP22.17 B) for mitigation; and 12 PAPs (PhP5.7 B) with adaptation/mitigation co-benefits. There are eight types of climate change PAPs: (a) formulation/enhancement of local land use plans; (b) provision of early warning system; (c) forecasting/modeling device; (d) hydro meteorological equipment; (e) construction of flood control facilities; (f) rural development or agriculture and agrarian reform; (g) energy and power sector; and (h) capacity building including. These CCA/M and DRRM PAPs are implemented in Category 3 provinces, as shown in the Box Figure 9.2.1 below. Box Figure 9.2.1. Spatial distribution of CCA/M and DRRM programs and projects Region No of Projects CAR 4 RI 2 RII 5 RII 5 RIVA 2 RIVB 1 RV 4 RVI 4 RVII 2 RVIII 3 RIX 0 RX 2 RXI 1 RXII 0 RXIII 1 ARMM 0 NCR 5 National Level Coverage 26 (Source: 2012 ODA Report) Sustainable and climate-resilient environment and natiural resources 221 Subsector outcome B: Sustainably managed natural resources achieved Strategies on managing natural resources will sustain ecosystem services in support of productive sectors. Table 9.2 presents the outcome targets from these strategies. Table 9.2. Revalidated results matrix (RM) on subsector outcome B: Sustainably managed natural resources achieved Indicators Baseline End-of-Plan target (2016) Assumptions and risks Forests and watersheds sustainably managed (in ha) Open and denuded forest land area reduced 8.6 million (2003) Reduced by 1.5 million (including 2012) • Adequate financial and human resources support are timely provided. • Survival rate of planted seedlings is about 80%.Protected forest land/area increased 6.431 million (2003) Increased by 1.1 million Biodiversity protection and conservation improved Extinction of threatened species of wild fauna prevented 221 (2004) 100% prevented from extinction • Forest quality, which will serve as habitat to the threatened species, is improved through reforestation and protection efforts. • Adequate financial resources are timely provided and relevant laws are strictly implemented. Extinction of threatened species of wild flora prevented 526 (2007) 100% prevented from extinction Population of Philippine Eagle increased 340 (2010) 400 Population of Tamaraw increased 274 (2011) 360 Population of Philippine Cockatoo increased 239 (2010) 400 Coastal and marine resources management improved Percentage of terrestrial, inland water and coastal and marine areas effectively and equitably managed • Establish partnerships among stakeholders in coastal management activities (DENR, DA, NCIP, LGUs) • LGUs recognize their role in ENR management (e.g., formulation of local policies and provision of budget for projects that will support effective management of coastal and marine protected areas) Terrestrial protected areas 2.10% (2010) 8.85% Marine protected areas 0.09% (2010) 0.62% Percentage of critical habitats effectively and equitably managed 0.37% 100% Area of degraded coral reefs within NIPAS MPAs rehabilitated (in ha) 676,000 (2012) 510,012, or 75% of degraded coral reefs 222 Philippine Development Plan 2011-2016 MIDTERM UPDATE Indicators Baseline End-of-Plan target (2016) Assumptions and risks Land administration and management improved Land degradation hotspots with developed sustainable land management (SLM) practices (in ha) 5,367,047 (2010) 182,000 • The current rate of land degradation is decreasing throughout the plan period. • Adequate financial and institutional support is provided, particularly in the development of SLM projects within land degradation hotspots. • Land administration, distribution and management-related policies are harmonized. Number of beneficiaries with secured land tenure in public agricultural A&D lands 1,900,333 100% of remaining DENR CARP target (473,490 patents) completed by 2015 Number of beneficiaries with secured land tenure in residential lands zoned as residential areas 0 (2011) 516,064 Number of Certificates of Ancestral Land Titles (CALTs) issued 258 (2010) 32 • Support initiatives that guide and facilitate the issuance of CADTs and CALTs and formulation of ADSDPPs are provided.Number of Certificates of Ancestral Domain Titles (CADTs) issued 156 (2010) 74 (2012-2016) Number of Ancestral Domains Sustainable Development and Protection Plans (ADSDPPs) formulated 95 (2010) 104 (2012-2016) Rehabilitation of abandoned mines improved Number of abandoned mines rehabilitated 22 (2004) • The 22 abandoned mines remain a priority for rehabilitation and protection. • Adequate financial, institutional and human resources supports are timely provided. • For the Plan period, the following will be undertaken: 100% rehabilitation of Bagacay and 100% risk assesment of other four abandoned mines (i.e. Black Mountain, Consolidated Mine, Dizon Mine and Basay Mine) Bagacay Mine rehabilitated 100% Antamok Mine risk assessment 100% Black Mountain risk assessment 100% Consolidated Mine Inc. risk assessment 100% Dizon Mine risk assessment 100% Basay Mine risk assessment 100% Sustainable and climate-resilient environment and natiural resources 223 The general strategy to attain the above outcomes is to strengthen the management of natural resources through conservation, protection and rehabilitation. Strategy 6: Strengthen the management of forest, coastal and marine, land and biodiversity The following priority activities will be undertaken: a. Complete delineation of forestland boundaries The sector target is to complete the demarcation of forest boundaries within the Updated Plan period to effectively manage forestlands and identify appropriate land use. b. Strengthen the Integrated River Basin Management (IRBM), reforestation and forest protection programs, and sustainable forest-based industries The IRBM will serve as the systematic framework for ridge-to-reef management (i.e., forest management through comprehensive river administration system for flood control, water use and environmental conservation). Along with this is the completion of river basin master plans for 18 priority rivers. Forest protection activities will be strengthened through: (a) the Philippine National REDD-Plus Strategy; (b) capacity improvement of forest managers in addressing forest fires, pest and diseases; (c) provision of support facilities in patrolling forests; and (d) strengthening of the anti-illegal logging campaign. With the forestry sector’s potential to alleviate poverty and generate employment, sustainable forest-based industries will be pursued by: (a) developing forest plantation with high-value timber and non-timber forest species; (b) encouraging communities to develop multipurpose forests in open, denuded and degraded areas; (c) developing a portfolio approach for forest investment with LGUs and the NCIP in identifying protected and production areas; and (d) adopting third party certification guidelines for forest products. c. Strengthen the enforcement of forest, land, biodiversity, coastal and marine policies Stakeholders, including CSOs, local communities and IPs, will be involved in the vigorous enforcement of environmental laws and policies, promotion of environmental justice, and in advocating the resolution of ENR cases through Supreme Court-designated green courts. Strict implementation of natural resources policies will be strengthened, particularly on the compliance of mining companies with environmental and social development commitments; apprehension of illegal logging and fishing, poaching and trading of endangered species; and reversion of abandoned, underutilized and unproductive coastal fishponds to mangroves. 224 Philippine Development Plan 2011-2016 MIDTERM UPDATE d. Strengthen management of PAs under NIPAS and other biodiversity conservation initiatives To improve the number of threatened and endangered species, management of PAs will be strengthened by: (a) assessing the effectiveness of PA management; (b) establishing additional critical habitats and key biodiversity areas; (c) issuing security of tenure and providing alternative livelihood for local communities; (d) completing maps for all PAs under NIPAS; and (e) preparing PA management plans incorporating CCA/M and DRRM considerations. The following biodiversity conservation initiatives will be continuously implemented: (a) National Biosafety Framework; (b) Nagoya Protocol; (c) Updated National Wetland Action Plan; (d) Coral Triangle Initiative National Plan of Action; (e) Sulu-Sulawesi Marine Eco-region Conservation Plan; (f ) Integrated Coastal Management (ICM) program; (g) 2012-2020 Sustainable Coral Reef Ecosystem Management Program; (h) cave management, protection and conservation programs; and (i) the “Adopt-a-Wildlife Species” program. e. Complete delineation of municipal waters This is necessary to empower LGUs to manage coastal and marine resources and provide preferential rights to small fisherfolk. f. Complete land distribution and improve land administration and management Activities will include: (a) completing cadastral surveys in cities and municipalities; (b) accelerating titling of agricultural, residential and ancestral lands in partnership with DAR, NCIP, Land Registration Authority, and LGUs; (c) institutionalizing the Foreshore Master Plan that incorporates environmental safeguards, climate change considerations and sustainable practices in issuing foreshore leases; (d) intensifying campaign against the proliferation of fake land titles; (e) computerization of land resources and cadastral information management; and (f ) integrating the guiding principles of the Land Sector Development Framework in the implementation of land administration and management reforms. g. Improve management of mineral resources To set the direction for responsible mining, amendment of the mining law will be needed to provide policies and guidelines for the institutionalization and implementation of reforms in the mining sector, particularly on: (a) environmental and social safeguards; (b) no-go zones for mining; (c) proper valuation of minerals; (d) value-adding and development of downstream industries for the mineral sector; (e) new fiscal regime and revenue-sharing arrangement; (f ) operationalization of the Extractive Industries Transparency Initiative in the mining sector; (g) creation of a one-stop shop for mining-related application and procedures; and (h) creation of centralized database for the mining industry. Amendment of the mining law will be needed to provide policies and guidelines for the institutionalization and implementation of reforms in the mining sector. Sustainable and climate-resilient environment and natiural resources 225 To facilitate the full rehabilitation of the mined-out areas, the government will strictly require mining companies of the following: (a) submission of Environmental Work Program, Environmental Protection and Enhancement Program, and Final Mine Rehabilitation and Decommissioning Program; (b) conduct of environmental monitoring and audit, including final mine rehabilitation, de-commissioning and multi-partite monitoring; and (c) contribution to the Contingent Liability and Rehabilitation Fund and payment of mine wastes and tailings fee. h. Improve RD&E The government will collaborate with research and academic institutions on ENR in conducting studies focused on, but not limited to, the following areas: (a) approaches to effective ENR management; (b) extent of forest cover needed to sustain ecosystem services; (c) carrying capacity of ecosystems; (d) geological assessment and exploration of undiscovered mineral resources; and (e) studies linking gender concerns and resource use, to profile women’s roles and opportunities in ENR initiatives. Mechanisms to improve the accessibility of ENR-related researches will also be established. i. Implement innovative financing mechanisms/options for effective and efficient ENR management To provide adequate and sustainable financing for ENR management, there is a need to institutionalize carbon credits and payments for ecosystems services and resource valuation techniques, such as user fees and economic rent for use of natural resources. Harnessing the potential of PAs in ecotourism will help improve not only the areas’ environmental quality through improved ENR management but also the rural communities’ state of living through additional livelihood and income, and the empowerment of the marginalized, including women and indigenous peoples. To date, there are 83 PAs identified by the DENR-Protected Areas and Wildlife Bureau as priority for ecotourism development (Figure 9.6). There is a need to institutionalize carbon credits and payments for ecosystems services and resource valuation techniques. 226 Philippine Development Plan 2011-2016 MIDTERM UPDATE Figure 9.6. Protected areas with potential ecotourism benefits Region No. of PAs for Ecotourism CAR 2 RI 5 RII 7 RIII 5 RIV A 7 RIV B 8 RV 5 RVI 7 RVII 9 RVIII 3 RIX 10 RX 6 RXI 3 RXII 3 RXIII 2 ARMM 1 Total 83 Subsector outcome C: Environmental quality improved for cleaner and healthier environment To provide communities with a healthier environment, the quality of air, land and water will be improved to meet the minimum safety standards. Table 9.3 presents the Updated Plan targets on this outcome. Sustainable and climate-resilient environment and natiural resources 227 Table 9.3. Revalidated results matrix (RM) on subsector outcome C: Environmental quality improved for cleaner and healthier environment Indicators Baseline End-of-Plan target (2016) Assumptions and risks Air pollution in Metro Manila and other major urban centers reduced Total Suspended Particulate (TSP) level in Metro Manila and major urban centers with levels above 90ug/Ncm (baseline: 2009) LGUs prioritize strategies that will help reduce air pollution through provision of local ordinances and budget support to programs contributing to the achievement of this outcome. NCR 130.00 91.62 Alaminos City 131.00 96.30 San Fernando City 135.14 99.34 Saluysoy 122.26 89.87 Cabanatuan 117.00 86.01 San Fernando, Pampanga 206.00 151.43 Iriga City 188.24 138.38 Panganiban Drive 177.17 130.24 Mandaue City (Baricuatro Res) 120.56 88.62 Zamboanga City: Stn. II 166.53 122.41 Zamboanga City: Stn.IV 136.26 100.17 Zamboanga City: Stn. VII 185.82 136.60 Davao City Stn. 8 102.96 75.68 Gas emission reduced due to increased travel speed and reduced travel time in Metro Manila (baseline: 2010) Travel speed increased (km/hr) 27.79 31.84 Travel time reduced (min/km) 2.17 1.98 Water pollution reduced (Baseline: 2010) Water quality of priority river systems improved (by BOD water criteria: Class C <= 7mg/L; Class D >7mg/L & >= 10mg/L) 35% reduction in 2010 level • LGUs prioritize strategies that will help reduce water pollution through provision of local ordinances and budget support to programs contributing to the achievement of this outcome.BOD level of priority rivers not within the water quality criteria improved (in mg/L) 35% reduction in 2010 level Meycauayan River (C) 59.00 38.06 Marilao River (C) 24.00 15.48 Bocaue River (C) 11.00 7.10 Ylang-ylang River (C) 119.00 76.76 Imus River (C) 12.00 7.74 Calapan River (C) 14.00 9.03 Iloilo River (C) 12.00 7.74 Balili River 37.00 23.87 228 Philippine Development Plan 2011-2016 MIDTERM UPDATE Indicators Baseline End-of-Plan target (2016) Assumptions and risks Parañaque River (C) 38.00 24.51 • LGUs prioritize strategies that will help reduce water pollution through provision of local ordinances and budget support to programs contributing to the achievement of this outcome. Pasig River (C) 29.01 18.71 Marikina River (C) 10.29 6.64 San Juan River (C) 35.38 22.82 BOD level of other priority rivers already within the water quality criteria sustained (in mg/L) <7.00 Anayan River (D) 4.28 <7.00 Malaguit River (C) 4.00 Paniqui River (C) 1.05 Luyang River (C) 4.00 Sapangdaku River (‘C) 6.00 Cagayan de Oro (C) 1.14 Pampanga River (C) 2.00 Angat River (C) 4.00 BOD level of Laguna Lake maintained within standard (in mg/L) 7.00 <7.00 Waste generated reduced and waste disposal improved (Baseline: 2010) Solid waste diversion rate increased (in %) 33 50 LGUs prioritize strategies that will help reduce waste and improve solid waste management by strictly implementing RA 9003. To achieve the above targets, the following strategies will be implemented: Strategy 7: Strengthen enforcement of laws on clean air and water, solid and hazardous waste management The government will strictly enforce the following: (a) industry compliance with environmental standards; (b) compliance with emission-testing and mandatory vehicle inspection and maintenance; (c) full establishment of monitoring stations in Metro Manila and other major urban centers; (d) publication of the list of non-environmentally acceptable packaging and products; (e) compliance on the establishment of disposal facilities and MRFs; (f ) establishment of a separate cell for disposal of treated healthcare wastes; (g) LGU compliance in the submission of SWM Plans; and (h) conversion of wastes into useful resources. Sustainable and climate-resilient environment and natiural resources 229 Strategy 8: Update and intensify monitoring of air and water quality standards Activities on updating and monitoring of air and water quality standards include the following: (a) formulation of science-based policies, abatement measures and strategies; (b) strengthening implementation of Bantay Tsimineya, Bantay Tambutso, Adopt-an-Estero Program and rehabilitation programs of Pasig River, Laguna Lake, and Manila Bay, among others; (c) establishment of additional environmental management areas; (d) installation of additional PM10 and PM2.5 monitoring stations for a more comprehensive analysis; and (e) promotion of residual waste management, among others. Strategy 9: Promote eco-friendly production technologies and energy-efficient infrastructure and transport facilities This includes promoting the use of clean fuel and indigenous resources as sources of clean energy, advocating green architecture, and devising related tax or market incentives mechanisms. Strategy 10: Promote appropriate technology for waste management and establishment of sustainable markets for recyclables and recycled products The continuous implementation of ecological solid waste management (ESWM) will focus on the establishment of LGU-wide ESWM systems. The promotion of recycling will be supported by markets capable of converting recycled and recyclable materials to productive use. Various options to stimulate market and consumer demand for recyclable and recycled products will be exhausted. Strategy 11: Pursue RD&E to improve the quality of the environment RD&E will be pursued to: (a) identify air and water pollution impacts to human health and economy; (b) develop and replicate low-cost technologies to optimize solid waste recycling, reuse, and recovery, including the conversion of residual organic materials into clean renewable energy; (c) develop clean and energy efficient technologies; (d) develop and propagate low-cost non-combustion technologies for infectious and hazardous wastes; (e) identify environmentally sound management and disposal of toxic and hazardous waste, including e-waste; (f ) conduct life cycle assessment of proposed non-environmentally acceptable packaging and products; and (g) develop and manufacture non-mercury-based technologies used in healthcare facilities. The continuous implementation of ecological solid waste management (ESWM) will focus on the establishment of LGU-wide ESWM systems. 230 Philippine Development Plan 2011-2016 MIDTERM UPDATE Crosscutting strategies The following crosscutting strategies are crucial to the achievement of the objectives of the ENR sector by the end of the term. Strategy 12: Improve knowledge management (KM) systems and tools Timely, accurate and updated science-based information on ENR is necessary for development planning and informed decision-making on ENR. The following are priority activities in improving KM systems and tools in the ENR sector: a. Fast-track the production of updated higher-scale topographic and other thematic base maps and completion of geo-hazard maps with 1:10,000 scale The acquisition of nationwide high-resolution elevation data from Interferometric Synthetic Aperture Radar and satellite imageries will support geo-hazard mapping and serve as the primary inputs to the production of multi-scale topographic base maps. The development of the Philippine Geoportal will provide common and standard base maps and pave the way for the integration of geospatial information produced by public and private institutions. This will also provide high-resolution geo-hazard maps with detailed and accurate information, as well as an online facility for access, development, and sharing of spatial data; b. Update and further downscale of climate projections Building on initial efforts that localized global climate change projections and models, it is necessary to further downscale the outputs to the provincial level to aid local development planning; c. Fast-track VA, mapping of highly vulnerable areas, communities and priority sectors and integration of CCA/M and DRRM in development plans and programs All these will identify climate-sensitive and disaster-risk communities and mainstream CCA/M and DRRM in sectoral, development and land use plans. VA for all sectors will be in place by 2016 to implement more concrete CCA/M and DRRM actions; d. Integrate ecological values into national accounts through the Wealth Accounting and the Valuation of Ecosystem Services (WAVES) This effort will address demand for ENR indicators, tools and methodologies that will help determine sustainable use of ENR, correlate sustainable use of ENR with economic growth, and make informed development planning and policy analysis; and Building on initial efforts that localized global climate change projections and models, it is necessary to further downscale the outputs to the provincial level to aid local development planning. Sustainable and climate-resilient environment and natiural resources 231 e. Implement/pilot-test best practices in the ENR management Success stories on ENR management need to be disseminated, as they provide evidence-based options for policy makers, development planners and implementers of ENR strategies. Strategy 13: Strengthen multi-stakeholder participation and partnership in ENR management and governance Enabling mechanisms will be created to encourage greater participation of stakeholders, including women and Filipino migrants, in CCA/M, DRRM and ENR governance. This will be achieved through: (a) community-based ENR management efforts; (b) promotion of public-private partnership in ENR management; (c) mandatory creation of ENR offices for LGUs; (d) provision of security of tenure in upland and coastal areas; (e) recognition of IPs’ rights to their ancestral domain; and (f ) stewardship agreements and contracts between government and community. Strategy 14: Sustained capacity building, institutional strengthening and IEC campaign A key in sustaining ENR management gains is to continuously build capacities and educate managers, policy and planning officers, technical personnel, law enforcers, and the general public. Strengthening of ENR institutions will require institutionalization of various stakeholder coordination mechanisms, as mandated by different ENR laws, for greater transparency and accountability in environmental governance. Trainings, seminars and other communication tools will be provided to instill awareness and build consciousness on ENR management. Women’s enhanced roles in ENR management will be highlighted through policies, capacity building and gender mainstreaming mechanisms. Priority ENR legislations For the remaining years of the Updated Plan, the following proposed legislations need to be enacted: a. National land use This aims to achieve optimal use of land based on economic, environmental and social development considerations. In particular, it is expected to harmonize sector spatial land use policies to address competing uses of limited land resources and cross-cutting land use issues (e.g., food security, settlement development, industry development and environmental protection), and integrate ongoing CCA/M and DRRM efforts in national and local development planning; Women’s enhanced roles in environment and natural resource management will be highlighted through policies, capacity building and gender mainstreaming mechanisms. 232 Philippine Development Plan 2011-2016 MIDTERM UPDATE b. Land administration reform This will reform the present land administration and management system by consolidating agencies into a single body responsible for survey, mapping, titling, registration, title transfer and public land management. This will prevent delays in the disposition and titling of A&D lands, duplication and fake titles, inaccurate and incomplete land records, overlapping of activities among government agencies, and unnecessary cost to the government and clients of land administration services. The creation of the Interagency Committee on Institutional Arrangements for Land Management and Rural Development (Administrative Order 34, s. 2012) is a step forward in recognizing the need to improve institutional arrangements among agencies, particularly DAR whose redistribution function will be completed by 2014; c. Forest limit This will provide permanent boundaries of forestlands in the country, set guidelines in determining the specific limits of forestlands, and create a national review and evaluation committee as implementation oversight in the actual marking of forest lines. This law is contingent with the national land use legislation; d. Sustainable forest management This will adopt the Sustainable Forest Ecosystems Management Strategy as the overarching policy framework for all plans and programs in the forestry sector, identify the river basins and component watersheds as basic planning units in forest resources management, and recognize the administrative jurisdiction of LGUs and owners of ancestral domains as the basic management unit in forestry. Overall, this legislation will identify the acceptable forest cover for the country to supply the demands for timber and non-timber forest products; e. Establishment of MPAs in all coastal communities and cities This will mandate coastal LGUs to establish at least one MPA within their area, sanction LGUs that fail to establish MPAs, allow the DENR to continue to manage MPAs established under the NIPAS, and develop incentive mechanisms to promote effective management of MPAs; f. Integrated coastal management This will institutionalize ICM as a national strategy of sustainable development of coastal and marine environment and resources. A National ICM Program will guide LGUs in formulating and implementing ICM programs in their respective areas, with the Department of Education integrating ICM into the basic education curricula and the National Economic and Development Authority incorporating coastal and marine resource accounting in the national and regional income accounts; A National Integrated Coastal Management (ICM) Program will guide LGUs in formulating and implementing ICM programs in their respective areas. Sustainable and climate-resilient environment and natiural resources 233 g. Defining the maritime zones of the Republic of the Philippines This will define the limits of the country’s various maritime zones, including internal and archipelagic waters, territorial sea, contiguous and exclusive economic zones, consistent with the United Nations Convention on the Law of the Sea; h. Rationalizing mining fiscal regime and revenue sharing arrangement This will rationalize existing mining revenue sharing scheme and arrangement. In this law, a sharing scheme will apply to new mineral agreements, as well as financial or technical assistance agreements (FTAA) covering large-scale metallic mineral mining operations. Such scheme will govern the renewal and renegotiations of existing mineral agreements or FTAA. In addition, all mining areas will be declared as Mining Industry Zones; i. PAGASA modernization This will enhance the agency’s capability in providing timely and reliable weather forecasting and warning services by setting up an interagency body that will formulate the modernization program and establish a modernization fund to finance said program; j. Amending Ecological SWM and toxic substances and hazardous and nuclear wastes control acts Amending the Ecological SWM Act will reconcile provisions of other laws on fines, penalties and local taxation (RA 7160), environmental impact assessment (PD 1586), air emissions (RA 8749), environmental education (RA 9512), compost quality requirements (RA 10068), climate-proofing of SWM facilities (RA 9729), and incentives (EO 226). On the other hand, the Toxic Substances and Hazardous and Nuclear Waste Control Act needs to be updated to provide a framework on management and disposal of toxic, hazardous and nuclear wastes, including e-wastes; and k. Review IRR of the Water Code This will strengthen resource regulation and promote more efficient use of water resources. (See also Chapter 10: Accelerating infrastructure development.) All mining areas will be declared as Mining Industry Zones. 234 Philippine Development Plan 2011-2016 MIDTERM UPDATE IV. PLAN IMPLEMENTATION To achieve the Chapter’s sector and subsector outcomes, strong commitment of mandated government agencies, such as DENR, NDRRMC, DBM, CCC, MMDA, DA, LGUs, NCIP, DOTC, DILG, and Laguna Lake Development Authority (LLDA), in collaboration with civil society organizations and business sector, is essential to implement strategies towards achievement of a sustainable and climate resilient ENR. In particular, the NDRRMC, CCC, DILG and DBM play significant roles in subsector outcome A (adaptive capacities of human communities improved). On the other hand, majority of the targets under subsector outcomes B and C will be delivered by the DENR, in close partnership with the LGUs. To ensure the successful implementation of the plan strategies, the two interagency committees under the NEDA Board—the National Land Use Committee (NLUC) and the Regional Development Committee (RDCOM)—will oversee the coordination of the sector deliverables. The NLUC will provide guidance in the implementation of targets with a national scope, while the RDCOM will spearhead implementation and monitoring of the plan’s PAPs given their presence at the local level. Indicators Annual Plan targets (in %) Means of verification Agency responsible2013 2014 2015 2016 Subsector outcome A: Adaptive capacities of human communities improved Annual damage and losses (crops and properties) due to natural disasters, environmental hazards, human induced and hydro-meteorological events decreased Decreasing per year Decreasing per year NDRRMC Accomplish ment Report CCC, NDRRMC Subsector outcome B: Sustainably managed natural resources achieved Forests and watersheds sustainably managed (ha) Open and denuded forest land area reduced by 1.5 million ha (including 2012) 300,000 300,000 300,000 300,000 National Greening Project (NGP) Accomplish ment Report DENR-FMB Protected forest land/area increased by 1.1 million ha 200,000 300,000 300,000 300,000 Table 9.4. Annual target indicator matrix on sustainable and climate-resilient environment and natural resources, 2013-2016 Sustainable and climate-resilient environment and natiural resources 235 Indicators Annual Plan targets (in %) Means of verification Agency responsible2013 2014 2015 2016 Biodiversity protection and conservation improved Extinction of threatened species of wild fauna prevented 207 207 207 207 DENR-PAWB Accomplish ment Report DENR-PAWB DA-BFARExtinction of threatened species of wild flora prevented 526 526 526 526 Population of Philippine Eagle increased 353 366 379 400 DENR-PAWBPopulation of Tamaraw increased 345 345 350 360 Population of Philippine Cockatoo increased 360 370 380 400 Coastal and marine resources management enhanced Percentage of terrestrial, inland water and coastal and marine areas effectively and equitably managed DENR-PAWB Accomplish ment Report DENR, DA BFAR & LGUsTerrestrial protected areas 5.13% 7.96% 8.45% 8.85% Marine protected areas 0.58% 0.61% 0.62% 0.62% Percentage of critical habitats effectively and equitably managed 20.05% 43.02% 58.12% 100% Agency Reports DENR, DA BFAR & LGUs Area of degraded coral reefs within NIPAS MPAs rehabilitated (in ha; target: 510,012 or 75%) 33,157 or 5% 163,592 or 24% 170,724 or 25% 142,539 or 21% DENR, DA BFAR Land administration and management improved Land degradation hotspots with developed sustainable land management (SLM) practices (in ha) 33,000 33,000 33,000 33,000 DA-BSWM Accomplish ment Report DA-BSWM in collaboration with DENR and DAR Number of beneficiaries with secured land tenure in public agricultural A&D lands 2,227,605 2,327,605 2,373,823 DENR-LMB Accomplish ment Report DENR-LMB Number of beneficiaries with secured land tenure in residential lands zoned as residential areas 281,064 356,064 436,064 516,064 236 Philippine Development Plan 2011-2016 MIDTERM UPDATE Indicators Annual Plan targets (in %) Means of verification Agency responsible2013 2014 2015 2016 Number of Certificates of Ancestral Land Titles (CALTs) issued 1 1 (TBI) 1 (TBI) 1 in CAR NCIP Accomplish ment Report NCIP 74 Certificates of Ancestral Domain Titles (CADTs) issued from 2012-2016 12 12 12 12 104 Ancestral Domains Sustainable Development and Protection Plans (ADSDPPs) formulated from 2012-2016 0 36 24 24 Rehabilitation of abandoned mines improved Number of abandoned mines rehabilitated Bagacay Mine rehabilitated 85% 95% 100% 100% DENR-MGB Accomplish ment Report DENR (MGB, ERDB, PAWB) & LGUs Antamok Mine risk assessment 70% 80% 90% 100% Black Mountain risk assessment Consolidated Mine Inc. risk assessment Dizon Mine risk assessment Basay Mine risk assessment Subsector outcome C: Environmental quality improved for cleaner and healthier environment Air pollution in Metro Manila and other major urban centers reduced Total Suspended Particulate (TSP) level in Metro Manila and major urban centers with levels above 90ug/Ncm (baseline: 2009) DENR-EMB Accomplish ment Report DENR-EMB, DOTC-LTO, MMDA, LGUs NCR 110.30 103.68 97.46 91.62 Alaminos City 112.32 106.70 101.37 96.30 San Fernando City 115.86 110.07 104.57 99.34 Saluysoy 104.83 99.58 94.60 89.87 Cabanatuan 100.31 95.30 90.53 86.01 San Fernando, Pampanga 176.62 167.79 159.40 151.43 Iriga City 161.39 153.32 145.66 138.38 Panganiban Drive 151.90 144.30 137.09 130.24 Mandaue City (Baricuatro Res) 103.36 98.20 93.29 88.62 Zamboanga City: Stn. II 142.78 135.64 128.85 122.41 Sustainable and climate-resilient environment and natiural resources 237 Indicators Annual Plan targets (in %) Means of verification Agency responsible2013 2014 2015 2016 Zamboanga City: Stn.IV 116.83 110.99 105.44 100.17 DENR-EMB Accomplish ment Report DENR-EMB, DOTC-LTO, MMDA, LGUs Zamboanga City: Stn. VII 159.32 151.35 143.78 136.60 Davao City Stn. 8 88.27 83.86 79.67 75.68 Gas emission reduced due to increased travel speed and reduced travel time in Metro Manila (baseline: 2010) Travel speed annually increased from 2010 (km/hr) 3.22 3.47 3.75 4.05 MMDA Accomplish ment Report MMDA Travel time annually reduced from 2010 (min/km) 0.21 -0.2 -0.19 -0.19 Water pollution reduced (Baseline: 2010) Water quality of priority river systems improved (by BOD water criteria: Class C <= 7mg/L; Class D >7mg/L &>= 10mg/L) 5% reduction from previous year’s level DENR-EMB Accomplish ment Report DENR, LGUs BOD level of priority rivers not within the water quality criteria improved (in mg/L) 5% reduction from previous year’s level Meycauayan River (C) 50.59 48.06 45.65 43.37 Marilao River (C) 20.58 19.55 18.57 17.64 Bocaue River (C) 9.43 8.96 8.51 8.09 Ylang-ylang River (C) 102.03 96.93 92.08 87.48 Imus River (C) 10.29 9.77 9.29 8.82 Calapan River (C) 12.00 11.40 10.83 10.29 Iloilo River (C) 10.29 9.77 9.29 8.82 Balili River 31.72 30.14 28.63 27.20 Parañaque River (C) 32.58 30.95 29.40 27.93 Pasig River (C) 24.87 23.63 22.45 21.33 Marikina River (C) 8.82 8.38 7.96 7.56 San Juan River (C) 30.33 28.82 27.38 26.01 BOD level of other priority rivers already within the water quality criteria sustained (in mg/L) <7.00 Agency Reports DENR-EMB, LGUsAnayan River (D) <7.00 Malaguit River (C) Paniqui River (C) Luyang River (C) Sapangdaku River (C) 238 Philippine Development Plan 2011-2016 MIDTERM UPDATE Indicators Annual Plan targets (in %) Means of verification Agency responsible2013 2014 2015 2016 Cagayan de Oro (C) <7.00 Agency Reports DENR-EMB, LGUsPampanga River (C) Angat River (C) BOD level of Laguna Lake maintained within standard (in mg/L) <7.00 LLDA Accomplish ment Report LLDA, LGUs, MWSS, Water Districts, LWUA Waste generated reduced and waste disposal improved Solid waste diversion rate increased (%) 40 43 48 50 DENR-NSWMC Accomplish ment Report DENR-EMB, NSWMC 239Accelerating infrastructure development 10Accelerating infrastructure development 240 Philippine Development Plan 2011-2016 MIDTERM UPDATE I. INTRODUCTION Infrastructure development supports the sector outcomes of the previous chapters, as shown in this chapter’s results framework (Figure 10.1). Chapters 3 and 4 present the roadmaps for globally competitive and innovative industry and services sectors, as well as a competitive and sustainable agriculture and fisheries sector. Chapter 6 details the strategies that improve human capabilities and reduce vulnerabilities to equalize development opportunities, while Chapter 7 discusses the country’s blueprint towards having effective and efficient governance. Finally, achieving stable national security and an environment that is both sustainable and climate resilient are the expected results of Chapters 8 and 9, respectively. The overall strategy outlined in this chapter is to invest massively in infrastructure development by increasing public infrastructure spending to at least five percent of the country’s gross domestic product (GDP) by 2016. II. ASSESSMENT, CHALLENGES AND OPPORTUNITIES In the first half of the Plan period, critical reforms were initiated to address constraints and bottlenecks in infrastructure by embarking on programs and projects to support rapid and sustained economic growth. Still, the country’s infrastructure facilities and systems continue to lag behind those of the country’s counterparts in the Southeast Asian region. According to the latest Global Competitiveness Report (2013-2014), the Philippines ranked 98th out of 148 countries in terms of the overall quality of infrastructure. This is still way behind the rankings of Malaysia (25th), Thailand (61st), Indonesia (82nd), and Cambodia (86th). Table 10.1 further compares the Philippines’ status in terms of e-government service, ICT cost and affordability, and infrastructure for basic services, such as water, sanitation, education and health. Moving forward, the country’s infrastructure development agenda will focus on providing the necessary infrastructure support for attaining and sustaining the development outcomes of the five key result areas of the Aquino administration, while further reaffirming the government’s commitments to address issues earlier identified in 2010. The following subsections present a summarized assessment of the country’s infrastructure development in the first half of the Plan implementation, as well as the challenges and opportunities in moving to the next half. 241Accelerating infrastructure development Figure 10.1. Results framework on accelerating infrastructure development Goals Intermediate goals Intermediate outcomes Poverty in multiple dimensions reduced and massive quality employment created Rapid and sustained economic growth achieved Equal development opportunities achieved Competitiveness enhanced and productivity increased in the industry, services and agriculture sectors Governance improved Safer and more secured environment created and sustained Environmental quality improved Adequacy and accessibility of basic infrastructure services enhanced, and infrastructure gaps in far flung areas reduced Infrastructure supported sector outcomes Globally competitive and innovative industry and services sectors achieved Competitive and sustainable agriculture and fisheries sector achieved Effective and efficient governance achieved Stable national security achieved Sustainable and climate resilient environment achieved Human capabilities improved Vulnerabilities reduced Increasing competitiveness and productivity of the industry, services and agriculture sectors According to the Global Competitiveness Report 2013-2014, the inadequate supply of the country’s infrastructure facilities remains as one of the impediments to the country’s global competitiveness. These inadequacies result in inefficient logistics and infrastructure support in key growth areas, inadequate supply of power particularly in Mindanao, high cost of electricity and lack of available and quality broadband and ICT services. The same gaps had been recognized during the first half of the Plan, as the government consciously poured its resources in infrastructure investments. This consequently made the infrastructure sector as one of the key drivers of the country’s higher economic growth trajectory. From a contraction of 8.4 percent from 2010 to 2011, investments in construction dramatically grew by 15.1 percent from 2011 to 2012. In the first nine months of 2013, it further grew by 15.9 percent, with public and private spending jumping by 31.8 and 11.5 percent, respectively. Box 10.1 highlights some of the government’s major infrastructure interventions that support the lowering of the costs of transporting goods and people, improving agricultural productivity, and generating economic investments and employment. 242 Philippine Development Plan 2011-2016 MIDTERM UPDATE Table 10.1. Ranking and status of the Philippines, 2010-2012, and selected ASEAN countries, 2012, in key infrastructure indicators Indicator Philippine ranking/status Ranking/status of selected ASEAN countries in 20122010 2011 2012 Quality of overall infrastructure[1] 113 of 139 113 of 142 98 of 144 Malaysia: 29 Thailand: 49 Indonesia: 92 Cambodia: 72 Vietnam: 119 Quality of roads[1] 114 of 139 100 of 142 87 of 144 Malaysia: 27 Thailand: 39 Indonesia: 90 Cambodia: 66 Vietnam: 120 Quality of railroad infrastructure[1] 97 of 139 101 of 142 94 of 144 Malaysia: 17 Indonesia: 51 Vietnam: 68 Thailand: 65 Cambodia: 81 Quality of port infrastructure[1] 131 of 139 123 of 142 120 of 144 Malaysia: 21 Thailand: 56 Cambodia: 69 Indonesia: 104 Vietnam: 113 Quality of air transport infrastructure[1] 112 of 139 115 of 142 112 of 144 Malaysia: 24 Thailand: 33 Indonesia: 89 Cambodia: 75 Vietnam: 94 Quality of electricity supply[1] 101 of 139 104 of 142 98 of 144 Malaysia: 35 Thailand: 44 Indonesia: 93 Vietnam: 113 Cambodia: 105 Information and communications technology (ICT) development index[2] 92 of 152 94 of 155 98 of 157 Malaysia: 59 Vietnam: 88 Thailand: 95 Indonesia: 97 Cambodia: 120 243Accelerating infrastructure development Indicator Philippine ranking/status Ranking/status of selected ASEAN countries in 20122010 2011 2012 ICT price basket (cost and affordability of ICT services)[2] 114 of 165 113 of 161 119 of 161 Malaysia: 53 Thailand: 90 Indonesia: 110 Vietnam: 112 Cambodia: 130 e-government ranking[3] 78 of 183 (no data; survey conducted twice a year) 88 of 190 Malaysia: 40 Vietnam: 83 Thailand: 92 Indonesia: 97 Cambodia: 155 Water supply coverage[4] 84.8% 84.4% (no data) Malaysia: 100% Vietnam: 96% Thailand: 96% Sanitation coverage[4] 92.5% 91.9% (no data) Malaysia: 100% Thailand: 100% Hospital beds per 1,000 people[5] 0.5 (c. 2009) 1.0 (no data) Vietnam: 2.2 (c. 2010) Thailand: 2.10 (c. 2010) Malaysia: 1.8 (2009-2011) Sources: [1] Global Competitiveness Reports for 2010-2011, 2011-2012 and 2012-2013 by World Economic Forum [2] Measuring the Information Society (MIS) Reports for 2011, 2012 and 2013 by International Telecommunication Union (ITU) [3] United Nations Global e-Government Survey 2010 and 2012 [4] Annual Poverty Indicators Survey Reports for 2010 and 2011 by National Statistics Office (for Philippines); Progress on Sanitation and Drinking-Water: 2013 Update by WHO and UNICEF (for ASEAN Countries) [5] World Bank—Health Nutrition and Population Statistics 244 Philippine Development Plan 2011-2016 MIDTERM UPDATE Box 10.1. Major infrastructure achievements in support of the productive sectors Roads (as of 2012) • 25,992 km of national roads already paved • 67% of 31,456-km provincial roads and 56% of 14,749-km city roads maintained in good to fair condition Seaports and Airports (as of 2013) • 18 of 32 Road Roll-On/Roll-Off Terminal System routes made operational as of June 2013 • Pocket Open Skies Policy (EO 29) issued in 2011, allowing foreign carriers to operate unilateral and unlimited traffic rights to airports other than the Ninoy Aquino International Airport • Common Carriers Tax Act (RA 10378) signed in 2013, rationalizing taxes paid by foreign carriers, thereby encouraging them to include the Philippines in their primary routes Irrigation (as of 2011) • 58.97% of 3.02 million hectares of irrigable area nationwide provided with irrigation services ICT (as of 2013) • Cellular mobile signal coverage increased to 99.4% in 2012 • Broadband coverage increased to 60.9% in 2012 • Average broadband download speed in major cities increased to 4.4 million bits per second (Mbps) in 2013 Energy (as of 2012) • On-grid installed capacity increased to 17,025 megawatts (MW), adequate for Luzon and Visayas until Q1 2015 and mid-2014, respectively, but not for Mindanao in 2013 • Share of indigenous sources in the total energy mix at 56.3% • 79.56% of 4,236.18 MW generating assets from National Power Corporation privatized, which is one of the prerequisites for retail competition and open access that contributes to lower, more competitive electricity rates 245Accelerating infrastructure development Equalizing development opportunities The government aims to improve every Filipino’s participation in governance and the economy, as well as to reduce the social vulnerability of the populace. These entail the provision of critical infrastructure support related to health, nutrition, education, shelter and other means of social protection. Improving human capabilities To date, around 3.5 million households still have no access to formal sector health facilities. This, despite the upgrading, rehabilitation or reconstruction of 3,846 health facilities from 2010 to 2013, of which 1,567 were barangay health stations, 2,027 rural health units and city health centers, and 252 local government unit (LGU) hospitals. In addition, the PhP13.6-billion fund from the Health Facilities Enhancement Program provided capital-upgrading support to LGU and DOH hospitals with infrastructure and equipment grants in 2013. As of 2012, classroom-to-pupil ratio is still at 1:40 and 1:51 in the elementary and secondary levels, respectively, below the respective standard of 1:30 and 1:45. To attain the standards, the government significantly increased the budget for classroom construction from only PhP6.14 billion in 2010 to PhP17.9 billion in 2013. As of June 2013, 65 percent of 66,800 classrooms targeted for construction within the year were already completed. Through the Public-Private Partnership (PPP) for School Infrastructure Project (PSIP), around 19,980 classrooms will be completed by 2013 or early 2014 in regions with acute classroom shortage. As of 2011, only 84.4 percent of families, or 17.21 million, have access to clean and safe drinking water.132 To help attain 100-percent coverage, the Sagana at Ligtas na Tubig sa Lahat (SALINTUBIG) Program of the Department of the Interior and Local Government (DILG), DOH and National Anti-Poverty Commission (NAPC) provided water supply systems and capacity building measures to 37 waterless municipalities, 16 basic emergency obstetric and newborn care units, 11 resettlement areas, and 21 poorest barangays as of August 2013.133 Statistics on sanitation remain uncoordinated and at times conflicting.134 While the proportion of households with access to basic sanitation135 increased from 76 percent in 2008 to 92.5 percent in 2010, coverage in 2011 slightly decreased to 91.9 percent due to population increase. Despite this, the Millennium Development Goal (MDG) target of 83.8-percent access to basic sanitation has already been realized, but achieving 100-percent coverage remains a challenge. 132 Based on the 2010 and 2011 Annual Poverty Indicators Survey (APIS) reports, which considered only community water systems and protected wells as potable water supply sources. 133 Based on preliminary consolidated report as presented by NAPC on 27 to 29 August 2013 during the SALINTUBIG Midterm Operational Planning Workshop 134 The 2010 DOH Field Health Service Information System (FHSIS) report shows a mere 77-percent access to sanitary toilets, which is contrary to the APIS figure of 92.5 percent. 135 Basic sanitation refers only to access to sanitary toilet [flush (owned or shared) and closed pit type toilet facility], without accounting for septic tank connections. 246 Philippine Development Plan 2011-2016 MIDTERM UPDATE Reducing vulnerabilities From 2011 to July 2013, the government shelter program has channeled PhP115.22 billion to service the housing requirements of 299,022 households. Of this total amount for housing assistance, it allocated 63 percent to low-cost housing covering 87,785 households, with the remaining 37 percent to socialized housing covering 211,237 households. Despite having provided electricity to 76.7 percent of households and 76.1 percentof sitios since 2010, a total of 4.9 million households and 24,758 sitios still do not have access to electricity as of 2012. The 2013-2017 Household Electrification Development Plan (HEDP) issued by the Department of Energy (DOE) sets the plans and strategies to attain 86.2-percent household electrification by 2016 and 90-percent by 2017. For the sitios, the Philippine Energy Plan 2012-2030 targets a100-percent electrification by 2015. Furthermore, the National Power Corporation (NPC), through its Small Power Utilities Group (SPUG), operates 302 power plants in off-grid areas nationwide with total rated capacity of 283.06 megawatts (mW) as of 2012. Its 2012-2016 Missionary Electrification Development Plan includes strategies for private sector participation in SPUG and distribution utility (DU)-covered unviable areas, improved technical efficiency of SPUG and DUs in small-island and isolated grids, and rationalized Universal Charge for missionary electrification subsidy, among others. The government expanded the Community e-Center (CeC) Program that provided ICT service centers and shared Internet access facilities in remote areas. As of 2013, it already established 1,573 CeCs nationwide. The ICT Office (ICTO) of the Department of Science and Technology (DOST) also explored the use of television white space (TVWS) as an alternative technology for providing education and public services beyond commercial wired or wireless broadband coverage. Making governance effective and efficient The government undertook several critical reforms in the past three years to improve governance within the sector and subsequently enhance the country’s investment climate. However, a number of crucial regulations, policies, as well as data gathering and monitoring systems, are still necessary to foster an enabling atmosphere for accelerating infrastructure development and to ensure effective planning, implementation, and sustainability. The PPP approach is a major strategy to mobilize the private sector as a partner in infrastructure development. Two major legal frameworks—the implementing rules and regulations of the Build-Operate-Transfer Law (RA 6957 as amended by RA 7718) and the guidelines and procedures for joint venture agreements—were amended to further streamline and fast-track the implementation of PPP projects and increase transparency through a check-and-balance mechanism. The former became effective on 22 October 2012, and the latter on 26 May 2013. A total of 4.95 million households and 24,325 sitios still do not have access to electricity as of 2012. 247Accelerating infrastructure development Reforms in the energy sector have also led to increased private sector participation. On the implementation of the Renewable Energy (RE) Act of 2008 (RA 9513), the Energy Regulatory Commission (ERC) approved in July 2012 the feed-in-tariff (FiT) rates to encourage RE developers to invest at the initial stage and hasten RE deployment. The Net Metering Program, a consumer-based RE incentive scheme that offsets DU-provided electric energy with electric power generated by end users from eligible RE facilities and delivered to local DUs, has also been initiated. Meanwhile, the Renewable Portfolio Standards, which requires suppliers to source part of their supply from RE resources, is being reviewed. On managing local roads, the DILG instituted local roads management systems in 10 provinces in the Visayas and Mindanao through the Performance-based Incentive Scheme under the Provincial Road Management Facility (PRMF). The goal is to improve delivery of basic road services and increase economic activity in the South. In line with improvements in the country’s e-government system, the DOST ICTO launched in June 2012 the Integrated Government Philippines (iGovPhil) Project that provides needed infrastructure, software and support systems. Also in 2012, the ICTO launched two initiatives: the Contact Center ng Bayan (CCB) as the government’s main helpdesk and the Philippine ICT Statistics Portal as a web based system providing ICT-related statistics. As chair of the National Economic and Development Authority (NEDA) Board’s Infrastructure Committee, the NEDA Secretariat has been at the helm of optimizing infrastructure investments nationwide. The NEDA introduced the conduct of Value Engineering/Value Analysis (VE/VA) in appraising priority projects to ensure that these are not overdesigned or over-specified and to minimize cost overruns, project implementation delays and changes in scopes of works. In addition, the President signed EO 146 in 2013, delegating to the NEDA Board his power to approve reclamation projects to ensure that such initiatives are consistent with national priorities and synchronized with the planning, programming and budgeting process. Stabilizing national security Upholding territorial integrity is a primary challenge given the country’s archipelagic nature. The thrust is to strengthen maritime security capabilities and infrastructure facilities and reinforce security measures from external threats through ICT-based technologies. In 2012, the Philippine Coast Guard (PCG) became the first coast guard or maritime safety agency in the world to be certified as compliant with International Organization for Standardization (ISO) 9001:2008 standards. This expanded an earlier certification given to the Coast Guard Action Center (CGAC) in 2010. The PCG operates 561 light stations nationwide, 166 of which were rehabilitated, and In line with improvements in the country’s e-government system, the Department of Science and Technology-Information and Communications Technology Office launched in June 2012 the Integrated Government Philippines (iGovPhil) Project that provides needed infrastructure, software and support systems. 248 Philippine Development Plan 2011-2016 MIDTERM UPDATE ensures a 95-percent operational level by deploying field maintenance inspection teams. Similarly, commercial ports in Batangas, Cagayan de Oro and Davao also received ISO Quality Management System certifications and recommendations from 2011 to 2012. The Maritime Industry Authority (MARINA) issued major policies on water transport safety and security. Advisory No. 2012-07 in 2012 prohibits the use of unregistered vessels or motorized bancas for tourism, island hopping or sightseeing, while Flag State Administration Advisory (FSAA) No. 2012-21 safeguards the working and living conditions of seafarers against counter-terrorist actions, in relation to the ratification of the Maritime Labour Convention 2006. MARINA also completed the Philippine Map on Navigational Areas that include danger zones and hazardous areas. Improving sustainability and climate-resiliency of the environment In 2011, the Department of Public Works and Highways (DPWH) constructed flood management infrastructure that protected 3,822 hectares of land against 25-year floods, thus decreasing by 11.72 percent the identified 32,618 hectares deemed vulnerable to flooding. In September 2012, the NEDA Board approved the implementation of a master plan for effective flood risk management (FRM) in Metro Manila and surrounding areas, with an initial allocation of PhP5 billion for immediate, high-impact flood management interventions. It also approved the FRM Project along selected principal rivers. To help avert further degradation/pollution of major waterways in Metro Manila and alleviate flooding during heavy rains, the government allocated PhP50 billion for the relocation of 104,219 informal settler families residing along Metro Manila waterways, with the National Housing Authority (NHA) implementing the program for off- and in-city relocation, the latter involving the construction of medium-rise buildings. To manage properly the country’s solid wastes, around 1,500 LGUs and 32,000 barangays still need to be covered by additional sanitary landfills and materials recovery facilities, respectively, until 2016. In Metro Manila, 4.07 million households are not yet covered by sewerage systems. Furthermore, rapid technological developments have led to increased quantities of electrical and electronic wastes (e-wastes). Specific legislation, policy framework and infrastructure facilities are needed for managing the country’s e-wastes. III. STRATEGIC FRAMEWORK Guided by the President’s Social Contract with the Filipino People, which envisions socioeconomic progress anchored on high and sustained economic growth that generates massive quality employment and reduces poverty, infrastructure development will focus on the attainment of the following intermediate outcomes: (a) competitiveness enhanced and productivity increased in the industry, services and agriculture sectors; (b) adequacy and accessibility of basic infrastructure services 249Accelerating infrastructure development enhanced, and infrastructure gaps in far-flung areas reduced; (c) governance improved; (d) safer and more secured environment created and sustained; and (e) environmental quality improved (see Figure 10.2). Figure 10.2. Strategic framework on accelerating infrastructure development Intermediate outcomes Strategies Competitiveness enhanced and productivity increased in the industry, services and agriculture sectors 1. Improve connectivity and efficiency 2. Support agricultural production 3. Pursue energy and water security 4. Improve business climate 5. Improve access to and adequacy of basic infrastructure services 6. Address infrastructure gaps in far-flung areas 7. Promote good governance through ICTs 8. Improve coordination and planning, streamline government processes. 9. Optimize infrastructure investment 10. Provide safety and security measures 11. Enable development in conflict-affected areas 12. Strengthen resilience to climate change and disasters 13. Improve wastewater and solid waste management 14. Support measures to improve air quality Adequacy and accessibility of basic infrastructure services enhanced, and infrastructure gaps in far-flung areas reduced Governance improved OVERALL STRATEGY: Increase public infrastructure spending to enhance the quality, adequacy, and accessibility of infrastructure facilities and services Safer and more secured environment created and sustained Environmental quality improved Overall strategy The overall strategy is to increase public infrastructure spending to enhance the quality, adequacy and accessibility of infrastructure facilities and services. With adequate fiscal space for the medium term (see Chapter 2: Macroeconomic policy; and Chapter 5: Resilient and inclusive financial system), the government will increase public infrastructure spending from 2.2 percent of GDP in 2012 to at least 5.0 percent by 2016 (Figure 10.3). The spending will still be supplemented by private sector investments through PPP and will be anchored on a conscious effort to increase efficiency based on the synchronized planning and budgeting processes. 250 Philippine Development Plan 2011-2016 MIDTERM UPDATE Figure 10.3. Infrastructure spending as component of capital outlay, 2012-2016 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 2012 2013 2014 2015 2016 2.2% 2.5% 3.5% 4.0% 5.1% Source: DBM and NEDA Note: Actual figure for 2012. The following infrastructure development strategies and action plans, clustered according to the five infrastructure intermediate outcomes, will be pursued for the remaining term of the administration. Intermediate outcome A: Competitiveness enhanced and productivity increased in the industry, services and agriculture sectors Infrastructure serves as among the key measures in promoting growth in the agriculture, industry and services sectors. Strategy 1: Improve connectivity and efficiency among urban centers, regional growth hubs Under the master plan on High Standard Highway Network Development, additional 234.13 kilometers (km) of toll expressways will provide interconnectivity in Central Luzon, Metro Manila and the CALABARZON. In addition, the government will develop a seamless multimodal logistics system along the Subic-Clark-Manila-Batangas (SCMB) corridor to ensure efficient flow of commodities, supplies, and inputs to tourism, agricultural production and economic/industrial zones. With several projects also lined up to enhance the services of Clark International Airport (CIA), the extension of SCMB corridor farther north and south will be pursued through increased utilization of the Subic and Batangas Ports. In addition, the government will explore establishing a long-distance, high-speed mass rail transit system and an integrated/full-length railway system for freight-rail services across Luzon that are duly coordinated with transport systems in Metro Manila and other urban centers. Along with this is the rationalization of agency roles on mass transport development. 251Accelerating infrastructure development Box 10.2. Innovation and growth corridors in Mindanao • Mindanao Food, Agribusiness and Logistics Corridor (Tagum-Davao-General Santos); • Mindanao Industrial Trade Corridor (Western and Northern Mindanao); • Mindanao Food Basket Corridor (Central Mindanao-Bukidnon); • Mindanao Biodiversity and Ecotourism Corridor (Surigao-Agusan-Davao Oriental including former Paper Industries Corporation of the Philippines [PICOP] concessionaire areas); and • Mindanao Mariculture and Trade Corridor (Zambasulta: Zamboanga-Basilan Sulu-Tawi-Tawi) The ASEAN, in its 17th summit in 2010, adopted the Philippine initiative of establishing an ASEAN RORO Network as a flagship program of the ASEAN Connectivity Master Plan. Related initiatives, including developing the General Santos, Philippines-Bitung, Indonesia route, will be linked to the ASEAN Community Roadmap 2009-2015. The convergence program of DPWH and the Department of Tourism will provide road access to designated priority tourism destinations under the National Tourism Development Plan (NTDP). To support this plan in meeting the expected increase in tourist arrivals, the Department of Transportation and Communications (DOTC) will develop the capacities of international and principal Class 1 and 2 airports with commercial flights. Along with the continuous implementation of the Open Skies Policy, Common Carriers Tax Act, as well as consultation talks participated by the Philippine Air Negotiating Panel, construction/rehabilitation of terminals and navigational facilities is planned for the following tourism airports: Marinduque, San Jose, Siargao, Vigan, Basco, Bukidnon, General Santos, and Roxas airports. In addition, construction/upgrading and improvement of several tourism ports, like Ivana Port in Batanes, Panganngan Port in Bohol, Lawigan Port in Camiguin, and Cagban Jetty Port in Aklan, will be undertaken to expand their capacities. The government will continue to promote the spread of ICT to develop the information technology-business process management (IT-BPM) industry, as guided by the 2012-2016 IT-BPM Road Map that targets US$25 billion in revenues and 1.3 million employees in said industry by 2016 (see Chapter 3: The completion of the Central RORO (Roll-On/Roll-Off ) Spine Project will enhance interisland logistics, to facilitate seamless movement of passengers, vehicles and goods along the Luzon-Panay-Negros-Cebu-Bohol-Mindanao route. In Mindanao, Box 10.2 shows the five innovation and growth corridors that will be developed. 252 Philippine Development Plan 2011-2016 MIDTERM UPDATE Indicators Baseline (2010) End-of-Plan target (2016) Assumptions and risks Travel time via road in key corridors and key urban corridors decreased (in min) 20.59 (2012) 20.03 • Satisfactory traffic management system in place by LGUs. • Implementation of other infra projects (e.g. communications, water system) systemically coordinated for smooth traffic. Transfer time in MRT/LRT decreased (in min)136 9 5 • Contactless Automatic Fare Collection System to be implemented in 2015Platform to platform 8 4 Concourse to platform 10 5 Optimal capacity (train’s standing capacity with allowance to consider passengers' comfort/space) in train systems achieved (per sq.m.)137 4-8 4-7 • Rolling stocks/materials are available and sufficient PNR-Metro Commuter (Optimal capacity = 6 passengers per sq. m.) 6 6 LRT 1 (Optimal capacity = 6 passengers per sq. m.) 6 5-7 LRT 2 (Optimal capacity = 4-5 passengers per sq. m.) 4 4-5 MRT3 (Optimal capacity = 6 passengers per sq. m.) 8 6 Table 10.2. Revalidated results matrix (RM) on improving connectivity and efficiency among urban centers, regional growth hubs Competitive and innovative industry and services sectors). The government will provide the overall development framework on the deployment of new technologies and improvement of the country’s digital connectivity through the following plans: • National Broadband Deployment Plan, to address current gaps and recommend appropriate initiatives on optimizing broadband service; and • Digital Terrestrial Television Broadcasting Migration Plan, to prepare the Philippines’ switchover from analogue to digital signaling broadcast system. The revalidated results matrix (RM) under this strategy is presented in Table 10.2. 253Accelerating infrastructure development Indicators Baseline (2010) End-of-Plan target (2016) Assumptions and risks Load transported via the Central RORO Spine increased (in tons per ship-hour)138 189 (2012) 251 • Efficiency indicator affected by: o Economic factors (e.g., demand and supply affecting cargo throughput); o Physical and operational condition of ports • Does not consider government policy on diversion from Manila port to Batangas port Davao 126 (2012) 179 Cagayan de Oro 42 (2012) 47 Batangas 21 (2012) 25 Passengers transported via air increased per annum139 37,960,765 56,084,528 • Projects to be completed as scheduled Coverage of cellular mobile telephone service (CMTS) in cities and municipalities increased (in % of total number of cities/ municipalities) 95 100 • Enabling policies/ regulations on increasing coverage to be issued by government (DOST ICTO, NTC, etc.) • Return of investment is good/ attractive for private sector Cities and municipalities with broadband coverage increased (in % of total number of cities/municipalities) 47 100 Strategy 2: Support agricultural production Increasing the competitiveness of agriculture requires increasing yield as well as farmed land. To intensify rice production, among others, development and rehabilitation of irrigation systems will be pursued. Small water impounding projects, among others, will be established, where and when feasible, to augment the demand for water. In parallel, irrigation management transfer will be undertaken so that irrigators’ associations will be more efficient in operating and managing secondary canals and on-farm structures in larger systems, as well as entire systems covering more than 3,000 hectares. In addition, rural infrastructure and facilities will be improved through the construction/rehabilitation of farm-to-market roads that strategically connect rural and agricultural areas with market towns and destinations, and enable efficient transport of agriculture produce to market towns and distribution centers. The revalidated RM under this strategy is presented in Table 10.3. 254 Philippine Development Plan 2011-2016 MIDTERM UPDATE Strategy 3: Pursue energy and water security Table 10.4 shows the capacities of committed and indicative power projects in Luzon, Visayas and Mindanao from 2013 to 2016, and the targeted ratio of dependable capacity to peak demand and required reserve by 2016. The committed projects targeted to be implemented from 2013 to 2016 include 515.27 MW power projects utilizing RE resources, with 130.31 MW from geothermal, 169.64 MW from hydropower, 68.00 MW from wind, 47.33 MW from biomass and 100 MW from solar. To help ensure the reliability of power supply, the National Grid Corporation of the Philippines will implement various transmission projects under its Transmission Development Plan 2012. Particulars Grid Luzon Visayas Mindanao Capacity of committed power plant projects (2013-2016), in MW 767.4 429.6 515.0 Capacity of indicative power plant projects (2013-2016), in MW 9,702.5 718.0 1,928.0 Ratio of dependable capacity to peak demand and required reserve (2016) 107.86% 105.32% 100.0% Table 10.4. Target capacity of committed and indicative private sector-initiated power plant projects, 2013-2016 140 Total value of NIA and DA (BSWM and RFUs). Based on an estimation from the submitted Public Investment Program (PIP) of NIA, only about 64.71% can be achieved by 2016. However, NIA is currently reviewing its PIP. 141 Based on the NIA 2012 Year End Report Indicators Baseline (2010) End-of-Plan target (2016) Assumptions and risks Irrigation service coverage increased (in % of total potential irrigable area)140 56.01 73.80 • Total irrigable area of 3.126 million hectares assumed in 2010 was reduced to 3.021 million in 2011 due to conversion and areas made permanently non-restorable.141 • Potential areas to be irrigated are restorable and not converted. • Irrigators associations manage the irrigation systems effectively . NIA 49.34 65.27 DA-BSWM and DA-RFUs 6.67 8.53 Table 10.3. Revalidated results matrix (RM) on supporting agricultural production 255Accelerating infrastructure development Pending new capacity addition, rehabilitation and uprating of existing power plants in Mindanao, the DOE supports the DUs’ implementation of Interruptible Load Program (ILP) as a short-term solution to the region’s power situation. The program will compensate large energy consumers for operating their own generating facility and voluntarily taking themselves off the grid during situations of peak demand or supply shortfall. The DOE will also continue to implement two programs as additional options for DUs in the short-term: • Modular Genset Program, wherein electric cooperatives may purchase or rent modular generator sets to fill the gap between demand and contracted supply, particularly during peak hours; and • Interim Mindanao Electricity Market, which encourages the use of available uncontracted and unutilized capacities in the Mindanao grid for real-time correction of electricity supply-demand imbalance. The Bright Now Campaign under the National Energy Efficiency and Conservation Program (NEECP) will promote smart energy use through the dissemination of basic information on energy standards, energy efficient products and innovative technologies. As part of the NEECP, the DOE will also expand its existing energy labeling program to include television sets, washing machines and new models of passenger cars and light duty vehicles, apart from the current coverage of air conditioners, refrigerators and compact fluorescent lamps or CFL. As an overarching strategy in the pursuit of water security, eco-efficient approaches/ interventions for developing water infrastructure will be considered. To guide water security objectives, river basin master plans will be developed, including water resource assessments or water availability studies particularly for water critical areas, to identify new water sources for domestic, commercial, industrial, irrigation and other needs. Surface water will be prioritized over groundwater resources, where appropriate. Studies will be undertaken in water-critical areas, such as Metro Manila, Metro Cebu, Metro Davao, Angeles City, Metro Iloilo, Cagayan de Oro City and Bulacan, among others. For Metro Manila, new water sources will be identified and developed to eliminate the risks arising from being dependent on a single water source for various consumption needs. Raw water pricing will also be explored and complemented with capacity development for stakeholders, particularly for the agriculture sector (which is the largest consumer of water), to promote efficient water utilization/extraction. Domestic and municipal water supply provision targets the increase of Level III and 24-hour service coverage and the reduction of non-revenue water. In addition, the government will ensure adequate water supply in priority tourism destinations under the NTDP. For Metro Manila, new water sources will be identified and developed to eliminate the risks arising from being dependent on a single water source for various consumption needs. 256 Philippine Development Plan 2011-2016 MIDTERM UPDATE Box 10.3. Major government infrastructure projects to pursue energy and water security • Angat Dam and Dyke Strengthening Project • Angat Water Transmission Improvement Project • New Centennial Water Source-Kaliwa Dam • Bulacan Bulk Water Supply Project • Rehabilitation, Operation and Maintenance of the Angat Hydro Electric Power Plant (AHEPP) Auxiliary Turbines 4 & 5 through PPP • Uprating of Agus 6 Units 1&2 • 50-MW Isabela Coal Mine-Mouth Power Plant • 50-MW Coal-fired Power Plant in Malangas • 278.4 MW Renewable Energy Project The revalidated RM under this strategy is shown in Table 10.5. Indicators Baseline (2010) End-of-Plan target (2016) Assumptions and risks Power demand met (i.e., ratio of dependable capacity to total peak demand with required reserve is maintained above 100%) (in %) 108.14 104.39 • Projections based on 7.0% GDP growth. • Actual commercial operation dependent on private sector decision. • Private sector investment in the subsector increased. • Management of the service is efficient and effective. Luzon 113.42 107.86 Visayas 103.29 105.32 Mindanao 107.70 100.00 Target energy self sufficiency (at 60%) met (in % of total energy) 58.31 60.00 • Energy savings targets under the National Energy Efficiency and Conservation met • RE committed projects implemented as scheduled • Mandated biofuels blending implemented as scheduled142 Table 10.5. Revalidated results matrix (RM) on pursuing energy and water security 142 Mandated blending for biodiesel and bioethanol is 5% and 10%, respectively, of total volume sales 257Accelerating infrastructure development Indicators Baseline (2010) End-of-Plan target (2016) Assumptions and risks Water demand in water critical areas met (in % ratio of water supplied in million liters per day [MLD] to water demanded in MLD) 116.06 (2011) 92 • Scheduled projects are implemented without delay • Sector investment increased and management for the water system by LGU/private sector are satisfactory. MWSS Concession Areas 122 (2011) 113 • Deficit in MWSS Concession Area by 2017 Metro Cebu 38 (2011) 52 Bulacan 88 (2011) 89 • Projections only for the Balagtas, Bocaue, Bulacan, Calumpit, Plaridel and Malolos WDs Cagayan de Oro City 109 (2011) 121 Davao City 86 (2011) 86 Coverage of 24/7 water supply (WS) services in cities increased (in %) 77.59 90.12 • Average of 559 WDs and 2 MWSS concessionaires. • Sector investment increased and management for the water system by LGU/private sector are satisfactory. Level III WS service coverage increased (in %) 82 100 Non-revenue water decreased (in % of total water volume produced) 36 23 • Average of 559 WDs and 2 MWSS concessionaires. • Management for the water system by LGU/private sector are satisfactory. Tourist Destination Areas (TDAs) with improved water system increased (in % of TDAs identified as waterless) NA 100 • Covers only 26 TDAs that are identified as waterless areas • Private sector investments in tourist areas increased and management are efficient and effective. Strategy 4: Improve business climate through institutional and policy reforms, and legislation It is necessary to strengthen institutional and regulatory regimes, particularly in the transport, water, and ICT subsectors, by creating independent regulators to enhance competitiveness and protect consumers. 258 Philippine Development Plan 2011-2016 MIDTERM UPDATE The expected approval of the National Transport Policy will raise the level of accountability in decision making and enhance interaction among institutions regulating international and domestic freight transport, transport operators and intermediaries providing brokerage services. Through this, bottlenecks will be eliminated to enhance transport infrastructure, improve logistics, reduce transport time, and lower transport logistics costs. To address institutional fragmentation and coordination issues in the water subsector, the following interventions will be pursued: (a) establishment of a lead/ apex agency in the water resources sector for the coordination of policies, plans and programs related to water resources; (b) prioritizing water resources assessments and developing river basin master plans in priority river basins; and (c) creation of a lead coordinating agency for water supply and sanitation (WSS) provision. Box 10.4 lists the priority policies and legislation aimed at fostering an enabling atmosphere for infrastructure development. Box 10.4. Priority infrastructure sector policies and laws • Enactment of Anti-Trust Law, to combat unfair competition in industries • Amendment of the Tariff and Customs Code and Domestic Shipping Development Act, to foster greater competition and lower transportation cost • Amendment of the BOT Law, to further enhance transparency, competitiveness, impartiality and mobilization of private sector for infrastructure development • Strengthening of National Telecommunications Commission as the independent regulator of the ICT sector • Enactment of law enabling an atmosphere for converging technologies brought about by enhancements in the ICT sector • Enactment of law strengthening security and capability against cyberattacks, cybercrimes, cyberterrorism, and cyberwarfare • Amendment of Solid Waste Management Act, to harmonize conflicting/ overlapping provisions with existing laws on fines, penalties, and local taxation (RA 7160), environmental impact assessment (PD 1586, s. 1978), air emissions (RA 8749), environmental education (RA 9512), compost quality requirements (RA 10068), climate-proofing of facilities (RA 9729), and incentives (EO 226, s. 1987); and, to incorporate appropriate management of electronic wastes • Amendment of the IRR of the Water Code, to strengthen resource regulation and promote more efficient use of water resources • Harmonization of Renewable Energy Act, National Integrated Protected Areas System Act and Indigenous People’s Rights Act, to address social concerns in project approval • Enactment of law on national land use and management (see Chapter 9: Sustainable and climate-resilient environment and natural resources) • Amendment of law on right-of-way, site or location acquisition for government projects, to balance State and private rights • Enactment of National Transport Safety and Security Act, to create a board that investigates transport accidents and provides transport safety recommendations • Amendment of the Charters of Philippine Ports Authority and Civil Aviation Authority of the Philippines, to address conflicts in their regulatory and operation/ operator functions 259Accelerating infrastructure development Intermediate outcome B: Adequacy and accessibility of basic infrastructure services enhanced, and infrastructure gaps in far-flung areas reduced Both soft and hard infrastructure strategies will address gaps in the supply-side of basic and social services to help improve human capability, reduce vulnerabilities, and ultimately equalize development opportunities for all. Strategy 5: Improve access to and adequacy of basic infrastructure services For 2014-2016, the government will construct, rehabilitate and upgrade 10,596 basic health care hospitals and facilities within the Updated Plan period, including the installation of basic and comprehensive emergency obstetric facilities with modern and new equipment. Adequate water supply infrastructure and capacity development support will be provided to the target waterless poor areas. Provision of WSS for rural and hard to-reach areas will be augmented through the bottom-up planning and budgeting approach,143 among others. The government will scale up coverage of regional water and sanitation (WatSan) hubs using standardized local capacity development materials, such as WatSan toolboxes and localized customer service codes, among others. Zero open defecation at the barangay level through community-based methodologies, as well as mainstreaming of sanitation in emergency/disaster response areas, will also be improved. The Department of Education targets the construction of 43,183 classrooms in 2014, 39,366 in 2015, and 16,773 in 2016. The government will fast-track the completion of classrooms under the first and second phases of the PSIP. It will also construct additional batches of classrooms for PSIP and for the Basic Education Facilities Program, Regular School Building Program and School Building Program for Basic Education through increased private sector and public spending. The 2011-2016 target of the National Housing Authority (NHA) and Social Housing Finance Corporation (SHFC) is to provide 578,756 socialized housing units. Along with this is the expansion of energy access to remaining sitios and households without electricity in the country to achieve 100-percent sitio electrification by 2015, 86.2-percent household electrification by 2016 and 90-percent household electrification by 2017. This will entail installation of 65.225-mW additional power capacity in off-grid areas, as well as accelerating the implementation of retail competition and open access up to the household level and providing support to DUs. The revalidated RM under this strategy is shown in Table 10.6. 143 This approach is consistent with the policy direction under the Cabinet Cluster on Human Development and Poverty Reduction. 260 Philippine Development Plan 2011-2016 MIDTERM UPDATE Box 10.5. Major infrastructure programs and projects to improve access to and adequacy of basic infrastructure services • Public-Private Partnership (PPP) for School Infrastructure Project (PSIP) Phases I & II • Health Facility Enhancement Program (HFEP) • Modernization of the Philippine Orthopedic Center • SALINTUBIG Program • Sitio Electrification Program • Expanded Rural Electrification Program Indicators Baseline (2010) End-of-Plan target (2016) Assumptions and risks Classroom-to-pupil ratio improved • Projects to be completed/ implemented as scheduled Primary 1:39 1:30 Secondary 1:54 1:45 WatSan facilities-to-pupil ratio improved Primary 1:58 1:50 Secondary 1:103 1:50 Households (HH) with electricity increased (in % of total number of HH)144 72.07 86.20 • Private sector investments increased and management efficient and effective Sitios with electricity increased (in % of total number of sitios)145 68.65 100.00 HH access to water supply increased (in % of total number of HH) 84.80 88.21 Barangays with zero open defecation increased (in % of total number of barangays)146 11.91 (2011) 71.47 • Dependent on DOH assessment of LGUs coordinated through DILG Table 10.6. Revalidated results matrix (RM) on improving access to and adequacy of basic infrastructure services 144 Total number of households in 2010 is 20.2 million. 145 The total number of households in 2010 is 20.2 million. 146 Total number of barangays is 41,975. 261Accelerating infrastructure development Indicators Baseline (2011) End-of-Plan target (2016) Assumptions and risks Access to ICT in public schools increased (in % of total number of public schools) • Government will allocate budget for connectivity of primary/secondary schools • Return of investment to the private sector for broadband infrastructure is good/attractive • By 2014, all energized schools shall be provided with computer packages and connectivity • Investment by private sector for broadband infrastructure increased and management efficient and effective. Primary 61 91 Secondary 88 91 Table 10.7. Revalidated results matrix (RM) on addressing infrastructure gaps in far-flung areas Strategy 6: Address infrastructure gaps in far-flung areas To further expand communications services in remote and rural areas, the government will aggressively implement the CeC Program and establish 2,586 CeCs by 2016 to provide alternative means of access to information and government services. Another strategy is to pursue the TVWS initiative to provide broadband access in rural, remote, unserved and underserved areas. The revalidated RM under this strategy is shown in Table 10.7. Intermediate outcome C: Governance improved The following strategies aim to enhance efficiency and transparency in governance and provide better means of communication between government and the public. Strategy 7: Promote good governance through ICTs The e-Government Master Plan 2013-2016 will serve as the blueprint for introducing innovations within government work processes, enhancing administrative productivity and allowing more citizen participation. The iGovPhil Project will set up a government-shared network among agencies and other infrastructure for e-governance. The Philippine Radio Frequency Management System will provide greater efficiency in facilitating increasing demand for radio frequencies and other wireless communications services. 262 Philippine Development Plan 2011-2016 MIDTERM UPDATE To harmonize data gathering, monitoring, and analyses of various ICT statistics for policy and decision making, the government will further enhance the Philippine ICT Statistics Portal, as well as other government websites in the energy subsector (e.g., kuryente.org.ph, langis.org.ph and wattmatters.org.ph). Strategy 8: Improve coordination and planning, and streamline government processes Apart from the National Transport Policy, the government developed a number of roadmaps and master plans to improve coordination and planning among government agencies in implementing key infrastructure projects. These include the “Roadmap for Transport Infrastructure Development for Metro Manila and Its Surrounding Areas” and the “Transport Infrastructure Development Framework Plan,” both of which aim to interconnect Metro Manila, Central Luzon, CALABARZON region and other highly urbanized cities and economic regions to improve investments in key growth areas. Furthermore, to address institutional fragmentation and coordination issues in the water resources subsector, the following interventions will be pursued: (a) establishment of a lead/apex agency in the water resources sector for the coordination of policies, plans, and programs related to water resources; (b) prioritization of water resources assessments and development of river basin master plans in priority river basins; and (c) creation of a lead coordinating agency and adoption of a unified financing framework/policy for WSS provision. Strategy 9: Optimize resources and investments in infrastructure Since most infrastructure projects are capital-intensive, NEDA will continue to study the full institutionalization of VE/VA and address concerns including the optimal timing of conducting VE/VA and consideration of social component in VE/VA activities, among others. The government will ensure a systematic process for planning, budgeting, implementation, monitoring and evaluation of government-wide ICT programs and projects with the implementation of the Medium-term ICT Harmonization Initiative (MITHI) for FY 2014-2016 (see Chapter 6). The fragmented nature of WSS service provision, especially for rural and unserved areas, requires that the use of all available funds be rationalized towards more efficient resource allocation. In this regard, a unified financing framework/policy will be developed. To preserve and extend the service life of government’s infrastructure assets, government agencies will ensure asset preservation and management activities through proper maintenance, rehabilitation, upgrading, and funding. Particularly for transport infrastructure, the “user-pays” principle will be applied at the very least for the purpose of asset preservation and full-cost recovery. This principle may be Particularly for transport infrastructure, the “user pays” principle will be applied at the very least for the purpose of asset preservation and full-cost recovery. 263Accelerating infrastructure development invoked when service pricing is possible and potential users unwilling to pay for the service can be excluded. Optimizing resources will focus on upgrading the quality and capacity of existing transportation infrastructure instead of expanding network coverage. In the case of existing mass transport systems, priority interventions include installation of automatic fare collection systems and system rehabilitation to modernize facilities and improve service. For long-term sustainability, the government will ensure availability and adequacy of maintenance funds. For local transport networks management and maintenance, innovative financing schemes will be set up for LGUs. Intermediate outcome D: Safer and more secured environment created and sustained The following strategies will be put in place to secure people’s property, livelihood, and well-being from human security threats, and consequently attain just and lasting peace and national security. Strategy 10: Provide safety and security measures Pending the passage of the National Transport Safety and Security Act, the DOTC-Office of Transport Security (OTS) will continue thorough inspections and evaluation of security plans of public transport terminals. In upholding the country’s territorial integrity, the government will continue rehabilitating sea navigation aids, including capability building of PCG personnel on counter terrorism and against other external threats. Along with this is the procurement of patrol boats and multi-role response vessels, as well as the utilization of geographical information system technologies in identifying safe areas for marine navigation. As the nation faces new risks from cybercrimes, the government will formulate a National Cybersecurity Program, which will include, among others, the development of a National Cybersecurity Plan and implementation of a government-wide systems and networks security management program. It will also implement the Government Web Hosting Service, as issued through Administrative Order No. 39 (s. 2013), to enhance security and robustness of government websites. The revalidated RM under this strategy is shown in Table 10.8. Indicators Baseline (2010) End-of-Plan target (2016) PCG responsiveness increased (in % of calls for assistance responded to) 46.40 82.11 Table 10.8. Revalidated results matrix (RM) on providing safety and security measures As the nation faces new risks from cybercrimes, the government will formulate a National Cybersecurity Program, which will include, among others, the development of a National Cybersecurity Plan. 264 Philippine Development Plan 2011-2016 MIDTERM UPDATE Box 10.6. Major infrastructure interventions to improve environmental quality Strengthen resilience to climate change and disasters • Implementation of immediate high-impact projects identified under the Master Plan for Flood Management in Metro Manila and Surrounding Areas • Flood Risk Management Project (FRIMP) along principal rivers (Cagayan River, Tagoloan River, Imus River and Cagayan de Oro River) • Improvement/Restoration of Telemetry Equipment of the Effective Flood Control Operation System (EFCOS) Improve wastewater and solid waste management • Development and Operation of Waste-to-Energy Facilities • National Sewerage and Septage Management Program Strategy 11: Enable development in conflict-affected areas The government will continue providing infrastructure support to conflict affected and impoverished areas through the Investment Support Program (ISP) for Autonomous Region for Muslim Mindanao (ARMM) and the Payapa at Masaganang Pamayanan or PAMANA Program (see Chapter 8: Peace and security). Relatedly, the Stimulus Development Plan (SDP) for ARMM was prepared as a reform roadmap towards economic recovery and development through strategic projects promoting basic services, livelihood and basic infrastructure such as national roads. The government will continue until 2016 to implement ongoing and programmed foreign-assisted projects for road and bridge construction, with the DOTC improving, constructing and rehabilitating municipal ports in San Esteban in Ilocos Sur, Tarahib in Catanduanes, Kawayan in Biliran, Galas in Dipolog, Lugus in Sulu, as well as other ports in ARMM. Intermediate outcome E. Environmental quality improved The environment needs effective infrastructure support to adapt to climate-change threats and mitigate risks from disasters and natural calamities. The government will undertake the following strategies in the infrastructure sector to ensure a livable and safe environment conducive to sustainable economic growth. 265Accelerating infrastructure development Strategy 12: Strengthen resilience to climate change and disasters The government will implement the Master Plan for Flood Management in Metro Manila and Surrounding Areas. Approved by the NEDA Board in 2012, the plan identifies measures to increase safety of population and protection of property and livelihood from floods and related environmental risks (e.g., landslides). Related to this is the prioritization of construction of flood management structures in highly vulnerable areas based on river basin master plans, and expediting immediate financing for the rehabilitation of flood management structures. The government will improve the existing flood forecasting and warning systems through strengthened coordination among the National Disaster Risk Reduction and Management Council (NDRRMC), Advanced Science and Technology Institute (ASTI), Philippine Atmospheric, Geophysical and Astronomical Services Administration (PAGASA), DPWH, Metro Manila Development Authority and LGUs. In the aftermath of the devastation brought about by natural calamities or extreme weather conditions, the government will fast-track the mobilization of funds and provision of infrastructure program for rebuilding and reconstructing priority infrastructure. In addition, it will undertake capacity building for LGUs to improve basic service delivery and exercise of regulatory powers, specifically in ensuring integrity and sustainability of local structures from disasters. To ensure the immediate recovery of areas hit by disasters, a coordinated response strategy for the immediate rehabilitation/provision of necessary infrastructure for disaster relief and recovery (e.g., water supply and sanitation, electricity, roads, etc.) will be established. For the water resources subsector, mainstreaming of WSS in emergency/disaster response areas will be promoted. Strategy 13: Improve wastewater and solid waste management The government will prioritize treatment and proper discharge of wastewater by investing in adequate wastewater management to minimize the impact on the environment, fisheries, livelihood and the food chain. The full implementation of the operational plan of the National Sewerage and Septage Management Program (NSSMP), which started in December 2012, will be undertaken to improve water quality and public health in highly urbanized cities (HUCs), as also required by the Clean Water Act of 2004. To attain the 50-percent diversion rate by 2016 of solid waste from waste disposal facilities through reusing, recycling, compositing and other resource recovery activities, the government will strictly implement the Philippine National Solid Waste Management Strategy, which is anchored on the National Solid Waste Management Framework adopted in 2004. In addition, both the Solid Waste Management and Philippine Clean Air Acts will be revisited in connection with the policy on incineration technology. The revalidated RM under this strategy is presented in Table 10.9. The government will strictly implement the Philippine National Solid Waste Management Strategy, which is anchored on the National Solid Waste Management Framework adopted in 2004. 266 Philippine Development Plan 2011-2016 MIDTERM UPDATE Strategy 14: Support measures to improve air quality The government will pursue the National Environmentally Sustainable Transport (NEST) strategy, which aims to reduce energy consumption and associated greenhouse gases and air pollutant emissions. The NEST also promotes the use of transport systems with low carbon intensity and shift towards more environmentally sustainable modes. Further installation of safe, non-motorized transport facilities, such as sidewalks, footbridges, underground walkways and bicycle ways, will be provided to ensure pedestrian safety. The use of clean and environment-friendly alternative fuels and technologies, including increasing biofuel blend and use of natural gas, will be promoted in the energy sector. Moreover, energy efficiency and conservation will continue to be implemented through the NEECP (see strategy 3). These measures will contribute to the government’s 10-percent annual energy savings target to reduce greenhouse gas emissions. The revalidated RM under this strategy is presented in Table 10.10. Indicators Baseline (2010) End-of-Plan target (2016) Assumptions and risks Treated municipal wastewater increased (in % of total volume of municipal wastewater produced) • Survey computation to be conductedMWSS total concession area 62.81 68.85 Clark Economic Zone 100 100 Household coverage of sewerage systems increased (in % of total number of HH)147 1.28 18.49 Highly urbanized centers (HUCs) outside Metro Manila with installed sewerage systems increased (in % of total number of HUCs outside Metro Manila)148 6.25 25.00 • There is demand from HUCs HH coverage of septage management systems increased (in % of total number of households) 1.27 56.15 Table 10.9. Revalidated results matrix (RM) on improving wastewater and solid waste management 147 Total number of households in 2010 is 20.2 million. 148 Covers 16 HUCs outside Metro Manila 267Accelerating infrastructure development Indicators Baseline (2010) End-of-Plan target (2016) Assumptions and risks Annual amount of electricity and fuel conserved (in Kilo Tons Oil Equivalent [KTOE]) 3,700.00 1,115.10 • Private sector investments increased Table 10.10. Revalidated results matrix (RM) on supporting measures to improve air quality IV. PLAN IMPLEMENTATION To monitor and assess the implementation of the infrastructure strategies and interventions, an annual target indicator matrix (Table 10.11) was formulated and further revalidated, together with the RMs presented in the previous section. An iterative process of consultation, analysis and validation was conducted through the expanded NEDA Board–Committee on Infrastructure (INFRACOM), which served as the Plan Committee (PC) chaired by the NEDA Secretariat. The PC has five Sub-plan Committees (SPCs) on transport (chaired by DOTC), energy (chaired by DOE), water (chaired by DPWH and co-chaired by NWRB), ICT (chaired by DOST), and social infrastructure. Indicators Annual Plan targets (in %) Means of verification Agency responsible2013 2014 2015 2016 Intermediate outcome A: Competitiveness enhanced and productivity increased in the industry, services and agriculture sectors Strategy 1: Improve connectivity and efficiency among urban centers, regional growth hubs Travel time via road in key urban corridors in Metro Manila decreased (in min) 20.46 20.31 20.15 20.03 Actual survey data MMDA Transfer time in MRT/LRT decreased (in min)149 9 9 5 5 Actual Operation data of MRT/ LRT DOTC Platform to platform 8 8 4 4 Concourse to platform 10 10 5 5 Optimal capacity (train’s standing capacity with allowance to consider passengers’ comfort/ space) in train systems achieved (per sq.m.)150 4-8 4-8 4-8 4-7 Actual Operation data DOTC, PNR, LRTA Table 10.11. Annual target indicator matrix on accelerating infrastructure development, 2013-2016 149 Average platform-to-platform and concourse-to-platform values. 150 Range value of PNR, LRT Lines 1 and 2, and MRT3, with maximum/full capacity of 8 standing passengers per sq.m 268 Philippine Development Plan 2011-2016 MIDTERM UPDATE Indicators Annual Plan targets (in %) Means of verification Agency responsible2013 2014 2015 2016 PNR-Metro Commuter (Optimal capacity = 6 passengers per sq. m.) 7 6 6 6 Actual passenger/ sqm DOTC, PNR LRT 1 (Optimal capacity = 6 passengers per sq. m.) 7-8 7-8 5-7 5-7 Project status report, operations related report, accomplishment report DOTC, LRTA LRT 2 (Optimal capacity = 4-5 passengers per sq. m.) 4-5 4-5 4-5 4-5 MRT3 (Optimal capacity = 6 passengers per sq. m.) 8 8 8 6 DOTC Load transported via the Central RORO Spine increased (in tons per ship-hour)151 202 221 232 251 Annual/ actual survey/ monitoring/ verification on port operation and performance DOTC, PPA, MARINA, DPWH and TRB Davao 137 153 161 179 Monthly statistical reports PPA*Cagayan de Oro 43 45 47 47 Batangas 22 23 24 25 Passengers transported via air increased per annum152 46,340,236 49,344,076 53,153,098 56,084,528 Actual operation data, DOTC report DOTC* Coverage of cellular mobile telephone service (CMTS) in cities and municipalities increased (in % of total number of cities/municipalities) 99 100 100 100 NTC annual report, NTC monitoring/ evaluation of private sector ICTO, NTC* Cities and municipalities with broadband coverage increased (in % of total number of cities/ municipalities 60 70 80 100 151 Total value of Batangas, Davao and CDO ports 152 Total projected value for 19 airports/areas 269Accelerating infrastructure development Indicators Annual Plan targets (in %) Means of verification Agency responsible2013 2014 2015 2016 Strategy 2: Support agricultural production Irrigation service coverage increased (in % of total potential irrigable area)153 67.44 69.01 70.91 73.80 NIA/DA report, actual inventory data NIA, DA, DAR NIA 59.39 60.74 62.63 65.27 NIA DA-BSWM and DA-RFUs 8.05 8.26 8.29 8.53 DA-BSWM, DA-RFUs Strategy 3: Pursue energy and water security Power demand met (i.e., ratio of dependable capacity to total peak demand with required reserve is maintained above 100%) (in %) 106.52 103.86 108.06 104.39 Phil. Energy Plan 2012 2030 Power Outlook DOE* Luzon 113.07 109.28 110.37 107.86 Visayas 109.14 109.54 103.95 105.32 Mindanao 97.35 92.78 109.86 100.00 Target energy self sufficiency (at 60%) met (in % of total energy) 59.04 59.28 60.22 60.00 Water demand in water critical areas met (in % ratio of water supplied in million liters per day [MLD] to water demanded in MLD) 89 90 90 92 Actual inventory data/ report MWSS, concessionaires, LWUA, WDs, DENR-RBCO and NWRB MWSS Concession Areas 119 117 116 113 Metro Cebu 43 46 49 52 Bulacan 83 86 89 89 Cagayan de Oro City 109 115 119 121 Davao City 89 87 79 86 Coverage of 24/7 water supply (WS) services in cities increased (in %) 86.98 88.62 89.34 90.12 MWSS, concessionaires, LWUA, WDs, LGUs and NWRB 153 Total value of NIA and DA (BSWM and RFUs). Based on an estimation from the submitted Public Investment Program (PIP) of NIA, only about 64.71% can be achieved by 2016. However, NIA is currently reviewing its PIP. 270 Philippine Development Plan 2011-2016 MIDTERM UPDATE 155 Total number of sitios in 2010 is 103,489. 156 Total number of barangays is 41,975. Indicators Annual Plan targets (in %) Means of verification Agency responsible2013 2014 2015 2016 Level III WS service coverage increased (in %) 98 99 99 100 Actual inventory data/report MWSS, concessionaires, LWUA, WDs, and NWRB Non-revenue water decreased (in % of total water volume produced) 26 25 24 23 MWSS, concessionaires, LWUA, WDs Tourist Destination Areas (TDAs) with improved water system increased (in % of TDAs identified as waterless) 4 100 100 100 DPWH, DOT, LWUA, WDs Intermediate outcome B: Adequacy and accessibility of basic infrastructure services enhanced, and infrastructure gaps in far-flung areas reduced Strategy 5: Improve access to and adequacy of basic infrastructure services Classroom-to-pupil ratio improved Actual inventory data/report DepEd Primary 1:34 1:32 1:31 1:30 Secondary 1:48 1:47 1:46 1:45 WatSan facilities-to-pupil ratio increased Primary 1:53 1:52 1:51 1:50 Secondary 1:75 1:65 1:55 1:50 Households (HH) with electricity increased (in % of total number of HH) 77.38 79.43 82.67 86.20 Phil. Energy Plan 2012-2030 Power Outlook DOE Sitios with electricity increased (in % of total number of sitios)155 82.91 91.18 100.00 100.00 NEA HH access to water supply increased (in % of total number of HH) 86.06 86.48 86.90 88.21 Actual data survey DPWH, MWSS, LWUA, WDs, Concessionaires, WSPs, DILG, NAPC, DSWD Barangays with zero open-defecation increased (in % of total number of barangays)156 35.74 47.65 59.56 71.47 Annual report DOH, DILG 271Accelerating infrastructure development Indicators Annual Plan targets (in %) Means of verification Agency responsible2013 2014 2015 2016 Strategy 6: Address infrastructure gaps in far-flung areas Access to ICT in public schools increased (in % of total number of public schools) Actual inventory data/report ICTO, DepEdPrimary 51 90 90 91 Secondary 91 91 91 91 Intermediate outcome D: Safer and more secured environment created and sustained Strategy 10: Provide safety and security measures PCG responsiveness increased (in % of calls for assistance responded to) 46.40 46.40 67.83 82.11 PCG actual data/report PCG Intermediate outcome E. Environmental quality improved Strategy 13: Improve wastewater and solid waste management Volume of treated municipal wastewater increased (% of volume of municipal wastewater produced) MWSS, concessionaires Annual Reports MWSS, concessionairesMWSS total concession area 65.88 66.86 67.93 68.85 Clark Economic Zone 100 100 100 100 Annual report SEZs Household coverage of sewerage systems increased (in % of total number of HH)157 5.44 7.87 13.56 18.49 Agency Reports MWSS, concessionaires, DPWH, LWUA, WDs, LGUs, SEZs Highly urbanized centers (HUCs) outside Metro Manila with installed sewerage systems increased (in % of total number of HUCs outside Metro Manila)158 6.25 6.25 6.25 25.00 Actual data/ report HH coverage of septage management systems increased (in % of total number of households) 2.34 3.24 4.07 56.15 Strategy 14: Support measures to improve air quality Annual amount of electricity and fuel conserved (in Kilo Tons Oil Equivalent [KTOE]) 917.50 987.70 1,054.40 1,115.10 Phil. 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Chapter 3: Competitive and innovative industry and services sector Aldaba, R.M. (2013). Reviving the manufacturing industry. Paper presented during NAST Roundtable Discussion on Development Progeria on 17 January 2013 Association of Southeast Asian Nations. Foreign Direct Investment Statistics. Retrieved from http://www.asean. org/news/item/foreign-direct-investment-statistics Bangko Sentral ng Pilipinas. Foreign Direct Investment Statistics. Retrieved from Bangko Sentral ng Pilipinas Website: http://www.bsp.gov.ph/ Department of Trade and Industry (2011). MSME Development Plan 2011-2016. Retrieved August 27, 2013 from http://www.dti.gov.ph/dti/index.php?p=51 Department of Tourism. (2011). National Tourism Development Plan 2011-2016 Department of Tourism. (2013). Presentation to the Economic Development Cluster (EDC), June 17, 2013 Usui, N. (2012). Taking the right road to inclusive growth: Industrial upgrading and diversification in the Philippines. Mandaluyong City, Philippines: Asian Development Bank United Nations Conference on Trade and Development (2013). Concentration and diversification indices of merchandise exports and imports by country, annual, 1995-2012. Retrieved from http://unctadstat.unctad.org/ TableViewer/tableView.aspx The World Bank and International Finance Corporation. Doing Business Reports. Retrieved 21 March 2013 from http://www.doingbusiness.org/reports World Economic Forum. The Global Competitiveness Reports. Retrieved 22 May 2013 from World Economic Forum Website: http://www.weforum.org/reports Bibliography 275 Chapter 4: Competitive and sustainable agriculture and fisheries sector Agricultural Credit and Policy Council.(2013). Inputs to the PDP 2011-2016 Updating, submitted to NEDA through a Memorandum on August 2013. Department of Agrarian Reform (2012). ARC Level of Development Assessment (ALDA) Report for CY 2011.Diliman, Quezon City: Department of Agrarian Reform, Planning Service. Food and Agriculture Organization.(2013). International data on agricultural yield. Retrieved from FAO Corporate Statistical Database (FAOSTAT) website: http://faostat3.fao.org/faostat-gateway/go/to/download/Q/*/E Habito, C. and Briones, R. (2005). Philippine agriculture over the years: Performance, policies and pitfalls. Paper presented at the conference on Policies to Strengthen Productivity in the Philippines; Makati City, Philippines. Philippine Atmospheric, Geophysical and Astronomical Services Administration. (2011). Scenarios under the MDG-F 1656: Joint Programme on strengthening the Philippines’ Institutional Capacity to Adapt to Climate Change. Diliman, Quezon City: DOST-PAGASA, Climatology and Agrometeorology Division. Philippine Statistics Authority – Bureau of Agricultural Statistics. (Various Years). Selected Statistics on Philippine Agriculture. Retrieved from BAS CountryStat website: http://www.http://countrystat.bas.gov.ph/ Philippine Statistics Authority – Bureau of Labor and Employment Statistics. (2012). Yearbook of Labor Statistics. Retrieved from BLES website: http://www.bles.dole.gov.ph/PUBLICATIONS/Yearbook of Labor Statistics/stat tables.html Philippine Statistics Authority – Bureau of Labor and Employment Statistics.(2013). Current Labor Statistics. Retrieved from BLES website: http://www.bles.dole.gov.ph/PUBLICATIONS/Current Labor Statistics/ index.html Philippine Statistics Authority – National Statistics Coordination Board.(Various Years). National Income Accounts. Retrieved from NSCB website: http://www.nscb.gov.ph/sna/DataCharts.asp Philippine Statistics Authority – National Statistics Coordination Board.(Various Years). Philippine Poverty Statistics. Retrieved from NSCB website: http://www.nscb.gov.ph/poverty/dataCharts.asp Philippine Statistics Authority – National Statistics Office. (Various Years). Annual Labor and Employment Estimates and Labor Force Survey. Retrieved from NSO website: http://www.census.gov.ph/statistics/survey/labor-force World Trade Organization.(2013). Time series on international trade. Retrieved from WTO website: http://stat.wto.org/StatisticalProgram/WSDBStatProgramHome.aspx?Language=E Chapter 5: Resilient and inclusive financial system Balakrishnan, R. et al. (2012). Surging capital flows to emerging Asia: Facts, impacts and responses. IMF Working Paper 12-2012. Bangko Sentral ng Pilipinas. (2012). Report on the State of Financial Inclusion in the Philippines. Retrieved from Bangko Sentral ng Pilipinas Website: http://www.bsp.gov.ph/downloads/Publications/2012/Financial%20 Inclusion.pdf Bangko Sentral ng Pilipinas. (2012). BSP Financial Inclusion Initiatives 2012. Retrieved from Bangko Sentral ng Pilipinas Website: http://www.bsp.gov.ph/downloads/Publications/2012/microfinance 2012.pdf Philippine Development Plan 2011-2016 MIDTERM UPDATE276 Bangko Sentral ng Pilipinas. (2013). Q&A on the exchange rate impact: how much, what we can do,and what’s next. Retrieved from Bangko Sentral ng Pilipinas Website: http://www.bsp.gov.ph/downloads/Publications/ FAQs/fximpact.pdf accessed on 26 June 2013. Commission on Filipinos Overseas. Stock Estimate of Overseas Filipinos as of December 2012.Retrieved from Commission on Filipinos Overseas Website: http://www.cfo.gov.ph/images/stories/pdf/ StockEstimate2012.pdf International Monetary Fund. (1993). Balance of Payments Manual 5 (BMP5). Retrieved from https://www.imf. org/external/pubs/ft/bopman/bopman.pdf. Chapter 6: Social development Department of Health. (2013) Philippine Health Sector Roadmap. Food and Nutrition Research Institute of the Department of Science and Technology (FNRI-DOST). 2011 National Nutrition Survey. Philippine Statistical Authority - Bureau of Labor and Employment Statistics. (2008) Survey of Occupational Skills and Shortages. Philippine Statistics Authority. 2011 Family Health Survey. Philippines Development Forum. (2013). Report of the Philippines Development Forum (PDF) Working Group on MDGs and Social Progress. Technical Education and Skills Development Authority. (2011). National Technical Education and Skills Development Plan (NTESDP) 2011-2016. Retrieved from http://www.tesda.gov.ph/uploads/File/LMIR2011/ july2012/NTESDP%20Final%20asofSept12.pdf Chapter 7: Good Governance and the rule of law Schwab, Klaus (2013). The Global Competitiveness Report: 2010-2011, 2011-2012 and 2012-2013. Retrieved from the World Economic Forum (WEF) website: http://www.weforum.org/reports/global competitiveness-report-2012-2013 United Nations (UN) Secretary-General. (2004). The rule of law and transnational justice in conflict and post-conflict societies report. Retrieved from the UN Rule of Law website: http://www.unrol.org/doc.aspx?n=2004+report. pdf. World Bank. (2010, 2011, 2012). World Governance Indicators (WGIs). Retrieved from the World Bank (WB) website: http://info.worldbank.org/governance/wgi/index.aspx#home World Bank. (2010, 2011, 2012). Ease of Doing Business Index Data. Retrieved from the World Bank (WB) website: http://data.worldbank.org/indicator/IC.BUS.EASE.XQ/countries World Bank and International Finance Corporation. (2010, 2011, 2012) Doing Business: Measuring Business Regulations. Retrieved from Doing Business Website: http://www.doingbusiness.org/rankings Bibliography 277 Chapter 8: Peace and security Armed Forces of the Philippines. (n.d.). AFP Internal Peace and Security Plan (IPSP)-Bayanihan. Retrieved from http://www.army.mil.ph/pdf files/bayanihan.pdf United Nations. (1982). UN Convention on the Law of the Sea (UNCLOS). Retrieved from http://www.un.org/ depts/los/convention agreements/texts/unclos/UNCLOS-TOC.htm Chapter 9: Sustainable and climate-resilient environment and natural resources Carandang, A.P. (2012). Assessment of the Contribution of Forestry to Poverty Alleviation in the Philippines. In Making Forestry Work for the Poor: Assessment of the Contribution of Forestry to Poverty Alleviation in Asia and the Pacific. FAO- Regional Office for Asia and the Pacific. (Chapter 9). Retrieved from FAO website: http://www.fao.org/docrep/016/i2732e/i2732e.pdf Center for International Earth Science Information Network, Columbia University & Yale Center for Environment Law and Policy, Yale University (2012). 2012 EPI: Environmental Performance Index and Pilot Trend Environmental Performance Index. Retrieved from Yale University website: http://epi. yale.edu/files/2012 epi report.pdf Harmeling, S. & Eckstein, D. (2012, November). Global Climate Risk Index 2013: Who suffers most from extreme weather events? Weather-related loss events in 2011 and 1992 to 2011. Retrieved from German Watch website: http://germanwatch.org/fr/download/7170.pdf Mucke, P. (2012). Disaster risk, environmental degradation and global sustainability policy. In World Risk Report 2012 (Chap. 1). Retrieved from United Nations University Institute for Environment and Human Security website: https://www.ehs.unu.edu/file/get/10487.pdf National Disaster Risk Reduction and Management Council (2012). Estimated Damages to Properties of Natural Disasters in the Philippines Philippine Atmospheric, Geophysical and Astronomical Services Administration (2011). Climate Change in the Philippines. Retrieved from PAGASA website: http://www.pagasa.dost.gov.ph/climate-agromet/ climate-change-in-the-philippines World Bank (2006). Where is the Wealth of Nations? Measuring Capital for the 21st Century. The World Bank, Washington, D.C. Retrieved in The WorldBank website:http://webworldbank.org/WBSITE/ EXTERNAL/ TOPICS/ENVIRONMENT/EXTEEI/0,,contentMDK:20872280~pagePK:210058~piPK210062 ~thesitePK:408050,00.html United Nations University-Institute for Environment and Human Security (2012). World Risk Report 2012. Retrieved from the United Nations University-Institute for Environment and Human Security website: http://www.ehs.unu.edu/file/get/10487.pdf Philippine Development Plan 2011-2016 MIDTERM UPDATE278 Chapter 10: Accelerating infrastructure development Association of Southeast Asian Nations (ASEAN). (2009). Roadmap for an ASEAN Community: 2009-2015. Retrieved from ASEAN website: http://www.asean.org/images/2012/publications/ RoadmapASEANCommunity.pdf Department of Science and Technology (DOST). (2013). e-Government Master Plan. Retrieved from DOST website: http://i.gov.ph/wp-content/uploads/2014/01/eGovMasterPlan Final-Version.pdf International Telecommunication Union (ITU). (2011). Measuring the Information Society 2011. Retrieved from ITU website: http://www.itu.int/ITU-D/ict/publications/idi/material/2011/MIS 2011 without annex 5.pdf International Telecommunication Union (ITU). (2012). Measuring the Information Society 2012. Retrieved from ITU website: http://www.itu.int/en/ITU-D/Statistics/Documents/publications/mis2012/ MIS2012 without Annex 4.pdf International Telecommunication Union (ITU). (2013). Measuring the Information Society 2013. Retrieved from ITU website: http://www.itu.int/en/ITU-D/Statistics/Documents/publications/mis2013/ MIS2013 without Annex 4.pdf Schwab, K. (Ed.). (2013). The Global Competitiveness Report: 2013-2014. Retrieved from World Economic Forum website: http://www3.weforum.org/docs/WEF GlobalCompetitivenessReport 2013-14.pdf Schwab, K. (Executive Chairman). (2010). The Global Competitiveness Report: 2010-2011. Retrieved from World Economic Forum website: http://www3.weforum.org/docs/WEF GlobalCompetitivenessReport 2010-11.pdf Schwab, K. (Executive Chairman). (2011). The Global Competitiveness Report: 2011-2012. Retrieved from World Economic Forum website: http://www3.weforum.org/docs/WEF GCR Report 2011-12.pdf Schwab, K. (Executive Chairman). (2012). The Global Competitiveness Report: 2012-2013. Retrieved from World Economic Forum website: http://www3.weforum.org/docs/WEF GlobalCompetitivenessReport 2012-13.pdf United Nations (UN). (2010). United Nations E-Government Survey 2010: Leveraging e-government at a time of financial and economic crisis. Retrieved from United Nations website: http://unpan1.un.org/ intradoc/groups/public/documents/un/unpan038851.pdf United Nations (UN). (2012). United Nations E-Government Survey 2012: E-government for the people. Retrieved from United Nations website: http://unpan1.un.org/intradoc/groups/public/documents/ un/unpan048065.pdf World Bank. (2013). Health Nutrition and Population Statistics. Retried from World Bank website: http://data. worldbank.org/data-catalog/health-nutrition-and-population-statistics Glossary 279 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. 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. Acquired Immune Deficiency A condition characterized by a combination of signs and symptoms, caused by the Syndrome (AIDS) Human Immunodeficiency Virus (HIV) contracted from another which attacks and weakens the body’s immune system, making the afflicted individual susceptible to other life-threatening infections. Action Program for Judicial A comprehensive set of programs and projects aimed at enhancing conditions Reform (APJR) and 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 A program designed to secure the country’s coasts especially in Mindanao System regions. 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. (Source: RA 6657). Philippine Development Plan 2011-2016 MIDTERM UPDATE280 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 (Source: RA 9700). 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 (Source: Department of Agrarian Reform Administrative Order 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 (Source: RA 8435). 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. Areas with common weather or meteorological conditions and sources of airpollution which affect the interchange and diffusion of pollution in the surrounding atmosphere. Alienable or Disposable Land Land of the public domain, which has been classified and declared as such and available for disposition. Alkire Foster (AF) A method that was devised to measure the multidimensional poverty. It considers several factors that show poor people’s experience of deprivation. Allocation to Local The share of LGUs from the internal revenue collections of the national Government Units government based 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 (ADR) of a 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 Indigenous Cultural Communities/Indigenous Peoples (ICCs/IPs) comprising lands, inland waters, coastal areas, and natural Glossary 281 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 Domains Sustainable A plan that embodies the goals and objectives, policies and strategies of ICCs/ Development and IPs for the sustainable management and development of their ancestral domain Protection Plans (ADSDPPs) and all resources therein including the human and cultural resources such as their Indigenous Knowledge Systems and Practices (IKSPs). 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. Anti-Red Tape Program An initiative of the government to monitor compliance of government agencies with the Anti-Red Tape Act (ARTA). This program includes Citizen’s Charter monitoring, Report Card Survey (RCS), Service Delivery Excellence Program, ARTA Watch, and conferment of the Citizen’s Satisfaction Center Seal of Excellence. Autoclave/Autoclaving A more efficient method of wet thermal disinfection. This method is typically used in hospitals for the sterilization of reusable medical equipment. It 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. Balance of Payments (BOP) Refers to statistical statement that summarizes transactions between residents and non-residents during a period. It consists of the current account, the capital account, and the financial account. The overall BOP position can be in surplus, deficit or in balance. A surplus arises when inflows are greater than outflows while a deficit is incurred when outflows exceed inflows. When inflows and outflows are equally matched, the BOP position is in balance. Balance of Payments and Refers to the manual issued by the International Monetary Fund (IMF) which International Investment provides guidance to member countries on the compilation of statistics on the Position, 6th Edition (BPM6) BOP and international payments position (IIP). The BPM6 is the successor to the Balance of Payments Manual, 5th Edition or BPM5. 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; 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 Philippine Development Plan 2011-2016 MIDTERM UPDATE282 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 systems for out-of-school youth and adult learners and includes education for those with special needs (Source: RA 9155). Basic Education Sector A package of policy reforms pursued by the Department of Education to Reform Agenda (BESRA) (DepEd) improve the quality of education in the Philippines and attain the Education For All (EFA) goals in 2015. Basic Literacy The ability to read and write with understanding a simple message in any language or dialect. Also known as simple literacy. 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 the Philippine Health Insurance Corporation (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 (BOD) required by bacteria to break down organic matter in wastewater or surface water. Biodiesel Renewable and biodegradable diesel fuel extracted from plant oil such as Coconut Methyl Esther (CME). 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 A high-octane, water-free alcohol produced from the fermentation of sugar or converted starch. 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 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 non-fossilized and biodegradable organic materials. Glossary 283 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. Budget Partnership A formal agreement entered into by a national government agency (NGA) Agreements (BPAs) or a government-owned and controlled corporation (GOCC) and a partner civil society organization (CSO) defining the roles, duties, responsibilities, schedules and expectations with regard to implementing the CSO’s participation in monitoring and evaluating budget programs/ activities/ projects (PAPs) of the counterpart NGA GOCC for preparation of the annual budget. 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 Permit and Licensing Refers to the procedures followed by cities and municipalities in processing System (BPLS) permits and licenses which must be secured by businessmen to operate legally in a locality. Efforts to streamline the BPLS include adopting a unified form, reducing the number of signatories, limiting the number of steps in securing permits and licenses, and reducing processing time through automation. Business Process Management The discipline of managing processes (rather than tasks) as the means for improving business performance outcomes and operational agility. Processes span organizational boundaries, linking together people, information flows, systems and other assets to create and deliver value to customers and constituents. Processes may be IT-enabled but do not necessitate on-shore presence and may be outsourced to off-shore providers. BPM involves the deliberate, collaborative and increasingly technology-aided definition, improvement, innovation, and management of end-to-end business processes that drive business results, create value, and enable an organization to meet its business objectives with more agility. Business Process Outsourcing A form of outsourcing that involves the contracting of the operations and (BPO) 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. Philippine Development Plan 2011-2016 MIDTERM UPDATE284 Capital Account This covers capital transfers receivable and payable, and acquisition and disposal of non-produced, nonfinancial assets between residents and non-residents. Capital accumulation The increase in the capital stock by undertaking investment in excess of replacement investment. This accumulation is usually viewed as the expansion of the productive potential of the economy. Capital Flows The movement of money for the purpose of investment, trade or business production. Capital Inflows The private and official inward flows of money to the country in the form of investments, grants and loans. Capital Markets 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 markets 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 Sequestration The prevention of greenhouse gas build-up in the earth’s atmosphere by methods such as planting trees to absorb carbon dioxide or pumping carbon dioxide into underground reservoirs. Career Executive Service The corps of well-selected and development-oriented career executives who (CES) provide competent and faithful service. Career Executive Service A program of the Development Academy of the Philippines (DAP) that aims Development Program to produce a cadre of government executives that are knowledgeable, skilled, (CESDP) and committed to multi-sectoral development and high quality of public service. Career Executive Service A Career Executive Service (CES) eligible government executive who is Officers (CESOs) conferred a CES rank appointed to a position covered by the CES. Case Management Information An automated modernization program to improve overall efficiency of the System (CMIS) Judiciary in the administration of justice in the Supreme Court and the Appellate courts (e.g. Court of Appeals, Court of Tax Appeals and Sandiganbayan.) Category 1 Provinces Areas which have the highest number of poor families; provinces where development opportunities exist but pockets of poverty also exist. Category 2 Provinces Areas which have the highest poverty incidence; typically these are provinces with small population, or those that less densely populated, or are in remote areas. Category 3 Provinces Areas exposed and prone to multiple natural and man-made hazards, such as landslides, extra ordinary strong winds, flooding, earthquakes, and volcanic eruption. Cellular Mobile Telephone A public radio telephone service which, by means of mobile, portable, or fixed Service (CMTS) service terminal equipment, gives two-way access to the public switched telephone network and other mobile telephone stations. Glossary 285 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. Central Counterparties Refers to organizations that facilitate trading done in derivatives and equities markets. These clearinghouses are often operated by the major banks. Their prime responsibility is to provide efficiency and stability to the financial markets that they operate in. Central Securities Depository An entity that holds and administrates securities and enables securities transactions to be processed by book entry. Securities can be held in a physical (but immobilised) or dematerialised form (i.e. so that they exist only as electronic records). In addition to the safekeeping and administration of securities, a CSD may incorporate clearing and settlement functions. Certificate of Ancestral A title formally recognizing the rights of possession and Domain ownership Domain Title (CADT) of indigenous people and communities 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. Certificate of Ancestral Land A title formally recognizing the rights of indigenous people and communities Title (CALT) over their ancestral lands identified and delineated in accordance with RA 8371. Certificate of Land Ownership A document evidencing ownership of the land granted or awarded to the Award (CLOA) beneficiary by Department of Agrarian Reform (DAR), and contains the restriction and conditions provided for in RA 6657 and other applicable laws. (Source: Administrative Order No. 3 Series 1990) 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 using chemicals such as aldehydes, chlorine compounds, ammonium salts, and phenolic compounds, to kill or inactivate pathogens. 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 includes nonbiodegradable mixtures. Philippine Development Plan 2011-2016 MIDTERM UPDATE286 Citizens Database and An information system maintained by the National Bureau of Investigation Information System (CDIS) (NBI) whose main sources include the Clearance Processing and Issuance, e-Clearance and the Crime Information and Monitoring System. It provides effective and efficient frontline service to NBI clients, partners and counterparts, and is used for clearance, authentication, investigation, and effective decision-making. Citizens Participatory Audit Conduct of joint audits by the Commission on Audit (COA) and civil society (CPA) organizations (CSOs) of select infrastructure projects, including the setting up of systems, tools, and processes to institutionalize participatory audit. Citizens’ Satisfaction Index A system designed to collect and generate citizens’ feedback on local government System (CSIS) units’ (LGUs) service delivery performance. Civil Society Organization Refers to a wide array of organizations, such as community groups, non government organizations (NGOs), labor unions, indigenous groups, charitable organizations, faith-based organizations, professional associations, and foundations. Classroom shortage A condition wherein the classroom-pupil ratio is higher than 1:45. 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 (Source: RA 9729). Closed fishing season This refers to the policy imposed by the government banning the fishing of sardines from December to March in the waters of Zamboanga and ARMM, and November to March in the Visayan Sea. This allows the fish species to spawn during the months when mature sardines reproduce. Also known as fishing ban. 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. Committed Power Projects Power projects that have reached financial closure and have complied with all the necessary clearances (i.e., financial, legal, technical and environmental). Communal Irrigation System An irrigation system managed by a bona fide Irrigators Association, as defined by RA 8435. Community e-Center (CeC) 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. 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). Completion Rate The percentage of first grade or first year entrants in a level of education who complete the level in accordance with the required number of years of study. 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 Glossary 287 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 land’s use (Source: Department of Agrarian Reform Administrative Order 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 An area where the local and peripheral population is heavily impacted by the infighting of armed groups. Consolidated Public Sector The combined financial positions (in terms of balances, positive for surplus Deficit and negative for deficit) of the national government (NG), the monitored non-financialgovernment corporations (MNFGC’s), the government financial institutions (GFI’s), LGU’s, social security institutions (SSI’s) as well as the cost of restructuring the defunct Central Bank and the financial position of the present Bangko Sentral ng Pilipinas (BSP). 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 certain area. Contingent Liability Refers to a potential obligation that may be incurred by the NG that is conditional tothe outcome of an uncertain future event. Guaranteed contingent liabilities are loans incurred by GOCCs and GFIs, with NG guarantee under RA 4860 or under the charter of the GOCC/GFI. On the other hand, assumed contingent liabilities are GFI-guaranteed obligations that are transferred to the NG. Continuous Quality A strategic approach to providing the best health care possible. It is a preventive Improvement (CQI) strategy that uses consultant innovation to improve work processes and systems by reducing time-consuming, low-value activities. Contraceptive prevalence The percentage of currently married women 15 to 49 years of age reporting rate (CPR) current use of any method of contraception. Control of Corruption Reflects perceptions of the extent to which public power is exercised for private gain, including both petty and grand forms of corruption, as well as “capture” of the state by private interests. Controlled dumpsites A site at which solid waste is disposed in accordance with the minimum prescribed standards of dumpsite operation. Convention on Indigenous A legally binding international instrument that is open to ratification, and and Tribal Peoples (ILO which deals specifically with the rights of indigenous and tribal peoples. Convention No. 169) Countries that have ratified the Convention are subject to supervision with regards to its implementation. Convention on the Rights The first instrument to incorporate the complete range of international human of the Child rights — including civil, cultural, economic, political and social rights as well as aspects of humanitarian law. Convergence May refer to one of two different trends: (a) Convergence between the broadcasting and telecommunications sectors, where 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 Philippine Development Plan 2011-2016 MIDTERM UPDATE288 (b) Fixed/mobile convergence, where 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 usually designed to 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 Software designed for logging, monitoring and monitoring caseload and Management Information caseflow statistical data. The software was developed with the assistance of the System (CAMIS) 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). Credit Default Swap An agreement designed to transfer the credit exposure of fixed income products from seller to buyer. The buyer pays a periodic fee to the seller in return for a potential payment by the seller in the event of a default by the corporate or government issuer. The buyer is then assured of a credit protection whereas the seller guarantees the credit worthiness of the product. In essence, it is a form of insurance that promises payment to investors in mortgage securities and other bonds if the borrower defaults. Credit Surety Fund Program A credit enhancement scheme developed by the Bangko Sentral ng Pilipinas (Bangko Sentral) which aims to increase the credit worthiness of micro, small and medium enterprises (MSMEs) that are experiencing difficulty in obtaining loans from banks due to lack of acceptable collaterals, credit knowledge and credit track records. It is created by pooling the contributions of cooperatives and NGOs, the local governments units (LGUs) and partner institutions. Under the program, a Fund shall be created at the provincial or city level to provide more flexibility. It will also serve as a security for loans of MSMEs from banking institutions by providing a surety cover in lieu of acceptable collaterals. Banks generally require collaterals when extending loans, a requirement that some MSMEs often find difficult to comply. Creditworthiness A creditor’s measure of the ability of an individual or company to meet debt obligations. Cropping calendar Refers to the time period from land preparation, planting, sowing and harvesting of agricultural crops. It varies according to the commodity and the area in which it is grown. Current Account This consists of transactions in goods, services, primary income and secondary income. It measures the net transfer of real resources between the domestic economy and the rest of the world. Current Operating Expenses The amount budgeted for the purchase of goods and services that will be used or consumed for the conduct of normal government operations within a budget year. Glossary 289 Customs Modernization Refers to a legislative proposal that seeks to introduce amendments to the and Tariff Act Tariff and Customs Code of the Philippines (TCCP) with a view of aligning its provisions with the International Convention on the Simplification and Harmonization of Customs Procedures (i.e., Revised Kyoto Convention (RKC)), which the Philippines supports as one of the member-countries of the World Customs Organization. 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 may fluctuate, depending on 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. Derivatives Financial instruments that primarily derive their value from the performance of an underlying variable such as interest rates, FX rates, or prices of financial instruments, commodities, securities, or indices. The term is also used to refer to the set of financial instruments that includes futures, forwards, options and swaps. It can be used as an insurance to limit the risk of a particular investment. Dietary Energy Requirement The level of energy intake from food that will balance energy expenditure when the individual has a body size and composition, and level of physical activity consistent with long-term good health, and that will allow for the maintenance of economically necessary and socially desirable physical activity . The adequate energy intake for Filipinos is 100% per capita based on the Recommended Energy and Nutrient Intakes (RENI) for Filipinos. 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 The sending and receiving of moving images and sound by means of discrete (DTT) Broadcasting (digital) 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 The concept and practice of reducing disaster risks through systematic efforts to (DRR) 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 The settlement of government obligations and/or accounts payable by cash; movement of cash from the Bureau of Treasury or from an authorized disbursing officer to the final recipient. Disposal The discharge, deposit, dumping, spilling, leaking or placing of any solid waste into or in any land. Disposal site A site where solid waste is finally discharged and deposited. Philippine Development Plan 2011-2016 MIDTERM UPDATE290 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. Ease of Doing Business A plan developed and approved by the National Competitiveness Council in (EODB) – Gameplan July 2012 that aims to simplify government processes and make them more for Competitiveness business-friendly. Ease of Doing Business An index created by the World Bank (WB) that ranks economies from 1 to (EODB) Survey Index 189, with first place being the best. A high ranking indicates that the regulatory environment is conducive to business operation. Survey indicators cover various areas of business regulation, particularly the complexity and cost of regulatory processes and the strength of legal institutions. Eco-efficiency A management philosophy that encourages business to search for environmental improvements that yield parallel economic benefits. It means having “more value with less impact on the environment;” and emphasizes monitoring of material and energy flows of stocks and life cycle assessment. Ecological Solid Waste The systematic administration of activities which provide for segregation at Management 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 growth Growth in the total, or per capita, output of an economy, often measured by an increase in real GDP and caused by an increase in the supply of factors of production or their productivity. 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. Glossary 291 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; licenses 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. El Niño/La Niña El Niño is a warming of the surface water of the Pacific Ocean that causes extreme dry weather or drought while the La Niña causes heavy rains in the country that may also bring strong winds and storms. La Niña brings mostly the opposite effect of El Niño. 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 Employed persons include all those who, during the reference period are 15 years and over as of their last birthday and are reported either: a. At work. Those who do any work even for one hour during the reference period for pay or profit, or work without pay on the farm or business enterprise operated by a member of the same household related by blood, marriage or adoption; or b. With a job but not at work. Those who have a job or business but are not at work because of temporary illness/injury, vacation or other reasons. Likewise, persons who expect to report for work or to start operation of a farm or business enterprise within two weeks from the date of the enumerator’s visit, are considered employed. Employment generated Derived from the Labor Force Survey conducted by the Philippine Statistics Authority, 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. Energy Intensity Refers to total energy consumption per unit of GDP. It is calculated as units of energy per unit of GDP (i.e., million tons oil equivalent per GDP in billion pesos) Enhanced Case Flow An offshoot project of the Case Flow Management (CFM) System that aims Management System to establish 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 (E-JOW) expedite 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 Philippine Development Plan 2011-2016 MIDTERM UPDATE292 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 a business enterprise or 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 Certificate (ECC) Director certifying 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 The process of predicting the likely environmental consequences of implementing Assessment (EIA) projects or undertakings and designing appropriate preventive, mitigating and enhancement measures. 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 the following: 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; and 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 No. 3 s. 2001 An EO that mandates government to continue to pursue a comprehensive, (Defining Policy and integrated and holistic approach to peace; provides the framework for Administrative Structure implementation, coordination, for monitoring and integration of all Government’s Comprehensive government peace initiatives and guides its partnership with civil society Peace Efforts) in pursuit of just and enduring peace. It also identifies the components of the comprehensive peace process; establishes an administrative structure for implementing the comprehensive peace process; establishes government peace negotiating panels for negotiations with different rebel groups; EO likewise organized several peace bodies and identified funding sources for implementing the peace process. Glossary 293 Executive Order No. 514, An order establishing the National Biosafety Framework, which aims to s. 2006 (Establishing the strengthenthe existing science-based determination of biosafety to ensure the National Biosafety safe and responsible use of modern biotechnology, enhance decision-making, Framework, prescribing and guide implementation of international obligations on biosafety. The NBF guidelines for its integrates existing biosafety regulations, delineates the responsibilities of implementation, strengthening biosafety agencies, strengthens the National Committee on Biosafety of the the National Committee Philippines and provides a venue for discussion of overlapping policy issues. On Biosafety Of The Philippines, and for other purposes) Executive Order No. 533, An order adopting an Integrated Coastal Management as a National Strategy s. 2006 (Adopting Integrated to ensure the sustainable development of the country’s coastal and marine Coastal Management as a environment and resources in order to achieve food security, sustainable national strategy to ensure livelihood, poverty alleviation and reduction of vulnerability to natural hazards, the sustainable development while preserving ecological integrity. It mandates the DENR to develop a of the country’s coastal and National ICM Programme, in consultation with other concerned agencies, marine environment and sectors, and stakeholders, to provide direction, support and guidance to the resources and establishing local government units (LGUs) and stakeholders in the development and supporting mechanisms for implementation of theirlocal ICM programmes. for its implementation) The EO seeks to address environmental and socioeconomic issues in a and integrated manner in order to promote optimum resource utilization and comprehensive sustainable coastal and marine development; and establishes support mechanisms for its implementation. Executive Order No. 797 An order that reorganized the Ministry of Labor and Employment and created s. 1982 (Reorganizing the the Philippine Overseas Employment Administration. The EO aimed to Ministry of Labor and develop employment opportunities, protect workers, and promote industrial Employment, creating the peace. Philippine Overseas Administration, and for other purposes) Executive Order No. 888, An EO adopting the SNAP and its 18 priority programs and projects in s. 2010 (Adopting the order reduce economic losses from the adverse impacts of climate variability Strategic National Action including extreme events as the country undergoes economic growth, Plan (SNAP) on Disaster population increase and rapid urbanization. The EO mandates all government Risk Reduction, 2009-2019 agencies and GOCCs to institutionalize DRR in their policies, plans, programs, and institutionalizing DRR) and budgets; participate in the 18 priority programs and projects; and cooperate with national and international NGOs and the private sector towards safer and more resilient communities; and encourages LGUs to integrate DRR in their day-to-day operations and planning. As the secretariat and executive arm of the National Disaster Coordinating Council, the Office of Civil Defense was designated to oversee implementation of SNAP. Expanded Tertiary Education A certification mechanism for non-school based learning that is integrated Equivalency and into the country’s educational system through the EO 330. This program is a Accreditation Program comprehensive educational assessment scheme at the tertiary level which (ETEEAP) 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. Philippine Development Plan 2011-2016 MIDTERM UPDATE294 Exports Covers all goods and services in which ownership has been transferred from Philippine residents to non-residents through sales, grants, gifts, and donations (BOP–based). Exports of Goods Refers to all goods leaving the country, which are properly cleared through the customs (Customs-based). 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). External Debt Covers all short-term and medium-term obligations of the BSP, domestic commercial banks, public and private sectors’ payable to non-residents. Short term external debt obligations are those with maturities of one year or less, while medium- and long-term external debt consists of foreign borrowings with maturities of more than one year. External Debt Service Ratios Refers to the ratio of debt service payments to export earnings, GNI, GDP. Extractive Industries A tripartite initiative between government, civil society and business to ensure Transparency Initiative greater transparency in revenues from extractive industries, specifically through the publication of a report that compares government and industry figures in government revenues in mining, oil and gas. This publication is verified by an independent and internationally accredited auditor. 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. 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 kilowatt‐hour 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 Account An account that records transactions involving financial assets and liabilities between residents and non-residents. Financial Inclusion A state wherein there is effective access to a wide range of financial services for all. Financial Sector Forum (FSF) A voluntary interagency body between the heads of BSP, SEC, IC and PDIC. 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. Financial Stability A voluntary interagency council whose key objective is to identify, manage and Coordinating Council mitigate the build-up of systemic risks. It was launched by the Insurance (FSCC) Commission, Department of Finance, Bangko Sentral ng Pilipinas, Securities and Exchange Commission and Philippine Deposit Insurance Corporation in order to foster a strong and resilient financial system that supports market innovation and mitigates any build-up of systemic risks. The members of the council will have to collaborate and coordinate to identify, manage, and address external and internal risks to financial stability to protect financial consumers and our economy. Glossary 295 Fiscal Deficit Refers to a shortfall or deficiency of revenues over the 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. Fiscal Responsibility Bill A proposed bill which aims to strengthen fiscal discipline in the public sector (FRB) 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. Fiscal space Refers to the difference of projected obligations ceilings (after considering projected revenues and deficit targets) and forward estimates of the cost of ongoing programs of the government. This provides for available funding which the government could use for its priority programs. 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 A condition wherein 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 Investment Defined as an international investment by a resident entity in one economy (“direct investor”) in an enterprise resident in another economy (“direct investment enterprise “) made with the objective of obtaining a lasting interest. The “lasting interest” implies the existence of long-term relationship between the direct investor and the enterprise and a significant degree of influence on the management of the enterprise. This lasting interest is generally indicated by ownership of at least 10 percent of the ordinary shares or voting power (for incorporated enterprise) or the equivalent (for an unincorporated enterprise). FDI covers equity capital, reinvested earnings and other capital (i.e. inter company loans). Foreign Exchange Rate Defined as the price of one unit of foreign currency (usually in US$) expressed in terms of the domestic currency. Forward and backward Refers to the channels through which products, materials, information, and linkages money flow from suppliers to the firms (backward) and from suppliers to customers (forward). Backward and forward linkages are also descriptive measures of the economic interdependence of industries. Forward Estimates (FEs) Projections or estimations 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. Philippine Development Plan 2011-2016 MIDTERM UPDATE296 Full Disclosure Policy (FDP) Enables the public to view, download, and print local government units (LGUs) financial documents to allow their constituents to understand how their local governments budget and spend for public services. The FDP mandates LGUs to post plans, budgets, and full utilization reports in a designated web portal, print media, and in conspicuous places. It also obliges provinces, cities, and municipalities (PCMs) share their financial documents with their constituents. Functional Literacy A range of skills and competencies – cognitive, affective and behavioral – (new definition) 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 A significantly higher level of literacy which includes not only reading and (old definition) 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. Fund transfer system A formal arrangement based on a private contract or legislation, with multiple membership, common rules and standardised arrangements, for the transmission, clearing, netting and/or settlement of monetary obligations arising between its members. 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 convert geothermal energy into useful power. Geothermal Resources Mineral resources, classified as renewable energy resource, in the form of: (a) all products of geothermal processes, including 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 ratio (Gini coefficient) A concentration ratio which is used to measure inequality in income distribution. It takes values from zero (0), representing complete equality of income distribution, 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. Also known as Gini concentration ratio. Global Competitiveness An index that measures the set of institutions, policies and Index (GCI) factors that make a nation remain productive over the longer term while ensuring social and environmental sustainability. Global Warming An increase in the average temperature of the earth’s near-surface air and oceans that is associated with the increased concentration of greenhouse gases in the atmosphere. Government Effectiveness A measure of the quality of public services, the quality of the civil service and the degree of its independence from political pressures, the quality of policy formulation and implementation, and the credibility of the government’s commitment to such policies. Glossary 297 Government Human An integrated system encompassing the full cycle of human – from recruitment Resource Information and hiring to retirement – initially focusing on an NPS that will remove ghost System (GHRIS) -National employees in the government payroll, as well as ensure the timely payment of Payroll System (NPS) government employees’ insurance premiums. Government Integrated An integrated information technology (IT) solution that will improve Financial Management efficiency in the use of public resources through real-time online accounting, Information System monitoring and control of public funds, an improved cash management (GIFMIS) system, and a more systematic recording of all real and contingent liabilities of government. Government of the The official title of the Philippine government. Republic of the Philippines Grassroots Participatory The enhancement of budget and planning process to involve grassroots Budgeting Process (GPBP) organizations and local government units (LGUs) in the identification of – formerly Bottom-Up priority poverty reduction projects that will be funded by national government Budgeting (BUB) agencies (NGAs). Green ICT An 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. Greenhouse gases (GHG) Atmospheric gases that contribute to the greenhouse effect including, but not limited to, carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons and sulfur hexafluoride. Grid The high voltage backbone system of interconnected transmission lines, substations and related facilities. Gross Domestic Product Refers to the value of all goods and services produced domestically. It is the (GDP) 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). 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 Reserves Refer to foreign assets that are readily available to and controlled by the BSP (GIR) 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 International Monetary Fund. Gross National Product A measure of the country’s output of final goods and services. It is equivalent (GNP) 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. GNP is also defined as the total value of income earned by residents of a country regardless of where the income came from. In its simplest terms, Philippine GNP is the value of goods and services made by Filipinos Philippine Development Plan 2011-2016 MIDTERM UPDATE298 Gross Regional Domestic Reflects the aggregate gross value added of all productive sectors of a region Product (GRDP) during an accounting period. Addition of the GRDP of all regions will yield the Gross Domestic Product (GDP) at the national level. Gross value-added Refers to the total payment to factors of production, namely: wages, interest, profits and rents. It also includes capital consumption allowance and indirect taxes. It is estimated by deducting from gross value of output the sum of non-factor cost such as raw materials and supplies, containers and packing 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 Used or discarded substances or materials that are without any safe commercial, industrial, agricultural or economic uses, and which pose substantial or potential threats to public health and/or the environment. In past incidents, hazardous wastes have been shipped, transported or brought from their country of origin for dumping or disposal into or in transit through any part of the territory of the Philippines. Headline Inflation This measures the year-on-year change in the prices of a specified basket of goods and services in the CPI, including goods and services with volatile price movements such as food and energy items. Health Care Waste Infectious wastes 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. Higher Education (HE) The stage of formal education requiring secondary education covering the programs on all courses of study leading to bachelor’s degree and all degree courses of study beyond bachelor’s degree level. High-value crops Non-traditional agricultural and horticultural commodities that include coffee, cacao, fruits, root crops, vegetables, spices and condiments, cutflowers, and ornamental plants. Because of their high industrial and commercial potentials, these commodities are covered by the DA Agrikulturang Pinoy - High Value Crops Development Program. 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. Glossary 299 Housing Unit A building or structure that is a dwelling or place for habitation by human beings. Human Capital Productive wealth embodied in labour, skills and knowledge. Human Development Index Measures quality of life or wellbeing in terms of health, education and income. (HDI) Hydropower Resources Water resources found technically feasible for development of hydropower projects. Hydropower Systems Water-based energy systems which produce electricity by utilizing the kinetic energy of falling or running water to turn a turbine generator. Import Cover Refers to the number of months of imports of goods and services that can be financed by reserves, measured as the ratio of total imports to the GIR. Imports These cover all goods in which ownership has been transferred from non residents to Philippine residents through purchase, grants, gifts, and donations (BOP-based). Imports of Goods These refer to all goods entering any of the seaports or airports of entry of the Philippines properly cleared through customs or remaining or under customs control (Customs–based). Inclusive Finance Greater access to financial services and further deepening of the financial system towards sustainable growth and stability. Inclusive growth Usually referred as growth for all. For economic growth to be inclusive it has to be rapid enough to matter, given the country’s large population, geographical differences, and social complexity and sustained. It should create massive quality of jobs, draws the vast majority into the economic and social mainstream, and continuously reduces mass poverty. 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. Income Poor Families or individuals whose incomes fall below the designated poverty threshold; captures the specific poverty dimension of income deprivation. Independent Power Producer An existing power generating entity which is not owned by NPC. Indicative Power Projects Power projects with no definite funding and have not yet complied with the necessary clearances. Indigenous Community Geographic locations that cover the significant biodiversity, ecological services, Conserved Areas (ICCAs) and cultural values voluntarily conserved by indigenous communities, primarily for their subsistence and other cultural purposes. Indigenous Energy Refers to all energy forms produced or sourced from within a country’s natural resources. Indigenous People (IP)/ A group of people or homogenous societies identified by self-ascription Indigenous Cultural and ascription by others, who have continuously lived as organized community Communities (ICC) 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 Philippine Development Plan 2011-2016 MIDTERM UPDATE300 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. Inelastic supply A 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. Inequality Income inequality; measure of the distribution of income and material resources across society. Infant mortality rate (IMR) The number of deaths among children below one year old per 1,000 live births at a specified period of time. Inflation Refers to the rate or the year-on-year percentage change in overall prices as measured by the Consumer Price Index (CPI). Inflation Rates The annual rate or percentage change or the year-on-year change in the Consumer Price Index (CPI). It indicates how quickly or slowly 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. Information and An umbrella term that covers all technical means for processing and Communications Technology communicating information. It defines a broad range of technologies, including (ICT) methods for communication (communication protocols, transmission techniques, communications equipment, media communication), as well as techniques for storing and processing information (computing, data storage, etc.) INFRACOM An interagency committee for the Water Resources Sector established through Sub-Committee on Water NEDA Board Committee on Infrastructure (INFRACOM) Resolution No. 2, (SCWR) Series of 2008. It is 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. Innovation The act or process of generating and introducing new ideas in the form of products, process, as well as marketing and organizational methods. Innovative capacity is the internal potential to generate new ideas, identify new market opportunities and implement marketable innovations through exploration of the firm’s existing resources and capacities. Glossary 301 Installed/rated capacity The maximum capacity of an equipment or facility such as a power plant for which it is designed by the manufacturer. It is usually expressed in megawatts (MW). Integrated Forest A production-sharing contract entered into by and between the DENR and a Management Agreement qualified applicant wherein the DENR grants to the latter the exclusive right (IFMA) to develop, manage, protect and utilize a specified area of forestland and forest resource therein for a period of 25 years and may be renewed for another 25 year period, consistent with the principle of sustainable development and in accordance with an approved Comprehensive Development and Management Plan, and under which both parties share in its produce. Integrated River Basin The process of coordinating conservation, management and development of Management (IRBM) water, land and related resources across sectors within a given river basin, in order to maximize the economic and social benefits derived from water resources in an equitable manner while preserving and, when necessary, restoring freshwater ecosystems. (Adapted from Integrated Water Resources Management, Global Water Partnership Technical Advisory Committee Background Papers, No. 4, 2000) Integrated Water Resources A framework which promotes the coordinated development and management Management (IWRM) 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. Interconnection The physical connection of telephone networks owned by two different operators. Network operators typically charge per minute fees for use of their network by other network operators. Interim Mindanao Electricity An interim wholesale market for the trading of electricity in the Mindanao Power Market (IMEM) System intended to facilitate the transparent and efficient utilization of all available capacities in Mindanao in order to minimize the perennial power shortages in the region. International Budget An international non-government organization (NGO) that collaborates with Partnership (IBP) civil society organizations (CSOs) around the world to analyze and influence public budgets in order to reduce poverty. The organization ensures that government budgets are more responsive to the needs of poor and low income people and accordingly, to make budget systems more transparent and accountable to the public. International Convention United Nations convention adopted and opened for signature and ratification on the Elimination of by the United Nations General Assembly on December 21, 1965, and All Forms of Racial entered into force on January 4, 1969. It defines and condemns racial Discrimination discrimination and commits States to change national laws and policies which create or perpetuate racial discrimination. Investment climate Refers to the overall policy, institutional, and behavioral environment affecting business and investment decisions. It is determined by several factors such as macro-economic situation, governance, infrastructure and logistics, business taxation and regulation, alternative dispute resolution, insolvency, investment policy and promotion, among others. Investment-to-GDP ratio The ratio of fixed capital to GDP in real terms. Philippine Development Plan 2011-2016 MIDTERM UPDATE302 Irrigation Service Fees (ISF) A means to generate revenues to cover the operations and maintenance (O&M) costs of irrigation facilities. Joint Venture An arrangement whereby a private sector entity or a group of private sector entities on one hand, and a Government Entity or a group of Government Entities on the other hand, contribute money/capital, services, assets (including equipment, land, intellectual property or anything of value), or a combination of any or all of the foregoing to undertake an investment activity. The investment activity shall be for the purpose of accomplishing a specific goal with the end view of facilitating private sector initiative in a particular industry or sector, and eventually transfer the activity to either the private sector under competitive market conditions or to the government. The JV involves a community or pooling of interests in the performance of the investment activity, and each party shall have the right to direct and govern the policies in connection therewith with the intention to share both profits and, risks and losses subject to agreement by the parties. A JV may be a Contractual JV or a Corporate JV ( JV Company). Judiciary Case Management A management system of the Supreme Court and one of the Judiciary’s reform System ( JCMS) projects aimed at declogging congested dockets and helping solve delays in case management and resolution through the use of information technology. Justice Sector Coordinating An inter-agency body composed of senior representatives from the Judiciary, Council ( JSCC) the of Justice (DOJ), the Department of the Interior and Local Government (DILG), 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 to 12 Program The K to 12 Program covers Kindergarten and 12 years of basic education (six years of primary education, four years of Junior High School, and two years of Senior High School [SHS]) to provide sufficient time for mastery of concepts and skills, develop lifelong learners, and prepare graduates for tertiary education, middle-level skills development, employment, and entrepreneurship. Kapit-bisig Laban sa A program for implementing small-scale projects by barangays following their Kahirapan-Comprehensive own plans, priorities, and processes, with funding support and in-kind support and Integrated Delivery of from the national and local governments. Social Services (KALAHI CIDSS) Kilowatt-hour (kWh) A unit of energy equivalent to one kilowatt (kW) of power expended for one hour of time. Labor Force Refers to the population 15 years old and over who are either employed or unemployed. 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. Glossary 303 Large-Value payment systems A system for the clearing and settlement of very large transactions, mainly between banks or participants in financial markets. Lateral Attrition Refers to the transfer in posts and/or separation from government service of internal revenue and customs officers, as well as 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, in accordance with civil service rules and regulations. Level I Water Supply System A protected well or developed spring system without a distribution system, (point source) generally 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). Level II Water Supply System A system composed of a source, reservoir, distribution system and communal (communal faucet system faucets. Usually, one faucet serves 4 to 6 households. Generally suitable for or standpost) rural and urban fringe 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 (waterworks system or household taps. It is generally suited for densely populated urban areas (NEDA individual household Board Resolution No. 12 Series of 1995). connections) LGU Income Re-classification A legislative proposal that seeks to establish updated, rationalized and System Bill transparent processes for the income re-classification of provinces, cities and municipalities by amending EO 249, issued on July 25, 1987. It seeks to empower the Secretary of Finance to review and revise the income ranges for the different income classes of provinces, cities and municipalities at least once every four (4) years to conform to prevailing economic conditions and over-all financial status of LGUs. Local Exchange Carrier The regulatory term in telecommunications for the local telephone company. Low-Cost housing Housing units that are priced from PhP 450,000 to PhP 3,000,000. Magnitude of Poor Families The number of families whose income cannot provide for their basic food and non-food requirements. Magnitude of Poor Population The number of individuals whose income cannot provide for their basic food and non-food requirements. Maintenance and Other Expenditures to support the operations of government agencies such as Operating Expenses (MOOE) expenses for supplies and materials; transportation and travel; utilities (water, power, etc) and repairs, etc. Managing for Development A management strategy that focuses on development performance and on Results 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). Marine-Protected Areas Portions of coasts, seas, and oceans with unique physical and biological (MPAs) significance, and which are managed to enhance biological diversity and protect against destructive human exploitation. (BFAR, 2010) Philippine Development Plan 2011-2016 MIDTERM UPDATE304 Market Capitalization Refers to the total market value of all of a company’s outstanding shares. It is calculated by multiplying a company’s shares outstanding by the current market price of one share. The investment community uses this figure to determining a company’s size as opposed to sales or total asset figures. It is created by pooling the contributions of cooperatives and NGOs, the local governments units (LGUs) and partner institutions. 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 A facility designed to receive, sort, process, and store compostable and recyclable materials efficiently and in an environmentally sound manner. It includes solid waste transfer station or sorting station, drop-off center, a composting facility, and a recycling facility. Maternal mortality ratio The number of women who die from any cause related to or aggravated by (MMR) 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 travelling 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. 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 and budgeting framework of the government which provides a Framework (MTEF) medium term three-year perspective to decision making processes during budget preparation. Medium-Term Information An electronic-government and information and communication technology and Communication (ICT) support initiative that aims to harmonize and ensure interoperability Technology among ICT-related resources, programs, and projects in all national Harmonization government agencies (NGAs),as well as address the gaps in computer network Initiative (MITHI) and broadband connectivity within government. 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 or enterprise engaged in industry, agribusiness, or Enterprises (MSMEs) services; whether single 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: Category Asset Size* No. of employees** Micro not more than P3,000,000 1-9 Small P3,000,001 - P 15,000,000 10-99 Medium P15,000,000 - P100,000,000 100-199 *Based on Republic Act No. 9501 **Based on MSME Development Plan 2011-22016 Glossary 305 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 (Climate change) Refers to efforts and interventions to reduce or prevent the emission of greenhouse gases and ozone-depleting substances. 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. Most-at-risk population Refers to groups that are at higher risk of being infected or affected by HIV. (MARP) This includes female sex workers (FSW), clients of female sex workers, injecting users (IDU), and males who have sex with males (MSM). Multidimensional Poverty An indicator of poverty that recognizes that poverty is the state of being Index (MPI) deprived of goods and services necessary for basic functioning. This is manifested in several dimensions: lack of education, insufficient nutrition and poor health, inadequate living standard (e.g. no access to clean water and sanitation, facilities, electricity, poor quality of housing, etc), lack of income, social exclusion, disempowerment, unstable and poor quality of work/ employment, and threat of violence. 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. National Convergence A multisectoral and integrated planning approach adopted by the DA, DAR, Initiative and the DENR towards more efficient use of resources. National Framework A framework strategy of the Philippines that serves as basis for a program for Strategy on Climate Change climate 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 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 governance—from city to municipal down to the barangay level. National Integrated The classification and administration of all designated protected areas to Protected Areas Systems maintain essential ecological processes and life-support systems, to preserve (NIPAS) genetic diversity, to ensure sustainable use of resources found therein, and to maintain their natural conditions to the greatest extent possible. National Irrigation System A major irrigation system managed by the National Irrigation Administration (RA 8435). National Justice Information A program that is intended to address and remedy the current information System (NJIS) gaps in the Philippine criminal justice system by enabling effective sharing of data between the police, judiciary, probation services, custodial authorities, and criminal information registries, at key decision points in our criminal justice system process. Philippine Development Plan 2011-2016 MIDTERM UPDATE306 National Transport Policy A long-term comprehensive policy which shall guide all elements of the (NTP) 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. Nationwide Operational A responsive program of the government for disaster prevention and Assessment of Hazards mitigation. It aims for the Philippines’ warning agencies to provide a six (6) (NOAH) hour lead-time warning to vulnerable communities against impending floods and to use advanced technology to enhance current geo-hazard vulnerability maps. Natural gas A gas consisting primarily of methane, typically with 0 to 20 percent higher hydrocarbons (primarily ethane). It is found in coal beds associated with other hydrocarbon fuels, as methane clathrates, and is an important fuel source and a major feedstock for fertilizers. Net Enrolment Rate (NER) The ratio of the enrolment for the age group corresponding to the official or Participation Rate school age in 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 A combination of telecommunications resources, for example, exchanges, wire links (copper cable, optical fiber) and terrestrial or satellite radio transmission links. NG Deficit A shortfall/deficiency of revenues over expenditures of the National Government. Non-Tax Revenues Revenues collected from sources other than compulsory tax levies. Includes those collected in exchange for direct services rendered by government agencies to the public, or those arising from the government’s 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. Off-Grid Areas Areas not connected to the wires and related facilities of the On‐Grid System of the Philippines. Glossary 307 On-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). Open Budget Index (OBI) A country’s score according to the clarity, scope and availability of documents on public spending. A country’s tendency to encourage or avoid wasteful and corrupt use of public funds. 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 Indicator System (OPIF) or major final outputs and measures agency performance by key quality and quantity indicators. Outstanding Public Sector The combined debt of the NG, the government owned and controlled Debt corporations (GOCCs), the social security institutions (GSIS, SSS, PHIC), the local government units (LGUs) and the Bangko Sentral ng Pilipinas (BSP). Over-the- Counter A security traded in some context other than on a formal exchange such as Derivative Exchange Philippine Stock Exchange. The phrase “over-the-counter” can be used to refer to stocks that trade via a dealer network as opposed to on a centralized exchange. It also refers to debt securities and other financial instruments such as derivatives, which are traded through a dealer network. 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 country’s industrial base. Pantawid Pamilyang Pilipino The Philippines’ conditional cash transfer (CCT) program, which provides Program (4Ps program) direct cash 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 priority areas for spending and to incorporate the sectoral and regional implications in the dimension and distribution of the budget. Payapa at Masaganang The national government’s peace and development framework to respond Pamayanan Program and 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 Philippine Development Plan 2011-2016 MIDTERM UPDATE308 corresponding increase in tax and/or revenue or a cut in spending in other items in the budget over a specified time period. Payment for Environmental A compensation involving cash that is linked directly to the provision of Services (PES) environmental 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 country’s 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. Payment Systems Refers to the set of instruments, banking procedures and interbank funds transfer systems which facilitate the circulation of money in a country or currency area. Often used synonymously with “fund transfer system”. 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. People’s Budget A publication that makes the national budget more accessible to the public, both published in print and electronic form. It is a less technical version of the national budget. People’s Survival Fund (PSF) A special fund in the National Treasury, established under Republic Act 10174 of 2012, for the financing of adaptation programs and project based on the National Strategic Framework and Program on Climate Change. Per Capita Estimates expressed as the ratio of a particular transaction like GDP over total population. Per capita income Obtained by dividing the total family income by the total number of family members. Percentile Rank A method of determining the relative standing of an individual in a population. For example, if a country’s corruption index is at the 75th percentile, this means that it performed better than 75% of all countries that were evaluated for that index. Performance Challenge A financial subsidy given to local government units (LGUs) that were awarded Fund (PCF) with the Seal of Good Local Governance (SGLG) for projects that are aligned with national government priorities, such as achieving the Millennium Development Goals (MDGs), improved solid waste management, disaster risk reduction and management (DRRM), and tourism and local economic development. Performance Enhancement An incentive/ bonus that is provided to employees across the board, regardless Incentive (PEI) of their actual performance. The amount available for PEI bonuses will depend on savings incurred by a particular national government agency (NGA). Performance-Based Bonus A merit-based incentive program that recognizes and rewards exemplary (PBB) performance in government. The program is a top-up bonus that is given to employees based on their performance and contributions to the accomplishment of their Department’s overall targets and commitments. Under the PBB, units of Departments will be ranked according to their performance. The personnel within these units shall also be ranked. The ranking of units and personnel will Glossary 309 be based on their actual performance at the end of the year, as measured by verifiable, observable, credible, and sustainable indicators of performance. Performance-Based A system of incentives for government employees introduced in 2012, per Incentive System (PBIS) Executive Order (EO) No. 80. Under this system, employees may receive two incentives: the Performance-Based Bonus (PBB) and the Productivity Enhancement Incentive (PEI). Persons with Disability Those suffering from restriction of different abilities, as a result of a mental, physical or sensory impairment, to perform an activity in the manner or within the range considered normal for a human being. Philippine Development The primary mechanism of the government for facilitating substantive policy Forum (PDF) dialogue among stakeholders on the country’s development agenda. The Forum also serves as a process for developing consensus and generating commitments among different stakeholders toward critical actionable items of the government’s reform agenda. Philippine Quality Award A national award program that recognizes achievements of public and private (PQA) sector organizations in their efforts to attain performance excellence. Political Stability Reflects perceptions of the likelihood that the government will be destabilized or overthrown by unconstitutional or violent means, including politically motivated violence and terrorism. Post -Harvest Facilities Facilities and equipment that handle the processing, packaging, storage, and transportation of agricultural products in order to reduce losses and increase market value. 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). Post-trade processing A process where the buyer and the seller compare trade details, approve the transaction, change records of ownership and arrange for the transfer of securities and cash. Post-trade processing is especially important in markets that are not standardized such as the over-the-counter (OTC) market. 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 Threshold The minimum income/expenditure required for a family/individual to meet the basic food and non-food requirements. 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). Primary Adjusted NER The total number of children aged 6-11 years old who are enrolled in any basic education level, expressed as a percentage of 6-11 population (official elementary school age) 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. Philippine Development Plan 2011-2016 MIDTERM UPDATE310 Productivity Measures how efficiently production inputs, such as labor and capital, are being used in an economy to produce a given level of output. Productivity is considered a key source of economic growth and competitiveness and, as such, is basic statistical information for many international comparisons and country performance assessments. 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 Financial Management Deals with all aspects of resource mobilization and expenditure management in government. It is about the way government raises its income (in the form of taxes, customs duties and other revenues) and manages its expenditures to deliver essential services to its citizens, i.e., education, health care and other social programs, roads and infrastructure, the rule of law and security, and those areas which generally make the lives of citizens better off. Public Management An intensive program that provides comprehensive and multi-modal learning Development Program opportunities for public managers. It aims to foster careerism in government (PMDP) and promote stability in the bureaucracy by producing a corps of public managers that embody competence, integrity and commitment. Public-Private Partnership A contractual arrangement between the government and the private sector to (PPP) 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 of Fiscal A Fiscal Incentives Reform (FIR) initiative that seeks to institute a strategic Incentives approach in the grant of tax incentives that promotes competitiveness and, at the same time, ensures cost-efficiency and fiscal sustainability. It aims for a fiscal incentives system that is time-bound and well-targeted to the most responsive sector, thus, maximizing investments and their beneficial spillovers and minimizing redundancies or unnecessary costs to the government. It further aims to promote transparency and rationalized responsibilities in tax incentives administration. Rationalization of the Refers to the adoption of a fiscal regime framework for the mining industry Mining Fiscal Regime covering areas such as revenue sharing arrangement, incentives and royalties, as well as the allocation and utilization of mining revenues. Moreover, the government wants to develop a system that will support its entry into the Extractive Industries Transparency Initiative (EITI), the internationally accepted practice which makes the payment and collection of all mining related fees and taxes paid by mining companies to national and local government units more transparent through standardized disclosures. 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 The weighted average of a country’s currency relative to an index or basket Rate (REER) of other major currencies adjusted for the effects of inflation. The weights are determined by comparing the relative trade balances, in terms of one country’s Glossary 311 currency, with another country within the index. Essentially it refers to the NEER adjusted for inflation differentials. Real gross domestic product The total value of output, adjusted to inflation, produced within the geographical boundaries of the country regardless of the nationality of the entities producing the output. 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 Availability of at least 20 liters per day from a source within 1 kilometer of Access the dwelling. 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 Deforestation and Forest countries would provide financial incentive for forested, developing countries Degradation Plus to manage and protect forests to reduce their GHG emissions and enhance (REDD-plus) 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. Regulatory Quality Reflects perceptions of the ability of the government to formulate and implement sound policies and regulations that permit and promote private sector development. Remittances Goods or financial instruments transferred by migrants living and working abroad to the residents of the home economies of the migrant. Personal remittances measure the total amount of remittance flows into the country, including cash and non-cash items that flow through both formal (via electronic wire) and informal channels (such as money or goods carried across borders) while cash remittances represent those which are coursed through commercial banks, offshore banking units, and foreign exchange corporations of sea-based and land-based OFWs. Remunerative Employment Refers to employment opportunities for which fair compensation is provided; engagement in work for which the working individual is being paid 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 A policy mechanism which places an obligation to electric power industry Standards (RPS) participants 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. Philippine Development Plan 2011-2016 MIDTERM UPDATE312 Report Card Survey (RCS) Used to obtain feedback on how provisions in the Citizen’s Charter are being followed and how the agency is performing. The RCS shall also be used to obtain information and/ or estimates of hidden costs incurred by clients to access frontline services which may include, but is not limited to, bribes and payment to fixers. Republic Act 10121 An act that seeks to strengthen the Philippine disaster risk reduction and (Philippine Disaster Risk management system through the adoption of the National Disaster Risk Reduction and Management Reduction and Management Framework (NDRRMF), and the National Act of 2010) 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. Republic Act 10149 (GOCC The law promotes financial viability and fiscal discipline in government Governance Act of 2011) owned or controlled corporations and strengthens the role of the state in its governance and management to make them more responsive to the needs of public interest. The Governance Commission for Government Owned and Controlled Corporations or the GCG was created for purposes of its implementation. Republic Act 10351 An act restructuring the excise tax on alcohol and tobacco products. Revenues (Sin Tax Reform Law) from these products will support the Universal Health Care (UHC) Program of the administration. Republic Act 10354 An act providing for a national policy on responsible parenthood and (Responsible Parenthood reproductive health. It mandates the government to promote all effective and Reproductive Health Act natural or modern methods of family planning, which are safe and legal. of 2012) Republic Act 6657 Refers to the law that established the comprehensive agrarian reform program (Comprehensive Agrarian (CARP) and provided the mechanism for its implementation. Reform Law of 1988) Republic Act 6810 A law that aims to promote growth of countryside and barangay business (Magna Carta for enterprises by minimizing bureaucratic restrictions and granting incentives and Countryside and other benefits. It exempts countryside business enterprises from all national Barangay Business and local taxes, license and building permit fees and other business taxes, Enterprises/Kalakalan 20) except real property and capital gains taxes, import duties and other taxes on imported articles; and from any and all government rules and regulations with respect to assets, income, and other activities indispensably and directly utilized in, proceeding from or connected with the business of the enterprise. Republic Act 6969 An act to control toxic substances and hazardous and nuclear wastes, providing (Toxic Substances and penalties for violations thereof. It regulates, restricts, or prohibits the Hazardous Waste importation, manufacture, processing, sale, distribution, use and disposal of Act of 1990) chemical substances and mixtures that present unreasonable risk and/or injury to health or the environment. It also prohibits the entry, even in transit, of hazardous and nuclear wastes and their disposal into the Philippine territorial limits for whatever purpose; and facilitates research and studies on toxic chemicals. Glossary 313 Republic Act 7160 An act providing for a local government code which seeks to promote genuine (Local Government and meaningful local autonomy for territorial and political subdivisions of the Code of 1991) 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. Republic Act 7586 An act providing for the establishment and management of national integrated (National Integrated protected protected areas system, defining its scope and coverage, and for Protected Areas System other purposes. It encompasses outstanding remarkable areas and biologically Act of 1992) 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. Republic Act 7718 An act amending certain sections of RA No. 6957 (An act authorizing the (Build-Operate-Transfer financing, construction, operation and maintenance of infrastructure projects (BOT) Law) by the private sector, and for other purposes). Republic Act 7898 A comprehensive modernization of the AFP primarily for defense capability (AFP Modernization/ with support mechanisms for national development. Development Program) Republic Act 8371 An act which recognizes, protects and promotes the rights of indigenous (Indigenous Peoples cultural communities/indigenous people, creating a national commission of Rights Act of 1997) 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. Republic Act 8435 An act modernizing the agriculture and fishing industries of the Philippines. It (Agriculture and Fisheries mandated the prescription of urgent related measures to modernize the Modernization Act (AFMA) agriculture and fisheries sectors to enhance their profitability, and prepare said of 1997) sectors for the challenges of globalization through an adequate, focused and rational delivery of necessary support services. Republic Act 8749 An act providing for a comprehensive air pollution control policy. It aims to (Philippine Clean protect and advance the right of the people to a balanced and healthful ecology Air Act of 1999) in accord with the rhythm and harmony of nature. It seeks to promote and protect the global environment to attain sustainable development while recognizing the primary responsibility of local government units to deal with environmental problems. Republic Act 9003 An act providing for an ecological solid waste management program, creating (Ecological Solid Waste the necessary institutional mechanisms and incentives, declaring certain acts Management Act of 2000) 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. Republic Act 9136 An act that provides a framework for the restructuring of the electric power (Electric Power industry, including the privatization of the assets of National Power Industry Reform Corporation, the transition to the desired competitive structure, and the Act of 2001) definition of the responsibilities of the various government agencies and private entities. Philippine Development Plan 2011-2016 MIDTERM UPDATE314 Republic Act 9275 An act providing for a comprehensive water quality management. It aims to (Philippine Clean protect, preserve and revive the quality of the country’s fresh, brackish and Water Act of 2004) marine waters. Republic Act 9513 An act that establishes the framework for the accelerated development and (Renewable Energy advancement of renewable energy resources, and the development of a strategic Act of 2008) program to increase its utilization. Republic Act 9700 An act that extended the acquisition and distribution of agricultural lands (Comprehensive Agrarian through the CARP. RA 9700 also amended certain provisions of the Reform Program Extension Comprehensive Agrarian Reform Law of 1988 (RA 6657), and instituted with Reforms (CARPER)) reforms in the implementation of agrarian reform. Republic Act 9710 A comprehensive women’s human rights law that seeks to eliminate discrimination (Magna Carta of Women) 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. Republic Act 9729 An act mainstreaming climate change into government policy formulations, (Climate Change) establishing the framework strategy and program for climate change. It adopts Act of 2009 a principle ofprotecting 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. Republic Act No. 9512 An act to promote national awareness on the role of natural resources in (National Environmental economic growth and the importance of environmental conservation and Awareness and Education ecological balance towards sustained national development. This legislation Act of 2008) concretized the country’s 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). 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. Results-Based Performance A unified system for monitoring, evaluating, and reporting the performance of Management System national government agencies (NGAs) that serves as basis for determining (RBPMS) entitlement of the performance-based bonus (PBB) for national government personnel in the executive department. Retail Electricity 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. Glossary 315 Retail payment systems An exchange for small- value payments mainly between banks or between participants in financial markets, and usually require urgent and timely settlement. Retail trade Any act or occupation of selling direct to the general public merchandise, commodities or good for consumption. Revealed Comparative Refers to the share of product to total Philippine exports as a ratio of share of Advantage 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. It 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 The anti-corruption arm of the DOF created by EO 259 (December 17, 2003). Service (RIPS) The 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 The internationally accepted risk-sensitive capital adequacy standards for Adequacy Framework financial institutions. It prescribes that financial institutions must, at all times, have capital commensurate with their risk taking activities. Rule of Law A principle of governance in which all persons, institutions and entities, public and private, including the State itself, are accountable to laws that are publicly promulgated, equally enforced and independently adjudicated, and which are consistent with international human rights norms and standards. It requires measures to ensure adherence to the principles of supremacy of law, equality before the law, accountability to the law, fairness in the application of the law, separation of powers, participation in decision-making, legal certainty, avoidance of arbitrariness and procedural and legal transparency. In international governance indices, rule of law reflects perceptions of the extent to which agents have confidence in and abide by the rules of society, and in particular the quality of contract enforcement, property rights, the police, and the courts, as well as the likelihood of crime and violence. Run After the Smugglers A program of the Bureau of Customs (BOC) under the Department of (RATS) Finance (DOF) that focuses on monitoring or profiling, case-building, and Run Against Tax Evaders prosecution of smugglers. A program initiated by the DOF and BIR to (RATE) 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 A series of laws and issuances covering the compensation and position classification system in the government. Philippine Development Plan 2011-2016 MIDTERM UPDATE316 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. Seal of Good Local A mechanism that monitors and recognizes adherence of local government units Governance (SGLG) (LGUs) to performance criteria on any of the following areas: good financial – formerly Seal of Good housekeeping, disaster preparedness, social protection for the basic sector, Housekeeping (SGH) business friendliness and competitiveness, environmental compliance, and law and order and public safety. An LGU must comply with all three core elements of the SGLG (good financial housekeeping, disaster preparedness, and social protection) and at least one from the other assessment areas in order to receive the SGLG. Secondary Adjusted Net The total number of 12-15 years old enrolled in any basic education level, Enrolment Rate (NER) expressed as a percentage of 12-15 population (official secondary school age) Secondary Mortgage Market A market for the purchase and sale of existing mortgages, designed to provide greater liquidity for selling mortgages. Securities Borrowing The temporary loan of securities between borrower and lender. This allows the and Lending 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. Securities Settlement System A system which permits the holding and transfer of securities, either free of payment or against payment (delivery versus payment) or against another asset (delivery versus delivery). It comprises all the institutional and technical arrangements required for the settlement of securities trades and the safekeeping of securities. The system can operate on a real-time gross settlement, gross settlement or net settlement basis. A settlement system allows for the calculation (clearing) of the obligations of participants. Septage The sludge produced in individual/communal onsite wastewater-disposal systems, principally septic tanks. Service Delivery Excellence A program of the Civil Service Commission (CSC) which aims to Program (SDEP) immediately assist and provide solutions for agencies that have failed to comply with their Citizen’s Charter. The SDEP is designed for agencies to review systems and procedures and identify appropriate interventions to address concerns, if any. lt is aligned with the implementation of the Anti-Red Tape Act (ARTA), particularly the Citizen’s Charter. Agencies that receive a “Failed” rating in the ARTA Report Card Survey are recommended to undergo the SDEP. 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. Glossary 317 Sewage Wastewater; consists of liquid or water-carried wastes removed from households, institutions, 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. Shari’ah Courts Shari’ah District Courts (SDCs) and Sharia’h 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 A service available on digital networks, typically enabling messages with up to (SMS) 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 The functional unit of the National Power Corporation created to pursue Group (SPUG) 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 Refers to 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 people’s 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. Social Services Refers to an area of public service related to the provision of education, manpower development, health, housing and social security and welfare services. Social Welfare Preventive and developmental interventions that seek to support the minimum basic requirements of the poor, particularly the poorest of Philippine Development Plan 2011-2016 MIDTERM UPDATE318 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 units refer to house and lot packages costing less than PhP450,000. Solid Waste Management The discipline associated with the control of generation, storage, collection, (SWM) 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 values of all securities traded on a financial market. Strategic Agriculture The areas within the Network of Protected Areas for Agricultural and and Fisheries Development Agroindustrial Development (NAPAAD) identified for production, agro Zones (SAFDZ) 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). Strategic Performance A mechanism that links individual employees’ performance to their agency’s Management System (SPMS) organizational vision, mission and strategic goals. It is designed by the Civil Service Commission to ensure that the employee achieves the objectives set by the organization; and that the organization achieves the objectives that it has set itself in its strategic plan. The SPMS focuses on the agency’s major final outputs (MFOs), together with their corresponding performance indicators, as these relate to the achievement of the agency’s strategic objectives. Strengthening the Integrity A program of the Judiciary that aims to: (a) provide the Judiciary with effective of the Judiciary (SIJ) tools and techniques to systematically 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, which occurred 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 provided 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. Glossary 319 Subsistence Incidence The proportion of families or individuals/population with per capita income/ expenditure less than the per capita food threshold to the total number of families or individuals. Subsistence Threshold Refers to the minimum income/expenditure required for a family or individual to meet the basic food needs, which satisfies the nutritional requirements for economically necessary and socially desirable physical activities. Also known as the food threshold. Supplier Any person or entity authorized by the Energy Regulatory Commission to sell, broker, market or aggregate electricity to the end-users. Sustainable Development A model of development that is compatible with the preservation of the ecosystem in areas where agriculture and fisheries activities are carried out (RA 8435). Sustainable Land The use of the land to meet changing human needs (agriculture, forestry, Management 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). Tariff Tax levied on imports and exports. Tax Effort The ratio between the government’s tax revenue collection vis-à-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 The education process designed at secondary and lower tertiary levels, officially Education and Training recognized as nondegree programs aimed at preparing technicians, para (TVET) 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. 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. Third Party Clearing Bank A clearing house that act as a third parties to all futures and options contracts as a buyer to every clearing member seller and a seller to every clearing member buyer. It is an agency or separate corporation of a futures exchange responsible for settling trading accounts, clearing trades, , and regulating delivery and reporting trading data. 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 total number of births a woman would have on average during her reproductive years (15-49). Total suspended particulates Small airborne particles such as dust, fume and smoke with diameters less than (TSP) 100 micrometers. 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 Philippine Development Plan 2011-2016 MIDTERM UPDATE320 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. Trade Repositories A legal entity that centrally collects and maintains the records of derivatives. It is essential to bringing transparency to the global derivatives markets by making market positions and potential risk concentrations fully visible to regulators and, in aggregate form, to the public. Transmission (Electric) The conveyance of electricity through the high voltage backbone system. Transmission Development The program for managing the transmission system through efficient planning Plan 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 All types of higher education study programs, sets of courses of study, or (TNE) 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. Transparency Seal The mandatory disclosure of key budget and major plans of national government agencies (statement of allotment, obligation and balances or SAOB, disbursement and income, procurement plans) in their respective websites under the Seal. UN Security Council A resolution that reaffirms the important role of women in the prevention and Resolution 1325 resolution 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. It 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 (persons) All employed persons who express 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. Glossary 321 Unemployed Includes 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 Charge A fixed amount approved by the ERC pursuant to Section 34 of RA 9136 imposed on all electricity end-users for: a) the payment of stranded debts in excess of the amount assumed by the National Government and stranded contract costs of NPC; b) missionary electrification; c) equalization of the taxes and royalties applied to indigenous or renewable sources of energy vis-à-vis imported energy fuels; and d) environmental charge. 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 A principle of providing all individuals or households with access to (Telecommunications) telecommunications services, whether at home or mobile. 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. Valuation Reform Act A proposed legislative measure that seeks to institutionalize reforms in land and real property valuation intended to improve the administration of real property and related taxes. Value Chain In agriculture, the value chain identifies the set of actors and activities that bring a basic agricultural product from production in the field to final consumption, where value is added to the product at each stage. 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 A professionally applied and systematic team management approach used to Analysis (VE/VA) manage 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. Philippine Development Plan 2011-2016 MIDTERM UPDATE322 Value-Added Service (VAS) A telecommunications industry term for noncore services including all services beyond standard voice calls and fax transmissions. Voice and Accountability Reflects perceptions of the extent to which a country’s citizens are able to participate in selecting their government, as well as freedom of expression, freedom of association, and a free media. 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 Refers to the database of Warrant of Arrests issued by the different courts Information System (WAIS) nationwide accessible by all Philippine National Police (PNP) units and other law enforcement agencies nationwide. Wasting Current, 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/ A barangay or municipality wherein 50 percent or less of the population has Municipality 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 A process of 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 121°C is needed. This method is similar to the autoclave sterilization process. Whole-of-Government An approach wherein a government actively uses formal and/or informal approach networks across different agencies to coordinate the design and implementation of interventions in order to increase the effectiveness of those interventions in achieving the desired objectives. Wholesale Electricity Spot The market where competitive, efficient, transparent and reliable market/ Market trading of electricity will be made. Wind Energy Kinetic energy derived from air movement (wind), which is converted into useful electrical or mechanical energy. Wind Energy Systems Machines or other related equipment that convert wind energy into useful electrical or mechanical energy. Wireless Generic term for mobile communication services which do not use fixed-line networks for direct access to the subscriber. Glossary 323 World Governance Indicators A research dataset summarizing the views on the quality of governance. (WGI) provided by a large number of enterprise, citizen and expert survey respondents in industrial and developing countries. These data are gathered from a number of survey institutes, think tanks, non-governmental organizations (NGOs), international organizations, and private sector firms. Yield Curve 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 A budgeting approach through which major agency programs and projects are evaluated to: (a) determine the continued relevance of program objectives vis-à-vis current developments/directions; (b) assess whether program objectives/outcomes are being achieved; (c) ascertain alternative or more viable ways of achieving the objectives, and ultimately; (d) guide decision makers on whether the program/project should continue to be funded at its present level, or if funding should be increased, reduced or discontinued. Planning Committees 325 Planning Committees Philippine Development Plan 2011-2016 Plan Steering Committee Sec. Florencio B. Abad, Jr. Department of Budget and Management Sec. Jose Rene D. Almendras Office of the President Sec. Rosalinda Dimapilis-Baldoz Department of Labor and Employment Sec. Ramon J. P. Paje Department of Environment and Natural Resources Sec. Cesar V. Purisima Department of Finance Sec. Manuel A. Roxas II Department of Interior and Local Government Sec. Rogelio L. Singson Department of Public Works and Highways Sec. Corazon Juliano-Soliman Department of Social Welfare and Development Chair: Sec. Arsenio M. Balisacan National Economic and Development Authority Members: Romulo Emmanuel M. Miral, Jr. Congressional Policy and Budget Research Department Ronald R. Golding Senate Economic Planning Office Carmelita N. Ericta National Statistics Office Jose Ramon G. Albert National Statistical Coordination Board Sec. Imelda M. Nicolas Commission on Filipinos Overseas Gilberto M. Llanto Philippine Institute for Development Studies Additional inputs provided by: Philippine Development Plan 2011-2016 MIDTERM UPDATE326 Planning Committee on Economic Development Chair: DDG Emmanuel F. Esguerra, National Economic and Development Authority Co-chair: ADG Rosemarie G. Edillon, National Economic and Development Authority Subcommittee on Macroeconomy Chair: Dir. Francisco G. Dakila, Jr., Bangko Sentral ng Pilipinas Members: Bangko Sentral ng Pilipinas Department of Budget and Management Philippine Statistics Authority Senate Economic Planning Office House of Representatives-Congressional Policy and Budget Research Department Department of Budget and Management Department of Finance-Fiscal Policy and Planning Office Department of Labor and Employment-Institute for Labor Studies Office of the President-Presidential Management Staff National Statistical Coordination Board Subcommittee on Industry and Services Chair: Usec. Adrian S. Cristobal, Department of Trade and Industry Co-chair: Dir. Bernie S. Justimbaste, Department of Science and Technology Members: Department of Trade and Industry Department of Science and Technology Department of Labor and Employment Department of Tourism Department of Environment and Natural Resources Department of Interior and Local Government Department of Agriculture Philippine Statistics Authority Senate of the Philippines House of Representatives Federation of Philippine Industries Information Technology and Business Process Association of the Philippines Caucus of Development NGO Networks Fair Trade Alliance Additional Inputs provided by: Department of Energy Planning Committees 327 Subcommittee on Agriculture Chair: Sec. Proceso J. Alcala, Department of Agriculture Co-chair: Sec. Virgilio R. Delos Reyes, Department of Agrarian Reform Members: Philippine Rice Research Institute Department of Trade and Industry-National Competitiveness Council Department of Trade and Industry-Board of Investments Philippine Council for Agriculture, Aquatic and Natural Resources Research and Development Philippine Statistics Authority-Bureau of Agricultural Statistics Department of Budget and Management Bureau of Fisheries and Aquatic Resources Land Bank of the Philippines Philippine Atmospheric, Geophysical and Astronomical Services Administration Philippine Statistics Authority-National Statistics Office Philippine Institute for Development Studies Philippine Statistics Authority-National Statistical Coordination Board Philippine Coconut Authority Philippine Center for Postharvest Development and Mechanization Sugar Regulatory Administration Agricultural Training Institute National Irrigation Administration National Food Authority Department of Environment and Natural Resources Department of Labor and Employment Development Academy of the Philippines Development Bank of the Philippines National Fisheries Research and Development Institute Mindanao Development Authority National Commission on Indigenous Peoples House of Representatives Senate of the Philippines Management Association of the Philippines-Agribusiness and Countryside Development Foundation Northern Mindanao Vegetable Producers Association, Inc. Federation of Philippine Industries, Inc. Philippine Exporters Confederation, Inc. Rural Bankers Association of the Philippines Philippine Business for Social Progress Caucus of Development NGO Networks Asian NGO Coalition for Agrarian Reform and Rural Development Alyansa Agrikultura Philippine Rural Reconstruction Movement National Academy of Science and Technology University of Asia and the Pacific-Center for Food and Agri-Business Ateneo Center for Economic Research & Development University of the Philippines Los Baños-School of Environmental Science and Management Negros Island Sustainable Agriculture and Rural Development Foundation University of the Philippines National Institute of Geological Science Philippine Development Plan 2011-2016 MIDTERM UPDATE328 Partido kalikasan Institute, Inc. UPLB-Institute of Statistics Department of Agriculture - Agricultural Credit and Policy Council Additional Inputs provided by: Philippine Partnership for the Development of Human Resources in Rural Areas Food and Nutrition Research Institute NGO for Fisheries Reform Pambansang Kilusan ng mga Samahang Magsasaka Subcommittee on Finance Chair: Dir. Johnny Noe E. Ravalo, Bangko Sentral ng Pilipinas Members: Bangko Sentral ng Pilipinas Department of Finance Bureau of Treasury Department of Trade and Industry National Competitiveness Council Board of Investments Development Bank of the Philippines LandBank of the Philippines Government Service and Insurance System Social Security System Philippine Institute for Development Studies Securities and Exchange Commission Insurance Commission Philippine Stock Exchange Department of Budget and Management Philippine Statistics Authority-National Statistics Office Philippine Statistics Authority-National Statistical Coordination Board House Committee on Banks and Financial Intermediaries House Committee on Cooperatives Development Senate Committee on Banks, Financial Institutions & Currencies Senate Committee on Finance National Reintegration Center for Overseas Filipino Workers Senate Economic Planning Office Congressional Policy and Budget Research Department Philippine Dealing System Export Development Council Financial Executives Institute of the Philippines Planning Committees 329 Planning Committee on Infrastructure Development Chair: DDG Rolando G. Tungpalan, National Economic and Development Authority Subcommittee on Transport Chair: Asec. Sherielysse R. Bonifacio, Department of Transportation and Communications Members: Metro Manila Development Authority Manila International Airport Authority Department of Public Works and Highways Philippine Ports Authority Maritime Industry Authority Bases Conversion and Development Authority Light Rail Transit Authority Civil Aeronautics Board Toll Regulatory Board Department of Budget and Management Department of Agriculture Clean Air Initiative for Asian Cities Land Transportation Franchising and Regulatory Board Land Transportation Office Department of Tourism Cagayan Economic Zone Authority Philippine National Railways Philippine Statistics Authority Cebu Ports Authority Department of Labor and Employment Civil Aviation Authority of the Philippines Department of the Interior and Local Government Clark International Airport Corporation Mactan-Cebu International Airport Authority National Center for Transportation Studies Subcommittee on Energy Chair: Usec. Raul B. Aguilos, Department of Energy Members: Power Sector Assets and Liabilities Management National Power Corporation National Electrification Administration National Transmission Corporation Philippine National Oil Company Energy Regulatory Commission Philippine Statistics Authority Department of Labor and Employment National Grid Corporation of the Philippines Philippine Development Plan 2011-2016 MIDTERM UPDATE330 Subcommittee on ICT Chair: Dir. Philip A. Varilla, Information and Communications Technology Office (representing Exec. Dir. Louis Napoleon C. Casambre) Members: National Telecommunications Commission Department of the Interior and Local Government Department of Science and Technology-Telecommunications Office Department of Science and Technology-National Computer Center Department of Science and Technology-Philippine Atmospheric, Geophysical and Astronomical Services Administration House of Representatives-Congressional Policy and Budget Research Department Senate Economic Planning Office Philippine Statistics Authority Department of Labor and Employment Presidential Communications Operations Office Philippine Information Agency People’s Television Network Inc. Philippine Broadcasting Service-Bureau of Broadcast Services Philippine Postal Corporation Information Technology Association of the Philippines Subcommittee on Water Resources Chair: Asec. Maria Catalina E. Cabral, Department of Public Works and Highways Members: National Water Resources Board Department of Agriculture Department of Agriculture-Bureau of Soils and Water Management Department of the Interior and Local Government National Irrigation Administration Local Water Utilities Administration Pasig River Rehabilitation Commission Department of the Environment and Natural Resources-River Basin Control Office Department of Trade and Industry-Board of Investments Department of Justice Department of Agrarian Reform Office of the Executive Secretary Cooperative Development Authority Metropolitan Waterworks and Sewerage System Philippine Statistical Authority Department of Budget and Management Office of the Civil Defense Department of Labor and Employment Senate of the Philippines-Senate Economic Planning Office House of Representatives-Congressional Policy and Budget Research Department Department of Finance Department of Finance-Municipal Development Fund Office Planning Committees 331 Department of Health Department of Tourism Department of Transportation and Communication Department of Social Welfare and Development National Housing Authority Mindanao Development Authority Metropolitan Manila Development Authority Subic Bay Metropolitan Authority Department of Science and Technology-Philippine Council for Agriculture, Aquatic and Natural Resources Research and Development Department of Science and Technology-Philippine Atmospheric, Geophysical and Astronomical Services Administration Department of Science and Technology-Philippine Council for Aquatic and Marine Research and Development League of Provinces League of Cities of the Philippines League of Municipalities of the Philippines Laguna Lake Development Authority National Anti-Poverty Commission Philippine Association of Water Districts Office of Civil Defense-National Disaster Risk Reduction and Management Council National Confederation of Irrigators’ Associations Philippine Water Partnership Development Bank of the Philippines Manila Water Company, Inc. Maynilad Water Services, Inc. University of the Philippines-National Hydraulic Research Center Subcommittee on Social Infrastructure Chair: Asec. Jesus L.R. Mateo, Department of Education Co-chair: Dir. Ma. Rebecca M. Peñafiel, Department of Health Members: Department of Environment and Natural Resources-National Solid Waste Management Commission Department of Environment and Natural Resources-Environment Management Bureau Housing and Urban Development Coordinating Council National Housing Authority Planning Committee on Peace and Security Chair: Asec. Danilo Augusto B. Francia, Department of National Defense Co-chair: Usec. Luisito G. Montalbo, Office of the Presidential Adviser on the Peace Process Additional Inputs provided by: House of Representatives-Congressional Policy and Budget Research Department National Commission on Muslim Filipinos House of Representatives-Committee on Public Order and Safety House of Representatives-Committee on National Defense and Security House of Representatives-Committee on Mindanao Affairs House of Representatives-Special Committee on Peace, Reconciliation and Unity Philippine Development Plan 2011-2016 MIDTERM UPDATE332 Senate Committee on National Defense and Security Senate Committee on Justice and Human Rights Senate Committee on Peace, Unification and Reconciliation Philippine Statistics Authority Gazton Peace Institute Sulong CARHRIL INCITE Gov Subcommittee on Peace Chair: Usec. Luisito G. Montalbo, Office of the Presidential Adviser on the Peace Process Members: Office of the Presidential Adviser on the Peace Process Philippine Commission on Women Council for the Welfare of Children Department of Labor and Employment Department of Social Welfare and Development National Anti-Poverty Commission National Commission on Indigenous Peoples Commission on Human Rights Department of Agrarian Reform Department of Agriculture Department of Environment and Natural Resources Mindanao Development Authority Autonomous Region in Muslim Mindanao-Regional Planning and Development Office Subcommittee on Security Subcommittee Chair: Asec. Danilo Augusto B. Francia, Department of National Defense Members: Department of National Defense Armed Forces of the Philippines Office of Civil Defense Department of the Interior and Local Government Philippine National Police Bureau of Jail Management and Penology Bureau of Fire Protection Department of Foreign Affairs Department of Justice National Bureau of Investigation Bureau of Corrections Bureau of Immigration National Security Council Philippine Coast Guard Bureau of Customs National Police Commission Philippine Drug Enforcement Agency Planning Committees 333 Planning Committee on Good Governance and Anti-Corruption Chair: Asec. Margarite Theresa Lucila-Tesoro, Office of the Chief Presidential Legal Counsel Co-chair: Asec. Rolando M. Acosta, Department of the Interior and Local Government Members: Office of the President-Chief Presidential Legal Counsel Civil Service Commission Department of Budget and Management Department of the Interior and Local Government Department of Finance Department of Justice Department of Labor and Employment Department of Trade and Industry Philippine Statistics Authority Office of the President-Presidential Legislative Liaison Office Union of Local Authorities of the Philippines Subcommittee on Good Governance and the Rule of Law Chair: OIC-Dir. Lida C. Ayon, Civil Service Commission Co-chair: Dir. Francisco R. Cruz, Department of the Interior and Local Government Members: Commission on Elections Office of the Ombudsman Office of the President-Presidential Management Staff Development Academy of the Philippines Office of the President-Chief Presidential Legal Counsel Civil Service Commission Department of Budget and Management Department of the Interior and Local Government Department of Finance Department of Justice Department of Labor and Employment Department of Trade and Industry Office of the President-Presidential Legislative Liaison Office Commission on Human Rights Commission on Audit House of Representative-Congressional Planning and Budget Research Department Supreme Court of the Philippines-Program Management Staff Integrated Bar of the Philippines Union of Local Authorities of the Philippines University of the Philippines-National College of Public Administration and Governance Ateneo School of Government Transparency and Accountability Network Transparency International Philippines National Competitiveness Council-Private Sector Caucus of Development NGO Networks Philippine Association of Management Accountant Philippine Development Plan 2011-2016 MIDTERM UPDATE334 Planning Committee on Human Development and Poverty Reduction Chair: Sec. Corazon Juliano-Soliman, Department of Social Welfare and Development Subcommittee on Health, Nutrition and Population Chair: Usec. Madeleine R. Valera, Department of Health Members: National Nutrition Council Commission on Population Philippine Health Insurance Corporation National Economic and Development Authority Subcommittee on Education Chair: Asec. Jesus R. Mateo, Department of Education Members: Technical Education and Skills Development Authority Commission on Higher Education National Economic and Development Authority Subcommittee on Housing Chair: Sec. Gen. Cecilia S. Alba, Housing and Urban Development Coordinating Council Members: National Housing Authority Housing and Land Use Regulatory Board Home Development Mutual Fund Home Guaranty Corporation Social Housing Finance Corporation National Home Mortgage Finance Corporation National Economic and Development Authority Subcommittee on Social Protection Chair: Usec. Florita R. Villar, Department of Social Welfare and Development Members: National Economic and Development Authority Commission on Higher Education Department of Agriculture Department of Agrarian Reform Department of Budget and Management Department of Education Department of Health Department of the Interior and Local Government Department of Labor and Employment Department of Trade and Industry Government Service Insurance System Housing and Urban Development Coordinating Council Planning Committees 335 National Anti-Poverty Commission National Nutrition Council Philippine Health Insurance Corporation Social Security System Technical Education and Skills Development Authority League of Provinces of the Philippines League of Cities of the Philippines League of Municipalities of the Philippines Other members: Philippine Statistics Authority-National Statistics Office Philippine Statistics Authority-National Statistical Coordination Board Philippine Commission on Women National Commission on Indigenous Peoples Presidential Commission for the Urban Poor Council for the Welfare of Children Philippine Institute for Development Studies Philippine National Volunteer Service Coordinating Agency Senate Economic Planning Office Congressional Planning and Budget Department House of Representatives-Committee on the MDGs House of Representatives-Committee on Social Services Asian Institute of Management Social Watch Philippines Philippine Business for Social Progress Aidwatch Philippines Philippine Judicial Academy Caucus of Development NGO Networks Asian Institute of Management Planning Committee on Climate Change Adaptation and Mitigation Chair: Usec. Manuel D. Gerochi, Department of Environment and Natural Resources Co-chair: Usec. Austere A. Panadero, Department of the Interior and Local Government Members: National Economic and Development Authority Department of Science and Technology Department of Agriculture Department of National Defense-Office of the Civil Defense Metropolitan Manila Development Authority Department of Transportation and Communication Department of Labor and Employment Climate Change Commission Laguna Lake Development Authority Pasig River Rehabilitation Commission Philippine Statistics Authority Senate Economic Planning Office Congressional Policy and Budget Research Department League of Provinces of the Philippines Philippine Development Plan 2011-2016 MIDTERM UPDATE336 Department of Agrarian Reform Department of Budget and Management Department of Trade and Industry Philippine Institute for Development Studies National Water Resources Board Department of Public Works and Highways Center for Environmental Concerns National Commission on Indigenous People Management Association of the Philippines Philippine Business for the Environment Chamber of Mines of the Philippines Civil Society Counterpart-Council for Sustainable Development World Wide Fund-Philippines Conservation International-Philippines Aksiyon Klima Greenconvergence AidWatch Philippines c/o IBON Foundation Development Academy of the Philippines Green Research Additional Inputs provided by: Migration Policy Institute Department of Justice NEDA Regional Offices NEDA Board 337 NEDA Board Sec. Florencio B. Abad Department of Budget and Management Sec. Manuel A. Roxas II Department of Interior and Local Government Sec. Cesar V. Purisima Department of Finance Sec. Proceso J. Alcala Department of Agriculture Sec. Rogelio L. Singson Department of Public Works and Highways Sec. Ramon J.P. Paje Department of Environment and Natural Resources Sec. Joseph Emilio A. Abaya Department of Transportation and Communications Sec. Carlos Jericho L. Petilla Department of Energy Sec. Mario G. Montejo Department of Science and Technology Sec. Ramon R. Jimenez, Jr. Department of Tourism Sec. Gregory L. Domingo Department of Trade and Industry Sec. Jose Rene D. Almendras Office of the President Sec. Julia Andrea R. Abad Presidential Management Staff Vice President Jejomar S. Binay Chairman Housing and Urban Development Coordinating Council Usec. Manuel L. Quezon III Presidential Communications Development and Strategic Planning Office Diwa C. Guinigundo Deputy Governor Bangko Sentral ng Pilipinas Luwalhati R. Antonino Chairperson Mindanao Development Authority Francis N. Tolentino Chairman Metro Manila Development Authority Gov. Mujiv S. Hataman Autonomous Region for Muslim Mindanao Gov. Alfonso V. Umali, Jr. Union of Local Authorities of the Philippines Chairperson: President Benigno S. Aquino III Vice-Chairperson: Sec. Arsenio M. Balisacan Socioeconomic Planning Secretary National Economic and Development Authority Members: Philippine Development Plan 2011-2016 MIDTERM UPDATE338 NEDA Secretariat* Office of the Director-General Arsenio M. Balisacan Socioeconomic Planning Secretary Kenneth V. Tanate Assistant Director-General and Chief-of-Staff Roweena M. Dalusong Director III Development Information Staff Nerrisa T. Esguerra Director IV Internal Audit Staff Joan Marivic F. Alhambra-Ozo OIC-Director Agriculture, Natural Resources and Environment Staff Mercedita A. Sombilla Director Gina V Aljecera OIC-Assistant Director Governace Staff Carlos Bernardo O. Abad Santos Director IV Thelma C. Manuel OIC-Assistant Director National Policy and Planning Staff Rosemarie G. Edillon Concurrent Director Marites B. Oliva OIC-Assistant Director Social Development Staff Erlinda M. Capones Director IV Myrna Clara B. Asuncion Director III Trade, Services and Industry Staff Brenda Joyce R. Mendoza Director IV Amelia A. Menardo OIC-Assistant Director National Development Office—Policy and Planning Emmanuel F. Esguerra Deputy-Director General Rosemarie G. Edillon Assistant Director-General * As of April 2014 NEDA Secretariat 339 National Development Office—Investment Programming Infrastructure Staff Ruben S. Reinoso Jr. Concurrent Director Kathleen P. Mangune Director III Monitoring and Evaluation Staff Roderick M. Planta Director IV Violeta S. Corpus Director III Public Investment Staff Jonathan L. Uy Director IV Florante G. Igtiben Director III Administrative Staff Ma. Theresa R. Escolano OIC-Director Financial, Planning and Management Staff Joseph Melvin B. Basas Director IV Information and Communications Technology Staff Kenneth V. Tanate Concurrent Director Legal Staff Jocelyn P. Reyes Director IV Central Support Office Rolando G. Tungpalan Deputy Director-General Ruben S. Reinoso Jr. Assistant Director-General Nestor R. Mijares IV Deputy Director-General Philippine Development Plan 2011-2016 MIDTERM UPDATE340 Cordillera Administrative Region Milagros A. Rimando Director Region I Nestor G. Rillon OIC-Director Region II Mary Anne ER. Darauay OIC-Director Region III Severino C. Santos OIC-Director Victor B. Ubaldo OIC-Assistant Director Region IV-A Agnes M. Espinas OIC-Director Fidel T. Udarbe OIC-Assistantl Director Region IV-B Cecilia R. Lopez OIC-Director Region V Luis G. Banua OIC-Director Edna Cynthia S. Berces OIC-Assistantl Director Region VI Ro-Ann A. Bacal Director Raul S. Anlocotan Assistant Director Region VII Efren B. Carreon OIC-Director Region VIII Bonifacio G. Uy OIC-Director Region IX Teresita Socorro C. Ramos Director Region X Leon M. Dacanay Jr. Director Fe D. Domingo Assistant Director Region XI Ma. Lourdes D. Lim Director Mae Ester T. Guiamadel OIC-Assistant Director Region XII Arturo G. Valero Director Noel E. Quiratman Assistant Director Caraga Region Mylah Faye Aurora B. Cariño OIC-Director Regional Development Office Margarita R. Songco Deputy Director-General Regional Development Staff Remedios S. Endencia OIC-Director Cynthia A. Villena OIC-Assistant Director NEDA Regional Offices Index 341 Index A access to finance 12, 111 Aquired Immune Deficiency Syndrome (AIDS) 124 adaptation 23, 89, 95, 140, 160, 165, 208, 216, 219, 220 AFP Coast Watch System 185 agrarian reform 3, 5, 12, 83, 84, 92, 96-99, 215, 220 Agrarian Reform Community (ARC) 5, 84, 92, 93 agribusiness V, 12, 60, 66, 90, 93, 94, 133, 215 agricultural lands 78, 83, 92 agro-forestry 90, 94 airsheds 213 alienable or disposable land 211, 222, 232, 235 Alkire Foster (AF) 5, 111 Alternative Dispute Resolution (ADR) 25, 109, 168, 170, 171, 176, 191 alternative fuels 266 ancestral domains 214, 231, 232 Ancestral Domains Sustainable Development and Protection Plans (ADSDPPs) 211, 222, 236 ancestral lands 224 Anti-Red Tape Program 164 B Balance of Payments (BOP) 36, 37 barangay 18, 66, 92, 126, 156, 170, 191, 214, 245, 248, 259, 260, 270 Basel 111 basic education 17, 18, 121, 122, 129-132 147, 232, 259 Bio-chemical Oxygen Demand (BOD) 213, 227, 228, 237, 238 biodiesel 256 biodiversity 24, 87, 210, 217, 221, 223, 224, 235, 251 bioethanol 256 biofuel 256, 266 biomass 254 biosafety 224 broadband 241, 244, 246, 252, 253, 261, 268 Budget Partnership Agreements (BPAs) 157, 158, 174 Business Permit and Licensing System (BPLS) 54,62, 159, 164 Business Process Management 7, 10, 17, 20, 36, 56, 61, 66, 251 C cabotage 63 capital account 37 capital accumulation 6 capital flows 26, 30, 37, 105-107 capital inflows 22, 26, 30, 113 capital markets 104, 115 capital outlay 10, 32, 42, 250 carbon sequestration 208, 210 Career Executive Service (CES) 163 Career Executive Service Development Program (CESDP) 163 Career Executive Service Officers (CESOs) 163 Category 1 Provinces 13, 60, 91, 125 Category 2 Provinces 14, 17 Category 3 Provinces 14, 135, 220 Cellular Mobile Telephone Service (CMTS) 253, 268 Centers of Excellence 134 Central counterparties 115 Central Securities Depository 115 Certificate of Ancestral Domain Title (CADT) 190, 201, 211, 222, 236 Certificate of Ancestral Land Title (CALT) 211, 222, 236 Certificate of Land Ownership Award (CLOA) 83, 84, 89, 101, 214 certification rate 128, 147 chattel 117 chemical 55, 87 Citizens’ Participatory Audit (CPA) 163, 166 Citizens’ Satisfaction Index System (CSIS) 158 Civil Society Organization (CSO) 24, 100, 140, 157 159, 167, 174, 208, 223, 234 classroom shortage 245 Philippine Development Plan 2011-2016 MIDTERM UPDATE342 climate change 11, 23, 68, 74, 75, 85, 87, 89, 90, 95, 102, 160, 165, 206-210, 215, 216, 218-220, 224, 230, 249, 264, 265 coastal and marine 24, 210, 217, 221, 223, 224, 232, 235 cohort survival rate 128-130, 147 Community e-Center (CeC) 246, 261 competency 66, 134 competitive advantage 61 completion rate 128-130, 147 Comprehensive Land Use Plan (CLUP) 20, 145, 208 concession 257, 266, 269, 270, 271 conflict-affected area 12, 25, 181, 187, 190, 249, 264 Consolidated Public Sector Deficit 34, 39, 47 contingent liability 44, 225 contraceptive prevalence rate (CPR) 123, 146 control of corruption 25, 150-152, 173 Convention on Indigenous and Tribal Peoples (ILO Convention No. 169) 192 Convention of the Rights of the Child 192, 196 convergence 5, 27, 90, 96, 121, 140, 183, 186, 190, 211, 215, 251 coverage 19, 22, 83, 84, 108, 112, 117, 123-126, 136, 137, 139, 147, 168, 175, 185, 195, 197, 243-245, 246, 253-255, 257, 259, 263, 266, 268-271 credit default swap 106 cropping calendar 87 current account 26, 36, 37, 39, 40, 44, 47 Customs Modernization and Tariff Act 41 D dependable capacity 254, 256, 269 derivatives 111, 115 Dietary Energy Requirement 123, 147 Digital Terrestrial Television (DTT) Broadcasting 252 Disaster Risk Reduction (DRR) 22, 23, 137, 193, 203, 208, 265, 215-220, 224, 230, 231, 234 disbursements 31, 35, 39, 40, 47, 162 disposal 169, 213, 228, 229, 233, 238, 265, 283 distribution utility 246 diversion rate 213, 214, 228, 238, 265 dumpsites 215 E Ease of Doing Business 54, 150, 151, 164 eco-efficiency 68, 255 Ecological Solid Waste Management 213, 229 e-Commerce 62, 64 economic growth V, VI, 4, 5, 7, 9, 12-14, 23, 31, 35, 44, 51, 53, 68, 75, 86, 105, 120, 121, 124, 151, 172, 179, 207, 230, 240, 241, 248, 264 economic zones 62-64, 233 Eco-tourism 210, 225, 226, 251 education V, VI, 4, 5, 7, 9, 17-19, 23, 24, 36, 42, 53, 57, 61, 64, 66, 67, 69, 86, 91, 95, 111, 115, 120-122, 127-134, 147, 148, 157-159, 180, 190, 200, 215, 218, 232, 233, 240, 245, 246, 258, 259 e-Governance 162, 261 e-Government 22, 162, 240, 43, 247, 253, 261, 247 electric cooperatives 255 electricity 5, 9, 52, 97, 241, 242, 244, 246, 255, 259, 260, 265, 267, 270, 271 employment V, 3-12, 14, 16, 17, 19, 22, 26, 30, 31, 51 53, 55, 57-60, 63, 64, 68, 70, 71, 74, 75, 79, 80, 95, 97, 105, 113, 120-122, 124, 127, 132, 133, 135, 136, 138, 141, 151, 153, 172, 179, 207, 210, 223, 241, 248 employment generated 9, 58, 70, 71 employment rate 7 end-user financing 141, 143 Enhanced Justice on Wheels (E-JOW) 168, 176 enterprise-based training 133, 134 entrepreneurship 17, 66, 85, 131 Environmental Impact Assessment (EIA) 206, 233, 258 Exclusive Economic Zone 185, 233 exports 11, 35, 37, 38, 56, 58, 60, 69, 71, 78-81, 85, 88, 94, 100 extension services 5, 83, 86, 90, 91, 94, 96, 98 external debt 37-40, 44, 47 External Debt Service Ratios 38 Extractive Industries Transparency Initiative 60, 154, 224 F Farm-to-Market Roads 19, 20, 40, 85, 253 financial account 37 financial inclusion 22, 46, 104, 107, 108, 110, 112, 113, 115-118 Financial Sector Forum (FSF) 23, 116, 118 Financial Stability Coordinating Council (FSCC) 117, 118 fiscal deficit 34, 39, 47 Index 343 fiscal policy 6 fiscal space VI, 2 30, 31, 41, 249 fishing 76, 77, 79, 80, 87, 95, 210, 223 food security 74, 82, 231 Foreign Direct Investment 6, 52, 70, 106, 114 foreign exchange 37, 113 forward and backward linkages 11, 26, 57, 75, 89, 90, 93, 102 Full Disclosure Policy 155, 156, 173 G geothermal 254 global competitiveness 2, 50, 53, 55, 58, 70, 71, 129, 133, 150, 151, 240, 241 Government Human Resource Information System (GHRIS)-National Payroll System (NPS) 162 Government Integrated Financial Management Information System (GIFMIS) 43, 157, 161 Grassroots Participatory Budgeting Process (GPBP) formerly Bottom-Up Budgeting (BUB) 158 greenhouse gases 266 grid 246, 254, 255 Gross Domestic Product (GDP) 2, 3, 7, 10, 12, 20, 22, 26, 32-35, 38-40, 42, 44, 46, 47, 51, 53, 57, 58, 68, 76, 106, 107, 112, 118, 121, 207, 240, 249, 256 Gross International Reserves (GIR) 37, 38 Gross Regional Domestic Product (GRDP) 8 gross value-added 7, 51, 58, 70, 71, 76-78, 88 100 H hazardous wastes 215, 217, 228, 229 headline inflation 35 health care 18, 20, 121-126, 139, 259 higher education (HE) 17, 19, 91, 121, 122, 128, 129, 131, 133, 134, 148, 198 high-value crops 77, 100 household 2, 5, 12, 13, 17, 19, 20, 23, 31, 36, 74, 84, 89, 90 92, 93, 95, 102, 114, 116, 123, 125, 128, 135, 136, 138, 141-144, 147, 190, 200, 245, 246, 248, 259, 260, 266, 270, 271 housing 5, 9, 19, 20, 36, 62, 121, 122, 136, 141-145, 148, 246, 248, 259 housing unit 20, 141, 259 human capital 4, 5, 17, 124, 127 hydropower 254 I import cover 38 imports 41, 85, 99 imports of goods 37 inclusive finance 23 inclusive growth VI, 2, 3, 6, 7, 12, 23, 31, 43, 51, 57, 60, 86, 94, 104, 110, 170, 206 income poor 3 Indigenous Community Conserved Areas (ICCAs) 210 Indigenous People (IP)/Indigenous Cultural Communities (ICC) 19, 93, 126, 137, 170, 190, 192, 201, 211, 225, 258, 280 inequality V, 4, 120 Infant mortality rate (IMR) 123, 146 inflation 2, 26, 30, 31, 35, 36, 39, 40, 44, 47, 58, 112 inflation rates 26, 35, 36, 39, 47, 112 informal settlers 19, 20, 135, 144, 248 Information and Communications Technology (ICT) 65, 66, 90, 92, 94, 160, 162, 184, 240-244, 246, 247, 249, 251, 257, 258, 261, 262, 267, 271 INFRACOM Sub-Committee on Water (SCWR) 267 innovation VI, 11, 19, 22, 43, 50, 55, 57, 58, 59, 65-67, 70, 71, 87-91, 95, 97, 132, 251, 261 installed/rated capacity 244, 246 Integrated Forest Management Agreement (IFMA) 208 Integrated River Basin Management (IRBM) 223 Integrated Water Resources Management (IWRM) 216 Interim Mindanao Electricity Market (IMEM) 255 International Budget Partnership (IBP) 155 International Convention on the Elimination of All Forms of Racial Discrimination 192 investment climate 4, 246 investment-to-GDP ratio 3 Irrigation Service Fees (ISF) 3, 144 irrigation system 77, 91, 253, 254 J joint venture 145, 171, 246 Justice Sector Coordinating Council ( JSCC) 169, 172 K K to 12 Program 18, 131 Philippine Development Plan 2011-2016 MIDTERM UPDATE344 L labor force 3, 6, 8, 11, 19, 52, 57, 65, 79, 120, 124, 129, 132, 133, 136 labor market 6, 10, 133, 134 Large-value payment systems 115 LGU Income Re-classification System Bill 43 low-cost housing 141-142, 246 M magnitude of poor families 133 Marine-Protected Areas (MPAs) 86, 210, 221, 232, 235 market capitalization 106 materials recovery 213, 214, 248 maternal mortality ratio (MMR) 18, 123, 124, 146 Medium-Term Information and Communication Technology Harmonization Initiative (MITHI) 162, 262 metrology 56, 60, 70 Micro, Small and Medium Enterprises (MSMEs) 11, 12, 23, 55, 59, 65, 68, 69, 92, 94, 110, 111, 114, 116 missionary electrification 246 mitigation (climate change) 17, 23, 160, 165, 208, 220 monetary policy 35, 39, 44, 45, 47 Most-at-risk population (MARP) 124 Multidimensional Poverty Index (MPI) VI N National Integrated Protected Areas Systems (NIPAS) 210, 221, 224, 232, 235, 258 National Justice Information System (NJIS) 24, 169 National Transport Policy (NTP) 258, 262 Nationwide Operational Assessment of Hazards (NOAH) 208 natural gas 266 Net Enrolment Rate (NER) or Participation Rate 128, 130, 131, 147, 160, 190, 200 net lending 32 network 92, 111, 132, 186, 250, 251, 261, 263 NG Deficit 35 Non-Tax Revenues 32-34, 39, 47 nuclear wastes 215, 233 O off-grid areas 246, 259 on-grid areas 244 open access 244, 259 Open Budget Index (OPI) 25, 173, 152, 155 organic agriculture 215 Organizational Performance Indicator System (OPIF) 43 Outstanding Public Sector Debt 35 P payment systems 115, 126, 157 penetration 50, 108 people’s budget 156 People’s Survival Fund (PSF) 208, 219 per capita 50, 123, 147 percentile rank 24, 25, 150, 152, 173, 175 Performance Challenge Fund (PEF) 160 Performance Enhancement Incentive (PEI) 160 Performance-Based Bonus (PBB) 154, 160 Performance-Based Incentive 43, 247 Persons with Disability 19, 23, 126 Philippine Development Forum (PDF) 169 Philippine Quality Award (PQA) 165 political stability VI, 39, 58, 150 post-harvest facilities 82, 92, 100 post-trade processing 115 poverty V, VI, 2-6, 9-14, 17-19, 26, 31, 50, 51, 57, 60, 74, 75, 82, 94, 96, 97, 105, 109, 110, 116, 120 122, 124, 125, 127, 128, 135, 136, 139, 141, 146, 147, 151, 153, 157, 158, 160, 165, 172, 174, 179, 207, 223, 241, 245, 248 poverty incidence 3, 4, 7, 9, 13, 14, 82, 93, 97 poverty threshold 9, 84 power 10, 64, 220, 241, 244, 246, 247, 254-256, 259, 269, 270 productivity 93, 99, 100, 124, 133, 160, 165, 241, 248 250, 261, 267 protected area 86, 210, 221, 232, 235 Public Financial Management 43, 161, 162, 174 Public Management Development Program (PMDP) 161, 163, 175 Public-Private Partnership (PPP) 44, 62, 90, 96, 114, 116, 171, 231, 245, 246, 249, 256, 260 Index 345 R rationalization of fiscal incentives 41 rationalization of the mining fiscal regime 41 real gross domestic product 3 recyclable material 229 Reducing Emissions from Deforestation and Forest Degration Plus (REDD-plus) 223 regulatory quality 25, 150, 152, 175 remittances 22, 27, 69, 108, 114 remunerative employment 17 Renewable Portfolio Standards (RPS) 247 Report Card Survey (RCS) 161, 164, 175 Republic Act 10149 (GOCC Governance Act of 2011) 42 Republic Act 10351 (Sin Tax Reform Law) 32, 123, 125 Republic Act 10354 (Responsible Parenthood and Reproductive Health Act of 2012) 123, 125 Republic Act 6969 (Toxic Substances and Hazardous Waste Act of 1990) 125 Republic Act 7160 (Local Government Code) 158, 215, 233, 258 Republic Act 7718 (Build-Operate-Transfer (BOT) Law) 246 Republic Act 8749 (Philippine Clean Air Act of 1999) 213, 215, 233, 258 Republic Act 9003 (Ecological Solid Waste Management Act of 2000) 213, 228 Republic Act 9513 (Renewable Energy Act of 2008) 247 Republic Act 9700 (Comprehensive Agrarian Reform Program Extension with Reforms (CARPER)) 83, 84, 97, 98 Republic Act 9729 (Climate Change) Act of 2009 215, 233, 258 Republic Act 9512 (National Environmental Awareness and Education Act of 2008) 215, 233, 258 repurchase agreement 115 resettlement 245 residual waste 229 Results-Based Performance Management System (RBPMS) 160, 162 retail payment systems 115 retail trade 52 revenue effort 26, 32, 33, 39 Revenue Integrity Protection Service (RIPS) 166 rule of law 4, 24, 64, 150-153, 167, 172, 173, 175 Run After the Smugglers (RATS) 425, 33, 171, 176 Run Against Tax Evaders (RATE) 25, 32, 33, 171, 176 S sanitary landfill 248 sanitation VI, 5, 9, 17, 20, 240, 245, 258, 259, 265 Seal of Good Governance (SGLG) formerly Seal of Good Housekeeping (SGH) 156, 160, 161, 163, 174 Securities Settlement System 115 Septage 264-266, 271 Service Delivery Excellence Program (SDEP) 164 sewerage 216, 248, 264, 265, 266, 271 Shari’ah Courts 192 sitio 191, 246, 258-260, 270 slum 141, 144, 145 Small Power Utilities Group (SPUG) 246 social insurance 17, 138, 139 social protection 12, 17, 19, 97, 120, 121, 135-140, 148, 163, 182, 245 social safety nets 139 social services V, 17, 18, 25, 26, 32, 42, 121, 122, 190, 200, 259 social welfare 138-140, 146, 191 socialized housing 121, 136, 141-145, 148, 246, 259 Solid Waste Management (SWM) 213-215 217, 228, 229, 233, 234, 249, 258, 264-266 271 standardization 145, 247 Strategic Performance Management System (SPMS) 161-163, 174 subsidy 126, 246 subsistence incidence 82 supplier 11, 57, 67, 70, 78, 157, 247 sustainable development 18, 20, 96, 99, 211, 222, 232, 236 sustainable land management 99, 211, 222, 235 T tariff 41, 62, 98, 247, 258 tax 2, 25, 32-34, 41, 54, 83, 99, 111, 123, 125, 153, 170, 171, 176, 215, 229, 244, 251 tax effort 26, 33, 39 Philippine Development Plan 2011-2016 MIDTERM UPDATE346 tax revenues 33, 34, 39, 47, 125 Technical Vocational Education and Training (TVET) 17, 19, 121, 122, 128, 132, 133, 147 tourism V, 8, 10, 17, 20, 32, 50, 56, 61, 63, 69, 70, 94, 195, 197, 248, 250, 251, 255 trade repositories 115 transmission (electric) 20, 254, 256 Transmission Development Plan 254 Transparency Seal 154, 155, 173 U UN Security Council Resolution 1325 192 underemployment (persons) VI, 8, 80, 132 underemployment rate 8, 9 unemployed 79 unemployment rate 3, 8, 9 universal access 18 universal charge 246 universal health care 121, 123, 124 utilization rate 139 V Valuation Reform Act 42 value chain 12, 67, 90, 93, 94, 96 Value Engineering/Value Analysis (VE/VA) 246, 262 vulnerability 13, 19, 23, 82, 83, 85, 95, 120, 137, 140, 141, 186, 215, 216, 219, 245 vulnerable groups 121, 138, 139 W water quality 217, 227-229, 237, 265 water resources (SCWR) 2216, 233, 255, 258, 262, 265 watershed 5, 24, 87, 210, 221, 232, 234 water supply 20, 23, 190, 200, 216, 245, 255, 257-260, 265, 269, 270 wireless 246, 261 World Government Indicators (WGI) 24, 25, 150, 152, 172, 173, 175 Z Zero Based Budgeting 43 Philippine Development Plan 2011-2016 MIDTERM UPDATE With Revalidated Results Matrices Published by: National Economic and Development Authority 12 Escriva Drive, Ortigas Center, Pasig City Tel: +632 631 0945 to 56 info@neda.gov.ph ISSN: 2243-7576